Archive for May, 2010
Saudis invest heavily in Ethiopian farm sector
By K.S. RAMKUMAR | ARAB NEWS
JEDDAH: Saudi trade and investment in Ethiopia is expanding. “The investment increase is particularly seen in the agricultural sector and is in line with Custodian of the Two Holy Mosques King Abdullah’s initiative to provide food security for the Kingdom. Agricultural lands being leased by Saudis have been increasing by the day in Ethiopia,” Ethiopian Consul General Tekleab Kebede told the community at the country’s national day celebrations at the consulate over the weekend.
Kebede said many Saudis and local companies had been signing contracts with landowners across Ethiopia to produce grains and other agricultural products. “Rice produced by a prominent Saudi company was presented to the king recently,” he said.
Saudis are allowed 100 percent investment in projects in Ethiopia. “They either lease plots of land or enter into deals in cooperation with local partners,” the consul general said. Such investments are now worth millions of dollars, he added.
“We have plenty of land, water and abundant labor, while Saudis have capital. We have been giving the message to Saudis that we complement each other in boosting our bilateral business, investment and trade volumes. After all, both countries have close geographical proximity,” Kebede said.
Kebede said the bilateral trade volume had exceeded $500 million, with the balance remaining in favor of the Kingdom due to heavy oil imports into his country. “The Kingdom remains our second trading partner, with our trade continuing to increase,” he said, adding that Saudi investors were prominent in his country and have been increasingly investing in agriculture, tourism, hotels, mining and manufacturing.
The consul general said a ministerial delegation belonging to agriculture and rural development had a successful visit to the Kingdom earlier in May. “They discussed with their Saudi counterparts in Riyadh and Jeddah new proposals related to livestock and meat exports to the Kingdom,” he said. “We have huge livestock potential. We have already been exporting livestock and meat, but our new thrust is in further strengthening our presence in the Kingdom’s food sector,” Kebede added.
The consul general said May 28, 1991 marked the end of 17 years of war, thus heralding peace and stability that resulted in the country’s march toward economic, social and political progress.
“Ethiopia is changing for the better, and the country is open for business and foreign investment,” he said and urged Saudis to take advantage of the “congenial” investment atmosphere.
EXIM India to open office in Ethiopia next month
In a bid to support Indian companies’ growing investments in East Africa, the Export and Import (EXIM) Bank of India will open an office in Ethiopia next month, officials said.
Ethiopia’s Minister of Finance and Development Sufian Ahmed and EXIM bank officials are expected to sign the agreement Tuesday, which will further boost ties between India and East Africa.
The bank and the Ethiopian ministry have been in negotiations for the last couple of months about the opening of the East African office in Addis Ababa.
The bank will open its office in a month, Indian embassy officials told IANS.
It will be the third office of EXIM bank in Africa. The bank has offices in Johannesburg and Dakar, responsible respectively for southern and western Africa.
In Ethiopia, EXIM has so far been active in disbursing loans for the construction of the Tendaho sugar factory and the expansion of two existing sugar factories.
The Indian government has accepted Ethiopia’s project proposal and offered a $640 million soft loan through EXIM bank for two expansion projects at the Fincha and Wonji sugar factories and to construct the giant new factory at Tendaho in Afar Regional State.
This is the largest single line of credit India has extended to a foreign country.
EXIM bank was appointed to execute the loan disbursement for Ethiopia in October 2007.
It is an Indian government-owned financial institution based in Mumbai and managed by a board with representatives from the government, Reserve Bank of India, Export Credit Guarantee Corporation of India (ECGC), a financial institution, public sector banks, and the business community.
The bank’s functions are segmented into several operating groups that include the Corporate Banking Group, which handles a variety of financing programmes for Export Oriented Units (EOUs), importers, and overseas investment by Indian companies; and Project Finance/Trade Finance Group that handles the entire range of export credit services such as supplier’s credit, pre-shipment credit, buyer’s credit, finance for export of projects and consultancy services, and guarantees.
The Indian government launched the institution not just to enhance exports from India but to integrate the country’s foreign trade and investment with the overall economic growth.
Since its inception, the Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment.
Source: Indo-Asian News Service
U.S. exports are up 17 percent this year.
Export
THE NUMBERS: U.S. export growth -
Average, 1949-2009 8.3%
Needed to double exports in five years: 14.8%
Actual growth, first quarter 2010 16.6%
WHAT THEY MEAN:
Where will America’s economic growth come from? How will unemployment go down? In last Friday’s Idea Lab, the DLC reviews the short list of options: with families saving, growth driven by home buying and shopping is less likely; as stimulus fades, government support for growth will decline. With strong exports the only choice, President Obama’s January call for doubling exports in five years reflects necessity as well as enthusiasm.
