Showing posts with label oil. Show all posts
Showing posts with label oil. Show all posts

Thursday, October 22, 2020

2021's Presidential Hot Topics

At tonight's presidential debate between US President Trump and former Vice President, Joe Biden, the candidates have their last chance to detail how they would meet the challenges the country will face in 2021 and beyond. What are those challenges? The Foreign Policy Association has released the following list of the global issues their groups will be discussing when they meet remotely next year. It would be interesting to see if you can check off any of these issues discussed at tonight's presidential debate. 1. The role of international organizations in a global pandemic. 2. Global supply chains and national security. 3. China and Africa. 4. Korean peninsula. 5. Persian Gulf security. 6. Brexit and the European Union. 7. The fight over the melting Arctic. 8. The end of globalization. The US presidential candidates touched on all of these topics, except the supply chain, which is complicated by moral as well as economic and political considerations: and Brexit and the EU, which is not of much interest to US voters. COVID-19 and China were discussed, but not in relation to international organizations or Africa. North Korea, with an economy crippled by sanctions and crop damage from unusually punishing typhoon rain, needs help, maybe from China, but possibly from selling weaponry to would-be nuclear states using hard-to trace cryptocurrency. The future of the oil industry discussion involved both the Persian Gulf and the effect of climate change melting in the Arctic. The future of globalization involves jobs, always a subject of US presidential debates. For information about how to engage in the Foreign Policy Association's discussion groups, go to fpa.org.

Wednesday, September 16, 2020

China's One Belt, One Road: Pakistan's Cautionary Tale

Back in 2015, the China-Pakistan Economic Corridor (CPEC) section of China's One Belt, One Road (OBOR) Initiative was expected to bring economic development and jobs to Pakistan and also provide substantial benefits to China. The new deep water port at Gwadar, Pakistan, on the Arabian Sea would enable China to transport oil from the Middle East up through Pakistan to western China rather than across the Indian Ocean and through the congested Malacca Straight between Indonesia and Malaysia to the South China Sea. By encircling India, the CPEC offered a way to balance or neutralize democratic India's influence in the region, but the CPEC also involved China in India's Kashmir border dispute with Pakistan high in the Himalaya Mountains. Shots fired on the border in Septemebr, 2020, violated an Indo-Chinese agreement. Pakistan found the terms of the CPEC less than transparent and a debt burden Beijing was unwilling to renegotiate. The Chinese support Pakistan expected for its border dispute with India failed to materialize. In fact, in September, 2017, China and India signed an anti-terrorist declaration that criticized Pakistan for shielding terrorist groups. The US even floats the notion that China might be an ally willing to help persuade Pakistan to pressure its Taliban friends to help stabilize neighboring Afghanistan. The bottom line is: Pakistan's deteriorating economy, made worse by the coronavirus, finds 18 million employees out of work. China, which expects repayment for the CPEC, has no need for Pakistan's textile exports. CPEC construction jobs failed to satisfy Pakistan's need for the education, technical training and scientific research necessary for modern employment, such as monitoring and correcting Pakistan's poor air quality. Finally, the CPEC involves atheistic China with a Muslim country, when China is trying to eliminate the Uighur Muslim culture in Kashgar, home of the Id Kah Mosque, and to control up to one million Uighurs in so-called re-education camps. At the same time, Pakistan's Hindu minority, already discriminated against in better economic times, is converting to Islam just to receive assistance from the government and charities.

Tuesday, September 8, 2020

Putin's Private Siberian Project Excludes Alexei Navalny

Two-dimensional maps often show Russia on the far right side and the United States all the way over on the left. This separation provides the false impression the countries are far apart. But as John McCain's vice presidential running mate, Sarah Palin, famously observed, she could see Russia from her kitchen window. Presumably, Russia's President Vladimir Putin can see the United Staes from a Siberian window. And lately, US military planes have intercepted Russian planes snooping from the skies over Alaska. Climate change turned Siberia, once identified with Russian prison camps in an inhospitable frozen wasteland, into what President Putin calls the East Sibrian Sea's Northern Sea Route "a matter of national pride." With increased seasonal passage through Arctic waters comes faster market access for oil and gas from Russia's Yamal Penninsula and a new military option. Beginning on September, 11, 2018, Russia, China and Mongolia participated in Vostok-2018, a massive military exercise in Siberia. By the middle of 2020, Vladimir Putin, who considered the collapse of the USSR the 20th century's geopolitical disaster, felt confident. Russia tamed the Chechnya separatists in 2000 and annexed Crimea in 2014. Possible domination of Georgia and Belarus was still in play. The US was about to walk away from an Open Skies Treaty, resisted by the Kremlin ever since one was designed to prevent surprise attacks after World War II. Refusing to authorize treaty-permtted flights over Russia's military exercises and staging areas for nuclear weapons aimed at Europe provoked the US to designate a final November, 2020 participation date. Russia already interfered with US elections in 2016 and was prepared to do so again in 2020. On July 1, 2020, voters approved a referendum allowing a Russian president to serve two consecutive 6-year terms after the next election, when the current term of President Putin, age 67, ends in 2024. At this propitious moment, Putin's political nemesis, Alexei Navalny, arrived in Siberia. Mr. Navalny's anti-corruption message had gained traction in Russia's urban areas, where his slick YouTube delivery system skirted state-owned media and inspired massive protests when Putin decided to return to the presidency in 2012. By 2020, Navalny was far outside Russia's major cities schooling opposition city council candidates who won two seats and ousted the majority held by Putin's United Russian party in the student town of Tomsk in Siberia's elections on Sunday, September 13, 2020. By winning one seat in Novosibirsk and uniting with three other independent candidates, the United Russian party also seemed likely to lose its majority there. Timing favored Mr. Navalny's opposition party, since the coronavirus exposed the effect of falling oil prices on a falling standard of living, while Putin's wealthy oligarchy buddies remained untouched. On the plane back to Moscow from Siberia, Mr. Navalny became seriously ill. The plane made an emergency landing in Omsk, Siberia, where Alexei spent two days in a coma before the Kremlin allowed a plane to fly him to Germany on August 22, 2020. There, and also later in laboratories in France and Sweden, doctors determined he was exposed to the nerve gas chemical weapon, Novichok, the same poison that nearly killed the former Russian spy, Sergei Skripal, in England. On Tuesday, September 8, 2020, a masked man threw a foul-smelling liquid into the offices of Navalny's Anti-Corruption Foundation in Novosibirsk, Siberia. By Wednesday, September 9, German officials announced the attack on Navalny forced them to reconsider Gazprom's Nord Stream 2 gas pipeline between Germany and Russia, which already is a source of controversy in Germany and Poland. Although Mr. Navalny came out of his coma on Monday, September 7, 2020, and could walk a short distance by September 14, German physicians remain uncertain about the extent of his long-term recovery. German doctors released Mr. Navalny from the hospital on September, 22, 2020. He will remain in Germany for rehabilitation but has expressed his intention to return to Russia, where court orders have frozen his bank accounts and, on August 27, 2020, seized his apartment to prevent it from being "sold, donated, or mortgaged." Knowing Mr. Navalny will be greeted with a rousing rally when he returns to Moscow, Putin certainly is planning to counter his reception. It is interesting to note how enthusiastic Vladimir Putin was about Siberia, when Secretary of State Hillary Clinton visited him in 2010. He took her to a map in his dacha's private office to show her the areas where he was involved in saving Siberian tigers and polar bears from extinction. An earlier post, "North Pole Flag," also details Russia's continuing interest in the Arctic.

