|Friday 18th of October 2019
.@SirikoiLodge crowned top resort in the world @CondeNast Readers awards H/T @rshilenje
Kenya's Sirikoi Lodge has been ranked as The Best Resort in the World
in the 2019 Condé Nast Readers' Choice Awards.
Everyone at the lodge had been thrilled when they received the news
that they had been ranked number one in the Top 30 Safari Properties
in Africa category of the awards.
“A few days later, however, we heard that we were also ranked the
number one resort in the world, and at this point, we were all
surprised and in shock,” said Nikki Hartley, marketing manager,
But why Sirikoi?
Tucked at the Lewa Conservancy in Laikipia County, Sirikoi is an
intimate, hand-created and family-owned resort.
The resort comprises of a main lodge, a three-bedroom house, two and
four-bedroom tents facing a watering hole. Hartley said that the
resort stood out for its exceptional location, attention to detail and
a true personal touch of the safari experience it offers.
''The feeling that you've entered a private home suffuses, from the
lovingly tended gardens to the heirlooms collected by the family over
the years. In addition to morning and evening game drives, you can do
a bush walk with a ranger, horseback ride across the plains, fly in a
helicopter up to Mount Kenya or do a quad bike safari for an overnight
campout,'' a statement on the Condé Nast website reads.
Sirikoi has bagged several awards before both at home and abroad. In
2015, the lodge bagged the Eco-lodge of the year award, in the annual
Ecotourism Kenya awards.
The lodge has also made it to the Condé Nast Traveler Gold List of
favourite hotels in the world three times - in 2016, 2017 and 2018. In
2017, it was crowned Africa's leading luxury lodge by the World Travel
But beating nearly 10, 000 hotels, resorts and spas in the world to
win the coveted accolade was hard to believe.
“What is amazing about this year’s award and ranking in the Conde Nast
Traveler’s Reader’s Choice Awards is that it is a global position and
importantly, it is the travellers and safari-goers themselves who
ranked Sirikoi number one,” said Hartley.
This was the 32nd edition of the annual Choice Awards. Nearly 10,000
hotels, resorts and spas were rated by 600,000 well-travelled
The travel enthusiasts voted for their favourite destinations before
the number was whittled down to 50. Sirikoi emerged the best. Coming
in second, in the list of top 50 resorts was L'Horizon Resort and Spa
which is located in the Palm Springs of California, United States.
Sirikoi Lodge was founded by Willie and Sue Roberts. Hartley said the
success of the lodge was attributable to the couple who had poured
their soul into the resort adding that the resort is the couple’s
incredible creation and a legacy of their lifetime love affair with
Kenya’s wild places.
“The late Willie Roberts was a visionary and perfectionist, with an
absolute passion and connection to wildlife, the wilderness and
communities of Kenya. Sue shares this passion,” said Hartley.
The couple, she noted, had created an extraordinary winning formula,
expressing her optimism that the lodge would keep up the great work.
Besides Sirikoi Lodge, the other Kenyan resort that made it to the top
list is Nanyuki-based Ol Jogi Home which came in at number 17.
Meru National Park's Elewana Elsa's Kopje took the eleventh position
with Maasai Mara's Richard River camp coming in sixth.
A Million People Are Jailed at China's Gulags. I Managed to Escape. Here's What Really Goes on Inside @haaretzcom
Law & Politics
STOCKHOLM – Twenty prisoners live in one small room. They are
handcuffed, their heads shaved, every move is monitored by ceiling
cameras. A bucket in the corner of the room is their toilet. The daily
routine begins at 6 A.M. They are learning Chinese, memorizing
propaganda songs and confessing to invented sins. They range in age
from teenagers to elderly. Their meals are meager: cloudy soup and a
slice of bread. Torture – metal nails, fingernails pulled out,
electric shocks – takes place in the “black room.” Punishment is a
constant. The prisoners are forced to take pills and get injections.
It’s for disease prevention, the staff tell them, but in reality they
are the human subjects of medical experiments. Many of the inmates
suffer from cognitive decline. Some of the men become sterile. Women
are routinely raped. Such is life in China’s reeducation camps, as
reported in rare testimony provided by Sayragul Sauytbay (pronounced:
Say-ra-gul Saut-bay, as in “bye”), a teacher who escaped from China
and was granted asylum in Sweden. Few prisoners have succeeded in
getting out of the camps and telling their story. Sauytbay’s testimony
is even more extraordinary, because during her incarceration she was
compelled to be a teacher in the camp. China wants to market its camps
to the world as places of educational programs and vocational
retraining, but Sauytbay is one of the few people who can offer
credible, firsthand testimony about what really goes on in the camps.
I met with Sauytbay three times, once in a meeting arranged by a
Swedish Uyghur association and twice, after she agreed to tell her
story to Haaretz, in personal interviews that took place in Stockholm
and lasted several hours, all together. Sauytbay spoke only Kazakh,
and so we communicated via a translator, but it was apparent that she
spoke in a credible way. During most of the time we spoke, she was
composed, but at the height of her recounting of the horror, tears
welled up in her eyes. Much of what she said corroborated previous
testimony by prisoners who had fled to the West. Sweden granted her
asylum, because in the wake of her testimony, extradition to China
would have placed her in mortal danger. She is 43, a Muslim of Kazakh
descent, who grew up in Mongolküre county, near the China-Kazakh
border. Like hundreds of thousands of others, most of them Uyghurs, a
minority ethnic Turkic group, she too fell victim to China’s
suppression of every sign of an isolationist thrust in the northwest
province of Xinjiang. A large number of camps have been established in
that region over the past two years, as part of the regime’s struggle
against what it terms the “Three Evils”: terrorism, separatism and
extremism. According to Western estimates, between one and two million
of the province’s residents have been incarcerated in camps during
Beijing’s campaign of oppression.
As a young woman, Sauytbay completed medical studies and worked in a
hospital. Subsequently she turned to education and was employed in the
service of the state, in charge of five preschools. Even though she
was in a settled situation, she and her husband had planned for years
to leave China with their two children and move to neighboring
Kazakhstan. But the plan encountered delays, and in 2014 the
authorities began collecting the passports of civil servants,
Sauytbay’s among them. Two years later, just before passports from the
entire population were confiscated, her husband was able to leave the
country with the children. Sauytbay hoped to join them in Kazakhstan
as soon as she received an exit visa, but it never arrived.
“At the end of 2016, the police began arresting people at night,
secretly,” Sauytbay related. “It was a socially and politically
uncertain period. Cameras appeared in every public space; the security
forces stepped up their presence. At one stage, DNA samples were taken
from all members of minorities in the region and our telephone SIM
cards were taken from us. One day, we were invited to a meeting of
senior civil servants. There were perhaps 180 people there, employees
in hospitals and schools. Police officers, reading from a document,
announced that reeducation centers for the population were going to
open soon, in order to stabilize the situation in the region.”
