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Macro Thoughts

.we can assess range, Sydney (and Asia) are generally snooze fests.

Home Thoughts

In an era of globalisation, he argues, a nation's borders are no
longer external but run through its cities. Nations will have to
defend themselves not abroad, but within their own dense metropolises
("the metropolitics of globalisation will take over the geopolitics of
nations"). Modern warfare is "a war on civilians" which, aided by
instantaneous telecommunications, will result in "a world civil war"
(the global equivalent of the riots in Los Angeles after the footage
of police officers beating Rodney King was broadcast).

Our minds are literally besieged by these Weapons of Mass
Communication (as he calls them), creating a "panic-driven
tele-reality" and resulting in an odd kind of "emotional
synchronisation ... in which terror must be instantaneously felt by
all ... on the scale of a global terrorism". Virilio maintains that
the global village has created hyperterrorism as its "integral
accident" (just as derailment is the integral accident of a train).
The Pentagon is eager to exploit the audiovisual impact of real-time
mass communication (remember Saddam's statue being toppled?), but
unfortunately so are the terrorists. The same impulse drives
contemporary art, says Virilio, and he often returns to Stockhausen's
incendiary remark that 9/11 was "the greatest work of art ever".

Political Reflections

Barely 15 months after assuming power, Pakistan’s Prime Minister Imran
Khan faces his first serious political crisis. Hitherto protected by
his extraordinarily close relationship with the powerful military,
Khan finds Islamabad – and his government – besieged by tens of
thousands of Islamists led by Pakistan’s most influential
cleric-politician Maulana Fazl-ur-Rehman.
With the leaders of the country’s two largest mainstream opposition
political parties, ex-prime minister Nawaz Sharif and former president
Asif Ali Zardari, behind bars on corruption charges, Rehman has
assumed leadership of a campaign against the controversial 2018
elections that brought Khan to power.
Rehman has dubbed the protest campaign the “azadi [freedom] march”.
This is reflected in his four-point charter of demands: the
resignation of Khan, fresh elections, non-interference by the
military, and the upholding of the constitution in letter and spirit.
Rehman is giving voice to the widely held public sentiment that the
2018 general elections were brazenly rigged by the military to bring
about the downfall of their civilian rivals for power.
According to this view, Khan is the handsome face of an ugly farce
that has stolen the democratic rights of Pakistanis. Rehman contends
that this supposed wrong must be righted before an implosive “conflict
between state institutions” breaks out.
Rehman’s demands have been endorsed by Sharif’s centre-right Pakistan
Muslim League-Nawaz party and the Pakistan People’s Party of Zardari,
ex-prime minister Benazir Bhutto’s widower.
As such, Khan is not facing an Islamist protest movement per se, but a
resurgence by Pakistan’s political old guard.
Rehman has made a point of dragging the military into the spotlight,
but so far avoided crossing the traditional red line of Pakistani
politics of referring to it by name – instead using vague terms like
“the establishment” and “state institutions”.
The military has unabashedly vowed to stand by Khan. The army’s corps
commanders conference – effectively, the military’s cabinet – has
issued a stern warning against any violent attempt by the Islamists to
overthrow the government.
The Islamists’ sit-in has coincided with the annual meeting of the
joint coordination committee of the China-Pakistan Economic Corridor
(CPEC) in Islamabad. Following Khan’s visit to Beijing a month ago,
the committee is now expected to approve a host of new projects
ranging from education and health care schemes to agricultural and
industrial ventures.
Beijing will view the brewing unrest in Pakistan warily. When Khan
launched his campaign to bring down Sharif in 2014, he staged a
five-month sit-in that disrupted Islamabad’s government district and
forced the postponement of President Xi Jinping’s visit, during which
he unveiled CPEC as the showcase programme of his Belt and Road
Initiative.
If the protesters decide to head for the so-called Red Zone, Chinese
delegates may find themselves in an awkward situation, although their
safety will not be threatened by China-friendly Rehman’s hordes.
Like Pakistan’s other close friends, Saudi Arabia and Turkey, China
will not want the political situation there to deteriorate, especially
with billions of CPEC dollars on the line. Along with the US, which
needs a stable Pakistan to see through a peace deal with Afghanistan’s
Taliban, Beijing may quietly be urging the military and political
leadership in Islamabad to compromise.

Conclusions

I thought Imran has displayed finesse and a great deal of elegance in
trying to reconcile seemingly intractable issues.

This weekend he was boo’ed at a UFC 244 event at Madison Square
Garden. Pollice verso or verso pollice is a Latin phrase, meaning
“with a turned thumb”, that is used in the context of gladiatorial
combat.

Trump’s faith adviser and ‘Righteous Gemstones’ character come to life
Paula White is now an official White House employee

'At the moment of vision, the eyes see nothing'
I have found as I have gotten older that Time and even the World
simply does not move in a linear fashion.

.@VP Pence who is an evangelical Christian [and is in the habit of
praying with another evangelical Christian and Nobel Prize Winner far
away in Addis Ababa, allegedly] is the coming Man and this could
happen real quick

Section 4 of the 25th Amendment to the Constitution, which says that
if the president is deemed unfit to discharge the duties of his
office, the vice president would assume the role.
That letter would need to be signed by a majority of the Cabinet,
delivered to Pence for his signature and then submitted to Congress.
According to Anonymous, there was no doubt in the minds of these
senior officials that Pence would support invoking the 25th Amendment
if the majority of the Cabinet signed off on it.
While discussions of invoking the 25th Amendment were never
formalized, the idea that the vice president could go along with a
Cabinet-backed plan to remove the president was certain to raise the
ire of Trump, who is intolerant of dissent or any hint of disloyalty.

One day in 2014, Belém, a member of Brazil’s Kayapo tribe, went deep
into the forest to hunt macaws and parrots. He was helping to prepare
for a coming-of-age ceremony, in which young men are given adult names
and have their lips pierced. By custom, initiates wear headdresses
adorned with tail feathers. Belém, whose Kayapo name is Takaktyx, an
honorific form of the word “strong,” was a designated bird hunter. Far
from his home village of Turedjam, Belém ran across a group of white
outsiders. They were garimpeiros, gold prospectors, who were working
inside the Kayapo reserve—a twenty-six-million-acre Amazonian
wilderness, demarcated for indigenous people. Gold mining is illegal
there, but the prospectors were accompanied by a Kayapo man, so Belém
assumed that some arrangement had been made. About nine thousand
Kayapo lived in the forest, split into several groups; each had its
own chief, and the chiefs tended to do as they pleased. Ever since the
Kayapo had come into regular contact with the outside world, in the
nineteen-fifties, whites had been trying to extract resources from
their forests, beginning with animal skins and expanding to mahogany
and gold. In the eighties, some chiefs made easy profits by granting
logging and mining rights to outsiders, but after a decade the
mahogany was depleted and the price of gold had dropped. After
environmental advocates in the Brazilian government brought a lawsuit
against miners, the Kayapo closed the reserve to extraction. Since
then, though, international gold prices have tripled, to fourteen
hundred dollars an ounce, and an influx of new miners have come to try
their luck. The prospectors whom Belém met told him that they wanted
to build a road linking Turedjam with their mine, about forty miles
away through the forest. Belém understood why they wanted such a road.
Turedjam was situated on the Rio Branco, which formed the northeastern
boundary of the Kayapo reserve. The area was rich in gold—and Turedjam
had a recently built bridge that could support heavy vehicles. The
proposed road would also allow prospectors to sneak machinery through
the reserve under tree cover, without being spotted from the air by
federal police, who periodically raided their operations. Back in
Turedjam, Belém told his chief, Mro’ô, about the proposal. A young
chief, Mro’ô had founded Turedjam four years earlier, leading a group
of Kayapo from his home village after a dispute with a senior chief,
who wished to allow outsiders to mine and to log mahogany. Mro’ô had
established Turedjam as a “sentinel village,” keeping watch over the
vulnerable edge of the reserve. He told Belém to let the prospectors
know that he wasn’t interested. A year later, Mro’ô died, apparently
from diabetes. His brother, a heavy drinker known as Juan Piranha,
quickly made a deal with the prospectors, and before long their road
was cut—a track through the forest wide enough for excavators capable
of moving hundreds of tons of rock and earth a day. Then Mro’ô’s
successor began allowing prospectors to work the surrounding land in
exchange for ten per cent of their findings. Hundreds, perhaps
thousands, of miners poured in.