Monday, February 11, 2019

Corruption Haunts Every Nigerian Presidency

According to the final vote tabulation on February 27, 2019, President Buhari, who had promised to fight corruption, won re-election by a wide margin. He asked his voters not to gloat, since victory was prize enough. As expected, his opponent, Mr. Abubakar, claimed the vote count in some areas was suspect, and he said he would contest the election in court.       

     Nigeria's February 16, 2019 presidential election had been rescheduled to February 23. Leading candidates, current President Muhammadu Buhari and wealthy businessman Atiku Abubakar, both Fulani Muslims from northern Nigeria, blamed each other for the delay as an attempt to rig the election in their favor. The National Election Commission claimed weather conditions prevented all the ballots from reaching Nigeria's 120,000 polling places.

     There was general agreement that either winner would have to deal with: Boko Haram terrorists determined to eliminate Christian influences, conflict between cattle herders and farmers, restructuring representation to provide greater balance between Muslims in the north and southern Christians, unemployment over 20%, economic hardship from volatile oil export revenue,  crushing public debt, and corruption.

     Buying votes and rigging elections are features of local, governor, party primary, and presidential elections, but they are far from the only sources of corruption in Nigeria. The state-owned Ajabkuta Steel Company, which has received $8 billion and "employed" 10,000 over a 40 year period, has never produced any steel, according to The Economist (February 9, 2019). Carnegie's Endowment for International Peace identified corruption as the greatest obstacle preventing Nigeria, with Africa's largest economy and population, from achieving its enormous potential.

     Contract fraud, embezzlement, money laundering, bribes, and other forms of corruption siphon off billions from every economic sector: petroleum, trade, manufacturing, agriculture, transportation, energy, banking, and the environment.
Bureaucratic corruption channels funds into questionable departments. Nigeria has three space agencies that only have managed to launch five satellites into orbit.

     Politicians also pocket funds meant for hospitals and clinics. In the areas of health, education, and humanitarian aid, corruption prevents international organizations from providing development and emergency assistance.

     Authors of books on trust in business, Barbara Brooke Kimmel and Charles H. Green, note "the most powerful form of trust is personal." They know words require backup by action. Nigeria may lay claim to democracy, security, and progress, but these words have no meaning as long as corruption undermines every personal transaction.

Friday, August 31, 2018

Santa Opens Arctic Ocean for Business

Reindeer have new competition. Between now and next March, ice thickens in the Arctic Ocean, but, because of climate change, gradual melting after March opens a shipping channel in August. Ships with stronger hulls and expensive icebreaker escorts even can use the route for up to three months.

     Up until about five years ago, the dark cold South Pole was home to penguins, and the far north only housed Eskimos and Russian prisoners in Siberia. Oleg Sentson, the Ukrainian film director on a hunger strike, is still there in a penal colony serving a 20-year sentence for protesting Russia's annexation of Crimea. But Russia's President Putin also now hikes on vacations in Siberia, and Russian ships travel from Vladivostok to St. Petersburg on a Northern Sea Route Putin calls "a matter of national pride."

     Why are countries scrambling for claims to sea routes through the Arctic Ocean and not around Antarctica? Examine the North and South Poles on a globe or map. How many degrees latitude does it take from both poles before you find at least five countries? What potential problems do you see when passing between Russia and Alaska?

     Arctic shipping routes, according to a paper prepared by the engineering faculty at Macquarie University in Sydney, Australia, are most dangerous in the East Siberian Sea. In the shallowest area of the Arctic Ocean, ice builds up earlier and faster after summer, and uncharted waters are more likely to cause ships to run aground. Even during summer, half of the East Siberian Sea can remain ice covered.

Go North, Young Men

     Despite the harsh environment and high insurance rates, activity is expected to increase in the far north due to a variety of factors. Arctic routes shorten navigation time, and they are free of pirates. Oil and gas reserves in the area already have attracted exploration. (See the earlier posts: "Troubled Northwest Passage Found" and "North Pole Flag.")

     Accidents, seldom now, can be expected to increase as shipping traffic increases, however. Ship captains who ply the Arctic Ocean cannot help but feel a little like captains of potential Titanics. Ice can trap ships, and they still can hit icebergs, as well as icebreaker escorts and other ships. Captains need constant weather station updates about the changing wave heights, wind speeds, and temperatures that affect icing in each section along their routes, information they also need in order to know how long crew members should stay out on deck. They want protocols about plans for emergency assistance and oil spill clean ups from members of the Arctic Council (Russia, Norway, Sweden, Denmark-Greenland, Finland, Iceland, Canada, and the United States).

Tourists Who Have Been Everywhere

     Possible perils failed to deter 900 passengers from paying anywhere from $20,000 to one million dollars per person to book passage on the Crystal Serenity's first cruise through the Arctic Ocean in 2016. The ship sailed from Seward to Nome, Alaska, where it docked to unload solar panels ordered by the city's population of 3800. In groups, cruise passengers took turns sailing to shore in transport boats to photograph wild musk oxen; eat $5 slices of blueberry pie; watch Eskimo dancers; and purchase locally made seal gloves and wallets. From Nome, a month long voyage passed by Greenland and ended in New York.

     The trip required a crew of 600, a special navigation satellite system, and chartering cargo planes to deliver perishable food for pickups at communities along northern Canada. The Crystal Serenity made another, and its final, passenger voyage in 2017.

Faster Cargo Shipments

     After the Crystal Serenity tested the Arctic route for passenger cruises, the Danish-based Maersk line, the world's largest shipping company, launched the Russian Venta Maersk's container ship north from Vladivostok, west across the Arctic Ocean, and south around Norway and Sweden to St. Petersburg on the Baltic Sea. Carrying 3600 containers of Russian frozen fish and electronics from South Korea, the ship cut off about two weeks from the usual time it takes to use the southern route from Asia and enter Europe using the Suez Canal. While time was saved, profit was lost, because container ships are used to dropping off and picking up a thousand containers at a dozen or more ports along the way. No such transshipment points exist on the Arctic route. Following the test trip, Maersk announced no immediate plans to substitute the Northern Sea Route for its usual schedule.

     Russian cargo ships already do service domestic ports on an irregular basis. Now Moscow is building roads, a railroad, and facilities to establish regular ports of call along its Northern Sea Route. China also has made overtures to Iceland and Greenland to establish outposts on what Beijing calls its "Polar Silk Road." (See the earlier posts, "Iceland Gives China the Cold Shoulder" and "China Stakes New Claim to Arctic.")

      After China's President Xi Jinping determined to reduce pollution by switching from coal to natural gas, a serious shortage left Chinese homes without heat and shut down factories. To prevent future natural gas shortages, China's state-owned COSCO shipping company and Japan's Mitsui O.S.K. Lines formed a 50-50 partnership to ship liquefied natural gas (LNG) east on the Arctic Ocean and south to Asia from Russia's Novartek producer on the Yamal Peninsula. While a tanker can make this trip in 15 days in summer, compared to 35 days by going west and south through the Suez Canal, ice is too thick in the winter. Yet, there is pressure to increase China's shipments through the most dangerous East Siberian Sea.



 
           

Saturday, June 30, 2018

Introducing the Real Mexico

Mexico is more than revolutions, drug smugglers, and undocumented immigrants. The country's probable new president, Andres Manuel Lopez Obrador, founded the political party, Movement for National Regeneration (Morena), that expects to bring him to power in tomorrow's election on July 1, 2018. Victory over the earlier ruling Institutional Revolutionary Party (PRD) and the National Action Party (PAN) would be much different from the bloody revolutios that once brought, for example, a Victoriano Huerta to his provisional presidency.