By stabilization, the Chinese were referring to what they perceived as
a prolonged separatist struggle waged by the Uyghur minority.
Terrorist attacks were perpetrated in the province as far back as the
1990s and the early 2000s. Following a series of suicide attacks
between 2014 and 2016, Beijing launched a tough, no-holds-barred
“In January 2017, they started to take people who had relatives
abroad,” Sauytbay says. “They came to my house at night, put a black
sack on my head and brought me to a place that looked like a jail. I
was interrogated by police officers, who wanted to know where my
husband and children were, and why they had gone to Kazakhstan. At the
end of the interrogation I was ordered to tell my husband to come
home, and I was forbidden to talk about the interrogation.”
Sauytbay had heard that in similar cases, people who returned to China
had been arrested immediately and sent to a camp. With that in mind,
she broke off contacts with her husband and children after her
release. Time passed and the family did not return, but the
authorities did not let up. She was repeatedly taken in for nocturnal
interrogations and falsely accused of various offenses.
“I had to be strong,” she says. “Every day when I woke up, I thanked
God that I was still alive.”
The turning point came in late 2017: “In November 2017, I was ordered
to report to an address in the city’s suburbs, to leave a message at a
phone number I had been given and to wait for the police.” After
Sauytbay arrived at the designated place and left the message, four
armed men in uniform arrived, again covered her head and bundled her
into a vehicle. After an hour’s journey, she arrived in an unfamiliar
place that she soon learned was a “reeducation” camp, which would
become her prison in the months that followed. She was told she had
been brought there in order to teach Chinese and was immediately made
to sign a document that set forth her duties and the camp’s rules.
“I was very much afraid to sign,” Sauytbay recalls. “It said there
that if I did not fulfill my task, or if I did not obey the rules, I
would get the death penalty. The document stated that it was forbidden
to speak with the prisoners, forbidden to laugh, forbidden to cry and
forbidden to answer questions from anyone. I signed because I had no
choice, and then I received a uniform and was taken to a tiny bedroom
with a concrete bed and a thin plastic mattress. There were five
cameras on the ceiling – one in each corner and another one in the
The other inmates, those who weren’t burdened with teaching duties,
endured more stringent conditions. “There were almost 20 people in a
room of 16 square meters [172 sq. ft.],” she says. “There were cameras
in their rooms, too, and also in the corridor. Each room had a plastic
bucket for a toilet. Every prisoner was given two minutes a day to use
the toilet, and the bucket was emptied only once a day. If it filled
up, you had to wait until the next day. The prisoners wore uniforms
and their heads were shaved. Their hands and feet were shackled all
day, except when they had to write. Even in sleep they were shackled,
and they were required to sleep on their right side – anyone who
turned over was punished.”
Sauytbay had to teach the prisoners – who were Uyghur or Kazakh
speakers – Chinese and Communist Party propaganda songs. She was with
them throughout the day. The daily routine began at 6 A.M. Chinese
instruction took place after a paltry breakfast, followed by
repetition and rote learning. There were specified hours for learning
propaganda songs and reciting slogans from posters: “I love China,”
“Thank you to the Communist Party,” “I am Chinese” and “I love Xi
Jinping” – China’s president.
The afternoon and evening hours were devoted to confessions of crimes
and moral offenses. “Between 4 and 6 P.M. the pupils had to think
about their sins. Almost everything could be considered a sin, from
observing religious practices and not knowing the Chinese language or
culture, to immoral behavior. Inmates who did not think of sins that
were severe enough or didn’t make up something were punished.”
After supper, they would continue dealing with their sins. “When the
pupils finished eating they were required to stand facing the wall
with their hands raised and think about their crimes again. At 10
o’clock, they had two hours for writing down their sins and handing in
the pages to those in charge. The daily routine actually went on until
midnight, and sometimes the prisoners were assigned guard duty at
night. The others could sleep from midnight until six.”
Sauytbay estimates that there were about 2,500 inmates in the camp.
The oldest person she met was a woman of 84; the youngest, a boy of
13. “There were schoolchildren and workers, businessmen and writers,
nurses and doctors, artists and simple peasants who had never been to
Sauytbay: “I have no idea where the camp was located. During my time
there, I was not allowed to leave the grounds even once. I think it
was a new building, because it had a great deal of exposed concrete.
The rooms were cold. Having connections with others was forbidden. Men
and women were separated in the living spaces, but during the day they
studied together. In any case, there were police who supervised
What did you eat?
“There were three meals a day. All the meals included watery rice soup
or vegetable soup and a small slice of Chinese bread. Meat was served
on Fridays, but it was pork. The inmates were compelled to eat it,
even if they were religiously observant and did not eat pork. Refusal
brought punishment. The food was bad, there weren’t enough hours for
sleep and the hygiene was atrocious. The result of it all was that the
inmates turned into bodies without a soul.”
Sins and abortions
The camp’s commanders set aside a room for torture, Sauytbay relates,
which the inmates dubbed the “black room” because it was forbidden to
talk about it explicitly. “There were all kinds of tortures there.
Some prisoners were hung on the wall and beaten with electrified
truncheons. There were prisoners who were made to sit on a chair of
nails. I saw people return from that room covered in blood. Some came
back without fingernails.”
Why were people tortured?
“They would punish inmates for everything. Anyone who didn’t follow
the rules was punished. Those who didn’t learn Chinese properly or who
didn’t sing the songs were also punished.”
And everyday things like these were punished with torture?
“I will give you an example. There was an old woman in the camp who
had been a shepherd before she was arrested. She was taken to the camp
because she was accused of speaking with someone from abroad by phone.
This was a woman who not only did not have a phone, she didn’t even
know how to use one. On the page of sins the inmates were forced to
fill out, she wrote that the call she had been accused of making never
took place. In response she was immediately punished. I saw her when
she returned. She was covered with blood, she had no fingernails and
her skin was flayed.”
On one occasion, Sauytbay herself was punished. “One night, about 70
new prisoners were brought to the camp,” she recalls. “One of them was
an elderly Kazakh woman who hadn’t even had time to take her shoes.
She spotted me as being Kazakh and asked for my help. She begged me to
get her out of there and she embraced me. I did not reciprocate her
embrace, but I was punished anyway. I was beaten and deprived of food
for two days.”
Sauytbay says she witnessed medical procedures being carried out on
inmates with no justification. She thinks it was done as part of human
experiments that were carried out in the camp systematically. “The
inmates would be given pills or injections. They were told it was to
prevent diseases, but the nurses told me secretly that the pills were
dangerous and that I should not take them.”
What happened to those who did take them?
“The pills had different kinds of effects. Some prisoners were
cognitively weakened. Women stopped getting their period and men
became sterile.” (That, at least, was a widely circulated rumor.)
On the other hand, when inmates were really sick, they didn’t get the
medical care they needed. Sauytbay remembers one young woman, a
diabetic, who had been a nurse before her arrest. “Her diabetes became
more and more acute. She no longer was strong enough to stand. She
wasn’t even able to eat. That woman did not get any help or treatment.
