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China's new mission in Africa (2:22) @Reuters Video @alykhansatchu
ALY KHAN SATCHU, ECONOMIC ANALYST, SAYING: "It hasn't evolved into a
grown up relationship, if you look at the stock market, the stock
market still today 52, 54 percent of the companies are owned by
British companies. There is not a single Chinese stock holder that I
know, the Chinese investment arm which is the sovereign investment
fund I don't know if they have invested on the continent." This latest
visit may mark the start of a change of investment strategy by China.
And that could be the real game changer.
OBAMA'S FOREIGN-POLICY "FAILURES": A WORD FOR THE DEFENSE
Law & Politics
President Obama has lost the foreign-policy commentariat--and I'm not
just talking about the usual conservative bashers. In today's
Washington Post, David Ignatius writes, "Under Obama, the United
States has suffered some real reputational damage. I say that as
someone who sympathizes with many of Obama's foreign policy goals."
Echoing Ignatius's point, the cover of The Economist this week asks
"What Would America Fight For?" and suggests this is "the question
haunting its allies." In the Financial Times earlier this week, Ed
Luce wrote, "The US is behaving like a declining hegemon: unwilling to
share power, yet unable to impose outcomes." Even the New York Times,
in an editorial saying that critics have gone too far, noted, "Too
often, Mr. Obama's ambitions seem in question. It does not feel as if
he is exercising sufficient American leadership and power, even if he
is in fact working to solve a problem."
The immediate issue is the West's failure to prevent Vladimir Putin
from destabilizing eastern Ukraine, but the concerns about Obama run
deeper and broader than that. He stands accused of prematurely pulling
out of Iraq and Afghanistan; encouraging the Arab Spring protests but
doing nothing to prevent authoritarian regimes from reasserting
control; issuing "red lines" and ignoring when they are crossed;
failing to clinch a trade deal with Japan; and, well, you get the
idea. Underlying the individual charges is an argument that the
President neither cares for nor understands foreign policy, and that
he is largely content to react to events overseas based on domestic
political considerations. "At key turning points--in Egypt and Libya
during the Arab Spring, in Syria, in Ukraine and, yes, in Benghazi--the
administration was driven by messaging priorities rather than sound,
interests-based policy," Ignatius writes.
It all adds up to quite an indictment. In assessing its merits, let's
set aside the Benghazi tragedy, which reflected a failure of State
Department security arrangements, but which did not, as far we know,
directly involve the President or then Secretary of State Hillary
Clinton. The rest of the charges share a common theme: Obama lacks a
coherent foreign-policy strategy--an "Obama doctrine"--and, because of
this, he tends to behave opportunistically and inconsistently.
Is that really the case? It would be equally accurate to say that
Obama, for the most part, has been following a consistent strategy--but
one that many foreign-policy experts don't like, because it mitigates
against American interventionism. This strategy, which some would call
"realism," is based on cold-hearted self-interest. It's equally
skeptical of far-flung military entanglements and high-minded liberal
nostrums. It's a way of looking at the world that dates back to
Machiavelli, and one which, at this moment in history, happens to have
the overwhelming support of the American public.
If you examine what Obama has done rather than what he has said, most
of it fits the realist rubric. (As Fred Kaplan observed in Politico
Magazine in February, where he, too, described the President as a
realist, "Perhaps more than any president since Dwight Eisenhower,
Obama defines the national interest narrowly and acts accordingly.")
Obama hastened the removal of U.S. troops from Iraq, arguing that the
war didn't warrant the expenditure of any more U.S. lives or tax
dollars. When some people suggested that the United States, having
made a terrible mess of things, had a moral duty to help clean it up,
he went ahead and withdrew all the U.S. forces anyway. In Afghanistan,
a similar calculus played out. After criticizing George W. Bush for
concentrating on the wrong war during the 2008 election, Obama agreed
to the Pentagon's request for a military surge, but he quickly decided
it was a largely a futile effort. In his memoir, Bob Gates, the former
Secretary of Defense, noted, "For him, it's all about getting out."
About the only time Obama overcame his skepticism about overt military
action was during the Libyan uprising, and even then he sought the
cover of the United Nations and restricted U.S. involvement to air
power. In making his "red line" remark about Syria, he conveyed an
unequivocal message he didn't really mean to send: if Bashar
al-Assad's regime resorted to chemical weapons, the United States
would attack it. The U-turn that eventually ensued was something of a
shambles, but it was perfectly consistent with the realist approach.
The United States got Assad to agree to give up the chemical-weapons
stockpiles that threatened Israel, and almost ninety per cent of them
have now been turned over to international monitors. The Syrian
dictator got the green light to carry on crushing the rebels, and
their supporters, using conventional weapons.