     Northern Mexico reaps prosperity from the North American Free Trade Agreement (NAFTA). Unskilled, cheap labor initially attracted US. factories south of the border, but these opportunities in Mexico helped create a new, educated cadre with up-to-date experience. Sister city mayors of Tijuana, Mexico, and San Diego, California, think in terms of a single urban region. A privately financed bridge enables travelers to walk back and forth between San Diego and the Tijuana Airport.

     As a presidential candidate, Lopez Obrador tapped into the feelings of southern Mexicans watching norther Mexicans thrive. He promised to pave roads through the south's mountainous Oaxaca state and to add oil refineries in the southern states of Tabasco and Campeche. In an effort to eliminate food imports, he proposes price guarantees for crops grown by southern farmers. Rising oil prices also expect to help Mexico recover from export revenue losses when prices collapsed in 2014. Yet, to gain electoral support, Mr. Lopez Obrador made a variety of expensive proposals, including a pension for the elderly and disabled, scholarships, and water system improvements. In one instance, Mr. Lopez Obrador is known for an extreme measure.  Residents in Tabasco, at his suggestion, did not pay their electric bills for two decades, thereby costing the company money and causing power to be disconnected periodically.

     From China, the new president is likely to accept an offer of loans to build a railway north of Guatemala to connect the states of Quintana Roo and Chiapas and to builld another road/rail connection through Tehuantepec to the Oaxaca and Veracruz states west of Mexico's southern isthmus. By working with China, Mexico would demonstrate how different international relationships are from 1823, when the Monroe Doctrine told Europe the United States considered any attempt to extend its influence in the Western Hemisphere a threat to its "peace and safety."

     Mexico's new leadership will have only one term to deal with two traditional problems. Drug gangs and the associated increase in murders and violence provide President Trump with justification to build a border wall. Yet, the US demand for cocaine and other illegal substances perpetuates the drug trade. Related turf wars among dealers cause violence and murders in the US and foreign countries, and the arrests of drug dealing criminals fill US prisons. In 2018, Mexico is on track to break the record for murders it set in 2017. With 22 homicides per 100,000 people, Mexico has one of the world's highest rates. The Tijuana arts council building on the site of a concrete-encased structure reminds those on the roof viewing California and those escaping across the border that the art gallery below them is in a tunnel that once carried drugs into the United States.

     Besides inheriting a traditional drug transit destination, Mr. Lopez Obrador also would inherit Mexico's reputation for corruption. Implementation of a National Anticorruption System (NAS) has been on hold pending the results of the presidential election. NAS requires:

  • An independent national anticorruption prosecutor devoted to investigating and trying criminal cases,
  • An autonomous Federal Administrative Court specializing in serious cases of bribery, vanishing public funds, benefits from campaign contributions, and other acts of corruption by administrative officials,
  • Adoption of local anticorruption systems in each Mexican state, and
  • A national computerized data platform capable of supporting NAS's objectives.
Facing an increased crackdown on corruption, companies doing business in Mexico are wise to finance serious compliance programs, and Mr. Lopez Obrador would be wise to make good on his presidential campaign promises to eliminate corruption and to abide by Mexico's rule of law.


     

Sunday, June 24, 2018

Cut Off the Head and the Colombian Snake Dies?

 In fact, eliminating the head of a drug cartel can spawn a host of little drug organizations, Jack Devine wrote in his book, Good Hunting. What happened after Osama bin Laden, Saddam Hussein, and Qaddafi were eliminated? What have those who watched the TV version of the successful hunt and death of Pablo Escobar, Colombia's notorious drug lord, witnessed after Colombia's June 17 election? The 2,000-member National Liberation Army (ELN), though smaller than FARC's once 18,000 guerrillas, is demonstrating the challenge separate dedicated cells can present.

During 50 years that resulted in 220,000 deaths, the Marxist Revolutionary Armed Forces of  (FARC) used drugs to finance efforts to overthrow the Colombian government. Coca cultivation for the cocaine trade continues to grow, reaching a new high in 2018 with a 17% increase over 2017. Security forces have failed to stop the violence occurring in former FARC areas where cocaine production continues on the Colombian border.

 President Juan Manuel Santos, who won a Nobel Peace Prize for the 2016 peace accord he negotiated with FARC, could not run for another term. Two potential presidential successors emerged from the May 27 primary this year:
     Ivan Duque, the conservative Democratic Central party candidate mentored by Alvaro Uribe, a     major critic of the Santos peace accord and Colombia's former conservative, authoritarian president, who is now accused of accepting a bribe (a charge he denies) from right wing paramilitary groups,
                                                                 ans
     Gustavo Petro, a pro-peace former guerrilla member and former mayor of Bogota who also           opposed President Santos.

Duque won with 45% of the vote and will take office as President on August 7. Petro may not be the only loser. When FARC controlled as much as 40% of the country, a diverse variety of species was untouched in this wide tropical area. Under Santos, scientists working on the "Colombia BIO" project began a comprehensive systematic survey in the former FARC territory with the idea of transforming biological assets into economic benefits, such as the eco-tourism Chile and Argentina plan to attract with their national park systems featuring biodiversity.  How important the new regime considers funding for "Colombia BIO" is unknown.

What is known is fragmented FARC and ELN guerrilla groups, as well as paramilitary forces, continue to fight for control of the coca fields still being cultivated to supply the demand for cocaine in the US and elsewhere. Infrastructure needed to switch to legal crops and approved funding for former FARC members to set up co-ops have not materialized 

ELN members live without uniforms in towns and villages as civilians who infiltrate political parties, local governments, progressive social movements, and universities. A 5-man central command, headed by Jaime Galvis, that uses encrypted computers to direct attacks has never engaged in serious peace talks.

Despite the problem of even getting ELN to a negotiating table, Duque's supporters continue to consider peace treaty terms with FARC too lenient. His congressional leader, Ernesto Macias, rejects the peace accord's provision that imposes no prison time on disarmed FARC leaders who agree to confess their crimes to a special tribunal based on the model South Africa used after apartheid. Ten non-voting members of FARC; including Sandra Ramirez, the lover of FARC's founder, Manuel Marulanda, now hold seats in Congress. Duque, who studied at Georgetown and worked for the Inter-American Development Bank in Washington, D.C., won election on a vague  plan to foster entrepreneurship, talent, and knowledge that had more appeal to voters than Petro's idea about replacing oil, the country's major export, with a green economy based on agribusiness. Duque needs the cooperation of Macias to pass legislation to reform Colombia's pension system by raising the retirement age, to improve court efficiency, and to reduce corporate taxes.

     In September, 2018, a referendum on seven measures designed to stem corruption was defeated, when only a third of the voters needed to pass it went to the polls. The death of Jorge Enrique Pizano in his home, apparently from cyanide poisoning in November, 2018, finds Colombia involved in one of the Odebrecht bribery cases spilling over from Brazil. Partners, the Odebrecht construction firm and the Grupo Aval financial group owned by Colombia's Luis Carlos Sarmiento, won a $1.6 billion contract to build Ruta del Sol, a road connecting Bogota with the Caribbean beaches. A Grupo Aval auditor, the deceased Mr. Pizano , had discovered $30 million of the $1.6 billion contract was paid for what were listed as consultancies that could have been a cover for what were, at least in part, political bribes. Grupo Aval and Nestor Humberto Martinez, Grupo Aval's attorney, denied prior knowledge about $11 million in bribes Odebrecht admitted to the U.S. Department of Justice it paid to obtain the Ruta del Sol contract. Yet in early 2018, Mr. Pizano had given the Noticias Uno TV program recordings of his secret conversations with Mr. Martinez about the consultancy payments. Mr. Martinez, who is now Colombia's Attorney General, has recused himself from all cases, including Mr. Pizano's death, relating to the Ruta del Sol contract. Public pressure urges his resignation. 

