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Satchu's Rich Wrap-Up
Monday 05th of September 2022

This is the Titanic
World Of Finance

This is the Titanic

Before proceeding, we should note that pointing out the flaws in the West’s war response is not “pro-Putin,” nor is it “unpatriotic” as some propagandists on Twitter would have you believe. It is the opposite. Crazy Pills @DoombergT

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The most disturbing part of all is that the parabola has not resulted in any policy shifts, and in fact a doubling down. Deee-Lite - Good Beat (Official Music Video)
World Of Finance

The most disturbing part of all is that the parabola has not resulted in any policy shifts, and in fact a doubling down.
Deee-Lite - Good Beat (Official Music Video)

Depending on you see a thing
The ship is free, or is it sinking?
This is the Titanic, plain and simple. 

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US-China shadow war descends on Taiwan @asiatimesonline
Law & Politics

 US-China shadow war descends on Taiwan @asiatimesonline 

This week saw the Taiwanese military fire warning shots at a Chinese drone for the first time in history, underscoring rising tensions in the Taiwan Strait. 

Earlier, Taiwanese President Tsai Ing-wen had ordered her armed forces to adopt “strong countermeasures” against any further Chinese provocations.

“For aircraft and ships that entered our sea and air territory of 12 nautical miles, the national army will exercise right to self-defense and counter-attack without exception,” declared Lin Wen-Huang, Taiwan’s deputy chief of the general staff for operations and planning, during a press conference this week.

Biden administration is now seeking for the US Congress to approve a US$1.1 billion arms package sale to Taiwan, which would reportedly include 100 AIM-9X Block II Sidewinder tactical air-to-air missiles and 60 AGM-84L Harpoon Block II missiles.

In retrospect, China’s fiery response to Pelosi’s visit to Taiwan was far more than just a strategic tantrum. 

The People’s Liberation Army (PLA) conducted massive, complex and highly intimidating drills on almost a daily basis shortly after the US speaker left the self-ruling island Beijing considers a renegade province.
At one point, as many as 22 Chinese fighter jets pierced through Taiwan’s air defense identification zone (ADIZ), while 22 others crossed the median line that has long served as a de facto territorial demarcation in the Taiwan Straits.
In the largest exercise of its kind, stretching across six zones surrounding the island nation, the PLA fired missiles over Taiwan for the first time in history. 

As many as 10 warships were also deployed close to Taiwan’s territorial waters.
During previous showdowns, including the 1995-1996 Taiwan Strait Crisis, the PLA largely kept its warships within the median line and didn’t fire missiles over Taiwan. 

In contrast, this year saw China responding with a vengeance, breaching previously-held operational understandings.

This time, however, “the PLA is going further to bring east Taiwan and the southwest Bashi Channel under its missile range coverage … 

This is a clear move aimed at showing how they would block the entrance of vessels and aircraft from the US and Japan to Taiwan in the event of a contingency,” he added.

The message to Taiwan was crystal clear: Beijing is inching closer to gaining the ability to fully choke off the self-ruling island in the event of a total war.
As one researcher at the Institute for National Defense and Security Research, which is affiliated with Taiwan’s Defense Ministry, noted, “I think they [China] have shown their intentions, encircling Taiwan and countering foreign intervention.”

Pentagon has doubled down on its naval maneuvers in the area, deploying two guided-missile cruisers through the strait over the weekend.
Singapore-based analyst Collin Koh underscored the unusual nature of the deployment, since “[h]aving two instead of the usual one vessel to do this mission is certainly a ‘bigger’ signal of protest against not only Beijing’s recent military exercises around Taiwan following the Pelosi visit, but also in response to Beijing’s attempt to subvert the legal status of the waterway and the longstanding freedom of navigation rights through the area.”

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Strategic context: It's all about the maritime century. In the broadest sense, whether it's the Black Sea or the Taiwan Strait, the key strategic link is between the sea as a space for communication and manoeuvre @alessionaval
Law & Politics

Strategic context: It's all about the maritime century. In the broadest sense, whether it's the Black Sea or the Taiwan Strait, the key strategic link is between the sea as a space for communication and manoeuvre and either can be leverage for political gains:

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23-AUG-2021 :: Xi Jinping is on a winning streak ever since he started salami slicing his then adversary President Obama.
Law & Politics

23-AUG-2021 :: Xi Jinping is on a winning streak ever since he started salami slicing his then adversary President Obama.

It is inevitable he will roll the dice on Taiwan 

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Salami slicing tactics
Law & Politics

Salami slicing tactics

Salami slicing tactics, also known as salami slicing, salami tactics, the salami-slice strategy, or salami attacks,[1] is a divide and conquer process of threats and alliances used to overcome opposition. 

With it, an aggressor can influence and eventually dominate a landscape, typically political, in piecemeal fashion. 

Opposition is eliminated "slice by slice" until its members realize, usually too late, that it has been virtually neutralized in its entirety.

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Putin has pulled off a shock win that could destroy the free world @Telegraph @AllisterHeath
Law & Politics

Putin has pulled off a shock win that could destroy the free world @Telegraph @AllisterHeath 

Britain is now in grave danger of falling into Vladimir Putin’s trap. 

His kamikaze economic war on the West will eventually take down his disgusting coterie of war criminals, but in the meantime it is beginning to inflict immense, permanent damage on the Western way of life, to the great delight of Moscow’s siloviki hard men.
We risk ending up with calamitous poverty, civil disobedience, a new socialist government by next year, a break-up of the UK, nationalisations, price and incomes policies, punitive wealth taxes and eventually a complete economic and financial meltdown and IMF bailout. 

The situation in the EU is, if anything, worse.
This is not a plea for pacifism, for looking away when Ukraine is being illegally invaded by a savage regime. 

Britain was – and remains – morally right to back Ukraine in a carefully calibrated way. 

Instead, this is a plea for an economic counter-offensive, for Liz Truss, the next PM, to tackle Putin’s economic and energy war head-on.
Mass, immediate intervention is inevitable, but must be designed to avoid hastening Britain’s shift into demagoguery, welfarism and socialist central planning, all steps down Hayek’s “road to serfdom” that the Leftist and green elites are longing us to take. 

The wrong response – because too little is done, or because the wrong solutions are chosen – would merely advance Putin’s masterplan to cripple the West.
Cheap and plentiful energy is essential to our consumerist societies. 

