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Friday 03rd of January 2020 |
He is a canny, ruthless military leader - and Iran's greatest defender. Has the US fundamentally misconceived the motives of this commander, and by extension, Iran itself? @prospect_uk H/T @TamerBadawi1 Law & Politics |
He is a canny, ruthless military leader—and Iran's greatest defender. Has the US fundamentally misconceived the motives of this commander, and by extension, Iran itself? In the summer of 2014, Islamic State (IS) blindsided Iran by occupying a third of neighbouring Iraq. The self-styled caliphate captured a town only 20 miles from the border with Iran named Jalawla, where Islam’s second caliph Omar defeated the Persian Empire in 637. Jalawla was also where, 1,377 years later, the Iraqi dictator Saddam Hussein had invaded Iran. For Iranians, the enemy was once more at the gates. Within days, Tehran dispatched Qasim Soleimani, the commander of its overseas paramilitary forces. There he co-ordinated the supply of 140 tons of military equipment per day to the Iraqi army and Shia paramilitary groups: small arms, mortars, Ababil surveillance drones and tank and artillery ammunition. The United States-led international coalition against IS would pick up the slack later in 2014. But right then Iran’s early intervention, led by Soleimani, was the only thing keeping Iraq together. Iran also began deploying Soleimani on another front: launching a propaganda war centring on the self-styled “noble warrior,” a man who could appeal to both nationalists and religious conservatives. The “Commander of Hearts” became a fixture on domestic news. Iranian elites who would refer to him tongue-in-cheek as “Soleiman the Magnificent,” after the Ottoman sultan who so intimidated Europe, presented him as the nation’s protector against the barbarism of IS and the imperialism of the US. Tehran authorised the translation into Farsi of western articles that cast Soleimani as a formidable agent of Iranian regional power. Instagram accounts dedicated to him sprung up, many with hundreds of thousands of followers. They showed Soleimani posing with children; Soleimani reading Gabriel García Márquez; Soleimani in a Palestinian keffiyeh; and Soleimani posing alongside Iran-backed paramilitary fighters in Iraq and Syria. Increasingly, he was also held up as a pious and humble servant of the Islamic Republic. When a state-run news agency asked his father why America feared him so much, he responded: “They’re afraid of Islam, not of my son.” Soleimani has enemies closer to home too—in October Iranian officials claimed they had foiled an assassination attempt against Soleimani, pinnng the blame on Israeli and Arab agents. Soleimani commands the Qods force, an elite paramilitary army that reports directly to the Iranian Supreme Leader Ayatollah Ali Khamenei. He gathers intelligence, builds political alliances and creates a hostile environment for foreign forces opposed to Tehran. The methods have been consistent, even as the enemies changed. In Iraq, the enemy was first Saddam and later IS, and—indirectly—the US; in Syria, it has been the various rebel groups opposed to President Bashar al-Assad; in Lebanon, the Israelis who are ranged against his Hezbollah allies; and in Yemen, it is the official government that is being propped up by western-backed Saudi bombing. Throughout Soleimani’s two decades at the top, he has had to navigate the forces unleashed by the US and British invasion of Iraq and Afghanistan, the associated rise of jihadist insurgents and, later, the democratic protests of the Arab Spring. Although his success has a lot to do with him capitalising on his enemies’ failures, he is a remarkable tactician. More than that, his life story is that of the generation of revolutionaries who control Iran today, and helps us to understand the choices Tehran makes, and does not make, in its Middle East interventions. But in 1997 Rezaee was fired and Supreme Leader Khamenei promoted Soleimani to head the Qods brigade. A year later, the US-led invasion of Iraq caused a national security crisis for Iran. Soleimani was faced with three problems. The first was the occupation. Iran feared that the US would establish a client state in Iraq that could serve as a base to challenge Iran along the 900-mile border. This wasn’t just paranoia. In Bush’s first term, the refrain among hawkish neocons was “Boys go to Baghdad, but real men go to Tehran.” But as America got bogged down, the threat ebbed away. His second problem was Saddam’s ousted Baathists, many of whom had joined the Sunni insurgency against both the US and Iraq’s newly-ascendant Shia majority. Soleimani supported the Shias and especially the Supreme Council for the Islamic Revolution in Iraq (SCIRI), a coalition of Iraqi Shia political exiles, which Iran had nurtured and planned to establish as an incoming government if they had won the 1980-8 war. Soleimani drew on SCIRI’s military wing to assassinate Saddam-era officials—partly to forestall any attempt for Baathists to return to power and partly for simple vengeance. Ironically, though, the biggest challenge for Soleimani was not the US, Sunni militants or former Baathists. It was a 29-year old Iraqi nationalist Shia cleric named Muqtada al-Sadr. In a message to the US ambassador to Iraq, Soleimani wrote: “I swear on the grave of Khomeini, I haven’t authorised a bullet against the US,” but acknowledged that his Qods brigade had targeted the British. He may have protested too much, but his capacity for restraint is real. Attacking the US was risky. And while he did funnel arms to so-called “special groups” that attacked US troops, he was happy to patronise other forces who worked with the Americans against the Sunni insurgents. Soleimani was less animated by his anti-Americanism than his determination to advance Iranian regional interests. “[The US] is stuck in the mud in Iraq,” warned Rafsanjani in 2004, and added a warning: “that if Iran wanted to it could make their problems even worse.” Still, he was deeply entrenched with Iran’s security services and would provide a bulwark against American domination of the new Iraqi state. During this same period, Soleimani was also focusing on Lebanon. Tehran was helping the Shia militant group Hezbollah to build a military capability to deter Israel both from invading Lebanon (after its withdrawal in 2000), and from acting on its threat to bomb Iranian nuclear facilities. Non-interventionists argued that defending Assad would be unpopular, doomed and expensive. Interventionists, including Soleimani, believed that if Syria fell to US-backed rebels, Iran would be next. “If we lose Syria, we cannot keep Tehran,” warned an influential Iranian cleric. The Iranian system of governance is often said to combine democratic and theocratic elements, but Soleimani has increasingly demonstrated the independent clout of a third arm of power: the military. It was he who, in 2012, broke the deadlock by persuading Iran’s Speaker of Parliament Ali Larijani to join the interventionists. Soleimani flew to Syria and established the National Defence Forces (NDF), local paramilitary militias, whose leaders received training from Hezbollah in Lebanon and his own Qods force in Iran. In Soleimani’s view, the Syrian Army, which had suffered mass defections, was “useless.” The NDF’s immediate job was to fight the insurgency, but it was also a back-up military network in case Assad fell. In 2014, Soleimani was dispatched by Tehran to Iraq to help Shia militias fight a new force: IS. Its rise, both in Iraq and Syria, initially turned the tide against Assad. Turkey, Saudi Arabia and Qatar, which until then backed different rebel groups in Syria, overcame their differences and threw their weight behind a separate coalition of rebels, the Army of Conquest. Rebels secured major victories in Idlib, eastern Homs and