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New Zealand’s navy lost its first ship since World War II after the HMNZS Manawanui sank on a reef off the coast of Samoa on Sunday creating a potential environmental disaster in waters used for fishing and tourism.

The specialist dive and hydrographic vessel lost power and ran aground on Saturday evening while conducting a reef survey one nautical mile off the southern coast of the Samoan island of Upolo, according to New Zealand authorities.

By Sunday morning, the vessel was “listing heavily,” the navy said. Smoke was spotted around 6:40 a.m., and by 9 a.m. the ship had slipped below the surface.

It’s the first unintentional sinking of a New Zealand naval vessel since the Second World War, authorities said, as they opened a court of inquiry into what happened.

Local businesses and conservationists now fear the potential environmental impact of the accident, which occurred in waters off Samoa’s most populated island.

New Zealand Defense Minister Judith Collins told Newstalk ZB that authorities’ first priority was assessing the depth of the vessel and the risk of a spill.

“It’s got a lot of oil on board. …. It’s got lubricating oil, hydro oil, diesel, urea. It’s got a lot of stuff in it. And I don’t think we can just sort of leave it like that,” she said.

Divers were sent to the scene on Sunday night, she said. “They’ll be having a look to see what they can, but it’s going to be quite a big job,” she added.

Acting Samoan Prime Minister Tuala Tevaga Iosefo Ponifasio said in a press statement Sunday that an oil spill was highly probable.

“The HMNZS Manawanui is not recoverable and has sunk into the ocean,” he said.

A reef emergency

Samoan police received a distress call just before 7 p.m. on Saturday night, according to local authorities. Small boats were dispatched with the warning that the ship was taking on water and its crew would likely need evacuating.

Numerous vessels and aircraft were sent to help, including a Royal New Zealand Air Force P-8A Poseidon and C-130J aircraft, the New Zealand navy said.

By 5 a.m. Sunday, all 75 passengers and crew had been rescued, but witnesses said they soon saw smoke rising from the sinking wreck.

“It took 15 minutes for the boat to be fully ablaze and then sink,” he said, adding that local villagers left a Sunday church service to watch the ship.

“They were visibly upset and concerned for their beach, reef, marine reserve and income as fishermen,” Poole said.

New Zealand Prime Minister Chris Luxon said that “environmental spill kits” had been sent from New Zealand to help mitigate and minimize the effects.

The HMNZS Manawanui was a relatively new addition to the New Zealand navy, having been purchased in 2018 for around $100 million NZD ($61 million), though it was built in the early 2000s.

According to the navy, the ship was designed to “survey harbours and approaches prior to larger support ships landing support equipment and personnel whether for combat or disaster relief.”

This post appeared first on cnn.com

Africa is home to the world’s largest free trade agreement, in terms of number of countries, territory, and population – the African Continental Free Trade Area (AfCFTA). Fifty-four of 55 African Union member countries have signed up to the deal which covers a market of 1.3 billion people and a combined GDP of $3.4 trillion.

It aims to boost economic growth, intra-African trade and investment across the continent, but although it was established in February 2020, implementing the agreement has been slow.

According to the Economic Commision for Africa, African countries continue to trade with the rest of the world more than among themselves. Inadequate infrastructure, a lack of finance, and weak governance are often to blame.

The following interview has been edited for clarity and length.

Eleni Giokos: When you took on the job as Secretary General, did you think it was going to be this intense to create so many different standards across the continent, and what was the most challenging aspect of putting this all together?

Wamkele Mene: I don’t think anybody would’ve imagined how challenging and enormous the task is. One of the reasons it’s challenging and will continue to be challenging for a long time is because we are a very, very fragmented market. We have 47 state parties to the agreement establishing the AfCFTA. Hopefully the remaining few countries will ratify soon. Within those 47, we have 42 currencies. We have countries that have a GDP per capita of $110, and then at the (other) end of that spectrum, a GDP per capita of $25,000. We have the least developed countries, we have landlocked countries, we have countries that are at variance from a macroeconomic policy standpoint. So, when you try to integrate and create a single market, economic integration is incredibly difficult.

EG: How has AfCFTA evolved since it came to inception, since it’s been launched on the continent?

WM: We were established in the middle of Covid-19 in February 2020. The following month, March 2020, is when the entire continent of Africa shut down – closure of borders, closure of airports, everything that is an instrument for trade was shut down. For the first six to nine months of the year, it was extremely difficult to get anything done.

Now, we have concluded all the protocols of the agreement – in other words, the legal construct – including very difficult areas such as digital trade; rules of origin of local content for textiles and clothing, for the automotive sector; creating a dispute settlement mechanism for an entire continent of 47 countries trading under the AfCFTA. All these rules are the nuts and bolts of trade, and I am very happy that we are now in transition from negotiating the rules to implementing the rules.

EG: In 2022, seven countries chose to pilot the African Continental Free Trade Area. How is that going, how is that being adopted, are you seeing the actual implementation?

WM: In 2022, seven countries were ready. By readiness, we mean they introduced the customs systems, they gazetted the AfCFTA into their national law. This October (there) will be 37, which means that 37 countries are at a state of readiness and are trading under the rules and the preferences.

EG: A lot of people in the private sector say they don’t really feel the impact of the African Continental Free Trade Area. They don’t, frankly, think it’s working. What do you say to that?

WM: We are integrating a market of 47 countries. The private sector is, as I always say, a co-pillar and a co-driver of market integration on the continent because it’s the private sector that trades. What I would say to them is this: we are overcoming 60 years of market fragmentation. It’s not going to happen overnight. And we know this from the experience of the European Union, which is arguably the most successful market integration model in the world today. It is (31) years since the establishment of the European Union, and yet it still continues to have challenges.

EG: Here’s one of the most controversial issues. Aliko Dangote has been talking about the fact that he needs 35 visas to travel across the African continent. If the richest man in Africa can’t get around easily, who can? How does this hinder people doing business cross-border?

