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Senegal lines up $1.9b IMF bailout
Senegal has reached a provisional agreement with the IMF on a $1.9 bailout. If the deal gets final approval, most of the money will be disbursed over the next three years as part of an extended fund facility and extended credit facility.
The agreement came days after a Senegalese court handed Ousmane Sonko, one of the country’s primary opposition figures, a six-month suspended sentence that could jeopardize his planned presidential campaign, France24 reports. Sonko came in third in 2019’s presidential contest. In March, he was convicted of defaming a current government official.
Ouasmane Sonko on the way to his trial in Dakar in March. Photo: Guy Peterson, AFP
Senegal’s elections are scheduled for next February. Some international organizations have warned that authorities have already begun cracking down on journalists and government critics. Incumbent President Macky Sall has not announced whether he will attempt to run for a third term, which his opponents say would be unconstitutional.
Zimbabwe announces digital currency launch
Zimbabwe’s central bank introduced a new currency on Monday that will be significantly harder to tear: a digital token backed by gold. The currency will complement but not replace the Zimbabwean dollar, whose value has fluctuated significantly in recent years, the FT reports.
The digital token, which is backed by the country’s gold reserves, is intended to hedge against such currency volatility. In an announcement that was light on details, the Reserve Bank of Zimbabwe said it would allow holders of the paper currency to exchange it for digital tokens.
Zimbabwe’s central banker, John Mangudya. Photo: Dan Keeler/File
Zimbabwe has substantial gold deposits but the sector has been mired in controversy recently, in part because Al Jazeera published a documentary series detailing allegations of deep corruption and money-laundering. The news organization has also accused one of Zimbabwe’s top diplomats of being involved in a gold-smuggling scheme.
Ramaphosa affirms commitment to clean energy transition
South Africa’s President Cyril Ramaphosa this week reiterated his government’s commitment to weaning the country off coal, but stressed it would do so at a pace that didn’t threaten to undermine its already deeply flawed electric power system. In a speech to parliament, Ramaphosa rejected claims by opposition leaders that foreign lenders such as France and the US were dictating the pace of the transition to clean energy—and also slapped down claims, based on allegations by the former head of state power utility Eskom, that the ruling ANC party was “clinging onto coal” because its leaders were benefitting financially from it.
In late 2021, the southern African nation became the first country to sign up to a so-called Just Energy Transition Partnership—a collaboration with a handful of Western nations including the US, the UK and Germany aimed at rapidly ramping up developing nations’ renewable energy capacity while also ensuring universal access to affordable power. But in recent weeks, concerns had been growing that Ramaphosa’s party was pulling back from its commitment in the face of strong opposition by mining firms and others dependent on the continued existence of the conventional power sector.
South Africa’s President Cyril Ramaphosa during a trip to New York Photo: Dan Keeler/File
Ramaphosa reportedly described the deal, which comes with $8.5 billion in concessional funding, as “a great boon to South Africa.” In an interview with FMN, John Steenhuisen, leader of the biggest opposition party, said the JETP could help South Africa create a new industry supporting clean energy. “We could actually become the world leader in renewable energy,” the Democratic Alliance leader said.
Myanmar overshadows economic cooperation at ASEAN summit
Leaders of Southeast Asian countries urged an immediate end to the violence in Myanmar at the annual ASEAN summit, held in Indonesia this week.
Conversation at the summit, which was originally intended to focus on the region’s economic growth, was dominated by discussions about resolving the Myanmar crisis, Nikkei reports. The summit came days after an attack against an ASEAN humanitarian convoy in eastern Myanmar. ASEAN leaders condemned the attack.
An Indonesian soldier guards the Meruorah hotel in Labuan Bajo, Indonesia, ahead of the ASEAN summit. Photo: AP
Myanmar is a member of the bloc, but was not invited to the summit this year amid reports of atrocities committed by its ruling military junta. After seizing power in a coup in February 2021, Myanmar’s junta reached an agreement with ASEAN leaders to pursue a peace plan, but has made no indication of honoring that deal, Reuters reports. Meanwhile, international human rights groups such as Amnesty International have said that ASEAN’s approach to resolving the crisis is failing.
Extreme weather intensifies in Southeast Asia
An acute heat wave and high levels of air pollution combined to rock parts of Southeast Asia this week. Temperatures in Laos, Myanmar, Thailand and Vietnam reached record highs, and thick smog smothered many of the region’s cities. Local media reported that the heat wave has killed dozens in Myanmar, Radio Free Asia reports.