Daraa, while IS took Palmyra. Iran needed another ally. In July 2015, Soleimani went to Moscow to meet the Russian defence minister and, -reportedly, President Vladimir Putin. The plan was for Iran to defeat rebel strongholds on the ground with the support of Russian air power. Two months later Russia started bombing, generating waves of refugees. Within three months of the intervention, Soleimani was pictured in Aleppo’s Old City, following its bloody recapture by the regime, a major turning point in the war. The past three years have been characterised by the slow but inevitable destruction of IS and myriad rebel groups that grew out of Syria’s failed revolution. Soleimani, a born revolutionary, was now deploying Iranian power to shore up a brutal and secular established order. In an Iranian television documentary aired following Iran’s intervention in Syria, Soleimani is shown watching footage of himself as a commander in the Iran-Iraq war. The clip shows him before a squadron of troops weeping inconsolably, naming martyrs recently fallen in battle. “My heart aches,” says the young Soleimani. “Their bodies lay on the front, glowing even under soil.” Soleimani and other men in his generation that fought to overturn a US-client monarch, the old Shah, shared a definite ideology. They believed in the revolution’s restorative value not only for Iranian Muslims but also Muslims across the world dispossessed by western imperialism. Like Trotsky (but unlike later Soviets), they envisaged their revolution spreading across national borders. US foreign policy gurus continue to view Iran through the lens of the 1980s. Mike Pompeo, the US secretary of state, refers to “Iran’s violent export of revolution”: he sees the Trump administration’s protection of Israel and opposition to Iran as a God-given mission that he will pursue until “the rapture.” But while the Americans still regard Iran as an agent of revolution, for Iran’s elites revolutionary talk has become mere rhetoric. You can see it in Soleimani’s career, which has just as often pursued counter-revolution in the Islamic world as the opposite—propping up the Iraqi and Syrian governments against revolutionary, often millenarian, currents in their societies. What he offers the country is not ideology, but rather the ruthless pursuit of Iranian interests as he sees them. “The Islamic Republic of Iran has a specific strategy in the region,” said Soleimani’s adviser Sadollah Zarei in a recent speech. “We have definite principles, friends, and capabilities. And we have a coherent understanding of our enemy and we know where we should stand in the next 20 years.” And, despite the sanctions and isolation, Soleimani’s single-minded approach is working. Even the US admits that its strategy is blowing in the wind when it comes to countering Iranian influence in the region. “Soleimani’s accomplishments are, in large part, due to his country’s long-term approach toward foreign policy,” wrote Stanley McChrystal, the former commander of US forces in Afghanistan, earlier this year. “While the United States tends to be spasmodic in its responses to international affairs, Iran is stunningly consistent in its objectives and actions.” The truth is that Iran’s original expansionist revolutionary ideology, which was seen from Tehran as a means to protect Muslims worldwide, but by America as a means to spread terrorism, died during the Iran-Iraq war along with half a million Iranians. Khomeini’s declaration that his acceptance of a ceasefire with Iraq in 1988 was akin to “drinking from the cup of poison” acknowledged the pain he felt in breaking with this ideology. After that war, Iran became just another nation seeking to preserve its territorial integrity and pursue its own economic and national security interests. Soleimani understands this better than anyone. While Iran’s elites have moved on, their US counterparts are stuck in the past.
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13 MAY 19 :: Iran is at the Hunter S. Thompson[Ian] edge Law & Politics |
Iran is at the Hunter S. Thompson[Ian] edge. “There is no honest way to explain it because the only people who really know where it is are the ones who have gone over'' if the US thinks that Tehran will just roll over, which appears to be the case, then they are exhibiting the same deluded ideas that they exhibited a day before the peacock Throne got plucked. Iran is a geopolitical bleeding edge.
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Revelation 6:12-13: When he opened the sixth seal, I looked, and behold, there was a great earthquake, and the sun became black as sackcloth, the full moon became like blood Law & Politics |
Revelation 6:12-13: When he opened the sixth seal, I looked, and behold, there was a great earth- quake, and the sun became black as sackcloth, the full moon became like blood, and the stars of the sky fell to the earth as the fig tree sheds its winter fruit when shaken by a gale.
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@TullowOilplc Slumps After Guyana Oil Find Is Smaller Than Expected @markets World Currencies |
Tullow Oil Plc discovered light oil at its Carapa-1 well in Guyana, but the reservoir was smaller than the troubled company had expected prior to drilling. Shares fell as much as 20%. The independent oil producer’s first discovery of the new year comes after a calamitous 2019 in which its stock declined 64% and the chief executive officer and exploration chief stepped down. The commercial viability of Tullow’s previous offshore discoveries in Guyana remains in doubt after the reservoirs were found to contain heavy oil. “The Carapa-1 result is an important exploration outcome with positive implications” for both blocks the company has in the South American country, Mark MacFarlane, Tullow’s chief operating officer, said in a statement on Thursday. “While net pay and reservoir development at this location are below our pre-drill estimates, we are encouraged to find good quality oil.” About four meters of net oil pay were encountered. That was lower than pre-drill forecasts, but Tullow highlighted positive aspects of the well that “suggests the extension of the Cretaceous oil play from the Stabroek license southwards into the Kanuku license.” “Expectations were high going into this,” said David Round, an analyst at BMO Capital Markets. “There will be a level of disappointment about the size.” Tullow shares were 4.5% lower at 61.14 pence as of 9:55 a.m. in London trading. That’s down about 95% from the company’s 2012 peak. Rig site testing indicated that the oil is 27 degrees API with a sulfur content of less than 1%, according to Tullow. The well will be plugged and abandoned and a detailed laboratory analysis of the oil quality will follow. Tullow has a 37.5% stake in the Kanuku block. Repsol SA is the operator with 37.5% and Total SA has 25%. “We will now integrate the results of the three exploration wells drilled in these adjacent licenses into our Guyana and Suriname geological and geophysical models before deciding the future work program,” MacFarlane said. The latest well concludes Tullow’s “high-impact exploration program in Guyana,” and while the company made three “technical discoveries,” none are expected to be commercially viable, Will Hares, a senior analyst for Bloomberg Intelligence, said in a note. The Guyana results come as Tullow searches for a new CEO after Paul McDade, and exploration director Angus McCoss, quit on Dec. 9. At the time the company forecast its total production this year will be 70,000 to 80,000 barrels a day -- lower than in 2019 -- because of weaker expectations from its main fields in Ghana. A process to reduce its stake in a Uganda project has been delayed for years. “The Guyana results emphasize Tullow’s increasingly challenged growth outlook amid its Ghana project issues and East Africa delays,” Hares said.