Wildcat mining is less pervasive than logging, but it can be more
insidious. Loggers usually harvest valuable trees and leave the rest;
miners cut everything. Mercury, used in the refining process, leaves
rivers poisoned, and the pollution can spread hundreds of miles
downstream. The allure of gold attracts fortune-seekers, who bring
prostitution, alcohol, drugs, and violence. “Letting prospectors into
the Kayapo reserve is like leaving your children in the protection of
a drug gang,” Barbara Zimmerman, a Canadian ecologist who has worked
with the Kayapo for three decades, told me. In the past few years,
according to environmentalists, several hundred thousand acres of the
reserve have been destroyed or degraded by illegal mining and logging.
The destruction of Kayapo land is just part of what Zimmerman calls
the “sacking” of the Amazon. In addition to the mining and logging,
soy farmers and cattle ranchers have cleared huge tracts of forest,
mostly by fire. Brazil’s National Institute of Space Research, which
tracks the damage, calculates that one-fifth of Brazil’s Amazonian
rain forest—the world’s largest remaining “green lung,” which absorbs
billions of tons of carbon dioxide—has been destroyed since the
nineteen-seventies. Indigenous reserves serve as a bulwark against
destruction, green islands amid industrial soy fields and clear-cut
ranchlands. But the closer indigenous people live to whites the more
vulnerable they are. In these places, all that stands in the way of
the destruction of the Amazon is the ability of a few thousand
indigenous leaders to resist the enticements of consumer culture. In
Turedjam, that battle is being lost. “It’s like the Four Horsemen of
the Apocalypse have been let loose,” Zimmerman said.

There are eighty-two Kayapo settlements, scattered across the green
expanse of the reserve. In riverside communities, small boats are the
primary means of transportation; prospectors haul away ore on barges,
or in trucks where there are roads. In the forest, indigenous people
traditionally walked from village to village, on journeys that could
take days. During the past few decades, airstrips have been hacked
out, so that bush planes can ferry people and goods. In the course of
a two-week visit, I took several flights over the forest. On one, as
the plane cleared the treetops, I saw smoke rising in a huge, menacing
column, like a cloud of volcanic ash. For hours, the fire burned,
unattended, and a dense blanket of smoke settled on the horizon. Fires
like this one are an increasingly regular feature of life in the
Amazon, where settlers regard them as an essential part of progress.
Thomas Lovejoy, an American biologist who for decades has been a
preëminent authority on the Amazon, told me that the burning of
forests, along with climate change, was disrupting the Amazon’s
ability to produce rain for itself. “We’re now seeing historic
droughts every four or five years,” he said. “The problem with
droughts is that they dry up rivers and cause more fires, leading to
more deforestation.” The Amazon, he noted, produces twenty per cent of
the world’s rainwater. If the system is pushed too far out of balance,
the forest will cease to be able to regenerate itself and turn into a
savanna; a carbon sink nearly the size of the continental United
States will become a carbon producer. “We’re really close to the
tipping point right now,” Lovejoy said. The conquest of the forest
began in earnest in the seventies, after Brazil’s government, which
was then a military dictatorship, carved a highway into the Amazon and
encouraged people to move in. Since then, millions of settlers have
founded towns and cities, built roads, dammed rivers, and burned
forests, ultimately clearing an area larger than France. Much of their
land sits uneasily alongside indigenous reserves, which constitute
about thirteen per cent of the national territory—more than four
hundred thousand square miles, in which approximately nine hundred
thousand people live. (They are what remain of an estimated eleven
million indigenous people who lived there when the Portuguese arrived,
in 1500.) For decades, funai, the country’s indigenous-affairs agency,
has delineated reserves and helped guard them from developers. But
Brazil’s leaders have been lax about enforcing the strictures, and in
the Amazon conservationists and indigenous-rights activists have
struggled to contain a scramble for land and fortune. While the
leftist President Inácio Lula da Silva was in office, from 2003 to
2010, deforestation decreased for a time. But since last January, when
Jair Bolsonaro became President, the destruction has become a kind of
perverse political goal.

Bolsonaro, a former Army captain whose followers call him the Legend,
is an unabashed racist, homophobe, and misogynist. A climate-change
denier, he came to power with a vehemently anti-environmentalist
message, supported by a powerful lobby known as “the three B’s”:
Bibles, bullets, and beef, meaning evangelicals, gun advocates, and
the agribusiness industry. Bolsonaro has complained for years that
indigenous protections are a senseless brake on development. “The
Indians do not speak our language, they do not have money, they do not
have culture,” he once said. “How did they manage to get thirteen per
cent of the national territory?” Before he was elected, he described
the Amazon as “the richest area in the world” and vowed, “I’m not
getting into this nonsense of defending land for Indians.” During his
first days in office, Bolsonaro, emulating Donald Trump, signed a
flurry of executive orders dismantling environmental safeguards and
protections for minorities. He reduced funai to a subsection of a new
family-and-human-rights ministry, led by an ultraconservative
evangelical pastor, and stripped its ability to create reserves. (The
Supreme Court recently overturned these measures, but funai remains
politically disenfranchised.) Bolsonaro also slashed the budget of the
primary environmental agency, ibama, by a third. Since last year, the
rate of deforestation in Brazil has increased nearly forty per cent,
with thousands of fires—many of them intentionally set—scorching
forests across the Amazon. In August, as the skies over São Paulo
blackened from the smoke of fires burning more than a thousand miles
away, concern grew around the world. With the G-7 summit approaching,
the French President, Emmanuel Macron, called for international
leaders to hold an emergency discussion, and tweeted, “Our house is
burning. Literally.” Bolsonaro indignantly accused Macron of a
“colonialist mentality unacceptable in the 21st century.” After
Germany and Norway announced plans to revoke funding for conservation
projects in Brazil, Bolsonaro ordered his military to combat the
fires, and declared his “love” for the Amazon. But when G-7 members
pledged twenty million dollars to help fight the fires, Bolsonaro
refused, then said he would accept the money only if Macron
apologized. In the argument over the fires, he mocked Macron’s wife on
Facebook and declared that he would boycott Bic pens, because they
were made by a French company. His tourism ambassador, a former
mixed-martial-arts fighter named Renzo Gracie, told Macron, “The only
fire going on is the fire inside Brazilian hearts and our president’s
heart, you clown. Come over here you’ll be caught by the neck, that
chicken neck. You don’t fool me.”

In recent months, Bolsonaro has given speeches encouraging the
development of the Amazon. Addressing a group of miners in October, he
noted, “Interest in the Amazon isn’t about the Indians or the fucking
trees—it’s about mining.” For Bolsonaro, gold prospectors serve as a
symbol of the country’s pioneer spirit—much as West Virginia coal
miners do for Trump. In the eighties, Bolsonaro’s father, an itinerant
dentist, went to work among the tens of thousands of prospectors at
the Serra Pelada gold mine, a brutal place that Bolsonaro speaks of
nostalgically. Whenever he has a chance, he maintains, he parks his
car at a riverbank to take out a pan and try his luck. Miners and
loggers understand that they have a friend in office. Last year,
Brazil’s military abandoned two river outposts guarding the country’s
Yanomami reserve, which had been established to keep out prospectors.
Since then, at least twenty thousand miners have made their way into
the reserve. In July, prospectors in another reserve killed an
indigenous man in his own village; Bolsonaro’s environment minister,
contesting the reports, suggested that the victim had got drunk and
drowned.

