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Beijing Reveals Demands To Agree To Trade War "Truce", Including Lift Of @Huawei Ban @zerohedge Law & Politics |
Citing a source, the SCMP reported that Xi’s price for holding the meeting in Osaka was that Trump delay additional tariffs, which of course is a risk: "The reality, though, is President Trump could always have a change of heart,” the source said. “But the truce cake seems to have been baked." A senior Trump administration official told POLITICO earlier this week that it is possible that tariffs could be delayed but cautioned that “nothing is certain. Absolutely nothing.” A Washington-based source familiar with the talks said that there were “ongoing attempts to coordinate press messaging”, but added that there was no specificity yet regarding decisions on tariffs or timing within that messaging. But while the original SCMP report helped boost risk sentiment overnight, sending futures to session highs, a subsequent report by the WSJ in turn slammed sentiment, after it detailed that the ceasefire is not unconditional but instead Chinese President Xi Jinping will present Trump with a set of terms the U.S. should meet before Beijing is ready to settle a market-rattling trade confrontation, raising fresh questions whether a ceasefire will even be implemented and the two leaders will agree to relaunch talks. Among the preconditions noted by the WSJ, Beijing is insisting that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports than Beijing said it would when the two leaders last met in December. In short, simply to agree to a ceasefire, Beijing demands that Trump concede to many of the currently implemented steps in the ongoing trade war in return for, well, nothing. How or why Trump will agree to any of this is unclear and is why futures stumbled immediately after the WSJ report hit... As the WSJ further adds, despite his preconditions, "Xi isn’t expected to take a confrontational tone with Mr. Trump, according to the Chinese officials." Of course, if the WSJ is right and Beijing has such high-threshold conditions to even agree to a truce, it may well be that absolutely nothing is announced after the meeting between the two presidents concludes, and the market is starting to price it in.
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Transcript of a conversation between Vladimir Putin, Russian president, Lionel Barber, Financial Times editor, and Henry Foy @FT Law & Politics |
I would cautiously say the situation has not changed for the better, but I remain optimistic to a certain extent. But, to put it bluntly, the situation has definitely become more dramatic and explosive. LB: Do you believe that the world now has become more fragmented? VP: Of course, because during the Cold War, the bad thing was the Cold War. It is true. But there were at least some rules that all participants in international communication more or less adhered to or tried to follow. Now, it seems that there are no rules at all. In this sense, the world has become more fragmented and less predictable, which is the most important and regrettable thing. so I would like all the G20 members to reaffirm their intention — at least an intention — to work out some general rules that everyone would follow, and show their commitment and dedication to strengthening international financial and trade institutions. Everything else is details that complement the main topics one way or another. We certainly support Japan’s presidency. As for the development of modern technology, the information world, the information economy, as well as our Japanese colleagues’ attention to matters such as longevity and the environment — all this is extremely important, and we will certainly support it and will take part in all these discussions. LB: Mr President, you have observed four American presidents at close quarters and maybe five, you have had direct experience. So, how is Mr Trump different? VP: We are all different. No two people are the same, just like there are no identical sets of fingerprints. Anyone has his or her own advantages, and let the voters judge their shortcomings. On the whole, I maintained sufficiently good-natured and stable relations with all the leaders of the US. I had an opportunity to communicate more actively with some of them. The first US president I came into contact with was Bill Clinton. Generally, I viewed this as a positive experience. We established sufficiently stable and business-like ties for a short period of time because his tenure was already coming to an end. I was only a very young president then who had just started working. I continue to recall how he established partner-like relations with me. I remain very grateful to him for this. VP: It would be better to ask what would be to America’s advantage in this case. Mr Trump is not a career politician. He has a distinct world outlook and vision of US national interests. I do not accept many of his methods when it comes to addressing problems. But do you know what I think? I think that he is a talented person. He knows very well what his voters expect from him. Russia has been accused, and, strange as it may seem, it is