In dollar terms, to double in five is to go from $1.55 trillion in 2009 to $3.1 trillion by 2014. In statistical terms, it means raising America’s annual export growth to 14.8 percent, from the 8.3 percent average between 1949 and 2009. Ambitious goal! But with one quarter gone and 19 quarters left, exports are up 16.6 percent — manufacturing exports in particular have jumped — and we are on track to meet the president’s goal. So far, then, so good … but two points about this year’s growth raise questions about the future:
Awful base year: In 2009, the financial crisis cut American exports from $1.83 trillion to $1.55 trillion. This 15 percent drop was the steepest since the 34 percent crash in 1932. Since World War II, the sharpest export declines until last year were a 6 percent drop in 2001, and a 3 percent decline in 1983. The return of global growth makes fast export growth this year likely without policy help; afterward it gets harder.
European Crisis: By country, five big partners buy about 66 percent of American exports: in order, the EU, Canada, Mexico, China and Japan. Four of these five are buying lots more than they did last year. Exports to China and Hong Kong are surging, up 42 percent. Sales to Canada, Mexico and Japan are up respectively by 26 percent, 22 percent and 15 percent. European Union members, who buy fully 25 percent of American exports and 40 percent of services exports, are the exceptions – up only 1 percent this year. (And neighboring Russia, though still a small export destination, is down 5 percent.) The financial crisis erupting in Greece, and the accompanying fall in euro values, will make this all the worse, meaning we would need truly historic performances in other regions to meet the president’s goal.
So — a good start, but not one that will be easy to sustain for 19 more quarters, without some push from policy. DLC’s Idea Lab therefore says that with the big challenges of the administration’s first year met — emergency response to crisis done, health reform passed — it is time for a more ambitious trade policy. The National Export Initiative, based on export promotion and review of export control laws, is a good start but not enough; likewise multilateral currency diplomacy with China is an important part, but only part, of the effort. Beyond this: pass the signed FTAs with Korea, Colombia and Panama; rethink the anachronistic embargo on exports to Cuba; come up with clever initiatives for Europe, Canada, Japan and other rich-country markets; push for larger market-opening initiatives, in particular the WTO’s Doha Round, and Russia’s apparently reviving campaign to enter the WTO.
10 things African leaders should learn from President Obama
1. Be humble, respectful and people will give you a chance to hear you. Don’t simply demands respect from your people and expect to be given but lead by example, you know, “walk the talk.”
2. Be inclusive. Your tribe is not the only one allowed to share power and all the privileges.
3. Do not make your race or your tribe an issue for hate. But use them as a tool to allow others to discover who you are, your strengths and your weaknesses.
4. It is okay to disagree on key fundamental issues with your opponents. We are all different and these differences make us strong. At least start a dialogue on issues you agree on or share common concern. There is no need to start a war. But engage in a honest dialogue.
5. Change is good. Life is a changing process. There is no reason for you to be stuck on old ideology. Look around you! There is a new generation. Go out and meet them, have a dialogue and be open-minded because change is healthy, organic, natural and mostly feels good.
6. Be at the service of people who elected you. Remember their power. Invite them to your house, make them part of the government. Make them feel patriotic again and pride of their country.
7. As with change tolerance is also healthy, organic, natural and most of all chic.
8. Use “I” when taking responsibility for your dumb actions and never “We.” You might want to say “I mess up our country’s economy because of my unwillingness to be surrounded with people who have experience and knowledge on how to do things. But the buck stops here.” This will demonstrate your leadership and show how responsible you are.
9. Choose a role model. Someone you can look up to, someone who is not afraid to admit his or her failures, someone who is accountable, someone who respects human rights, freedom of expression, someone who understands the true meaning of words like democracy, fair election, power sharing, equality, poverty. Someone who knows when it is times to move on and let others with new ideas chip in…bottom line someone who fights for the people. They don’t have to be from your tribe…but sometimes it is just an African-American with a funny name like Barack H. Obama.
10. And, if you don’t have a role model to look up to then becomes one.
Corruption Carries High Cost, World Bank Says
By Mohammed A. Salih
Poverty is on the rise in Sub-Saharan Africa (SSA) and various forms of corruption threaten to undermine the impact of investments made to meet the Millennium Development Goals (MDGs) in the continent, said the World Bank in a report released Monday on Africa’s development.
