|Thursday 08th of October 2015
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Andy Warhol Drove Route 66. So Did She.
Much has been made of how Andy Warhol’s glam-pop approach to everyday
objects and celebrities transformed the American art world, but less
has been known about how a 1963 drive from New York to Los Angeles
inspired the artist’s personal metamorphosis. “Before this he was
called Raggedy Andy,” said Deborah Davis, author of “The Trip,” which
examines Warhol’s journey. “He dressed in chinos. He was tongue-tied.
He was searching for what he should paint. Then he took this trip and
realized he had to package himself differently. He dressed in black.
He opened the Factory. This was when he became Warhol.”
Somalia Looks Safer for Yemenis Fleeing State Breakdown via @business
Law & Politics
Even before the conflict, Yemen imported 90 percent of its food. Now a
naval blockade has choked supplies and sent the prices of foodstuff
soaring six-fold. About 13 million Yemenis have little access to food
in a country that already had one of the highest levels of
malnutrition in the world; half of them are on the brink of famine and
half are eating just one meal a day, if that, according to the UN's
World Food Programme. Widespread hunger risks undermining Yemen's
progress in reducing its mortality rate to near the global average.
Shoigu said that the warships had carried out 26 cruise missile strikes against 11 targets.
Law & Politics
Russian warships in the Caspian Sea have launched rockets at the
Islamic State of Iraq and the Levant (ISIL) in Syria which hit their
targets, Russia's President Vladimir Putin and Defence Minister Sergei
Shoigu said in a joint television appearance.
Russian efforts "will be synchronised with the actions of the Syrian
army on the ground and the actions of our air force will effectively
support the offensive operation of the Syrian army," Putin said in the
meeting with Shoigu on Wednesday.
"In addition to the air force, four warships of the Caspian flotilla
have been involved," Shoigu said, adding that the warships had carried
out 26 cruise missile strikes against 11 targets.
"The intensity of the strikes is increasing."
Putin is now show-boating.
Oct. 7, 2015, a Russian navy ship launches a cruise missile in the Caspian Sea. Photograph: Russian Defense Ministry Press Service via AP
Law & Politics
05-OCT-2015 Putin is a GeoPolitical GrandMaster @TheStarKenya
Putin has always been considered a grandmaster of geopolitics, but of
late has been placed under tremendous pressure by the oil warfare
specialist –President Barrack Obama of the US.
The wrestling of the oil price from above $100.00 to below $50.00 a
barrel, was always intended to wither Russia’s power, and send it into
Let us return to UNGA, where Putin set out his stall and I quote: ‘’I
cannot help asking those who have caused the situation, do you realise
now what you’ve done?’’
With hundreds of thousands of refugees entering Europe, his question
was a sharp one.
Within 24 hours of delivering that speech, Russia instructed that the
US should vacate Syrian Air Space. This message was not delivered to
Ashton Carter by his Russian counterpart Shoigu. It was delivered to
the US Embassy in Baghdad. And pretty soon after that message was
delivered, Russia began its intervention on the side of President
Bashar Assad of Syria.
You could hear the squealing start immediately from Ankara to Riyadh,
from the GCC to Washington. All these capitals have assets on the
ground in Syria, and what is clear is that Russia is not making a
distinction between IS or the ‘’moderate opposition fighting Assad’’
[which really means ‘’our’’ terrorists].
Lavrov said: “If it looks like a terrorist, if it acts like a
terrorist, if it walks like a terrorist, if it fights like a
terrorist, it’s a terrorist, right?”
Putin fancies himself the fly-catcher and syria the fly-trap. The
speed of execution confirms that Russia is once again a geopolitical
actor that will have to be considered. It is a breath-taking rebound.
President Obama is now probably considering how he can wrestle the Oil
price to $20.00.
RusEmbassy Iceland @RusEmb_Iceland Sep 28 Interview of Vladimir
Putin to American TV channel CBS and PBS
Congo's 25 October referendum likely to lead to violent protests and riots in Brazzaville and Pointe-Noire IHS Jane's Country Risk Daily Report
The government of the Republic of Congo announced on 5 October that it
will hold a referendum on 25 October on a new constitution that would
remove existing presidential term limits and age restrictions,
effectively allowing President Dennis Sassou Nguesso who is currently
constitutionally barred from seeking an additional mandate, to stand
for elections scheduled in August 2016.
This announcement comes barely two weeks after Sassou Nguesso
announced his intention to hold a referendum. The short notice of the
25 October poll is likely to be intended to impede efforts by the
opposition to build a coalition and mobilise against the adoption of
the proposed constitutional changes.
Burundi expels Rwandan diplomat as tensions rise
Salvator Ntacobamaze, permanent secretary in Burundi's Ministry of
External Relations and International Cooperation, said the diplomat,
Desire Nyaruhirira, had been expelled but declined to give any further
Government spokesman Phillipe Nzobonariba said the expulsion was most
likely due to the diplomat's alleged contacts "with putschists hosted
"It is not a problem with a country but a problem with an individual
since he is reported to be in permanent contact with coup plotters,"
Rwanda had no immediate comment.