In recent years, temperatures in Southeast Asia have risen more rapidly than the global average, and the region is one of the world’s most vulnerable to climate change, according to the United States Agency for International Development. Scientists say heat waves and degrading air quality could become more common in the future, NBC News reports.
A woman attempts to cool herself outside Wat That Thong Buddhist temple in Bangkok this week. Photo: AP
If the trend continues, extreme weather could hobble the region’s economies by constraining the critical agriculture and tourism sectors, both of which are large contributors to GDP. The Asian Development Bank estimates that climate change could cause Southeast Asia’s GDP to fall by 11% within 75 years.
Pakistan to boost ties with Afghanistan’s Taliban amid unrest
Officials in Pakistan and leaders of Afghanistan’s ruling Taliban government have agreed to bolster bilateral trade, despite rising tensions on their shared border. As part of the deal, the Taliban will allow China to extend its Belt and Road Initiative into Afghanistan, Bloomberg reports.
The deal is a boon for Afghanistan, which has few trading partners and an economy that has tanked since the Taliban takeover in August 2021.
As officials hammered out the agreements, protests swept Pakistan after the police arrested former Prime Minister Imran Khan. On Friday, the country’s highest court announced that the arrest on corruption charges was illegal and granted Khan bail, the BBC reports.
Imran Khan leaving court on Friday. Photo: AFP via BBC
Pakistan’s economy has been in crisis since last year, buffeted by fallout from the Covid-19 pandemic, the Russian invasion of Ukraine and years of economic mismanagement. Meanwhile, negotiators are struggling to finalize a much needed $6.5 billion economic bailout from the IMF, CNN reports.
Uzbekistan to hold snap elections
Uzbek President Shavkat Mirziyoyev called for a snap election on Monday, a week after a referendum passed that will allow him to rule for an additional 14 years. The referendum, which passed with 90% of the vote last month according to government figures, amended Uzbekistan’s constitution to limit presidents to serving two seven-year terms. It also granted the 65-year-old Mirziyoyev, who has ruled since 2016, a reset on his time in office.
Uzbek President Shavkat Mirziyoyev at a CIS meeting in Russia. Photo: Sputnik/Alexei Danichev/ via Reuters
New elections are expected to be held on July 9, giving other candidates little time to mount campaigns. That might be a moot point: Experts note that Uzbekistan has never held an election deemed credible by international observers, the Diplomat reports. In 2021, Mirziyoyev was re-elected with over 80% of the vote, Deutsche Welle reports.
Such constitutional amendments have become common in post-Soviet states, Al Jazeera reports. The presidents of Belarus, Kazakhstan and Tajikistan have all extended their terms in recent years.
Syria readmitted to Arab League
After an emergency session on Sunday, the Arab League has readmitted Syria, 12 years after its membership was revoked in the wake of a crackdown on protests against President Bashar al-Assad, Reuters reports.
As part of a wider regional realignment, Saudi Arabia’s King Salman bin Abdulaziz has formally invited Assad to the next Arab League summit, which is to be held in Jeddah on May 19th. This week also saw Syria mend ties with its non-Arab neighbor Turkey, after a summit in Moscow jointly brokered by Iran and Russia concluded with the two neighbors agreeing on a “roadmap” to improving their relationship.
Syria’s President Bashar al-Assad. Photo via REUTERS
Syria’s readmission to the Arab League is expected to come at a cost, with reports of Arab leaders demanding concessions by Assad on refugees and drug trafficking, especially on the production and smuggling of the amphetamine captagon. On Monday, Jordan launched airstrikes against a captagon “drug baron” and an affiliated arms network.
Market uncertainty prompts Saudi IPO pullback
ADES International Holding, an oil and gas drilling operator owned by Saudi Arabia’s Public Investment Fund and other investors, pushed back its planned IPO to the second half of the year, Bloomberg reports. Oil giant Saudi Aramco also delayed the IPO of its energy trading unit, once expected to be the largest IPO of 2023, to next year due to expected difficulty in placing such a large listing in Riyadh amidst a fall in oil prices and broader concerns over economic growth.
An offshore drilling platform in Manifa, Saudi Arabia. Photo: Bloomberg
Aramco also scaled-back its plan to export so-called blue hydrogen, a fuel seen as potentially important in the global move toward renewable energy, due to difficulty finding buyers and scaling production. This reversal comes after a March announcement by the PIF sovereign wealth fund of a joint venture with Japan’s Marubeni on hydrogen production in the kingdom.
Rounding out a difficult week for PIF was the announcement that Lucid Motors, in which the PIF owns a 60.46% stake, suffered a larger than expected first quarter revenue drop and cut its 2023 outlook. Aramco also this week reported a 19% decline in first quarter profits compared to last year due to falling oil prices.