The report says the number of people who live on less than two dollars a day has doubled from 292 million in 1981 to nearly 555 million in 2005.
Painting a gloomy picture of Africa’s state of development, the report says the SSA region presents the “most formidable development challenge” of the world. It says thousands of people are dying from preventable diseases on a daily basis, and HIV/AIDS and malaria continue to spread through the continent.
The report also highlights “pervasive” corruption in Africa in a 29-page essay elaborating on the subject. It focuses on “quiet corruption”, a term referring to the “the failure of public servants to deliver goods or services paid for by governments” that do not involve monetary exchange.
The report warns about quiet corruption’s “harmful long-term consequences” for Africa, saying it strongly marginalises the poor.
Although “ubiquitous” in Africa, the Bank says, because it is less “salient” and “noisy”, quiet corruption draws less public attention compared to big corruption.
As an example of quiet corruption, the report says that in some SSA countries, primary school teachers are not in school 15 to 25 percent of the time.
The problem has spread to the health sector as well, with deadly consequences. In rural Tanzania, four out of five children who died of malaria had sought medical attention from the country’s health facilities, to no avail.
The World Bank says a number of factors such as the absence of diagnostic equipment, drug theft, and absence of providers in health centres contributed to the children’s deaths.
In the agriculture sector, one major reason behind the low fertiliser usage among African farmers is the poor quality of fertilisers manufactured in the continent. Although manufacturers have the capability to produce good fertiliser, 43 percent of fertilisers in West Africa in the 1990s lacked the expected nutrients due to poor controls at the producer and wholesaler levels, the report says.
Referring to the pervasiveness of “quiet corruption”, the World Bank report calls the familiar “big-time corruption” – bribes and kickbacks to public officials – the “tip of the iceberg”.
While the World Bank regularly publishes reports on the state of developing world, it has been frequently lambasted for the role it has played in developing countries.
Doug Hellinger, executive director of Development GAP, accuses the World Bank of contributing over time to some of the current problems in Africa through its policies. Hellinger’s organisation works to promote economic justice across the South, a term referring to the developing countries.
“The Bank historically has been the facilitator for Northern corruption by changing the policy environment in these countries,” he told IPS. The term “North” refers to the world’s developed countries.
“Just the fact that the World Bank insisted on full implementation of the Structural Adjustment Programs (SAPs) and held back loans until they were implemented and the fact that these programmes such as privatisation and import liberalisation benefited Northern companies, it created an environment of corruption, it’s a corrupt practice,” he said.
SAPs are used to promote and implement free market policies, deregulation and privatisation in countries that borrow loans from institutions like the World Bank and International Monetary Fund.
Hellinger blames institutions like the World Bank for contributing to the inefficiency of health and education systems in the countries of SSA because “they have been the major institution for the cutting of budgetary support for health and education services” in those countries.
Africa has been a key focus of efforts to implement the MDGs set by world leaders in 2000. While the countries in the region are at different stages of development, SSA appears to have a long way to go to achieve the MDGs.
The MDGs include, among others, considerably reducing poverty, child mortality rates and halting epidemics such as AIDS by 2015. But many countries in SSA still fare poorly in some key areas on the World Bank’s Development Indicator. The overall GDP of the SSA’s 47 countries grew 5.1 percent, with Angola’s growth rate of 14.8 percent at the top and Botswana with a negative growth of -1.0 at the bottom. Zimbabwe has the highest adult literacy rate of 91.2 percent in the SSA, while Mali and Burkina Faso have the lowest with 28.7 percent.
In Chad, only nine percent of the population has access to improved sanitation facilities, while the access rate is 94 percent in Mauritius.
Liberia has the lowest primary enrollment rate of 30.9 percent and Sao Tome and Principe has the highest rate, at 97.1 percent.
Child mortality is also a serious problem, with 155 out of 1,000 children in Sierra Leone dying before the age of one, while in Seychelles, the rate is 12 per 1,000.
Pb Chief claimed the company’s oil spill ‘relatively tiny’
The BP boss has had plenty to say about the Gulf coast oil spill. Not all of it has been entirely diplomatic
By Tim Webb
BP chief executive Tony Hayward leaving a government meeting in Washington last week. Photograph: Pablo Martinez Monsivais/AP
You’d think that someone whose job is on the line might choose his language more carefully.
Tony Hayward, the beleaguered chief executive of oil giant BP, has claimed the company’s oil spill in the Gulf of Mexico is “relatively tiny” compared with the “very big ocean”.