In Brazil, illegal mining is estimated to bring in more than a billion
dollars a year—for Bolsonaro, an apparently unconscionable amount of
money to give up. In August, he announced that he was working on a
bill that would legalize mining on indigenous lands. “We can’t keep
living like poor people on earth that is so rich,” he said. “We want
to include the Indians in our society, and a large part of them want
it that way, too.”

Turedjam is a tiny, sleepy place, with two dozen communal homes set
around a dusty clearing in the forest. Except for a few signs of
relative prosperity—tin roofs, homes made of wood planks rather than
of palm thatch, the occasional Chinese motorbike—there is little to
suggest that it plays a central role in Brazil’s gold boom. Children
kick balls around, and a few scrawny dogs loll in the shade. Behind
the houses, there are hammocks and wooden benches where women sit
together, stoking cook fires and making intricate beaded armbands and
necklaces. They wear short, sleeveless dresses cut from vividly
patterned fabric. When I visited recently, one woman’s was decorated
with cartoon squirrels, owls, and lions; another’s had a Christmas
motif, with snowflakes and stockings stuffed with gifts. Most women
adorn their limbs with black paint, like leopard spots, and their
cheeks with geometric designs; their scalps are shorn in a distinctive
V. The men traditionally wear their hair shoulder-length and their
bodies intricately painted. I had arrived in Turedjam with Felipe
Milanez, a humanities professor at the Federal University of Bahia,
who has spent years visiting Amazonian communities and advocating for
indigenous rights. Mro’ô’s widow embraced him with the traditional
Kayapo greeting of tears, in which they produced a high-pitched
keening to mourn dead friends and relatives. I was new to the area, so
the community’s elders—including Belém, the bird hunter, who was also
the village schoolteacher—welcomed me with a handshake. In the
eighties, the Kayapo were known as committed activists, travelling to
Europe and the United States to raise awareness about the destruction
of the Amazon; the chief Raoni Metuktire appeared onstage with Sting,
a distinctive three-inch plate in his lip. But the leaders of Turedjam
took pains to talk to me about anything but mining. When I asked Belém
about its effects, he demurred. He had spent five years commuting to
school in the capital of Pará—a city called Belém, which also supplied
his nickname. Because he had come and gone so often, he said, he
hadn’t noticed much mining, so he couldn’t really say what effect it
might have had. When I asked if life in Turedjam had been better
before the miners came, he hesitated. There was less disease then, he
acknowledged. Now there was leishmaniasis (akin to leprosy) and also
malaria, and there were “too many kuben”—white people. He paused, and
offered, “But we have free electricity now, which is good.”

The opening of the reserve was the subject of a long fight in Belém’s
family. Born in 1973, he was a nephew of Tutu Pombo, a wily,
flamboyant chief who had grown rich in the eighties as he negotiated
with whites to extract mahogany and gold from the jungle. Glenn
Shepard, an American ethnobotanist and anthropologist who has known
the Kayapo for decades, told me that Tutu Pombo devised a template for
dealing with the kuben: demand a cut of the take and make sure that
they don’t cheat. “His genius was in recognizing that this was an
unavoidable reality and deciding to get organized for it,” he said. At
the peak of Tutu Pombo’s wealth, Kayapo people told me, he had five
hundred head of cattle, an airplane, and houses in Tucumá and Belém;
he also had numerous wives, including several white women. His deals
with outsiders helped to open a rift among the Kayapo. In the eastern
part of the reserve, where Tutu Pombo lived, many people embraced
mining and logging; in the west, many resisted, and conservation
N.G.O.s came in to support them. In his own community, Tutu Pombo
eased dissent by spreading money around. Belém’s father died while he
was a boy, and Tutu Pombo financed his schooling in the city. But,
eventually, the chief asked him to return and work as a bag-checker in
a gold mine. “It was my job to make sure the prospectors weren’t
bringing in guns or drugs, or stealing gold on their way out,” Belém
explained. “I also made sure they paid their percentage.” He didn’t
like the job, so Tutu Pombo installed him as a supervisor at a logging
camp; he also arranged for him to marry one of his nieces. Belém
stayed in the job until Tutu Pombo died from illness, in 1992.  After
the chief’s death, the Kayapo fell into conflict about how much
extraction to permit. In 2007, one of Tutu Pombo’s heirs pressed to
allow more. Mro’ô argued with him, and eventually stabbed him in a
knife fight. As Mro’ô prepared to leave and found a new village, Belém
was conflicted—he was related to both men—but he decided to go. Mro’ô
established Turedjam at the edge of the reserve, across the border
from a mining town called Ourilândia, in the hope of bringing some of
its benefits to his people. An intelligent, charismatic man, Mro’ô
persuaded local whites to supply his village with electricity, and to
pay for the bridge across the river. Before long, Turedjam also had a
health clinic and a primary school. But Mro’ô was adamant about
preserving the traditional Kayapo way of life, and tried to keep out
loggers and prospectors. “After he died,” Belém said quietly,
“everything changed.” Belém seemed embarrassed by what had happened in
Turedjam since then, but he didn’t say so; the Kayapo consider it
inappropriate to criticize elders, and his elders had decided to allow
mining. When I asked to see one of the mines, he offered instead to
show me the community farm. We drove to a spot on the prospectors’
road, and he led me into the forest where a tangled patch of yucca and
bananas grew. He said vaguely that the Kayapo hoped to expand their
agricultural activities, but would need help from N.G.O.s. Somewhere
nearby, an excavator churned past, its engines the loudest noise in
the forest, but he pretended it wasn’t there. At the riverside, the
effects of mining became impossible to ignore. The water of the Rio
Branco, the river that runs past the community, was a nauseous pale
yellow. In most Amazonian villages, people go to the river every day,
to bathe or wash clothes or escape the heat of the late afternoon.
Here there was no one. Across the river, on the kuben-owned ranches,
the land was rumpled and gouged, with dirt piled up next to wide
craters filled with standing water, the same livid color as the Rio
Branco. On the way back from the farm, I asked Belém about the river.
“It changed color when the mining started,” he said neutrally. “Now
nobody goes to wash in the river. People get skin rashes if they do.”
On my third visit to Turedjam, Kupato, the village chief, agreed to
show me one of the illegal prospecting operations on the reserve. When
I arrived at his home, he and Belém were getting painted by their
wives in preparation for the outing, their torsos and faces daubed in
vivid swatches of yellow and red. Kupato carried a carved hardwood
staff, a chiefly version of the traditional Kayapo war club.Before the
trip, Belém explained that he and Kupato wished to pay their respects
at the tomb of Mro’ô. We walked along the Rio Branco, into a clearing
where a half-dozen earthen mounds rose from the forest floor, piled
with former belongings—sun-bleached mattresses, household appliances,
pots and pans, flip-flops. Kupato and Belém stood looking at Mro’ô’s
tomb, at the center of the site. Kupato whispered a few inaudible
words, and the men began to cry. After ten minutes, we walked silently
back to the village, climbed into my pickup truck, and drove into the
jungle. Kupato sat in the front seat next to the driver, using
peremptory hand signals to direct the way. (The Kayapo all share a
language, with regional differences on the scale of Brooklyn and New
Jersey, but few speak Portuguese.) Not far past the community farm,
Kupato motioned for us to stop. He led the way down a path to a
makeshift thatched hut, where a grizzled middle-aged man clambered out
of a hammock and hailed us uncertainly. As Belém introduced us, he
relaxed a bit and said that his name was Chicão. He walked us over to
his site, a couple of hundred feet away. Chicão’s operation was small,
just him and a three-man crew, but in half a year it had torn a chunk
out of the forest the size of five football fields: a miasma of muddy
pathways, water-filled craters, and fallen trees. In the nearest
crater, the crewmen were running a pump off a small generator, washing
mud toward a sluice with a hose. The generator shook and roared,
drowning out the macaws that flew overhead. Belém stared down at the
hosemen, his expression unreadable. In the pit, the prospectors cut
the generator in order to take a water break: the heat was ferocious,
and they were parched. One of them, a thin man with curly hair,
introduced himself as Jorge Silva. He told me that he had studied
physics, but had never been able to find paying work in his field, and
so, in addition to prospecting, he had worked as a gym teacher and as
an electrician. Looking me in the eyes, he said, “All of us here
realize we’re fucking the environment. It’s not like we want to—it’s
that we haven’t found any alternative means to survive.”

