Category: political struggle
Fascism
| November 12, 2016 | 10:37 pm | Analysis, class struggle, Donald Trump, Imperialism, political struggle, socialism | Comments closed

Fascism

by James Thompson

Let’s examine Georgi Dimitrov’s classic definition of fascism:

Fascism has also been described as “the open terrorist dictatorship of the most reactionary, most chauvinistic and most imperialist elements of finance capital.” According to Georgi Dmitrov in a collection of his reports in 1935 and 1936 Against Fascism and War, fascism is “the power of finance capital itself. It is the organization of terrorist vengeance against the working class and the revolutionary section of the peasantry and intelligentsia. In foreign policy, fascism is jingoism in its most brutal form, fomenting bestial hatred of other nations.”

Let’s break down this classic definition into its key components:

  1. An open terroristic dictatorship of the bourgeoisie

The bourgeoisie represents the most reactionary sector of the population. The bourgeoisie displays astounding unity in its effort to fight for the interests of the bourgeois class. The bourgeoisie always fights against the interests of the working class. This is why the working class has been subjugated to abject poverty. The bourgeoisie is not shy about employing terroristic tactics to oppress the working class. Indeed, the bourgeoisie has been very effective in destroying any efforts to fight for the interests of the working class.

  1. A dictatorship of the reactionary sector of the population

Although the bourgeoisie represents the most reactionary sector of the population, they, the 1%, could not survive without the support of the general reactionary sector of the population. Currently, the bourgeoisie has the steadfast support of large numbers of sycophants, opportunists and revisionists. In the most recent electoral cycle (2016), 47% of people who voted expressed their support for extreme reaction.

  1. A dictatorship of chauvinism

Chauvinism is an expression of the belief of superiority of certain sectors of the population over others. The bourgeoisie inherently views itself as superior to everyone else. The bourgeoisie represents an extremely small sector of the population, however they have the support of large numbers of opportunists. In the most recent electoral cycle (2016), 47% of the population who voted expressed their support for extreme chauvinism.

  1. A dictatorship of imperialism

Imperialism is a strategy of subjugating the working people in other sovereign nations to the will of the bourgeoisie. It is a fight to the death for cheap labor, appropriation of natural resources and ultimately, global domination. Extreme chauvinism dictates hatred of other nations and minority sectors of the population. Terroristic tactics are used under fascist governments to destroy resistance and maximize profit for capitalist enterprises around the globe. Under fascism, working class and revolutionary resistance around the globe are mercilessly suppressed “by any means necessary.” The needs of working people around the upload are ignored and the demands of the capitalists receive first priority. “The ends justify the means” is the slogan of fascist perpetrators. Fascists also seek to confuse people by conflating fascism with socialism and/or communism. The differences between fascism and socialism/communism are stark and unmistakable.

  1. Finance capital

According to Wikipedia:

Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.[1]

Financial capitalism is thus a form of capitalism where the intermediation of saving to investment becomes a dominant function in the economy, with wider implications for the political process and social evolution:[2] since the late 20th century it has become the predominant force in the global economy,[3] whether in neoliberal or other form.[

Finance capitalism subjugates industrial production to the maximization of profits. In order to achieve the maximization of profits, Karl Marx has proven that the capitalists must seek the cheapest labor possible.

It is no secret that Donald Trump transported Polish workers to the USA in order to construct the buildings he owns. It is easy to surmise that his agenda was to secure the cheapest labor possible in order to complete his building projects.

The working class around the world is waiting to see if a Donald Trump administration meets all the criteria of fascism. The working class around the world is also considering its options to oppose fascism in all its forms. The recent demonstrations in the USA epitomize the possibilities for resistance. The question is “Will the working class be able to continue its resistance to fascist extremism?”

Africa/Global: Climate Threat, Action Tracks
| November 11, 2016 | 6:06 pm | Africa, Climate Change, Donald Trump, environmental crisis, Latin America, political struggle | Comments closed

AfricaFocus Bulletin
November 10, 2016 (161110)
(Reposted from sources cited below)

Editor’s Note

“Africa is already burning. The election of Trump is a disaster for
our continent. The United States, if it follows through on its new
President’s rash words about withdrawing from the international
climate regime, will become a pariah state in global efforts for
climate action. This is a moment where the rest of the world must
not waver and must redouble commitments to tackle dangerous climate
change,”  Geoffrey Kamese, Friends of the Earth Africa.

For a version of this Bulletin in html format, more suitable for
printing, go to http://www.africafocus.org/docs16/ren1611.php, and
click on “format for print or mobile.”

To share this on Facebook, click on
https://www.facebook.com/sharer/sharer.php?u=http://www.africafocus.org/docs16/ren1611.php

[This version of this AfricaFocus Bulletin sent out by email contains
only brief excerpts from each article. For more extensive excerpts,
read on-line at http://www.africafocus.org/docs16/ren1611.php; for
full articles go to the link cited in each case.]

There is no doubt that the election of Donald Trump poses an extreme
threat to action on climate change, as on a host of other
interconnected issues. But, in this case, as in many others, it is
important to remember that a U.S. president, no matter how powerful,
is only one of the forces affecting the outcomes.

Yes, this is a major setback, but the threat did not begin with
Trump and the struggles to combat it must and will continue – on
multiple fronts. While no one organization or movement can fight on
all fronts, those forces fighting for justice and for a future for
our planet must have a vision of a wider background than one U.S.
presidential election.

The context is not only the United States, but the world. And the
arenas are not only political (at multiple levels of government, and
even within the executive branch of the federal government itself),
but also technical, economic, and activist (from divestment to
protest sites such as the Dakota Pipeline). No one organization or
even movement can be on all fronts at once, but together we must
find ways to strategies embedded in a wider vision rather than
engage in fruitless debates about which action track is the “most
important.”

This AfricaFocus Bulletin consists of excerpts from a selection of
statements and articles illustrating the multiple tracks on which
action to combat the threat of global warming can and must take
place, globally, in Africa, and in the United States.

* The first two statements are reactions from climate activists to
the additional threat posed by the election of Donald Trump.

* The third highlights the continuing technical and economic success
of cheap off-grid and mini-grid solar in Africa, which is now
estimated to be reaching 10% of the 600,000 Africans living off
national  electricity grids.

* The next provides a summary of both the necessity and the economic
and technical viability of a comprehensive transition away from
fossil fuels, from Oil Change International and a coalition of
related organizations.

* The fifth is an open letter from climate activist groups to the
Equator Principles Association of banks committed to social
responsibility principles, calling for withdrawal of support for the
Dakota Access Pipeline.

* The sixth is an update from the International Energy Agency,
revising upwards its projections for growth of renewable energy
worldwide.

* And the last is a report from South Africa’s Council for
Scientific and Industrial Research (CSIR) noting that “new power
from solar PV and wind today is at least 40% cheaper than that from
new baseload coal today.”

For previous AfricaFocus Bulletins on the environment and climate
issues, visit http://www.africafocus.org/intro-env.php

Other background articles worth noting:

“There’s no way around it: Donald Trump is going to be a disaster
for the planet,” Vox, Nov 9, 2016
http://tinyurl.com/oturdlb

“10 Ways You Can Help the Standing Rock Sioux Fight the Dakota
Access Pipeline”

25 Snapshots from the Stillwater Pow Wow

++++++++++++++++++++++end editor’s note+++++++++++++++++

“Deep breaths. Now let’s plan the fight ahead,” 350.org, Nov 9, 2016

[Excerpts: full text at
https://350.org/deep-breaths-now-lets-plan-the-fight-ahead/]

Here’s what I’m keeping in mind right now:

* This is a global movement. It’s more important than ever to
remember our connection with people in literally every country who
are fighting the fossil fuel industry right now — many in the
toughest conditions imaginable. I believe in our collective power
like nothing else.