Colombia has seen an influx of as many as 1.5 million immigrants fleeing dire political and economic conditions in neighboring Venezuela. Work permits, health benefits, and study opportunities have been provided for at least 442,000 as a return favor for the hospitality Venezuela offered those fleeing FARC's reign of terror. To cover Colombia's growing need for revenue, Duque considered expanding the value-added-tax to include staples, including some foods, that are now excluded, but Duque is likely to find his approval rating drop the way Santos' did to 14%, when he raised taxes. In fact, Duque's approval rating in November already is half the 54% it was a month after he took office.


,

Thursday, May 17, 2018

Corrupt Government Turnaround in Angola?

In Angola, President Joao Lourenco attempts to join Muhammadu Buhari in Nigeria, Adama Barrow in The Gambia, and Emmerson Mnanggagwa in Zimbabwe, the new leaders trying to break with a tradition that allowed African rulers to put their own interests ahead of their countries'.

     After unseating Jose Eduardo dos Santos, Angola's president for 38 years, Lourenco began a crackdown on corruption rampant among the country's elite. Starting with the former president's rich daughter and son, he removed Isabel as head of the country's national oil and gas company, Sonangol, which exported $640 billion since the end of Angola's civil war in 2002 and charged Jose Filomeno with fraud for attempting to transfer $500 million from the country's $5 billion wealth fund through a London account.

     Although the price of crude oil has rebounded from its 2014 low, as Africa's second-largest oil producer after Nigeria, Angola was still left with public debt, mainly to China, hovering between 65% and 80% of GDP, and missing billions, when Lourenco took office. To revive the economy, the new president no longer requires foreign investors to have local partners and asked the International Monetary Fund for advice. Suggested next steps include: an independent audit to discover where revenue from oil and diamond exports went, especially to overseas accounts. Locals share information about the corruption crackdown in Brazil, another former Portuguese country, that has sent former high-level officials to jail.

     Additional needed reforms include: elimination of excessive licenses and regulations that provide bribery opportunities for those issuing or waiving them; improving living and health care conditions to reduce the country's high child and maternal mortality rates; stripping courts of political influence; freedom of the press and media, especially to report on corruption; and Angola's first local elections in 2020.

     Meanwhile, in Portugal's other former African possession, Mozambique, the continuing 3-year attacks by a group of radical Muslim jihadists resulted in new beheadings in May, 2018.

     While African leaders like Rwanda's President Paul Kagame, who led the Tutsi rebels who overthrew the Hulu regime responsible for genocide, and President Pierre Nkurunziza in neighboring Burundi intimidate their opposition and dictate constitutional reforms that enable them to extend their presidential terms to 2034, every indication of a gradual shift to responsible government by the rule of law on the African continent is welcome.

   

,

Thursday, August 3, 2017

Boil or Preserve the Planet?

Attention to rising temperatures and sea levels is generating positive and negative reactions, depending on which side of the climate change citizens, organizations, and governments are on.

     An Inconvenient Sequel: Truth to Power, the new film on climate change from former U.S. Vice President and presidential candidate, Al Gore, opened at movie theaters  August 4, 2017.

     In her current book, No Is Not Enough, Naomi Klein reports current U.S. Secretary of State and former head of ExxonMobil, Rex Tillerson, expects humans to adapt to an overheated planet by moving crop production around as they have in the past, when weather patterns changed. Yet, ExxonMobil's oil and gas drilling equipment has arrived in the Arctic before the world's farmers, who can't work long outdoors even if their crops and livestock could survive in blistering heat.

     Although James Hansen, who formerly headed NASA's climate research team, expects melting polar ice caps to keep temperatures cooler than some suggest, he believes the melting cannot help but cause a rise in sea levels. He further notes a mass inland migration of people from flooded coastal cities could cause ungovernable chaos.

     Klein's book reveals Exxon's scientists knew as far back as 1978 there was general scientific agreement that humans burning fossil fuels released the carbon dioxide that influenced climate changes, and only five to 10 years remained before a serious decision to transition from fossil fuels to clean energy sources was needed. A report by the Climate Accountability Institute found 25 investor-owned corporate and state-owned fossil fuel producers, including ExxonMobil, Shell, BP, and Chevron, are responsible for half of all global greenhouse gas emissions since the Intergovernmental Panel on Climate Change was established in 1988.

     In California, three communities already have filed law suits for compensation from oil, gas, and coal companies for current and future costs of property damage from and adapting to rising sea levels. San Mateo, Marin, and San Diego counties claim that instead of working to reduce the impact of  fossil fuel emissions that they had known about for up to 50 years, they launched a campaign to discredit scientific findings about climate change.

     Members in the U.S. House of Representatives, according to insideclimatenews.org, have been voting to prevent regulatory agencies from evaluating future damage from greenhouse gas pollution, to streamline environmental reviews of pipelines and electric transmission projects that cross state borders, and to sponsor legislation supporting federal coal leasing. In contrast, a bipartisan House caucus of 6 Democrats and 7 Republicans introduced the Climate Solutions Commission Act of 2017 (H.R.2320) to establish a National Climate Solutions Commission. By appointing Commission members, the President and Congressional leaders from both parties would acknowledge climate change is "real, human caused, and requires solutions." Based on the latest scientific findings, Commission members would recommend to the President, Congress, and the States policies and actions to reduce greenhouse gas emissions.

     Environmental organizations, such as the Sierra Club and Greenpeace, are warning investors in publicly traded fossil fuel producers that they are jeopardizing the value of their stock holdings, since auto makers are moving toward electric and hybrid models and companies, such as Apple, Facebook, Google, and Ikea, are leading the way to a corporate culture committed to the use of 100% renewable power.

     Finally, the Arbor Day Foundation (arborday.org) has a program to help homeowners absorb air pollution and reduce the need for fossil fuel-generated energy. To find out if there is a nearby active U.S. program to select trees and determine the best location to plant them to provide shade around homes, go to arborday.org/est.

Saturday, July 15, 2017

Venezuela Shows Need to Beware of Government Actions during Crises

Due in part to conflict erupting during an ongoing economic crisis, the first baseball player from Venezuela to be inducted into Cooperstown's Hall of Fame was absent from the ceremony honoring past greats at this year's All Star Game. Luis Aparicio, the celebrated, base-stealing Major League shortstop who lives in Maracaibo, is just one of the Venezuelans who has been affected by the food and medicine shortages caused by the world's falling oil prices that used to finance the country's economy.

     Street sit-downs by citizens, barricades set on fire by masked young men, and public rosary-praying by members of religious orders have led Venezuela's President Nicolas Maduro to:

  1. Send Venezuela's National Guard troops to fire tear gas into protesters from highway overpasses,
  2. Postpone regional elections, 
  3. Support the Supreme Court's attempt to strip the National Assembly of its powers.
     In her new book, No Is Not Enough, Naomi Klein recounts case after case where governments have used crises to blame scapegoats and to impose measures they have been longing to enact. Fear and confusion enable governments to get away with actions that would be unthinkable in normal times. But whether its economic collapse, natural disasters, election fraud, war, or cyber attack, there's no clear choice between the powers a government needs to deal with a problem and those the government has been looking for an opportunity to grab.