still being accused, despite the Mueller report [on the investigation into allegations of Russian meddling in the 2016 presidential campaign], of mythical interference in the US election. What happened in reality? Mr Trump looked into his opponents’ attitude to him and saw changes in American society, and he took advantage of this. LB: Mr President, you have had many meetings with President Xi, and Russia and China have definitely come closer. Are you putting too many eggs in the China basket? Because Russian foreign policy, including under your leadership, has always made a virtue of talking to everybody. VP: First of all, we have enough eggs, but there are not that many baskets where these eggs can be placed. This is the first point. Secondly, we always assess risks. Over the past 25 years or so (25, I believe), the share of G7 countries in the global GDP has declined from 58 per cent to 40 per cent. We are self-sufficient, and we are confident. Russia is the largest continental power. We should think about guarantees, which we should use as the basis for talks with North Korea. VP: It did not increase or decrease. Risk must always be well-justified. But this is not the case when one can use the popular Russian phrase: “He who doesn’t take risks, never drinks champagne.” Primarily, this concerns Syria, we have managed to preserve Syrian statehood, no matter what, and we have prevented Libya-style chaos there. And a worst-case scenario would spell out negative consequences for Russia. When we discussed this matter only recently with the previous US administration, we said, suppose Assad steps down today, what will happen tomorrow? Your colleague did well to laugh, because the answer we got was very amusing. You cannot even imagine how funny it was. They said, “We don’t know.” But when you do not know what happens tomorrow, why shoot from the hip today? This may sound primitive, but this is how it is. But when a person enters a square, raises his eyes to the sky and proclaims himself president? Let us do the same in Japan, the US or Germany. What will happen? Do you understand that this will cause chaos all over the world? This spy story, as we say, it is not worth five kopecks. Or even five pounds, for that matter. And the issues concerning interstate relations, they are measured in billions and the fate of millions of people. How can we compare one with the other? Secondly, the average person listens and says, “Who are these Skripals?” And it turns out that [Sergei] Skripal was engaged in espionage against us [Russia]. So this person asks the next question, “Why did you spy on us using Skripal? Maybe you should not have done that?” You know, these questions are infinite. We need to just leave it alone and let security agencies deal with it. VP: As a matter of fact, treason is the gravest crime possible and traitors must be punished. I am not saying that the Salisbury incident is the way to do it. Not at all. But traitors must be punished. As concerns treason, of course, it must be punishable. It is the most despicable crime that one can imagine. LB: You have seen many world leaders. Who do you most admire? VP: Peter the Great. LB: But he is dead. VP: He will live as long as his cause is alive just as the cause of each of us. (Laughter). We will live until our cause is alive.
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Palm Oil Posts Its Longest Quarterly Slump on Record @markets Commodities |
Benchmark futures in Malaysia are down 7.1% this quarter as the world’s most-consumed edible oil grapples with persistently high stockpiles in top growers amid lackluster demand. Its performance is in stark contrast to the Bloomberg agricultural spot price index, which is on course for the best quarterly gain in three years thanks to weather-related grain-supply disruption. Another quarterly loss for palm would cap a seventh straight drop -- the worst run since futures started in 1995. The oil, used in everything from candy to biofuel, fell for a seventh straight day in Kuala Lumpur on Friday, touching 1,951 ringgit a ton ($471), the lowest intraday level in seven months.
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A potential 'Uberization' of the cocaine trade - a competitive market in which sellers compete by offering additional services such as fast and flexible delivery options. @bopinion Commodities |
A reorganization of the cocaine supply chain and the players involved is visible at the middle and retail level, with the emergence of fragmented, looser and more horizontal organizational structures. Smaller groups have been able to enter the market by using a range of information technology like encryption, darknet marketplaces, social media for dealing and cryptocurrencies. Entrepreneurship in the competitive cocaine market is evident from innovative distribution strategies, such as cocaine-exclusive call-centres. These new methods appear to reflect to some extent the type of disruption seen in other areas facilitated by the common use of smartphones — a potential ‘Uberization’ of the cocaine trade — a competitive market in which sellers compete by offering additional services such as fast and flexible delivery options.