There was another woman who had undergone brain surgery before her
arrest. Even though she had a prescription for pills, she was not
permitted to take them.”
The fate of the women in the camp was particularly harsh, Sauytbay
notes: “On an everyday basis the policemen took the pretty girls with
them, and they didn’t come back to the rooms all night. The police had
unlimited power. They could take whoever they wanted. There were also
cases of gang rape. In one of the classes I taught, one of those
victims entered half an hour after the start of the lesson. The police
ordered her to sit down, but she just couldn’t do it, so they took her
to the black room for punishment.”
Tears stream down Sauytbay’s face when she tells the grimmest story
from her time in the camp. “One day, the police told us they were
going to check to see whether our reeducation was succeeding, whether
we were developing properly. They took 200 inmates outside, men and
women, and told one of the women to confess her sins. She stood before
us and declared that she had been a bad person, but now that she had
learned Chinese she had become a better person. When she was done
speaking, the policemen ordered her to disrobe and simply raped her
one after the other, in front of everyone. While they were raping her
they checked to see how we were reacting. People who turned their head
or closed their eyes, and those who looked angry or shocked, were
taken away and we never saw them again. It was awful. I will never
forget the feeling of helplessness, of not being able to help her.
After that happened, it was hard for me to sleep at night.”
Testimony from others incarcerated in Chinese camps are similar to
Sauytbay’s account: the abduction with a black sack over the head,
life in shackles, and medications that cause cognitive decline and
sterility. Sauytbay’s accounts of sexual assaults has recently been
significantly reinforced by accounts from other former inmates of
camps in Xinjiang published by The Washington Post and The
Independent, in London. A number of women stated that they were raped,
others described coerced abortions and the forced insertion of
Ruqiye Perhat, a 30-year-old Uyghur woman who was held in camps for
four years and now lives in Turkey, related that she was raped a
number of times by guards and became pregnant twice, with both
pregnancies forcibly aborted. “Any woman or man under age 35 was raped
and sexually abused,” she told the Post.
Gulzira Auelkhan, a woman of 40 who was incarcerated in camps for a
year and a half, told the Post that guards would enter “and put bags
on the heads of the ones they wanted.” A Kazakh guard managed to
smuggle out a letter in which he related where the rapes at his
Xinjiang camp took place: “There are two tables in the kitchen, one
for snacks and liquor, and the other for ‘doing things,’” he wrote.
Journalist Ben Mauk, who has written on China for The New York Times
Magazine and others, investigated the camps in Xinjiang and published
a piece in The Believer magazine containing the accounts of former
prisoners. One is Zharkynbek Otan, 32, who was held in a camp for
eight months. “At the camp, they took our clothing away,” Otan said.
“They gave us a camp uniform and administered a shot they said was to
protect us against the flu and AIDS. I don’t know if it’s true, but it
hurt for a few days.”
Otan added that since then he has been impotent and prone to memory
lapses. He described the camp he was in as a huge building surrounded
by a fence, where activity was monitored by cameras that hung in every
corner: “You could be punished for anything: for eating too slowly,
for taking too long on the toilet. They would beat us. They would
shout at us. So we always kept our heads down.”
Thirty-nine-year-old Orynbek Koksebek, who was incarcerated in a camp
for four months, told Mauk, “They took me into the yard outside the
building. It was December and cold. There was a hole in the yard. It
was taller than a man. If you don’t understand, they said, we’ll make
you understand. Then they put me in the hole. They brought a bucket of
cold water and poured it on me. They had cuffed my hands… I lost
consciousness.” Koksebek also told about roll calls held twice a day
in which the prisoners, their heads shaven, were counted “the way you
count your animals in your pasture.”
A 31-year-old woman, Shakhidyam Memanova, described the Chinese regime
of fear and terror in Xinjiang thus: “They were stopping cars at every
corner, checking our phones, coming into our homes to count the number
of people inside… People getting detained for having photos of Turkish
movie stars on their phones, new mothers separated from their babies
and forced to work in factories like slaves.” Later in her testimony
she added that children were being interrogated at school about
whether their parents prayed, and that there were prohibitions on head
coverings and possessing a Koran.
Curtain of secrecy
The Xinjiang region in northwestern China is a very large. Spanning an
area larger than France, Spain and Germany combined, it is home to
more than 20 million people. About 40 percent of the population is Han
Chinese, China’s ethnic majority, but the majority in Xinjiang are
ethnic minorities, mostly Turkic Muslim groups. The largest of these
is the Uyghurs, who constitute about half the region’s population;
other ethnic groups include Kazakhs, Kyrgyz and others.
Xinjiang became part of the People’s Republic of China in 1949 and
received an autonomous status. In recent decades, the region has
experienced dramatic social, political and economic changes. Formerly
a traditional agricultural area, Xinjiang is now undergoing rapid
industrialization and economic growth powered by the production of
minerals, oil and natural gas, and by the fact that it is a major hub
of the Belt and Road Initiative, which is an important part of China’s
global economic expansion.
“Since the 1950s, the Chinese government has invested heavily in
Xinjiang,” says Magnus Fiskesjö, an anthropologist from Cornell
University who specializes in ethnic minorities in China.
“A large part of this investment is managed by a governmental military
enterprise called Bingtuan [short for the Xinjiang Production and
Construction Corps], whose activity, together with various economic
and political measures taken by the central government, created
resentment among the local population. They were discriminated against
and were becoming a minority in their own land, because the
authorities moved masses of Han Chinese to Xinjiang,” he explains.
“The tension between minority peoples and Han Chinese there is not
only a result of religious feelings or a specific economic enterprise.
It stems from a wide range of Chinese policies that the native
population does not benefit from. Tensions reached a boiling point on
several occasions, and in some cases deteriorated into organized
violence and terror attacks.”
The vast majority of the minorities in Xinjiang are opposed to
violence, but radical Uyghurs have at times been able to dictate the
tone. Fiskesjö elaborates: “The Chinese government used these
conflicts and terror attacks to paint the entire population of
Xinjiang as terrorists and to start a campaign of erasing the
population’s cultural identity. The Chinese are erasing minority
cultures from both the public and the private arena. They are
criminalizing ethnic identities, erasing any trace of Islam and
minority languages, arresting singers, poets, writers and public
figures. They are holding about 10 percent of the minority ethnic
groups in modern-day gulags.”
According to Fiskesjö, the Chinese initially denied these claims, but
when pictures and documents were leaked to the West, and satellite
images showed camps being built all over the region – Beijing revised
its story. Officials now admit that there is a legal campaign under
way that is aimed at combating radicalism and poverty by means of
vocational reeducation centers.
“The Chinese claim that these are vocational retraining camps and that
the inmates are not there by coercion is a complete lie,” says Nimrod
Baranovitch, from the University of Haifa’s Asian studies department.
“I know directly and indirectly of hundreds of people who were
incarcerated in the camps and have no need of vocational retraining.
