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Macro Thoughts

Dec 2 - The last day to sign the Hong Kong Bill.  The Chinese have
already threatened it could derail the trade deal if he does. (recall
1 NBA tweet)
Dec 15 - Tariffs to be hiked by 25%.  If no deal by this date, what
does Trump do?  Hike tariffs or hold off?

Recall China's over-the-top reaction to one obscure tweet from the
Houston's GM Morely to Free HK.  The Chinese ended a $1B+ NBA deal
over it.
If Trump signs the HK bill can China "let it go?" Risk looking weak
... something an authoritarian communist Government never wants.

Home Thoughts

In that time, we have destroyed 50% of the world's forests. This isn't
sustainable."

Political Reflections

Conclusions

Trend Change.

Lebanon is on the verge of total bankruptcy. There is no longer any
trust in the Lebanese Lira, nor in the banking system. The US (is
withholding for now) support – unrelated to its financial crisis – for
the Lebanese Army in the amount of $105 million dollars doesn’t even
cover a small part of the country’s $85 billion dollars deficit.

@Maryam_Rajavi who tweeted ''The whole issue is that the Velayat-e
Faqih regime is on its last leg''
This alliance of Pompeo, the ''MAGA'' Tweet Army, Maryam Rajavi and
the MEK is just not credible its incredible.
Of course, ''ARAB'' NATO which includes the Kingdom of Saudi Arabia,
the GCC and Israel is a lot more credible and they are surely guiding
the Inferno however if a civil war is ignited in the Shia crescent and
the nature of the hybrid warfare indicates this is the direction of
travel, the implosion will engender catastrophic consequences which
will be impossible to manage and which surely will imperil ''ARAB
NATO'' itself.
Oil is the Purest Proxy and is at an 8 week high.

