|
Monday 28th of October 2019 |
28-OCT-2019 :: From Russia with Love Law & Politics |
President Putin, whom I amongst others believe moved the Needle sufficiently to put Trump into the White House.Putin's assets range from Marine Le Pen to the Movimento 5 Stelle in Italy and if there are Barbarians at the gates of Fortress Europe, they do belong to Vladimir. His Syrian Intervention on behalf of Bashar Assad has lasted 48 months so far and the Optics of US Military vehicles departing [in a hail of tomatoes] and Russian Military vehicles patrolling precisely the same area a few minutes later sums it up.
Last week Putin made his ''late cycle'' Play for Africa hosting a Russia Africa Summit in the Black Sea resort of Sochi. “Late to the Party: Russia’s Return to Africa.” tweeted @pstronski.
Putin in an interview with state-run news service Tass, said
“Indeed, interest in developing the relations with African countries is currently visible not only on the part of Western Europe, the US and [China], but also on the part of India, Turkey, the Gulf states, Japan, the Republic of Korea, Israel and Brazil. “This is not accidental, as Africa increasingly becomes a continent of opportunities.”
These opportunities include natural resources, infrastructure development and increasing consumer demand from a growing population, Putin specified. But, he said, Russia was going to be a different kind of superpower, one that does not engage in “pressure, intimidation and blackmail” to “exploit” sovereign African governments.
“Our African agenda is positive and future-oriented. We do not ally with someone against someone else; and we strongly oppose any geopolitical games involving Africa.”
Putin's linguistics are an Art Form and I imagine he buttressed the above points by discreetly showing his Visitors a Photo of a dead Gaddafi and maybe he dwelled a little on the bottle and then a Photo of a spritely Bashar Assad and would surely not even have had to ask the question; what's the difference?
Between 2006 and 2018 Russia's trade with Africa increased by 335%, more than both China's and India's according to the Espresso Economist. Russia is now Africa's leading supplier of arms. According to the Swedish think tank SIPRI, between 2012 and 2016 Russia had become the largest supplier of arms to Africa, accounting for 35 percent of arms exports to the region, way ahead of China (17 percent), the United States (9.6 percent), and France (6.9 percent). Exports of Russian-made weapons and military hardware to Africa amount currently to $4.6 billion annually, with a contract portfolio worth over $50 billion. Russian arms trade with Africa doubled compared with 2012. Russia is the world’s largest wheat exporter and will surely ramp up its supplies of grain and fertiliser to meet demand that is rising in step with Africa’s booming population.
Russia’s clout on African soil runs on many tracks, and its expansion is geared primarily towards hybrid activities. In Moscow’s offer for Africa are mercenaries, military equipment, mining investments, nuclear power plants, and railway connections.
“Russia regards Africa as an important and active participant in the emerging polycentric architecture of the world order and an ally in protecting international law against attempts to undermine it,” said Russian Deputy Foreign Minister Mikhail Bogdanov back in November 2018
The Spokesman for the Egyptian Presidency gushed ''Russia has white hands in Africa''
Recently we have seen Russian interventions in the Central African Republic (CAR.
In July this year, a three-minute animated video appeared on YouTube. Called Lionbear, the cartoon was aimed at children and told the story of a brave but beleaguered Central African lion, who was fighting a losing battle against a pack of hungry hyenas. Luckily the lion had a friend who came to the rescue — the strong Russian bear. The bear fights off the hyenas, brings peace to the land and everyone lives happily ever after. The video was produced by Lobaye Invest, a Russian mining company with links to the Wagner Group. Lobaye runs a radio station in the CAR, and organised a Miss CAR pageant. But, as a CNN investigation reported this year, Lobaye also funds the 250 Russian mercenaries who are stationed in the country. “The dividend for Lobaye Invest: generous concessions to explore for diamonds and gold in a country rich in mineral wealth,” it reported. The Russian mercenaries are officially there to train the CAR’s national army. But their activities in the country are shrouded in secrecy, and when three Russian journalists travelled there to investigate they were murdered.[Mail and Guardian Simon Allison]
I would argue Putin's timing is exquisite and optimal and his Model has an exponential ROI. The Warsaw Institute headlined its article Russia in Africa: Weapons, Mercenaries, Spin Doctors. Russia’s clout on African soil runs on many tracks, and its expansion is geared primarily towards hybrid activities. In Moscow’s offer for Africa are mercenaries, military equipment, mining investments, nuclear power plants, and railway connections.
Andrew Korybko writes
Moscow invaluably fills the much-needed niche of providing its partners there with “Democratic Security”, or in other words, the cost-effective and low-commitment capabilities needed to thwart Color Revolutions and resolve Unconventional Wars (collectively referred to as Hybrid War). To simplify, Russia’s “political technologists” have reportedly devised bespoke solutions for confronting incipient and ongoing Color Revolutions, just like its private military contractors (PMCs) have supposedly done the same when it comes to ending insurgencies
Once we look through the Optics of two nuclear-capable supersonic bombers belonging to the Russian Air Force landing in Pretoria for the aircraft’s first ever landing on the African continent and, according to an embassy official, only the second country in which it has made a public appearance outside of Russia. The first was Venezuela. Then we need to see this move for what it is.