WM: It’s a significant barrier and constraint to intra-Africa trade and intra-Africa investment. There are only four countries that to date have ratified the African Union’s protocol on movement of persons – only four countries. There is an emotional instinct against allowing movement of persons in some countries. In some countries there are legitimate national security concerns. So, we have to work hard to make sure that we convince countries about the importance of moving in the same direction on free movement of persons whilst at the same time addressing the national security concerns that those individual countries have.

EG: Can we even be having this conversation on integration if we don’t actually focus on infrastructure that links the continent up? 

WM: More needs to be done to enable the continent of Africa to have the infrastructure that we need so that these goods can transit through borders seamlessly, efficiently, based on the rules that we have agreed to. So, we look forward to the operationalization of the Lobito corridor (a railway project that links link Angola, Zambia, and the Democratic Republic of Congo). All of these trade corridors that are embedded on world-class infrastructure will enable our continent to take drastic steps in boosting intra-Africa trade.

It’s not just about the trade rules, it’s about establishing the supply chain networks, the transport and logistics infrastructure that will support trade.

EG: It’s five years from now: What kind of conversation do you hope to be having with me about where we are?

WM: I think that what I’ve learned over the last four years in this position is that you have to be extremely patient. If in five years time we can demonstrate that we have moved intra-Africa trade from let’s say 15% to 25% or 30%, that will be a very important step forward.

I think we can double intra-Africa trade in the next five years, provided we introduce the tools that are required. So in other words, payment, ensuring that there is ease of access to intra-Africa payments; ensuring at the very minimum (there is) trade supporting infrastructure, particularly in the trade corridors (between) Central Africa, Eastern Africa, Northern Africa; and then third, we combine all of that with the political will and the rules that have been negotiated to create the single market. I believe that we’re going to get there.

In 2018, many (people) around the world, including on the continent of Africa, were saying that these Africans will negotiate forever and that the AfCFTA shall never be signed. And then of course, the AfCFTA was signed in Rwanda in 2018. Then they said it’ll never be ratified, and a year later the agreement was ratified – now 47 countries have ratified it. Now they’re saying that it shall not be implemented. In October, 37 countries will demonstrate implementation when they showcase the goods and the certificates of origin that they are trading in. At every milestone, there’s a new goal post for us to meet.

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It is “absolutely impossible” for Communist China to become Taiwan’s motherland because the island’s government is older, Taiwan’s president has said in a carefully timed speech that underscores the intense historical rivalry between the two.

Lai Ching-te, who took office in May, has long faced Beijing’s wrath for championing Taiwan’s sovereignty and rejecting the Chinese Communist Party (CCP)’s claims over the island.

Despite having never controlled Taiwan, China’s ruling Communist Party has vowed to “reunify” with the self-governing democracy, by force if necessary. But many people on the island view themselves as distinctly Taiwanese and have no desire to be part of the People’s Republic of China.

On Saturday, in a move likely to further infuriate Beijing, Lai dug into history to make his point, stressing that Taiwan is already a “sovereign and independent country” called the Republic of China (ROC), whose government ruled mainland China for decades before relocating to Taiwan when the CCP came to power.

The ROC was founded in 1912 after a Nationalist revolution overthrew China’s last imperial dynasty, the Qing. At the time, Taiwan was a Japanese colony, ceded by the Qing dynasty after it lost a war to Imperial Japan nearly two decades earlier.

The ROC later took control of Taiwan in 1945, following Japan’s defeat in World War II. Four years later, its Nationalist government then fled to the island after losing a civil war against Mao Zedong’s Communist forces, moving the seat of the ROC from the mainland to Taipei.

In Beijing, the CCP took power and founded the People’s Republic of China (PRC) on October 1, 1949. Since then, the two sides have been ruled by separate governments.

Successive Chinese leaders have vowed to one day take control of Taiwan. But Xi Jinping, China’s most assertive leader in decades, has ramped up rhetoric and aggression against the democratic island – fueling tension across the strait and raising concerns for a military confrontation.

Speaking at a concert ahead of Taiwan’s national day on October 10, Lai noted the two governments’ different political roots, delivering a lesson in comparative history.

“Recently, our neighbor, the People’s Republic of China, just celebrated its 75th birthday on October 1. In a few days, the Republic of China will celebrate its 113th birthday,” Lai said, receiving to a round of applause from crowds in a stadium in Taipei.

“Therefore, in terms of age, it is absolutely impossible for the People’s Republic of China to become the motherland of the people of the Republic of China. On the contrary, the Republic of China may actually be the motherland of citizens of the People’s Republic of China who are over 75 years old.”

Monday is the last day of China’s week-long national day holiday and the Chinese government has not responded to Lai’s remarks.

But his comments have already drawn criticism from politicians in Taiwan’s largest opposition party, the Kuomintang (KMT), which has long accused Lai’s ruling Democratic Progressive Party of needlessly stoking tensions with China.

“President Lai has deliberately mentioned ‘People’s Republic of China’ and his ‘motherland theory’ to incite political confrontation on both sides of the Taiwan Strait,” Ling Tao, a city councillor from the KMT, wrote in a post on Facebook.

The KMT are the political successors of the Nationalists who fled to Taiwan, ruled the island under martial law for decades and long harbored ambitions to one day restore the Republic of China on the mainland. They later joined Taiwan’s evolution into a democracy and have made significant ideological transformations, including favoring closer ties with Communist China.

Leaders in both Taipei and Beijing have long used their national day addresses to send a message across the Taiwan Strait.

Last week, on the eve of the PRC’s 75th birthday, Xi reiterated his pledge to achieve “reunification” with Taiwan.

“It’s an irreversible trend, a cause of righteousness and the common aspiration of the people. No one can stop the march of history,” Xi told a state banquet at the Great Hall of the People in Beijing, according to state-run news agency Xinhua.

“Taiwan is China’s sacred territory. Blood is thicker than water, and people on both sides of the strait are connected by blood,” he said, vowing to resolutely oppose “Taiwan independence” separatist activities.

Beijing has labeled Lai a “dangerous separatist,” and tensions have ratcheted up over the last five months since Lai’s inauguration in May, during which he called on China to cease its intimidation of Taiwan.

Lai is expected to give his first national day address as Taiwan’s president on Thursday.