We cannot be delusional about the scale of the developing catastrophe. 

Household energy and vehicle fuel costs will jump from 4.5 per cent of household spending in early 2021 to some 13.4 per cent by April next year, much higher than at any time during the past 50 years, including the 1970s, according to Carbon Brief

Households may face a rise in energy costs of £167 billion, or 7 per cent of GDP, taking total expenditure to £231 billion, more than government spending on health, and that is before the hit to business is accounted for. 

The rise for consumers alone is more than the combined defence and education budgets.
This is equivalent to a Depression-style shock. 

Pay rises will protect some workers at the expense of investors, but – until and unless energy prices fall again – our national living standards will slump massively. 

The nation is sending tens of billions more abroad to pay for energy imports.
The state can borrow to cushion the blow, reducing future consumption to prop up current living standards, but our impoverishment cannot be magicked away

Coming after years of QE, there is a real danger of excess borrowing triggering even higher inflation, rocketing interest rates, mass repossessions and a banking crisis, so caution is imperative.
There was little the West could do other than rely on hostile Opec nations in the 1970s, the last time an energy war almost destroyed us; but it was an unforgivable error for Europe to become so reliant on Russian supplies, and to fail so miserably to increase domestic energy production. 

The French even allowed their nuclear plants to break down.
Putin struck at the right time: the zombified Western economy was in the doldrums

Covid was a disaster of unpreparedness and errors, increasing national debts and inflation and entrenching a dependency culture. 

But the Russian tyrant’s canniest move was to understand just how suicidal our energy policy had become. 

A toxic brew of net zero ideology, deep hypocrisy about decarbonising without making the nuclear effort, endemic nimbyism, short-termism and state incompetence had radically weakened the West.
There are four broad emergency options. 

The first is targeted help: anybody under a certain income gets cash from the state, paid for by borrowing. Some needy cases would be missed, however, and can the benefits system cope? 

The second is to freeze energy prices for all, with the state subsidising the acquisition of gas: this looks “free”, while in fact it massively increases the national debt, as in France. 

The third is to cut taxes dramatically, something the Left always rejects as “untargeted” or “regressive”. 

The fourth is to help some or all firms.
Whenever possible, Truss must cut tax; whenever possible, she should target help on families and companies that need it and avoid bailing out the well off; if she must cap prices, given the total collapse of the system, she needs an exit strategy; and she has to launch the greatest, most urgent energy infrastructure programme in history while suspending as many green rules as possible. 

She needs to work visibly with business, showing voters they are delivering big investments under warlike conditions, reducing the pressure for confiscatory windfall taxes.
On top of the extra debt, all these options come with downsides. 

All four are being weaponised by the Left to shift politics permanently in their direction. 

For many activists, this is a useful crisis. 

They are calling for wealth taxes and income tax surcharges: they claim that this would be “just” if the “rich” benefit from untargeted handouts or price caps. 

They demand “social tariffs”, where the rich or bigger users pay crippling surcharges.
But once such taxes are imposed, they never go away. 

In France, the Left are calling for bans on private swimming pools, private planes and even detached housing: permanent green austerity. 

The Germans are slashing the cost of public transport, supposedly to save energy but really to undermine the private car. 

In Britain, there is huge support for nationalisations, even though they wouldn’t increase the supply of energy or reduce its cost. 

Price caps, made mainstream thanks to Theresa May, are now the norm: ever more wages and prices are set by civil servants. Will supermarkets be next?
One paradox of Putin’s neo-Soviet revanchism is that it is strengthening America’s position as leader of the West. 

The US emerged better from Covid. Its interest rates have gone up faster, bolstering the dollar. Its health care system hasn’t fallen over like the NHS. 

But it is its energy policy – “Frack, baby, frack”, as the Republicans advocated in the early 2000s – that has been the real triumph. 

Tyler Cowen, the George Mason University polymath, argues in a Bloomberg piece that “2022 may be remembered as the year when living standards in the US truly pulled away from those in Western Europe”.
Why, oh why, did Britain and Europe allow themselves to become Putin’s hostages?

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“the price of liberty” This is the Titanic
Law & Politics

“the price of liberty” This is the Titanic

States with such rulers can get “seized by senility and the chronic disease from which [they] can hardly ever rid [themselves], for which [they] can find no cure”
Emmanuel Macron  warned France to  prepare  for a miserable winter in which they must be ready to pay “the price of liberty”
“the price of liberty” which was not engaging with Putin and at least picking a better moment is beyond calculation.

Our Economies are teetering and the downside cascade effects are now in plain sight. Is anyone modelling what is now a cliff edge? 
How many Jobs are about to be vaporized? How many Businesses? Are we going to print more worthless Euros?

Are our Leaders going to spin more weaponized babble? as we career at top speed off the cliff.

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Professor Thomson “a grasp of geopolitical realities is also essential Western governments must either invite economic misery on a scale that would test the fabric of democratic politics in any country or face the fact that energy supply constrains th
Law & Politics

In other words, it’s either save the European political class’ skin through reverting to cheap Russian gas, or stay aligned with Washington and subject your electorates to misery – and its leaders to a political reckoning that is unfolding already.

“the price of liberty”

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Imho, three possible scenarios: @MrnllMtt
Law & Politics

Imho, three possible scenarios: @MrnllMtt

- they admit their bad faith and their errors, backtrack and step down
- civil unrest make them step down, probably violently
- they fear not the electors' sentiment because they don't plan to hold elections anymore

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Russia will not supply oil and oil products to those countries that support the price cap - Deputy Prime Minister Novak @DagnyTaggart369
Law & Politics

Russia will not supply oil and oil products to those countries that support the price cap - Deputy Prime Minister Novak @DagnyTaggart369

"The idea of capping the price of Russian oil is completely absurd, it will destabilize the industry, and consumers in the EU, the USA will pay"

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Currency Markets at a Glance WSJ
World Currencies

Currency Markets at a Glance WSJ

Euro 0.989640
Dollar Index 110.088
Japan Yen 140.4145
Swiss Franc 0.98204
Pound 1.145930
Aussie 0.678995
India Rupee 79.87750 
South Korea Won 1371.950 
Brazil Real 5.1661143
Egypt Pound 19.212818
South Africa Rand 17.35490 

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Strains mount in European power market as UK generators call for help @FT
Minerals, Oil & Energy