It is meaningful. Where Xi is fed up and speaks about the ''The End of Vanity'' because the ROI [outside Commodities and Telecoms for China] is negative, Putin has created a hybrid Model with an exponential ROI. I would imagine he is on Speed Dial.
|
read more |
|
Photo released by @WhiteHouse showing @POTUS, @VP and @EsperDoD, along with members of the national security team, in the Situation Room watching as US Special Operations forces close in on #ISIS leader Abu Bakr al-Baghdadi. @W7VOA Law & Politics |
Abu Bakr al-Baghdadi is a nom de guerre.[25] He had various names and epithets, including Abu Du'a[5] (أبو دعاء ʾabū duʿāʾ),[26] Al-Shabah (the phantom or ghost),[27] Amir al-Mu'minin, Caliph (sometimes followed by Abu Bakr, al-Baghdadi, or Ibrahim), http://j.mp/2qPJKJ8
|
read more |
|
As far as we know, this man was already dead. Maybe twice. He reportedly faked his death once as well. Law & Politics |
From a domestic point of view, the purpose of the attack is fairly obvious: Donald Trump has an election coming up, and potential Presidents like nothing more than being seen to be tough. That means taking out some “bad guys”. Of course, none of that matters. It doesn’t matter what happened, it doesn’t matter why it happened and it doesn’t matter whether who it (allegedly) happened to was real, or alive…or otherwise. Because, as always, the problem is not the specifics. It’s the principle and the precedent.
|
read more |
|
Pity our Conservative MPs, forced to go on strike to protect their way of life @guardian's @MarinaHyde Law & Politics |
It was the worst of times, it was the worst of times. On the one hand, inflatable reservist Mark Francois MP has previously promised that we will leave the EU on 31 October, or “this country will explode”. On the other hand, Devon-based extremist Katie Hopkins has previously tweeted that we will leave the EU on 31 October, or “I will drink a pot of tea naked in the Apprentice losers cafe with Farage’s face on each nipple.” We will not be leaving the EU on 31 October. According to some reports, Brexit coins minted with the 31 October date “could be worth up to £800”. So could €1 coins, soon enough. Still, the cabinet hoarding the misprinted Brexit coins to pay for their skiing holidays would be an irony we could all get behind. If you’re keeping track of the accounts, Boris Johnson has just blown £100m on an ad campaign insisting the UK was leaving on 31 October, even though the chances of this were always so slim they amounted to Conservative party election positioning. Given that seven months ago the prime minister was describing £60m spent on the historical sex abuse inquiry as money “spaffed up a wall”, it’s important that you get his Brexit ads in perspective. They were complete bollocks, and at the same time almost twice as valued as investigating mass institutionalised child rape. It’s a very exciting branding space for the Tories to be in. Strange to think that, in another timeline, we would all currently be pooling our corned beef and lightbulbs in anticipation of Theresa May’s planned Festival of Brexit. Instead, we’re waiting to see whether the French will give us an election. Yesterday, Boris Johnson told MPs in the Commons tea room that he had asked the French to block the Brexit extension request. In a documentary filmed when he was foreign secretary, Johnson told the cameras that the French were “turds”. So it will be interesting to see which version of our friends and partners turns up. What’s the French for, “You want picking up in the morning, pal?” The prime minister wants a Christmas election, but at present that old Scrooge Jeremy Corbyn won’t give him one. Despite having a deal that parliament merely wished to properly scrutinise, we are told that no-deal plans are being stepped up by Michael Gove (who frequently appears to have been visited by three spirits). “We are triggering Operation Yellowhammer,” he announced on Sunday. You’re triggering us all, dear. And what if they can’t get an election? Then, like a lot of other comedy shows, the Conservative government has decided to have a strike episode. South Park did one once, where the nation of Canada goes on strike because it feels disrespected by the world. As for how the Tory version will play out, instinct suggests you should put your money on “for mirthless laughs”. We’ll have no choice but to watch Conservative ministers presenting themselves as victims of The Man, which is a bit like Peter Sutcliffe presenting himself as a victim of the Yorkshire Ripper. Consequently, they’ll be forced to band together and take industrial action to protect their way of life. Listen, they just want their dignity. They know that when these jobs go there’ll be nothing else, bar retraining as an arms lobbyist or non-executive director of Goldman Sachs. Sadly, we know from bitter experience the privations of a winter strike for those involved. The Conservatives wisely outlawed sympathy actions in the past, so they won’t face having to go through it without essential auxiliary services such as unwanted child collection and Ocado. But do begin putting aside your spare pennies to buy the young Rees-Moggs footwear, while their da makes soaring speeches behind an SW1 brazier. “My father went down the money pit, I went down the money pit, and, so help me, my son will have a money pit to go down.” Except not. This week, Jacob could be found in the House of Commons, explaining why the withdrawal agreement bill that the government actually had a majority for was suddenly nowhere to be seen, by adapting the famous poem from the Scarlet Pimpernel. “The answer lies with Sir Percy Blakeney,” he honked of that novel’s hero. “They seek it here, they seek it there, those parliamentarians seek it everywhere. Is it in heaven, or is it in hell? That damned elusive Brexit bill!” Oh dear. Of course, much to the chagrin of their silly 50-year-old boy, the hugely bourgeois Rees-Moggs would have been entirely safe during the French Revolution. The voluminously suited Jacob’s chief exposure to Sir Percy Blakeney would have run along the lines of the latter’s remark to the ghastly government official Chauvelin: “Sink me! Your tailors have betrayed you. T’would serve you better to send them to Madame Guillotine.” I suppose it’s nice to see Jacob disporting himself with the confidence of a man yet to realise Dominic Cummings is building an oubliette for him to spend any election in. And so to that gilet-clad Loki. This week we’ve had so many definitive and yet contradictory anonymous No 10 rants about what fiendish stratagem is next. Yet here we are, in the same place. The October Surprise is that there is no surprise. There are mayflies that survive longer than Cummings’ briefings, which now have a four-hour lifespan yet somehow always achieve their destiny. They are an essential component of a media ecosystem that kind of knows that not signing a mandated letter means jack shit in legal terms, but will write it anyway because their news editor’s Mr Right Now and needs the appearance of fresh meat. Hey – it’s all retail. Isn’t it? With both main party leaders taken up with hourly contradiction, their extravagantly gifted junior troops have been on hand to desecrate the airwaves. Informed by Kay Burley that the polls said Labour wouldn’t win, shadow lord chancellor Richard Burgon retorted: “The polls said we wouldn’t win last time.” Burley: “You didn’t.” Reposting this exchange, Tory minister Johnny Mercer failed to appreciate his precise comic status as the Tory Burgon. “I sometimes get teased for being thick because I spurned university to join up and serve when I was 19,” Mercer sensationally revealed. “Then I see what a Cambridge degree and career in politics does for this guy and so many others of my colleagues, and think I got it about right.” If you say so yourself. I do enjoy Johnny’s tireless attempts to disguise his raging self-regard as affable humility. His entire output reads like one of those guys who replies to the pictures porn stars tweet: “Mornin darlin! All the better for seeing u! Think u posted that one just for me!!!!!” All in all, another vintage week in the national journey. We remain in the wandering hands of a government that doesn’t want 16- and 17-year-olds to vote because they aren’t mature enough, but will go on strike if it can’t get its election exactly when it wants it. Meanwhile, 16- and 17- year olds are having to bunk off their childhoods to draw the attention of infantilised adults to the looming risk of ecological and social collapse. One month ago, members of Boris Johnson’s government were lining up to tell teenagers that missing one day of school was unacceptable and wrong. Presumably we’ll now hear from those same ministers how missing weeks of your six-figure-salary job running the country is right and heroic. What a time to be existing, when the best escape route feels like giving Xboxes to politicians, and waiting for the nation’s children to grow up.