Intellectuals, professors, physicians and writers have disappeared.
One of them is Ablet Abdurishit Berqi, a postdoctoral student who was
here with us in Haifa. I hope he is still alive.”
Baranovitch finds it striking that the Muslim countries are ignoring
the Chinese suppression. “For quite a few countries, we’re not only
talking about coreligionists but also about ethnic affinity, as the
Uyghurs are of Turkish descent. The thing is that many Muslim states
are involved in the Silk Road [Belt and Road Initiative] project. In
my opinion, one of the reasons for the promotion of that project,
whose economic rationale is not always clear, is to facilitate the
elimination of the Uyghur problem. By means of investments and the
promise of huge future investments, China has bought the silence of
many Muslim countries.”
Indeed, last July, an urgent letter about Xinjiang to the United
Nations Human Rights Council from the ambassadors of 22 countries was
answered by a letter of support for China from the representatives of
37 other states, including Saudi Arabia, Syria, Kuwait and Bahrain.
One factor that makes it easier for the world to remain silent about
the events in Xinjiang is that China has effectively closed off this
immense region behind a curtain of secrecy, by means of surveillance
and espionage, internet and social-network censorship, travel
restrictions and bans on residents’ contact with relatives and others
abroad, along with policing, oversight and control on a vast scale.
According to Fiskesjö, these efforts are concealing an actual genocide
– according to the UN definition of the term from 1948 – even if the
measures don’t include widespread acts of murder.
“Children are being taken from their parents, who are confined in
concentration camps, and being put in Chinese orphanages,” he says.
“Women in the camps are receiving inoculations that make them
infertile, the Chinese are entering into private homes and eradicating
local culture, and there is widespread collective punishment.”
Sayragul Sauytbay’s story took a surprising turn in March 2018 when,
with no prior announcement, she was informed that she was being
released. Again her head was covered with a black sack, again she was
bundled into a vehicle, but this time she was taken home. At first the
orders were clear: She was to resume her former position as director
of five preschools in her home region of Aksu, and she was instructed
not to say a word about what she had been through. On her third day
back on the job, however, she was fired and again brought in for
interrogation. She was accused of treason and of maintaining ties with
people abroad. The punishment for people like her, she was told, is
reeducation, only this time she would be a regular inmate in a camp
and remain there for a period of one to three years.
“I was told that before being sent to the camp, I should return home
so as to show my successor the ropes,” she says. “At this stage I
hadn’t seen my children for two-and-a-half years, and I missed them
very much. Having already been in a camp, I knew what it meant. I knew
I would die there, and I could not accept that. I am innocent. I did
nothing bad. I worked for the state for 20 years. Why should I be
punished? Why should I die there?”
Sauytbay decided that she was not going back to a camp. “I said to
myself that if I was already fated to die, at least I was going to try
to escape. It was worth my while to take the risk because of the
chance that I would be able to see my children. There were police
stationed outside my apartment, and I didn’t have a passport, but even
so, I tried. I got out through a window and fled to the neighbors’
house. From there I took a taxi to the border with Kazakhstan and I
managed to sneak across. In Kazakhstan I found my family. My dream
came true. I could not have received a greater gift.”
But the saga did not end there: Immediately after her emotional
reunion with her family, she was arrested by Kazakhstan’s secret
service and incarcerated for nine months for having crossed the border
illegally. Three times she submitted a request for asylum, and three
times she was turned down; she faced the danger of being extradited to
China. But after relatives contacted several media outlets,
international elements intervened, and in the end she was granted
asylum in Sweden.
“I will never forget the camp,” Sauytbay says. “I cannot forget the
eyes of the prisoners, expecting me to do something for them. They are
innocent. I have to tell their story, to tell about the darkness they
are in, about their suffering. The world must find a solution so that
my people can live in peace. The democratic governments must do all
they can to make China stop doing what it is doing in Xinjiang.”
Asked to respond to Sayragul Sauytbay’s description of her experience,
the Chinese Embassy in Sweden wrote to Haaretz that her account is
“total lies and malicious smear attacks against China.” Sauytbay, it
claimed, “never worked in any vocational education and training center
in Xinjiang, and has never been detained before leaving China” – which
she did illegally, it added. Furthermore, “Sayragul Sauytbay is
suspected of credit fraud in China with unpaid debts [of] about
400,000 RMB” (approximately $46,000).
In Xinjiang in recent years, wrote the embassy, “China has been under
serious threats of ethnic separatism, religious extremism and violent
terrorism. The vocational education and training centers have been
established in accordance with the law to eradicate extremism, which
is not ‘prison camp.’” As a result of the centers, according to the
Chinese, “there has been no terrorist incident in Xinjiang for more
than three years. The vocational education and training work in
Xinjiang has won the support of all ethnic groups in Xinjiang and
positive comments from many countries across the world.”
05-MAR-2018 :: China has unveiled a Digital Panopticon in Xinjiang
Law & Politics
Dissent is measured and snuffed out very quickly in China. China has
unveiled a Digital Panopticon in Xinjiang where a combination of data
from video surveillance, face and license plate recognition, mobile
device locations, and official records to identify targets for
detention [CDT]. Xinjiang is surely a Precursor for how the CCCP will
manage dissent. The actions in Xinjiang are part of the regional
authorities’ ongoing “Strike-Hard” campaign, and of President Xi’s
“stability maintenance” and “enduring peace” drive in the region.
China's Digital Silk Road: Strategic Technological Competition and Exporting Political Illiberalism via @CFR_org
Law & Politics
Great power competition has returned as a defining feature of the
geopolitical landscape, with the United States and China vying for
regional and global influence. Technological development will be
crucial to the outcome of this competition, and China has adopted a
model that combines state-led capitalism with a form of political
illiberalism supported by a broad range of digital technologies.
Beijing is using the Digital Silk Road, a subset of the Belt and Road
Initiative (BRI) to enhance digital connectivity abroad, extend its
influence, and further China’s ascendance as a technological
Announced in a 2015 Chinese government white paper, the Digital Silk
Road has both foreign and domestic policy objectives that include
creating China-centric digital infrastructure, exporting industrial
overcapacity, facilitating the expansion of Chinese technology
corporations, accessing large pools of data, and projecting sharp
power as well as manipulating political perceptions, thus undermining
democratic processes abroad. While China’s Digital Silk Road has the
potential to enhance digital connectivity in developing economies, it
simultaneously has the capacity to spread authoritarianism, curtail
democracy, and curb fundamental human rights.
The project is comprised of four interrelated, technologically-focused
components. First, China is investing in digital infrastructure
abroad, including next-generation cellular networks, fiber optic
cables, and data centers. Second, the initiative contains a domestic
focus on developing advanced technologies that will be essential to
global economic and military power, including satellite-navigation
systems, artificial intelligence, and quantum computing. Third,
because China recognizes the importance of economic interdependence to
its international influence, the Digital Silk Road promotes e-commerce
through digital free trade zones, which increase international
e-commerce by reducing cross-border trade barriers and establishing
regional logistics centers. Fourth, China is working to establish its
ideal international digital environment through digital diplomacy and
multilateral governance. This has included using multilateral
institutions to establish technological standards related to
telecommunications infrastructure and promoting the principle of
cybersovereignty at UN forums.