* The fossil fuel industry is in a fight for its life. When we
expose their lies, stop their pipelines, divest from their stocks
and take away their social license — they fight back. Their
investment in this election was no secret, and they’re going to
double-down in its aftermath.

* Local fossil fuel resistance is taking root everywhere. Not only
has the fight against the Dakota Access pipeline spread like
wildfire, but other campaigns against fracking, pipelines, and coal
are too many to name. None of us are giving up or going home today.

********************************************************

Global Community Must Unite Against Trump to Avoid Climate
Catastrophe

Friends of the Earth International

Joint Press release

9 November 2016

http://tinyurl.com/pe4u693

As news of Donald Trump’s victory in the US Presidential Election
reached Marrakech, climate justice groups gathered at the COP22
United Nations annual climate change talks reacted:

“Whilst the election of a climate denier into the White House sends
the wrong signal globally. The grassroots movements for climate
justice – Native American communities, people of color, working
people – those that are at this moment defending water rights in
Dakota, ending fossil fuel pollution, divesting from the fossil fuel
industry, standing with communities who are losing their homes and
livelihoods from extreme weather devastation to creating a renewable
energy transformation – are the real beating heart of the movement
for change. We will redouble our efforts, grow stronger and remain
committed to stand with those on the frontline of climate injustice
at home and abroad.. In the absence of leadership from our
government, the international community must come together redouble
their effort to prevent climate disaster,” said Jesse Bragg, from
Boston-based Corporate Accountability International.

“For communities in the global south, the U.S. citizens’ choice to
elect Donald Trump seems like a death sentence. Already we are
suffering the effects of climate change after years of inaction by
rich countries like the U.S., and with an unhinged climate change
denier now in the White House, the relatively small progress made is
under threat. The international community must not allow itself to
be dragged into a race to the bottom. Other developed countries like
Europe, Canada, Australia, and Japan must increase their pledges for
pollution cuts and increase their financial support for our
communities,” said Wilfred D’Costa from the Asian Peoples’ Movement
on Debt and Development.

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

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As prices plunge, Africa surges into clean, cheap solar energy

Maina Waruru

Mail and Guardian, 12 Oct 2016

http://tinyurl.com/nu7f9v8

Solar systems in Africa can now provide electricity for many
households for as little as $56 a year.

Last August Kenya won $36 million in support from France to put in
place 23 mini-grid systems in northern Kenya that will use solar
panels, wind or a combination of the two. (Bloomberg) Last August
Kenya won $36 million in support from France to put in place 23
mini-grid systems in northern Kenya that will use solar panels, wind
or a combination of the two. (Bloomberg) Until almost two years ago,
James Mbugua, a farmer living in Karai, a village on the outskirts
of Kenya’s capital, relied on kerosene to light his house, and a car
battery to power his television so he wouldn’t miss the news.

Part of the reason he couldn’t plug into the power grid, despite
being so close to Nairobi and in an area where electricity is
readily available, is that he lives on government land as a
squatter, with no papers to show he owns the 70-foot by 80-foot
parcel where he has put up a makeshift house.

Now, however, he has found an alternative: An affordable solar
system to power his home.

“I could not go on like that and had to seek an alternative way of
lighting my house and I discovered that with only $150 I could use
solar to light my house and power the television plus radio,” he
told the Thomson Reuters Foundation.

The money for the purchase, he said, came from a loan from his
community savings group, which asks members to contribute $5 a month
and then offers loans from that pot of cash.

The father of five grown children is one of the millions of people
across Africa who are taking advantage of falling prices of home
solar panel systems to get cheaper, cleaner and more reliable
energy.

According to the International Renewable Energy Agency (IRENA), home
solar systems in Africa can now provide electricity for many
households for as little as $56 a year – a cost lower than getting
energy from diesel or paraffin.

Of the estimated 600 million people living off-grid in Africa, about
10 percent of them are now using off-grid clean energy to light
their homes, according to IRENA statistics.

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

******************************************************

The Sky’s Limit: Why the Paris Climate Goals Require a Managed
Decline of Fossil Fuel Production

Greg Muttitt, September 22, 2016

Oil Change International, in collaboration with 350.org, Amazon
Watch, APMDD, AYCC, Bold Alliance, Christian Aid, Earthworks,
Équiterre, Global Catholic Climate Movement, HOMEF, Indigenous
Environmental Network, IndyAct, Rainforest Action Network, and
Stand.earth

http://priceofoil.org/2016/09/22/the-skys-limit-report/

September 2016

Press Release

A new study released by Oil Change International, in partnership
with 14 organizations from around the world, scientifically grounds
the growing movement to keep carbon in the ground by revealing the
need to stop all new fossil fuel infrastructure and industry
expansion. It focuses on the potential carbon emissions from
developed reserves – where the wells are already drilled, the pits
dug, and the pipelines, processing facilities, railways, and export
terminals constructed.

Key Findings:

The potential carbon emissions from the oil, gas, and coal in the
world’s currently operating fields and mines would take us beyond
2deg C of warming.

The reserves in currently operating oil and gas fields alone, even
with no coal, would take the world beyond 1.5°C.

With the necessary decline in production over the coming decades to
meet climate goals, clean energy can be scaled up at a corresponding
pace, expanding the total number of energy jobs.

Key Recommendations:

No new fossil fuel extraction or transportation infrastructure
should be built, and governments should grant no new permits for
them.

Some fields and mines – primarily in rich countries – should be
closed before fully exploiting their resources, and financial
support should be provided for non-carbon development in poorer
countries.

This does not mean stopping using all fossil fuels overnight.
Governments and companies should conduct a managed decline of the
fossil fuel industry and ensure a just transition for the workers
and communities that depend on it.

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

***************************************************************

An open letter to the Equator Principles Association

Civil society groups call for stronger climate commitments in EPs
and a halt to financing the Dakota Access Pipeline

By: BankTrack,Friends of the Earth US,others & RAN

For full version, including signatories and references, visit
http://www.banktrack.org/ – Direct URL: http://tinyurl.com/p4pwhpr

Nov 7 2016

[For contact on this letter: johan@banktrack.org)]   To:  Mr. Nigel
Beck, Standard Bank, Chair of the Equator Principles Association,
All Equator Principles Financial institutions (EPFIs)

Concerning:  Equator Principles climate commitments, and EPFI
financing of the Dakota Access Pipeline, for discussion at your
Annual Meeting and Workshop in London

Dear Mr. Beck,

The undersigned organizations are writing to you, as Chair of the
Equator Principles Association, to urge the Association at its
upcoming Annual Meeting in London to address two distinct and
important issues:

* Equator Principles Financial Institutions (EPFIs) must take long
overdue, concrete steps to strengthen their climate commitments.

* Our deep concern about the involvement of a substantial number of
EPFIs in the financing of the Dakota Access Pipeline (DAPL).

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

************************************************************

IEA raises its five-year renewable growth forecast as 2015 marks
record year (Paris)

International Energy Agency 25 October 2016

https://www.iea.org – Direct URL: http://tinyurl.com/h6x3qrc

The International Energy Agency said today that it was significantly
increasing its five-year growth forecast for renewables thanks to
strong policy support in key countries and sharp cost reductions.
Renewables have surpassed coal last year to become the largest
source of installed power capacity in the world.

The latest edition of the IEA’s Medium-Term Renewable Market Report
now sees renewables growing 13% more between 2015 and 2021 than it
did in last year’s forecast, due mostly to stronger policy backing
in the United States, China, India and Mexico. Over the forecast
period, costs are expected to drop by a quarter in solar PV and 15
percent for onshore wind.

Last year marked a turning point for renewables. Led by wind and
solar, renewables represented more than half the new power capacity
around the world, reaching a record 153 Gigawatt (GW), 15% more than
the previous year. Most of these gains were driven by record-level
wind additions of 66 GW and solar PV additions of 49 GW.