Chicão seemed hesitant to discuss his mine’s yield in front of the
Kayapo, but he eventually said that he found three or four grams a
day. It wasn’t a lot, but Chicão thought that he would carry on for
the time being. He was married, and his wife visited him from their
home town, eight hours away by bus. His only real preoccupation, he
said, was his leg. He peeled back a bandage on his shin, revealing a
line of deep, festering lesions. He thought it was leishmaniasis, but
a doctor had said it wasn’t, so he wasn’t sure what it was. He was
taking medicine for it. He shrugged. As we drove back to Turedjam,
Belém said that Chicão seemed to be a poor man, trying to make his
way. He spoke as if the mine were a kind of charitable endeavor,
helping the unfortunate. A few days later, on a bush-plane flight, I
spotted Chicão’s mine from above: a tiny, raw rectangle in the forest,
like a gum wrapper dropped onto Wrigley Field. Beyond it, a denuded
area, hundreds of times larger, came into view. Scores of illegal
mines had carved out a vast expanse where there was no green—only mud,
dirt roads, excavators, mining camps, and a couple of airstrips, from
which, presumably, bigger operators were able to fly out their gold
without encountering resistance. Much of the Rio Branco on either side
of Turedjam no longer resembled a river; mining had turned it into a
spreading mass of craters, filled with toxic lime-white water. The
forest ends at Turedjam. On the far side of the bridge spanning the
Rio Branco, a dirt road leads through treeless, rolling hills to the
town of Ourilândia, a half-hour journey by motorbike or pickup truck.
Ourilândia, or Land of Gold, is the frontier of development in this
part of the world. Three decades ago, the area where the town stands
was untouched forest. “Ourilândia started as an airstrip in the
jungle,” Zimmerman, the ecologist, said. “Then the settlers came, and
it’s exactly like what happened in the United States in the
eighteen-thirties and eighteen-forties—the land gets cleared and the
Indians get pushed back. The reason the Kayapo got as much land
demarcated as they did for their reserves is that they were tough
guys, warriors, and people were afraid of them. The first thing the
Kayapo traded was jaguar skins—pilots flew in to get skins for the
fashion industry. And it progressed from there to logging and gold.”
As Ourilândia grew, it had an inevitable effect on the indigenous
people nearby. “When the Kayapo have such close contact with the
outside, the elders come under pressure from the youth, who see things
they want in the towns,” Zimmerman said. “They come back with visions
of sugarplums in their heads.” Ourilândia has a few modest residential
neighborhoods; the rest feels like a latter-day Silver City, with
Hilux pickups instead of stagecoaches. A bronze sculpture of a
prospector stands on one of the main avenues, and dozens of shops sell
mining gear: water pumps, generators, bulldozers, hammocks, rubber
boots. At Casa do Garimpeiro, two young women buy gold dust from
prospectors and sell them gold jewelry, to give to their wives and
girlfriends; outside is a giant glass-topped table, fashioned out of
the gold-painted metal treads of an excavator. There are “kilo”
restaurants, where patrons pay according to the weight of their food;
there is also a series of gimcrack Pentecostal churches, a red-light
district, and a few seedy hotels. At the entrance to the place where I
stayed, plastic sculptures of leaping black panthers stood guard.
Parked alongside was a truck that the proprietor employed in his side
business, a septic-tank-cleaning operation. Its container was
emblazoned with the slogan “Expresso da Merda”—“The Shit Express.”

In an office on a street lined with brothels, Wesson Cleber Guimaraes,
a spare-looking lawyer, acknowledged that illegal gold was the
lifeblood of the local economy. He estimated that some fifteen million
dollars’ worth a month was being extracted from the pits nearby. He
described Ourilândia as a lawless place. Pointing to a
construction-supply business across the street, he told me that its
owner, who was now in jail, had been found to own forty-seven
airplanes. The man had apparently been operating his business as a
front for the cocaine mafias that increasingly invest their money in
the mines and also use the miners’ clandestine airstrips to ship
drugs. “Money laundering is a big business here,” Cleber said mildly.
When I expressed amazement that an operation as big as his neighbor’s
could have gone undetected, Cleber laughed: “Here, it’s the law of
silence.”
Cleber had been in Ourilândia since 2004, offering legal services to
the “entrepreneurs” in town, but he wanted me to know that he had a
social conscience. His current mission was to help the Kayapo overcome
their status as third-class citizens. He was part of a group that had
drafted a proposal to legalize gold mining and logging on the reserve.
It was time, he said, for the Indians to exploit their lands to their
full potential, and to benefit from them. When I said that his views
seemed to echo Bolsonaro’s, Cleber beamed. “Exactly,” he said. Cleber
showed me a draft charter for the recently created Kayapo Coöperative,
described as an “indigenous coöperative for the extraction,
production, and commercialization of the Kayapo agro-industrial,
forest, and mineral resources.” He was not himself Kayapo, of course,
but he and his associates claimed to have secured the support of
Kayapo elders from various communities. He showed me a page filled
with signatures.

Taking out a calculator, Cleber explained that the untapped resources
in the Kayapo reserve represented an “incalculable” fortune. “There
are twenty-five cubic metres of harvestable wood per hectare,” he
said, punching buttons. “That makes twenty-five million cubic feet of
wood, which in turn is worth about twenty-five billion reals”—roughly
six billion dollars. This was a conservative estimate, he said; the
actual value could be three times that. “There are about nine thousand
Kayapo living in that whole area, which means that, if the wealth they
extracted were distributed evenly among them, each of them would be
very rich. But today they are living in misery, people in a zoo where
you go and take pictures of them.” The coöperative would change all
that, Cleber said with a smile: “The Kayapo could be billionaires.”

The main local promoter of the Kayapo Coöperative—João Guerra, a
friend of Cleber’s—had an office down the street, across from a
Pentecostal church. A potbellied man in his late fifties, he was the
president of the local Association of Prospectors, an advocacy group
for gold miners. When I pointed out that his association represented
an illicit enterprise, he laughed good-naturedly; there was, he
pointed out, one legal gold mine in the region, just across the river
from Kayapo land. The next day, we set off to see it, speeding in
four-wheel-drive vehicles on the dirt road that also led to Turedjam.
Near the bridge over the Rio Branco, we turned down a private road and
into the mine. There were sheds for workers to wash and to change
their clothes, a canteen, and, beyond, a landscape dominated by huge
piles of dirt and deep craters. The mine had two yellow excavators,
which allowed workers to strip the land far faster than Chicão’s crew
could. The machines were in constant motion, working a pit about
twenty feet deep. A forlorn patch of forest stood intact just beyond
the pit’s edge. A few hundred feet away was the Kayapo reserve, its
jungle hills rising from the river.

Guerra waved toward the jungle. “From there to Mato Grosso”—the
neighboring state—“it’s about five hundred kilometres, and it’s all
indio.” At three points of the compass from where we stood, he
complained, indigenous people controlled the land. “It’s just not
viable,” he said.

He explained that when the boundaries of the indigenous territories
were set, beginning in the nineties, some white settlers had been
dispossessed. “That’s where the problems start,” he said. “They should
reduce the size of the reserves, especially in those places where
whites are now living. That would pacify a lot of people.” Pointing to
the Kayapo reserve, he added, “As for that, it’s theirs. But they
should have economic activity going on: mining, logging, Brazil-nut
collecting, and cattle ranching. If all that were allowed on their
land, in addition to the re-demarcation of Indian reserves, it would
reduce the conflicts by eighty per cent.”