|
read more |
|
Neumann, the founder of @WeWork will walk away from this corporate bonfire with a billion dollars and a bunch of fancy houses. @bopinion World Currencies |
Well obviously there will be a Harvard Business School case study about WeWork, but what will it say? What is the lesson? It’s a good lesson, right? A lot of kids starting at Harvard Business School next fall will be hanging up posters of Adam Neumann in their dorm rooms. Neumann, the founder of WeWork, will walk away from this corporate bonfire with a billion dollars and a bunch of fancy houses. Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend.
My very favorite part of the Adam Neumann legend might be the story of his first encounter with Masayoshi Son, who runs SoftBank Group Corp. and invests its vast piles of money. (One insane aspect of this encounter is that it happened in 2017. A busy two years!) “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” 1 I like to imagine that conversation with the hindsight of the last few months:
Son: What does your company do? Neumann: We lease office buildings, spruce up the space and sublet it in small chunks. Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my thing. Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs. Son: Okay yeah that’s more like— Neumann: The world’s first physical social network. We encompass all aspects of people’s lives, in both physical and digital worlds. Son: You’re crazy! I love it! But could you be, say, ten times crazier? Neumann: You’re going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you. Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come. Neumann: I’m gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world’s tiniest violin after all your money is gone. Son: YES PUNCH ME IN THE FACE. Neumann: Also I’ll rename the company “We” and charge it $6 million for the name. Son: RUN ME OVER WITH A TRUCK. He got his money; SoftBank ended up investing more than $9 billion in WeWork before its aborted IPO. 2 Now it is doing this: WeWork, in danger of running out of cash in the coming weeks, chose a rescue offer from SoftBank over a competing proposal from JPMorgan Chase & Co., according to people familiar with the matter. It had asked both parties to submit proposals by a deadline yesterday. The deal is expected to value the company at about $8 billion, a far cry from what it was aiming for in an initial public offering earlier this year and even less than the $47 billion at which a January investment from SoftBank pegged its worth. Mr. Neumann, who was forced out as chief executive after pushback from prospective investors scuttled the IPO, has the right to sell $970 million of shares, or roughly one-third of his stake, in a so-called tender offer in which SoftBank will offer to buy up to $3 billion in WeWork stock from employees and investors. The Japanese conglomerate, which already owns about a third of the company, will also extend Mr. Neumann credit to help him repay a $500 million loan facility led by JPMorgan, the people said. It will also pay him a $185 million consulting fee. ... As part of the deal, which We was expected to announce as soon as Tuesday, SoftBank would move up a $1.5 billion investment it had been scheduled to make next year and extend the company a $5 billion loan. That’s nine point five billion dollars that SoftBank is putting into WeWork, 3 on top of the more than nine billion dollars it has already put into WeWork, an astounding total of more than $18.5 billion for a company it values at $8 billion. 4 And while WeWork is desperate for the $1.5 billion equity investment and the $5 billion loan—it is running out of cash and “so strapped that it could not afford severance payments for the employees it plans to lay off,” notes my Bloomberg Opinion colleague Shira Ovide—the $3 billion tender offer seems a little gratuitous? That is not money that is going to keep WeWork afloat; that is just cashing out other investors to leave SoftBank holding more of the bag. (The bailout will give SoftBank about 80% ownership.) Presumably—though who knows!—SoftBank does not have limitless money to pour into WeWork, so it’s strange that such a big chunk of its WeWork rescue investment is not going to fund the company.
Perhaps the motivation is that SoftBank are true believers and don’t want their deep-value bet on WeWork to be diluted by other shareholders. But my assumption is that the tender offer is the result of Neumann’s holdup power: Prior to the deal, Neumann is still the company’s controlling shareholder, and he could just say no to a deal that he didn’t like. That might completely evaporate his own wealth, but it would evaporate a whole lot more of SoftBank’s, and it kind of looks like SoftBank blinked first: In effect, the price of Neumann allowing SoftBank to rescue WeWork was that SoftBank had to hand Neumann a billion dollars for himself. One version of that Son/Neumann origin myth has Son telling Neumann that “in a fight, being crazy is better than being smart,” and you can see a little of that in this negotiating dynamic. As his company’s value vanished due to his own hubris and weirdness, Neumann went back to his biggest investor for more desperately needed money, and somehow he held all the cards.
Certainly that $185 million consulting fee is a result of his holdup power. 5 But to be fair there is a consulting arrangement, and a four-year noncompete. Do you think they’ll call him up and ask him for advice? Make him earn the money? What will he tell them?
When WeWork first filed the hilarious paperwork for its IPO, I wrote about some of the governance red flags—not so much Neumann’s absolute lifetime-and-beyond control of the company, but his apparent willingness to enrich himself at the expense of shareholders. It all struck me as ominous. If the founder-CEO-controlling-shareholder is doing all that stuff before the IPO, I wondered, what will he do later when the profits roll in? If WeWork ends up creating a lot of value, how can you be sure that Neumann won’t find ways to appropriate a lot of it for himself rather than sharing it with his investors? In hindsight, this was insufficiently cynical. In the event, WeWork ended up destroying a ton of value between that IPO filing and now, and Neumann found new ways to enrich himself anyway.