About half a million solar panels were installed every day around
the world last year. In China, which accounted for about half the
wind additions and 40% of all renewable capacity increases, two wind
turbines were installed every hour in 2015.

“We are witnessing a transformation of global power markets led by
renewables and, as is the case with other fields, the center of
gravity for renewable growth is moving to emerging markets,” said Dr
Fatih Birol, the IEA’s executive director.

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

*****************************************************

Comparative Analysis: The cost of new power generation in South
Africa

Chris Yelland

Daily Maverick, 9 November 2016

http://tinyurl.com/nbdwh3o

In a presentation dated October 14, 2016, the head of CSIR’s Energy
Centre, Dr Tobias Bischof-Niemz, and Ruan Fourie, energy economist
at CSIR’s Energy Centre, provide a comparative analysis for new
power in South Africa based on recent coal IPP bid price
announcements by Minister of Energy Tina Joemat-Pettersson on
October 10, 2016, and other data.

This study is seen as important for any review of the draft update
to the Integrated Resource Plan for Electricity (Draft IRP)
currently in progress by the Department of Energy (DoE).

The Draft IRP was to have been presented to the Cabinet last week,
and thereafter made available to the public for comment, but this
has since been delayed, with no further dates being given.

Since the previous due date of end March 2016, the request for
proposals (RFP) for the proposed 9.6 GW new nuclear build in South
Africa has also been further delayed from the revised issue date of
end September 2016.

However, it is known that in the meantime various stakeholder
structures reporting to the Minister of Energy are currently
reviewing the Draft IRP and its proposals for new renewable,
baseload coal and nuclear power, and making further input and
recommendations.

The CSIR study shows the significant reduction in the cost of energy
from wind and solar PV generation technologies in South Africa since
submission of bids for Window 1 of the renewable energy IPP
programme (REIPPP) on November 4, 2011, to those of the expedited
round of Window 4 on November 4, 2015.

The result of this reduction is that new power from solar PV and
wind today is at least 40% cheaper than that from new baseload coal
today.

[continued on-line http://www.africafocus.org/docs16/ren1611.php]

*******************************************************

AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with a
particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please
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La Riva: Solidarity with Standing Rock!

http://icp.sol.org.tr/americana/la-riva-solidarity-standing-rock

NODAPL_16301715940389.jpg

The Gloria La Riva for President Campaign stands in solidarity with the water protectors at Standing Rock and calls for an end to the construction of the Dakota Access Pipeline. La Riva calls for freedom for all those who have been arrested at Standing Rock including the 141 people arrested on Oct. 27; all charges should be dropped. Millions of people witnessed the arrests over social media; the police have exposed themselves as protectors of private property and the oil companies, and as agents of ongoing colonialism.

October 27 started out normally in the camps surrounding the Dakota Access Pipeline and Standing Rock Sioux tribal lands. People had begun morning prayers and activities but police began to converge on an area outside of the main camp known as Treaty Camp or bridge 1806.

By 11 am the police were reinforced with light armored vehicles and riot police. As resistance increased, the police attacked the people with concussion grenades, bean bag rounds, rubber bullets, and other weaponry. .

Police actions included attacking people in a sweat lodge at gunpoint and shooting at horseback riders via ATV. This resulted in a horse being so severely injured it had to be put down.

As protectors continue to stand up for clean water and energy, the voices of Native people have been heard across the world. The UN has called for the United States to end the Dakota Access Pipeline and people in many major cities are gathering in support of the NO DAPL stance of the Standing Rock Sioux Tribe. We can’t drink oil, keep it in the soil!

La Riva in solidarity with Standing Rock

http://icp.sol.org.tr/americana/la-riva-solidarity-standing-rock

Within the context of Vote Socialist in 2016 campaign, Party for Socialism and Liberation (PSL) issued a statement in soldarity with the water protectors at Standing Rock.

ICP, 2 November 2016

The Gloria La Riva for President Campaign of the Party for Socialism and Liberation issued a statement in solidarity with the water protectors at Standing Rock, demanding an end to the construction of the Dakota Access Pipeline. The campaign also demanded the release of all those who have been arrested at Standing Rock and that all charges be dropped.

As protectors continue to stand up for clean water and energy, the voices of Native people have been heard across the world. The UN has called for the United States to end the Dakota Access Pipeline and people in many major cities are gathering in support of the NO DAPL stance of the Standing Rock Sioux Tribe. We can’t drink oil, keep it in the soil!” says the statement.

For the full statement see the link.

A Vote for the greater good, not the lesser evil
| October 28, 2016 | 9:03 pm | Green Party, Jill Stein, political struggle | Comments closed

by James Thompson

As I drove through my working-class neighborhood, I spotted a political sign standing by itself. I did not see any other political signs in my neighborhood.

The sign read “Vote for the greater good, not the lesser evil.” It was a slogan of the Jill Stein campaign for president. This simple slogan was very inspiring.

In the chaos of the current political circus, the flaws of the system are thrust in every working person’s face. It is still unclear whether working people in the USA will be able to rise to the occasion and reject the arrogance and buffoonery of the Democratic and Republican parties.

On the one hand, we have a male chauvinist, misogynistic, xenophobic, anti-immigrant, pro-war billionaire. On the other hand, we have a mendacious, warmongering, anti-labor woman. These two leading candidates are a disgrace to the United States and the rest of the world. They are vying for the position of the President of the United States.

Some people have pointed out the paucity of political signs and/or bumper stickers in this current electoral cycle. These people have surmised that people are not exhibiting signs because they are ashamed to publicly support either candidate from the major political parties.

Working people need to remember that they do not have to vote for the lesser evil. There are third-party candidates, to include Jill Stein for president. Dr. Stein is a pro people, antiwar candidate and she stands in stark contrast to the two War Party candidates of the bourgeoisie.

We must accept the fact that the bourgeoisie are about to impose one of two possible fascists into the office of the President of the United States.

Since the CPUSA has deteriorated into a pathetic lapdog of the imperialistic Democratic Party, working people must find other ways of opposing impending fascism.

Working people can oppose the race to fascism by voting for Green Party candidates. A vote for the Green Party is a vote against imperialistic wars, international genocide, anti-communism and oppression of working people. A vote for the Green Party is a vote for universal healthcare, universal access to education, and housing for all.

There is no reason for progressives in the USA to vote for imperialism. There is every reason to vote against imperialism and for the Green Party. The future of humanity depends on the working class in the USA.

Congo (Kinshasa): “No Elections” Reports
| October 26, 2016 | 9:17 pm | Africa, political struggle | Comments closed

AfricaFocus Bulletin
October 26, 2016 (161026)
(Reposted from sources cited below)

Editor’s Note

Central Africa’s largest and most populous country, the Democratic
Republic of the Congo (DRC), is bordered by nine countries: the
Republic of the Congo, Central African Republic, South Sudan,
Uganda, Rwanda, Burundi, Tanzania, Zambia, and Angola. With the
exception of Zambia and Tanzania, none can claim to be a
consolidated competitive democracy. But most have at least managed
to hold presidential elections within the last two years. In
contrast, with this month’s postponement of the scheduled election
for 2016, the DRC has joined South Sudan and Angola in extending a
“no elections” scenario.

For a version of this Bulletin in html format, more suitable for
printing, go to http://www.africafocus.org/docs16/drc1610.php, and
click on “format for print or mobile.”

To share this on Facebook, click on
https://www.facebook.com/sharer/sharer.php?u=http://www.africafocus.org/docs16/drc1610.php

Few, if any, observers would venture to predict the next few months
and years, as domestic protest plus international criticism and
mediation has been met with state violence and continued stalling.
But the consensus view is “not good”; veteran commentator on central
Africa Colette Braeckman, for example, notes that “the milk has been
spilled” and warns that there is danger of “breaking the bottle” or
even “butchering the cow.”