UN fundraising effort to remove oil from decaying tanker in the Red Sea falls short
A joint fundraising effort led by the UK, the Netherlands and the UNfell short of raising sufficient funds to remove oil from a decaying tanker, FSO Safer, which is currently moored off the coast of Yemen in the Red Sea. The UN estimates it has raised $105.2 million, but needs another $23.8 million in emergency funds to complete the first phase of the removal and an additional $19 million for the second phase of the project.
Constructed in 1976, the 1-million-barrel capacity vessel was converted into a floating oil storage facility off the Houthi-controlled port of Hodeida. The Safer was abandoned after Yemen’s civil war broke out in 2015 and has been left unserviced since, raising the risk of a significant oil spill, and prompting the UN to purchase the vessel and implement plans to remove its oil.
Ecuador signs trade deal with China
Ecuador has snagged a long-sought free-trade agreement with China, Ecuador’s foreign minister Gustavo Manrique confirmed in a text exchange with FMN. Describing the deal as a continuation of the government’s mission to get “more Ecuador in the world and more world in Ecuador,” Manrique said the agreement provided “a unique opportunity to promote our agro-industrial and food products, generate employment, attract investment and boost the country’s competitiveness.”
Ecuador’s foreign minister Gustavo Manrique. Photo via CGTN
In a 2022 interview with FMN, Ecuador’s external commerce and production minister Julio José Prado said securing a trade agreement with China was a high priority for the government of President Guillermo Lasso, in part to capitalize on strong demand there for shrimp, a key Ecuadorean export. “Our trade relationship with China is growing really rapidly, so a free-trade agreement with China is important…to put more shrimp in China [and] to allow us to export more products to China,” he said.
Chile elects right-wing council to draft new constitution
Chilean stocks gained on Monday after voters elected a right-wing council that is expected to draft a constitution that will maintain the country’s market-based economic model, the Wall Street Journal’s Ryan Dubé reports. The results were a major rebuff for leftist President Gabriel Boric from voters scared off by an earlier left-wing constituent assembly that proposed a sweeping overhaul to Chile’s political and economic system.
President Gabriel Boric preparing to cast his vote for the constitutional council over the weekend. Photo: Andres Poblete/AP
Boric’s popularity has also declined over his government’s handling of crime, immigration and a weak economy. Chile’s economy is expected to contract 1% this year, the only South American nation projected to post an economic decline, according to the IMF.
On Sunday, conservatives took 34 seats in the constitutional council, versus 16 seats for left-wing delegates and one seat for an indigenous candidate, according to the Servel electoral agency. The Santiago stock exchange rose 2.3% as investors became more confident that Chile wouldn’t make far-reaching changes to an economic model they credit for years of strong growth.
What We’re Reading
Nigeria looks to coal for money and energy despite net zero commitments (The Africa Report)
Sudan conflict delivers fresh blow to China’s African lending strategy (FT)
Somalia’s 18 months of reckoning as foreign forces start departing (The Africa Report)
Southern Africa bloc agrees to send troops to eastern DRC (Bloomberg)
Eskom chief visits China as South Africa seeks to shore up ailing power monopoly (FT)
US accuses South Africa of supplying arms to Russia (FT)
India’s $1 billion credit line to Sri Lanka extended by a year (BusinessToday)
Kazakhstan, Kyrgyzstan and Armenia in spotlight over EU–Russia ‘ghost trade’ (FT)
Thailand election handout pledges risk debt pileup, experts say (Nikkei)
Turkey’s Erdogan faces toughest test yet in landmark election (CNBC)
Saudi-backed group explores launch of English news channel to rival Al Jazeera (FT)
China’s local governments look to Middle Eastern funds for investment (FT)
Iraqis fly to nearby countries to get dollars as US cracks down on money laundering (WSJ)
Total-led consortium to start drilling off Lebanon coast (Reuters)
Iraq asks Turkey to resume oil exports as firms in Kurdistan region scale back (Al-Monitor)
Renewables help Romania become net energy exporter (Romania Insider)
Central banker to head Slovakia’s caretaker government in political crisis (FT)
Serbia stalls plan to ease citizenship rules for Russians amid EU backlash (FT)
Ukraine threatens to bar Moldovan imports amid grain dispute (Balkaninsight)
Bosnia approves negotiations for construction of two pipelines to deliver gas from Russia andAzerbaijan (Radio Free Europe)
Migration through Panama’s Darien Gap surges despite US plan (Reuters)
G-7 to help emerging economies move up supply chains for EVs, solar panels (Nikkei)