Nonetheless the thing he did is a normal and mostly praiseworthy, or at least okay, financial thing. He identified an irrationality in the market and got on the other side of it. He saw prices that were wrong and moved them toward right. By betting against other people’s mistakes, he gave them incentives to correct them. He made the markets more efficient, he improved the allocation of capital, he did his small part to speed humanity’s progress out of ignorance and into enlightenment. I mean, it’s fine, I don’t want to overstate the moral case here or anything, but it’s fine.
I can’t quite say that Neumann improved the allocation of capital, but there are certain parallels. Neumann too … look, here I am speculating, and I don’t mean to speak for Neumann’s subjective experience of his WeWork career, but from the outside, in hindsight, objectively, one could describe it like this: He spotted a bubble in venture-subsidized fast-growing money-losing capital-intensive low-margin tech-adjacent companies, noticed in particular that SoftBank seemed to be on the long side of that bubble, and set himself up to profit on the other side—by raising money for his own ultra-unicorn, by setting up the governance of that unicorn in a maximally self-interested way, and by selling and margining a bunch of his personal shares. 6 When investors like SoftBank were frenziedly buying unicorn stock, he was frenziedly selling it. He set himself up to profit from the collapse of the unicorn bubble, and accelerated that collapse. Lessons were learned, and he taught them. Now he’s rich.
“Capitalism occasionally makes huge mistakes,” is part of the story, but the other part is that there are rich rewards for those who spot the mistakes and bet against them. This is a lesson specifically of financial capitalism: In most businesses you can notice a competitor doing a dumb thing and create value by doing a better thing, but the financial markets are special because you can notice a competitor doing a dumb thing and get rich by taking the other side, without creating value or doing a better thing. If you notice that people are buying dumb unicorn shares for too much money, you don’t have to invent a better way of doing business or of funding companies. You can just sell them as many as possible of the dumbest possible unicorn shares; when the bubble bursts, you collect your winnings. This sort of thing—getting rich by being smarter than your counterparties, making markets more efficient by being on the right side of bets—is a classic path to wealth creation in the financial business. Tech, traditionally, has a different ethos, one of getting rich by changing the world. But sometimes there are crossovers, and anyway maybe WeWork was never really a tech company.
Here’s one more crazy WeWork story, about an all-hands meeting in January where Neumann told employees that he would run the company for the next 300 years:
"WeWork is a controlled company. People don't know that," he tells the audience. "I, Adam, and my family control the company 100% — very rare when you have investors. It's not the truth of any company in the world. Google still has it a little bit. Facebook and Mark [Zuckerberg] already lost it. No other company else has it." …
He said he didn't expect his children to be future WeWork CEOs, as he was before his ouster last month. Neumann added that he worried that his children wouldn't "earn" leadership and that he would prefer a leader who "grew from the bottom." ... "It's important that one day, maybe in 100 years, maybe in 300 years, a great-great-granddaughter of mine will walk into that room and say, 'Hey, you don't know me; I actually control the place. The way you're acting is not how we built it,'" he said. “You’re not gouging SoftBank enough,” she’ll say. “Get Masayoshi Son’s great-great-great-grandson in here and punch him in the face.” Those basic WeWork values, passed down through the centuries.
Here’s a longer version from New York Magazine: “Son met Neumann at WeWork headquarters and told him he had precisely 12 minutes for a tour, after which he invited Neumann to join him in his car, where Son sketched out a deal on his iPad to invest $4.4 billion in WeWork. Son told Neumann to make WeWork ‘ten times bigger than your original plan’ and to recognize that, in a fight, being crazy is better than being smart — and that WeWork wasn’t being ‘crazy enough.’ Son said he thought WeWork could be worth ‘a few hundred billion dollars.’” SoftBank and its affiliates, including its Vision Fund, had “invested or committed to invest …approximately $10.65 billion,” according to WeWork’s IPO prospectus, but that counted $1.5 billion of warrant financing that hadn’t closed yet and that also gets counted in the new package. The $9.5 billion is (1) about $1.5 billion for warrants that it had already committed to buy, (2) “a $5 billion debt package” organized by SoftBank,“which will include contributions from SoftBank itself, Mizuho Financial Group Inc. and other lenders,” and (3) a $3 billion tender offer. I am not counting the $500 million loan that SoftBank is giving Neumann, because it appears that that’s a short-term measure that will be paid back out of the tender offer proceeds. (Also it appears to bereally $395 million.) I’m not counting the consulting either because that might be paid by WeWork. Thosenumbers aren’t apples-to-apples or anything; $5 billion of SoftBank’s $18.5 billion is debt (and syndicated), whereas that $8 billion valuation is an equity value, also it ispresumablypre-money. Still! “What SoftBank has agreed to add would bring its total equity investment to more than $13 billion for a company now worth less than $8 billion,” notes the Wall Street Journal. “Japanese investment firm SoftBank will pay former WeWork CEO and current non-executive chairman Adam Neumann around $200 million to leave the board of directors, give up his voting shares and support SoftBank's takeover,” reports Dan Primack at Axios, characterizing the consulting fee a payoff to get Neumann to agree to the bailout. I havesaid this before, even before the latest payout.“If you want,” I once wrote,“you can imagine him as a diabolical genius who explicitly set out to short the unicorn bubble and then walked away barefoot with a jaunty whistle and $700 million of SoftBank’s money, but that does not strike me as necessary or accurate. My model doesn’t require you to think that your startup is dumb! You don’t need to worry about Neumann’s personal beliefs and motivations at all, really. You can just think of him as a product of the invisible hand of the market. A lot of money was pouring into startups, there was a lot of demand, and the demand called forth supply, and the people who supplied the supply got rich; it is elemental and straightforward and has very little to do with questions like ‘is this a good business model?’”