The United States has sought to constrain the Digital Silk Road and
China’s technological ascendancy by presenting Chinese technology
corporations as an unacceptable risk to international security,
including attempts to persuade allies to prohibit Chinese corporations
from contributing to their critical digital infrastructure. These
efforts have had limited success, with Australia, New Zealand and
Japan banning Chinese corporations’ involvement in developing their 5G
networks, while others such as the United Kingdom and Germany have
been less willing to completely block Chinese involvement in such
infrastructure. Additionally, the United States has included digital
connectivity as an aspect of its Advancing a Free and Open
Indo-Pacific Region policy in an effort to counteract Chinese
investment in digital infrastructure in the region.
Through the Digital Silk Road, and the BRI more broadly, China aims to
maintain the liberal economic system that has permitted its rise while
promoting an illiberal political environment. An illiberal political
order would promote authoritarian regimes, curtail individual rights,
and hinder the rule of law around the globe. China is not only
exporting it forms of digital authoritarianism or digital Leninism
through digital infrastructure, it is also providing a model and
guidance on how governments can use technology to repress their
Washington is correct to challenge Beijing in the technological and
economic spheres; however, if the United States approaches this
strategic competition as it has generally approached foreign policy
under the current administration, without sufficiently promoting
liberal political values, it will play into China’s hands. The United
States should take a more holistic approach that includes working with
allies along the BRI to counteract the spread of digital
authoritarianism and ensures that international digital connectivity
creates a secure, free and open cyber environment, including through
the involvement of international organizations, civil society, and the
private sector. The United States and like-minded democracies should
provide a positive model of technological development and digital
connectivity that promotes their core values, otherwise the
competition for global technological supremacy could usher in a
politically illiberal international order.
Inside the Derailed White House Meeting @nytimes
Law & Politics
“I hate ISIS more than you do,” President Trump said. “You don’t know
that,” Speaker Nancy Pelosi replied. Here’s the rest of their
You know a White House meeting has gone off the rails when the
president of the United States and the speaker of the House cannot
agree over the precise insult one called the other.
According to Speaker Nancy Pelosi, President Trump called her a
“third-grade” politician during a combative meeting with congressional
leaders of both parties on Wednesday about the worsening situation in
The White House and Senator Chuck Schumer of New York, the minority
leader, said Mr. Trump actually called Ms. Pelosi “third-rate.”
At one particularly tense moment, Ms. Pelosi informed the president
that “all roads with you lead to Putin,” referring to Vladimir V.
Putin, the Russian president.
And so, on Day 1,000 of his presidency, that is where things stand
between Mr. Trump and Ms. Pelosi, who have a fraught history of
derailing meetings shortly after pledging to work together, including
one in January, when the president abruptly stood up, said “bye bye,”
and stormed out. A meeting in May basically ended before it began.
The roughly 20-minute meeting on Wednesday, the first since Democrats
began an impeachment inquiry of Mr. Trump, was a new low, according to
the recollections of several Democratic officials who shared details
of the meeting. The White House did not dispute their accounts.
Mr. Trump began the proceedings in the Cabinet Room by making it clear
that he did not want to be there.
“They said you wanted this meeting,” Mr. Trump told the congressional
leaders. “I didn’t want this meeting, but I’m doing it.”
Several lawmakers replied that the White House had reached out to them
in efforts to brief them on the administration’s Syria policy.
Mr. Trump then began a speech about a “nasty” letter he had sent to
President Recep Tayyip Erdogan of Turkey, which he said was proof that
he had not given the Turkish leader a green light to advance Turkish
forces into Syria.
Mr. Trump then directed Representative Kevin McCarthy of California,
the Republican minority leader, to pass copies of the letter around
The letter to Mr. Erdogan, which began with the sentence “Let’s work
out a good deal!” was dated Oct. 9, or three days after the two
leaders discussed the departure of American forces from the area.
A short time later, Ms. Pelosi told the president that the House had
passed a bipartisan resolution with overwhelming Republican support
that condemned his acquiescence to a Turkish assault against the
Kurds, who have been crucial American allies in the fight against
Mr. Schumer, for his part, tried to appeal to Mr. Trump as a fellow
New Yorker who lived through the Sept. 11 terrorist attacks.
“I told the president, being from New York,” Mr. Schumer said to
reporters shortly after the meeting, “we’re particularly aware of the
problems that terrorism that an organization like ISIS can create. And
the fact that someone no less than General Mattis has said that ISIS
has been enhanced, that the danger of ISIS is so much greater, worries
all of us.”
At Mr. Schumer’s mention of Gen. Jim Mattis — who quit last year as
Mr. Trump’s secretary of defense to protest the president’s decision
to pull American troops out of Syria — Mr. Trump began denigrating the
retired four-star general’s approach to combating terrorism in the
Mr. Mattis was “the world’s most overrated general,” Mr. Trump told
the group. “You know why? He wasn’t tough enough. I captured ISIS.
Mattis said it would take two years. I captured them in one month.”
The conversation, several Democratic officials said, only devolved
from there, and reached a fever pitch after Ms. Pelosi told the
president that Russia, which has quickly stepped in to fill the void
left by American troops in Syria, “has always wanted a foothold in the
It was at this point that she told Mr. Trump that all roads with him
led to Mr. Putin.
At another point, Mr. Trump told Ms. Pelosi that he cared more about
defeating terrorism than she did.
“I hate ISIS more than you do,” the president declared.
“You don’t know that,” the speaker replied.
What happened next is now a matter of ammunition by both the Democrats
and the White House.
“You’re just a politician,” Mr. Trump said to Ms. Pelosi.
“Sometimes I wish you were,” Ms. Pelosi shot back.
Mr. Schumer interjected, telling Mr. Trump that name-calling was not necessary.
“Is that a bad name, Chuck?” Mr. Trump asked, then turned to Ms.
Pelosi. “You’re not a politician, you’re a third-grade politician.”
(Or “third-rate,” depending on which politician was doing the
Ms. Pelosi stood up to leave, but then sat back down. At this point
Representative Steny Hoyer of Maryland, the House majority leader —
who later said he was “deeply offended” by the president’s treatment
of the speaker — said it was time to go.
“This is not useful,” Mr. Hoyer said as he and Ms. Pelosi made for the door.
“Goodbye,” the president responded. “We’ll see you at the polls.”
In the hours afterward, Democrats and the White House leapt to promote
their side of the story and take shots at each other. Stephanie
Grisham, the White House press secretary, said the president had been
completely in control during the meeting with lawmakers.
“The president was measured, factual and decisive, while Speaker
Pelosi’s decision to walk out was baffling, but not surprising,” Ms.