Commodities
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Meet the Economy That the IMF Sees Growing 86% in 2020 @economics Frontier Markets |
South America may be battered by weak growth, unrest and austerity but one of its smallest countries is about to experience the fastest economic growth on the planet. Guyana, a country of 780,000 that neighbors Brazil and Venezuela in the region’s northeast corner, will see its economy balloon 86% next year after expanding 4.4% this year, according to the International Monetary Fund. That’s 14 times the projected pace of China and driven by Exxon Mobil Corp.’s discovery of oil. “We’re moving from a very low base to a stratospheric leap,” Finance Minister Winston Jordan said in a telephone interview from Georgetown. South America’s only English-speaking nation owes the anticipated windfall to offshore oil deposits discovered in 2015. At the moment, the country doesn’t produce any crude, though its neighbor Venezuela holds the world’s largest reserves. While Guyana’s $4 billion annual gross domestic product is about a tenth the size of Vermont’s, it will expand to about $15 billion by 2024, according to the IMF. The government plans to use some of the money derived from its royalties to build highways to connect coastal towns to the sparsely populated interior, which has gold, diamond and bauxite deposits, Jordan said. The oil sector will represent about 40% of the economy within five years, the IMF calculates. The fund says its forecast may be subject to large revisions, since even small changes to the projected oil output in 2020 would result in big swings in the overall economic performance. Exxon has partnered with Hess Corp. and China’s CNOOC Ltd. to develop one of the world’s biggest new deepwater oil discoveries off the country’s coast. Exxon said it will begin pumping from its first well next month, and by 2025 Guyana will produce at least 750,000 barrels a day. Total SA, Tullow Oil Plc and Repsol SA are also among the companies exploring for oil in Guyana’s waters. The government expects the initial $300 million a year in revenue from profit-sharing and royalties to more than double after a second offshore well starts production around 2022. That money will go directly to a sovereign wealth fund the country established this year, which will be used for “inter-generational” savings, to protect against oil price swings, and to fund development plans, Jordan said.
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Constructing Commercial Empire: The United Arab Emirates in the Red Sea and the Horn The Century Foundation Africa |
Almost a decade ago, the late Ethiopian prime minister Meles Zenawi described a “nightmare” he had for his country: “an Egyptian agenda that is financed by Gulf money.” Zenawi, an ex-rebel and an intellectual, was expressing his fear of expanding Egyptian influence in the Horn of Africa, made possible by the financial power of the Gulf monarchies. “Imagine how much weaker Ethiopia’s position will be with the [United Arab Emirates] controlling every port we use,” Zenawi warned. In 2019, in the midst of dramatic Middle Eastern expansion into Red Sea ports, Zenawi’s words seem almost prophetic. But Zenawi was only half correct. His nightmare has come true, sans the bogeyman of Egypt—it is a Gulf agenda financed by Gulf money. Today, the Emirates and other Gulf states control a vast array of commercial ports and military bases along the coast of the Red Sea and the Gulf of Aden, transforming the political geography of the Horn of Africa. And the scenario he imagined seems to be a subplot in a much broader reorientation. Most analyses tend to read the changing politics of the Red Sea and the Horn of Africa as simply the result of competition between rival Gulf states, especially in the wake of the 2017 Qatar diplomatic crisis. While this framing helps to explain some recent developments, it does not explain why Gulf expansionism has specifically taken place in these regions. The interests and actions of commercial entities are equally important in understanding what Gulf policy looks like on a more molecular level. This report examines the issue of Gulf expansionism through the case study of the Emirates-based company Dubai Ports World (DP World), a leading global port operator and logistics giant. DP World is an aggressively expanding privately owned enterprise with strong links to Emirati ruling families. In many ways, it is spearheading the aspirations of both the Emirati private and public sectors in the Red Sea and the Horn. Perhaps more than any other commercial or government entity, the story of DP World illustrates a convergence of state and capital that has echoes in many other Gulf states. In turn, the story of DP World—and of the interests of Gulf capital more generally—illuminates the factors that influence state formation and fragmentation in the Horn of Africa and the Red Sea. Such fragmentation is, of course, a dire concern. Somalia has been shattered for nearly thirty years, and is only becoming increasingly splintered. The war in Yemen, nearly half a decade old, rages on. Ethiopia and Eritrea, bitter and sometimes warring rivals, have been involved in a fragile rapprochement since the summer of 2018. The precise nature of Emirati and Gulf power affects all these future-shaping processes. Private Emirati infrastructure projects in the Horn of Africa are not neutral economic projects. Rather, these ports, highways, security installations, and water and sanitation facilities are intimately linked to Emirati foreign policy. They are important mechanisms for the expansion of both Emirati capital and power. This expansion is, in essence, imperial—it is a marriage of international economic and political ambitions. This is not yet imperialism on the scale of, say, nineteenth-century Britain, but it is imperialism, nonetheless. Its aim is to exert political influence in the region and aggressively control and expand key trade routes and markets. Further, it is a hallmark of imperialism that the trade and strategic interests of Gulf states are not distinct. Rather, they are co-constitutive—they establish and reinvent each other. In the Red Sea and the Horn, the nexus of state and commercial involvement in counterterrorism, counter-piracy, maritime security, and supply chain protection reveals fundamental realities—both about those regions, and about why Gulf state rivalries are so potentially volatile. Further, understanding that Emirati policy in the Red Sea and the Horn follows the logic of empire helps us better confront some of the drivers of disastrous state fragmentation in the region. The Birth and Rapid Growth of Dubai Ports World DP World traces its roots to the establishment of Port Rashid, Dubai in 1972, named after Dubai’s ruler at the time, Sheikh Rashid bin Saeed Al Maktoum. In 1979, Sheikh Rashid completed the ambitious Jebel Ali Port, and in 1991, the two ports were brought together under the directorship of the newly formed, state-owned Dubai Ports Authority. As the Emirates increased its financial clout, largely from growing oil-based wealth, the country witnessed rapid urban and demographic changes, and extensive infrastructural development. During this time, Jebel Ali grew dramatically, and the combined ports handled more than a million shipping containers’ worth of cargo (termed twenty-foot equivalent units, or TEUs, in the industry). Increasingly becoming a regional and international hub for trade, Jebel Ali also developed as a favorite port of call for the U.S. Navy. In fact, following the United States-led wars in Afghanistan and Iraq (beginning in 2001 and 2003, respectively), Jebel Ali profited immensely from the presence of Halliburton employees, private mercenaries, and American soldiers en route to Baghdad and Kabul. It has been described as the busiest commercial terminal in the world for the United States’ wars in the Middle East.3 But while Jebel Ali grew to be a key logistical hub underpinning U.S. militarism in the region, corporate and state leaders looked beyond the shores of the Emirates for important investment opportunities. In 1999, the government established Dubai Ports International (DPI) to manage and operate container terminals outside the Emirates in Jeddah (Saudi Arabia), Visakhapatnam (India), Dolareh (Djibouti), and Constanta (Romania), on