Down in the belly of the crater, men held the ends of giant black
hoses between their legs and moved the nozzles back and forth,
directing torrents of water into loose mounds of scree. Downstream, by
the mouth of a larger hose, another man stood in the water, separating
rocks from the flow of sediment. The flow was sucked uphill and burst
onto a sluice tray, lined with a layer of felt that trapped the gold.
Inside a shed, several employees got into waist-deep water in a
concrete pool and sifted the final sediments. Using handheld pans,
they washed the sediment with silvery streaks of mercury, until they
came up with a pinkish blob of unrefined gold. It went into a vial in
the owner’s hands. The day’s yield was about a hundred and forty
grams, worth some sixty-five hundred dollars. For buyers abroad, it is
difficult to distinguish between legal and illegal gold. Ore from
small mines travels through a complex network of intermediaries before
arriving at a processing facility, where it’s melted together with ore
from other sources, in a procedure sometimes called “gold laundering.”
Much of the resulting alloy is shipped abroad; last year, Brazil
exported ninety-five tons of it, mostly to the U.S., the U.K., and
especially Switzerland, which refines seventy per cent of the world’s
gold.

The trade in gold provides an index of global sentiment. In times of
political anxiety and market volatility, investors stockpile gold
bars. Authoritarian governments see deep reserves as a sign of
strength; last year, demand from central banks was the highest in
decades, with large purchases from Russia, Turkey, Hungary, and
Poland. A third of the gold produced is sold as jewelry in China and
India, where booming middle classes support demand for wedding bands,
ornate bridal necklaces, and New Year’s charms. Tech companies are
thought to consume three hundred and thirty-five tons of gold a year.
(Pure gold, a corrosion-proof conductor, is used in every smartphone.)
The larger companies profess ethical buying practices, but the
Brazilian government’s unwillingness to regulate the supply chain
insures that “dirty gold” finds its way into the market, much as blood
diamonds do. According to a 2016 report by the human-rights group
Verité, ninety per cent of the Fortune 500 companies that are required
to file disclosures had bought gold from refineries linked to illegal
mines. Last August, Brazil’s Federal Public Ministry called the
current conditions “a breeding ground for fraud.”

For local workers, these kinds of concerns seem remote, even
ridiculous. In the mine’s canteen, I met João Vieira da Silva, a thin
man of sixty-two who was the oldest worker on the site. He had grown
up in Piauí—Brazil’s poorest state, in the drought-stricken
northeast—and when he was ten his father had abandoned the family.
Silva left soon afterward, hoping, he said, to “escape the poverty.”
He had landed at a metallurgy plant in São Paulo but found the work
tiring, so he had gone to seek his fortune in the Amazon. There, he
had worked in desmatamento—burning the jungle to create pastures for
cattle. In 1983, he followed talk of a gold rush to a place called
Castelo dos Sonhos, or Castle of Dreams. In the years since, he had
worked when he could as a prospector, or else on cattle ranches, on
the crews that drove fenceposts.

Every two weeks, he took a few days off in the nearby town of Tucumã,
where he had a small house. A widower with no children, Silva spent
his free time in complete idleness, eating his meals in a local
restaurant. He didn’t own a car or a motorbike, so he got around on
his own “hooves,” he said, but sometimes people gave him rides. He
didn’t know how to read, so whenever an official signature was
necessary he made a thumbprint. At the mine, he worked as a
despedrador—the last man in the pit, who removes rocks from the water
before it is sucked into the sluice. His hands were deeply calloused
and rough, like a barefoot runner’s feet. “I could drive an excavator,
and I wouldn’t have hands like these,” he said, without regret. He
smiled, and added, “Prospecting is my favorite kind of work. It’s
better than clearing forests and driving posts. I grew tired of that.”

On the way back to Ourilândia, João Guerra talked about the allure of
the gold-mining life. He had come to the region, with his two
brothers, during the boom of the eighties. Smiling nostalgically, he
said that they had been successful enough to buy themselves ranches. A
few years ago, when Ourilândia’s gold rush began, he had returned to
the business. He laughed ruefully, and said, “It’s easier for a man to
become a prospector than for a prospector to become a man.” He meant
that once gold fever gets into your blood it doesn’t easily leave.

A survey published last December by the regional environmental group
R.A.I.S.G. identified some twenty-three hundred illegal mining sites
in the Amazon, spread across six countries. “The craving for valuable
minerals resembles an epidemic,” the report said, adding that the
proliferation of mining “is not comparable to any other period of its
history.” Guerra figured that there were more than two hundred
thousand prospectors working illegally in Pará, but he suggested that
the real problem was government intervention. Although conservation
laws are spottily enforced, the federal police had at times worked
with N.G.O.s to mount aggressive raids. “We don’t repair the areas
where we mine, because we are always ready to run from the police
operations,” Guerra said. If prospectors could work legally, he
argued, they could institute safeguards in their use of mercury, and
could also bulldoze their tailings and plant tree seedlings.

The campaign of raids had cooled the mining activity in the region.
But since Bolsonaro took office the raids have stopped. “The
government is not only not working with us—it’s actively against us,”
the official said. The agencies that look after the environment and
indigenous concerns are practically defunct—and, the official said,
the Bolsonaro administration is trying to block funding for
conservation N.G.O.s.

This summer, when fires in the Amazon attracted scrutiny, Bolsonaro
claimed that N.G.O.s had set them in order to discredit his
administration. On Brazil’s far right, it is an article of faith that
N.G.O.s are conspiring with outside powers to seize control of the
Amazon. In São Paulo, a Bolsonaro adviser named Dom Bertrand de
Orléans e Bragança told me that environmentalists were akin to a
Communist insurgency, saying, “Greens are the new Reds.” (A descendant
of Brazil’s last emperor, he is scheduled to join Steve Bannon this
month at a legislative hearing on the environment.) This kind of talk
exacerbates a tradition of hostility toward anyone who resists mineral
extraction. N.G.O. workers in the region raise the example of Zé
Cláudio, an environmentalist in Pará, who was murdered, along with his
wife, in 2011. Several of them explained that they often received
threats, and had begun to restrict their movements in the countryside.
The official told me, “The Kayapo provide a good example of how
conservation is an actual war.”

Just outside the Kayapo reserve is a bar built in a roadside shack,
with a jukebox and a couple of cloth-sided rooms, where prostitutes
entertain prospectors who work in the reserve. At the entrance to
Turedjam, another shack serves as a bodega and a rest house; the
clients I saw there were invariably non-Kayapo, hanging out, avoiding
eye contact. My hosts passed by without acknowledging the place at
all. I asked Belém whether the Kayapo were concerned about having so
many strangers in their midst. How did they know who was trustworthy?
Belém spoke cautiously, but he acknowledged that security and trust
were issues. The Kayapo had appointed men to guarantee that the
prospectors paid a fair commission, but there were suspicions that
some might be cheating their own communities. He mentioned a recent
rumor that a prospector had found a giant gold nugget, weighing
forty-six pounds, and hadn’t paid a commission. “We were told it was a
myth,” Belém said. “Later, we found out it was true.” The prospectors
were sometimes violent, Belém added. The Kayapo women didn’t go alone
into the forest to harvest food, and the men took care to bring a
partner when venturing outside Turedjam.

The violence of the gold economy unsettled the Kayapo, but
Ourilândia’s white community regarded it as normal. Everyone I spoke
to accepted that the Brazilian state was weak, and that vigilantism
was necessary. “Criminals who pop up around here tend to end up dead,”
Cleber, the lawyer, told me with a smile. At the mine I visited with
João Guerra, an employee named Patricia Soffa mentioned in the canteen
that the local police had killed three criminosos the day before. The
official version was that the police had been tipped off about the
location of their hideout and gone to arrest them. When they arrived,
the criminals had begun shooting, so the police had fired back,
killing them all. It sounded a little pat, I remarked, and asked, “So,
they applied la ley de fuga?” The “law of escape” is a euphemism that
Latin-American police use for the summary execution of suspects. Soffa
and the prospectors burst into approving laughter.