Commodities
|
read more |
|
Dubai needs to halt all new home construction for one or two years to avert an economic disaster brought on by continued oversupply @DAMACOfficial @business Emerging Markets |
“We’re entering a crossroads now,” Damac Properties PJSC Chairman Hussain Sajwani said in a Bloomberg interview. “Either we fix this problem and we can grow from here or we are going to see a disaster.” Damac has dramatically reduced new sales in the past two years and will focus on selling the properties in its inventory, Sajwani said. Still, the developer will complete 4,000 homes this year and another 6,000 in 2020. “All we need is just to freeze the supply,” Sajwani said. “Reduce it for a year, maybe 18 months, maybe 2 years,” he said. Sajwani pointed at his competitor Emaar Properties PJSC as the main culprit in the oversupply and said the company offers payment plans that encourage speculation. The majority of other big developers, including Meraas Holding LLC and Nakheel PJSC, have halted new construction or cut it back by about 80%, while Emaar continues to “dump” properties on the market, he said. Damac’s share price has fallen 40% this year and the company won’t pay dividend this year because profitability is down. Sajwani said he prefers to keep the cash in the company to meet financial obligations. Emaar, which built the world’s tallest tower in Dubai, declined to comment.
Frontier Markets
Sub Saharan Africa
|
read more |
|
Russia in Africa: Soft power comes with hard edges @mailandguardian @simonallison Africa |
‘Do you believe in coincidences?” The Russian embassy’s press attaché, Alexander Kulyaev, is on the apron of Waterkloof Air Force Base. He is a busy man this week: not only is his president entertaining 43 African heads of state and government at the inaugural Russia-Africa summit, but two nuclear-capable supersonic bombers belonging to the Russian Air Force have just landed in Pretoria. This is the aircraft’s first ever landing on the African continent and, according to an embassy official, only the second country in which it has made a public appearance outside of Russia. The first was Venezuela, which has received three visits from Tu-160s, most recently in 2018 as a show of support for the under-fire government of President Nicolás Maduro. It is unclear whether the same message is intended for the administration of President Cyril Ramaphosa, who is in Russia for the summit. Both Russian and South African officials deny any ulterior motives, maintaining that this is strictly a military exercise. “The timing is just a coincidence. And honestly, one I could have done without,” Kulyaev jokes. Coincidence or not, the bombers’ high-profile visit comes during a week in which Russia-Africa relations are under scrutiny like never before. In the Black Sea resort of Sochi, Vladimir Putin is making an audacious play for influence on the continent by portraying Russia as an enlightened partner for Africa — along with generous loans and arms deals (such as the 12 combat helicopters sold to Nigeria this week). As Putin said in an interview with state-run news service Tass, Africa is attracting interest from every major power. “Indeed, interest in developing the relations with African countries is currently visible not only on the part of Western Europe, the US and [China], but also on the part of India, Turkey, the Gulf states, Japan, the Republic of Korea, Israel and Brazil. “This is not accidental, as Africa increasingly becomes a continent of opportunities.” These opportunities include natural resources, infrastructure development and increasing consumer demand from a growing population, Putin specified. But, he said, Russia was going to be a different kind of superpower, one that does not engage in “pressure, intimidation and blackmail” to “exploit” sovereign African governments. “Our African agenda is positive and future-oriented. We do not ally with someone against someone else; and we strongly oppose any geopolitical games involving Africa.” This fine rhetoric is difficult to square with Russia’s recent track record on the continent. In the last 18 months alone, Russian mercenaries — run by the Wagner Group, a shadowy military contractor led by a businessman with close links to Putin — tried and failed to prop up the regime of former Sudanese president Omar al-Bashir; Russian political strategists tried and failed to influence the result of the presidential election in Madagascar; and a consignment of Russian military hardware was delivered to Mozambique, amid persistent reports that Russian mercenaries have been deployed there too. Nowhere is the gap between Russia’s rhetoric and its actions greater than in the Central African Republic (CAR), where Russia began its new scramble for Africa several years ago. In July this year, a three-minute animated video appeared on YouTube. Called Lionbear, the cartoon was aimed at children and told the story of a brave but beleaguered Central African lion, who was fighting a losing battle against a pack of hungry hyenas. Luckily the lion had a friend who came to the rescue — the strong Russian bear. The bear fights off the hyenas, brings peace to the land and everyone lives happily ever after. The video was produced by Lobaye Invest, a Russian mining company with links to the Wagner Group. Lobaye runs a radio station in the CAR, and organised a Miss CAR pageant. But, as a CNN investigation reported this year, Lobaye also funds the 250 Russian mercenaries who are stationed in the country. “The dividend for Lobaye Invest: generous concessions to explore for diamonds and gold in a country rich in mineral wealth,” it reported. The Russian mercenaries are officially there to train the CAR’s national army. But their activities in the country are shrouded in secrecy, and when three Russian journalists travelled there to investigate they were murdered. If this is Putin’s definition of “positive and future-oriented”, then African countries have cause for concern. Not that any of this is unique to Russia. Perhaps Putin should not try so hard to distance itself from his global rivals — in Africa, at least, they all seem to have plenty in common. The United States, for example, operates a string of top-secret military bases across the continent; China buys off leaders with enormous, unsustainable loans and flashy infrastructure deals; and France is no stranger to morally dubious arms deals (a French company, Thales, played a starring role in the multibillion-rand arms scandal in South Africa, for which former president Jacob Zuma is facing criminal charges). So far, there is little evidence to suggest that Russia is any better — or significantly worse — than any of the other superpowers scrambling to take advantage of Africa’s resources and markets. What is clear, however, is that Russia’s soft power play in Africa comes with hard edges — and none harder than the two Tu-160s currently parked at Waterkloof.
|
read more |
|
JAN-2019 :: "money is the most universal and most efficient system of mutual trust ever devised." Africa |
“Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.” “Cowry shells and dollars have value only in our common imagination. Their worth is not inherent in the chemical structure of the shells and paper, or their colour, or their shape. In other words, money isn’t a material reality – it is a psychological construct. It works by converting matter into mind.” The Point I am seeking to make is that There is a correlation between high Inflation and revolutionary conditions, Zimbabwe is a classic example where there are $9.3 billion of Zollars in banks compared to $200 million in reserves, official data showed. The Mind Game that ZANU-PF played on its citizens has evaporated in a puff of smoke. ‘’The choice of that moment is the greatest riddle of history’’ and also said “If the crowd disperses, goes home, does not reassemble, we say the revolution is over.” What is clear to me is that Zimbabwe is at a Tipping Point moment.