the Black Sea coast. And in 2005, DPI and Dubai Ports Authority merged to form DP World, becoming one of the largest port operators in the world. The historical trajectory of DP World suggests a tight-knit relationship with state power, and its current structure and leadership is also deeply wedded to the Emirates’ ruling families, blurring the lines distinguishing the state from private capital. Overseeing the management of one of Dubai’s primary revenue-generating infrastructures, DP World is the lifeblood of Dubai’s ruling classes. As such, those classes have a vested interest in shaping the future of the company. DP World’s CEO, Sultan Ahmed bin Sulayem, comes from one of Dubai’s most prominent business and political families. In fact, his father was a key advisor to the ruling Al Maktoum family. Moreover, Dubai World—a global holding company that is an investment arm of the government of Dubai—owns 80 percent equity in DP World, essentially giving the ruling family ultimate control. In further evidence of the interlocking relationship between state and private capital, bin Sulayem was himself the chairman of Dubai World; the chairman of Istithmar World, the investment arm of Dubai World, which specializes in private equity; and the chairman of Nakheel, the global property development company incorporated by the government in 2001 to establish and develop the real estate sector in Dubai This is not to suggest an equal standing between CEOs and Dubai’s ruling families. A year after the 2009 Dubai debt crisis, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, removed bin Sulayem as chairman of Nakheel and Dubai World (though bin Sulayem retained his position as chairman of DP World). The Dubai ruler replaced bin Sulayem with his uncle, Sheikh Ahmad bin Saeed Al Maktoum, as chairman of Dubai World; Al Maktoum also appointed his close confidants Mohammed Al Shaibani and Ahmad Al Tayer as board members. In fact, the debt crisis served as a moment to solidify and concentrate ruling class power in the Emirates. Members of Dubai’s historic mercantile families, such as Al Tayer and Al Lootah, gained prominent positions in companies such as Dubai World, Nakheel, and Istithmar. Meanwhile, at DP World, where Bin Sulayem had previously overseen the extensive growth of the company, he resumed the company’s two-pronged strategy: acquiring rivals and bidding aggressively for port concessions. The Emirates insists that DP World is a private enterprise, but its activities move in lockstep with the country’s strategic interests. But 2009 undoubtedly marked a rupture in intra-Emirati relations. Following Dubai’s crucial $10 billion bailout from oil-rich Abu Dhabi, the latter tightened its grip over political decision making in the country. While political decision making in the federal monarchy of the Emirates remains relatively opaque, researchers and commentators generally agree that Abu Dhabi has taken the lead following the financial crisis. Although DP World insists that it operates independently from Emirati foreign policy, the changing atmosphere has clearly affected the firm as well. The Emirates “always say[s] DP World is a private company and is acting out of commercial interests,” said a Western diplomat quoted in a 2018 International Crisis Group report. “But clearly those interests align with Emirati foreign policy.”12 The interlocking relationships between state and private capital, the growing authority of Abu Dhabi over political decision making, and an increasingly expansionist Emirati foreign policy have all served to ensure that the activities of DP World continue to move in lockstep with the “strategic interests” of the Emirates. Commercial Interests in the Red Sea and the Horn Following the Arab uprisings that began in 2010, and especially in the wake of the destructive Saudi Arabia- and Emirates-led war in Yemen, which began in 2015, the Emirates has led a concertedly aggressive foreign policy. The rise of China’s globally ambitious Belt and Road Initiative, Indian ambitions in the Indian Ocean, and Western states’ efforts to retain military hegemony in the region, have also meant that Gulf states are positioning themselves as mediators of maritime routes and territorial hinterlands surrounding the Arabian Peninsula, as scholar of Gulf political economy Adam Hanieh has explained. As such, Emirati strategic interests and commercial interests have developed in tandem, like a helix. In order to fully understand why commercial and strategic interests have dovetailed so closely in the Emirates, it is worth untangling some of the distinct features of Emirati commercial interests in the Red Sea and the Horn, especially prior to 2015. Commercially, the Horn of Africa has been an important market to capture for a range of Emirati conglomerates and other investors based in the countries of the Gulf Cooperation Council (GCC). In the middle of the first decade of this century, companies based in the GCC aggressively bought farmland in countries such as Sudan and Ethiopia in an attempt to shield themselves from food insecurity and commodity price volatility. The Emirates, which imports approximately 90 percent of its food, sought to improve its food security by centralizing capital and exerting control over entire supply chains, from farm to shelf. Powerful conglomerates such Al-Dahra, flush with cash, were able to purchase vast swathes of land in the Horn. In addition to agriculture, Gulf-based companies made significant investments in the Red Sea and the Horn of Africa in manufacturing, construction, real estate, and telecommunications. However, many of these expanding investments were predicated on robust trade infrastructures between the Gulf and the Horn. Ethiopia, with a population of more than 100 million and an economy that has grown an average of more than 10 percent a year for the last fifteen years, is one of the largest and fastest growing economies in all of Africa, let alone the Horn—and thus an attractive destination for Gulf investors. However, Ethiopia is entirely landlocked. Developing port infrastructure in Ethiopia’s coastal neighbors thus became a cornerstone for Gulf commercial expansion. As such, one of the first overseas investments that DPI (precursor to DP World) made during its phase of global expansion was in Djibouti. In 2000, DPI and the government of Djibouti established a joint venture and signed a twenty-year concession to operate the Port of Djibouti.16 Six years later, DP World signed a thirty-year concession with the government to design, build, and operate the Doraleh Container Terminal at the port. With a capacity to handle 1.25 million TEU, it became the most technologically advanced container terminal on the African continent. For Ethiopia, the port was a lifeline. Some 95 percent of trade destined for Ethiopia passed through the Port of Djibouti, with DP World responsible for handling operations. But Ethiopian leaders became cautious about their overreliance on a single port and company. Notwithstanding Ethiopian fears, access to the Horn has continued to be a key pillar for Emirati and GCC commercial expansion. Another commercial mainstay for the Emirates—but more importantly, for Dubai and DP World in particular—is the maintenance of the Jebel Ali Port as the preeminent transshipment and trading hub in the Indian Ocean. Accounting for 33 percent of Dubai’s GDP and employing 15 percent of the emirate’s workforce, the Jebel Ali Port and Free Zone continuously generate significant cash flows for DP World. With a handling capacity of 22.1 million TEU, service to 140 other ports, the largest and busiest maritime terminal in the Middle East, and the ninth-largest container terminal port worldwide, Jebel Ali’s leading regional and global position appears incontestable. However, Jebel Ali’s success may, ironically, be the biggest threat to its primacy. Across the GCC, governments and global port operators, often through public–private partnerships, are replicating the Jebel Ali model by developing large-scale port infrastructure with intermodal transport networks such as airports, roads, rail, and free zones. These projects are centered primarily around economic diversification and intra-GCC regional integration. But Rafeef Ziadah, a scholar of Middle East political economy, argues that the political hierarchies of the GCC and the