Strains mount in European power market as UK generators call for help @FT 

More governments will need to intervene to relieve the strains on Europe’s power market, officials and industry figures have warned, 

after Sweden and Finland launched emergency backstops for their energy producers and UK electricity generators called on the British government to help.
The Nordic states this weekend both announced emergency financial liquidity measures for their energy generators, which are facing rapidly mounting calls for collateral as a result of extreme volatility in energy prices.
Russia’s announcement on Friday evening that it would no longer supply gas through the Nord Stream 1 pipeline is expected to trigger a sharp rise in energy prices when markets open on Monday morning, adding urgency to the pleas for government support.
Electricity producers in Britain are “really concerned about the situation this winter in relation to [financial] liquidity”, warned Adam Berman, deputy director at Energy UK, a trade body that speaks for around 100 energy companies.
“Fundamentally the energy market is not designed to deal with the scale of market volatility that we have seen over recent months,” Berman said as he urged the UK government to urgently investigate 

and “understand the scale of the challenge that generators” are facing as wholesale prices remain at historically high levels.
Sweden, which sounded the alarm about the problem on Saturday, said on Sunday that it would provide up to $23bn in credit guarantees to Nordic utilities to help them avoid technical defaults.
“This is a problem that is Europe-wide . . . liquidity is probably an issue in many countries. It may be the case that other countries will have to follow suit,” Max Elger, Sweden’s financial markets minister, told the FT.

Finland on Sunday proposed a €10bn loan and guarantee package. Sanna Marin, the prime minister, said it was designed to protect companies that were essential for the functioning of society.

“The nervousness in the market is strong,” Finnish economy minister Mika Lintilä told a press conference. 

“Here were all the ingredients for the energy sector’s version of Lehman Brothers,” he added, referring to the collapse of the US bank during the 2008 global financial crisis.
Germany — which has already provided access to government-backed funding for energy companies — 

said on Sunday it would impose a windfall tax on electricity generators to help fund a €65bn package of support for households and companies grappling with soaring energy bills.
Some energy traders expect gas and power market prices to breach new records in the coming week.
“We’re expecting a significant jump [in prices] on Monday and for the market to test new highs this coming week,” said James Waddell, head of European gas at the consultancy Energy Aspects.
Sweden’s finance minister Mikael Damberg said authorities were forced to act as the expected rise in electricity prices is likely to lead to a big increase in margin calls on Monday

, and “we were worried that utilities in the Nordic region would technically default in their relationship with [clearing house] Nasdaq Clearing”.
Deepa Venkateswaran, European utilities analyst at Bernstein, said financial illiquidity wasn’t “just a Swedish issue” and “in general [there were] rising collateral requirements across the board” in Europe.
Traders said existing short-term credit facilities with banks were in danger of becoming tapped out, while lenders are hesitant to increase their exposure to the energy sector by tens of billions of euros without additional government guarantees or support.
One electricity industry executive warned it would be easy to envisage scenarios where it takes “only a matter of days for not only small but large generators” to topple because of liquidity problems.
EU energy ministers will consider taking bloc-wide steps at an emergency meeting on Friday, according to two officials briefed on the discussions.
But one European official said some countries opposed EU action because it could encourage energy companies to make speculative bets on future prices.
Supporting energy companies by lowering the amount of collateral they had to post with their banks was a “bad idea” because it would “move the credit risk from the energy industry to the financial industry”, the official added.
Marin called on the EU to act. “With this solution, we treat the symptoms, but we have to see this in this crisis, it is the system that is a problem,” she said.
Alexander Novak, Russia’s top energy official, said the EU was at fault for the dramatic cuts in gas supplies and warned that prices could continue to rise if the EU did not roll back sanctions. 

Russia claims western sanctions have made it more difficult to repair turbines that help pump gas.
“The whole problem is all at their end,” Novak said. 

“This nearsighted policy is leading to the collapse we see on European energy markets. This is not even the end, because we are still in the warm part of the year. Winter is coming, and many things are hard to predict.”

On Sunday Finland warned that the energy sector was facing a potential “Lehman Brothers” moment if governments did not provide emergency funding to help providers meet spiralling collateral requirements caused by soaring wholesale prices.

But on the same day Germany announced a windfall tax on many of the same electricity generators, saying those not reliant on burning gas to create power were enjoying “excessive profits”.
How can companies both be earning huge profits and require government-backed funding at the same time?
The answer lies in the sheer scale of the energy crisis that has engulfed Europe after Russia cut gas supplies following its invasion of Ukraine.
The short-term issue is around trading — and specifically hedging.
Power generators often hedge their sales to households and businesses by taking short positions in future markets prior to selling the physical electricity. 

In normal times if electricity prices rise the money they lose on their paper positions is offset by their gains in the physical market, and vice versa.
But the sheer scale of the market moves in recent weeks means many of their hedges — often for electricity sold months or years in advance — are deep underwater, requiring them to post more and more cash to exchanges, even if the positions ultimately turn profitable once the electricity is sold.
Companies are struggling to increase their short-term borrowing facilities quickly enough to finance the cash calls.
Jakob Magnussen, chief credit analyst at Danske Bank, said on Saturday that “margin calls are really exploding right now”.
“It’s particularly an issue for smaller utilities,” said Magnussen.

 “Once the contracts mature and the utilities sell the power they will get their money back, but there’s a huge need for additional short-term funding in the meantime and many banks could be reluctant to increase their exposure so rapidly to the sector.”
Many European energy companies are profiting hugely from the rise in wholesale gas and power prices, but there are large discrepancies across the sector.
Even the strongest companies are starting to struggle with short-term financing tied to the huge volatility in wholesale prices, which requires them to tie up billions of euros in collateral with exchanges — 

trading which is often essential to managing the flow of energy to households and businesses.
If those markets seize up, or a smaller utility implodes, there are fears of a domino effect across the sector as banks pull back funding — ultimately posing a threat to the stability of energy supplies.
“The amount of cash you need to participate in these markets is getting to impossible levels,” said one European trader on Sunday.
Companies which produce gas or generate electricity using renewables or nuclear — where input costs have not risen — should eventually realise large profits of the kind that Germany plans to tax.
But those reliant on burning gas for electricity generation are more likely to struggle — especially if they were once reliant on Russian supplies. 

Germany has already provided billions of euros in support to help companies like Uniper — once the biggest German buyer of Russian gas — to keep operating.