This issue of AfricaFocus contains a diverse set of recent articles
and other links providing summaries, analyses, and background on the
current situation, without venturing into predictions or solutions.
Included below is an editorial from The Observer, the very short
commentary by Braeckman (in French), a report on a $413 million
bribery case judgement against the New York hedge firm Och-Ziff,
brief excerpts from an extensive Washington Post feature article on
“The cobalt pipeline: From dangerous tunnels in Congo to consumers’
mobile tech,” and a commentary from African Arguments raising the
question whether President Joseph Kabila can trust his security
forces.

Breaking News

Poll shows Kabila support at only 7.8%, October 25, 2016
http://tinyurl.com/jpzvg77

For previous AfricaFocus Bulletins on the Democratic Republic of the
Congo, visit
http://www.africafocus.org/country/congokin.php

Other sources particularly worth following for updates and
commentary

http://reliefweb.int/country/cod

http://allafrica.com/congo_kinshasa/

http://congoresearchgroup.org/category/congo-siasa/

http://www.lemonde.fr/congo-rdc/

Additional links of related interest

UN Human Rights Report, October 21, 2016
http://tinyurl.com/hl7b8xr

Statement by European Union, October 17, 2016
http://tinyurl.com/jsho57n

MONUSCO statement to UN Security Council, October 11, 2016
http://www.un.org/apps/news/story.asp?NewsID=55266

Le Monde background on violence in September, September 21, 2016
http://tinyurl.com/j84nb46

Reviews of The Democratic Republic of the Congo: Hope and Despair,
by Michael Deibert. African Arguments, 2013.
http://tinyurl.com/zt4t2jm and http://tinyurl.com/j39mhj2

++++++++++++++++++++++end editor’s note+++++++++++++++++

The Observer view on Congo and the failure of democracy in Africa

Observer editorial

The Democratic Republic of Congo is the latest country
disintegrating because a leader wants to hang on to power

22 October 2016

http://www.theguardian.com/commentisfree – Direct URL:
http://tinyurl.com/hx8mrtk

Two decades ago, the Democratic Republic of Congo, sub-Saharan
Africa’s largest country, was engulfed in what became known as
Africa’s Great War, a conflict that drew in half-a-dozen
neighbouring countries and raged for five years from 1998.

The conflict and its aftermath cost the lives of an estimated 5.4
million people, mainly from starvation and disease. This epic
disaster was largely ignored outside Africa, even though it was the
developed world’s insatiable demand for the DRC’s mineral riches
that helped to fuel it.

The war was halted, in part, by the introduction of a new
constitution and a democratic system of governance, replacing
decades of Mobutu Sese Seko’s brutal dictatorship. In 2006 Joseph
Kabila was confirmed as DRC president by popular vote, although the
fairness of the election was widely disputed. In 2011 he was re-
elected. Again, the results were hotly contested. A key factor in
their acceptance was his pledge to honour the constitution and
refrain from seeking a third term.

The DRC’s next presidential election is due next month. It isn’t
going to happen. A court last week upheld a request by the election
commission that the poll be postponed, ostensibly because voter
rolls are incomplete. A “national dialogue” by the ruling coalition
and involving fringe parties and civic groups, but boycotted by the
main opposition and Catholic church, also agreed a delay until at
least April 2018. In effect, Kabila and his security force backers
have compromised the constitution and the judiciary and engineered a
silent coup. His solemn 2011 promise has been broken.

This shameless subversion of the democratic process (parliamentary
and provincial polls have also been put off) was condemned by the
main opposition party, the UDPS, as a “flagrant violation”.
Rassemblement (Gathering), the multi-party opposition organisation,
reacted with fury and called a general strike last Wednesday.
Kabila’s attempt to cling to power threatens the DRC’s hard-won and
still precarious stability. Worse, it risks a return to national and
regional upheaval, violence and war. At least this time the world is
paying more attention. Maman Sambo Sidikou, the senior UN official
in the country, warned the UN security council last week that
“large-scale violence is all but inevitable” if the impasse is not
resolved. “The tipping point could be reached very quickly.” After
related clashes in Kinshasa last month, in which at least 50 people
died, the US imposed limited sanctions on army generals implicated
in human rights abuses. On Monday EU foreign ministers also agreed
to pursue possible punitive measures.

Matters are not as clear cut as they might seem. Kabila denies he
wanted the delay. Analysts suggest the president, thrust into office
after his father was assassinated in 2001, is a frontman for the
security apparatus. The opposition is fragmented and its readiness
to resort to protests often leads to violence. Concerns over
stability by countries such as France and Belgium are not wholly
disinterested, commercially speaking. But that the leadership of
another African country appears ready to ride roughshod over
democracy and laws is clear. The DRC has never had a peaceful
transition of power since independence in 1960. This is why term
limits are so important. Last year the presidents of Burundi, Rwanda
and Congo-Brazzaville overrode constitutional requirements that they
step aside. In Burundi’s case, violence and displacement resulted.
In Uganda, Yoweri Museveni looks determined to go on for ever.
Robert Mugabe’s Zimbabwean “presidency for life” and José Eduardo
dos Santos’s Angolan ascendancy provide further examples of endemic
disregard for democratic principles.

It would be a mistake to think Africans care less about self-
serving, corrupt and irresponsible politicians than Europeans or
Americans. The African Union has repeatedly stressed peaceful
political transitions in embedding democratic habits. Studies show
African voters value democratic systems but are increasingly
frustrated at their malfunctioning and wilful subversion.

Nigeria demonstrated last year how it could be done. But South
Africa, ruled since apartheid’s end by a single, overpowerful party,
is less of a shining light. Its reported decision to renounce the
International Criminal Court is another sign that too many African
politicians would rather jettison democratic and legal norms than
subject themselves to scrutiny and public judgment.

***********************************************************

Le Carnet de Colette Braeckman, Le Soir

Le lait est renversé

http://blog.lesoir.be/colette-braeckman/ – Direct URL:
http://tinyurl.com/hrvsb8y

October 18, 2016

On le pressentait, c’est désormais confirmé: le lait est renversé.
Les élections n’auront pas lieu cette année, ni même l’an prochain.
Ce qui a manqué? L’argent peut-être, la préparation sérieuse sans
doute, mais surtout la volonté politique. Le pouvoir est à blâmer
car tout a été fait (ou pas fait … ) pour qu’il soit impossible
d’organiser le scrutin dans les délais constitutionnels et qu’un
‘rabiot’ de deux ans au moins soit accordé au président Kabila.

Le lait est renversé, car la population gronde, qu’en septembre déjà
le sang a coulé. Poussés dans la rue, des jeunes ont brûlé vifs deux
policiers et entamé des pillages. Appelés en renfort, des militaires
ont tiré à bout portant et fait, au moins 50 morts. Et demain, que
va-t-il se passer? Le dialogue qui vient de se conclure avec une
partie de l’opposition fera-t-il rentrer le lait dans la bouteille,
réussira-t-il à calmer les esprits, repartira-t-on comme si de rien
n’était ? Certainement pas: les délais sont inacceptables, les
signataires ne représentent pas la totalité de la classe politique
et même l’inclusion des absents ne garantira l’apaisement. Comment
croire que l’association d’Etienne Tshisekedi, qui, l’été dernier
encore, négociait pour son fils le poste de Premier Ministre et qui
fut depuis Mobutu l’homme de toutes les volte face, suffirait à
calmer le jeu ?