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Sen. John Fetterman, D-Penn., on Sunday said that he will continue to ‘support and follow’ Israel after seeing how the Jewish State has been able to humiliate Iran and its proxies, Hamas and Hezbollah.

Fetterman made the remarks on ‘Fox News Sunday,’ telling anchor Shannon Bream that Israel knows best about how to take on Iran and the regime’s proxies.

‘Whatever they decide to do in response to Iran, I’m going to support that because Israel will have a better idea of the intelligence and the circumstances on the ground,’ Fetterman said. ‘And that’s why I’m going to support and follow that.’

The Democrat praised Israel for their effective responses against Hezbollah and Hamas that he said left the Iranian proxies ‘cowering.’ 

‘I also want to celebrate what Israel has been able to do,’ Fetterman said. ‘They’ve demolished Hamas and now they have humiliated Hezbollah and they are now cowering. And Iran shot, you know, 200 missiles and [Israel] vaporized those. So, Iran now is left exposed and humiliated, and Israel has put them back on the ropes. And I am going to support what they continue to do.’

Iran bombarded Israel with 181 missiles last week in what the regime said was retaliation for the killing of Hezbollah leader Hassan Nasrallah in Beirut, Lebanon, in an Israeli airstrike in September and the killing of Hamas leader Ismail Haniyeh in Tehran in July. 

Meanwhile, Hamas in Gaza and Hezbollah in Lebanon have traded attacks with Israel since the Israel-Hamas war began on Oct. 7.

Fetterman’s comments come days after President Biden told reporters that he would not support an attack by Israel on Iranian nuclear sites in retaliation for Iran’s missile attack against Israel amid fears that a lethal regional war is around the corner.

Biden said all the G7 leaders on a recent call – France, Canada, Japan, Britain, Italy and Germany – agreed that Israel had the right to ‘proportionally’ respond to Iran’s military strike.

Biden’s response came under fire from former President Trump, who told Fox News correspondent Bill Melugin on Thursday that Biden’s response on Israel attacking Iran was the ‘craziest thing I’ve ever heard. That’s the biggest risk we have. The biggest risk we have is nuclear.’

Meanwhile, Israeli Prime Minister Benjamin Netanyahu on Saturday called out Western leaders who he said had called for an arms embargo on Israel over its airstrikes against Hamas in Gaza. 

‘As Israel fights the forces of barbarism led by Iran, all civilized countries should be standing firmly by Israel’s side, yet President Macron and other western leaders are now calling for arms embargoes against Israel. Shame on them,’ Netanyahu said in a statement.

He continued, ‘Is Iran imposing an arms embargo on Hezbollah, on the Houthis, on Hamas and on its other proxies? Of course not. This axis of terror stands together, but countries who supposedly oppose this terror axis call for an arms embargo on Israel.’

Fox News’ Brie Stimson contributed to this report.

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Israeli Defense Minister Yoav Gallant issued an ominous warning to Iranian officials during an interview with Fox News on Sunday, amid the rapid escalation of the Israel-Hamas war in the Middle East.

The interview came days after Israel invaded Lebanon as part of a mission to eliminate Hezbollah, on the heels of several successful strikes against the terrorist group. The Israel Defense Forces (IDF) confirmed that it had killed Hezbollah leader Hassan Nasrallah last weekend – prompting Iran to launch 181 retaliatory missiles in response.

During an exchange with Fox News chief foreign correspondent Trey Yingst on Sunday, Gallant promised that Israeli forces are considering all options in terms of its response to Iran’s attacks against Israel – even potentially striking Iranian nuclear sites.

‘At the moment, everything is on the table,’ the Israeli official said. ‘Israel will respond to the unprecedented Iranian attack in the manner of our choosing, and at the time and place of our choosing.’

President Biden told reporters last week that he would not support a strike against Iran’s nuclear facilities, but said Israel had the right to act ‘proportionately’ to Iran. On Saturday, Vice President Kamala Harris vowed to send $157 million of ‘additional assistance’ to Lebanon, which, she claimed, is ‘facing an increasingly dire humanitarian situation.’

‘I am concerned about the security and well-being of civilians suffering in Lebanon and will continue working to help meet the needs of all civilians there,’ Harris said.

Amid the White House’s response to the IDF’s recent strikes, Gallant emphasized that he hopes the United States continues to cooperate with the Israeli military.

‘It is important for us to hold discussions on strategic cooperation between our countries and defense cooperation in light of the threats posed by Iran and its proxies,’ Gallant said. ‘We are powerful when we are aligned and I want to make sure of it.’

Gallant also said the IDF’s recent strikes in northern Gaza were in response to terrorists planning ‘Oct. 7-style attacks’ against Israelis.

‘We have conducted counterterrorism activities in northern Gaza and in Judea and Samaria, following intel indicating that terrorists were planning Oct. 7-style attacks on Israeli citizens,’ he explained. ‘We will operate precisely and preemptively when necessary in order to defend our citizens.’

The military official acknowledged the IDF’s ‘extraordinary’ wins against Hezbollah in recent weeks and vowed to continue its mission. On Friday, the IDF announced that it had killed 250 Hezbollah terrorists since the ground strikes began, including several commanders. 

‘Israel has made extraordinary achievements against Hezbollah – we will do what it takes to defend our citizens and our sovereignty,’ Gallant said. ‘This includes eliminating their attack capabilities, taking out leadership, and placing a weapons embargo on Hezbollah.’

Later on Sunday, Pentagon press secretary Maj. Gen. Patrick Ryder announced that Secretary of Defense Lloyd J. Austin III will host Gallant on Wednesday.

‘@SecDef will host Israeli Defense Minister Yoav Gallant at the Pentagon Oct. 9 for an official visit to discuss ongoing Middle East security developments & looks forward to welcoming the Minister back to Washington DC,’ Ryder wrote.

Fox News Digital’s Greg Norman, Stephen Sorace and Michael Lee contributed to this report.

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‘When was the last time you talked to your kid? Do you know where he slept last night? Do you know what he ate? Do you know if he had a blanket on him?’ Ruby Chen, father of Itay Chen who was taken by Hamas on Oct. 7, 2023, asked in a sit-down interview with Fox News Digital.