competitive pressures of capitalist economies raise the possibility of port overcapacity, duplication of development initiatives, and inter-rivalry. Qatari and Omani ports’ emulation of the Jebel Ali model may overtake the handling capacity of the Jebel Ali Port itself. Even within the Emirates, Jebel Ali faces stiff competition from the development of Abu Dhabi’s Khalifa Port and its enormous free zone. Gaining a competitive edge, however, does not only boil down to increasing handling capacity. While undoubtedly significant, the regional importance of ports is also defined by the ways in which they seamlessly weave together different ports, logistical corridors, free zones, and trade routes. On a local level, DP World has gone to great lengths to oversee, control, and extract rents from different points of the supply chain. In December 2014, DP World agreed to purchase the Jebel Ali Free Zone for $2.6 billion, thereby integrating logistical functions and gaining ownership of a revenue-generating infrastructure that accounts for more than 20 percent of Dubai’s GDP. In the breadth of its growth, DP World is singular in the Middle East. The company also sees global and regional expansion as a way to underscore the preeminence of Jebel Ali, stifle potential competitors, and sustain a competitive bottom line. In the breadth of its growth, DP World is singular in the Middle East. By expanding port developments and pursuing a tactic of aggressive port acquisition, DP World is better situated to crowd out potential competitors and maintain Jebel Ali as the dominant port for smaller feeder ports in the surrounding zones, particularly in the Arabian Sea and the Red Sea. For example, when the Yemeni government signed a deal with DP World to develop and run the Port of Aden, there were accusations that DP World was purposely running the Yemeni port under full capacity to maintain the preeminence of Jebel Ali. In the Red Sea, one of DP World’s initial expansions was the establishment of a container terminal in Djibouti. Given that approximately 10 percent of global maritime trade (cargo worth $750 billion) passes through the Red Sea, acquiring ports throughout its littoral is clearly of the utmost importance to the company. This was undoubtedly a major consideration in DP World’s initial expansion into Djibouti. Not only do these port expansions reproduce the global significance of Jebel Ali—they also provide DP World with the opportunity to tap into the revenues that emanate from one of the most lucrative trade routes in the world. Counter-Piracy and Counterterrorism Expansion in the waters surrounding the Arabian Peninsula has profound strategic considerations and implications. Port acquisition, logistics integration, and increased shipping lines are ultimately preconditioned on the security of maritime trade routes. The policing of these maritime routes and combating of piracy have pronounced imperial precedents. During the colonial era, Britain used its navy to impose its empire’s political hegemony in the Indian Ocean and the Persian Gulf under the banner of protecting free trade and in pursuit of the abolition of slavery. Contemporary geopolitics today are, of course, markedly different from those of nineteenth-century British imperialism. However, legally fluid maritime spaces remain sites of imperial contestation and cooperation. This is not to suggest any insincerity on the behalf of the Emirates and other Gulf states in their counterterrorism and anti-piracy rhetoric. But neither have other imperialist powers always been insincere in their justifications. It is simply a quality of imperial logic that political and commercial goals abroad converge. Following the bombing of the USS Cole in 2000 near Aden, and the increase in piracy off the coast of Somalia later in the first decade of the new millennium, international efforts at countering terrorism and piracy were ratcheted up dramatically. In 2003, the United States established Camp Lemonnier in Djibouti as the headquarters of the Combined Joint Task Force–Horn of Africa, as part of the global war on terror. In 2008, a series of UN Security Council resolutions permitted the use of military force within sovereign Somali waters and inland territory. EU and NATO naval operations sprawled the region, and by 2009, the Combined Task Force 151 (CTF-151) was established as a multinational naval group to stop piracy attacks in the Red Sea. Even private military contractors thrived in this increasingly militarized environment; mercenaries were happy to meet the increasing demand for their services Moreover, the lines separating commercial and military obligations became so blurred that it became difficult to distinguish one from the other. For example, in April 2009, Rear Admiral William Baumgartner of the U.S. Coast Guard described “the unimpeded flow of maritime commerce” as “the lifeblood of the global economy;” the International Chamber of Shipping, on the other hand, argued that, “pirates in Somalia threaten the lives of seafarers and the security of world trade.” The frenzy surrounding maritime trade routes permeated multiple areas of responsibilities and interests, with commercial and security officials sounding increasingly like one another. In effect, the dual mandates of counter-piracy and counterterrorism served to unite a diverse set of actors such as transnational corporations, nation-states, supranational governing bodies, and private military contractors, all in defense of supply-chain security. The Emirates was by no means leading these efforts, but this militarized context provided the backdrop for the proliferation of Emirati military and commercial developments. Prior to 2015, when the war began in Yemen, the Emirates invested significant resources in antipiracy operations in the Red Sea. In fact, of the thirty states participating in the Combined Task Force (CTF), four were from the GCC: Bahrain, Kuwait, Saudi Arabia, and the Emirates. According to a report from the Arab Center for Research and Policy Studies, “although not all GCC states are members of the CTF, their navies participated in, or contributed to, the military activities of the three CTF divisions—CTF-150, CTF-151 and CTF-152.” On a more local level, the Emirates also created partnerships with governments and paramilitaries in the Horn of Africa. In the early 2010s, the Emirates offered support for counter-piracy operations, which ultimately transformed into counterterrorism efforts aimed at defeating al-Shabaab in Somalia. In 2014, the Emirates signed a memorandum of understanding with the federal government of Somalia, training personnel and building infrastructure for the Somali army, marine police, and police forces throughout the country. It also developed specialized brigades of the Somali army and donated armored vehicles to Somalia’s Jubaland state. Moreover, the Emirates even trained and paid the salaries of the Puntland Marine Police Force, allegedly to eradicate piracy, terrorism, and illegal fishing off the coast of Somalia. According to the 2018 report from the International Crisis Group, one Emirati official estimated that as many as 10,000 Somalis had been trained and continued to receive salaries from the Emirates. So important were these maritime routes that the Emirates viewed the Horn of Africa as “primarily part of [its] security hinterland.” Concomitantly, DP World played a leading role in Emirati efforts to counter piracy in the Red Sea. From 2011 to 2014, the company hosted annual, high-level counter-piracy conferences in partnership with the Emirates’ Ministry of Foreign Affairs. Bringing together government and nongovernment stakeholders involved in counter-piracy operations in the Horn of Africa, bin Sulayem, the DP World CEO, stressed “the need for joint action both on land and at sea,” further adding that “political, economic, legal and military measures must go hand in hand to help mitigate the impact of piracy.” Echoing the dual nature of commercial and military obligations, the Emirati minister of foreign affairs, Sheikh Abdullah bin Zayed Al Nahyan, stated at the opening of the 2011 Counter-Piracy Conference that piracy “threatens our region’s sea lanes and indeed its livelihood as a center of commerce and trade.” Following the first conference in 2011, participants acknowledged the need for more than $5 million to