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China is thinking twice about lending to Africa @TheEconomist Africa |
For ten days in May Uhuru Kenyatta, Kenya’s president, vanished from view. Kenyans feigned concern on Twitter, using the hashtag #FindPresidentUhuru. A missing-person poster appealed for information on the whereabouts of a five-foot-eight African male last seen in Beijing. A government spokeswoman sought to reassure the public: Mr Kenyatta had been in his office “meditating”. But others speculate that the president was in a funk after his trip to China failed to yield a new loan for the next phase of Kenya’s ambitious $10bn railway. Mr Kenyatta could be forgiven for feeling piqued. Beijing’s largesse to Africa has sometimes seemed limitless (see chart). In September China promised another $60bn in aid and loans to the continent. Xi Jinping, its president, promised the money would come with “no political strings attached”. John Magufuli, Tanzania’s strongman president, was delighted. The West, he griped, made its money dependent on “strange conditions”, such as insisting that Tanzania should not lock up gay men. “China is a true friend,” he enthused. Its assistance comes “free of charge”. Being chummy with China has served Tanzania well. It has received more than $2bn in loans since 2010, reckons the China-Africa Research Initiative at Johns Hopkins University. In 2013 China agreed to finance and build a $10bn port in Bagamoyo, once a big slave- and ivory-trading entrepôt but now a sleepy fishing village. Kenya has done even better. It was an early African member of the Belt and Road Initiative, China’s global infrastructure project. It scooped up at least $9.8bn between 2006 and 2017, making it Africa’s third-largest recipient of Chinese loans. Mr Kenyatta must have reckoned that his railway project, on which he has staked much political capital, was due another cut of Mr Xi’s cash. Not only has it been one of China’s highest-profile projects in Africa, but Beijing has already doled out $4.7bn to finance its first two sections. An almost 500km stretch between the port of Mombasa and the capital, Nairobi, is up and running. The second is nearly completed. Kenya had assumed that China would fork out the $3.5bn needed for the penultimate section, to Kisumu on Lake Victoria. If China’s ultimate vision was a railway network connecting resource-rich inland states to Indian Ocean ports, why stop funding the project halfway through Some Africans suspect that China deliberately lends countries more than they can repay in order to seize strategic assets when they default. They point to the Chinese-financed port at Hambantota in Sri Lanka. After the project flopped commercially, a Chinese state-owned firm took control. Hambantota would be a handy place to park Chinese naval vessels seeking to patrol the Indian Ocean. “The situation that Sri Lanka got itself into may not turn out to be unusual,” says Mutula Kilonzo, a prominent Kenyan senator. “It is going to happen to African countries, too. The conditions of many loans are...a debt trap.” Deborah Brautigam at Johns Hopkins argues that Hambantota is an exception. She looked at more than 3,000 projects overseas financed by China, and found that it was the only example of such an asset being seized to cover a debt. Nonetheless, African leaders are spooked. Dialogue with the Chinese is becoming edgier. On June 7th Mr Magufuli indefinitely suspended construction at Bagamoyo, balking at demands from the project’s Chinese partner for a 99-year lease and a ban on port development elsewhere in Tanzania. Moving smoothly from cheerleader to critic, he accused the firm of setting “tough conditions that can only be accepted by mad people”. Last year Sierra Leone scrapped a Chinese-funded project to build a new international airport for fear that it would involve too much debt. The perception of a plot to turn the Indian Ocean into a Chinese lake endangers the political capital China has amassed in Africa. Since Mr Kenyatta came to power in 2013, public debt has nearly tripled. Last year the imf raised the country’s risk of debt distress from low to moderate. If Kenya defaults, China risks being blamed. China’s hesitation also reflects the uneven performance of past projects. A railway between Djibouti and Addis Ababa, completed in 2017, cost China’s state-owned insurer Sinosure $1bn in losses, its chief economist said last year. Corruption and mismanagement drive up costs. Sometimes plans smack of unreasonable optimism. Bagamoyo’s port was expected to handle more containers than Rotterdam, Europe’s biggest freight terminal. Kenya’s railway has had its critics from the outset. Corruption made it a ludicrously expensive venture, costing twice the international average per kilometre of track. The railway’s freight-carrying capacity was miscalculated and has proved to be only 40% of what was predicted. It was meant to be cheaper to ship goods up the line than send them by road. Even though the opposite has proved true, Mr Kenyatta’s government has forced all containers coming out of the port onto the railway. Hapless traders in Mombasa have to pay for