|
read more |
|
Angola: Where did all the money go? Part 5, the fight back @TheAfricaReport Africa |
President João Lourenço has a tough job on his hands trying to claw back any of the billions siphoned off by corrupt government officials in Angola. [In our fifth and final instalment of our series on Angola’s missing billions, we look at the obstacles facing President João Lourenço in his anti-corruption drive. It was the great promise when General João Lourenço spoke for 45 minutes at his presidential inauguration in Luanda in September 2017, pledging to crack down on corruption and invest in health and education. “No one is so rich and powerful that they cannot be punished and no one is so poor that they cannot protected,” he told the crowd. Then he talked about reforms to free up the media, give small businesses a chance against the country’s titanic monopolies and promote gender equality. Expectations were running low at the beginning. As outgoing President Dos Santos had backed Lourenço as his successor, many believed there was a deal to protect the old guard and the first family. People were afraid it would turn bloody. The way the transition was done was positive.” But things started to change, says Ana Gomes, who was in Luanda late last year. “People were afraid it would turn bloody. The way the transition was done was positive.” “Lourenço, with all the things he started doing, including putting some of the Dos Santos government in gaol, is significant. These things had a liberating impact on Angolan society. Suddenly there was a guy coming from the MPLA giving a totally different speech.” Some in Luanda argue that Lourenço has no choice but to go after the stolen money, so dire is the state of the economy he has inherited. For the next three years economic growth per head and oil production will shrink, according to forecasts from the IMF and the Economist Intelligence Unit. By introducing new laws for the repatriation of illicit financial flows, Lourenço has raised great expectations of the return of ill-gotten gains. It won’t be that easy, warned a well-travelled economic consultant. “If I were trying to have an effect, I would do the same thing that General Park did in South Korea in the 1960s. He said: ‘I know you guys have stolen money, it’s going to be brought in and used in the productive sector.’” Then the penalties came in: “If after three months if you haven’t brought it home, we are going to shoot you in the knees, if after six months we’ll do whatever….” However it’s done, he warns, it will take five to 10 years to pay off and the person who starts it may not get the credit. “The government should publish details of every cheque it writes, every contract it signs. The people own the assets, they should have the information. This is the only way anything would change.” A lack of data and information is at the root of the government’s problems, he argues. “Even the fiscal data is complete crap […] the IMF knows that.” Those who know how the economy has been operating reckon that at least 15% of state revenues have been lost, insists the consultant. “That’s just what this very corrupt, very opaque system has revealed because of external pressure.” No-one knows how much is missing Other experts are equally reluctant to put even an approximate number on Angola’s missing money, beyond itemising deals in the oil services and construction sector which were over-priced by tens of billions. A veteran banker, a regular visitor to Luanda, gave a low-register whistle when asked how much had gone missing. “The inner core who made more than a billion each is maybe 20 people where they are worth way more than we can imagine. The inner core are like Rockefellers […] and the outer core are those – and their kids – who will never have to work again. They have generational wealth.” Finding the cash could be more difficult, he adds: “I don’t quite get where the money is. I imagine it would flow into a Swiss bank account and it would have to flow out. I can’t image you would leave $20bn in a Swiss bank. All these guys have high-level connections […]. While you have your mansions in London and Portugal, you have your vast tracts of land in Latin America.” Yet if the government was determined to track the money if it could, says the banker. The central bank could lead the investigation, apply as a government to all the secrecy jurisdictions such as Jersey and the British Virgin Islands for information. Not all the ill-gotten gains are the proceeds of crime in Angolan terms, he adds. Many of them are hugely inflated oil-service contracts imposed on foreign producers such as Chevron, ENI and Total or commodity traders such as Trafigura. These are added as “costs of doing business”, and carved out of the state’s share of the revenue accordingly. When the economy was growing at 25% the elite was making money everywhere. The nomenklatura worked different deals with Chinese construction companies. A company would get a no-tender to build a bridge and a highway. Then the top official would say: “I own X hectares in Lunda Sul. On top of the deal we are doing, why don’t we do a partnership or you just build me 100 houses,” says the banker. “The Chinese would have come in and said: ‘This is great business.’” When the economy was growing at 25% the elite was making money everywhere. For example, cement imports were controlled by a handful of people. “An entire economy was being built that needed cement and 99% was being imported.” Once the main leakages have been identified, the real work has to start according to a forensic accountant. “To recover half-decent amounts the government needs to be so committed […] spending serious amounts of money on investigations, prosecutions. Most governments do it half-heartedly. Few manage to get to the bottom of it because you’re looking at a period so long ago,” says the accountant. And the asset trackers are up against formidable adversaries, he adds: “The targets usually have an army of lawyers and wealth managers because they want to protect it.” Most international recovery attempts require a final judgement from a local court. There may be a lack of evidence, or a lack of political will. That process can take years. For example, the Angolan government would have to hire a professional firm of investigators, says the accountant. “On the civil side, the lawyers work with local enforcement agencies. You then have the local prosecutor general whose job would be to bring the case against the targets. There is a whole army of people involved.” “Finally when you go through all the hoops, it’s rarely returned in cash,” says the accountant. “The Swiss pay through social projects that benefit the people and the country […] rather than to the treasury.” Out of court settlements or plea-bargaining can bring back some of the money, but often, as in Nigeria, there is little clarity about what has been returned and what it has been spent on. Some lobbyists are talking up Angola’s chance of clawing back billions of dollars and using it to reboot the economy; yet others, usually linked to the Dos Santos family, say the the new president is just pursuing vendettas and isn’t serious about structural change. Market conditions could influence the direction, according to one observer close to the current administration: if the oil prices goes back up to $110 a barrel, the relatively small reforms could be thrown overboard. “The reforms are so modest, they are about keeping the ship afloat rather than changing the course of navigation,” says the observer. “So much of what needs to be done in the country is capital-intensive. Just paying the civil-service salary bill for the next three years will be a struggle under current conditions.” That is why, we hear, Lourenço is so angry about the Chinese loans contracted between 2014 and 2017, their sheer volume and the amount of oil that has been mortgaged. The short maturities and high interest rates are putting Angola’s treasury under huge pressure to find the foreign exchange to service the debt. It has also shifted the power balance decisively in favour of China. “Even if there is genuine reform, say on agriculture, electrification, industrial policy and banking regulations […] the question is when [Lourenço] pulls the levers can he really make a difference?” asks the observer. For now, Lourenço’s anti-corruption campaign is narrowly focused on a range of political and military targets that he can take on without triggering instability or threatening the interests of his key allies. Yet to change Angola’s course, to restructure the economy, will require a massive infusion of capital – the sort of money that is no longer available from oil-backed loans from China, nor from the IMF and the World Bank, or from the commodity markets unless there is a dramatic return to the super-cycle. That leaves Lourenço with few options if he want to pull Angola out of the hole that the past two decades have dropped it in. It would mean a hard-headed and politically iron-clad plan to secure the return of at least $100bn of the state assets that have been taken out of the country and are currently parked in stock markets or upscale residential areas of several capitals in Europe, Asia or the Americas. That has been the talk in Luanda for months, but the policy remains shrouded in secrecy. Over the next year, Angolans will be able to test its seriousness. One positive sign: the creation of a new penal code in Angola — the first upgrade since the Portuguese arrived over 130 years ago – that actually creates the infrastructure for an anti-corruption fight. It represents one of “the central pillars of President João Lourenço’s criminal justice reform program”.