Ce qui est sûr, c’est que si le lait est renversé, la confiance
rompue, il faut aujourd’hui veiller à ne pas briser la bouteille. Et
surtout ne pas risquer de dépecer la vache elle-même, ce Congo si
convoité, qui n’a pas encore échappé aux risques d’implosion et de
rebellions diverses. Les progrès enregistrés depuis quinze ans sont
loin d’être irréversibles, les acquis peuvent encore être annulés,
par la révolte populaire sinon par la guerre.

La tâche du futur Premier Ministre s’apparentera à celle de Sisyphe:
auprès du président Kabila, il devra exiger un engagement clair,
avec une promesse de retrait assortie de dates précises, et surtout
il devra avoir les mains libres pour diriger en toute indépendance.
Ce qui supposerait, au minimum, que des technocrates sans allégeance
politique soient nommés aux postes clés: les finances, l’économie,
l’Intérieur, la banque nationale. Rétablir la confiance, c’est aussi
assécher les réseaux mafieux, redistribuer plus équitablement les
ressources, privilégier le ‘social’. Même au bord du précipice, il
n’est pas interdit de rêver.

***********************************************************

The Och-Ziff Files: Who are The Congolese Who Benefitted?

Congo Research Group | Groupe d’Etude Sur le Congo

September 30, 2016

http://congoresearchgroup.org/ – Direct URL:
http://tinyurl.com/jopx7xg

This week, big news from the financial world. Och-Ziff, a leading
New York hedge fund that at its height managed $48 billion, has been
fined $413 million for over $100 million in bribes it paid to
government officials in Libya, Guinea, Chad, Niger, and the DR
Congo. Yes, that seems a paltry fine given the abuse involved and
how much it affected the countries involved––its CEO Daniel Och, who
is worth several billion dollars, will pay a mere $2.2 million, and
no one except a consultant will face jail time for now.

The story is huge for several reasons: It is a rare occasion the US
government is enforcing the Foreign Corrupt Practices Act for
corruption in the Congo, and it is a huge blow to one of the
behemoths of the hedge fund world. It is also the first time, to my
knowledge, that we have a solid paper trail proving that the senior
Congolese officials, including the Congolese president himself, were
direct beneficiaries of over $100 million in bribes from foreign
companies.

As part of their deal with the US Justice Department, Och-Ziff
provided a public plea of guilt (aka “deferred prosecution
agreement.”) You can read it at http://tinyurl.com/je3lhmr (please,
read it). It include Hollywood-ready details of how Och-Ziff dealt
with Congolese officials. It features three protagonists: DRC
Partner, DRC Official 1 and DRC Official 2 and says they both
received millions in bribes from Och-Ziff. For reasons that will
become obvious, you can substitute those names with Dan Gertler,
Joseph Kabila, and Katumba Mwanke.

Here’s an example of the detail of the document. In 2008, when Dan
Gertler was trying to wrest control of a mining concession from
Africo, a Canadian firm, one of Gertler’s associates texted him:

Hi [DRC Partner], … im with the main lawyer … in the Africo
story, he has to arrange with supreme court, attorney gemal [sic]
and magistrates, he wants 500 to give to all the officials and 600
for 3 lawyers cabinets that worked on the file in defense[lawyer]and
batonnier [lawyer]. the converstaion is vey tough. (while talking I
said to ask money to [one of the Akam shareholders], [the Akam
shareholder]said he cant because most of the money has to go to
·[DRC Official 2] . . . i dont know if he wants to provoke me or it
was something [the Akam shareholder]invented …) but they are now
at 1. 1 in total.

He’s talking about about thousands of dollars.

Shortly afterward, Gertler responds: “We can’t ‘accept a mid result
… Africo must be screwd and finished totally!!!!”

All in all, the legal document says that Gertler transferred $23.5
million of Och-Ziff’s money to Katumba Mwanke between 2008 and 2012,
and $10.75 million to a person who is most likely Joseph Kabila.
Bloomberg reported that Gertler (“DRC Partner”) paid a total of over
$100 million in bribes to Congolese officials.

How do I know that those are the people involved?

Bloomberg’s article clearly identifies Gertler through other sources
familiar with the case, and the document itself is fairly clear: “an
Israeli businessman [with] significant interests in the diamond and
mineral mining industries in the Democratic Republic of the Congo.”

It says that “DRC Official 2,” was “a senior official in the DRC and
close advisor to DRC Official 1. Since at least 2004, DRC Official 2
was an Ambassador-at-Large for the DRC government and also a
national parliamentarian.” It goes on to say, citing an Och-Ziff
employee, that he was Gertler’s “guy in the DRC.” Finally, it says
he died on February 12, 2012. There is no doubt that is Katumba
Mwanke.

As for DRC Official 1, it says that Katumba was his closest aide and
advisor. When Katumba died, Gertler sent a text message to an Och-
Ziff employee saying: “I’m fine … sad but fine … I will have to
help [DRC Official 1] much more now … tomorrow the burial will
take· place.” Again, I cannot imagine that being anyone but
Kabila––Katumba was not an aide to anyone else in the Congolese
government during this time. In private, US government officials
have confirmed this to me.

***********************************************************

The cobalt pipeline: From dangerous tunnels in Congo to consumers’
mobile tech

By Todd C. Frankel

The Washington Post

September 30, 2016

Direct URL: http://tinyurl.com/zo63cws

The sun was rising over one of the richest mineral deposits on
Earth, in one of the poorest countries, as Sidiki Mayamba got ready
for work.

Mayamba is a cobalt miner. And the red-dirt savanna stretching
outside his door contains such an astonishing wealth of cobalt and
other minerals that a geologist once described it as a “scandale
geologique.”

This remote landscape in southern Africa lies at the heart of the
world’s mad scramble for cheap cobalt, a mineral essential to the
rechargeable lithium-ion batteries that power smartphones, laptops
and electric vehicles made by companies such as Apple, Samsung and
major automakers.

But Mayamba, 35, knew nothing about his role in this sprawling
global supply chain. He grabbed his metal shovel and broken-headed
hammer from a corner of the room he shares with his wife and child.
He pulled on a dust-stained jacket. A proud man, he likes to wear a
button-down shirt even to mine. And he planned to mine by hand all
day and through the night. He would nap in the underground tunnels.
No industrial tools. Not even a hard hat. The risk of a cave-in is
constant.

“Do you have enough money to buy flour today?” he asked his wife.

She did. But now a debt collector stood at the door. The family owed
money for salt. Flour would have to wait.

Mayamba tried to reassure his wife. He said goodbye to his son. Then
he slung his shovel over his shoulder. It was time.

The world’s soaring demand for cobalt is at times met by workers,
including children, who labor in harsh and dangerous conditions. An
estimated 100,000 cobalt miners in Congo use hand tools to dig
hundreds of feet underground with little oversight and few safety
measures, according to workers, government officials and evidence
found by The Washington Post during visits to remote mines. Deaths
and injuries are common. And the mining activity exposes local
communities to levels of toxic metals that appear to be linked to
ailments that include breathing problems and birth defects, health
officials say.

The Post traced this cobalt pipeline and, for the first time, showed
how cobalt mined in these harsh conditions ends up in popular
consumer products. It moves from small-scale Congolese mines to a
single Chinese company — Congo DongFang International Mining, part
of one of the world’s biggest cobalt producers, Zhejiang Huayou
Cobalt — that for years has supplied some of the world’s largest
battery makers. They, in turn, have produced the batteries found
inside products such as Apple’s iPhones — a finding that calls into
question corporate assertions that they are capable of monitoring
their supply chains for human rights abuses or child labor.

[For continuation of this feature story: http://tinyurl.com/zo63cws]

**************************************************************

DR Congo in crisis: Can Kabila trust his own army?

September 20, 2016 by James Barnett

African Arguments

http://africanarguments.org – Direct URL: http://tinyurl.com/jopdtcy

James Barnett is currently a Boren Scholar in Tanzania, having
previously researched at the Africa Center for Strategic Studies at
the National Defense University in Washington, D.C. You can follow
him on Twitter @jbar1648. All views expressed are his own.