International Markets

In early 2018, the founders of Chinese artificial intelligence startup
SenseTime Group Ltd. flew to Tokyo to see billionaire investor
Masayoshi Son.
As they entered the offices, Chief Executive Officer Xu Li was hoping
to persuade the head of SoftBank Group to invest $200 million in his
three-year-old startup.
A third of the way into the presentation, Son interrupted to say he
wanted to put in $1 billion. A few minutes later, Son suggested $2
billion.
Turning to the roomful of SoftBank managers, Son said this was the
kind of AI company he’d been looking for. “Why are you only telling me
about them now?” he asked, according to one person in the room.
In the end, SoftBank invested $1.2 billion, helping to transform
SenseTime into the world’s most valuable AI startup. The young
company’s valuation hit $7.5 billion this year.
That investment model is now under fire after Son, 62, boosted the
equity in office-sharing startup WeWork only to see it plummet as
investors balked at enormous losses and troublesome governance.
Indeed, SoftBank has participated, along with other investors, in
scores of fundraisings that have added a total of more than $150
billion to the value of private companies, according to Bloomberg
calculations.
Among its deals are the world’s top two startups—ByteDance Inc. valued
at $75 billion and Didi Chuxing Inc. at about $56 billion.
In some cases, SoftBank’s involvement in multiple funding rounds
helped drive up valuations that resulted in paper profits for Son’s
company.
The WeWork fiasco raises questions about such numbers. The co-working
startup’s valuation crested at $47 billion this year with SoftBank’s
investment, then plummeted to $7.8 billion in a bailout engineered by
Son.
WeWork is slashing jobs and scaling back operations.
“WeWork is not just a mistake, it is a signal of weakness in the whole
model,” said Aswath Damodaran, a professor of finance at New York
University’s Stern School of Business, who has written four books on
valuing businesses.
 “If you screwed up that valuation so badly, what about all of the
other companies in your portfolio?”
SoftBank said WeWork is an exception rather than a symptom of broader
problems, and it has learned from the experience.
Since unveiling his $100 billion Vision Fund in 2016, Son has become
the most active tech investor on the planet, pouring money into more
than 80 companies.
That helped create a bumper crop of unicorns, more than 300 startups
priced at $1 billion or greater, according to the research firm CB
Insights.
What’s not as well understood is the incentive Son has to keep
valuations rising. When SoftBank buys shares in a startup and then
invests again at a higher valuation, Son says he has made a profit.
That is legal under accounting standards, but SoftBank receives no
money. The only change is that SoftBank has boosted the value of its
original stake from, say, $1 billion to $2 billion by raising the
value of the startup.
In SoftBank’s income statements and return calculations, at least some
of the additional $1 billion can be counted as profit.
“My brain and my heart, almost everything about myself is focusing on
Vision Fund”
“They pump up valuations to get higher returns to look good to
investors,” says Eric Schiffer, chief executive officer of Patriarch
Organization, a Los Angeles-based private equity fund. “That kind of
fundraising apparatus is essentially unicorn porn.”
SoftBank said its accounting complies with all standards and is
consistent with widely accepted practices. As for startup valuations,
it said it is not determining them on its own and invests with
experienced firms such as Sequoia Capital and Temasek Holdings Pte.
“Our valuations have been validated by more than 120 sophisticated
investors who’ve invested alongside and after us,” Navneet Govil,
chief financial officer of SB Investment Advisers, the entity that
manages the Vision Fund, said in a statement.
SoftBank said it has a rigorous internal process for setting
valuations, and it books profit on any increase in valuation only
after taking into account future cash flows and public market proxies,
as well as private market funding prices.
SoftBank’s auditors at Deloitte & Touche check those calculations, and
the Vision Fund’s limited partners have their own auditors, including
staff from Duff & Phelps and Ernst & Young, who vet the final figures.
“Our valuation process is robust and reviewed quarterly by independent
auditors,” Govil said. “We believe our performance is strong. In just
two and a half years, Vision Fund 1 has already had seven IPOs, $4.7
billion of realized gains, $11.4 billion in cumulative investment
gains and returned $9.9 billion to our limited partners.”
Today’s accounting rules may be ill-suited to an era of unprecedented
speculation on unicorns. Under the International Financial Reporting
Standards (IFRS) that SoftBank uses, companies have wide latitude to
determine how much they think portfolio companies are worth—and
therefore how much profit they report to investors.
It’s unclear whether any company has tried to determine paper profits
for tech startups on the scale SoftBank is now using.
“I don't believe we’ve ever seen an attempt to record this magnitude
of income with respect to unquoted equity investments,” said Robert
Willens, a tax expert in New York.
Son’s bookkeeping has allowed him to claim his average internal rate
of return far outpaces those of other investors.
This month, as SoftBank took a hit from WeWork, Son defended his
investment approach. “There are 5,000 venture capitals globally and
average IRR is 13%,” he said. “Our return is about twice as big as
this.”
Son’s confidence in his own acumen led to the creation of the Vision