     During wars, history shows the United States passed Alien and Sedition Laws to deport or imprison male subjects of enemy countries and to punish those who published anti-government material; suspended habeus corpus which requires persons to be lawfully charged with a crime before they are detained; and sent Japanese citizens to internment camps.

     Just as governments may be ready to cut funding for education and Social Security to fund a military buildup, to muzzle the press, or to increase surveillance during a crisis, the public needs to be ready to come together to support voting rights, to defend the independence of courts, to demand constitutional guarantees, and, most of all, with a fierce determination not to repeat mistakes of the past. Will citizens be up to the task of discerning which powers a government needs for the crisis at hand?

Saturday, June 10, 2017

Troubled Northwest Passage Found

Even before the US decided it would be one of only three countries not bound by the goals for green- house gas emissions established in the 2015 Paris climate accord, the planet warmed to open a Northwest Passage through the Arctic Ocean. For example, cruise ships now travel from Alaska to New York without icebreaker assistance.

     Still, there is no guarantee that ships won't be grounded in a storm or that oil, natural gas, and mineral exploration in newly accessible waters won't accidentally endanger whales and migrating birds. Clean up in the cold Arctic where it is dark much of the year is an impossible task. Even without an incident, increased shipping activity introduces the new and unknown impact of underwater noise, dirty water, sewage discharge, and invasive species in the Arctic. With Russia now training military troops in Siberia, there also is a chance of aggression from the far North.

     Sunlight that the Arctic's ice used to reflect now helps quicken sea ice melt, at the rate of 10% per decade, and raises sea levels to threaten inhabitants of islands and coastal cities worldwide. As the disappearance of sea ice forced polar bears onto land, villagers along the Bering Straight needed to form polar bear patrols to protect students walking to school. Residents in the entire Alaskan village of Shishmaret had to relocate when their home began falling into the water. They will not be the only ones faced with the need to move to new homes.

     The reduced difference between temperatures in the Arctic and those in more temperate southern zones causes the fast moving air current, known as the jet stream, to weaken and make extreme weather changes of drought, heat, snow, and floods more likely in North America, Europe, and Asia.

     In 1996, representatives of Canada, Denmark, Norway, Sweden, Finland, Iceland, Russia, and the United States formed an Arctic Council for scientific and environmental study of the Arctic. This advisory body has not shown the leadership needed to outline a vision for the Arctic. Instead, the UN's International Maritime Organization stepped up to provide a Polar Code of environmental regulations for polar shipping. And under President Obama, the US on its own initiative prohibited oil and gas drilling in the Chukchi Sea and most of the Beaufort Sea. Prime Minister Justin Trudeau has declared a five year moratorium on offshore oil development in Canada's Arctic waters.

     Private companies are developing their own polar vision to generate geothermal steam energy from water heated in pipes by molten magma from Iceland's volcanoes. Buying into the possibilities of an expensive 20-year project to send clean, renewable volcanic energy from the Krafla Magma Testbed through North Atlantic underwater cables to power turbines in the UK, Netherlands, and/or Denmark are Iceland's Landsvirkjun, Norway's Statoil, Canada's Falco Resources, and US-based Sandia National Laboratories. Iceland's residents have received reassurances that drilling in the Krafla site will not trigger a volcanic eruption.

(For an earlier discussion of developments in the Arctic, go to the post, "North Pole Flag.")

   

   

Tuesday, May 23, 2017

China is Everywhere in Africa

"The Chinese are everywhere," writes a friend who is a missionary in Tanzania. News of China building sports stadiums, roads, railroads, pipelines, ports, bridges, hospitals, schools, and office buildings throughout the continent confirms her observation. China enjoys a reputation of making the lowest bid, not requiring local reforms, and bringing projects in on time.

     A consortium of companies led by the China Communications Construction Company broke ground this year on its $478.9 million contract to build the first three berths on phase one of a $5 billion infrastructure project on Kenya's coast at Manda Bay. To the Chinese, the islands of Lamu, Manda, and Pate that lay just off Africa's Indian Ocean coast may have resembled the Hong Kong and Macau areas of China.

     When completed in 2030, the Lamu area will be a deep-sea port hub with 32-berths, a pipeline to oil fields in Kenya (10 billion barrel reserve) and Uganda (2 billion barrels), a natural gas power plant, and a railroad that runs south to the Mombasa-Nairobi line and north to link landlocked Ethiopia and South Sudan to the Lamu port. The latter link would help free South Sudan's oil shipments from depending on Sudan's northern pipeline to Port Sudan on the Red Sea.

     Security at the Lamu project is a major concern. Islamic extremists, the Shabab from Somalia, killed in Lamu county in 2014 and at a Nairobi shopping mall in 2013. Earlier, violence left 1000 people dead and another 600,000 displaced during the 2007 election of Kenya's president, Uhuru Kenyatta. Poaching of elephant tusks and rhinoceros horns for art objects and folk medicine in China, Vietnam, and Thailand continues to reduce Africa's wildlife population. One Chinese woman was jailed in Kenya for two and a half years for trying to smuggle 15 pounds of ivory pieces onto a Kenya Airways flight by claiming they were macadamia nuts.

     Originally, China's interest in Africa resembled that of the Europeans who carved up the continent in the 19th century. They were intent on extracting raw materials. While it is true that China still builds roads in Ghana to mine gold and into Mozambique to cut timber, the forecast of three billion people added to the continent's population between 2000 and 2100, now also motivates China to open manufacturing plants in Africa and to develop a market for its exports. Some African manufacturers suffer by not being able to compete with China, but resellers benefit from higher profits on, for example, Chinese shoes, motorbikes, smartphones, and counterfeit goods. In return, China is a market for Africa's tea, cut flowers, and, of course, chemicals, minerals, and lumber. But China's infrastructure improvements will not benefit China alone. They will be open to all marketers who see an opportunity to get more goods in and out of Africa.

   

   
   

 

Monday, May 1, 2017

Russia Continues to Live in the Past

News of Russia's training for military operations and plans for oil drilling in the Arctic indicate Moscow continues to stake its future on aggression and wealthy oligarchs. Neither will stem volatile oil prices, which dropped to the $43-$44 a barrel range June 26-27, 2017, or unlock the sanctions, imposed after Russia invaded Ukraine in 2014, that block the import of drilling and fracking equipment needed to exploit the Arctic's oil and gas.

Nor, it seems, is Russia positioning itself to take advantage of the new commercial Northwest Passage opportunities climate change brings to the Arctic Ocean, such as voyages of cruise ships like the Crystal Serenity that carried 1,700 passengers and crew from Alaska to New York in the summer of 2016.

To catch up on the race for the Arctic, see the earlier posts, "North Pole Flag" and "Iceland Gives China the Cold Shoulder."

Wednesday, March 29, 2017

Russia's Alternative to Putin

Does Russia have a viable alternative to Putin? The more than a thousand protesters, who were detained when they marched with Alexey Navalny in Moscow, and the nearly 100 other Russian cities on Sunday, March 26, 2017, think so.