‘All those types of questions are questions that we ask ourselves constantly,’ he said. ‘The feeling is that we’ve been failed.’

Itay,19 years old when he was taken, has remained a hostage held in Gaza for 365 days after his unit in the Israel Defense Forces (IDF) was attacked in southern Israel when Hamas terrorists flooded the border in a series of mass assaults. 

Chen, a New York City native, said he and his wife have been given ‘unprecedented’ access to the White House, the CIA and other top agencies throughout the last year to discuss ongoing strategies to try and get the hostages out of Gaza.

The Chens have not only met with national security adviser Jake Sullivan a dozen times, as well as CIA Director William Burns and Treasury Secretary Janet Yellen, they also hold a weekly call with the White House. 

But ultimately, these supportive efforts have fallen flat when it comes to the real needs of American families whose loved ones are still held hostage by Hamas. 

‘We have been failed by the Israeli government, we, as U.S. citizens, feel we’ve been failed by the Biden administration despite all of the access that they’ve provided us,’ he explained. ‘They share as much as they can. But at the end of the day, it’s… very black and white.

‘Where is he?’

Chen explained that following the Oct. 7 attacks on Israel, the Israeli government pushed a strategy to secure the release of the then 251 hostages by bombarding suspected Hamas positions in Gaza.

In the initial weeks following the deadly Hamas attacks, Israel began pounding northern Gaza – a move Israeli Prime Minister Benjamin Netanyahu believed would bring Hamas leader Yahya Sinwar ‘to his knees’ and make him be ‘willing to release hostages.’

A week-long cease-fire in November saw the release of 105 hostages. Twelve other hostages have been freed following negotiations during the immediate aftermath of the attack, or because of IDF rescue operations between February and August. 

None of the eight American hostages that were kidnapped have been released, and only seven continue to be held by Hamas after the body of Hersh Goldberg-Polin was discovered by IDF forces in late August, after he along with five others were killed by the terrorist group.

More than 100 hostages remain in captivity in the Gaza Strip – 97 of whom were abducted on Oct. 7, 2023.

The Chens, other American families and the international community have repeatedly urged Israel and Hamas to reach a cease-fire agreement and return all hostages to their families. 

But disagreements over security corridors in Gaza have created a seemingly insurmountable hurdle as U.S., Egyptian and Qatari officials work to get Israel and Hamas to reach an agreement.

The father of the IDF soldier pointed out that so long as no one is discussing a ‘day after’ plan for the Gaza Strip and the Palestinians there, Hamas will continue to hold tightly to its most powerful bargaining chip, the hostages.

‘Where is Hamas in the day-after? And if no one is willing to talk about it, then Hamas believes that they are better off holding on to the hostages until something changes,’ he explained. ‘It’s a jihad organization. They wish to have chaos. They are looking for a regional conflict.

‘When they see that there’s now a conflict with Lebanon, that does not motivate them to get into a cease-fire agreement. On the contrary, they wish to belong, and have other players join in this jihad against Israel,’ Chen continued. ‘So I question, what is the plan?’

‘I am very critical of the time,’ Itay’s father said. ‘The last 10 months, I’ve been asking Mr. Sullivan, What’s plan B?

‘I haven’t heard of a Plan B. And that’s unacceptable,’ he added.

Securing peace in the region became even more precarious last week after Israel, against the objections of the U.S. and its international allies, launched an incursion into southern Lebanon with the expressed intent of dismantling the threat posed by Hezbollah.

Chen pointed out that this second front not only added another dimension to securing the release of the hostages, but it also seemingly pushed talks with Hamas on the backburner as concerns remain high over a broader regional conflict.

‘If you could follow the news, you could see that the hostage issue has been less prioritized,’ he said. ‘And that’s a very difficult feeling for us and the families.’

Netanyahu has said his top priority is securing the release of the hostages, but his refusal to withdraw from the Philidelphi Corridor due to security reasons has created a negotiation impasse and questions have begun to mount over whether the prime minister is truly prioritizing the hostages over his push to ‘eliminate Hamas.’ 

But the parents of Itay – who has been described as a ‘fun-loving kid,’ the ‘sandwich’ of the family with an older sibling and younger sibling, everybody’s ‘best friend,’ and a former Boy Scout turned a young man with a loving girlfriend – cannot allow for him, or the others still in Gaza, to be at the mercy of any political agenda. 

‘I’m a guy that comes from New York City – and we talk less, we look at actions. The actions of the last year show the opposite.’ Chen said. ‘He can say whatever he wants. I don’t believe a thing that comes out of his mouth, I believe in what he does.’

The father of three also urged the Biden administration to question whether it is still in the U.S.’s strategic interest to unequivocally back Netanyahu.

‘There is no accountability from either side for failed negotiation. You do not see any equation that says, ‘OK, if you do not do A, then there’s a consequence’ on either side,’ Chen said in reference to both Israel and Hamas. ‘There’s no consequence associated with a negative action to a strategic interest of the United States.’

Chen also argued that ‘effective pressure’ needs to be put on Hamas by reevaluating what other ‘pressure points’ can be utilized.

The father pointed to the clear need for tougher economic and diplomatic involvement when it comes to international aid sent to Gaza – including tougher sanctions not only on adversarial nations but on partner countries that allow aid to flow into Gaza.

This includes stricter oversight of United Nations-provided humanitarian aid, which though intended for the Palestinian people, is falling into the hands of Hamas, a group that is not designated as a terrorist organization by the UN.

Hamas has long been accused of seizing basic goods in Gaza and then reselling them in a black-market scheme at exuberant prices. 

Reports have further indicated that Hamas for years has had substantial access to monetary aid siphoned from funds provided by top organizations like the United Nations Relief and Works Agency (UNRWA), which has been directly used for combatant operations against Israel, including tunnel building and access to arms.  

But aside from the substantial need to address aid-based concerns, Chen also argued that diplomatic solutions are not being fully recognized by the U.S.