|
read more |
|
Mozambique's incumbent President Filipe Nyusi has won a landslide victory in an election @ReutersAfrica Africa |
Nyusi secured 73% of the vote in the presidential race, the National Election Commission (CNE) said on Sunday, while his party, the ruling Frelimo, also won big in the legislative and provincial contests. His main rival Ossufo Momade, of former guerrilla movement turned main opposition party Renamo, trailed behind with 21.88% of the vote, CNE Chairman Abdul Carimo told a news conference. During his second five-year term, Nyusi will be responsible for overseeing a gas boom led by oil giants such as Exxon Mobil Corp and Total, battling a festering Islamist insurgency and delivering on a peace deal signed two months ago.
|
read more |
|
Russian Railways, DR Congo to Discuss Possible $500m Rail Deal @markets Africa |
Russian Railways JSC signed a memorandum of cooperation with the Democratic Republic of Congo to help rehabilitate its decrepit rail system. An eventual deal between Congo and the Russian state-owned rail company could be worth $500 million, Kasongo Mwema Yamba Y’amba, spokesman for Congolese President Felix Tshisekedi, said by text message Saturday. A statement on the Russian Railways website said the two sides “intend to explore the possibilities for cooperation in areas such as the implementation of restoration projects, the modernization and construction of railway lines in the Democratic Republic of the Congo and promising projects in the development of railway logistics and freight and passenger transport.” Russian Railways may also offer training in Congo and Russia for Congolese rail workers, the statement said. Congo’s Minister of Transport and Communication, Didier Mazenga, signed the cooperation agreement Wednesday during the Russia-Africa summit hosted by President Vladimir Putin in Sochi. Congo has struggled to fix its railways, which once shipped the country’s copper and cobalt riches, after years of war and mismanagement. Last year, the World Bank ended a program that failed to revive Congo’s bankrupt national rail company, Société Nationale des Chemins de Fer du Congo, after spending about $380 million. “SNCC is even further away from being on a sustainable financial and operational path than it was in 2010,” the World Bank said in a project evaluation released this year. “The company accumulates additional debt at a pace of about $30 million per year.”
|
read more |
|
Kenya banks on Lamu Port to gain regional shipping hub status @The_EastAfrican Africa |
Kenya is betting on the multi-billion shilling Lamu Port to upset the power balance along Eastern Africa’s coast, setting Nairobi up for battle with the Port of Djibouti and the planned Bagamoyo harbour in Tanzania. The first berth of the Ksh32 billion ($320 million ) Lamu Port is set for official opening next month, with Kenya hoping to make it the region’s transshipment hub. The strategically located Port of Djibouti already controls transshipment business in the region, with Tanzania’s Bagamoyo port, whose takeoff has delayed over contractual concerns, now left to play catch up as Lamu's business comes to life. Tanzania is also undertaking a $345 million World Bank funded Dar es Salaam Maritime Gateway Project (DSMGP). Kenya’s President Uhuru Kenyatta is, in a few weeks, expected to commission the first of the 32 berths of a trans-African Lamu Port, when the first Neo-Panamax ship is expected to dock.
“Lamu will play host to the newest port on the African East coast. The Lamu Port will begin its operations, initially as a transshipment hub for global shipping lines. It will be supported by a special economic zone that is expected to attract investors from across the world, to undertake various economic activities. “Our aim is to make Lamu Port the port of choice for the export of Kenya’s crude oil,” President Kenyatta said in his October 20 Mashujaa Day address to the nation.
For Nairobi, this is a big gamble, as the country looks to become the Eastern Africa trans-shipment powerhouse. The country hopes to do this by taking advantage of Lamu Port’s 18 metres natural draft, capable of accommodating the increasingly huge maritime vessels.
“We intend to make Lamu a transshipment hub for the East African region, and the larger horn of Africa. Currently, our Kilindini port cannot handle a Suezmax, Neo-Panamax or Chinamax class vessels, because of its shallow depths,” the Kenya Ports Authority (KPA) managing director Daniel Manduku told The EastAfrican. For Kenya, the docking of such size of ships capable of carrying more than 20,000 twenty foot equivalents (TEU’s) will be a game changer. Djibouti, with its two ports of Dolareh and the Port of Djibouti, currently handles the largest cargo volumes in the region averaging three million tonnes annually. “When you look at our data, the transshipment traffic to Mombasa Port doubled to 1.3 million tonnes in the seven months of this year, from 624,000 tonnes over a similar period in 2018, showing the business opportunity for the Lamu port,” said Mr Manduku. Cargo coming into the region from China, currently East Africa’s biggest import source, docks at Singapore and is then offloaded to smaller ships en-route to Mombasa. Those coming from Europe dock at Omans’ Salala port, before they are shipped to the region. “With the Lamu port, we aim to remove this barrier, which is costly and time-wasting for shippers,” added Mr Manduku. The Lamu Port has already attracted the attention of regional neighbours hosting envoys and delegations from Uganda, Ethiopia, South Sudan and the Democratic Republic of Congo (DRC). Launched nine years ago, the multi-billion-dollar project entailed building link roads between the Kenya and Ethiopia, a pipeline to Kenya’s northern frontier of Turkana, an international airport in Isiolo town and a sea port in Lamu. Under its original plan, the Lamu Port, South Sudan, Ethiopia Transport (Lapsset) plan included a 32-berth port, transportation hubs for rail, highway and international airports in Lamu, Isiolo and Lodwar, an oil pipeline from South Sudan, Uganda and Ethiopia to Lamu Port, an oil refinery and three resort cities in Isiolo, Lamu and Turkana, in northern Kenya. Kenya’s Cabinet Secretary for transport and infrastructure James Macharia said with the completion of the access roads leading to the northern frontier, they will expect the port to eventually serve as far as Congo Brazzaville.