     Unlike the Chinese leaders who, realizing personal gain and other appearances of corruption undermine public support, adopted the Supervision Law that places everyone in the country's public sector under anti-corruption supervision (Under the guise of searching for corruption, Chinese authorities, of course, also position themselves to uncover other prosecutable violations), Putin and the oligarchs he enabled to accumulate their wealth continue to present their soft underbelly for Navalny's Anti-Corruption Foundation to document on his blog. Someone's $15 million worth of gold bars even fell out of a cargo plane leaving Yakutsk, Russia, according to TIME magazine (April 2, 2018). A Chinese spokesperson said China is willing to lend a hand to other countries that need help fighting corruption. Neighboring Russia is yet to take up the offer.

     Moscow's cyberpropaganda concerns U.S. and European democracies, and Putin's adviser, Andrey Krutskikh, brags that Russia is "at the verge of having something in the information arena which will allow us to talk to the Americans as equals"(TIME magazine, May 29, 2017). But these so-called "triumphs" do nothing to prevent government corruption and a failing economy, based on falling oil prices, from motivating protests in Russian streets.

     While Vladimir Putin basked in his March 18, 2018 sham election victory, ordinary Russian citizens continued to see their disposable income and standard of living deteriorate. By 2018. senior citizens protested Putin's plan to raise the age when they could retire and claim pensions. Although Putin promises to make Russia a great power again, he, like little North Korea's leader, stakes Russia's claim to world respect for its spheres of influence on new nuclear weapons (In December, 2018, he showed a new missile reaching Florida.) rather than the thriving economies and nuclear weapons that support the powerful positions of the United States and China. Where are Russia's wind farms, medical advances, and hybrid seeds to end world hunger?

    Putin has problems: volatile oil revenues far below a once per barrel high near $150; failure to engineer relief from sanctions from the Trump administration; a younger generation getting its news from social media rather than official, state-owned radio and TV stations; corruption favoring oligarchs; a war dragging on in Syria; and a revolt by the Orthodox church in Ukraine. Just as China fears the competing influence of international religions and locks up Uighur Muslims in re-education camps and caused Buddhism's Dalai Lama to flee Tibet, Russia fears the independence of the Orthodox church in Ukraine, supported by Patriarch Bartholomen in Constantinople and Ukraine's president, Petro Poroshenko. Russia's President Putin, who considers the allegiance of the Russian Orthodox church, including in Ukraine, critical to his authority, threatened to punish those who worshiped in churches affiliated with Constantinople and raised concern that Russia would take over Orthodox cathedrals and monasteries not affiliated with Moscow. The West needs to be prepared to respond to any excuse Putin can use to further strengthen Russia's grip on Ukraine or former Soviet satellites.

     The Kremlin has employed various strategies to silence Navalny and prevent him from running for President against Putin. After he was charged with stealing timber from a state-run forestry in 2013, he was sentenced to five years in prison, despite a lack of evidence. In protest, 10,000 took to Moscow's streets and failed to leave. The next morning Navalny was released. Following his release he ran for Mayor of Moscow and won 27% of the vote to come in second to Putin's candidate in a six-candidate field.

     Later Alexey Navalny and his brother, Oleg, were charged with shipping company fraud. Again a conviction was rendered with no evidence. Oleg was sentenced to three and a half years in a penal colony, where he has been punished repeatedly for minor infractions and his requests for parole were refused twice. Alexey received a suspended three and a half year sentence and house arrest. Russia was using a traditional method of silencing one family member by imprisoning others. But Alexey cut the tracking bracelet off his ankle, announced what he had done on his blog, and started leaving his family's apartment at will. However, his fraud case is used to keep his name off the ballot in  presidential elections, and, for staging protest rallies, he served 30 days in jail in 2018 and was re-arrested again two minutes after his release.

     In the later blog, "29 Countries Influence 7 Billion People," see what the former leader of the Soviet Union, Mikhail Gorbachev, wrote about Vladimir Putin and democracy.

Sunday, December 25, 2016

Iceland Gives China the Cold Shoulder

Unlike Russia and the United States, China has no military or commercial presence in the Arctic. To date, Beijing's attempts to remedy the situation have failed. China's hope for a foothold in a European NATO member were dashed, when the Iceland sheep farm Huang Nubo, a former official in the Chinese Communist Party's Propaganda Department, tried to buy was sold to British shale gas fracking billionaire, Jim Ratcliffe, in December, 2016.

(If a student has a globe, this would be a good opportunity to see where a sheep farm in northeastern Iceland would be in relation to the Arctic Circle and to see which other countries are in or near Arctic waters.)

Trading on his relationship with Hjorleifur Sveinbjornsson, his former roommate at Peking University, Huang first visited Iceland in 2010 to establish a China-Iceland Culture Fund to finance meetings of poets. Sveinbjornsson has said Huang was "not an idiot" and did not think Huang's offer to buy the sheep farm for $7 million in 2011 was a front for other than the stated eco-resort purpose.

In 2012 , the state-owned China Development Bank put up $100 million to back Huang's plan to build a luxury hotel and golf course in Grimsstadir, Iceland. In the 100 square mile sheep farm, where snow falls from September to May, Huang claimed that what he called his 100-room, high end, environmentally friendly resort was designed for wealthy Chinese tourists looking for clean air, peace, and quiet.

Since Huang's Zhongkun Group chose a location near oil reserves where China bid for a drilling license on Iceland's northeast coast and also planned to upgrade a landing strip to handle 10 aircraft, a suspicious interior minister rejected a request to exempt Huang from Iceland't laws restricting foreign land ownership. Huang countered with a proposal for a long-term lease arrangement which also was not approved.

 Ratcliffe will own two thirds of the Grimsstadir property; the Icelandic government and other minority investors will own the rest. Ratcliffe says his interest in Iceland is conservation, particularly for protecting area rivers that are important breeding grounds for Atlantic salmon. The Strengur angling club that leases rivers in Grimsstadir expressed pleasure having Ratcliffe as a partner they know as an avid salmon angler who has fished the area for years.

Beijing has made multiple approaches to Iceland. From its vantage point in the South China Sea, China is used to presiding over 30% of the world's ocean-going trade. Looking ahead to the prospect of climate change permitting more traffic through warming Arctic waters, China has expressed an interest in using Iceland as a shipping hub. China's embassy building in Reykjavik is the city's largest. The two countries negotiated a Free Trade Area accord. And, in an attempt to become an observer, China sent its Snow Dragon icebreaker for a stop at Iceland during an Arctic Council meeting of eight nations (Russia, Norway, Denmark, Sweden, Finland, Iceland, Canada, and the United States).

As opposed to China, Russia's oil and gas drilling prospects in the Arctic could improve. Rex Tillerson, currently Exxon Mobil's CEO and U.S. President-elect Donald Trump's choice for Secretary of State, has close ties with Russia.

Monday, November 28, 2016

All Eyes on OPEC Meeting

The 12 members of the Organization of the Petroleum Exporting Countries (OPEC), formed in 1960, and non-members, such as Russia, Brazil, and Kazakhstan, all had a major incentive to reach an agreement to reduce oil output and stop what has been a major collapse in crude oil prices since 2014. Compared to the $753 billion in revenue from exports then, revenue is expected to be $341 billion in 2016. OPEC members, Iran and Iraq, have been reluctant to cut production, with Iran also engaged in tit for tat charges with Saudi Arabia (See the earlier post, "Mixed Messages from Saudi Arabia.")