Nations like Russia and Thailand secured the release of their citizens taken by Hamas, and Chen argued Washington – which was able to negotiate with its biggest adversary just months ago to free U.S. citizens from Russian prisons – should be working to do the same to secure the release of those held in Gaza.

‘So, it’s possible,’ Chen said. ‘Complicated, yep. Doable, yep.’

‘The assumption that was put in front of us at the beginning was that U.S. hostages will come out via a larger deal that Israel will be a part of. And if that assumption is not working out after a year, then yes, we need to challenge the administration and look at that assumption.

‘Is that still valid after one year?’

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It’s time for a wellness check at CVS Health.

Shares of the company are down more than 20% this year as it grapples with higher-than-expected medical costs in its insurance unit and pharmacy reimbursement pressure, among other issues.

As it seeks to claw back faith with Wall Street, the company is considering breaking itself up.

CVS has engaged advisors in a strategic review of its business, CNBC reported Monday. One option being weighed is splitting up its retail pharmacy and insurance units. It would be a stunning reversal for the company, which has spent tens of billions of dollars on acquisitions over the last two decades to turn itself into a one-stop health destination for patients.

Some analysts contend that a breakup of CVS would be challenging and unlikely. 

CVS risks losing customers and revenue if it splits up its vertically integrated business segments, which includes health insurer Aetna and the major pharmacy benefits manager Caremark. That could translate to more lost profits for a health-care giant that has slashed its full-year 2024 earnings guidance for three consecutive quarters. 

“There really is no perfect option for a split,” said eMarketer senior analyst Rajiv Leventhal, who believes a breakup is still a possibility. “If that does happen, one side of the split becomes really successful and prosperous, and the other would significantly struggle.”

Notably, CVS executives on Monday met with major shareholder Glenview Capital to discuss how to fix the flailing business and recover its stock, CNBC previously reported. But Glenview on Tuesday denied rumors that it is pushing to break up the company.

If CVS stays intact, CEO Karen Lynch and the rest of the management team will have to execute major changes to address what industry experts say are glaring issues battering its bottom line and stock price.

The company has already undertaken a $2 billion cost-cutting plan, announced in August, to help shore up profits. CVS on Monday said that plan involves laying off nearly 3,000 employees.

Some analysts said the health-care giant must prioritize recovering the margins in its insurance business, which they believe is the main issue weighing on its stock price and financial guidance for the year. That pressure drove a leadership change earlier this year, with Lynch assuming direct oversight of the company’s insurance unit in August, displacing then-President Brian Kane.

CVS’ management team and board of directors “are continually exploring ways to create shareholder value,” a company spokesperson told CNBC, declining to comment on the rumors of a breakup. 

“We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model,” the spokesperson said in a statement. 

Investors may get more clarity on the path forward for the company during its upcoming earnings call in November.

Some analysts said the likelihood of CVS separating its retail pharmacy and insurance segments is low given the synergies between the three combined businesses. Separating them could come with risks, they added. 

“The strategy itself is still vertical integration,” Jefferies analyst Brian Tanquilut told CNBC. “The execution might not have been the greatest, but I think it’s a little too early to really conclude that it’s a broken strategy.”

Many of CVS’ clients contract with the company across its three business units, according to Elizabeth Anderson, analyst at Evercore ISI. Anderson said “carving out and pulling apart a whole contract” in the event of a breakup might be “quite difficult operationally” and lead to lost customers and revenue. 

Pharmacy benefits managers like CVS’ Caremark sit at the center of the drug supply chain in the U.S., negotiating drug rebates with manufacturers on behalf of insurers, creating lists of preferred medications covered by health plans and reimbursing pharmacies for prescriptions. 

That means Caremark also sits at the intersection of CVS’ retail pharmacy operation and its Aetna insurer, boosting the competitive advantage of both of the businesses. In the event of a breakup, it’s not clear where Caremark would fall.

Separating Caremark from Aetna would put the insurance business at a competitive disadvantage since all of its largest rivals, including UnitedHealth Group, Cigna and Humana, also have their own PBMs, said eMarketer’s Leventhal. 

But Caremark, in some cases, also funnels drug prescriptions to CVS retail pharmacies, he said. That has helped the company’s drugstores gain meaningful prescription market share over its chief rival, Walgreens, which has been struggling to operate as a largely stand-alone pharmacy business. 

CVS is the top U.S. pharmacy in terms of prescription drug revenue, holding more than 25% of the market share in 2023, according to Statista data released in March. Walgreens trailed behind with nearly 15% of that share last year. 

Now, CVS drugstores must maintain an edge over competitors at a time when the broader retail pharmacy industry faces profitability issues, largely due to falling reimbursement rates for prescription drugs. Increased competition from Amazon and other retailers, inflation, and softer consumer spending are making it more difficult to turn a profit at the front of the store. Meanwhile, burnout among pharmacy staff is also putting pressure on the industry. 

CVS’ operating margin for its pharmacy and consumer wellness business was 4.6% last year, up from 3.3% in 2022 but down from 8.5% in 2019 and 9.9% in 2015.

CVS and Walgreens have both pivoted from years of endless retail drugstore store expansions to shuttering hundreds of locations across the U.S. CVS is wrapping up a three-year plan to close 900 of its stores, with 851 locations shuttered as of August.

The rocky outlook for retail pharmacies could make it difficult for CVS to find a buyer for its drugstores in the event of a split, according to Tanquilut. He said a spinoff of CVS’ retail pharmacies would be more likely.

“There’s a reason they’re cutting down stores. Why break it up when the relationship between Caremark and CVS retail is what keeps it outperforming the rest of the pharmacy peer group?” Tanquilut said. 

CVS has other assets that would need to be distributed in the event of a breakup. 

That includes two recent acquisitions: fast-growing primary care clinic operator Oak Street Health, which the company purchased for $10.6 billion last year, and Signify Health, an in-home health-care company that CVS bought for about $8 billion in 2022. Those deals aimed to build on CVS’ major push into health care — a strategy that Walgreens and other retailers have also pursued over the last few years. 

Oak Street Health could theoretically be spun out with Aetna in the case of a split, Mizuho managing director Ann Hynes wrote in a research note Tuesday. 