However, earlier this week he sounded less sanguine when he admitted that the leak is being fought on three fronts: beneath the surface, on the surface and on the shore. At the “subsea” level, he said, this was the first time the industry had had to deal with any problems at this depth, and that there was a lot of “real-time learning going on”.
Hayward promised yesterday that BP would “fix” the disaster, which is on course to eclipse the 1989 Exxon Valdez incident as the biggest US oil spill in history. “The only question is we do not know when,” he said. That indicates little progress from last week, when he was unable to give a timescale for when the flow of oil would be stemmed. Nonetheless, he confidently declared on the Thursday before last that BP would “bounce back” from the setback.
This week he insisted that deep-water drilling would continue in the US despite the growing environmental and political backlash, and came up with this memorable analogy: “Apollo 13 [the unsuccessful third mission to the moon in 1970] did not stop the space race.”
Initially BP tried to palm off all responsibility on to Transocean, which owns the rig on which the blow-out happened, but Hayward conceded at the beginning of last week that BP was “absolutely responsible” for the oil spill.
Source: The Guardian
Bailouts are Not Enough: Is the Euro a Pipedream?
Euro
By establishing a 750 billion euro fund to bailout Greece and aid other struggling governments, Germany and other strong European states are chasing a dream–a single European currency and broader European unity–that may have no place in reality.
More budget crises will follow, if not in Greece then in Portugal, Spain, or perhaps Ireland or Italy, because the euro is simply not backed by a strong central government.
Although the currency is managed by a European Central Bank, European states have not ceded to the European Union
enough power to tax and spend.
Absent a central government that can tax citizens and businesses in richer nations, like Germany, to shoulder some of the costs of pensions, health care and other social benefits in poorer nations like Greece, fiscal stability in the less wealthy states, and a single currency, is simply not possible.
Since the late 19th Century, the Europeans have been two generations ahead of the Americans on social policy, and much more aggressive in assuring that each citizen, no matter his station in life, enjoys comprehensive health care and a significant measure of economic security.
With the commercial integration that followed World War II through the European Common Market, composed initially of only six nations, and the broader European Free Trade Area, which encompassed most of the non-communist states, public aspirations for benefits in poorer nations and regions, like Portugal, Greece and southern Italy, grew to rival those in richer states.
Politicians responded by expanding and enriching social safety nets but costs rose too, as doctors, teachers and the like, expected to enjoy salaries and benefits more comparable to their colleagues further north.
The price tag outran the ability of employers and governments to pay, and inflation and national budget headaches followed.
Until the euro was adopted in 1999, southern nations would let their national currencies gradually fall in value against the German mark and other currencies of richer nations.
That boosted exports and tax revenues, but the pensions paid by Portugal, Greece and others became worth less if spent in Germany and other northern jurisdictions. Conversely, these Mediterranean states became great places for Americans and northern Europeans to vacation and retire.
After 1999, national governments in Spain, Portugal and Greece, and to a lesser extent more prosperous Italy, faced the difficult prospect of telling their citizens they could not retire as young, enjoy the same health benefits or employment security as the wealthier French, Germans and Dutch.
Instead, these governments borrowed heavily and now face severe retrenchment and perhaps eventual bankruptcy.
The Teutonic austerity Germany and others will compel to bail out these floundering governments will shatter the myth that the welfare state can be provided equally across Europe, or Mediterranean states will simply quit the euro and take with them the Franco-German dream of European Unity.
Before we chasten our warm water friends too harshly for living beyond their means, remember northern reluctance to share wealth through a strong central government has much to do with their predicament.
In the United States, the states can’t print money and some spend more aggressively than others but most social benefits are substantially assisted by Washington, which can tax New York to subsidize Mississippi.
Unless Germans and others are willing to let Brussels tax them as necessary to equalize social spending between richer and poorer states, the euro will remain an uncertain adventure and European unity a utopian dream.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission
Source: AmericanEconomicAlert
Ethiopia Railway finally gets Chinese funding after Indian delay
Although the construction had been planned to commence several years ago, the project had been suspended due to lack of funding. Prior to the Chinese agreement, which was only announced last week, the Ethiopian government had invited a host of international railway companies to bid an engineering procurement contract on several occasions.
According to Hailemariam, government whip at parliament and board chair of the Ethiopian Railway Corporation (ERC), the Indian Government which was also invited to bid took too long to respond to the request. The ERC chair said the government had tried to obtain financing through various methods before the Chinese funding agreement.