Fund in 2017, which at the time was more than 10 times the size of any
venture capital fund.
He was seeking to repeat the success of his most celebrated
investment—a $20 million bet on China’s Alibaba Group Holding Ltd.
that turned into stock now worth more than $120 billion.
With Abu Dhabi’s Mubadala and Saudi Arabia’s Crown Prince Mohammed bin
Salman backing the Vision Fund, Son began a blitzkrieg of deals in
2017.
He invested more than $35 billion across about 100 companies,
according to research firm Preqin.
Among the biggest were multi-billion-dollar fundings of WeWork and
Didi Chuxing, the Chinese ride-hailing giant modeled after Uber
Technologies Inc.
In December, a SoftBank-led group invested $9 billion in Uber,
including buying stock from existing shareholders.
SoftBank began including financial results for the Vision Fund during
the fiscal year that ended in March 2018. Total operating profit
including a related Delta Fund was 303 billion yen, or less than $3
billion.
That surged to 1.26 trillion yen the following year, making it the
most profitable unit at Son’s company and accounting for more than
half the parent company’s operating income.
With Son’s energy directed at startups, SoftBank spun off the domestic
telecom business that had made it famous and generated cash for his
early investments.
“My brain and my heart, almost everything about myself is focusing on
Vision Fund,” Son told investors in May.
But the profits SoftBank booked were mostly on paper. In the first
fiscal year, unrealized gains on investment valuations accounted for
essentially all the stated income for the Vision and Delta funds.
In the most recent fiscal year, unrealized gains on valuations
amounted to 1 trillion yen, while realized gains—like the sale of
India e-commerce giant Flipkart to Walmart Inc.—totaled less than 300
billion yen.
WeWork underscores the risks of that approach. SoftBank first took a
stake in August 2017 at a valuation of $21 billion. It then invested
another $3 billion in November 2018 at a $45 billion valuation and
later agreed to a $1.5 billion warrant at $47 billion.
As Son reported results this May, he highlighted WeWork as an example
of portfolio companies heading for IPOs. When the deal fell apart,
SoftBank took a 498 billion yen hit.
SoftBank Vision Fund said it never took profits from WeWork by marking
it all the way up to $47 billion. It kept the shares on its books at
about half that price. It still had to take that down by about 75%,
which led to the loss.
Venture capital and private equity firms are mostly private so they
don’t need to report quarterly profits to public shareholders, and
their limited partners are typically focused on returns when portfolio
companies cash out through IPOs or acquisitions.
SoftBank doesn’t reveal specific valuation changes for each of its
portfolio companies in a quarter, typically only naming a few winners
or losers. Investors putting money in alongside SoftBank are at times
affiliates, like Grab, Didi and Alibaba.
“If I’m an investor, I want to know how they are coming up with these
numbers. Otherwise, you can’t believe any of the valuations,” said
NYU’s Damodaran. “The more they talk about accountants the less I
would trust the numbers.”
SoftBank concluded that under IFRS rules the Vision Fund must count
valuation changes as income because its primary business is investing,
and SoftBank Group must incorporate that income in its books because
the Vision Fund is a consolidated subsidiary.
One person close to the company said the resulting profit figures are
almost meaningless, but there is no better accounting method given the
current rules.
“I’m not an accountant or a lawyer, but presenting this as income
doesn’t make any sense,” said Ilya Strebulaev, a professor of finance
at Stanford University’s Graduate School of Business whose research
suggests the latest, post-money valuations typically overvalue
startups by about 50%.
Adding to the complexity is that startup stakes are sometimes
transferred between SoftBank Group and the Vision Fund, which have
different shareholders. The price at which those assets are shifted
has implications for profits on either side.
After WeWork, other deals are coming under scrutiny. SoftBank invested
in Didi Chuxing in 2015 with the Chinese company’s valuation at about
$6 billion. It then put more money in about once a year as Didi’s
valuation climbed to $56 billion.
But Didi has run into trouble since the fundraising two years ago.
Chinese regulators have cracked down on ride-hailing services for
drawing migrant workers into big cities and hurting taxi drivers’
incomes.
Two passengers were killed after using its car-pooling service,
prompting a government suspension. In addition, investors have grown
skeptical about ride-hailing after the roughly 35% slump in Uber’s
shares since its May IPO.
Uber’s drop means SoftBank should probably mark down Didi by at least
the same margin, said one person who has worked on deals with
SoftBank.
The Japanese company would also have to look at its investments in
other ride-sharing companies such as Grab Holdings Inc.
in Southeast Asia, the person said. Didi declined to comment. A Grab
spokeswoman said there has been no change in its valuation and it has
diversified beyond ride-hailing.
SoftBank took a loss in its most recent earnings report on its Uber
stake, but made no mention of the other ride-hailing firms in its
portfolio.
It did cut the estimated value of its stakes in Didi and other
ride-hailing services in the most recent quarter, according to one
person close to the company. SoftBank said it can’t disclose the loss
or gain on every portfolio company each quarter.