The primary care clinic operator complements Aetna’s Medicare business because it takes care of older adults, offering routine health screenings and diagnoses, among other services. CVS also sells Aetna health plans that offer discounts when patients use the company’s medical care providers. 

But CVS has also started to integrate Oak Street Health with its retail pharmacies. The company has opened those primary care clinics side by side with some drugstore locations in Texas and Illinois, with plans to introduce around two dozen more in the U.S. by the end of the year. 

Several companies, including Amazon, Walmart, CVS and Walgreens, are feeling the pain from bets on primary care. That’s because building clinics requires a lot of capital, and the locations typically lose money for several years before becoming profitable, according to Tanquilut. 

Walgreens could potentially exit that market altogether. The company said in a securities filing in August it is considering a sale of its primary care provider VillageMD.

But Tanquilut said it may not make sense for CVS to sell Oak Street Health or Signify Health because “they’re actually hitting their numbers.” 

Signify saw 27% year-over-year revenue growth in the second quarter, while Oak Street sales grew roughly 32% compared with the same period last year, reflecting strong patient membership, CVS executives said in an earnings call in August.

Oak Street ended the quarter with 207 centers, an increase of 30 from last year, executives added. 

“Why get rid of them when they’re still strategic in nature?” Tanquilut told CNBC, adding that it would be difficult to find a buyer for Oak Street given the challenging market for primary care centers.

If CVS doesn’t undergo a breakup, the “single best value-creating opportunity” for the company is addressing the ongoing issues on the insurance side of the business, according to Leerink Partners analyst Michael Cherny. 

He said the segment’s performance has fallen short of expectations this year due to higher-than-expected medical costs — by far the biggest hit to the company’s financial 2024 guidance and stock performance, he said. Cherny said he is confident the issue is “fixable,” but it will depend on whether CVS can execute the steps it has already outlined to improve margins in its insurance unit next year. 

Aetna includes plans for the Affordable Care Act, Medicare Advantage and Medicaid, as well as dental and vision. Medical costs from Medicare Advantage patients have jumped over the last year for insurers as more seniors return to hospitals to undergo procedures they had delayed during the Covid-19 pandemic, such as hip and joint replacements. 

Medicare Advantage, a privately run health insurance plan contracted by Medicare, has long been a key source of growth and profits for the broader insurance industry. More than half of Medicare beneficiaries are enrolled in those plans as of 2024, enticed by lower monthly premiums and extra benefits not covered by traditional Medicare, according to health policy research organization KFF. 

But investors are now concerned about the skyrocketing costs from Medicare Advantage plans, which insurers warn may not come down anytime soon. 

Cherny said CVS faced a “double whammy” in Medicare Advantage this year, grappling with excess membership growth at a time when many seniors are using more benefits. 

In August, CVS also said its lowered full-year outlook reflected a decline in the company’s Medicare Advantage star ratings for the 2024 payment year. 

Those crucial ratings help patients compare the quality of Medicare health and drug plans and determine how much an insurer receives in bonus payments from the Centers for Medicare & Medicaid Services. Plans that receive four stars or above get a 5% bonus for the following year and have their benchmark increased, giving them a competitive advantage in their markets.

Last year, CVS projected it would lose up to $1 billion in 2024 due to lower star ratings, the company disclosed in a securities filing. 

But things may start to look up in 2025. 

For example, one of the company’s large Medicare Advantage contracts regained its four-star rating, which will “create an incremental tailwind” in 2025, CVS executives said in August. 

“We’re giving them the benefit of the doubt because we know that the stars rating bonus payments will come back in 2025,” Tanquilut said. 

During a conference In May, CVS said it would pursue a “margin over membership” strategy: CVS CFO Tom Cowhey said the company is prepared to lose up to 10% of its existing Medicare members next year in an effort to get its margins “back on track.” 

The company will make significant changes to its Medicare Advantage plans for 2025, such as increasing copays and premiums and cutting back certain health benefits. That will eliminate the expenses tied to those benefits and drive away patients who need or want to use them. 

Those actions will help the company achieve its target of 100- to 200-basis-points margin improvement in its Medicare Advantage business, CVS executives said in August. 

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Glance up while strolling through parts of downtown Hong Kong and, chances are, you’ll notice the glassy black lens of a surveillance camera trained on the city’s crowded streets.

And that sight will become more common in the coming years, as the city’s police pursue an ambitious campaign to install thousands of cameras to elevate their surveillance capabilities.

Though it consistently ranks among the world’s safest big cities, police in the Asian financial hub say the new cameras are needed to fight crime – and have raised the possibility of equipping them with powerful facial recognition and artificial intelligence tools.

That’s sparked alarm among some experts who see it as taking Hong Kong one step closer to the pervasive surveillance systems of mainland China, warning of the technology’s repressive potential.

Hong Kong police had previously set a target of installing 2,000 new surveillance cameras this year, and potentially more than that each subsequent year. The force plans to eventually introduce facial recognition to these cameras, security chief Chris Tang told local media in July – adding that police could use AI in the future to track down suspects.

Tang and the Hong Kong police have repeatedly pointed to other jurisdictions, including Western democracies, that also make wide use of surveillance cameras for law enforcement. For instance, Singapore has 90,000 cameras and the United Kingdom has more than seven million, Tang told local newspaper Sing Tao Daily in June.

And, some critics say, what sets Hong Kong apart from other places is its political environment – which has seen an ongoing crackdown on political dissent, as it draws closer to authoritarian mainland China.

Following unprecedented and often violent anti-government protests that rocked the city in 2019, local and central authorities imposed sweeping national security laws that have been used to jail activists, journalists and political opponents, and target civil society groups and outspoken media outlets.

Hong Kong’s leaders have said the laws are needed to restore stability after the protests in the nominally semi-autonomous city, and argue their legislation is similar to other national security laws around the world.

“The difference is how the technology is being used,” said Samantha Hoffman, a nonresident fellow at the National Bureau of Asian Research who has studied China’s use of technology for security and propaganda.