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My friends and I have agreed to impose a price cap on our local pub's beer. @JavierBlas
Minerals, Oil & Energy

My friends and I have agreed to impose a price cap on our local pub's beer. @JavierBlas

My friends and I have agreed to impose a price cap on our local pub's beer. Mind we actually do not plan to drink any beer there. The pub's owner says he won't sell beer to anyone observing the cap, so other patrons, who drink a lot there, say they aren't joining the cap. Success

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West is either being ruled by psychopaths, or гетагds @AlexeiArora
Minerals, Oil & Energy

West is either being ruled by psychopaths, or гетагds @AlexeiArora

Russia already said they will not supply oil to anyone who agrees to this Medvedev warned of oil $300/bbl. 

JP Morgan warned of oil $380/bbl 

Even Gulf countries are opposed to these caps, with Saudi suggesting output CUTS 

West is either being ruled by psychopaths, or гетагds

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Putin has two HUGE vulnerabilities. First, the West controls most of the global tanker fleet. Second, Russia has little storage capacity if Western oil tankers stop shipping out of Russian ports. The West is totally in control of Putin's ONLY money machin
Law & Politics

Putin has two HUGE vulnerabilities. First, the West controls most of the global tanker fleet. Second, Russia has little storage capacity if Western oil tankers stop shipping out of Russian ports. The West is totally in control of Putin's ONLY money machine

Putin has two HUGE vulnerabilities. First, the West controls most of the global tanker fleet. Second, Russia has little storage capacity if Western oil tankers stop shipping out of Russian ports. The West is totally in control of Putin's ONLY money machine. With  @JonathanPingle @RobinBrooksIIF

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Let’s model this @RobinBrooksIIF The West cuts Russia supply by 5 million barrels per day. What could happen to the price? Would the move be higher? Lower? By how much?
Minerals, Oil & Energy

Let’s model this @RobinBrooksIIF The West cuts Russia supply by 5 million barrels per day. What could happen to the price? Would the move be higher? Lower? By how much? 

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And amazing data point that shows what's coming in the inflation pipeline: the cost of turning clay into a ceramic tile has surged 1,047% over the last year. @JavierBlas
Minerals, Oil & Energy

And amazing data point that shows what's coming in the inflation pipeline: the cost of turning clay into a ceramic tile has surged 1,047% over the last year. @JavierBlas

Think about it if you are planning to update your bathroom and/or kitchen (Spain is the 5th world's largest tile producer)

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“We may be on the cusp of a distressed debt supercycle,” Santiago Pardo and Patrick Kenney Man GLG, wrote in a note “But unlike in 2008, the crisis is likely to originate from EM, not DM.” @markets
Emerging Markets

“We may be on the cusp of a distressed debt supercycle,” Santiago Pardo and Patrick Kenney Man GLG, wrote in a note “But unlike in 2008, the crisis is likely to originate from EM, not DM.” @markets 

While European nations are likely safe from defaults, corporate-debt issuers are at greater risk of a drop-off in cashflow as the region faces an “unpalatable cocktail” of energy shortages, rising prices and low growth, they wrote. 

That’s an opportunity for investors who can discern sound businesses across emerging markets and in Europe, according to Pardo and Kenney.
A JPMorgan Chase & Co. gauge of debt from emerging governments has lost nearly 19% so far this year, on track for its worst year since 1994 amid turbulence in the US Treasury market tied to soaring inflation and central bank tightening. 

This year, almost $20 billion has been pulled out of developing-market debt funds, according to the Man GLG money managers -- the most on record for the asset class.
For Pardo and Kenney, there is opportunity in European companies that are at risk of trading at distressed prices because of rising energy prices and higher borrowing costs. 

They like residential real estate businesses in Germany and Sweden, as well as some that have critical infrastructure surrounding energy transportation, like a Slovakian gas transmission company. 

In other regions, they pointed to value in Argentina’s majority state-owned energy company, which has solid credit metrics despite a junk-rating because of its domicile.

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JUN-2019 The zeitgeist of the Revolution in Khartoum was intoxicating

JUN-2019 The zeitgeist of the Revolution in Khartoum was intoxicating

Hugh Masekela said ‘’I want to be there when the people start to turn it around.’’ Sudan is a Masekela pivot moment.

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The Despotism of Isaias Afewerki @thebafflermag Alex de Waal

The Despotism of Isaias Afewerki @thebafflermag Alex de Waal 

NO COUNTRY IN THE WORLD has a purer autocracy than Eritrea. 

The state of Eritrea is one man, Isaias Afewerki, who for twenty years was the leader of a formidable insurgent army that won a war of liberation against Ethiopia in 1991, and who has since ruled as president without constraint on his power. 

Three decades after independence, Eritrea has no constitution, no elections, no legislature, and no published budget. 

Its judiciary is under the president’s thumb, its press nonexistent. 

The only institutions that function are the army and security. There is compulsory and indefinite national service. 

The army generals, presidential advisers, and diplomats have been essentially unchanged for twenty-five years.

The country has a population of 3.5 million, and more than half a million have fled as refugees—the highest ratio in the world next to Syria and Ukraine.
President Isaias—Eritreans use the first name—got to his position and held it because his overriding concern is power. 

The country has no shrill personality cult, no slavish performances of obedience to the leader. Isaias is an underestimated cypher, a lesson in understated ruthlessness

In an era when autocrats have adopted new guises and mastered new tactics, he has persevered with old-fashioned forms of absolute despotism. 

He has not even pretended to change. He simply outlasted his most vigilant adversaries, expecting that, in due course, a new set of foreign leaders and diplomats would suffer amnesia, gamble on appeasement, or simply not care about norms of human rights and democracy.
The latest twist to Isaias’s despotism is his effort to contrive a war between the federal government in Ethiopia and its antagonists in the region of Tigray. 

He wants to see both weakened—and Tigray so badly mauled that he can eliminate it as a viable political entity, once and for all.  
Isaias’s logic is genocidal. In November 2020—when the world was distracted by the U.S. election—Isaias sent his army to join Ethiopian Prime Minister Abiy Ahmed’s forces in a war to “crush” the Tigrayans. 

Abiy gave him political cover, lying about the Eritrean role. After a year of mass killing, rape, and starvation inflicted on Tigray, as well as havoc across Ethiopia and the Horn of Africa more widely, the Tigray war settled into a stalemate. 