SoftBank said Didi is an example of how it is not responsible for
propelling startup valuations because Silicon Valley’s Silver Lake
Management invested alongside SoftBank at the same price. Toyota Motor
Corp. and Booking Holdings Inc. then bought shares at a higher
valuation.
In the U.S., food-delivery firm Doordash Inc. struggled to distinguish
itself from rivals and hadn’t hit the $1 billion unicorn mark until
SoftBank invested in the company last year.
Then in just over a year, Doordash’s valuation went from $1.4 billion
to $12.6 billion this May. When SoftBank reported earnings the next
quarter, it highlighted Doordash as one of the main contributors to
its operating income.
Perhaps SoftBank’s most controversial deal after WeWork is an Indian
startup called Oyo that was founded six years ago by teenager Ritesh
Agarwal.
It aimed to bring reliable quality to the country’s chaotic lodging
industry. Oyo staff help hoteliers upgrade everything from furniture
to bedding and toiletries and the hotel or guest house gets a bright
red Oyo sign as a seal of approval, encouraging travelers to book.
Oyo takes a cut of roughly 25%.
While SoftBank backed Oyo from its early days, some people close to
the company worry that Son’s relationship with Agarwal is similar to
his ties to WeWork co-founder Adam Neumann and that he may be making
similar mistakes.
The Vision Fund put $250 million into Oyo in 2017 and led a $1 billion
funding round last year, which pushed the Indian company’s valuation
to $5 billion.
 Son encouraged Agarwal to expand into markets such as China and the
U.S. and to buy properties, including the Hooters Casino in Las Vegas
for $135 million.
Stephen Givens, an M&A lawyer in Tokyo, argues that Oyo’s business
model resembles WeWork’s, a tech-inflected real estate business that
has expanded far beyond its initial concept.
“Oyo made sense in a place like India,” he said. “But moving into the
U.S. and buying real estate is a big risk.”
Even as SoftBank ran into trouble with WeWork, it helped push up the
valuation of Oyo with an unusual funding round. In October, the
Japanese company and Agarwal together chipped in, raising the
valuation to $10 billion.
SoftBank touted the startup as a bright spot when it took the
writedown for WeWork, booking a valuation gain of 590 billion yen on
25 investments, of which Oyo was the only one named.
“If you screwed up that valuation so badly, what about all of the
other companies in your portfolio?”
Yet it turned out that Agarwal, now 26, had borrowed $2 billion to
finance his share of the purchase from financial institutions,
including Japan’s Mizuho Financial Group Inc., people familiar with
the matter have said.
Son himself personally guaranteed the loans to Agarwal, according to
another person familiar with the matter. Mizuho declined to comment.
In addition, two earlier investors in Oyo were Didi and Grab, the
ride-hailing companies backed by SoftBank.
That raises the question of whether money used to boost their
valuations was then reused to hike the value of another SoftBank
investment.
SoftBank did not disclose Son’s personal role in the deal or the bank
loans to Agarwal. Ultimately, the Vision Fund decided it wouldn’t mark
up its Oyo stock to the $10 billion valuation because the latest
funding did not include independent investors.
In a statement, Oyo said it is grateful for the support of investors
including the Vision Fund. “We are a well-run company with a healthy
balance sheet and a strong focus on business economics, and the same
can be seen in the continued momentum we’ve seen in reducing our net
losses,” it said.
“We have great business relationships with both Didi and Grab since
late 2017 and early 2018 when the fundraising had not happened.”
Analysts trying to make sense of SoftBank’s valuations have been
frustrated by what they view as a lack of transparency in such cases.
SoftBank doesn’t discuss in detail the standards by which it values a
particular startup or accounts for such gains as profit on its income
statement.
“SoftBank has offered little visibility into how they value their
investments,” says Jefferies Group senior analyst Atul Goyal.
Masafumi Takeno represented Japan on the IFRS Foundation committee
that developed materials explaining how to use valuation guidelines.
He said companies have broad discretion to determine asset values and
disclosures. “The rules are pretty loose and permissive,” he said.
For years, Son has expressed frustration that investors don’t see the
value of his business. In presentations, he will often focus in on how
SoftBank’s market capitalization is below the value of its assets,
including publicly traded stocks like Alibaba.
In February, he opened an event with a slide that showed: “25 – 4 =
9?” The point he was making is that SoftBank held assets worth 25
trillion yen—including a 12.5 billion yen stake in Alibaba—and had
only 4 trillion yen in debt.
Yet investors bestowed a value of 9 trillion yen on SoftBank, a
discount of more than 60%. “It’s just beginner math,” Son said. “This
is too cheap.”
The SoftBank discount narrowed after that presentation with the help
of a stock buyback and the impending IPOs for companies like Uber. On
its website, Son’s company ran daily calculations of assets minus debt
to show what the share price should be.
But with the WeWork implosion, SoftBank’s market cap has dropped back
below 9 trillion yen and the discount has widened again to more than
60%. The stock has dropped 30% since its April peak, though it’s still
up 15% for the year. Shares reversed morning gains on Tuesday and
dropped almost 1%.
“Markets are telegraphing that the trust is gone,” said NYU’s
Damodaran. “Masa needs to rebuild that.”

