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African Union Seat at a G-21? Better Stop the Exploitation of Africa

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The United Nations held a pre-Summit on Food Systems on July 26-28, 2021, as a primer for its first Global Food Summit coming up in September 2021. At this meeting, Jeffrey Sachs, American and popular Economist as well as UN Special Envoy on Sustainable Development Goals (SDGs), made an important intervention. Many Africans were excited that Sachs called for the African Union, representing 1.4 billion people, to have a seat at a G-20 that transforms into G-21. The media focus has been on the tokenism of an AU seat, instead of many cogent issues that Sachs eloquently repeated.

I use repeated because this thought system dated from a long line of agitators for independence of Africa and scholars such as Dr. Walter Rodney in How Europe Underdeveloped Africa, andmore recently, Dr. Arikana Chihombori-Quao in many speeches and YouTube videos beyond her Africa 101: The Wake Up Call. Arikana was fired as African Union Ambassador to the United States by the African Union. Many an African, like myself, saw the termination of Arikana’s appointment as punitive. She dared to point out that colonialists never left Africa and showed how they continue to rip-off and exploit Africa.

Lucky for Arikana to have only lost her job. Walter Rodney lost his life. He was assassinated in 1980 at age 38. I am not aware that the riddle of who killed Rodney was ever solved. However, this illustrious Guyanese lives on through his works as an unsung great African hero. The Nobel Prize will always elude the likes of Rodney. If his type had been recognized it would have raised questions on the orthodoxy that Africa’s problems solely rests on African shoulders.

It is extremely helpful and hope raising to have an American Economist from the US articulating and showing the import of external dynamics on the continuing underdevelopment of Africa. He asked the pre-summit meeting to go into the history of why the Democratic Republic of Congo (DRC) remains in turmoil and poverty. Though Arikana articulated on this theme of the West causing turmoil in Africa in order to extract resources, Jeffrey Sachs rightly noted the extractions of King Leopold of Belgium’s claim to ownership of the Congo through to the CIA’s assassination of Patrice Lumumba and installed Mobutu Seseseko. Arikana details several assassinations of other visionary leaders of Africa as well as overthrow of others by colonialists operating under a different mode of imperialism referred to as neo-colonialism.

Jeffrey Sachs rightly pointed to Glencore’s extraction of cobalt from the DRC without responsibility or accountability to the sovereignty claims of the government of the DRC but paying taxes at Glencore’s home country for the insurance of continuing protection under the continuing destabilization of peace in the DRC – after all, weapons are not made in the DRC.

Arikana had called attention to the exploitation of Africans through loans from the world arena – especially the West, including from the Bretton Woods institutions. Of course, the US led some European powers, at the end of the Second World War, to design a United Nations at the political level and the Bretton Woods institutions at the economic level not to have tea parties but to rebuild and control the world for their interests with the architect being the primus inter pares (first among equals). The equals at the time were limited to the United Kingdom and France. Token veto rights were granted to Kuomingtang China and the Union of Soviet Socialist Republics (USSR) now Russia. Of course, in terms of tokenism, Egypt, Ethiopia, Liberia, and apartheid South Africa had token presence at the foundation of the UN. They were only needed to boost the pretense of having a multilateral entity that is “united”.

The claims of Europeans to ownership of Africa were ratified by the act of the US going ahead to with the formation of the UN without insisting on self-determination and the need for all territories being free and at the table from the beginning. Why should the US, the primus inter pares, insist for a place at the table for Africans? It new that the Europeans would have accused it of interference and probably called attention to the unsalutary situation of race relations in America, a situation that had benefitted and built America on the back of black people over centuries?

For me, what is important are the billions of African people, not mere political representation by the AU Envoy at a G-21. Does having the AU envoy at the G-21 meeting go beyond the protocol of just having an African sited for the sake of formality? Would it not be a reference point for legitimizing tokenism for Africans?