Places like the United States and the UK may have problems with how they implement that technology, too – but “this is fundamentally different… It has to do specifically with the system of government, as well as the way that the party state… uses the law to maintain its own power,” said Hoffman.

What this means for Hong Kong

Hong Kong has more than 54,500 public CCTV cameras used by government bodies – about seven cameras per 1,000 people, according to an estimate by Comparitech, a UK-based technology research firm.

That puts it about on par with New York City and still far behind London (13 per 1,000 people), but nowhere near mainland Chinese cities, which average about 440 cameras per 1,000 people.

Fears of mainland-style surveillance and policing caused notable angst during the 2019 protests, which broadened to encompass many Hong Kongers’ fears that the central Chinese government would encroach on the city’s limited autonomy.

Protesters on the streets covered their faces with masks and goggles to prevent identification, at times smashing or covering security cameras. At one point, they tore down a “smart” lamp post, even though Hong Kong authorities said it was only meant to collect data on traffic, weather and pollution.

At the time, activist and student leader Joshua Wong – who is now in prison on charges related to his activism and national security – said, “Can the Hong Kong government ensure that they will never install facial recognition tactics into the smart lamp post? … They can’t promise it and they won’t because of the pressure from Beijing.”

Across the border, the model of surveillance that protesters feared is ubiquitous – with China often celebrating the various achievements of its real-time facial recognition algorithms, and exporting surveillance technology to countries around the world.

According to an analysis by Comparitec, eight of the top 10 most surveilled cities in the world per capita are in China, where facial recognition is an inescapable part of daily life – from the facial scans required to register a new phone number, to facial recognition gates in some subway stations.

During the Covid-19 pandemic, the government mandated a QR “health code” to track people’s health status, which in some places required facial scans.

But the technology has also been used in more repressive ways.

In the far-western region of Xinjiang, Beijing has used cameras to monitor members of the Muslim-majority Uyghur population. And when unprecedented nationwide protests broke out in late 2022 against the government’s strict Covid policies, police used facial recognition along with other sophisticated surveillance tools to track down protesters, The New York Times found.

“(China’s) public security surveillance systems … tend to track lists of particular people, maybe people with a history of mental illness or participation in protests, and make a note of people who are marked as being troublesome in some way,” Hoffman said.

The systems then “track those specific people across the city and across its surveillance network.”

“I think it’s fair to anticipate that the use of CCTV and facial recognition technology in Hong Kong will begin to look a lot like those in mainland China over time,” she said.

Hong Kong police have argued the cameras help fight crime, pointing to a pilot program earlier this year of 15 cameras installed in one district. Already, those cameras have provided evidence and clues for at least six crimes, Tang told Sing Tao Daily – and police will prioritize high-risk or high-crime areas for the remaining cameras.

The first five months of this year saw 3% more crimes than the same period last year, Sing Tao reported.

When considering AI-equipped cameras, “the police will definitely comply with relevant laws,” the force added.

Steve Tsang, director of the SOAS China Institute at the University of London, warned that the new cameras could be “used for political repression” if they are employed under the “draconian” national security law.

Unless authorities assure the public that the cameras won’t be used for that purpose, “this is likely to be a further step in making Hong Kong law enforcement closer to how it is done on the Chinese mainland,” he said.

How to regulate facial recognition

Other experts argued it’s far too soon to say what the impact will be in Hong Kong, since authorities have not laid out in detail how they would use the technology.

“Hong Kong law doesn’t, in all measures, mirror what happens in mainland China,” said Normann Witzleb, an associate professor in data protection and privacy at the Chinese University of Hong Kong,

But that’s why it’s all the more important for authorities to address a raft of yet-unanswered questions, he said.

For instance, it remains unclear whether Hong Kong will deploy live facial recognition that constantly scans the environment, or whether the tech will only be applied to past footage when certain crimes occur or when legal authorization is granted.

Witzleb also raised the question of who would have the power to authorize the use of facial recognition, and what situations may warrant it. Would it be used to prosecute crime and locate suspects, for example – or for other public safety measures like identifying missing people?

And, Witzleb added, will police run the technology through their existing image databases, or use it more broadly with images held by other public authorities, or even publicly available imagery of anyone?

“It’s important to design guidelines for those systems that take proper recognition of the potential benefits that they have, but that also acknowledge they’re not foolproof, and that they have the potential to interfere with (people’s) rights in serious ways,” Witzleb said.

Regardless of how facial recognition might be used, both Hoffman and Witzleb said the presence of that technology and the increased number of security cameras may make Hong Kongers feel less free under the ever-watchful eye of the police.

“When you feel like you’re being monitored, that affects your behavior and your feelings of freedom as well,” Hoffman said. “I think that there’s an element of state coercion that doesn’t need to have to do with the effectiveness of the technology itself.”

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Scorch marks and bullet holes scar the battered walls of the Haran family home in kibbutz Be’eri. Its tiled roof has caved in, windows smashed, littering the floors with sharp shards of terracotta and glass – the debris, still untouched, of a day of horror for Israel.

“This house tells the story of Be’eri,” says Yarden Tzemach, a farmer and surviving resident of the kibbutz, one of the Israeli communities near Gaza that was overrun by Hamas militants last year.

“In this house, people were murdered. A family, including three children, were kidnapped from here,” he says.

Outside, beneath the fruit trees in the back yard, a toddler’s ride-on toy car, adorned with stickers of Winnie the Pooh, sits amid the rubble, a stark reminder of the lives shattered here.

In some neighborhoods of Be’eri, barely a building was left intact. More than 100 of its 1,100 residents were killed and another 30 abducted to Gaza on October 7.

Home after home was burned out or reduced to rubble and – a year on – many remain as poignant monuments to an ongoing trauma. At least 10 residents of the kibbutz, all friends and neighbors of each other, are among the more than 100 Israelis believed to still be held hostage.

Progress on a ceasefire and hostage deal between Israel and Hamas has repeatedly fallen apart to the anger and despair of hostage families.

‘Best recovery is coming home

In the main administration building of Be’eri, two large aerial photographs hang side by side near the entrance. One is an image of the kibbutz from April 2023, showing ordered rows of neat, white buildings set in lush gardens. The other, taken just after the October 7 attack, shows the same homes blackened and destroyed in the militants’ rampage.