The Impact of ‘Currency Wars’ in Oil-Exporting Africa By Dan Steinbock on October 6, 2015
Since lower oil prices typically result in depreciation of the oil
exporters’ currencies, the dramatic plunge of oil prices has severe
implications for sub-Saharan Africa.
After the global financial crisis, many emerging economies have coped
with diminished global growth prospects by deploying direct government
intervention and capital controls for competitive devaluation. In
turn, advanced economies have achieved the same indirectly through low
policy rates and quantitative easing (QE).
As the U.S. is recovering but Europe is amid its first ‘lost decade’
and Japan has begun its third one, the Fed is likely to hike its rates
in the fall or by early 2016. Interest rates will remain zero-bound in
Europe and Japan, and monetary easing will continue in emerging Asia.
After rate cuts, further easing, correction in equity markets and
subsequent rate adjustment in China, US dollar has climbed to 6.36
In Africa, the early effects of a stronger dollar have been far more
In 2014, US dollar rose from about 160 naira to 180. It peaked at
around 204 in February and has been around 199 ever since. In the
black market, however, the naira has traded around 220, and
occasionally as low as 240 to the dollar. These figures reflect the
ongoing struggle between those who support a strong naira and those
who would prefer a devalued naira.
As oil prices plunged to below $50 per barrel, Nigeria began to limit
dealing and prevent dollar outflows. In contrast to some other oil
exporters, including Russia and Colombia, President Buhari and central
bank Governor Godwin Emefiele oppose a devalued naira.
Investors’ unease has been reflected by JPMorgan Chase’s decision to
cut Nigeria from its local-currency emerging-market bond indexes.
During the Jonathan rule, foreign investors were uneasy with the
polarization between the president and the central bank. In the Buhari
era, the cause of their unease is precisely the reverse: the perceived
close association between the central bank and the president. Buhari
opposes depreciation, which he believes would stoke inflation that
already exceeds 9 percent. That view is supported by Governor Godwin
Emefiele’s efforts to restrict foreign-exchange trading to stabilize
This policy stance may prove untenable over time, however. It is
alienating foreign investors, local businesses and the critics of the
Monetary Policy Committee who believe that an overvalued naira deters
capital inflows and hinders economic growth. A year ago, McKinsey
expected Nigeria to grow at 7.1 percent a year through 2030. In the
ongoing year, economic growth dropped to 2.4 percent in the second
Excessive reliance on oil revenues and inadequate structural
diversification has already subdued Nigeria’s BRIC-style growth
Struggling African currencies
In Africa, plunging oil prices have hit hard major oil exporters. Oil
exports account for almost half of the GDP for oil-exporting African
countries, such as Gabon, Angola and the Republic of Congo and far
more in Equatorial Guinea. In most of these economies, oil also
accounts for most of government revenues.
As Africa’s second-largest oil producer, Angola produces some 1.8
million oil barrels per day but remains critically dependent on oil
for revenues. In 2014, US dollar increased from about 98 to 103
Angolan kwanza. As a result, net oil export revenue plunged by over 12
percent. But that was only the beginning. During the ongoing year, US
dollar has soared to 135 kwanza, and Angola has halved its 2015 oil
price assumption to $40 per barrel. As social conditions have
deteriorated, Luanda has courted international lenders for more than
$1 billion in loans.
As local currencies depreciate, central banks must often struggle to
fight speculation, which may discourage foreign investors’ new
investment. Concurrently, political risks typically become elevated,
especially when fiscal buffers are inadequate.
South Sudan, which had bet on a $100-a-barrel oil price, is an extreme
case. Due to a mix of plunging prices and highly unfavorable pipeline
contracts, Juba got the lowest oil price worldwide ($20-$25). In
Nigeria, Boko Haram has created a security risk that has compounded
foreign investors’ unease about central bank’s measures.
These pressures put government into a
damned-if-you-do-and-damned-if-you-don’t situation. Either they must
adjust expenditures, which will harm the more vulnerable social
classes, or they must devalue the currency, which could result in
higher inflation. In both cases, governments risk alienating their
constituencies, destabilizing the economy and triggering social
Of course, plunging oil prices are not a tragedy to all African
economies. In effect, oil importers – including South Africa,
Tanzania, Kenya and Ethiopia – will be the perceived winners.
Nevertheless, even these countries will not be spared from currency
In 2014, US dollar climbed from 10.50 to 11.60 South African rand.
This year it has continued to strengthen and rand has weakened to
13.92 per dollar. Indeed, the rand has declined over 20 percent
against the dollar.
In turn, US dollar increased from 1,560 to almost 1,700 Tanzanian
shilling in 2014. Recently, the shilling has weakened closer to its
perceived “equilibrium,” according to the IMF, while US dollar has
soared to more than 2,152 shilling. In addition to depreciating by
almost 25 percent against the dollar, Tanzanian shilling has been
weakened by high liquidity, seasonally low export income and high
repatriation of corporate dividends.