Despite protests intensifying with outbreaks of violence and deaths,
President Joseph Kabila has yet to call on his armed forces to
maintain order. He might regret it if he did.

The Democratic Republic of the Congo (DRC) is in the midst of a
protracted political crisis as President Joseph Kabila manoeuvres to
stay in power past the end of his second term, which expires this
December.

Kabila’s undemocratic machinations – most notably le glissement
(‘slippage’) or delaying of elections due to “logistical” issues –
have drawn the ire of much of the population with frequent protests
and strikes rocking the country since early 2015.

Yesterday, these reached a new pitch as protesters took to the
streets, angry at Kabila’s recent efforts to promote a “national
dialogue” – a move the opposition sees as a cynical ploy to
legitimise le glissement. In Kinshasa and Goma, violence erupted as
heavily armed police confronted protesters, leading to the deaths of
at least 17 according to the government and more than 50 according
to the opposition. Four people also reportedly died when the
headquarters of three different opposition parties were burnt down
in the night.

With further protests sure to follow and the possibility of
continued violence looming large, it is worth asking why Kabila has
yet to deploy the military. The answer lies in a deep history of
mistrust.

Preferred instruments of intimidation

The DRC is among the most heavily militarised states in Africa, with
its 70,000-strong Congolese armed forces (FARDC) deployed within the
country to combat various low-intensity threats. However, thus far
it has not been the army that Kabila has called upon on to “restore
public order” but the national police (PNC), the civilian
intelligence service (ANR), and, most notably, the Republican Guard
– Kabila’s personal security outfit.

According to an October 2015 report by the UN’s Joint Human Rights
Office, there were 142 human rights violations against members of
the political opposition that year. Tellingly, 69 of these were
carried out by the PNC, 24 by the ANR, and just 9 by FARDC. The
actual number of FARDC violations is lower, however, as the report
fails to note that the Republican Guard operates outside the army’s
chain of command.

Since he came to office in 2001, Kabila has steadily built up
civilian security forces, over which he exercises direct control, at
the expense of FARDC, the loyalty and effectiveness of which are in
doubt.

He has built the PNC into a veritable paramilitary force, most
notably in the capital city and opposition stronghold of Kinshasa
where the police chief, Kabila’s longtime ally Celestin Kanyama, has
earned the moniker espirit de mort (‘spirit of death’). He has
managed to effectively purchase the ANR’s loyalty, which has its
roots in the intelligence agencies of Mobutu Sese Seko’s rule
(1965-97).

And, most crucially to the survival of his regime, Kabila has
buttressed his presidency with a disproportionately formidable
Republican Guard. Nominally a simple presidential security outfit,
the Republican Guard enjoys full-division strength and receives
superior weapons and training than FARDC. The unit’s top officers
hail from the president’s home state of Katanga, an obvious ploy to
ensure the unit’s loyalty.

The existence of a disproportionately sized and financed
presidential guard is generally considered to be indicative of a
weak security sector and poor governance, and Kabila’s Republican
Guard is no exception.

FARDC’s patronage politics

The Congolese military took its current name and structure in 2002
in the midst of the Second Congo War. As part of the Sun City
Agreement, which sought to end the conflict through a power-sharing
arrangement, the largest rebel groups were incorporated into the
armed forces, including the Rwandan-backed RCD-Goma, the Ugandan-
backed RCD-Kinsangani and MLC groups, and various Mayi-Mayi ethno-
nationalist militias. In 2009 the CNDP, a formidable rebel group
formed to defend Congolese Tutsis, joined FARDC’s ranks as well.

FARDC thus acts as an instrument of political patronage to co-opt
rivals more than as a fighting force to provide security. By one
estimate, 65% of the FARDC are officers, 26% of whom are high-
ranking, creating an absurdly top-heavy organisation that begets
unnecessary bureaucracy and promotes impunity.

Combined with poor training, low pay, a critical lack of espirit de
corps, and a culture of corruption and politicisation that dates
back to independence – the Congolese military has attempted nine
coups since 1960 – the result is one of the least professional
armies in Africa.

Furthermore, despite pledging loyalty to the president, former
rebels brought into FARDC have frequently maintained separate chains
of command. The danger of this arrangement came to a head in April
2012, when former CNDP rebels defected en masse and took up arms
against the government, calling themselves the M23 movement.

With the help of the Force Intervention Brigade – the first UN
peacekeeping force in history with a strong offensive mandate –
FARDC eventually defeated the rebels in October 2013, but the
counterinsurgency highlighted strong turf wars within FARDC which
frequently hampered operational effectiveness.

Speculation remains that one of the FARDC’s most competent officers,
Col. Mamadou Ndala, was assassinated by rival commanders during the
counterinsurgency, highlighting the mistrust that permeates FARDC’s
ranks.

Wary of another rebellion, Kabila ordered a significant reshuffle of
FARDC in October 2014. The reshuffle is unlikely, however, to have
significantly tightened the president’s grip on the fractious
military. Many of those who benefited from the reshuffle were former
rebel commanders who had remained loyal to FARDC during the M23
rebellion. But these commanders sided with government not because
they felt any strong allegiance to Kabila, but rather because the
M23’s grievances were very specific to former CNDP combatants.

In the reshuffle, some of Kabila’s fellow Katangans also secured top
commands. Such moves exacerbate the debilitating patronage which
lies at the core of FARDC’s institutional weakness. Members of the
Republican Guard reportedly even threatened to stage a coup out of
disapproval of their new commander, forcing the president to hastily
reassign the general in question.

Who can restore order?

This week’s events suggest that Kabila will not be able to maintain
the status quo through half-hearted “dialogue”. This being the case,
we can expect the opposition to seek to resolve matters on the
streets through protests of a more frequent, widespread, and violent
nature than the country has heretofore experienced.

Regardless of whether Kabila can fully trust the Republican Guard
(and history from Caligula to Kabila’s late father teaches us not to
depend too heavily on bodyguards), the force would be too small to
confront a nationwide crisis, even with support from the police and
ANR. Indeed, reports indicate that in the latest round of clashes,
protestors managed to overwhelm police barricades, killing two
officers.

Kabila may thus be left with little choice but to call on the armed
forces. Such a deployment is liable to make matters worse for
everyone. Given the abysmal record of human rights abuses by FARDC
in the eastern Congo, such a deployment would almost inevitably lead
to wanton bloodshed. Given the fractious state of the Congolese
military, it could also backfire on Kabila’s regime itself.

*****************************************************

AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with a
particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please
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Ghana: New Debt Trap
| October 18, 2016 | 7:51 pm | Africa, Analysis, Economy, political struggle | Comments closed

AfricaFocus Bulletin
October 18, 2016 (161018)
(Reposted from sources cited below)

Editor’s Note

“Ghana is in a debt crisis. Despite having had significant amounts
of debt canceled a decade ago, the country is losing around 30% of
government revenue in external debt payments each year. Such huge
payments are only possible because Ghana has been able to take on
more loans from institutions such as the International Monetary
Fund (IMF), which are used to pay the interest on debts to previous
lenders, whilst the overall size of the debt increases. ”

For a version of this Bulletin in html format, more suitable for
printing, go to http://www.africafocus.org/docs16/gh1610.php, and
click on “format for print or mobile.”

To share this on Facebook, click on
https://www.facebook.com/sharer/sharer.php?u=
http://www.africafocus.org/docs16/gh1610.php

The downward spiral of debt, whether for individuals or for
countries, is commonly driven by loans that are risky and
unrealistic, a phenomenon for which both lenders and borrowers bear
responsibility. Structural vulnerability and misleading expectations
fuel a cycle in which interest payments increase the debt while
payments become increasingly difficult. A new report from the
Jubilee Debt Campaign, UK, with a coalition of non-governmental
organizations in Ghana, provides a clear illustration from a country
that is in many other respects a positive model for African
political and economic progress.