goods arriving by sea to be sent to Nairobi and back again as a result. China seems to have belatedly realised that throwing good money after bad would be an error. So it is embracing caution instead. When Mr Kenyatta and his delegation arrived in Beijing in May, they were treated to an unfamiliar experience, according to a presidential adviser. The Kenyans were questioned not only about their sums, but about corruption. Mr Kenyatta was asked how he would afford a census and a referendum on constitutional change. The Chinese even wanted to know if he planned to stand for office again (he is obliged to stand down in 2022). “It was like talking to the World Bank,” grumbled another aide. Mr Kenyatta did not return from Beijing empty-handed. He agreed to export avocados to China and won funds for a data centre and a road connecting Nairobi’s suburbs to its airport. Such laudably modest deals should be celebrated. Mr Xi might not be about to champion human rights, but China’s shift closer to Western lending standards is a step in the right direction. ◼
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Coups and contradictions Killings and claims of an attempted putsch rock Ethiopia @TheEconomist Africa |
On june 23rd 2018 Abiy Ahmed, Ethiopia’s newly inaugurated prime minister, took to the podium wearing a bright green t-shirt. Smiling and waving, he offered hope of democratic change to tens of thousands of supporters at a rally in the capital, Addis Ababa. A year later, almost to the day, he again addressed the nation, this time in army uniform, to declare, stony-faced, that his government had thwarted a coup. It was a sharp reminder of the fragility of his democratic revolution. There are many unanswered questions, including whether and how events in Bahir Dar were connected to the killing of the army chief. If the incidents were indeed linked, as the government claims, that would point to a wider conspiracy and suggest that Abiy faces a threat from elements of the national army. The ramifications for a country that seemed on the path to reform are gloomy. Scores of journalists, politicians and activists linked to Amhara nationalists have already been arrested. Repression may, in turn, stoke further resentment in Amhara, a region in which many young people are beginning to feel discriminated against by Abiy and his Oromo faction. The euphoria that greeted Abiy’s rise to power just over a year ago seems a distant memory. ◼
Conclusions
The near term events will surely alert Investors to risks which had been previously overwhelmed by Prime Minister Abiy's sheer force of personality and his velocity. Having announced his economic Pivot 90 days into his term, recent developments particularly around the Telecom Sector indicated he was ready to go much further much faster than even the boldest Commentator had imagined. The cross cutting political undercurrents are multi-sided and the seriousness is reflected in the number of IDPs. To Date Investors have given the Prime Minister the benefit of the doubt. This might be a popping over the Radar moment for political risk. The Final worry is around bandwidth in the PM's Office and whether the Office can risk manage the Politics and simultaneously fast track the much needed economic reform program.
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Morocco's Tangier port to become Mediterranean's largest @ReutersAfrica Africa |
Tanger Med, the biggest port in Africa with an annual volume of 3.5 million 20-foot equivalent units (TEU) in 2018, will add six million in capacity after its extension worth 1.3 billion euros, port director Rachid Houari said in an interview. Morocco hopes the port, which offers a platform for exports by local production plants of French car makers such as Renault SA and Peugeot SA, will reach volumes of 4.5 million TEU by this year’s end like Algeciras in southern Spain. Authorities at the port on the western tip of the Mediterranean, just across from the Spanish coast, hope it can build on its role as a calling point for container shipping firms, especially between Asia, Africa and Europe. “I hope we will add one million TEU of containers every year,” said Houari. He declined to estimate future volumes, saying only the original terminal had reached 3.5 million TEU in just six years.“Fingers crossed we will fill it up in six years,” he said. Some 90% of container volumes passing through the ports are transiting to other destinations, he said. The biggest market, with a 40% share, is West Africa, where Moroccan firms have heavily expanded to in recent years. Some 20% will go to Europe and 10% to the Americas. Morocco invested 1 billion euros in the first terminal which has created some 6,000 jobs at the port and 70,000 others in a trade zone in the area, he said. The port is about 50 kilometers west of Tangier, the main city in northern Morocco, allowing space for expansion. Tangier also has a ferry terminal carrying some 40,000 people per day in the summer peak season as Moroccans living in Europe cross the Mediterranean. The terminals are operated by APM Terminal, and owned by Denmark’s Maersk, Germany’s Eurogate and a local firm.