Just as it was in the beginning, so it remains that neither the UN Secretary-General nor the Presidents of the Bretton Woods institutions dare to intervene and call for a stop to the continuing structured ripping-off and exploitation of Africans. African leaders are not exonerated either. Most of them rip-off their continent and stash away proceeds of their loot with the cover of major powers from the West. In effect, there is a commonality of interests between bad African leaders and external powers ripping-off Africa.

I am not excusing most African leaders from their failure in moving Africa forward in spite of the active efforts to assassinate any that showed promise on developing Africa. If some Asian leaders could be focused and wiggle through structured underdevelopment, there must be enough of eternal excuses for the failure of African leaders ensure improved lives for their people. African bad leaders should have recognized the thorny paths to development and avoided them by creating alternative routes. 

I doff my hat to Jeffrey Sachs even if he is more accommodative to African bad leadership. After all, African leaders cherish Westerners more. Nonetheless, I appreciate Sachs being current during his intervention by calling for vaccine equity as opposed to vaccine hoarding with respect to the global Covid-19 pandemic. Sachs noted that the US alone was able to raise 7 trillion dollars in loans -at zero interest- to fight the scourge when Africans neither raised a penny/cent nor a yuan. Hence, it was possible for the West to implement lockdowns with some little human face as opposed to what happened in Africa.

As usual, African leaders found it easier to go abegging for vaccine donations through the COVAX arrangement. I must be thankful to Western taxpayers that I got two doses of AstraZeneca vaccines through this modality even if European interests now say that the AstraZeneca vaccines produced in India will not have equal rights with those made in Europe and probably America.

Of course, Africans are naïve if they think that the little vaccines being received are out of love. Declaring the Indian version of AstraZeneca as not measuring up for ease of passage in Europe shows the long-term preferred interest on financial flows on vaccine purchases. This material interest is separate from the fear of Covid-19 mutants that are of concern to mankind in general. The relative abandonment of Africa on Ebola virus speaks volumes since this virus was not as virulent outside of Africa.

We should abhor tokenisms. Generally, they play on people’s intelligence. They also give false impressions, which in this case is the pretense that 1.4 billion Africans are brought on to the table. So, my apologies to Jeffrey Sachs for differing with his call for a stronger UN and at the same time wanting a seat for the African Union at the proposed G-21.

At the end of the Cold-War in 1990/1991, the weak countries called for a new world order in which the United Nations would be a stronger coordinator of our world for good. Boutros Boutros-Ghali got carried away and thought the call was for real. He learnt the hard way as the carpet was pulled under his feet and he became the only UN Secretary-General, so far, not elected for a second term. He over-relied on the French to save him by continuing to veto Kofi Annan with the hope that the decision would go to the General Assembly that would gang up against America and give him a second term. The French bargained and lifted their veto on Kofi Annan and history was made to have a black man at helms of the UN. Kofi Annan also thought he could be daring in his second term and say it truthfully as he saw it. He was almost fired. In summation, only the weak countries yearn for strong multilateralism.

From antecedents, what use is an African Union’s Envoy having a seat at a G-21 to join: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union? For me, not much.

Being at the table should not be because Africa has a population of 1.4 billion. Sitting at G-21 should be based on the summation of the material net worth of the African Union making worthwhile contributions. Slighting Nigeria, the G-20 has the token presence of South Africa. What food has the South African representation at meetings put on the table in Africa? What use would a ceremonial presence at the table be, without decision-making powers? Will AU presence stop Western companies from continuing with the underdevelopment of Africa? Will it remove the European resistance to having Africans manufacture vaccines through their sharing of knowledge? If anything, the token presence would legitimize an erroneous perception that Jeffrey Sachs is inadvertently selling: that of a multilateral G-21 would turn around and start to serve the developmental interests of Africans.

Power exists to bolster interests. Under Western competitive ideology as opposed to Yoruba “Omoluabi” (character plus integrity imbued with a we sharing spirit) or Zulu “Ubuntu” (I am because you are spirit), it would be naïve to expect that granting a seat to the African Union would see to the protection of African interests. It is a joke to call for higher taxation for the 2,700 billionaires of our world to allow an African child have access to safe drinking water or reduce maternal mortality rate in Africa not to talk of ensuring that Africans enjoy utmost freedom which I had put as an ideal situation of enjoying the summation of all the SDGs that Jeffrey Sachs advises the UN on.