Nevertheless, the report documents, Ghana is again falling into a
debt trap. The causes include 1) continued dependence on primary
commodities with volatile pricing on international markets and (2)
bad judgement by both the Ghanaian government and by international
lenders pitching high-interest loans which can only be paid under
optimistic and unrealistic economic scenarios for the period of the
loan. For example, according to the report, there were three
successive $1 billion bond issues from 2013 to 2015, the latest at
an interest rate of 10.75%. Strikingly, the World Bank provided a
guarantee for the latest bond despite its own rules blocking such
risky loans.

This AfricaFocus Bulletin includes selected excerpts from the press
release, executive summary, and full report. The full report is
available at  http://tinyurl.com/zb8rm7u

For previous AfricaFocus Bulletins on Ghana, visit
http://www.africafocus.org/country/ghana.php

For previous AfricaFocus Bulletins on debt and related issues of
international capital flows, visit
http://www.africafocus.org/intro-iff.php

++++++++++++++++++++++end editor’s note+++++++++++++++++

“World Bank broke its own rules over high-interest loans to Ghana,”
Excerpt from Jubilee Debt Campaign, UK, press release, October 9,
2016

http://tinyurl.com/hcgx8mg

According to Sarah-Jayne Clifton, Director of the Jubilee Debt
Campaign, UK:

“The underlying causes of Ghana’s new debt crisis are that neither
borrowers nor lenders have learned from past mistakes, and that its
economy remains reliant on primary commodities, leaving it extremely
vulnerable to the recent global commodity price crash. The people of
Ghana should not have to suffer through yet another debt crisis
while lenders who speculated on their economy reap huge profits out
of high interest loans guaranteed by the World Bank.

Ghana’s debts need to be reduced or restructured to escape another
prolonged debt trap, while regulation of lending, more responsible
borrowing, and tax justice are essential to end this cycle of debt
crises once and for all.”

******************************************************

The fall and rise of Ghana’s debt : How a new debt trap has been set

October 2016

Integrated Social Development Centre Ghana, Jubilee Debt Campaign
UK, SEND Ghana, VAZOBA Ghana, All-Afrikan Networking Community Link
for International Development, Kilombo Ghana and Abibimman
Foundation Ghana.

[Full report and executive summary available for download at
http://jubileedebt.org.uk – direct URL:  http://tinyurl.com/zb8rm7u]

Executive Summary [excerpts]

Ghana is in a debt crisis. Despite having had significant amounts of
debt canceled a decade ago, the country is losing around 30% of
government revenue in external debt payments each year. Such huge
payments are only possible because Ghana has been able to take on
more loans from institutions such as the International Monetary
Fund (IMF), which are used to pay the interest on debts to previous
lenders, whilst the overall size of the debt increases.

Ghana’s crisis is the result of a gradual increase in lending and
borrowing off the back of the discovery of oil and high commodity
prices. More money was then borrowed following the fall in the
price of oil and other commodities since 2013, to try to deal with
the impact of the commodity price crash, whilst the relative size
of the debt also grew because of the fall in the value of the
Ghanaian currency (the cedi) against the dollar ($).

The underlying causes of the return to a debt crisis are therefore
the continued dependence on commodity exports, as well as borrowing
and lending not being responsible enough, meaning that new debts do
not generate sufficient revenue to enable them to be repaid.

At the moment, all the costs of the crisis are being born by the
people of Ghana, and none by the lenders. This is unfair. Lenders
should carry their share of the cost of any irresponsible lending,
and of the change in circumstance caused by the fall in commodity
prices.

Additional action is also needed in order to prevent a repeat of
Ghana’s crisis, including changes on the part of the government and
lenders to ensure that loans are well used, and that more of the
revenue generated by the economy is turned into government revenue
by taxation.

Commodity dependence

Ghana’s dependence on commodities dates back to colonialism. …
[almost 60 years after independence] the country’s economy remains
dependent on the export of just three primary commodities – gold,
cocoa and now oil, which together make up over 80% of Ghana’s
exports.

Debt crisis and debt cancellation

This dependence on commodities was the central factor underlying a
debt crisis which was common to much of the global South in the
1980s and 1990s. Global commodity prices fell at the start of the
1980s, rapidly increasing the size of foreign debt payments which
could only be paid out of foreign earnings such as exports. As
commodity producers across the world expanded production in order
to pay debts, on the advice of the IMF and World Bank, commodity
prices stayed low for over 20 years.

From the mid-1990s the global Jubilee movement called for debt
cancellation, which led to the creation and enhancement of two debt
relief schemes run by the IMF and World Bank, the Heavily Indebted
Poor Countries initiative and Multilateral Debt Relief Initiative.

As a result of this debt cancellation, Ghana’s government external
debt fell from $6.6 billion in 2003 to $2.3 billion in 2006.
Significant improvements in education and healthcare followed, due
to money being saved and invested, alongside good government
policies, enhancing basic service provision. …

Commodity and lending boom, and manufacturing decline

However, Ghana’s dependence on commodities continued, and as prices
rose, this created more willingness for lenders to give loans off
the back of a growing economy.

Gold and cocoa prices began to increase from the mid- 2000s, as part
of a global boom in primary commodity prices heavily influenced by
Chinese growth and demand, on top of continued high consumption in
rich North American, European and Asian economies. Furthermore,
Ghana discovered oil, and began to produce and export it from 2011.
Collectively these changes led to a booming economy. Between 2006
and 2013 Ghana’s GDP per person grew by 44%. However, over the same
time period the number of people living below the national poverty
line only fell by 10%, a slower rate than in the previous seven
years when growth had been far lower. The reason was that much of
the proceeds of growth went to those with the highest incomes. For
every 1 cedi increase in income for the poorest 10%, the incomes of
the richest 10% increased by more than 9 cedi.

This rapid economic growth led to an increased willingness and
desire of various institutions to lend to Ghana, with a
corresponding willingness to borrow. Loans increased steadily from
2008 to 2011. In total, between 2007 and 2015 there were $18.2
billion of external loans and $8.7 billion of debt payments,
leaving $9.5 billion of the additional borrowing to be spent within
Ghana.

There is little transparency on what the loans were used for, from
both the government and lenders. The IMF figures on public capital
formation show no relationship with the increase in lending,
suggesting that whilst some loans could have been used for
investment, the increase in lending did not lead to an increase in
investment.

One of the more transparent lenders is the World Bank. Whilst they
provide little information before loans are agreed – preventing
civil society, media and politicians from holding the government
and the World Bank to account – they do publish details during and
after projects. Our analysis of these reports shows that 25% of
outstanding debt from Ghana to the World Bank is for projects where
the World Bank judged its own performance to be less than
satisfactory.

Moreover, between May 2007 and February 2015 Ghana was assessed by
the IMF and World Bank to be at moderate risk of debt distress, and
since March 2015 of high risk. The World Bank is only meant to give
half its support to moderate-risk countries as loans, and the other
half as grants; to high-risk countries it is only meant to make
grants. Yet between May 2007 and February 2015, 93% of World Bank
funding to Ghana was in the form of loans. And since March 2015
when the World Bank was meant to stop giving Ghana loans, it has
agreed $1.16 billion of new loans or loan guarantees.

With high commodity prices and the beginning of oil production,
export revenues increased rapidly from 2008 to 2012. Yet there is
evidence that manufacturing was crowded out. As a share of GDP,
manufacturing production halved from over 10% in 2006 to 5% by
2014.

Commodity price crash and the new debt trap

A combination of the recent fall in the price of commodities and the
loans not being used well enough to ensure they could be repaid has
now pushed Ghana back into debt crisis.