It was broken late last month with a fierce battle between Tigrayan forces and the Ethiopian federal army. The Tigrayans won the first round.
On the morning of September 1, the second round began. Eritrean artillery opened up huge barrages, firing at Tigrayan defenses while Ethiopian conscripts readied for Isaias’s signal to charge into battle.
Eritrea was an Italian colony, carved out of the northern reaches of the feudal empire of Ethiopia during the late nineteenth century scramble for Africa. 

Isaias was born in 1946, five years after Italian defeat in World War II. Eritreans of his generation have a love-hate relationship with their former colonizer. 

The Italians exploited Eritreans as laborers and denied them education. But the imperial power also made Eritrea special. Italy’s initial interest was in the Red Sea coast, then as now a strategic shoreline. 

After the opening of the Suez Canal in 1869, as much as one eighth of the world’s maritime commerce passed through the channel between Eritrea and Yemen. 

The same is true today, and every global power wants a presence in the Red Sea: China’s first overseas station is in next-door Djibouti, and Russia is negotiating for a naval base in Eritrea.
Benito Mussolini dreamed of a new Roman Empire in Africa, including Libya, Somalia, and Ethiopia—with Eritrea as its model. 

The colony became Africa’s second biggest manufacturing center after Johannesburg. 

Architectural historians salivate over Eritrea’s capital Asmara, considered a showpiece for Art Deco buildings. Its Fiat Tagliero gas station modeled on an airplane is especially cherished by aficionados, of whom Isaias is said to be one. 

Successive wars have left the city undamaged and undeveloped, a museum of modernism. 

When a tall and ugly contemporary apartment block was built overshadowing the futuristic Fiat garage in 1994, the president is said to have intervened to insist that central Asmara retain its character. 

It is one of the few places where the fascist emblem of the bundle of sticks remains on public buildings.
Mussolini’s new Roman Empire was the “first to be freed” by the Allies in 1941. 

The British Military Administration dismantled much of Eritrea’s industry in the name of war reparations and referred the future status of the territory to the United Nations, which proposed the delicate and ambiguous solution of “federation under the Ethiopian Crown.” 

The British left in 1952, remembered for impoverishing the territory but introducing a parliament and newspapers. 

The federal formula required that Emperor Haile Selassie rule with restraint, but after ten years of contrived unification with the rest of Ethiopia, dissolving Eritrea’s autonomous parliament, a small rebellion escalated. 

The first shots were fired in September 1961, and the Eritrean Liberation Front (ELF)—founded in Cairo the year before—began its guerrilla operations shortly thereafter, with the single goal of independence.
Isaias was a science student at university in Addis Ababa when he slipped across the border to Sudan and joined the ELF. 

He dedicated himself to learning Arabic because the rebels relied heavily on Arab countries for support. 

In 1967, he went to China for military training. On returning to the field, he was dismayed by the ELF’s lack of consistency in applying its revolutionary tenets and its failure to follow the Maoist model of consolidating a base area: any Eritrean nationalist was welcome to join, and differences of opinion were resolved by putting people of different political leanings in different units or holding inconclusive meetings. 

Along with another leftist who had trained in China, Ramadan Mohammed Nur, Isaias set up the Eritrean People’s Liberation Front (EPLF) in 1970. It was nationalist but also revolutionary.
Successive Ethiopian regimes—imperial and communist—fought their wars in Eritrea on a huge scale and with unremitting brutality

Once or twice a year, they launched vast ground offensives. The emperor’s forces burned villages and singled out suspected nationalist sympathizers for detention and torture. 

Haile Selassie was overthrown in a revolution in 1974, and the head of the military junta, Colonel Mengistu Haile Mariam, switched to the Soviet bloc. 

The USSR supplied an arsenal and trained Ethiopia officers in its use. They mounted artillery barrages at EPLF-held hillside strongholds, after which massed infantry brigades stormed them, time and again, with relentless futility. 

Daily daytime air raids meant that the EPLF became nocturnal—all activities from transporting supplies to cooking and laundry took place during the hours of darkness

In the EPLF-controlled areas, every dusk, anonymous hillsides would transform into hives of activity as fighters emerged from their hideouts.
The EPLF’s ethos was egalitarian and ultra-disciplined. That was what ensured its survival under relentless onslaught. Its leaders insisted that Muslims, Christians, and members of all Eritrea’s nine ethno-linguistic groups were considered equal

Rather than postponing its revolutionary agenda until after the war, it enacted land reform and women’s emancipation in its “liberated areas,” and set up schools and hospitals for fighters and civilians alike. 

During its twenty years of armed struggle, it had no formal ranks, only positions of commander for specific tasks. 

After liberation, when it set up a memorial to its martyred fighters, the EPLF chose a monument in the shape of a plastic sandal. 

Manufactured in an underground factory dug out of a mountainside, sheltered from the daily air raids, plastic sandals had been the ubiquitous footwear of the guerrilla fighter.
This was the image that Isaias projected to the world: an austere revolutionary, first among equals among comrades. 

Less mentioned was the fact that the EPLF was also Leninist in structure and discipline. 

The decisions of the central committee, once adopted, were to be implemented without question. Nor did the EPLF hesitate to kill. 

On many other occasions, EPLF members were executed on the merest suspicion that they might be spies. 

Scores of Eritreans were “sacrificed” in these purges, and hundreds perished in the vicious internecine war with the older, fissiparous ELF. 

In one episode from the early days of the EPLF, a band of well-educated volunteers was purged because they dared challenge Isaias. 

Known as the Menqa—or “bats”—because they supposedly conspired in darkness, the moniker says as much about the executioners as their victims. 

(Among them was Mussie Tesfamichael, one of Isaias’s close friends from his school days.) 

The Menqa were at least subjected to a process of investigation, and their fate became the subject of whispered debate. 

Not so for the next challenge to Isaias, from a group dubbed Yamin—“rightists” in Arabic—many of them highly educated, who simply disappeared without trace. 

The merciless elimination of dissent is the original sin of many revolutionary movements, a dark spot that cannot be erased.
Ultimately, would-be dissenters fell in line because the EPLF was an astonishingly effective military machine. 

To call it a “guerrilla” movement would be a misnomer. It became a conventional army, defending its base areas in mountain trenches and fighting huge armored battles. 

The town of Nakfa in the desert hills close to the Red Sea—bombed into ruins by day-in-day-out attacks by Ethiopian fighter jets, yet never yielded by the EPLF—became the symbol of their resistance. 