Euro 1.1010
Dollar Index 98.314
Japan Yen 109.16
Swiss Franc 0.9980
Pound 1.2847
Aussie 0.6779
India Rupee 71.36
South Korea Won 1177.46
Brazil Real 4.2332
Egypt Pound 16.0991
South Africa Rand 14.8231

Commodities

Avocado is seen as a healthy fruit and Americans can’t get enough of
them. Statistics indicate that the US imports over 750 million Kgs of
the prized fruit to supplement homegrown volumes.
On average, over 21 million Avocados are eaten every hour. This partly
explains why despite earlier troubles, prices are up 10% year-to-date,
trading at $2.93 per KG.

The ‘’Zeitgeist’’ of a time is its defining spirit or its mood.
Capturing the ‘’zeitgeist’’ of the Now is not an easy thing because we
are living in a dizzyingly fluid moment.
Paul Virilio has said 'Wealth is the hidden side of speed and speed
the hidden side of wealth' and he is not wrong.
Last Year the Economist Richard Thaler was awarded the Nobel Memorial
Prize in Economic Sciences for his contributions to behavioural
economics and clearly behaviour is having an outsize influence on
Economics.
Malcolm Gladwell defined a tipping point as "the moment of critical
mass, the threshold, the boiling point".The book seeks to explain and
describe the "mysterious" sociological changes that mark everyday
life.
Gladwell stated: "Ideas and products and messages and behaviors spread
like viruses do".
You will recall in late April 2017, Avocado prices had doubled and
reached the highest in data going back 19 years.
The jump in demand in recent years has been dramatic. American
per-capita consumption was 6.9 pounds in 2015, versus 3.5 pounds in
2006.
My Point is that the Millenials discovered the virtues of Avocado, the
behaviour spread like a 'virus' and Boom prices sky-rocketed. Prices
have retraced some since those 2017 highs.
The Avocado Price surge is an example of the new c21st Millennial
Economy but there are many other examples.

Emerging Markets

The monetary authority sold dollars on the spot market twice on
Tuesday as the real weakened to an all-time low following comments
from Economy Minister Paulo Guedes that a weaker currency isn’t a
problem.
Campos Neto said at an event in Brasilia on Tuesday evening that the
foreign exchange market was “dysfunctional” when the central bank
decided to intervene and stressed that the bank’s actions do not
change the long-term trend of the currency.
He added that Brazil is “well prepared” to face turbulence, with large
foreign reserves and stressed the separation between currency and
monetary policy.

That high of 4.2770 reais was almost 1% higher than the dollar’s
previous peak, reached in 2015 when Brazil was mired in one of the
worst recessions in its history.
“Today we had a very atypical movement; the exchange rate became
dislocated, with gaps in liquidity,” central bank President Roberto
Campos Neto said at an event promoted by newspaper Correio
Braziliense.
“If tomorrow we think there are dysfunctional moves, that Brazil’s
exchange rate is behaving unlike other countries’ and there are
liquidity gaps in the market, we will intervene again just like we did
today,” he said.
Market participants said the real’s slump on Tuesday was triggered by
comments from Economy Minister Paulo Guedes the evening before that he
was not worried about its weakness and that a weakening exchange rate
is a natural consequence of falling interest rates.

and spoke of ‘’Trails of death and destruction. Ideologically infected
human souls and biologically perverted children’’

Frontier Markets

Sub Saharan Africa

While neither are realistically at risk of losing their majority,
their margins of victory are likely to narrow.
Geingob will square off against seven challengers. His main rival is
dentist Panduleni Itula, a member of the ruling party who took
advantage of a loophole in the electoral laws to run as an
independent.
He secured the endorsement of three other opposition party leaders and
could attract some support from Swapo’s support base.
Geingob, who trained as a teacher and holds a master’s degree in
international relations from the New School for Social Research in New
York, served as prime minister and trade and industry minister before
replacing Hifikepunye Pohamba as president in 2014.
A chronic drought sent Namibia’s economy into a downturn in 2016 and
the International Monetary Fund sees a third consecutive annual
contraction this year.
The government has increased borrowing to offset a slowdown in
revenue, and the ratio of public debt to gross domestic product has
surged to 49% from 23% five years ago.
More than 10% of the population of 2.6 million live in abject poverty
and unemployment is rampant, while ongoing drought has left more than
700,000 people in need of food aid and prompted Geingob to declare a
state of emergency.
Support for the ruling party has also been dented by a scandal that
saw Justice Minister Sackeus Shanghala and Fisheries and Marine
Resources Minister Bernhard Esau quit after media reports emerged that
they’d awarded quotas to one of Iceland’s biggest fishing firms in
exchange for bribes.
The reports alleged that Geingob had known about the scandal since
2018, an allegation he denies. Esau and Shanghala denied wrongdoing.
Polling stations are due to open at 7 a.m. local time and close at 9
p.m., with 1.36 million people registered to cost ballots. Fifteen
parties have fielded candidates for the 96 seats in the National
Assembly.