      At OPEC's November 30, 2016 meeting, members agreed to cut daily oil production by 1.2 million barrels beginning on January 1, 2017. Iran is allowed to increase its production to 3.8 million barrels a day as it recovers from sanctions imposed to block its nuclear program. Non-OPEC members are expected to cut 600,000 barrels a day from their production, with Russia accounting for half of the 600,000 barrel reduction. Large producers, Saudi Arabia, Kuwait, and the UAE, have a good record of compliance; compliance by other revenue-starved OPEC members will be closely monitored.

    The production cuts are designed to increase the price of a barrel of crude from under $50 to at least the range of $55 to $60, a welcome boost for oil-dependent economies in countries such as Angola, Venezuela, Nigeria, and Russia. Oil was selling in the low $50s in February, fell below $50 in early March, 2017, and rebounded in early April, 2017 to $52 a barrel. At the beginning of May, 2017, oil again had dropped to $45.5 a barrel and by June, 26-27. 2017, it was at the $43-$44 level.

     Nigeria provides an example of the devastating effect falling oil prices have had on an OPEC member. Banks are in trouble because of failing loans for investments in new local oil producers. Generating electricity is more costly. Currency controls have been imposed to limit the amount of foreign currency available to purchase imports and to foster local manufacturing; and the government has implemented a number of unsuccessful reforms to encourage unemployed urban residents to return to the farm (See the earlier post, "Nigeria's New Beginning.").

     Even with the OPEC agreement, it is feared oversupply will continue to dampen oil prices. US producers are in a position to increase output when prices rise and to shut down when oil is selling in the mid-$40 a barrel range or below. With higher prices, of course, more US shale oil production is also profitable.

Tuesday, November 22, 2016

Mixed Messages from Saudi Arabia

I like watching CNBC, because a station that follows the stock market has to keep up, not only with economics, but also with political and social trends. Following the U.S. presidential election, Prince Alwaleed bin Talal, chairman and controlling shareholder of Saudi Arabia's Kingdom Holding Company and one of the largest foreign investors in the US, told CNBC host, Jim Cramer, "We look at you (your country) as being the vanguard and being the leaders of the world."

     Prince Alwaleed reminded me of the time I began teaching a section on Medieval Italy by asking students to list what they knew about Italy. Roman Empire, pizza, pasta, and home of the Pope helped initiate a discussion of how fragmented the country was before unification in 1870. Now, I asked myself, "What do I know about Saudi Arabia?" Lots of oil, little water, home of 9/11 terrorists, Muslim, women not allowed to drive, considers Iran an enemy. I need to know more.

     The Kingdom of Saudi Arabia was not formed until 1932. In the 1950s, the US participated in the country's oil boom through Aramco, the Arabian American Oil Company.  US heavy machinery companies also participated in the oil-financed construction boom that transformed a desert into a wealthy country with ports, roads, schools, hospitals, and power plants.

     Despite these close US-Saudi connections, some Sunni Muslims in Saudi Arabia, as well as those from the enemy Shi'ite branch of Muslims in Persian Iran, harbored hatred of the US for its support of Israel against the Palestinians and resented the US presence in Saudi Arabia. At present, Iranian-backed rebels in Yemen fire long-range missiles into Saudi Arabia.

     Although Osama bin Laden's family came from poor South Yemen, his father won favor with Saudi's king and gained lucrative construction contracts. Bin Laden was born in Saudi Arabia and spent most of his early life there in Jeddah. Due to the Muslim terrorist activities he inspired from his later headquarters in Sudan, including a suspected attempt on the life of Egyptian President, Hosni Mubarak, Saudi King Fahd was pressured to revoke bin Laden's citizenship and passport in March, 1994. He left Sudan for Afghanistan in May, 1996.

     Fifteen of the 19 hijackers involved in the September 11, 2001 attacks on the US were Saudi nationals. Senior Saudi officials denied any role in the attacks and the 9/11 commission found no evidence linking the Saudi government with funding for the operation. Nonetheless, in September 2016, the US Congress passed the Justice Against Sponsors of Terrorism Act (JASTA) that gives the families of terrorist victims the right to sue governments suspected of playing a role in a terrorist attack on US soil. Congress overrode President Obama's veto of the bill and JASTA became a law which potentially undermines the close US-Saudi relationship and counter terrorism cooperation between the two countries.

     In Saudi Arabia, cuts in salaries and subsidies due to falling oil prices are understandably unpopular with the Saudi public. Saudi's Vision 2030 economic program is designed to reduce the country's dependence on oil revenues. On CNBC, Prince Alwaleed told Cramer that he is a member of a group looking into energy alternatives to oil.

     Besides the importance of oil in Saudi Arabia's future economy, succession to the Saudi throne also bears watching. Currently, King Salman of the House of Saud supports both Crown Prince Mohammed bin Nayef, his 57-year-old nephew and minister of interior who is next in the line of succession, and his son, Deputy Crown Prince Mohammed bin Salman, the 31-year-old contender who could leapfrog past his cousin. Speculation heightened when Crown Prince Muqrin bin Aldulaziz resigned his position in April, 2015, to make room for the Deputy Crown Prince.

Wednesday, October 19, 2016

Hot Topics Presidential Candidates Should Debate

Since tonight is the last presidential debate between the U.S. candidates for President, I turned to the Foreign Policy Association to see what Clinton and Trump should be discussing on TV today.
The topics the organization has selected for their Great Decisions program in 2017 are as follows:

  • The Future of Europe
  • Trade and Politics
  • Conflict on the South China Sea
  • Saudi Arabia in Transition
  • U.S. Foreign Policy and Petroleum
  • Latin America's Political Pendulum
  • Prospects for Afghanistan and Pakistan
  • Nuclear Security
Experts have written short summaries for each of these discussion topics at fpa.org. At the same site, you can sign up to receive Foreign Policy Association updates and to learn how to start a Great Decisions discussion group.

Looking back on the Foreign Policy Association's past discussion topics, such as the rise of ISIS, international migration, and Cuba and the United States, suggests this organization has useful insights on issues the world is likely to face in 2017.

Saturday, July 9, 2016

Africans Learn to Play the Game

Whether a child is playing Candy Land or trading Pokemon cards, an innocent young child can be tricked into trading a valuable card for one less useful. But as they learn how to play the game this kind of trickery no longer works. Africa has a lot of valuable "cards," and Africa will learn, and is learning, not to be fooled by those who take advantage of corruption, questionable land titles, promises of employment, and pretend friendships.

     Since Africa has valuable mineral deposits, the continent has been a target of questionable mining deals. After the Democratic Republic of the Congo seized First Quantum Minerals, the close relationship of an Eurasian Natural Resources Corporation (ENRC) partner with Congo President Joseph Kabila caused First Quantum to question the financial deal that enabled ENRC to purchase its seized copper assets. The legal dispute did not end after Luxembourg-based Eurasian Resources Group (ERG) acquired ENRC and strengthened its position in Africa's copper belt. In fact, ERG's stake in the former ENRC became even more valuable after the Industrial & Commercial Bank of China (ICBC) and China's Export-Import Bank provided $700 million to build the copper and cobalt project that made ERG the world's largest producer of the cobalt used in batteries. The UK's Serious Fraud Office (SFO) continues to investigate ENRC's original deal with the Democratic Republic of the Congo.