(Eritrea’s post-independence currency is called the Nakfa.) 

After years of relentless combat, the EPLF turned the military tide. In fighting at the port city of Massawa in 1990, the EPLF captured ninety-nine Soviet-supplied tanks and inflicted thousands of casualties. 

They won a decisive victory in 1991, which was duly followed by a 99 percent vote for independence.

The seven years after liberation were a period of hope for Eritrea. Fighters turned their energies to reconstruction.

 The diaspora returned, with professionals from Europe and America starting businesses, teaching at the university, and building retirement houses. Aid flowed in. Eritrea had the good will of the world.
Signs of incipient autocracy, however, were evident from the outset. The secretive, centralized command structure that had been so efficient in wartime didn’t vanish when the EPLF became an ostensibly civilian government

Days before the declaration of independence, fighters protested the decision that they should continue to serve without pay for two more years. 

A group of disabled veterans marched—there’s no verb that conveys the determined collective motion of their wheelchairs, artificial limbs, and sticks—towards the capital to demand their pensions

They were shot at with live ammunition. Some were killed, others were arrested and disappeared. 

At a political convention in 1994, the EPLF dissolved itself and established the Popular Front for Democracy and Justice as a civilian political party

It was ostensibly to be one of many in a multi-party system, but in practice, the PFDJ was indistinguishable from the state itself. 

The EPLF’s shadowy financial network, set up for clandestine arms purchases, morphed into the party-owned Red Sea Trading Corporation, later the focus of UN investigations for a host of illicit activities.

Veterans began to vote with their feet. Ramadan Nur quit politics. 

The minister of foreign affairs, Petros Solomon, a hero of the liberation war, asked to be demoted to run the ministry of maritime resources. 

Following elaborate consultations across the country, a constitution was drafted, but after the Constituent Assembly ratified it and handed it to the president in a ceremony at the national stadium, no more was heard about elections, an independent judiciary, or freedom of the press

Isaias had a reputation for knowing Eritreans one by one, forgetting no one, with an uncanny ability to espy their secrets. His intelligence network was both invisible and pervasive.
In May 1998, Isaias escalated a border skirmish into a war with Ethiopia, which was governed at the time by a sister revolutionary movement, the Ethiopian People’s Revolutionary Democratic Front (EPRDF). 

Ethiopia had a tradition of martial imperialism that the Eritrean leader had learned to fear. Isaias’s border incursion—claiming a small town known as Badme—re-awoke Ethiopia’s militaristic spirit.
The battle that was unfolding was both a comrades’ war and a cousins’ conflict. The two sides knew each other intimately. 

The EPRDF coalition was dominated by the Tigrayan People’s Liberation Front (TPLF), founded during the revolution of 1974–1975

Over the next seventeen years, the EPLF and TPLF literally fought in the same trenches against Mengistu’s army, which employed Soviet tactics of relentless obliteration by artillery and airstrikes and massed infantry assaults.
During that time, the EPLF and TPLF resisted with astonishing stoicism. But they also quarreled over doctrine and tactics. 

While the EPLF dug trenches to defend their base area in the desert mountains of northern Eritrea, the TPLF waged a textbook guerrilla war among peasant villages, withdrawing when the government army attacked and counterattacking when they could fight on their own terms. 

They disagreed over political doctrines too, in arcane debates that a generation later seem to belong in the seminars of Marxist theoreticians. 

Was the Soviet Union a “social imperialist” or ultimately an ally, even though it was the major backer of Mengistu? 

Were Ethiopia’s diverse ethnic groups—known in Marxist terminology as “nationalities”—entitled to self-determination?
The worst falling out occurred in the depths of the great famine of 1985, when the EPLF closed the main road that brought relief aid from neighboring Sudan. 

But three years later, they patched up their differences in order to defeat Mengistu, accomplishing the task in May 1991. 

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The Despotism of Isaias Afewerki @thebafflermag Alex de Waal [continued]

The Despotism of Isaias Afewerki @thebafflermag Alex de Waal [continued] 

For the next seven years the EPLF in Asmara and the TPLF/EPRDF in Addis Ababa appeared to be the best of friends. But their differences were deeper than the factionalism of leftist politics.
Isaias held the TPLF and its leaders in a special contempt. He and many of the Eritrean leaders hailed from the Eritrean highlands, historically coterminous with Tigray

They speak the same language—Tigrinya—and share the same history, dating back to the Axumite kingdom of the first century C.E. that were divided by the colonial boundary drawn at the turn of the twentieth century. 

Many Eritrean and Tigrayan families are intermarried. Isaias grew up in urban Asmara, where his father was among the first Eritreans to go to secondary school. 

Middle-class Asmarinos’ maidservants were often from Tigray’s northernmost district, Agame, as were the street sweepers and boys who hawked prickly pears. 

Their Tigrinya has a different accent. In private, members of the Asmara elite disparage the TPLF—including their leaders—as “Agames,” the sons of their maids. 

For them, it is unthinkable that Tigrayans could be their military equals or that Tigray’s prosperity could surpass Eritrea’s.
The ostensible reason for the 1998 war was a minor territorial dispute over the town of Badme

Underneath it was the question of who should be number one in the Horn of Africa—Isaias would never be content to be anything else

A few weeks earlier, when President Bill Clinton had traveled to meet Africa’s “new brand” of leaders—the other three were Uganda’s Yoweri Museveni, Rwanda’s Paul Kagame, and Ethiopia’s Meles Zenawi—the White House chose Kampala as the venue. 

To the dismay of White House staffers, Isaias declined the invitation. He knew he wouldn’t dominate the meeting and didn’t want to sign up to a coalition he wouldn’t lead.
A few weeks after the outbreak of that war, I went to see Isaias with Paulos Tesfagiorgis—who ran the Eritrean Relief Association during the liberation war and had after independence overseen the country’s only human rights organization, the Regional Center for Human Rights and Development, for a brief period until it was shut down.

 Isaias carefully stage-manages every encounter and likes to meet alone without staff to keep a record. 

But the Badme War seemed to have shaken him. Arriving at his office, the guards were casual in dress and manner. Security checks were minimal. 

The receptionist, wearing her fatigues, waved us upstairs. The austere camaraderie of the guerrilla days lingered, but every visitor was monitored.
The presidential office was an unremarkable Italian-era building with the spacious corridors and high ceilings favored by Mediterranean architects from the era before air conditioning. 