KHARTOUM (Reuters) - Late last year, as President Omar Hassan
al-Bashir’s hold on power weakened, one of Sudan’s most feared militia
leaders lashed out against the government of his long-time ally and
benefactor.
In a speech to cheering troops, militia chief Mohamed “Hemedti” Hamdan
Dagalo sympathised with the thousands of protesters who had poured
onto the streets in December demanding food, fuel and an end to
corruption. He hit out at officials “who take what isn’t theirs.”
“There are some people who are doing great harm, and they are the
officials, not the poor,” he raged.
After years of loyally supporting Bashir, Hemedti took part in the
military coup that toppled the leader in April and is now a senior
figure in the transitional government that is preparing the ground for
elections in three years’ time.
Under the constitution, members of the transitional government aren’t
allowed to engage in private business activity.
Now a Reuters investigation has found that even as Hemedti was
accusing Bashir’s people of enriching themselves at the public’s
expense, a company that Hemedti’s family owns was flying gold bars
worth millions of dollars to Dubai.
Current and former government officials and gold industry sources said
that in 2018 as Sudan’s economy was imploding, Bashir gave Hemedti
free rein to sell Sudan’s most valuable natural resource through this
family firm, Algunade.
At times Algunade bypassed central bank controls over gold exports, at
others it sold to the central bank for a preferential rate, half a
dozen sources said. A central bank spokesman said he had no
information about the matter.
Airway bills and invoices, reviewed by Reuters, give a rare glimpse
into Algunade’s dealings - a closely-guarded secret in a country where
two thirds of the population live in poverty.
The documents, covering a four-week period from the end of last year,
show Algunade sent around $30 million of gold bars to Dubai, around a
ton in weight.
In the past, Hemedti has spoken openly about owning gold interests,
most recently in an interview with the BBC in August. “I’m not the
first man to have gold mines. It’s true, we have gold mines, and
there’s nothing preventing us from working in gold,” he said then.
But in response to Reuters’ questions for this article, Hemedti’s
office denied any link between the commander and Algunade.
In a separate interview, Algunade’s general manager, Abdelrahman
al-Bakri, said the firm is owned by Hemedti’s brother Abdelrahim, who
is also the deputy head of Hemedti’s Rapid Support Forces (RSF).
Nevertheless, Bakri maintained there was no connection between
Algunade and Hemedti and his RSF, which has evolved from a militia in
Darfur to Sudan’s most powerful paramilitary group.
“Algunade is as far as can be from the RSF,” he told Reuters at the
firm’s heavily secured headquarters. He showed Reuters registration
documents that named Abdelrahim as the company’s owner.
Reuters was unable to contact Abdelrahim. Bakri acknowledged that
Algunade exported gold to Dubai in late 2018 but said it had done so
at the request of Bashir’s intelligence agency. He denied the firm
sold gold to the central bank at a preferential rate.
Hemedti’s grip on Sudan’s vital gold trade illustrates the scale of
the challenge to rescue an economy broken by decades of mismanagement,
corruption and war.
His career began as a militia man in western Darfur, where rebels took
up arms against Khartoum in 2003. Bashir mobilized several militia to
quell the revolt and, in the conflict that followed, some 300,000
people were killed and two million more driven from their homes.
The government disowned “outlaw” fighters who murdered civilians, but
the International Criminal Court issued an arrest warrant for Bashir
for war crimes and the United States imposed further economic
sanctions against his government.
In Darfur, Hemedti earned a reputation as a ruthless commander and a
loyal servant to Bashir. The president called him “Hemayti,” meaning
“my protector.”
After Hemedti seized the goldmines of Darfur’s Jebel Amer mountain
region, Bashir allowed him to hold onto the prize.
“He became the new king of Jebel Amer and its gold,” said Amjad Farid,
a politician and pro-democracy activist. “For Bashir, he was his loyal
boy, his protection force.”
Hemedti and his militia took full control of the Jebel Amer mines in
2017 - the year the United States began lifting economic sanctions
against Sudan. He faced few obstacles as he expanded his operations
from Darfur to South Kordofan and other regions of the country.
Algunade traded with poor, artisan miners who used toxic mercury to
extract gold, at grave risk to their health. The leftover soil, known
locally as “Karta,” was trucked to Algunade’s plants where it was
treated with cyanide to harvest the remaining ore.
These practices have sometimes brought Algunade into conflict with
local people. In October, people in the town of Talodi, South
Kordofan, set fire to the Algunade plant, accusing the firm of
plundering their gold and polluting their soil.
“This gold belongs to us and this is our land, handed down by our
grandfathers. Why should we give the gold to Algunade? We burned the
factory to stop pollution and to stop them stealing our gold,” said
miner Haroun Abdallah.
Algunade’s general manager, Bakri, said the “citizens of South
Kordofan should say thank you very much to Algunade” for all it had
done for the area. He estimated the attack on the facility caused
damage of about $6 million.
A global campaign against the use of mercury in gold mining and other
industries led to a United Nations treaty, the Minamata Convention on
Mercury, which will prohibit the manufacture, import and export of
products containing mercury by 2020.
Sudan’s Energy and Mining Minister Adil Ibrahim told Reuters his
country would comply with the agreement. The convention does not
extend to cyanide, however.
“Cyanide is more serious because it seeps into the earth, and can be
washed by rain, and it kills so many animals and seeps into drinking
water and affects vegetation in the area,” said Anwar al-Haj the chair
of Sudan Democracy First Group, a non-governmental organization which
advocates for democracy.
It published a report in 2018 that asserted a link between the use of
hazardous chemicals in mining and increased miscarriages, birth
defects and deaths.
Energy and Mining Minister Ibrahim said the government would help
miners find alternatives to mercury, but cyanide use would continue
because, if handled properly, it isn’t harmful.
Sudan’s central bank is supposed to oversee gold exports, but two
current and one former government official and several industry
sources told Reuters that Bashir sometimes allowed Hemedti to
circumvent this rule.
The former president let Algunade sell gold as it liked, these people
said, because Hemedti’s RSF militia was a useful counterweight to
generals in the regular military whom Bashir perceived as a threat to
his rule.
The export documents and invoices reviewed by Reuters, covering a
four-week period from the end of 2018, showed Algunade doing business
with one counterparty in Dubai, a company called Rozella.
Contacted by Reuters, Rozella confirmed the firm had dealt with
Algunade. A company official said transactions between the two
companies took place over a period of three months in late 2018.
Algunade’s general manager Bakri told Reuters that Rozella was the
only firm Algunade dealt with in Dubai.
Under the arrangement with Bashir, Algunade would hand some of its
export earnings to the state, to pay for the government’s fuel and
wheat purchases, government officials said.
Algunade’s general manager, Bakri, confirmed that some of the proceeds
of gold sales were used to buy fuel. He said Algunade bypassed the
central bank only for three months in late 2018, at Bashir’s request.
A senior government official, however, told Reuters, “there were no
official records showing that Algunade gave money” to the state.
This official said Hemedti used proceeds from gold exports “to buy
weapons for Bashir and himself.”
He estimated that Hemedti pumped millions of dollars into buying
weapons and vehicles for the RSF that roams the streets with
rocket-propelled grenades and machine guns mounted on jeeps.
Asked if revenues from Algunade’s gold sales were used to buy weapons,
Bakri maintained there was no connection between the firm and the RSF
or Hemedti. Hemedti’s office declined to comment beyond denying any
link between the commander and Algunade.
The head of Sudan’s gold exporters’ union Abdel Monem al-Siddiq said
that even when Algunade sold its gold to the central bank as it was
supposed to, it received a preferential rate - a claim Algunade’s
general manager Bakri rejected as “fake news.”
With tens of thousands of soldiers, the RSF is Hemedti’s power base.
It is deployed across the country to protect gold mines and strategic
buildings.
Thousands of its fighters have fought for Saudi Arabia and the United
Arab Emirates in Yemen’s civil war. Hemedti’s fighters are deeply
loyal.
“The leader sometimes takes the time to talk to us militiamen by
telephone. We will always support him,” said one fighter, declining to
be named because he wasn’t permitted to talk to the media.
He said he was paid $20,000 to fight in Yemen for six months. Many of
his countrymen live on less than $10 a month.
Energy and Mining Minister Ibrahim faces a big challenge to reform the
gold industry. He said successive ministers failed to ensure
concessions were awarded fairly and transparently, leading to
corruption. “It’s a mess,” he added.
Finance Minister Ibrahim Elbadawi, who estimated Sudan needs up to $5
billion in international support, said the government will push to end
monopolies in sectors including gold mining.
Algunade’s general manager Bakri insisted Algunade doesn’t have market
dominance.
For many Sudanese, Hemedti and his firm are symbols of the country’s
repressive past and economic inequalities.
One gold trader told Reuters how he stood up during an industry
conference recently to complain that Hemedti’s gold business had
become too dominant.
Two days later, he said, police hauled him to the prosecutor’s office
for questioning about his comments. His account couldn’t be
independently confirmed.
At the gold souk in downtown Khartoum, a large sign advertising
Algunade blazes above rows and rows of idle jewellery shops. Few
Sudanese can afford to buy these days, said shopkeeper Mohammed Awad.
When asked if gold exports had harmed his business, another trader
pointed to the Algunade sign above him and said: “We hope that Hemedti
will change his ways and keep the gold inside the country.”