“They killed my sister over there,” says Amit Solvy, pointing to a house on the map, five rows in from the fence that runs around the kibbutz.

Elsewhere in the administration building, two posters are taped in a window – one showing the names and faces of the kibbutz residents who were killed, and another listing those who are held hostage.

Solvy, the Be’eri finance chairman, himself an Israeli veteran of the 1973 Arab-Israeli War, is one of nearly 100 residents to have so far returned. Despite his personal loss, he came back to his house three months ago and is now helping lead efforts to bring kibbutz Be’eri, formerly a self-sustaining farming community, back to life.

“I said to all the people that the best recovery is coming home. This is the best emotional recovery, in my opinion,” says Solvy.

But he acknowledges not everyone feels the same, estimating that up to 15% of the surviving residents of Be’eri may never return because of the trauma and the memories of October 7.

And many of those who want to come back, he says, are unable to do so until the extensive damage has been repaired and homes rebuilt – a massive renovation project that means it will be at least 2 years, according to Solvy, before the majority of residents can return home.

“There is no infrastructure for kids, there are no schools, so people with families cannot come back yet,” he explains.

‘There were terrorists in my house’

Work on the physical scars has already begun, with heavy machinery breaking ground on a new neighborhood of Be’eri. New homes, untouched by the October 7 attack, are seen as an essential means of attracting the majority of the residents back.

Ayelet Hakim, her husband and their son, 12, and daughter, 5, live alongside many other Be’eri survivors in government-supplied temporary housing in another kibbutz, Hatzerim, an hour’s drive from the horrifying memories of what was their home.

“I sat in my safe room there for hours and hours not knowing what was going on, and feeling my life being threatened, my kid’s life being threatened, because there were terrorists in my house,” she adds.

Her son, Yehonatan, interrupts. “I want to go back to Be’eri, back to the house that I was living in. I don’t care about the trauma,” he pleads.

“The house, no. The kibbutz, yes,” asserts Ayelet.

“Kibbutz Be’eri has been my home for the past 56 years. That’s where I want to live,” she says.

But after so much death and destruction in Be’eri, a community so close to Gaza, much must also be done to reassure residents they’ll be safe.

In July, an Israel Defense Forces internal investigation into the events of October 7 concluded that the Israeli military had “failed in its mission to protect the residents” and was ill-prepared for the mass Hamas attack.

“I believe it will be possible. But it will be a big challenge and will take a long time for people to feel as safe as they felt before October 7,” says Tzemach, back at the ruins of his Be’eri neighborhood.

“You know, once something happens, you always have in the back of your mind that it can happen again.”

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“I went on Facebook to see if he would go the extent of meeting up with me. He did… but I never went.”

Savanna Harrison, 27, is a professional “checker”, using social media to expose cheating partners after being cheated on herself.

She wanted to help other women avoid the same heartbreak she felt, so she started working for a company called Lazo, which describes itself as a “tool designed to see intentions and let go of toxic relationships”.

Now, she gets paid to run dozens of loyalty tests a month on people suspected of cheating on their partners.

“I’ve seen some comments saying its messed up,” she said – but she doesn’t feel bad about what she’s doing.

“If you can’t be loyal, then you shouldn’t be in that relationship.”

The loyalty test

Once she accepts a “mission”, Savanna messages her client’s partner, following tips and instructions from the suspicious client.

It’s usually women asking her to test their boyfriends.

“She’ll give me details of where she wants me to go with a conversation,” said Savanna, talking to me from Corona, California, where she also works as a lash technician doing eyelash extensions.

She’ll find out where the boyfriend hangs out and start up a conversation, saying she’s seen him in his favourite bar, or pretending to accidentally send him direct messages and photos.

“Either way, I will flood into his [direct messages] and say something to see if he’ll reciprocate.”

Throughout the process, Savanna is updating her client, sending them screenshots of any conversations between her and the boyfriend.

A loyalty test can last around five days, with checkers like Savanna going as far as arranging dates with the target that they won’t turn up to.

In a recent test, Savanna was asked to “set up a date… all the way until going there”.

She was then told to cancel on him so his girlfriend could show up instead.

‘It would be much better to talk’

According to one relationship expert, a loyalty test is not a healthy way to build trust in your relationship.

“It would be much better to talk about why they feel insecure in the relationship,” said Marian O’Connor, consultant couple and psychosexual therapist at Tavistock Relationships.

“It’s about saying: ‘There’s something wrong with us, what’s happening?’ That is the important thing, not to catch them out.”

She also advises thinking about why you don’t trust your partner and whether there is something deeper going on.

“Is this the experience you’ve had in all relationships? Is this lack of trust something that is from childhood, or is it in this particular relationship?”

The company running the loyalty tests, Lazo, says they’re not trying to catch people out.

“There might be this misconception that we’re here to entrap people,” says Ashlyn Nakasu, community manager at Lazo.

“That really is not the case.”

She says all the company is doing is helping people confirm what they already suspect – that their relationship is ending.

“[Often] they just need that proof, that final kick in the butt to let them know: ‘This is the wrong person for you’,” she said.

“We always tell people the best first choice is to communicate with your partner. And if communication fails to exist, then you can try to have a loyalty test if you truly believe that something is wrong.”

So how much does it cost?

Tests usually cost between $50 to $80 (£37.50 to £60) but the price ranges from checker to checker, with some charging over $100 (£75) for their services.

“I don’t care about the money,” says Savanna. “It’s more about helping other girls because I’ve been there.”

Lazo only has one full-time checker, who is making around $3,000 a month doing loyalty tests, but there are 350-400 part-time checkers like Savanna on their books.

They’re a new company – Lazo launched fully in January – but loyalty tests aren’t a new concept.

The hashtag “loyalty test” already had millions of views on TikTok before Lazo launched, with suspicious partners often finding strangers on the internet and asking them to test their partners.

Lazo, says Ms Nakasu, just created “a database of people that are willing to help, who know exactly what to do and know exactly what people are asking for”.

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