Isaias’s own office was capacious, simply furnished, and dark. The curtains were drawn, and there was just one dim light shining on a coffee table. 

Isaias himself sat at a large desk, head in hands. He glanced up only to wave us to sit down. He was wearing a khaki safari suit and plastic sandals.
We sat, we waited. Then Isaias stood up, more heavily than his frame seemed to warrant—he is tall but slim—and joined us. 

His few steps were tired, and he slumped into the low chair, summoned coffee, and sighed. 

His face is normally inscrutable. At that moment he looked weary and wounded. He seemed at a loss for words. 

What he said next was the only time anyone can recollect any hint of remorse or self-doubt. 

If it was a performance for our benefit, it was a convincing one. “What have we done?” he asked. “What have I done?”
But Isaias’s brooding demeanor lasted no more than a minute. As he spoke, he transformed, becoming focused and energized. 

For more than an hour he surveyed the political and military landscape, the state of world geopolitics, and the failures of the previous seven years. 

His coffee remained untouched. He shifted his forceful gaze from Paulos to me and back. He was in command of our encounter, and our cups of coffee also went cold.
Eritrea had made the first gains on the battlefield. From Isaias’s encyclopedic monologue, battalion-by-battalion, he seemed utterly confident in victory. 

He was up against a much bigger country, however—and as Ethiopia cranked up its military mobilization, it would outnumber and outgun its smaller neighbor. 

Then again, overcoming long military odds was a familiar predicament for Isaias, even a comfortable one. 

Since leaving his university studies for the field in the sixties, forging the most efficient insurgent army in Africa, out-fighting Ethiopians was just what he did. 

We couldn’t tell if he believed in his own mystique, but he was certainly compelling: there was no detail on which Paulos or I could challenge him.
As Isaias detailed the deployment of his troops, their logistics and fighting capacities, he also portrayed himself as strategist, diplomat, quartermaster, and military tactician. 

All the other commanders who had led fighters in the previous war faded from his telling. 

And indeed, many were pushed away from any active role in the command. Isaias was determined that the victory should be his alone. 

We left the meeting with a clear sense of Isaias’s focused, manic micromanagement of the war, and a glimpse of the dark void that lay behind it. 

There was also no vision beyond battlefield victory and the inexorable working out of historical inevitability.
Isaias ran his war and lost it. Perhaps eighty thousand soldiers died on both sides in battles that resembled the western front of World War I. 

In May 2000, the Ethiopians overran Eritrean trenches, and the rout began. 

Veteran EPLF commanders hastily took charge of the disarrayed units and organized a last-ditch defense which slowed the Ethiopian advance. 

Isaias, who had previously scoffed at any suggestion of a ceasefire, desperately called Washington, D.C., to beg for one. 

Prime Minister Meles then ordered his troops to halt. The Ethiopian army chief of staff, General Tsadkan Gebretensae, rued that order for twenty years. He is now a member of the Tigrayan central command, organizing the defense against the Eritrean attack.
Meles’s calculus was that Isaias would be overthrown or contained, which seemed possible at first. 

Eritrean veterans knew who had bungled the war and who had salvaged some honor in the defeat. 

Demands for change grew louder. Paulos organized a group of independent Eritreans to petition for human rights and democracy. 

They met in Germany, writing a letter to Isaias, reflecting on their country’s predicament and asking for Eritrea to turn towards the path of democracy. 

(The story is vividly told in Stephany Steggall’s book, The Eritrean Letter Writers.) In November 2000, the “Group of 13” (G-13) met with Isaias in Asmara.
This was not an encounter that Isaias wanted and one for which he appeared astonishingly ill-prepared. 

Meeting the group alone, he began by accusing them of betraying Eritrea and giving solace to its enemies, then demanded they apologize and retract the letter. They of course refused. 

One of the G-13, the eminent physician Haile Debas, read out the substance of their letter, watching Isaias’s reactions closely. 

The president was ill at ease and unable to handle a well-articulated challenge. Leaving the meeting, Haile remarked to Paulos, “We have a bigger problem than I thought. He is mentally unstable.”
A few months later, fifteen senior EPLF leaders—the “G-15”—formulated similar demands. Isaias ignored them. They made the fatal error of waiting. 

In private conversations (some of them recounted in Dan Connell’s book, Conversations with Eritrean Political Prisoners) they shared their dismay at how Isaias had betrayed their dreams and their remorse over their own failure to confront him over his abuses. 

For his part, Isaias was biding his time. A week after 9/11, with the world’s attention distracted, he struck with his trademark ruthlessness.

Petros Solomon returned from his morning jog to find security men waiting for him outside his home. His young children were waking up inside. They have not seen or heard from him since

Their mother, Aster Yohannes, was studying in the United States at the time. After negotiating with the president’s office, she flew home. 

When Aster’s flight landed at Asmara airport, security agents boarded the plane and took her straight to a prison camp. 

Her children waited at the arrivals holding their flowers until the airport had emptied. She, too, has been neither seen nor heard of since. 

Their daughter Hanna has patiently campaigned for her parents not to be forgotten. She told her story in PBS Frontline’s Escaping Eritrea last year.
One of the G-15 dissidents recanted. Three were abroad. The other eleven—among the most celebrated leaders of the liberation struggle—disappeared into Isaias’s gulag. 

Some are feared dead, others incapacitated. No one knows. No charges have been published.
Abiy Ahmed became prime minister of Ethiopia in 2018. A reformer and relative political novice, he offered an olive branch to Isaias

One veteran diplomat compared it to a rabbit asking a cobra for a dinner date. 

The two men declared an end to the conflict with Eritrea, and Abiy was awarded the Nobel Peace Prize. 

The details of the deal weren’t revealed to the African Union or the Ethiopian parliament, however. 

Best practice—and the standard procedure at the African Union—is for a peace agreement to include provisions for democratization, human rights, and demobilization of over-sized armies, all subject to international monitoring and reporting. 

In this case, everything was chanced on words of goodwill. The Nobel Prize was a triumph for wishful thinking, but the Norwegian committee wasn’t the only one guilty of gullibility. 