Soffa told me that a local criminal had recently filmed himself
murdering a man and then shared the video on social media. She handed
me her phone and played me the clip. It showed a man falling to the
ground, twitching, and then the face of a teen-age boy, who smiles and
says, in Portuguese, “I just killed that motherfucker.” Soffa said
triumphantly, “The police caught and killed that boy the next day,
along with his friends. He was stupid. Now he’s dead.”

At a restaurant one evening, a man and a young girl in pigtails walked
over to my table. The man, a comfortable-looking Brazilian in his late
thirties, politely introduced himself and said that his daughter was
learning English. Would I mind exchanging a few words with her? I
agreed, and in several minutes of earnest conversation I learned that
the father was an engineer for the Vale mining consortium, and that
the family had visited the United States seven times, to go to Disney
World. “She loves Disney,” he said, looking at his daughter
indulgently.

A half hour later, the girl returned to my table with her mother. The
mother explained that they had come to Ourilândia because of her
husband’s work, and they loved it. “It’s like the Brazil of the
eighties,” she gushed. “We can sleep with the doors and windows open.
The kids can play in the streets, and you don’t have to worry about
them. You can’t live like this in São Paulo anymore.” I asked her why
Ourilândia was so safe. She replied, “If anyone does something
criminal around here, we just kill them.” She made a shooting gesture
with her hands. Her daughter giggled.

Shepard mentioned the Xikrin, a group, related to the Kayapo, whose
reserve is rich in nickel. In the eighties, Vale began mining there,
paying millions of dollars in compensation. The Xikrin quickly became
the wealthiest Indians in the Pará state. “Before long, the Xikrin
were throwing big parties, and inviting the Kayapo to attend as
guests,” Shepard said. “They even chartered bush planes to fly in
crates of soda pop.” Such displays of wealth, he explained, inspired a
local ethos of competitive consumption.

Published in the print edition of the November 11, 2019, issue, with
the headline “Blood Gold.”

“The Kayapo provide a good example of how conservation is an actual
war,” an N.G.O. official said.

Brazil’s National Institute of Space Research, which tracks the
damage, calculates that one-fifth of Brazil’s Amazonian rain forest
has been destroyed since the nineteen-seventies.

You know the story. Despite technologies, regulations, and policies to
make humanity less of a strain on the earth, people just won’t stop
reproducing. By 2050 there will be 9 billion carbon-burning,
plastic-polluting, calorie-consuming people on the planet. By 2100,
that number will balloon to 11 billion, pushing society into a Soylent
Green scenario. Such dire population predictions aren’t the stuff of
sci-fi; those numbers come from one of the most trusted world
authorities, the United Nations. But what if they’re wrong? Not like,
off by a rounding error, but like totally, completely goofed?
That’s the conclusion Canadian journalist John Ibbitson and political
scientist Darrell Bricker come to in their newest book, Empty Planet,
due out February 5th.
After painstakingly breaking down the numbers for themselves, the pair
arrived at a drastically different prediction for the future of the
human species. “In roughly three decades, the global population will
begin to decline,” they write. “Once that decline begins, it will
never end.”
But Empty Planet is not a book about statistics so much as it is about
what’s driving the choices people are making during the fastest period
of change in human history. Ibbitson and Bricker take their readers
inside the Indian slums of Delhi and the operating rooms of Sao Paulo,
Brazil, to eavesdrop on the conversations young professionals have at
dinner parties in Brussels and over drinks at a young professionals’
club in Nairobi.
The end result is a compelling challenge to long-entrenched demography
dogma, Trojan Horse-d inside an accessible, vivid portrait of modern
families from every walk of life. The authors sat for an interview
about how they arrived at a radical new outlook on the human race and
its implications for future societies.
WIRED: The UN is a well-regarded authority on everything from public
health to food security and global economics. What made you think that
they were getting population growth wrong?
JI: The UN population data is something we call vertical knowledge, or
“everybody knows” knowledge. Whether it’s the prime minister of a
country, a university academic, a business leader, a student, just a
guy on the street, you ask any of them, “What is happening with
population?” and they go, “Oh it’s terrible, there’s a huge population
explosion. I was just watching a movie last night where Earth got so
crowded everyone had to relocate to the moons of Jupiter.” It’s just
deeply embedded.
DB: And whenever that happens you should really go and look hard at
the assumptions, and test them yourself, because most of the time
reality has already moved past where that vertical knowledge resides.
JI: So that’s what we did. And it didn’t take long before we realized
that there was a whole body of demographers who have been questioning
the UN’s numbers for years. They’ve just been talking to each other at
conferences and through scholarly articles, but they’ve never gotten
this information before the general public. That was kind of our
starting point. And then when we went out and talked to real people in
the world about the choices they’re making, that’s when the statistics
we were seeing came to life.
You traveled all over the globe to interview people for this book.
What’s one image or conversation that really made the statistics jump
off the page?
DB: There was a moment when we were sitting in this little school in
Srinivaspuri, listening to a focus group of 13 or 14 women who lived
there. And I kept seeing this faint glow light up under their saris. I
didn’t know what it was. And then I saw one woman reach in and pull
out a smartphone, look at it, and put it back. And I realized, here we
are in a slum in Delhi, and all these women have smartphones. Who can
read. Who have data packages. And I was thinking, they have all of
human knowledge in their hands now. What’s the impact of that going to
be?
DB: So, the UN forecasting model inputs three things: fertility rates,
migration rates, and death rates. It doesn’t take into account the
expansion of education for females or the speed of urbanization (which
are in some ways linked). The UN says they’re already baked into the
numbers. But when I went and interviewed [the demographer] Wolfgang
Lutz in Vienna, which was one of the first things we did, he walked me
through his projections, and I walked out of the room gobsmacked. All
he was doing was adding one new variable to the forecast: the level of
improvement in female education. And he comes up with a much lower
number for global population in 2100, somewhere between 8 billion and
9 billion.
JI: Lutz has this saying that the most important reproductive organ
for human beings is your mind. That if you change how someone thinks
about reproduction, you change everything. Based on his analysis, the
single biggest effect on fertility is the education of women. The UN
has a grim view of Africa. It doesn’t predict much change in terms of
fertility over the first quarter of the century. But large parts of
African are urbanizing at two times the rate of the global average. If
you go to Kenya today, women have the same elementary education levels
as men. As many girls as boys are sitting for graduation exams. So
we’re not prepared to predict that Africa will stagnate in rural
poverty for the rest of the century.
DB: And that’s just one cultural variable. So you can say that the old
models always worked in the past, but what if the past is not
prologue? What if we’re moving into a different cultural moment? What
if it’s accelerating? And what if that cultural moment really is about
the personal decisions women make about their lives?
JI: We polled 26 countries asking women how many kids they want, and
no matter where you go the answer tends to be around two. The external
forces that used to dictate people having bigger families are
disappearing everywhere. And that's happening fastest in developing
countries. In the Philippines, for example, fertility rates dropped
from 3.7 percent to 2.7 percent from 2003 to 2018. That's a whole kid
in 15 years. In the US, that change happened much more slowly, from
about 1800 to the end of the Baby Boom. So that’s the scenario we’re
asking people to contemplate.
WIRED: OK, but so what though? Why does it matter who’s right or wrong?
DB: A lot of people who are thinking about the future of the world,
the future economy, the future of city planning, they’re basing their
projections on that future size of the human population. And people
are actually making decisions based on this. If you dig in and see
that there isn’t going to be a lot of growth of young people coming
into the population, a lot of growth is actually going to come from
older people hanging around longer because we’re getting better every
day at keeping them alive. How does that affect transit decisions in
New York City? Or how governments support rural communities that are
collapsing at an enormous rate right now. All those decisions are
based on having a correct understanding of what our societies will
look like in the future.

''People are suffering. People are dying. Entire ecosystems are collapsing’’
“We are in the beginning of a mass extinction. And all you can talk
about is money and fairytales of eternal economic growth. How dare
you!’’
‘’Trails of death and destruction. Ideologically infected human souls
and biologically perverted children’’
Of course, Greta was referencing the feedback loop and the risks of
die back where we enter a phase of ‘’cascading system collapse’’

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;

Its easy to see why.