I have no problem if the three billionaires wanting to create luxurious tastes and control space travels go to live in space and leave their billions behind with instructions to use their resources for realizing the SDGs as Sachs suggested in his intervention. But we know that the dominant ideology on earth does not support such orientation. Their respective billions would be invested for more material acquisitions irrespective of whether they need it or not.

By the way, does our world really need a G-21 when so many UN Agencies are doing their best but are deliberately underfunded as Jeffrey Sachs rightly noted? Should the League of Arab States (LAS); the Association of Southeast Asian Nations (ASEAN); the Organization of American States (OAS) etc., not be entitled to their respective seats at a G-24? More importantly, will Sachs suggestion not further undermine the United Nations? I am sure he and I are agreed for a stronger UN even if I know that such will never happen.

For me, Prof. Sachs could be of much help to the 1.4 billion people of Africa, probably as opposed to their bad leaders, if he directs a detailed study that builds on the thoughts of Walter Rodney, Arikana etc., to unravel the mechanisms of continuing ripping-off and exploitation of Africans by private interests actively supported by their respective national governments and the Bretton Woods institutions etc. Such knowledge can help towards the implementation of policies that bolsters the SDGs by a new set of purposefully recruited African leaders.

COURTESY: moderndiplomacy.eu/

Babafemi A. Badejo, Ph.D, Professor of Political Science/International Relations, Chrisland University, Abeokuta, Nigeria


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A Labour Government Should not Frighten the Horses

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The UK general election is likely to mean changes, but Gulf citizens need not be too worried.

By James Drummond

If the tension was killing you, now you know. If it wasn’t, then be aware that a general election in the United Kingdom will be held on July 4 – less than six weeks away.

For the hapless Rishi Sunak, it looks like a case of “If it were done when ’tis done, then ’twere well it were done quickly.” Polls indicate that after 14 years of conservatism, real or imagined, voters are likely to elect a new Labour government.

What does this mean for us here in the Gulf?

The six Gulf states are certainly exposed to Britain. The extent of GCC holdings in the UK is enormous, ranging from Qatari ownership of the Shard building in London, stakes in the Sainsburys supermarket chain and Barclays bank, to Sheikh Mohammed bin Rashid’s Godolphin stables in Suffolk.

Manchester City and Newcastle United football clubs are owned by Emirati and Saudi interests, respectively. Kuwait’s wealth is managed by the Kuwait Investment Office near St Pauls Cathedral.

Labour has been careful to detail very few policies (or hostages to fortune, as its strategists may see it), but last week, David Lammy, the likely new foreign secretary, outlined a further campaign against dirty money.

Britain is a “corruption services centre”, while London is a “hotbed of kleptocracy”, Mr Lammy said. He said that he wanted to reward whistleblowers and clamp down on “enablers” of financial crime.

Given the paucity of public announcements, Lammy’s speech is significant, because it implies that the incoming government is likely to act. Fighting financial crime is relatively uncontroversial and attracts cross-party support – although in the UK’s case with limited success.

British politicians have made similarly grandiose statements before. But after Russia’s invasion of Ukraine, London has moved particularly against Russian dirty money, and sanctioned individuals. It finally introduced an obligation mandating the disclosure of beneficial owners of property.

Overseas trusts are also now required to disclose their ultimate beneficial owners, and there is now greater transparency when registering entities at Companies House.

This seems to have had only limited effect, however. Last week Andrew Mitchell, the deputy foreign secretary, cited estimates that 40 percent of the world’s dirty money still passes through London.

Spotlight on Corruption, a non-governmental organisation, wrote in October last year that “major reform is needed to how lawyers and accountants, the property sector and company formation agents are regulated for money laundering.” Lammy may choose to take further action against these and other professionals.

Other so-called enablers include retired politicians, some of them in the House of Lords, who work as advisors to unsavoury actors. Labour could move to tighten disclosure, although several of its senior former members are likely to lobby against further transparency.