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@Uber targets expansion in fast-growing West African markets @ReutersAfrica Africa |
Global ride-hailing firm Uber Technologies Inc is in talks with regulators over plans to expand into two West African countries and provide a boat service in Nigerian megacity Lagos, a company executive said on Thursday. In much of sub-Saharan Africa there are low levels of personal car ownership, rapidly expanding populations and a lack of efficient mass transport systems in fast-growing cities. Uber, which said it has 36,000 active drivers in sub-Saharan Africa, operates in a number of countries in East and South Africa but is largely absent from West Africa, aside from Nigeria and Ghana. The firm has identified the region as a target for potential expansion, Chief Business Officer Brooks Entwistle told Reuters. He said the company was in talks with regulators in Ivory Coast and Senegal regarding the possible launch of services. “Both Abidjan and Dakar are logical opportunities for us,” said Entwistle, adding that discussions were at an early stage. He did not disclose further details. “We have talked about West Africa today as being a big growth priority for us and launch priority for us moving forward,” said Entwistle. Ivory Coast and Senegal have two of the world’s fastest growing economies, according to the International Monetary Fund. Nigeria, Africa’s largest economy, is also the continent’s most populous nation. A number of motorcycle ride-hailing firms have also targeted West Africa as an area for expansion in the last few months. Nigeria’s commercial capital Lagos, a megacity of around 20 million inhabitants built on a lagoon where Uber began operating in July 2014, is beset by heavy congestion. Entwistle, who spoke to Reuters during an interview in Lagos, said the company was in talks with state regulators about providing a transport system on the city’s waterways as a way of bypassing its choked roads. “We are looking at the waterways here, which are very interesting to us as it relates to a potential service,” said Entwistle. The company has launched a boat service in the Indian city of Mumbai in the last few months. “We did launch Uber Boat in Mumbai and we have watched the product develop. It’s in its early stages and we think there is high relevance here,” he said, referring to Lagos. The Uber executive, who described Lagos as “one of the great growth opportunity cities in the world”, said the company has also held discussions with a bus firm and regulators in the city. He said the talks were in line with a global push by the company to develop products that can work alongside public transit systems. Entwistle said the combination of population growth and congestion made Lagos, and other cities in the region, attractive. The United Nations predicts that Nigeria’s population will more than double to 400 million by 2050, which would make it the third most populous country in the world after China and India. Uber faces stiff competition in African cities from Estonian ride-hailing firm Bolt, which until early 2019 was called Taxify. Bolt has grabbed business largely by taking a smaller cut from drivers using its app. We did launch Uber Boat in Mumbai and we have watched the product develop. It’s in its early stages and we think there is high relevance here,” he said, referring to Lagos. The Uber executive, who described Lagos as “one of the great growth opportunity cities in the world”
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15-APR-2019 :: The Platform Economy Africa |
Uber is seriously ubiquitous and I recall how it arrived in Nairobi and made its Gladwellian level move. “The tipping point is that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire” Uber argues its platform positions it to become all-things transportation, encompassing everything from scooters and bicycles to freight delivery, driverless vehicles and even flying cars
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Tea prices have dropped to the lowest point this year with a kilogramme on average selling at Sh181 per kilo down from Sh190 last week. @BD_Africa Kenyan Economy |
The price at the Mombasa Auction, which had rebounded at the beginning of this month after a streak of poor performances, slid back to below two dollars in the last two sales of June. The prices have been so bad that last week the auction witnessed some teas selling for as low as $0.36 cents (Sh36) per kilogramme, leading to concern from stakeholders. “A kilogramme of made tea comes from four kilos of green leaf meaning it will be Sh9 per kg of green leaf. If you subtract the manufacturing, transport and warehousing costs, one wonders what the farmer will take home,” said Peter Kimanga, chiarman of the East African Tea Traders Association (EATTA). Mr Kimanga says increasing production and lack of expansion in the export markets is finally taking a toll on earnings, worsened further by the declining quality of Kenya teas. “Kenya’s overreliance on a few bulk export markets will continue to distress the sector and urgent interventions need to be employed in order to broaden our market base as well as arrest the declining quality,” he said. He said the government as a major beneficiary of the industry’s forex earnings should step in to reverse the trend.
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