Currency wars déjà vu
Recent currency friction will not lessen in the coming months. Rather,
the combined Fed-oil-currency effect will expand toward 2015/16.
Zimbabwe's Formal Employment Plummets to Half-Century low
The collapse of Zimbabwe’s manufacturing and agricultural industries
has cut the size of the economy by half and left the southern African
nation with fewer people in formal employment than at any time in
almost half a century.
About 700,000 people have formal jobs, almost equally split between
the state and private companies, government and independent statistics
show. That’s the lowest number since 1968, when Robert Mugabe was a
jailed freedom fighter, and Rhodesian Prime Minister Ian Smith’s
white-minority government was under sanctions for unilaterally
declaring independence from the U.K. The nation’s population was then
5.2 million compared with about 13.8 million today.
“Based on figures published by the employer organizations and the
occasional announcement from government on the size of the civil
service, about 700,000 people are employed in the country,” John
Robertson, an independent economist, said in an interview in the
capital, Harare. “People survive because they have to. Remittances
sent from family members abroad are a huge element of survival.”
Thousands of Zimbabweans have flooded city streets as informal vendors
of everything from tomatoes to pirated DVDs to support their families.
More than 3 million others had left their homeland in search of work
as of 2010, the bulk of them to neighboring South Africa, according to
the United Nations Development Programme.
Now the 49 percent weakening of the rand against the dollar over the
last four years has made many Zimbabwean manufacturers uncompetitive
as they pay their costs in the U.S. currency. With civil servant wages
accounting for 83 percent of government expenditure, more job cuts are
expected as the government seeks budget savings.
The size of the civil service has tripled in 35 years, according to
Robertson. Finance Minister Patrick Chinamasa said government pay
devours an “unacceptable” proportion of revenue.
Kenya's Borrowing Costs Bear Brunt in Battle to Defend Currency
Kenya is finding that the price for defending its currency is higher
borrowing costs for the government.
Yields on Treasury bills have surged to their highest levels in more
than 3 1/2 years as the central bank attempts to entice foreign
investors into buying the securities, attracting dollars into the
economy and taking shillings out of the system. Rates on Kenya’s
91-day notes last week rose above those of Uganda, a country with a
gross capita per income not even half that of its larger neighbor, for
the first time since July 2014, according to data compiled by
“As rates go up, we’re likely to see foreign investors bring money
into the market,” Fred Moturi, head of fixed-income at Sterling
Investment Bank Ltd., a Nairobi-based brokerage, said by phone. “The
Central Bank of Kenya is willing to stomach high rates. It’s all about
the shilling, they feel they have room to do this without negatively
So far, the efforts are paying off. The currency of East Africa’s
largest economy has declined less against the dollar than neighbors
Tanzania and Uganda, which have seen their shillings slide more than
20 percent to record lows, as Kenyan policy makers also run down
foreign-exchange reserves to defend the currency. The Kenyan shilling
dropped 12 percent against the dollar in 2015 as a slump in tourism
and agricultural exports cut foreign-exchange earnings and investors
shun riskier assets.
Kenya’s central bank has raised its benchmark interest rate by a total
of 300 basis points since June to try and stabilize the shilling in a
nation that relies on imports for goods ranging from wheat and sugar
to cars and fuel. The Monetary Policy Committee led by Governor
Patrick Njoroge held the benchmark interest rate at 11.5 percent on
Sept. 22 as concerns about growth outweighed inflation risks.
The government budgeted to borrow 229.7 billion shillings ($2.2
billion) from the domestic market to help bridge a deficit equal to
8.7 percent of gross domestic product. While there is pressure to fund
the shortfall, “borrowing rates are not sustainable,” Faith Atiti, an
analyst at CBA Capital Ltd., said by phone from Nairobi.
“Yields, where they are now, messes up the whole economy,” she said.
“It’s really paramount that they contain rates for the sake of the
economy. If they try to drop the rates aggressively, then that will
definitely renew pressure on the shilling.”
President Uhuru Kenyatta’s administration is also paying more to
borrow for less than a year than for two or even five years, an
anomaly known as an inverted yield curve that signals investors are
more concerned about short-term repayment risks than the longer-term
economic outlook. Yields on 364-day T-bills jumped 4.4 percentage
points to 20.7 percent at a Sept. 30 sale, the highest since February
2012, while two-year notes sold in August were issued at an average of
An increase in yields for bonds maturing in two- to five-years may
lure foreign investors, although most will probably prefer
higher-yielding infrastructure notes because of their tax-free status,
Samir Gadio, head of African strategy at Standard Chartered Plc in
“The authorities may be more reluctant to issue long-dated shilling
debt instruments given the sharp rise in domestic funding costs, but
will probably tolerate such rate levels at the short end for the time
being,” he said. With issuance lagging behind the government’s target,
there is an “increasing possibility that the authorities will step up
external borrowing to meet their overall financing needs.”