Grisham said in a statement.
“She had no intention of listening or contributing to an important
meeting on national security issues. While democratic leadership chose
to storm out and get in front of the cameras to whine, everyone else
in the meeting chose to stay in the room and work on behalf of this
By early evening, Mr. Trump had posted on Twitter the official White
House photos of the meeting. One showed Ms. Pelosi standing up to
speak to him, which Mr. Trump characterized as an “unhinged meltdown.”
Ms. Pelosi used “meltdown” to describe Mr. Trump’s behavior as well.
"THERE IS DEFINITE HANKY-PANKY GOING ON": THE FANTASTICALLY PROFITABLE MYSTERY OF THE TRUMP CHAOS TRADES @VanityFair
Law & Politics
In the last 10 minutes of trading at the Chicago Mercantile Exchange
on Friday, September 13, someone got very lucky. That’s when he or
she, or a group of people, sold short 120,000 “S&P
e-minis”—electronically traded futures contracts linked to the
Standard & Poor’s 500 stock index—when the index was trading around
3010. The time was 3:50 p.m. in New York; it was nearing midnight in
Tehran. A few hours later, drones attacked a large swath of Saudi
Arabia’s oil infrastructure, choking off production in the country and
sending oil prices soaring. By the time the CME next opened, for
pretrading on Sunday night, the S&P index had fallen 30 points, giving
that very fortunate trader, or traders, a quick $180 million profit.
It was not an isolated occurrence. Three days earlier, in the last 10
minutes of trading, someone bought 82,000 S&P e-minis when the index
was trading at 2969. That was nearly 4 a.m. on September 11 in
Beijing, where a few hours later, the Chinese government announced
that it would lift tariffs on a range of American-made products. As
has been the typical reaction in the U.S. stock markets as the trade
war with China chugs on without any perceptible logic, when the news
about a potential resolution of it seems positive, stock markets go
up, and when the news about the trade war appears negative, they go
The news was viewed positively. The S&P index moved swiftly on
September 11 to 2996, up nearly 30 points. That same day, President
Donald Trump said he would postpone tariffs on some Chinese goods, and
the S&P index moved to 3016, or up 47 points since the fortunate
person bought the 82,000 e-minis just before the market closed on
September 10. Since a one-point movement, up or down, in an e-mini
contract is worth $50, a 47-point movement up in a day was worth
$2,350 per contract. If you were the lucky one who bought the 82,000
e-mini contracts, well, then you were sitting on a one-day profit of
roughly $190 million.
A week earlier, three minutes before the CME closed on September 3,
someone bought 55,000 e-mini contracts, with the index at about 2906.
At around 9 p.m. in New York—9 a.m. in Hong Kong—the market started
moving and kept rallying for the next six hours or so, reaching 2936.
Around 2 p.m. in Hong Kong—2 a.m. in New York—Carrie Lam, the Hong
Kong leader, announced that she would be withdrawing the controversial
extradition bill that had been roiling the city in protest for months.
Whoever bought those e-mini contracts a few hours earlier made a
killing: a cool $82.5 million profit.
But these wins were peanuts compared to the money made by a trader, or
group of traders, who bought 420,000 September e-minis in the last 30
minutes of trading on June 28. That was some 40% of the day’s trading
volume in September e-minis—making it a trade that could not easily be
ignored. By then, President Trump was already in Osaka, Japan—14 hours
ahead of Chicago—and on his way to a roughly hour-long meeting with
China’s President Xi Jinping as part of the G20 summit. On Saturday in
Osaka, after the market had closed in Chicago, Trump emerged from his
meeting with Xi and announced that the intermittent trade talks were
“back on track.” The following week was a good one in the stock
market, thanks to the Trump announcement. On Thursday, June 27, the
S&P 500 index stood at about 2915; a week or so later, it was just
below 3000, a gain of 84 points, or $4,200 per e-mini contract.
Whoever bought the 420,000 e-minis on June 28 had made a handsome
profit of nearly $1.8 billion.
Traders in the Chicago pits have been watching these kinds of wagers
with an increasing mixture of shock and awe since the start of the
Trump presidency. They are used to rapid fluctuations in the S&P 500
index; volatility is common, of course. But the precision and timing
of these trades, and the vast amount of money being made as a result
of them, make the traders wonder if all this is on the level. Are the
people behind these trades incredibly lucky, or do they have access to
information that other people don’t have about, say, Trump’s or
Beijing’s latest thinking on the trade war or any other of a number of
ways that Trump is able to move the markets through his tweeting or
slips of the tongue? Essentially, do they have inside information?
Theoretically, market regulators are supposed to be keeping an eye on
big trades such as these, to try to figure out whether they are just
happy coincidences or whether there is something more nefarious afoot.
And they say they do. But calls to the Chicago Mercantile Exchange,
where the trades takes place, the Securities and Exchange Commission,
which regulates the equity markets, and to the Commodity Futures
Trading Commission, which regulates futures contracts, such as
e-minis, were answered in different ways. Christopher Carofine, at the
SEC, declined to comment. The CFTC did not respond to my inquiries,
while a spokeswoman for the CME says the trades in question did not
originate from a single source and they were of no concern.
There is no way for another trader, let alone an outsider such as me,
to know who is making these trades. But regulators know or can find
out. One longtime CME trader who has been watching with disgust says
he’s never seen anything quite like these trades, not at least since
al-Qaida cashed in before initiating the September 11 attacks. “There
is definite hanky-panky going on, to the world’s financial markets’
detriment,” he says. “This is abysmal.”
In the case of Trump, market manipulation also yields political
dividends. Perhaps the most obvious example dates to late August, when
Trump, desperate to reignite trade talks with China, boasted during
the G7 summit that his counterparts in Beijing had come back to the
table. “We’ve gotten two calls—very, very good calls,” he told
reporters. “They mean business.” The market rose more than 900 points
over the next few days. But a spokesperson for the Chinese foreign
ministry said he was not aware of any such calls. An editor at the
Global Times, the state-controlled newspaper, tweeted that he knew of
no calls made in the days leading up to the G7 meeting and that “China
won’t cave to US pressure.” Two U.S government officials later told
CNN that Trump misspoke and “conflated” comments from China’s Vice
Premier Liu He with direct communication from the Chinese. According
to CNN, the officials said Trump was “eager to project optimism that
might boost markets.”
Indeed, this single Trump lie briefly inflated domestic markets by
hundreds of billions of dollars. “What this describes is, quite
literally, market manipulation that constitutes criminal violations of
the Securities Exchange Act of 1934,” commented George Conway, the
conservative attorney and Trump critic.
Whether Conway is right or wrong is a matter of legal opinion, but
given how fishy and coincidental the trading in e-minis seems to be
these days, the SEC or CFTC would be doing a great service (and their
job) for the American people by investigating who is behind these
lucrative trades, and what they knew before they placed them. At the
moment, what we’re getting from them is an indifferent shrug.