aid the “Trust Fund to Support the Initiatives of States to Counter Piracy off the Coast of Somalia,” recognizing this commitment as a “transformative moment in ensuring a fully resourced, comprehensive public–private counterpiracy approach.” The conference concluded that the international community must pursue a comprehensive strategy of support to Somalia, not only assisting the Federal Authority, but also “the regional authorities of Galmudug, Puntland, and Somaliland.” This conclusion would prove important. Gulf financial support for Somalia (and especially its federal states) created path dependency and opened up a new space for Gulf rivalries to play out. Only half a decade after the first Counter-Piracy Conference, DP World’s contracts with these same regional authorities listed above would become a major sticking point between the Emirates and Somalia. By 2018, the federal government in Somalia had entirely banned DP World from operating in the country—a ban that has been impossible to enforce since so many of Somalia’s states govern themselves autonomously. These conferences, which predate the war in Yemen and the current tensions between Abu Dhabi and Mogadishu, demonstrate the convergence of interests between state and capital in the Emirates. While it would be inaccurate to ascribe the Emirates’ actions in Somalia solely to DP World’s commercial interests, the extent of the firm’s partnership with its home country’s government—as embodied by these high-level conferences—indicates the ways in which Emirati imperial strategy hinges on tight-knit collaboration with private actors. Yet trying to ascertain the precise nature of state–corporate relations in the Emirates is certainly a futile endeavor. As a country lacking necessary channels for political transparency and public accountability, it is often hypersensitive to those who seek to research such topics or criticize the government. But it is in the periphery, and through the logic of empire, that we are better positioned to examine the confluence of state and capital in remaking the geographies of war, trade, and state sovereignty. In this regard, the recent proliferation of infrastructural projects across the Horn of Africa serves as a key case for examining the changing politics of the Red Sea. DP World Drops Anchor in Somalia Following heated disputes between DP World and the government of Djibouti over accusations of bribery dating back to 2012, the latter ultimately nationalized and seized the Dolareh Container Terminal. In the wake of these struggles, Somalia became the focal point for DP World in the Horn of Africa. Most recently, the company has struck a number of deals with Somalia’s federal states for infrastructural development and port development and management. In April 2017, DP World’s subsidiary, P&O Ports, won a thirty-year concession to develop and manage the multipurpose port in Bosaso, the largest city in the autonomous northeastern Somali state of Puntland. The total investments are expected to be $338 million—no small figure in Puntland, which has a GDP of roughly $3 billion and an annual government expenditure of only $75 million. Similarly, in 2016, DP World won a thirty-year concession with an automatic ten-year extension for the management and development of a multipurpose port project at Berbera, in the Republic of Somaliland, an autonomous northern state that has declared independence from the rest of Somalia. Total investments are measured at $442 million, with DP World holding a 51 percent stake in the port, alongside 30 percent for Somaliland, and 19 percent for Ethiopia. The concession has also opened the door for other Gulf companies, such as Emirates-based construction company Shafa Al Nahda, which is responsible for expanding port capacity and establishing a free zone. Alongside these two concessions, DP World has also been in direct negotiations with other federal states in Somalia, such as South West state and Jubaland, for the development of ports and other investments. The development of these commercial ports has entailed significant military and strategic ramifications. Quickly following DP World’s deal to manage Berbera Port, the Emirates signed a twenty-five-year military agreement with the government of Somaliland to lease and refurbish the civilian airport and old military base in Berbera. Located on the southern coast of the Gulf of Aden, the port of Berbera was first modernized by the Soviet Union in the 1960s, where it constructed a deepwater port and carried out significant dredging. However, after Somalia severed ties with the Soviet Union in the late 1970s, the port underwent commercial expansion and was used by the United States military until the collapse of the Siad Barre regime in 1991. The Emirates is now extending these imperial “lineages”—DP World is now in the process of expanding the container terminal, and the Emirati military awarded a $90 million contract to Emirates-based Divers Marine Contracting in 2017 to build a naval base in Berbera. Most importantly, the new military base is located close to the shores of Yemen and was originally intended to assist in the war effort. Even though the Emirates announced in July 2019 its intention to withdraw from the war in Yemen, its occupation of the strategically positioned Yemeni archipelago of Socotra, the cementing of control over southern Yemen by Emirates-backed forces, and its military bases in Assab (in Eritrea) and Berbera ensure unprecedented control and strategic depth in the Red Sea. Given that military operations are complex logistical undertakings, commercial entities such as DP World will be further embedded in these military webs. These relationships are symbiotic for the Emirati state and Gulf companies. Not only will deeper Emirati control over the Red Sea guarantee the smoother circulation of civilian and military resources in coastal areas; it will also allow companies such as DP World to benefit from an expanded network of existing and emerging trade routes. For example, Berbera Port has already signed agreements for regular service with two of the biggest container shipping lines, Maersk and PIL, thereby integrating the port into international trade routes and allowing DP World to generate further revenue. According to DP World, the transportation companies CMA CGM and Simatech are running biweekly lines from Jebel Ali to Berbera. Last year, Berbera Port served vessels coming from Dubai, China, Oman, India, and Yemen, as well as consignments of humanitarian aid from the World Food Programme and the United States Agency for International Development (USAID)—ironically, humanitarian aid made necessary by the war in Yemen that the Emirates has helped wage. Moreover, with DP World now operating six ports in South Asia, cementing control over this corner of the Indian Ocean would further enable DP World to connect Indian, African, and Middle Eastern ports. In Puntland, where DP World’s subsidiary, P&O Ports, operates the Port of Bosaso, Emirati commercial interests have arrived on a field that is already militarized. Unlike Berbera, the Emirates has been spearheading military efforts and security trainings in Puntland for almost a decade, most notably (as mentioned above) training and paying the salaries of the Puntland Marine Police Force (PMPF). The force was formed in 2010 to counter terrorism and piracy off the coast of Somalia. But according to a UN investigation in 2012, it had “yet to be deployed as part of a comprehensive strategy to fight piracy in Puntland.” The report also found that the force had “no basis in Puntland’s constitution or domestic legislation,” and functioned instead as “an elite force outside any legal framework . . . answerable only to the Puntland presidency.” As explained above, the establishment of groups such as the PMPF did not occur in a vacuum. The proliferation of anti-piracy and counterterrorism initiatives by a range of international and regional powers in the Horn of Africa provided both the real and rhetorical justifications for such paramilitary organizations. Scholar Deborah Cowen notes that, in this militarized context, “poor states neighboring Somalia are being transformed into mercenary, legal and carceral spaces for imperial powers.” As nearby states such as Djibouti, Sudan, and Eritrea sought to tap into counterterrorism funds, the federal