The deal was greased by prince Mohamed bin Zayed of Abu Dhabi. The U.S. assistant secretary of state for African affairs, Tibor Nagy, anticipated a “warm, cordial” relationship with Eritrea. Isaias got sanctions lifted, a security pact with Ethiopia, and an emergent axis of autocrats that brought Somalia into his sphere of influence.
After Eritrea was brought in from the cold, Isaias didn’t relax his grip. Instead of demobilizing his vast army, he shopped for new weapons. 

Instead of allowing his people to move freely, he dispatched security agents to Addis Ababa. 

When Covid-19 hit, he took the opportunity for a rigorous lockdown. 

He trained special forces for the Somali army, reportedly with the goal that President Mohammed Abdullahi “Farmaajo” could dispense with the inconvenience of an election. 

The Somalis are skilled at restraining would-be autocrats, however, and managed to hold their election in May, removing their aspiring dictator. Isaias is also fishing in Sudan’s troubled waters.
But for Eritrea’s despot, these are sideshows. The contest with Tigray is the main event.
For Isaias, this portends a final decision by force of arms. He will fight without mercy. If he prevails, his lifelong ambition of becoming master of the Horn of Africa will be within his grasp

Should Isaias fall, a complacent international community will be able to claim no credit for the end of his dictatorship and destabilization. Hopefully, after a lost generation, Eritreans will be able to enjoy their long-awaited liberty.

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Global realignment – an opportunity for Africa? @MadeItInAfrica

Global realignment – an opportunity for Africa? @MadeItInAfrica 

Simmering rivalries and strategic shifts between superpowers and their allies are offering Africa more geopolitical and economic agency, as it seeks to avoid the pitfalls of the past.
Africa has the opportunity to rack up diplomatic and economic benefit, as geopolitical competition involving former cold war enemies, the US, Russia and China – and their allies – raises the geostrategic profile of the continent.
Unlike in the Cold War era where it was treated as a pawn on a grand chessboard, experts expect a more strategic Africa that aligns its foreign policy with broad-based, continental economic interest, particularly with Africa’s resources becoming increasingly important to greening economies around the globe.

The potential for a realignment comes on the back of the great power fallout following Russia’s invasion of Ukraine, with both the US and China – as well as Russia – increasingly keen to expand their sphere of influence in Africa.
On August 23, China announced it will waive 23 loans for 17 African states, further assuaging fears of its highly speculated debt-trap diplomacy on the continent. 

Its pardon is in addition to Beijing’s cancellation of more than US$3.4 billion in debt and restructuring of $15 billion of debt in Africa between 2000 and 2019. 

Beijing will also redirect $10 billion of its International Monetary Funds reserves to the continent in an unprecedented move seen by observers as one intended to shore up its diplomatic leverage.
Tellingly, however, China’s decision to forgive some African loans comes amid rising tensions between it and Taiwan that hit a crescendo during the recent visit of US House of Representatives Speaker Nancy Pelosi to Taipei.
Meanwhile, the US which has treated Africa as a backwater in its policy decisions is now signalling a shift towards greater involvement on the continent to counter China. 

Early this month, US Secretary of State Antony Blinken was in Africa and vowed that Washington would not dictate which choices Africa makes and “neither should anyone else” contradicting his initial appeal for Africa to condemn Russia’s war. 

“African nations have been treated as instruments of other nations’ progress, rather than the authors of their own,” he said during his visit to South Africa.
Blinken’s visit came at a time when China is out-competing the US and its allies in Africa on both political and economic fronts as reflected in the UN vote to condemn Russia. 

Blinken’s visit was also immediately followed by a visit by Igor Sechin, widely regarded as Russian President Vladimir Putin’s unofficial “second in command”, to South Africa. The “secret” visit was reported in South African media.
There are 54 African countries represented at the United Nations, which often vote as a block, making Africa an important force in multilateral diplomacy.

Aly-Khan Satchu, CEO of investment advisory firm Rich Management Ltd told bird that Africa can use the great power rivalry to its strategic advantage.
This would include investing in green energy production, road and rail networks and businesses.
“Our votes at the UN are highly prized and our national interest should inform us in how we avail our votes,” Satchu said.
For Africa to benefit, however, he argues it needs to ensure it is not used as a proxy battlefield, as happened during the Cold War.

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The surge in oil prices this year should have been great news for Nigeria. @business Next Africa — By Neil Munshi

The surge in oil prices this year should have been great news for Nigeria. @business Next Africa — By Neil Munshi

Yet, Africa’s biggest crude producer, which relies on the fuel for more than 80% of its export earnings, saw output slump in the second quarter — just when prices peaked. 

Things got even worse in July as production plunged to 1.2 million barrels a day, the lowest in more than three decades.

The government blames widespread pipeline vandalism and oil theft by criminals who operate mini refineries along the creeks of the crude-rich Niger Delta for the lost output. 

It plans a security upgrade similar to that used by Saudi Arabia’s Aramco.
But it’s not just waning production that’s keeping Nigeria from taking advantage of the oil bonanza.
The budget office projected a dire fiscal future for Africa's biggest economy if it doesn't end gasoline subsidies that it estimates will cost 6.72 trillion naira ($15.7 billion) next year — more than the government is expected to earn in tax revenue.

President Muhammadu Buhari’s administration has repeatedly floated the idea of ending the subsidy, but never follows through: It would be a political gamble too costly to attempt. 

Cheap pump prices are popular in Nigeria — and expected — so it’s unlikely to be touched ahead of presidential elections in February.
The industry has also left a scarred environment.
Shell, long the country’s most dominant oil company, claims bunkering is partly to blame for interminable spills. 

A Bloomberg exclusive report found that a $1 billion cleanup, heralded in 2019 as the most ambitious initiative of its kind anywhere in the world, is making one of the earth’s most polluted regions even dirtier. 
In Nigeria, the resource curse is living up to its name.

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9 DEC 19 :: Time to Big Up the Dosage of Quaaludes

9 DEC 19 :: Time to Big Up the Dosage of Quaaludes

we were all popping Quaaludes [Quaaludes ‘’to promote relaxation, sleepiness and sometimes a feeling of euphoria. It causes a drop in blood pressure and slows the pulse rate. These proper- ties are the reason why it was initially thought to be a useful sedative and anxiolytic It became a recreational drug due to its euphoric effect’’].

Everyone knows how this story ends. When the music stops, everyone will dash for the Exit and the currency will collapse 

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by Aly Khan Satchu (www.rich.co.ke)
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September 2022

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