International Markets

Euro 1.1060
Dollar Index 97.986
Japan Yen 108.72
Swiss Franc 0.9925
Pound 1.2846
Aussie 0.6870
India Rupee 71.0255
South Korea Won 1160.31
Brazil Real 4.0832
Egypt Pound 16.1408
South Africa Rand 14.8337

China’s first euro-denominated government bond in 15 years has been
gobbled up by yield-hungry investors including European pension funds,
feeding expectations of further deals. Beijing’s Ministry of Finance
sold a trio of bonds on Tuesday, raising a total of €4bn. There were
close to €20bn of orders from investors, according to figures shared
with the FT. The issuance will set a new price benchmark after the
expiration of the last euro-denominated sovereign bond, which was
issued in 2004. For big investors, the Chinese-issued,
euro-denominated bonds provided an opportunity to diversify and grab
higher yields than those available in Europe. The bonds had maturities
of seven, 12 and 20 years, with yields of 0.197 per cent, 0.618 per
cent and 1.078 per cent, respectively. By contrast, a seven-year
German Bund yields minus 0.5 per cent. The deal is likely to encourage
further issuance, according to analysts, and sets a price benchmark
for corporate bonds. It demonstrated “the depth of market demand for
quality Asian issuers”, said Samuel Fischer, head of China onshore
debt capital markets at Deutsche Bank, one of 12 banks involved in the
deal.
All three parts of the deal were heavily subscribed, with the €1bn,
12-year bond attracting more than €6.25bn in orders. Offering three
tranches had allowed China to target “a range of investor types”, said
Sean McNelis, HSBC’s co-head of debt capital markets for Asia-Pacific.
Dollar bonds account for $653bn, or 77 per cent of the total
outstanding Chinese foreign-currency bonds. Euro-denominated bonds
make up less than 5 per cent of the total, according to Dealogic data.
China mandated a dozen banks as managers and bookrunners for the euro
bonds. Alongside domestic players Bank of China, Bank of
Communications and China International Capital Corporation,
international banks Citigroup, Bank of America, Commerzbank, Crédit
Agricole, Deutsche Bank, HSBC, Société Générale, Standard Chartered
and UBS were involved in the deal.

Commodities

Emerging Markets

Frontier Markets

Investors in frontier-market bonds are on course to get their best
returns in seven years. It looks like it’ll be a lot tougher in 2020.
Some of the biggest money managers are already becoming more
selective. BNP Paribas Asset Management, which oversees almost $500
billion in assets, is sticking to countries with sound fiscal
management such as Ivory Coast, or those with investment-grade ratings
like Kazakhstan, Uruguay and Morocco.
Aberdeen Standard Investments sees opportunities to get above-market
returns by buying the bonds of Sri Lanka, Ecuador and Ghana.
Frontier dollar bonds are set for their best year since 2012 as Fed cuts rates
Rising debt loads and the increasing prospect of defaults in
Argentina, Lebanon and Zambia are making investors more nervous.
The International Monetary Fund’s estimate that the world economy is
growing at its slowest pace in a decade is scarcely helping.
“We’re going to have more and more defaults in the asset class,” said
Bryan Carter, London-based head of emerging-markets fixed income at
BNP Paribas Asset. “Argentina, Lebanon, Zambia -- they’re coming up.”
Total debt in frontier markets rose to a record $3.2 trillion in the
second quarter of 2019, equivalent to 115% of gross domestic,
according to the Washington-based Institute of International Finance,
which covers about 30 such countries. More than 40% are under “debt
stress or at high risk,” nearly double the proportion in 2013, it said
in a report on Oct. 31.
JPMorgan Chase & Co.’s Next Generation Markets Index, which tracks the
dollar debt of what it calls pre-emerging countries, reached a record
high this month.
That’s happened as the increased pile of negative-yielding securities
-- now about $12.5 trillion -- and the U.S. Federal Reserve’s monetary
easing caused investors to buy riskier assets.
The average yield for the frontier index is 6.3%, about 117 basis
points above that for emerging markets overall. It’s gained 17% this
year, the most since 2012 and beating the 13.2% return on the bonds of
developing nations as a whole.
Assets in Aberdeen’s frontier-market funds more than doubled over the
past year to about $600 million, according to Kevin Daly, investment
director for emerging-market debt in London.
NN Investment Partners’s equivalent funds have grown nearly 30% to
$390 million as of end-September, said Leo Hu, the firm’s
Singapore-based senior portfolio manager.
Reduced U.S.-China trade tensions, steady Chinese growth and the Fed
and European Central Bank retaining dovish stances will be a
pre-requisite for the less developed emerging markets to reap “low
double-digit” returns next year, Hu said.

Sub Saharan Africa

The meeting went well and discussions will continue during the day!

- Russia's Kamaz to set up military factory in Mozambique
- Russia's Rostec is completing the creation of maintenance, repair
and overhaul centre for Mi-8/17 helicopters based at the Helwan
Factory for Developed Industries in Egypt.
@alykhansatchu

Although Khama damaged the BDP in the central region, his people also
rejected the politicisation of their ethnicity.
Analysts had given the ruling Botswana Democratic Party (BDP), led by
Mokgweetsi Masisi less chance of winning the elections on 23 October
than its challenger, the opposition Umbrella for Democratic Change
(UDC).
The best they predicted for BDP was a hung parliament. The worst was
outright defeat.
In the end, BDP won 38 seats, one more than in 2014 whilst UDC, led by
Duma Boko got 15, three less than in 2014. Former President Ian
Khama’s Botswana Patriotic Front (BPF) got three whilst the Alliance
of Progressives won one seat.
BDP was able to reinvent itself minus Khama. The results show that
Khama’s popularity amongst his people was grossly overstated,
especially by himself.
The UDC was up against a formidable machine in the BDP. In power for
53 years, the BDP harnesssed incumbency.
It was helped by the first-past-the-post electoral system. In 2014
that gave the BDP a mandate to govern although it lost the popular
vote by over 50,000 votes.
With the BDP’s access to resources, President Masisi had another
advantage, a year ahead of the election. He increased salaries of
civil servants, soldiers and police, then promised to reinstate others
previously retrenched.
State institutions such as the Botswana Revenue Services (BURS)
frustrated the UDC campaign at every turn: they refused to allow UDC
campaign planes (donated by a South African businessman, Zunaid Moti)
to operate in the country.
Yet the Botswana air force ferried Masisi and his colleagues around
the country to campaign.
For the opposition, the clearest lesson is that it must unite against
the ruling party. For a country of less than 700 000 voters, to have
five opposition parties looks self-defeating.