The ‘’zeitgeist’’ of the Revolution in Khartoum was intoxicating. As I
watched events unfold it felt like Sudan was a portal into a whole new
normal.

The Congolese president intends to overhaul of his security system –
with one objective: to take back control of the services still run by
followers of Joseph Kabila.
DRC president Félix Tshisekedi is “seriously” considering overhauling
his security system, according to our sources in the presidency.
It comprises the Garde Républicaine and the Garde Rapprochée – which
also protects his family, his property and strategic sites such as
airports and public television.
Like the army and the intelligence units of the Agence Nationale des
Renseignements, these services are still run by people close to former
president Joseph Kabila.
Ilunga Kampete, who is under European Union sanctions, is the head of
the Garde Républicaine, and Josué Kasongo Ntenki leads the Garde
Rapprochée.
President Tshisekedi is gradually integrating his loyalists into the
latter structure, such as Freddy Mpindi, former president of the youth
league of Tshisekedi’s party, the Union pour la Démocratie de le
Progrès Social. Others are reportedly being trained abroad.
“Only when he feels his safety is assured will he be able to take on
Kabila,” says a source close to the President, referring the
directorships of the national mining company Gécamines and the railway
company Société Nationale des Chemins de Fer du Congo.

In the video of their deaths, Zaida Catalán and Michael J. Sharp are
shepherded, shoeless, through scrubby forest.
The two United Nations investigators, whose job it was to recommend
human rights abusers and arms embargo busters for sanctions, were
killed on a Sunday afternoon in March 2017 in Kasai, a southern region
of the Democratic Republic of Congo that is larger than the United
Kingdom but with barely a stretch of unpotholed paved road.
They are accompanied by at least 13 men: some wear red bandanas, some
carry 12-gauge shotguns, others hold knives. Sharp talks in French;
Catalán is silent.
The two are ordered to sit on the ground facing each other. A few
moments later, Sharp is shot at close range, then Catalán. She
stumbles to her feet and runs a few paces before falling.
Then two men take turns using a knife to cut off Catalán’s head. The
film, which surfaced two weeks after the killings, abruptly ends.
Catalán, 36, a Swede, and Sharp, 34, an American, were members of the
Group of Experts, a UN Security Council-mandated team of six
investigators monitoring war crimes in Congo.
Catalán’s expertise was in humanitarian issues, while Sharp, the
group’s leader, specialised in armed groups.
Two and a half years later the killings remain unsolved, but slowly
the layers of deliberate deceptions, false accounts, face-saving
cover-ups and callous disregard – both in Congo and at the UN – have
begun to dissolve, the tale of a deadly ambush by murderous rebels
giving way to something closer to the truth, and far darker.
A forensic team in white hazmat suits disinterred the bodies close to
the village of Moyo-Musuila. Although there was little doubt they were
indeed those of Catalán and Sharp, identification was hampered by the
absence of Catalán’s head.
An autopsy later found that she had bled to death after being shot
multiple times, and was subsequently decapitated. Sharp was also
killed by multiple gunshots, including to the head.
Catalán and Sharp are the first – and so far only – UN investigators
to be killed in the line of duty anywhere in the world, and Kinshasa
was eager that blame should fall on a Kasai-based insurgency known as
Kamwina Nsapu that was challenging central authority and irritating
the president.
ix weeks after their deaths, officials in Kinshasa held a press
conference, where they revealed the existence of the 6min 17sec video,
shot on a mobile phone, of the killings.
“The images speak for themselves,” the then information minister
Lambert Mende said after playing it for the journalists. “It is not
our soldiers that we see in the video executing the two UN workers but
the terrorists of the Kamwina Nsapu militia.”
After the video’s release, the government moved quickly to prosecute
some of those who appear in the video and a prize witness named Jean
Bosco Mukanda quickly came forward claiming to have seen the murders,
providing testimony implicating local Kamwina Nsapu leaders.
By June a military tribunal in Kananga had taken up the case. The
government’s simple story, which it laid out at the trial with
Mukanda’s ready testimony, was that Catalán and Sharp naively wandered
into a conflict, were waylaid by Kamwina Nsapu bandits, robbed and
killed.
Despite stepping down in December – reluctantly and two years late –
he remains powerful, the puppet master to his co-opted successor Félix
Tshisikedi. Parliament and the judiciary are still stacked with his
allies and loyalists and it is Kabila’s, not Tshisikedi’s,
presidential portrait that still hangs on walls around the country.
Congo’s most tenacious oppositionist, Étienne Tshisekedi (father of
Félix), was born in Kananga and made Kasai his stronghold as he
opposed first Mobutu, then his successor, Laurent Kabila (father of
Joseph), and finally Joseph Kabila.
In retaliation, Kasai has suffered even more abject neglect than the
rest of the country, leaving its residents deeply impoverished.
As the date for the 2016 elections loomed and Kabila sought avenues to
stay in power, an attempt was made to co-opt an influential
traditional leader in Kasai for political gain.
But the move went awry and the chief, known as Kamwina Nsapu, was
killed, triggering the insurgency that bears his name. Violent
confrontations saw soldiers armed with assault rifles and heavy
weapons battle villagers carrying shotguns and knives.
Even by Congolese standards the scale of violence was “alarming and
unusual”, said Ida Sawyer of Human Rights Watch.
Scores of mass graves were filled with the remains of Kamwina Nsapu
fighters, or civilians suspected of supporting them, and villages were
burned. Around 5,000 people were killed and, at the height of the
upheaval, a million and a half people were forced from their homes.
Jason Stearns, at New York University’s Congo Research Group and one
of Sharp’s predecessors as coordinator of the Group of Experts, told
me that the Congolese army’s extreme brutality in Kasai was
“unprecedented” even by the standards of a military well-known for its
excesses.
“You have this local, ragtag militia group that protested against the
Congolese government and in response the army goes in and responds
with extraordinary and often indiscriminate violence. This was
obviously very organised: there were orders given to deal with this in
the way they dealt with it.”
At the moment the shooting starts at least one man darts away in
surprise while others appear prepped and act efficiently. “One thing
that’s clear from the video is that this was an organised hit,” said
Stearns. “This was not some guys at a roadblock who all of a sudden
got upset.”
The video’s audio track, too, contains evidence. Kamwina Nsapu is a
local movement and its members speak a local language called Tshiluba
yet in the video, two men off-camera speak French and Lingala – a
language commonly spoken in the capital and among the security forces
– and bark orders in broken Tshiluba, sometimes sounding as if they
are talking on a phone.
“That’s a big deal,” Stearns said. “It would be strange for outsiders
to be involved in this militia.”
As investigators, Catalán and Sharp kept meticulous records, including
an audio recording of a meeting with a Kamwina Nsapu elder in a
Kananga hotel the day before their murders.
Transcripts produced independently by the UN and French broadcaster
Radio France Internationale (RFI) show that a crucial exchange was
mistranslated: the elder warns the investigators against travel to a
town called Bunkonde, since he cannot ensure their safety there.
Instead, Catalán and Sharp are told: “You can arrive in Bunkonde,
there is nothing … You will pass without problems.”
Their translator, Thomas Nkashama, fixer José Tshibuabua and guide
Betu Tshintela collude in the deceit. The next morning Catalán and
Sharp headed for Bunkonde, and their deaths.
According to a former colleague, Catalán and Sharp’s main focus in
Kasai was not in fact army atrocities and mass graves, but Kamwina
Nsapu’s practice of recruiting children and drugging them for battle.
However, the attention on mass graves in the weeks before their visit
meant there was “a misperception” about their presence in Kasai, one
that may have proven deadly.
Subsequent investigations by some UN officials, RFI and others have
revealed that those responsible for misleading Catalán and Sharp
during the hotel meeting had all worked for Congolese intelligence and
security services.
“All the people who lied to the experts during that recorded interview
were linked in some way with the intelligence service,” RFI’s Sonia
Rolley told me.
Documents show that Tshibuabua was a member of the Agence Nationale de
Renseignements (ANR), Congo’s national intelligence agency, and a
cousin of Tshintela, who had also worked for the agency, while
Nkashama was a member of the country’s pervasive
immigration-cum-security service, the Direction Générale de Migration
(DGM).
All three were in touch with local army commander Colonel Jean de Dieu Mambweni.
The meeting was a set-up. “It appears they were deliberately tricked,”
Sawyer said. “All of the research we have conducted indicates
government involvement, a plot planned by the intelligence services to
portray Kamwina Nsapu as terrorists,” and to shift the narrative of
atrocities from the army to the militia.
But gradually something approaching the truth is coming into focus. In
late 2017, during a ten-month adjournment, Tshibuabua and Nkashama –
the fixer and translator at the hotel meeting – were taken into
custody by Congolese security services (whether to put them on trial
or protect them from questioning was unclear as Petit was denied
access to them.)
Months later the one-time star prosecution witness, Mukanda, was
himself arrested after prosecutors scrutinised his phone records,
then, in December, Colonel Mambweni was also taken into custody on
suspicion of organising the murders. All four have been charged with
involvement in the killings.