     In Hia, Ghana, Bishop Afoakwah walked through mounds of dirt and deep puddles to do his own investigation of a gold mine digging a massive pit on church land. Earlier, after one of the mine's earthmoving machines cut an electrical line that left the town without power, Bishop Afoakwah had met with local chiefs. He understood the church held a legal deed to the land that had been donated by a chief for the purpose of building a clinic and nursing school. During his meeting, the bishop learned various chiefs claimed to protect land for other chiefs and, taking advantage of the interwovern land rights and the high per ounce price of gold, a Chinese mine owner provided a payoff to secure a mining concession on the church's land. At the gold mine, workers said a "Mr. Kumar" owned the Hia site. Two Chinese engineers dashed into the bush, when they saw the bishop approaching. Ghana's Minerals Commission only has eight officials to investigate the country's illegal mining and an incomplete database of mining concessions. President Nana Akufo-Addo, who took office in January, 2017, put Ghana's Chinese miners on notice that he intends to enforce laws governing gold mining.

     Not only have gold mining operations destroyed agricultural land that has fed local farmers for generations, but heavy machinery has buried and severely injured untrained workers and health-damaging cyanide and mercury used to extract gold from stone have contaminated air and water. Farmers who sell their land to miners enjoy only a short-term gain that lasts a few years. Even if the land is returned to them after the mine is exhausted, the three feet of top soil are destroyed and the poor quality clay soil underneath cannot support a family. Yet, workers who fear losing salaries from mining jobs willingly risk their health and ignore environmental consequences. In fact, miners have thrown rocks at inspectors and even killed a fleeing official by rolling over him with a car.

     The path to legal mining in Ghana and in other developing countries is a difficult one. It requires learning "to play the game" without corruption and payoffs, with only those foreign investors willing to train employees and commit to some community development, and with activists like Bishop Afoakwah who are willing to take on lengthy court battles for damages done to the land by illegal miners. In the end, Africans will come to the same conclusion that Cardinal Peter Turkson, archbishop emeritus of Cape Coast, Ghana, did. "It is...unjustifiable for developing countries to fuel the development of richer countries at the cost of their own present and future."

     While Ghana continues to sort out land ownership issues affecting local gold miners, a group of 33 illegal gold miners in Uganda spent four years forming the first gold mine the UK's Fairtrade organization certified in Africa. The Syanyonja Artisan Miners Alliance (SAMA) now boasts: 1) a timbered pit unlike the dangerous open pits where dirt walls collapse, when heavy downpours swamp quarries and whole families of miners, and 2) gold extraction processes that employ proper handling of mercury and cyanide. SAMA's certified gold mine offers small-scale coop members the prospect of premium prices, savings, a local health center, and subsidized school fees. Now that the association pays taxes SAMA members find they have more government influence. SAMA also benefits from the "I Do" campaign sponsored by the Fairtrade Foundation's focus on commodities campaign in the UK, which alerts couples to choose Fairtrade Gold wedding bands.

Earlier posts involving Africa's resources include:

  • Wood: Don't Take Any Wooden Nickels, Uncover the Economic Value of Wood
  • Coffee: Invest in Africa's Agricultural Future; Coffee Prices Going Up; Allowances Going Down?
  • Cocoa: Become A Discriminating Chocolate Consumer, Chocolate Tasting Party and More; Chocolate's Sweet Deals
  • Palm oil: Can Small Farms End Poverty?
  • Oil: Nigeria's New Beginning
  • Diamonds: Diamond Flaws
Also see the earlier post: Why Will Africa Overcome Poverty?"


   
   

Friday, April 17, 2015

Nigeria's New Beginning

It was said that General Muhammadu Buhari's election as President of Nigeria on March 31, 2015 was a repudiation of the corruption and cronyism of Goodluck Jonathan's administration. So it was, but it also showed voters are able to overcome the constitutional changes and intimidation that leaders have used to retain their positions and power. Buhari's victory was a profile in persistence, since it took him four tries and 15.4 million votes to be the first candidate to defeat an elected incumbent, since Nigeria became an independent country in 1960. To his credit, Jonathan, who lost with 13.3 million votes, kept his supporters from launching a bloody protest over the election results.

    The Buhari-Jonathan presidential race was the latest challenge in Nigeria's troubled political history until Buhari began suffering from an undisclosed illness that has kept him away from his office for long periods of treatment twice in 2017. Nigeria's new tradition of alternating eight-year presidential terms between northern Muslim leaders and southern Christians would be tested if Buhari, a northern Fulani Muslim, were defeated by another northerner who would be eligible for an eight-year term. That would keep southerners out of the presidency for 12 years.
 (Richard Bourne's book, Nigeria: A New History of a Turbulent Century, provides a good description of Nigeria since independence.)

      Buhari served as Nigeria's military head of state until he was overthrown in a 1985 coup' He was committed to protecting his people from the Boko Haram terrorists who kidnapped nearly 300 teen aged girls and killed thousands of villagers. As Boko Haram was being driven out of Gwoza in the Borno State of northeastern Nigeria, the militant Muslims massacred captured wives and old men. Local citizens expected the group's departure was only temporary. They were right. Just hours after Buhari was sworn in as Nigeria's new President on May 29, 2015, an attack by Boko Haram killed 13 people in Maiduguri, the provincial capital of northeastern Nigeria, before government troops forced the Islamic rebels to retreat. Buhari announced plans to set up a military command center in Maiduguri. Nonetheless, during the Muslim holy period of Ramadan in 2015, over 200 Nigerians were killed. Some 44 people also died in two July 6 bomb attacks in Jos, a city targeted by Boko Haram in the past. In early 2016, only a little over a month after Buhari announced Boko Haram was "technically defeated," the Islamic terrorist group killed 80 people in the village of Dalorl, near Maiduguri. A new abduction of another 100 teen aged girls by Boko Haram occurred in the northeastern Yobe state in February, 2018.

     Although Nigeria's oil and natural gas reserves, production, and exports are among the world's best, problems have plagued the industry. To counteract the loss of government revenue from collapsing crude oil prices, in October, 2015 the state-owned Nigerian National Petroleum Corporation announced plans to renegotiate contracts with oil producers in order to get a bigger share of revenue from their deepwater fields. At the same time, oil corporations, also suffering from declining crude prices, are threatening to cut development spending on new deepwater projects in Nigeria. Sagging revenue from falling oil prices is just the latest problem for a government that has faced multiple oil-related challenges: pipeline sabotage resulting in oil spills that have contaminated water, farm land, and air; uncertainty about OPEC's regulations on production; underutilized refinery capacity; lack of capital for deepwater drilling and the infrastructure needed to capture natural gas burn off; and protests by southerners who have never felt they fully participated in the wealth generated by oil fields in the Niger Delta. Bille and Ogale, fishing and farming communities in the Niger Delta, are suing Shell for failing to protect oil pipelines that have caused two oil spills in the past five years. Although Shell agreed to clean up water and land in the contaminated area, the Anglo-Dutch firm has delayed compliance.

     Out of Nigeria's 170 million population, 110 million, including college-educated young people, are said to be unemployed. With nothing to do all day and lack of funds, free time leads to pregnancies that produce even more poverty.

     The government is committed to re-energizing Nigeria's agricultural sector which was the backbone of the country's economy prior to the 1970s oil boom. The attention Akinwumi Adesina paid to the agricultural sector when he was Minister of Agriculture and Rural Development in Jonathan Goodluck's administration is credited with helping to reduce food imports by a third, to increase food production by 22 million tons, and to generate millions of jobs.  By providing electronic vouchers for purchases of fertilizer and seed from private suppliers, the administration worked to move farmers beyond subsistence farming in order to diversify the economy and reduce dependence on oil.

    As of May, 2015, Adesina, the son of a Nigerian farmer and PhD degree holder from Purdue University in the US, became the new President of the African Development Bank.