states of Somalia, such as Puntland, also joined in with the help of external sponsors and private mercenary groups. In fact, while the Emirates paid the salaries of the PMPF, Blackwater founder Erik Prince, along with a former apartheid-era South African special forces officer, Lafras Luitingh, helped to actually create the PMPF. Yet these developments are not simply top-down processes. As the scholar Alex de Waal notes, “just as an earlier generation of leaders had used geostrategic rents to pursue domestic political agendas, so too counterterrorism rent was manipulated for diverse other purposes, all of them to do with consolidating power, and often unconnected with defeating terrorist groups.” According to a report by The Intercept, it’s unclear that the millions of dollars that Emirati intelligence officers poured into the program had perceptible results. Some $50 million are unaccounted for; aircrafts, helicopters, and cargo planes either went missing or were never returned, and the United Nations reported “credible” allegations of human rights violations stemming from corporal punishment. Prince’s program was shut down in 2012 following the murder of a South African mercenary by a local soldier. In fact, the local soldier—originally hired to fight piracy—was actually a relative of a pirate who had been targeted by the program. Regardless of the program’s effectiveness in terms of battling piracy and terrorism, the Emirates’ unequivocal and handsome support of Puntland’s security forces served to strengthen its (proto-)state capacities and regional autonomy. The agreement with DP World’s subsidiary also undoubtedly reinforces Puntland’s pretensions to statehood and its state capabilities (the region declared its independence in 1998, but has not been recognized as independent by the international community). Like Berbera, “Puntland will benefit from an internationally recognized port operator contributing to its economic growth and trade potential,” bin Sulayem noted. Puntland will further integrate into world markets, and the agreement is set to assist vital state functions such as employment generation, clean drinking water provisions, mobile medical services, investments into agricultural industries, and the development of secondary and tertiary sectors through the establishment of a free zone. Yet, as it operates in an arena of established Emirati involvement, the company has become embroiled within the surrounding political landscape, sometimes in deeply destabilizing ways. Most recently, in February 2019, gunmen posing as fishermen murdered one of Bosaso Port’s executives, Paul Anthony Formsa. Although al-Shabaab claimed responsibility for the attack, in a leaked audio recording obtained by The New York Times, an unnamed businessman close to the emir of Qatar said that the assassination was intended to “advance Qatar’s interests by driving out its rival, the United Arab Emirates.” While the intentions of the attack still remain unclear and shrouded in gossip, the fact that DP World has been caught in the crossfire is indicative of the unintended consequences of Emirati imperial strategy. As many analysts have warned, the lack of a regional security strategy and the escalating maritime rivalries in the region have the potential to lead to an explosive and destabilizing situation.
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6 AUG 18 :: The Indian Ocean Economy and a Port Race. @TheStarKenya Africa |
The Indian Ocean Economy preceded the Atlantic Ocean Economy, where the Europeans only learnt how to ‘’crack the code’’ of the Atlantic winds [and a new ‘Western’ culture arose on both sides of the ocean] long after the Indian Ocean. As we scan the Blue Economy it is worth appreciating that Maritime shipping is the lifeblood of Africa, with over 90% of the continent’s imports and exports transported by sea. Today from Massawa, Eritrea [admittedly on the Red Sea] to Djibouti, from Berbera to Mogadishu, from Lamu to Mombasa to Tanga to Bagamoyo to Dar Es Salaam, through Beira and Maputo all the way to Durban and all points in between we are witnessing a Port race of sorts as everyone seeks to get a piece of the Indian Ocean Port action. China [The BRI initiative], the Gulf Countries [who now appear to see the Horn of Africa as their hinterland], Japan and India [to a lesser degree] are all jostling for optimal ‘’geo-economic’’ positioning. Overlay the Geopolitics and its worth noting that the Geopolitics has become much more fluid. Fluidity has been engendered by the spectacular arrival of Prime Minister Abiy in Ethiopia [which is land-locked, of course but a key Future Taker of Port facilities] who has made peace with President Afawerki’s Eritrea and is surely set to undercut Djibouti and even LAPPSET, both Projects which seem to me to have been predicated to some degree on a permanent Freeze between Ethiopia and Eritrea. Investments in Ports have a long lead time and I am not certain that those same investments are able to re-calibrate at the speed with which the Geopolitics is moving. The Big Risk is that some these Port investments will be ‘’Hambanota’’-ed.
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Ethiopia government announced that it would start the stock market by 2020 without giving a specific time frame. @Capitaleth H/T @addisstandard Africa |
The National Bank of Ethiopia (NBE) which has reintroduced the primary money market a couple of weeks ago announced it would commence the highly anticipated secondary market in May 2020. The government announced that it would start the stock market by 2020 without giving a specific time frame. Ethiopia actually had a stock marked before most other African countries, (around 60 years ago) but when the Derg took over that stopped. Yinager Dessie, Governor of NBE, told Capital that the central bank is preparing the document to table it to the Council of Ministers in the near future. Currently finance is only accessible in a primary market that is directly related with banks for the private and public sector or through treasury bills (T bill) for the government. “Capital market is another source of finance that is separate from banks and currently in the process to commence from initial stages,” Yinager says “for instance three weeks ago the T bill has recommenced with the aim to attract private banks and other private sector players and to make a transition for the biggest market.” “Based on our observation the beginning is very good that is good step to move to the secondary market.” He said that according to the NBE target, the secondary market will begin by May 2020, but it depends on the cabinet decision at the federal government. “The legal framework is under development and skilled professionals are being prepared, while preconditions are in the process and in the coming few months we will commence it,” he explained. “The final go ahead will depend on the Council of Ministers’ decision,” he added. According to the governor, the central bank will deliver the draft document to the council that will decide whether the business would be started by regulation or proclamation. If the council of Ministers’ approve it as a regulation the starting time will come soon, but if the council decides the law should be ratified as a proclamation it would be sent to the parliament. “As per our evaluation the T bill average interest rate offer that banks participate in the auction is attractive and reasonable,” he said. Most of them offer about 7.5 percent to 8.5 percent but some of the banks offer up to 15 and 16 percent at the auction, according to Yinager. “Most of the offers that come from the banks at the auction is very encouraging,” he said. “This will show us what the market interest rate should be. When the market goes up and people understand how to use it the capital market structure will improve,” he added. Recently NBE stopped the NBE bill directive enforcing banks to buy 27 percent of bonds from every loan that they disbursed for clients. NBE has reintroduced the weekly T bill with an attractive interest rate to attract banks and other interested players. International partners like the World Bank are providing technical and others support to commence the stock market. Currently the country’s finance accessibility is very poor; most of the citizens are not benefiting particularly from the loans.