Hailemariam Desalegn, has announced the government’s decision to commence the project late this year (2010), adding that priority will be given to railway lines running from Addis Ababa to Djibouti, Addis Ababa to Afar and West to Bedele from the capital.
The Djibouti line is a vital trade route; whilst the country’s major mineral resource areas are in Afar and Bedele, where potash and coal minerals are mined. Transporting these minerals by train, according to Hailemariam, is economically viable. Laying a one kilometer railway line requires an average sum of 40 million birr.
Allana Potash Corporation, a Canada-based company, recently announced that it had started exploration of potash at Denakil Potash Project in Afar region. Bedele is also one of the major sources of coal in the country, according to a study conducted by Coal Phosphate, an office under the Ethiopian Ministry of Trade and Industry.
Ethiopia has been considering the use of coal to help fill the energy supply gap.
Senior Chinese government officials will soon visit the Eastern African country to hold final discussions before the project kicks off.
“This project is one of the main strategic projects of the country within the coming five years”, Hailemariam said.
Source ENA
Five leaders invited to join G20 at Toronto summit
The leaders of Ethiopia, Malawi, the Netherlands, Spain and Vietnam have been invited to attend the G20 summit in Toronto next month, Canadian Prime Minister Stephen Harper said on Saturday.The five will join leaders of the permanent members of the Group of 20 industrialized and developing countries at the June 26-27 summit.
Canada, as host of the summit, announced the special invitees in a statement issued while Harper was traveling in Europe to consult with leaders about the G20 agenda.
The G20 meeting will follow a June 25-26 summit of the Group of Eight leading industrialized countries to be held in Muskoka, Ontario, north of Toronto.
(Reporting by Frank McGurty, editing by Vicki Allen)
crimes against humanity in post-election violence in Kenya in 2007-2008 should serve as a warning to others
By Wangui Kanina
NAIROBI, May 8 (Reuters) – An International Criminal Court investigation into crimes against humanity in post-election violence in Kenya in 2007-2008 should serve as a warning to other African states, the ICC chief prosecutor said on Saturday.
Luis Moreno-Ocampo is in Kenya to speak to victims of the ethnic clashes which erupted following a disputed presidential election, starting a process which could see influential politicians and businessmen from Kenya going to The Hague.
ICC judges have authorised Moreno-Ocampo to investigate the masterminds of the 2007-2008 unrest in which authorities have said more than 1,200 people were killed, several hundreds raped and more than 350,000 forcibly displaced.
“I think it’s important to investigate these crimes to ensure Kenya has a peaceful election in 2012. I would say that in the next year and a half, there may be 15 elections in Africa and we have to be sure these elections are peaceful,” he said.
“Kenya will send the signal to all these countries that (if) you commit crimes (against humanity) you can go to The Hague,” he told a news conference.
Ethiopia, Rwanda, Burundi, Tanzania and Uganda are some of the countries due to hold elections in the next two years.
Investigations are expected to last up to seven months and the trials to start in 2012.
VICTIMS’ HOPES
Kenya had promised to deal with the masterminds. But numerous attempts to kick-start the process floundered and many Kenyans doubt powerful individuals will be arrested and charged because of widespread impunity among politicians.
Moreno-Ocampo said he was in the country for five days to speak to victims of the bloodshed, church leaders, tribal leaders and local authorities, but would not be taking any statements just yet.
He said he has had full cooperation from the government and promises of more, including in arrests when needed.
He also said he was willing to speak to anyone who believed they had been identified as suspects on a list of 20 names he had previously submitted to the court.
“The investigation is just starting and we are collecting evidence and we have no one yet, suspect wise. We came back to listen to the victims, I have to represent them. I have to present the crimes they suffered to the judges,” he added.
He said he would speak to about 30 victims, and urged the government to provide security for witnesses.
Some Kenyans who lost their loved ones and property had high expectations of the chief prosecutor.
“The government seems to have forgotten us but we hope (Moreno-) Ocampo will make true his promise and arrest the people responsible for our sufferings,” said Beatrice Nyokabi, who still lives in a camp for the internally displaced.
Peter Otieno, who lost all his possessions during the violence in the Rift Valley town of Naivasha, said he was willing to meet Moreno-Ocampo.
“We have had sleepless nights and we now have hope that the people responsible for our suffering will be brought to book,” he told Reuters. (Additional reporting by Antony Gitonga in Naivasha; Editing by George Obulutsa and Myra MacDonald)