In dealing with Russia and Ukraine, Obama is being criticized for not
imposing tougher economic sanctions and for not sending more NATO
troops to places like Latvia and Estonia, which fear that the
Kremlin's meddling might spread to their borders. If we let Putin ride
roughshod over Ukraine, Obama's critics say, we will set a terrible
precedent for future military incursions. That may be true. But the
realist response is that Ukraine, like Georgia, which Putin's armed
forces attacked in 2008, has always been part of Russia's sphere of
influence, and that the only practical response is a graduated
economic one that steadily increases the pressure on the Russian
leader and his cronies. At this stage, it is too early to say whether
this strategy will work. It's not clear, though, what alternatives
Where Obama sees vital U.S. interests at stake, such as in the
progress of the Iranian nuclear program or the need to reassure Asian
allies about the rise of China, he is willing to go out on a limb and
show assertiveness. Even in the case of Ukraine, which is not an
overriding U.S. concern, he has played the key role in bringing the
Europeans together to support sanctions. For the most part, however,
he follows the admonitions of his electors and keeps his eyes focussed
on the home front. To the rest of the world, that's sometimes
frustrating. But compared to the actions of his predecessor, it's a
This Canard about @BarackObama being largely incoherent and supine in
the area of foreign Affairs and projecting US Power is totally absurd.
At this very moment, President Obama is parked on Russia's doorstep
and simultaneously pivoting to Asia, where at any moment via ''distant
blockade'' operations, he could choke Xi Jinping's Chinese 'Dream'.
The President has deployed a c21st Toolkit which just because it does
not deploy ''shock and awe'' is just as effective. The Syrian Red Line
was crossed but by Erdogan. Give the President some credit for staring
down Erdogan. It is the Foreign Policy commentariat that is stuck in a
Bush Timewarp. The President has moved on.
Currency Markets at a Glance WSJ
Euro 1.3840 The euro traded at $1.3840 at 1:02 p.m. in Tokyo, set for
a 0.2 percent weekly loss. It yesterday touched $1.3993, the strongest
level since Oct. 31, 2011
Dollar Index 79.45
Japan Yen 101.68 The currency will strengthen beyond 85 per dollar "by
this fall," said Kazuhiko Sano, the chief bond strategist at Tokai
Tokyo.[something to consider]
Swiss Franc 0.8805
Pound 1.6925 The pound fetched $1.6926, and has risen 0.3 percent
since May 2, poised for a fifth weekly advance.
India Rupee 60.062 My Target is 57.50
South Korea Won 1023.11
Brazil Real 2.2159
Egypt Pound 7.0449 losing ground
South Africa Rand 10.3416 The rand rose to its strongest level against
the dollar this year
The euro gained 5.4 percent in the past 12 months, the third-best
performer of 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes. The dollar fell 1.3 percent and the yen
weakened 2.5 percent. The pound was the biggest gainer, rising 9.2
percent. Australia's dollar was the worst performer, with a 9.2
Euro versus the Dollar 3 Month Chart 1.3840 [Draghi pulled the Euro
lower and singlehandedly]
Dollar Index 3 Month Chart INO 79.44
Could take 5-8 years to shrink Fed portfolio: Yellen
Yellen, in testimony to a Senate panel, said no decision had yet been
made on the central bank's portfolio of assets, which has swollen to
$4.5 trillion from about $800 billion in 2007.
Three rounds of asset purchases meant to stimulate the economy in the
wake of the 2007-2009 financial crisis have boosted the balance sheet
to this record level. Unsatisfied with the U.S. recovery, the Fed is
still adding $45 billion in bonds each month, though the purchases
should end later this year.
Yellen said the portfolio should start to shrink once the Fed decides
to raise near-zero interest rates.
"We've not decided, and we'll probably wait until we're in the process
of normalizing policy to decide, just what our long-run balance sheet
will be," she told lawmakers, adding it will be "substantially lower"
than it is now.
While the central bank could sell the mortgage-based bonds it has
accumulated, in the past it has telegraphed that it would more likely
simply stop re-investing funds from expired assets and then, over
years, let the assets run off the balance sheet naturally.
"If we do that and nothing more, it would probably take somewhere in
the neighborhood of five to eight years to get it back to pre-crisis
levels," Yellen said of halting reinvestments.