It is also possible that Labour will go further in taxing expatriates. In its limited public commitments, the party has promised to clamp down on “tax dodgers”.

Those with property in the UK already pay tax on rental income they receive, and worldwide assets are subject to Britain’s inheritance tax. Some Gulf Arab families with UK property have been caught by inheritance tax.

A government led by Sir Keir Starmer, the Labour leader, could go further, as the US does, in taxing worldwide income of its citizens, more than 200,000 of whom live in the UAE alone. The argument is that if you have the privilege of carrying the passport, you have an obligation to pay tax.

Another question surrounds nationalisation. Labour is committed to re-nationalising the railways for one, although the infrastructure is already under central government control.

But another target may – may – be England’s water supply network, which was privatised in 1989. Shareholders in various of the rump companies include the Qatar Investment Authority and Adia of the UAE.

The water companies have been the subject of a vociferous campaign, for allegedly paying their shareholders high dividends while neglecting maintenance and investment. It is possible that an incoming Labour government will nationalise the industry.

All that said, the primacy of the rule of law and respect for property rights remain strong in Britain.

Barratt, a mass housebuilder, reported earlier this week that London remains the top choice among world cities for UAE investors looking to buy overseas. The holdings of Gulf states and rights of Gulf citizens in the UK remain secure, even with a Labour government.

James Drummond is Editor-in-Chief of the AGBi

Courtesy: The AGBI.Com


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Kuwait’s Political Crisis Adds to Economic Uncertainty

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Kuwait’s latest standoff is deeply concerning for both the near and long term, writes Andrew Cunningham

The decision by Kuwaiti emir Sheikh Mishal Al-Ahmad to dissolve the country’s recently elected parliament just days before its inaugural session on May 14 presents overseas investors and Kuwaiti citizens with more uncertainty.

The situation raises concerns about the country’s economic prospects over both the short and long term.

Disputes and stand-offs between Kuwait’s emirs and its boisterous parliament are nothing new. Parliament has been dissolved, and the constitution suspended, numerous times over the past 40 years. The country has held four elections in the past four years.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

In March this year, rating agency Fitch described Kuwait’s fiscal and external balance sheets as among the strongest of any of the governments it rates.

But when we look at long-term trends, the picture is more complex and less secure.

Kuwaiti government spending remains overwhelmingly dependent on oil and gas revenues. The government has made almost no progress, over many decades, in diversifying the economy away from oil, or in reducing the huge burden of government salaries and welfare payments.

Oil and gas revenues currently account for nearly 70 percent of total income and, according to IMF projections, will continue to do so for the rest of the decade.

These revenues have served the country well in the past, despite the volatility of oil prices, but such overwhelming dependence looks foolhardy when consumers worldwide are striving to reduce consumption of oil and gas and investors and energy firms have pivoted towards renewables.

Nearly all of the Kuwaiti government’s non-oil and gas revenue arises from overseas investments and from dividends from state-owned companies. Tax revenues account for less than 1 percent of total government income.

Looking beyond the fiscal imperative to diversify the economy is the need to provide employment opportunities for Kuwaiti citizens.

No less than 84 percent of the Kuwaiti workforce was employed by the government at the end of 2022. It is hardly surprising that nearly half of government expenditure is allocated to the salaries of public employees.

Pressure for social spending will increase in the years ahead. A World Bank report, published last year, showed that levels of obesity and Type 2 diabetes were higher in Kuwait than in any of the other GCC countries and nearly double the average in OECD countries.

Partly as a result of this, the World Bank estimated that Kuwait’s old age dependency ratio – the number of people over 65 years old in relation to those of working age – will be nearly double that of its neighbours by 2040.

Kuwait is also a country that is being significantly affected, even today, by climate change. Temperatures during the summer can exceed 50 degrees, making Kuwait one of the hottest places on earth.

These are difficult and complex challenges, both economic and social, but they are hardly unique to Kuwait. That they are, in some cases, more acute in Kuwait than elsewhere is due to decades’ long procrastination and political paralysis.