Federal regulators might start here: In the last 10 minutes of trading
on Friday, August 23, as the markets were roiling in the face of more
bad trade news, someone bought 386,000 September e-minis. Three days
later, Trump lied about getting a call from China to restart the trade
talks, and the S&P 500 index shot up nearly 80 points. The potential
profit on the trade was more than $1.5 billion
Panic Behind The Scenes: China's Capital Outflows Are Soaring @zerohedge
Law & Politics
For months, pundits have been looking at China's official data - be it
the PBOC's reserve data or SAFE's monthly flow report - for indication
that capital flight is picking up again as it did in 2015 in the
aftermath of the first yuan devaluation, and so far the data has
refused to validate predictions that Chinese depositors are quietly
pulling their money from China's financial system.
That's one possibility. However, as the WSJ notes, instead of using
the front door, Chinese capital is increasingly "walking through the
back door" following the recent sharp devaluation in the yuan, which
has slumped 6% against the dollar since late April, and 10% since
mid-2018; of course should the back door open any wider Beijing will
find itself again forced to sell down big parts of its currency
reserves to avoid a panic. Worries about cracks in currency fortress
China are another reason Beijing is likely to remain wary of
aggressive monetary stimulus.
there is a relatively simple way to keep track of what is really
happening with China's fund flows behind the scenes. As the WSJ notes,
the relevant figure to track is China’s "errors and omissions" line in
its balance of payments.
This number represents the residual of the main BOP accounts
registering trade and investment flows—in other words, capital that
has moved across China’s borders without being documented. An equation
Whereas in most countries this line item is relatively small, in
China, since 2014 when Beijing decided to stop appreciating the yuan
against the dollar, it has become :persistently and mysteriously large
and negative" with analysts at Rhodium Group and others long
suspecting this item represents undocumented capital flight.
And while this shadow capital flight moderated in 2018, the trend
recently became even more striking, as "errors and omissions" hit a
record first-half high of $131 billion in 2019, the WSJ notes citing
Gene Ma of the Institute of International Finance, much larger than
the first-half average of $80 billion during the last period of big
capital outflows in 2015 and 2016.
On the surface, this suggests that true capital flight is now twice as
large as what was observed after the 2015 devaluation, and indicated
that while measures instituted a few years ago to limit capital flight
have appeared effective, China remains vulnerable to rising outflows
through unofficial channels.
Furthermore, the country has yet to report its third-quarter figures,
following the big yuan depreciation in early August, when it dipped
below 7.00 against the dollar for the first time in a decade.
So what to make of this? Two things, and neither is good.
First, as the WSJ notes, Beijing's decision to allow its currency to
offset the pressure from the trade war has been one of China’s key
survival strategies so far, but "with increasing signs that the ocean
of capital sloshing around behind China’s dike is finding new
cracks—and out-of-control domestic food-price inflation adding to the
stakes—that strategy is looking riskier."
The second one is that with capital already fleeing China, any future
attempts to boost China's economy using monetary policy will be
promptly punished, which also explains why the world is sinking into
recession: as a reminder, in a world where China has been the primary
growth dynamo thanks to its tremendous credit impulse after the
financial crisis, this massive credit creation mechanism has now shut
13-AUG-2019 :: The most important currency to watch right now is the USDCNH
Law & Politics
China has exerted the power of pull over a vast swathe of the world
over the last two decades. We can call it the China, Asia, EM and
Frontier markets feedback loop.
This feedback loop has been largely a positive one for the last two
decades. With the Yuan now in retreat [and in a precise response to
Trump], this will surely exert serious downside pressure on those
countries in the Feed- back Loop.
The Purest Proxy for the China, Asia, EM and Frontier markets feedback
loop phenomenon is the South African Rand aka the ZAR.
GS @GoldmanSachs on NFLX @netflix : raise PT to 400 @themarketear
1. we see considerable upside to management's subscriber guidance for
4Q and consensus expectations for next year given the strength of the
2. We remain Buy rated (on CL) and raise our 12-month price target to
$400 from $360 to reflect our revised estimates, incremental
visibility into forward subscriber growth, and recent expansion in
23-SEP-2019 :: Streaming Dreams Non-Linearity Crude Oil; Netflix
My Mind kept to an Article I read in 2012 ‘’Annals of Technology
Streaming Dreams’’ by John Seabrook January 16, 2012. “This world of
online video is the future, and for an artist you want to be first in,
to be a pioneer. With YouTube, I will have a very small crew, and we
are trying to keep focused on a single voice. There aren’t any rules.
There’s just the artist, the content, and the audience.”
“People went from broad to narrow,” he said, “and we think they will
continue to go that way—spend more and more time in the niches—
because now the distribution landscape allows for more narrowness’’.
And this brought me to Netflix. Netflix spearheaded a streaming
revolution that changed the way we watch TV and films. As cable TV
lost subscribers, Netflix gained them, putting it in a category with
Facebook, Amazon, and Google as one of the adored US tech stocks that
led a historic bull market [FT].
Netflix faces an onslaught of competition in the market it invented.
After years of false starts, Apple is planning to launch a streaming
service in November, as is Disney — with AT&T’s WarnerMedia and Com-
cast’s NBCUniversal to follow early next year. Netflix has corrected
brutally and lots of folks are bailing big time especially after
Netflix lost US subscribers in the last quarter.
Even after the loss of subscribers in the second quarter, Ben
Swinburne, head of media research at Morgan Stanley, says Netflix is
still on course for a record year of subscriber additions. Optimists
point to the group’s global reach.
It is betting its future on expansion outside the US, where it has
already attracted 60m subscribers. And this is an inflection point
just like the one I am signaling in the Oil markets. Netflix is not a
US business, it is a global business.
The Majority of Analysts are in the US and in my opinion, these same
Analysts have an international ‘’blind spot’’ Once Investors
appreciate that the Story is an international one and not a US one
anymore, we will see the price ramp to fresh all-time highs.
I, therefore, am putting out a ‘’conviction’’ Buy on Netflix at
Friday’s closing price of $270.75.
Africa's eurobonds are a blank cheque @FT
Eurobond financing is booming, even in the least-developed emerging
markets. African sovereigns issued $26bn on the market last year
alone. You would be hard-pressed, however, to find out how the money
In many eurobond prospectuses, you will find that the “Use of
Proceeds” section consists of a mostly blank page containing one short
message: “The Republic of . . . will use the net proceeds of the issue
for general budgetary purposes.” That blank page is, essentially, a
Despite the risks associated with the potential misallocation of
borrowed money and growing debt distress, the quality of public debt
management in debtor countries is not reflected in traditional
sovereign credit analysis.
in this context, environmental, social and governance (ESG)
evaluations could be a game changer. They could focus attention on
often overlooked debt management and governance issues, factors that
experience has shown to be material to sovereign risk.
Scoring those factors would offer investors a more accurate risk
profile of sovereign issuers.