South Sudan rebel leader on way to meet president: rebel spokesman
Machar's spokesman James Gatdet Dak told Reuters by telephone that
Machar "will arrive shortly" in Addis Ababa and would meet Kiir after
holding talks with the host, Ethiopian Prime Minister Hailemariam
South Africa All Share Bloomberg +7.49% 2014
Dollar versus Rand 3 Month Chart INO 10.3378 [gained 1.2 percent to
10.3258 per dollar, the strongest since Dec. 26, by 5:50 p.m. in
The rand gained for a third day yesterday, rallying 1.1 percent
against the dollar, the most of 16 major currencies tracked by
Egypt Pound versus The Dollar 3 Month Chart INO 7.0449 [losing ground]
Egypt EGX30 Bloomberg +22.80% 2014
8,211.05 -122.05 -1.46%
Nigeria All Share Bloomberg -3.49% 2014
"Barring a rescue of the abducted women, Jonathan's standing will
deteriorate," Philippe de Pontet, Africa analyst at Eurasia Group,
said in an e-mailed note yesterday.
"The political implications are damaging for the Jonathan
administration, which has been seen as ineffective in its response."
"President Jonathan has failed to show the kind of leadership that
would unite the country and give him a political bump from the
widespread outrage directed at Boko Haram," said de Pontet. "Instead,
much of that outrage has shifted to the administration itself, giving
the opposition an opportunity to hit the president on his
already-suspect national security credentials."
Chinese Premier Li Keqiang inspects the guard of honor during the
welcoming ceremony held by Nigerian President Goodluck Jonathan in
Abuja, Nigeria, May 7, 2014. (Xinhua/Li Xueren)
PricewaterhouseCoopers LLP and Nigeria's government auditor will need
12 to 16 weeks to "clarify" what happened to billions of dollars of
oil revenue alleged to be missing, Finance Minister Ngozi
Ghana Stock Exchange Composite Index Bloomberg +5.14% 2014
China is Angola's biggest single oil buyer and in 2013 bought 45
percent of all the crude oil the country exported.
In 2010 the two countries set up a strategic partnership, with China
providing Angola with credit lines that are repayable with oil, which
led two-way trade to increase by over 2,000 percent between 2002, at
the end of the civil war and 2012, making Angola China's
second-biggest Portuguese-speaking trading partner after Brazil.
According to official figures, trade between the two countries
totalled US$35.91 billion in 2013, which was a drop of 1.24 percent
against 2012. In 2013 China sold products to Angola worth US$3.96
billion (1.96 percent less) and bought goods worth US$31.94 billion
($.51 percent less).
Chinese premier pledges 'no strings' support for pan-African rail network
Chinese Premier Li Keqiang pledged "no strings" support for an African
plan to develop a continent-wide high speed rail network, and said
China has set aside $2 billion for an African Development Fund.
China would also support Africa's plans to boost its aviation and
"All China's support for Africa will come with no political strings
attached," Li said. "We will not interfere with Africa's internal
affairs or ask something impossible of Africa."
"We're looking for mutually beneficial economic relationships, not
confrontation," Chinamasa said on May 6. "We're too small a country to
Zimbabwe needs to repair damaged relations with European nations and
the U.S. to accelerate its economic development, according to a report
by Chatham House.
"Engagement with the Zimbabwe government is pivotal," according to the
study, titled "Zimbabwe's International Re-engagement: The Long Haul
to Recovery," published yesterday. "Such engagement should be
thoughtful, cautious and not uncritical." The U.S. and European
governments are considering the pace at which ties should be
"normalized," the London-based research institute said in the report.
Zimbabwe's International Re-engagement: The Long Haul to Recovery
Chatham House Full Report
ZIMBABWE Trafigura takes over Sakunda Africa Confidential
The global oil trader is taking over the ZANU-PF-connected fuels
distributor as part of a regional expansion campaign
Trafigura is consolidating its grip on the fuel supply and
distribution market in Zimbabwe with the acquisition of Sakunda Energy
via its South African subsidiary, Puma Energy Africa Holdings (AC Vol
54 No19, Sakunda fuels rumours). The move cements Trafigura's
relationship with President Robert Mugabe and the governing Zimbabwe
African National Union-Patriotic Front (ZANU-PF). Sakunda, one of the
country's most strategically important companies, is involved in other
sectors as well as oil and its key decisions are always taken or
approved at the highest levels of government. The acquisition also
puts Trafigura on course for a greatly expanded role in the southern
''The best risk assessment using the best available data and the most
amazing innovations generated in London is not likely to be used in
Mozambique," she told a debate on the issue at the London-based
Overseas Development Institute last week.
Mozambique opposition chief registers for October vote, says wants peace
Mozambique's Renamo opposition leader Afonso Dhlakama registered on
Thursday as a voter for a presidential election in October, which
would legally allow him to run as a candidate, a witness to his
Dhlakama, who has lived in the bush for more than a year to escape
what he said was government persecution, told reporters he was
interested in finalizing a deal with President Armando Guebuza's
Frelimo administration to maintain peace in Mozambique and end a
low-level Renamo insurgency.