“We have worked hard to make sure that the Northern corridors infrastructure is up to date. This has been very deliberate so that we position the country’s bespoke port services, with requisite supporting infrastructure. We expect the port to comfortably serve South Sudan, Congo-Brazzaville, DR Congo and other East African countries,” Mr Macharia said.
A recent report by the Japan International Co-operation Agency showed that the cost of transport in landlocked countries reduced by more than 16 per cent due to infrastructure investments and cross border trade facilitations along Kenya’s Northern corridor. “We have introduced reforms in the Northern Corridor including the introduction of motion weighbridges and reduction of the number of border points thus increasing number of turnaround of trucks. With the connection of interlink roads between Lamu and this corridor, we now expect to position ourselves between the competitors,” Mr Macharia said. The Ticad report ranked the Port of Mombasa fifth in Africa after Egypt’s Port Said, Durban in South Africa, Tanger Med in Morocco, and Alexandria in Egypt with Port of Dar reported to have handled only 60 per cent of what is currently being handled in Mombasa. For Lamu, the headache now remains the transit cargo shipments, as the supporting roads outside of the port remain incomplete and behind schedule.For example, the Garissa-Isiolo road is yet to start, even after re-assurances that it "would start this year," with only three months left of 2019.Other associated road infrastructure projects in the ongoing construction of the $108 million Lamu-Garsen road are behind schedule with its construction being 30 per cent complete, as its December completion deadline looks unattainable. This means that the haulage of any goods landing at the port this year will not be possible, leaving the port to only do transshipment business, for the start.Shippers, already aware of the poor supporting road infrastructure around the Lamu port have already raised concern, noting that “there was need to invest more on infrastructure to make the port more attractive to investors.” “The government needs to work on the inland operations cost to make Lamu Port more attractive to shippers and other investors,” Shippers Council of East Africa chief executive Gilbert Lagat said. “Most of shippers consider end-to-end cost before venturing in any business hence there is a need for the government to speed up the process of improving other infrastructure to make movement of goods cheaper. “We have seen KPA advertised promotional tariffs to entice more shipping lines and agents to use the facility but that is not enough as we consider other cargo handling cost from the port to its final destination which is mostly either Nairobi or Uganda, but without good roads or railway, the deal would not be attractive to many.” Lamu’s close proximity to the terrorist group Al-Shabab’s Somalia base also poses a security headache for the port’s management. The Lapsset CEO Silvester Kasuku said Kenya has deployed the Navy and Coast Guard at the port, the Army at Baragoni Police besides other security formations including a GSU camp. He also said the channel that ships use will be guarded by navy patrols. The recent changes in the regional political landscape, especially within the horn of Africa, has also seen Ethiopia-the project’s biggest backer at its launch in 2012- make peace with Eritrea and also invest hundreds of millions of dollars in several ports in Djibouti and Somaliland.Addis has also acquired stakes in the Djibouti port of Doraleh, Port of Djibouti, Khartoum’s largest seaport, Port Sudan. Its $80 million investment for a 19 percent stake in Somaliland’s Port of Berbera and its recent announcement that it is also seeking a stake in Eritrea Port leaves the Lamu port business model exposed.
“The Ethiopia/Eritrea peace deal will have no negative implications on this project. Lamu Port will strategically be located to service southern Ethiopia which alone has about 50 million people even when the country has access to Eritrean and Djiboutian ports. “The two ports will actively handle North of Addis Ababa,” Sylvester Kasuku, the chief executive officer of Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) Corridor project said.
In 2017, and to entice Ethiopia, Kenya offered land to enable Ethiopia set up a logistics facility at the Lamu Port, in the clearest indication that the Ethiopia was eyeing the Kenyan port for its import and export activities. Outside of transshipment, Kenya is also angling to have a crude oil dedicated berth for the port, as it actualises its pipeline project from Turkana. Berth three has already been reserved as a fuel dedicated berth. “We are hoping to have both Berth two and three ready by the end of next year. The cabinet recently approved for the petroleum ministry to take charge of Berth 3, and link it with the Lamu-Turkana pipeline to help us ship out our crude oil,” Mr Macharia said. Kenya’s game plan is to have on board South Sudan, and possibly Uganda, to use the pipeline facility, and berth three to export their crude oil once the projects has been commissioned. In June, Kenya signed agreements with Total, Tullow Oil and Africa Oil Corp to develop a 60,000 to 80,000 barrels-per-day crude processing facility for oil discovered in Lokichar, northern Kenya. It is now expected that the berth will play host to this facility, among other supporting oil infrastructure. “The infrastructure installed for the foundation stage will be utilised for the development of the remaining oil fields and future oil discoveries in the region, allowing the incremental development of these fields to be completed at a lower unit cost,” Tullow Kenya said.
|
read more |
|
06-AUG-2018 :: The Indian Ocean Economy and a Port Race Africa |
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 hinter- land], Japan and India [to a lesser degree] are all jostling for optimal ‘’geo-economic’’ positioning.
|
read more |
|
Africa |
(Transnational Bank recorded full-year pretax loss of 98.5 million shillings in 2018) -- Bloomberg
|
read more |
|
|
|
|