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02-JUL-2018 :: Ethiopia Rising. @TheStarKenya Africa |
On the same day he said, "we are in debt, we have to pay back but we can't. And secondarily, we aren't able to finish projects we have started." and announced his economic Pivot. Of course, the downside risk of all this infrastructure is plain to see and Sri Lanka and the Tale of its Hambantota Port is now a cautionary Tale. FX reserves were at less than a month's worth of imports and something needed to be done. Expectations are high. The Prime Minister needs to execute real quick on the economic front but if he levels the playing Field, a whole Troop of folks will be looking to pile in. That Troop will include the Ethiopian Diaspora, Foreign Investors and i am sure our very own Safaricom.
Abiy Ahmed Ali (Amharic: አብይ አህመድ አሊ, Oromo: Abiyyi Ahimad Alii; born 15 August 1976) was appointed the 12th Prime Minister of Ethiopia on 2 April 2018. He grew up in a Muslim family (Ahmed Ali, his Oromo father; Tezeta Wolde, his mother) and with Oromo Muslim and Christian grandparents. He is evidently a Virilian and Gladwellian Figure.
“To create one contagious movement, you often have to create many small movements first.”
“Look at the world around you. It may seem like an immovable, implacable place. It is not, With the slightest push — in just the right place — it can be tipped.” — Malcolm Gladwell
He has been Prime Minster for 90 days. During those 90 days, he has criss crossed the Country, he has ended a State of Emergency, released thousands of Political Prisoners, thawed relations with Eritrea [29 Mar 2018 H.E. Abiy Ahmed @PM_AbiyAhmed - It is time. Lets build a wall of love between #Ethiopia & #Eritrea], bagged a $1b from the U.A.E.'s MBZ, announced a dramatic economic about-turn and thats not the end of it. In Matters language and linguistics he has tapped into a ''Nelson Mandela'' 1994 mood. These 90 or so days represent the most consequential arrival of an African Politician on the African Stage since Mandela walked out of prison blinking in the sunlight and constructed his ''Rainbow Nation''
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Kenya's struggle with the burden of Chinese loans @RFI H/T @chigrl Africa |
Austerity cuts look likely in Kenya as the servicing of massive Chinese debt is expected to triple in 2019. Kenya is preparing to pay Chinese State-owned lenders €710 million in the year starting from July. That amounts to more than half of the funds President Kenyatta’s government spent on servicing the Chinese debt last year. The issue of Kenya’s loan repayments is the front-page spread in Wednesday's issue of the Daily Nation newspaper. According to the newspaper, China now accounts for up to 72 per cent of a whopping €2.36 billion is expected to pay in 2019 as repayments of loans contracted from bilateral lenders. Jaindi Kisero is former Managing Editor of the Nation Media Group in charge of Business and Economic Affairs, and now a columnist at Daily Nation and Business Daily. He says the national consensus qualifying Chinese loans as being a necessary evil is crumbling. “China is bringing corruption in the country through the funding of small projects which are very poorly drafted and the contracts opaquely procured holds Kisero. He also denounces “a small clique of ruling elite” who he believes are feeding fat on such contracts. According to Kisera, China is now in a position to influence Kenyan politics. The respected columnist says there is a strong case for Kenyans to be worried about the Standard Gauge Railway line running from Mombasa to Nairobi and from Mombasa to Naivasha, with an extension to Malaba in the eastern region of Uganda. “They brought in the Ports authority to sign a take or pay, meaning that they had to give SGR enough freight so that they can service the Chinese loan. If not they will just take the port”, Kisera noted. “Kisera doesn’t believe Kenya will continue with the Chinese route because of an acrimonious debate underway at home over Beijing’s propensity to seize critical national interests in lieu of payment in the event of a default.
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When Good Conservation Becomes Good Economics Kenya's Vanishing Herds @WorldBank Africa |
It is safari tourism, however, that generates the most employment and economic activity across the country A recent study by Sanghi et al (2017) found that despite a diversifying economy, wildlife-based safari tourism is deeply integrated into Kenya’s economic fabric in complex ways that stimulate much employment in rural areas Official statistics of the sector’s contribution to the economy tend to neglect the full panoply of backward and forward linkages and their dynamic effects on poverty and rural growth. But the wildlife that has lured travelers to Kenya by the planeload is in dramatic decline (Figure ES 1) In the past three decades, the country has lost more than half of its wildlife (ungulate) biomass according to data from the Directorate of Resources, Surveys and Remote Sensing (DRSRS) A Computable General Equilibrium (CGE) model is used to estimate the economic consequences of wild- life loss and compare these consequences to alternative development pathways Finally, spatial algorithms are developed to show how losses can be avoided and how to create win-win solutions that maximize economic gains The statistical model developed for this report indicates that roads built over the last four decades have caused an 80 percent decrease in wild- life within a 20-kilometer radius There are currently more than 166 conservancies spread across Kenya’s 28 coun- ties (Figure ES 6) They cover an area larger than the coun- try’s national parks, are home to more than 22 percent of Kenya’s ungulate wildlife biomass, and have some of the highest densities of wildlife in the country In fact, 18 out of the 20 zones with the highest density of wildlife are in conservancies and not parks The overall analysis suggests that the economic impacts of natural capital erosion have been significant, and they have received less policy attention than seems war- ranted since these issues are viewed as environmental problems that drain public funds, rather than an economic loss Within three decades, Kenya has lost 68 per- cent of its wildlife (Figure11) The declines were particularly extreme with a wide cross-section of species that includes ungulates and predators To be precise the declines were: warthog (–877 percent), waterbuck (–87 8 percent), Grevy’s zebra (86 3 percent), impala (–84 1 percent), Coke hartebeest (84 percent), topi (–82 1 percent), oryx (–78 4 percent), eland (–777 percent), Thomson’s gazelle (–75 percent), and lesser kudu (–72 4 percent) The declines were also severe for Grant’s gazelle (–69 6 percent), gerenuk (68 6 percent), giraffe (–66 8 percent), and wildebeest (–64 2 percent) In comparison ostrich (–43 4 percent), elephant (–42 3 percent) buffalo (–36 9 percent), and Burchell’s zebra (29 5 percent) experienced moderate declines Similar downward trends were exhibited by the big cats and other carnivores as their populations have also declined rapidly (Virani et al 2011) The losses have occurred across the entire country, with some variation over the 19 counties The highest decline was observed in West Pokot, which has experienced a total collapse, with 99 percent of its wildlife lost The smallest decline of wildlife was observed in Laikipia, which experienced a 7 percent decrease in wildlife bio- mass (Figure 1 2) The three other major tourist-dependent counties of Narok, Kajiado, and Taita Taveta showed varying trends: Narok, despite its high dependence on wildlife-based tourism, has lost about 70 percent of its wildlife; in Kajiado, the decline stands at 60 percent; and Taita Taveta registered a moderate decrease of about 40 percent Kenya’s population has grown more than sixfold since 1961 Kenya’s road network had increased by 50 percent to cover around 11,000 kilometers of improved and paved roads as of 2017
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