Most analysts following South Africa expect it to lose its final
investment-grade rating. But they disagree over when that might happen
and what the consequences would be.
The gloomiest reckon it would trigger more than $10 billion of
outflows and cause the rand to weaken to its lowest level in almost
four years.
Others say investors have already priced in a downgrade and South
African assets may even rise in the aftermath, especially if sentiment
toward emerging markets stays strong.
Moody’s Investors Service, which rates South Africa Baa3, one step
above speculative grade, cut its outlook to negative on Nov. 1.
That followed Finance Minister Tito Mboweni’s budget statement, which
showed the government’s financial situation deteriorating rapidly.
If Moody’s does downgrade South Africa, rand bonds will be excluded
from the FTSE World Government Bond Index, which comprises 14
currencies including the dollar and yen, and has about $3 trillion
tracking it, according to Bank of New York Mellon. Foreign investors
own 37%, or about 780 billion rand ($53 billion), of South Africa’s
local-currency bonds, according to National Treasury data.
Here’s what analysts say the impact would be:
Bank of America:
The U.S. lender expects a rating downgrade soon after February’s
budget review, doubting President Cyril Ramaphosa’s administration
will manage to address concerns about a widening fiscal gap or
debt-laden state power company Eskom Holdings SOC Ltd. by then. But
analysts David Hauner and Jure Jeric say markets have priced this in
and outflows may only reach $1.5 billion, especially if China and the
U.S. continue to buoy emerging markets by reducing tensions over
trade. South African assets are cheap and “post-downgrade, the market
is likely to rise as uncertainty declines,” they said in a note this
month.
Bank of New York Mellon:
Daniel Tenengauzer, head of markets strategy, is in the bearish camp
and forecasts between $8 billion and $12 billion of outflows if South
Africa exits the WGBI. Its status as the highest-yielding country in
the index may not help much to curb the selling, he said. Rand bond
rates average 9.2%, about 360 basis points more than those for the
second-highest yielding currency, the Mexican peso.
Citigroup:
A downgrade around March is possible if South Africa fails to come up
with a “credible debt-stabilization strategy,” which will involve
tough negotiations between the government and unions about reining in
spending, according to Gina Schoeman, an economist at the Wall Street
bank. Moody’s “tolerance appears low,” she said in a Nov. 4 note to
clients, adding that a WGBI exclusion would probably lead to between
$6 billion and $7 billion of capital exiting the country.
Intellidex:
South Africa’s chances of avoiding a downgrade after the February
budget are 50:50, said Peter Attard Montalto, the London-based head of
capital-markets research. A cut has been priced in to “a moderate
degree” and could result in $5 billion of outflows, he said.
Investec:
Annabel Bishop, the bank’s Johannesburg-based chief economist, said a
negative outlook, rather than a ratings watch, means Moody’s will
probably give South Africa as long as 18 months to improve its
finances. The government’s 10-year local-currency yields may rise to
about 10% if there’s a downgrade, but they probably won’t climb as
much as those in Brazil and Turkey did when they were cut to junk, she
said.
Rand Merchant Bank:
Moody’s “really marked South Africa down because of our politics,” Kim
Silberman, a fixed-income analyst at the Johannesburg-based investment
bank, said in a video for clients on Nov. 4. She thinks a downgrade by
March is now “quite possible” and the rand would probably drop to 16
per dollar, 7.6% weaker than its current rate and a level not reached
since early 2016. Adrian Schwellnus, a bond trader at RMB, said
outflows could amount to anything between 30 billion rand and 200
billion rand. “One thing is that this global environment is probably
the most ideal for a downgrade to happen in,” he said.
Standard Chartered:
“We do not see a downgrade as early as March as being at all likely,”
said Razia Khan, the bank’s London-based chief economist for Africa
and the Middle East. The negative outlook from Moody’s “provides the
authorities with exactly the political cover they might need to take a
firm stance on reforms,” and a pickup in growth next year may mean a
cut’s avoided altogether, she said. Even if it isn’t, estimates of
outflows of around $10 billion “look significantly overstated,” said
Samir Gadio, StanChart’s head of Africa strategy.

Uganda will begin refurbishing its century-old rail network this month
to boost bulk cargo transportation, after failing to secure $2.2
billion in Chinese funding for a new standard-gauge line, a senior
rail official said on Wednesday.
The rehabilitation will be carried out in phases over several years
and cost at least 241 million euros ($267 million), Charles Kateeba,
managing director of the state-run Uganda Railways Corporation, told
Reuters.
The European Union has given a grant of 21.5 million euros and the
railway corporation is talking to international development lenders
for the rest.
Former colonial power Britain built the meter-gauge, 1,266 km (790
mile) network a century ago, mainly to move copper and other
commodities.
But the network fell into disrepair during years of political upheaval
and economic instability.
Now old, dilapidated engines hiss and clatter as they trundle between
crumbling platforms, pulling drab carriages behind them. In many
places, grass has grown over disused or missing tracks.
“Due to lack of maintenance over the years, most of the network is now
in disuse,” Kateeba said. “We shall replace some areas which have been
either removed by vandals or are badly worn.”
French firm Sogea-Satom will undertake the works, which include
installing rocks ballast on sections, re-laying of tracks, flattening
sections and repairing about 500 freight wagons.
Bulk cargo transporters have been eager for cheaper transport and were
disappointed when China did not offer funding for the Ugandan section
of the Standard Gauge Railway (SGR) regional project.
It was originally designed to connect Kenya’s Indian Ocean seaport of
Mombasa to a vast hinterland including Uganda, South Sudan, Rwanda and
Burundi.
Kenya has developed a section of the SGR from Mombasa to Nairobi with
funding from China, but had to fund an expansion itself.
Ugandan authorities have been negotiating with China for more than
five years, hoping for funds to construct its own SGR branch.
But Kateeba said several factors, including Uganda’s delayed oil
production, delayed a credit deal.
Uganda discovered 6 billion barrels worth of crude oil more than 12
years ago in the west, but disagreements between the government and
oil firms over tax and development strategy have repeatedly delayed
production.
China’s CNOOC co-owns the fields with other firms. The Ugandan
government now says it expects production to start by 2022 at the
earliest.
If oil production had begun, Kateeba said, economic growth would mean
“we would be able to really afford the credit.
“China is not giving us charity,” he said.
Now China is examining whether repayments could be adjusted, costs
lowered or the implementation period pushed back, he said.

I only recently discovered Ecclesiastes and clearly Xi was ahead of me
in this regard.
Ecclesiastes 1:2-11 2 Vanity[a] of vanities, says the Preacher 2 Vani-
ty[a] of vanities, says the Preacher, vanity of vanities! All is
vanity. 11 There is no remembrance of former things,[c] nor will there
be any remembrance of later things[d] yet to be among those who come
after.
It seems to me that we are at a pivot moment and we can keep
regurgitating the same old Mantras like a stuck record and if we do
that this turns Ozymandias

Kenya

Kenya’s senate voted on Wednesday to raise the government’s debt
ceiling to 9 trillion shillings ($87.29 billion), as authorities
abandon a limit pegged to the GDP due to a growing debt burden.
Total public debt rose to 62.3% of the gross domestic product in June
this year, the World Bank said last week, having breached the
recommended threshold 50% of GDP in the 2015/16 financial year.
The vote got the approval of 30 senators while seven voted against it,
said the speaker of the senate, Ken Lusaka, in a televised session.
The government desperately needed the approval to prevent it from
running out of funds during this fiscal year, and to allow it to
restructure the portfolio by replacing expensive commercial debt with
cheaper funds from institutions like the World Bank.
Government officials say the increase in the ceiling will also unlock
421 billion shillings worth of loans with foreign development
agencies, which have been agreed, but are yet to be signed due to the
current breach of the ceiling.
“The National Treasury would have to cancel all of these projects and
do a drastic cutback of the budget that have been allocated... as
there will be a huge deficit,” the government said in a briefing note
seen by Reuters.
The government would not had been able to plug a budget deficit of
6.2% of GDP, equivalent to about 635 billion shillings, in its budget
for the 2019/20 (July-June) fiscal year, if the ceiling had not been
raised.
The Treasury projects that total public debt will rise to 9 trillion
shillings by June 2024.
“The intention to increase it (ceiling) is to create space to
refinance expensive debt and shift focus from domestic debt to
external debt in order to allow credit extension to the private
sector,” the government said in the briefing note.
Kenya has been forced to confront the ballooning public debt after
embarking on a borrowing binge in the past year to splurge on various
infrastructure projects, including a railway funded by China.
“If you look at the borrowing in Kenya today, 90 percent is being done
by the republic. Kenya is approaching the situation that was there in
Greece,” said James Orengo, the leader of the opposition in the
senate.
However, he backed the increase in the ceiling, saying it was required
to buy the government time to get its house in order on the fiscal
side.
“Even us as an opposition we wouldn’t want to inherit an economy that
has crashed,” he said.
The higher debt limit has already been approved by the national
assembly and it will now be sent to the president so he can sign it
into law.
“When you are in a hole you have to stop digging so this is our only
way out, so we can restructure our debt,” said Moses Kuria, a member
of the national assembly from the ruling Jubilee party.