The government’s General Reserve Fund, which held most of its liquid assets, was entirely depleted in September 2020, according to Kuwait’s own ministry of finance. With AA ratings, the obvious solution was to borrow money – Kuwait’s debt-to-GDP ratio is less than 5 percent. Yet the parliament has still not passed a so-called ‘Liquidity Law‘ that would allow modest issuance of foreign currency debt.

The parliament also held up the introduction of Value Added Tax (VAT), making Kuwait one of two of the six GCC countries not to fulfil a joint commitment to implement a minimum VAT of 5 percent.

Over the past four years, all three of the big international credit rating agencies have downgraded the government of Kuwait.

In their rating reports, all agencies cited a dysfunctional and slow-moving political environment that was reducing the country’s financial flexibility and delaying much needed economic and financial reform.

Politics matters.

It is unrealistic to think that after decades of enmity the ruling family and the parliament will soon form a harmonious working relationship.

But they do need to find some common ground that will enable them to start addressing fundamental economic and social issues while the country still has large financial reserves and strong credit ratings.

Time is running out.

Andrew Cunningham writes and consults on risk and governance in Middle East and sharia-compliant banking systems


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ICD and JSC Ziraat Bank Collaborate to Boost Uzbekistan’s Private Sector

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At the 3rd Tashkent Investment Forum, the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan took a significant step forward in their partnership to empower small and medium-sized enterprises (SMEs) and foster economic growth in Uzbekistan. The forum, held in the capital city of Uzbekistan, brought together key stakeholders from the public and private sectors to discuss investment opportunities and economic development strategies for the region. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is aimed at boosting the private sector in Uzbekistan.

During the forum, ICD and JSC Ziraat Bank Uzbekistan formalized an expression of intent to collaborate on various initiatives aimed at supporting SMEs. One of the key elements of this collaboration is the provision of a Line of Financing (LoF) facility by ICD to JSC Ziraat Bank Uzbekistan. This LoF facility will enable the bank to fund private sector projects as an agent of ICD, thereby providing SMEs with access to the necessary capital to initiate and grow their businesses.

The partnership between ICD and JSC Ziraat Bank Uzbekistan is expected to have a significant impact on the SME landscape in Uzbekistan. By equipping entrepreneurs with the resources they need to succeed, this collaboration will not only support the growth of individual businesses but also contribute to the overall economic development of the country. SMEs play a crucial role in driving economic growth, creating jobs, and fostering innovation, and this partnership will help strengthen the SME ecosystem in Uzbekistan.

JSC Ziraat Bank Uzbekistan, as a strategic partner for ICD, brings a wealth of experience and expertise to the table. As a prominent commercial bank with foreign capital, JSC Ziraat Bank Uzbekistan has a strong track record of supporting SMEs and promoting economic development. The bank’s partnership with ICD further underscores its commitment to advancing the private sector in Uzbekistan and its dedication to supporting the country’s economic growth.

ICD, for its part, is a leading multilateral development financial institution that focuses on supporting the economic development of its member countries through the provision of finance and advisory services to private sector enterprises. By partnering with JSC Ziraat Bank Uzbekistan, ICD is furthering its mission of promoting economic development and fostering entrepreneurship in Uzbekistan and across the Islamic world.

The LoF facility provided by ICD to JSC Ziraat Bank Uzbekistan is just one example of the many initiatives that the two entities are undertaking to support SMEs in Uzbekistan. In addition to providing financial support, the partnership between ICD and JSC Ziraat Bank Uzbekistan will also include capacity-building initiatives and technical assistance programs to help SMEs succeed in today’s competitive business environment.

Overall, the partnership between ICD and JSC Ziraat Bank Uzbekistan represents a significant step forward in supporting SMEs and fostering economic growth in Uzbekistan. By working together, these two institutions are helping to create a more vibrant and dynamic private sector in Uzbekistan, which will ultimately benefit the country’s economy and its people. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is expected to have a far-reaching impact on the private sector in Uzbekistan.


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