As the World Bank and IMF hold their annual meetings in Washington
this week, sovereign borrowing without conditionality is certain to be
a hot topic.
Debt campaigners are clamouring for discipline as the external debt of
African countries reaches unsustainable levels. Organisations such as
the IMF are being criticised for encouraging reckless borrowing.
There are legitimate questions as to how countries can be facing debt
distress, given that so many have recently benefited from debt
Some of the answers can be found on the blank pages of the eurobond
It seems barely possible today that, despite great pressure for loan
transparency from international institutions, G20 governments, rating
agencies and official creditors, sovereigns are still able to borrow
billions of dollars on the eurobond market with little or no
accountability regarding the use of proceeds.
When a private company makes a pitch for new finance, a business and
investment plan is essential, including clarity about how the borrowed
funds will be invested in future earnings capacity.
In the case of eurobond borrowing, this is notably absent. The general
investment themes of bond issuance roadshows notwithstanding, there
seems to be a “don’t ask, don’t tell” approach to sovereign bond
financing. Issuers shy away from committing to how funds will be
Investors don’t ask many questions. Most of the assessment of credit
risk is focused on outstanding debt, reserve accumulation, growth
forecasts and an overall macroeconomic outlook.
The quid pro quo is that investors get handsome returns in exchange
for sovereign finance with few strings attached.
The result is that eurobonds have become an expensive source of
discretionary spending. They often plug fiscal deficits and finance
short-term political objectives.
Longer-term priorities, such as critical infrastructure and economic
diversification, fall by the wayside.
In consequence, borrowing fails to generate the fiscal revenues needed
to cover increased levels of debt service, leading to a vicious cycle
of rollover financing.
As a new debt crisis looms on the continent and the ESG performance of
African sovereigns remains below target, investors are recognising
that more attention should be paid to the uses of eurobond proceeds,
to ensure improved performance and better long-term risk profiles for
the bonds issued.
An opportunity exists to integrate institutional debt management
policies and practices, including the use of eurobond proceeds, into
ESG evaluations as part of the general governance pillar of ESG
Higher ratings would be awarded to sovereign debtors that not only
disclosed the use of proceeds but also provided periodic feedback
through monitoring mechanisms.
A methodology could be developed to measure how effectively sovereign
issuers were channelling resources to projects adhering to green and
social performance criteria.
The scoring system, incorporating several complementary metrics, would
be part of a materiality map for sovereign investors and be based on
the commonly accepted principle that those countries that perform well
on ESG evaluations are less likely to face credit distress or default.
ESG ratings could help to provide transparency in sovereign lending
and more accurate credit risk assessments.
They could also play a role in making investors active owners of
assets and agents of change for better debt management.
By engaging directly with issuers, investors can encourage borrowers
to pursue long-term investment programmes, reinforce debt strategies
and accelerate fiscal consolidation.
This would lead to stronger public finances, debt sustainability and
an improved risk profile.
Andrew Roche has more than 20 years of experience in sovereign debt
restructuring. He has advised numerous countries on their Paris Club,
London Club and commercial debts and has managed World Bank sponsored
Ex-Credit Suisse Banker Hid $45 Million, Names Four Others @business
A former Credit Suisse Group AG banker told a federal jury in New York
that he alone pocketed at least $45 million in a massive kickback
scheme and named other ex-employees of the bank he says made millions
of their own.
Testifying on Wednesday, Andrew Pearse recited the illicit payments he
took for his role in arranging $2 billion in loans to companies in
Pearse, who pleaded guilty to conspiracy, told the court that at least
four former Credit Suisse bankers besides himself took millions of
dollars in bribes from ship builder Privinvest Group, including two he
hadn’t named before.
“They all played a role in ensuring the bank made the loans,” Pearse,
49, said in court in Brooklyn. “They provided the bank with false
information about Privinvest.”
Pearse is a key witness against Jean Boustani, a Privinvest salesman
described by prosecutors as the “mastermind” of a plot to defraud U.S.
The U.S. alleges that Mozambican government officials, corporate
executives and investment bankers stole about $200 million.
Defense lawyer Michael Schachter told jurors in opening statements
Tuesday that Boustani had nothing to do with the sale or marketing of
loans to investors and hadn’t defrauded them.
Pearse got the “sweetest of sweatheart deals” from the U.S. and was
testifying against Boustani to avoid prison, Schachter said.
The Credit Suisse loans were for three maritime projects -- a
tuna-fishing fleet, a shipyard and a surveillance operation to protect
Prosecutors say Privinvest officials charged Mozambique inflated
prices for equipment and services, freeing up money for bribes.
Surjan Singh and Detelina Subeva, two former Credit Suisse bankers who
Pearse said were involved, will also testify for the government,
lawyers said. Both have pleaded guilty.
In addition to Singh, Subeva and Pearse himself, a pair of former
Credit Suisse colleagues who introduced Privinvest to the bank -- Said
Freiha and Adel Afiouni -- made a multimillion-dollar profit after
Privinvest paid more than $10 million for a company they established
while working at the bank, Pearse told jurors.
“The defendant told me they were silent partners with him,” Pearse
said. When asked if both men were at Credit Suisse at the time, Pearse
replied, “Yes, that’s why the defendant described them as ‘silent.’”
Neither Freiha, Afiouni nor Credit Suisse has been charged with
wrongdoing. Karina Byrne, a spokeswoman for the bank, declined to
comment, as did John Marzulli, a spokesman for Brooklyn U.S. Attorney
Freiha and Afiouni are no longer at the bank, and neither returned an
email seeking comment on Pearse’s testimony.
Shares of Credit Suisse closed down 1.1% in Zurich on Thursday.
Switzerland’s benchmark index fell 0.2%.
Pearse testified that Boustani helped him set up a bank account in the
United Arab Emirates to hide the $45 million he’d paid him, even
providing him with the necessary work permit.
Asked what job was cited, the former banker said the permit falsely
described him as a “tube welder” at a construction site.
Four Mozambican officials also got millions of dollars in kickbacks
from Privinvest, and the son of the country’s then-president, Armando
Guebuza, collected at least $50 million in illegal payments, according
“The son introduced the defendant to his father and to the ministers
in the Mozambique government who were necessary for the project to
proceed,” Pearse said.
Ndambi Guebuza, the former president’s son, once demanded Boustani pay
him an additional 11 million euros ($12.2 million), Pearse testified.
“He was living in the South of France and asked to buy a house for
himself and a prostitute he’d fallen in love with,” Pearse said,
adding that the house belonged to Privinvest Chief Executive Officer
Iskandar Safa. “He wanted 11 million euros to buy a house with the
When he expressed surprise at Ndambi Guebuza’s request, Pearse said,
Boustani only shrugged, saying, “It’s nothing, given the $50 million I
already paid him.”
Ndambi Guebuza was arrested by Mozambican authorities in February and
is fighting charges. Safa isn’t charged.
The case is U.S. v. Boustani, 18-cr-681, U.S District Court, Eastern
District of New York (Brooklyn).