Chile’s worst civil unrest in decades means the Democratic Republic of
Congo is a more attractive proposition for mining investment,
according to billionaire Robert Friedland.
While Chile, the world’s top copper producer, seeks measures to quell
the social unrest that exploded last month, the election of President
Felix Tshisekedi earlier this year has improved the prospects in
Congo, Friedland said at the Mines and Money conference in London on
Monday.
Ivanhoe Mines Ltd., founded by Friedland, is developing the world’s
second-largest copper-mining project in Congo, with production due to
start in 2021.
“There is a new sheriff in town,” said Friedland, referring to
Tshisekedi. Chile is now a “terrible place to invest in mining, while
Congo is a really great place,” he said.
Over more than two decades, mining investor Friedland and his small
team have made some of the biggest mineral discoveries in the world.
In addition to unearthing Africa’s largest copper deposit, other
projects include building the Oyu Tolgoi copper-and-gold mine in
Mongolia’s Gobi Desert and discovering the Voisey’s Bay nickel deposit
in Canada, which he sold in 1996 for more than $3 billion. Ivanhoe is
also developing a platinum mine in South Africa.
“You have my sympathies,” said Friedland, commenting on investors in
Chile. The billionaire is well known for making controversial
comments.
His statement drew the ire of the Chilean government, which touted the
South American nation’s track record.
“The person who expresses this opinion doesn’t know Chile,” Mining
Minister Baldo Prokurica said in a voice mail.
“Chile has a long history of a stable mining investment climate and
one month of complex issues can’t erase that.”
Congo also has its own issues to address. Companies mining and buying
copper and cobalt from Congo must do more to fight corruption and
child labor in the country, the Organisation for Economic Co-operation
and Development said earlier this month.
Friedland “is comparing us with Congo, which has a history of
instability and of not respecting the rules of the game,” Prokurica
said. “Chile is a serious country with clear and permanent rules.”

Mario Vargas Llosa in his book, The Neighborhood which was a book
about Peru in the time of Fujimori and the The Doctor Vladimiro
Montesinos wrote’’Something bigger than you and me power. You don’t
fool around with power my friend’’
Jonathan Moyo said. “And, meanwhile, the people forgot the vision of
the liberation struggle. The people were saying, ‘What good is
liberation without food?’
And this is the point. Mugabe started well but then presided over the
immiseration of his country. Gross Domestic Product per capita has
shrunk by a third since the 1980s [IMF].
We are grateful to all those iconic leaders who liberated our
continent of which Mugabe is one but at what price? Fighting for
independence is not the same as building an economy which provides
opportunity for all its citizens.
As some African leaders laud Mugabe today, @PastorEvan- Live argues:
“There can be no mixed feelings, misconceptions or complications about
Robert Muga- be’s legacy. He presided over the destruction of millions
of people’s lives over a span of 37 years.”

Kenya

The governor described the revenue shortfalls by Treasury that
resulted in a borrowing spree as “parte after parte” in street
parlance.
“There was a lot of abracadabra,” said Njoroge of the budget-making
process that was overseen by Rotich and his Principal Secretary Kamau
Thugge.
Njoroge spoke at a press briefing in his office a day after the
Monetary Policy Committee slashed the benchmark lending rate from nine
per cent to 8.5 per cent.
“If that is the way you do budgeting, then you deserve what you get,
which is nothing. And indeed, you deserve the crisis that follows
after that,” said Njoroge.

“They are not going back to same old, same old ways of the past, the
wild west kind of banditry,” Patrick Njoroge told a news conference.
Lenders have promised not to jerk up rates dramatically, saying the
economic conditions do not warrant charging very high rates of more
than 18% or so.
“Banks will abide by the law,” Joshua Oigara, the chairman of the
Kenya Bankers Association, said in a statement issued earlier this
month after the cap was removed.
In February, the industry adopted a new banking charter, which
requires lenders to be transparent and to be guided by a customer’s
risk profile while pricing credit, Njoroge said.
“They need to be more ethical. They should stay away from short-term
gains; the focus on ... this quarter’s returns, what is my bonus?,”
Njoroge said.
Banks used to charge the bulk of their customers a flat rate, only
offering discounts to the most liquid blue-chip companies, stoking
consumer anger and bringing about the cap on rates.
They did not also consider a customer’s positive credit history in
pricing loans, only acting on the information when it was negative to
deny loans.
Policymakers cut the benchmark lending rate for the first time in more
than a year on Monday, saying a tightening stance by the Treasury had
created room for easing. [nL8N2853DI]
The economy is expected to grow by 5.9% this year compared with 6.3%
last year, Njoroge said.