In early 2013 the price of gold fell significantly, as did the price
of oil from the start of 2014. Since the start of 2013 the value of
the cedi against the dollar has fallen by 50%. This has caused the
dollar-denominated size of Ghana’s economy to fall from $47.8
billion in 2013 to $36 billion in 2015.  Because external debts are
owed in dollars or other foreign currencies, this has in turn
increased the relative size of the debt and debt payments. External
debt has grown from $14.7 billion in 2013 to $21.1 billion in 2016
(an increase of 44%), yet because of the depreciation external debt
has gone up from 30% of GDP in 2013 to an expected 56% in 2016 (an
increase of 87%). One response to these economic shocks has been
for the government to borrow more money, most visibly through $1
billion of bond issues each in 2013, 2014 and 2015, all under
English law. This money has mainly been used to make external and
domestic debt interest and principal payments, and to fund ongoing
government costs, plugging the gap created by dollar revenue being
lower than expected. Less visibly, there has also been significant
borrowing directly from external financial institutions.

The interest rates on the new debts are high, rising from 7.9% for
the 2013 bond issue to 10.75% for the October 2015 one. For the
October 2015 bond issue, the World Bank once again broke its own
rules by guaranteeing $400 million of payments if the Ghanaian
government fails to make them. The World Bank is not meant to give
such guarantees for governments assessed as at high risk of debt
distress, which Ghana had been for the previous seven months. The
high interest rate and guarantee mean that if the Ghanaian
government were to pay the interest every year until 2024, then
default on all other payments from 2025, including the principal,
the bond speculators would still have made $90 million more than if
they had lent to the US government. This means that the speculators
lent to Ghana believing that there was a high chance they would not
be fully repaid.

However, for the moment those speculators are being paid, in part
because since April 2015 the IMF has been lending more money which
is being used to meet debt payments, effectively bailing out
previous lenders. In return, the Ghanaian government has to cut
government spending and increase taxes, a process which is expected
to intensify further after the December 2016 elections. Under
current plans, government spending per person (adjusted to account
for inflation) will fall by 20% between 2012 and 2017.

The IMF estimates the Ghanaian government’s external debt payments
in 2016 will be 29% of revenue, well above the 18-22% it normally
regards as the upper limit of sustainability. Payments are expected
to stay well above 20% of revenue until at least 2035. This is only
considered possible due to a combination of very optimistic
expectations and requirements for large spending cuts and tax
increases, the very things the IMF has been criticising the
European Union for in the case of Greece.

The IMF predicts:

* Dollar GDP growth averaging 8.2% a year from now until 2035. Yet,
from 2008 to 2015 Ghana’s economy grew at less than half this rate
despite the discovery of oil. * Growth in government revenue in
line with GDP, collecting 19-21% a year. Yet, Ghana has only once
collected 19% of GDP in government revenue in a year (in 2011)
since IMF records began in 1980. …

* A fall in the average interest rate paid on external debt from
5.1% to 4.1%. Yet, interest rates on external private and
multilateral debt have been increasing, and dollar interest rates
are expected to increase as and when the US Federal Reserve
continues to raise rates. * A large primary budget surplus by 2017,
and continuing surpluses from then on. Yet, this will mean
continuing government spending cuts and tax increases, and will
take demand out of the economy, thereby reducing growth and risking
a classic debt trap where austerity leads to less growth, which in
turn increases the relative size of the debt, which leads to more
austerity and less growth, and so on.

Escapes from the trap

Debt is already placing a significant burden on Ghana’s economy and
society, and the country is at risk of falling back into an
extended debt trap, with an economic stagnation and possible
increases in poverty rates and failure to implement the Sustainable
Development Goals. Today’s crisis has resulted from a multitude of
factors: failure to diversify away from commodities, the government
and lenders failing to ensure loans were used productively enough,
falling global commodity prices, particularly gold and oil, and the
opportunism of speculators lending at high interest rates seeking
large profits.

The people of Ghana should not have to bear all the suffering of a
crisis caused by government policy, irresponsible lenders, and
global economic shocks, especially when speculators continue to
extract large profits from the country.

Additional excerpts from full report

Slowing progress in reducing poverty and increased inequality

During the ‘boom’ up until 2013, progress in reducing poverty slowed
down, and inequality increased.

The most recent data on poverty and inequality in Ghana comes from
the Ghana Living Standards Survey in 2013. This shows that the
number of people living in poverty fell from 7 million in 2006 to
6.3 million in 2013. The proportion of people living in poverty
fell from 31.9% to 24.2%. Poverty is defined as not having enough
income to meet all basic food and non-food needs, and was set at
1,314 cedi per adult per year for 2013 ($1,460 a year in Purchasing
Power Parity terms, 32 or $4 a day). According to a report for
Unicef, this means the average annual rate of poverty reduction
slowed to 1.1 percentage points a year from 2006 to 2013, down from
1.8 percentage points in the 1990s.

In total, the number of people living in poverty fell by 10% between
2006 and 2013. In contrast, over the same time period GDP per
person grew by 44%. In the previous seven-year period from 1999 to
2006, the number of people living in poverty fell by 14% whilst the
economy only grew by 18%. There has been an increasing divergence
between the pace of economic growth and the pace of poverty
reduction.

This divergence is because more of the financial benefits of growth
have been going to richer people. Average adult consumption for
Ghana’s richest 10% increased by 1,246 cedi between 2006 and 2013,
almost ten times more than the increase of 135 cedi for the poorest
10%. The ‘richest’ 10% is still a relative term however – the
average income of the richest 10% in 2013 of 5,789 cedi a year was
equivalent to $6,500 in Purchasing Power Parity terms. Within the
richest 10% there are still huge disparities in income and wealth.
Overall, inequality has been increasing on almost all measures (see
Table 1 below).

The New Debt Trap

Ghana is now at risk of entering an extended debt trap in which
government spending continues to fall with negative impacts on
poverty, inequality and economic growth, while debt stays high.
Meanwhile, high interest rates on private loans mean speculators
continue to take large profits out of the country.

The fall in oil prices from the middle of 2014 led to significant
falls in expectations of government revenue collection in Ghana, on
the part of the government, foreign speculators and the IMF. This
in turn led to sharp falls in the value of the cedi against the
dollar, thus increasing the relative size of debt payments.

Meanwhile, external debt payments began to increase from 2012 as
interest payments needed to be made on the recently taken out
private external debt, whilst interest and principal payments on
the multilateral and bilateral loans increased because of the
increase in such debts, and because grace periods 80 on loans given
after HIPC and MDRI came to an end (see Graph 14 below).

Initially these increased debt payments were met by more borrowing
of both external and domestic debt. In addition, in April 2015, an
agreement was reached with the IMF for $930 million of loans from
2015 to 2018, all of which are effectively being used to help meet
debt  payments, including the interest to private speculators.
These have been added to by other similar loans from the World Bank
and African Development Bank.

Projections beyond 2017.

The IMF is only able to predict that Ghana will be able to keep
paying its debt by making very optimistic predictions about the
future.

The IMF and World Bank DSA projects that external debt service will
continue to stay high for many years, still being almost one-
quarter of government revenue in 2035. However, it also projects
that overall external debt and total public debt will gradually
fall as a percentage of GDP. This assumes that growth in GDP
measured in dollars is high, averaging over 8% in nominal terms. It
also assumes there is a primary surplus every year, from a height
of 2.3% of GDP in 2017 to 0.9% by 2025 and 0.1% in 2035.

However, the predictions for dollar-GDP growth in the DSA have
already proven over-optimistic compared to the more recent April
IMF World Economic Outlook for 2016 and 2017, which, as noted
above, indicates that external debt will continue to rise.

The only way the IMF can predict Ghana’s debt will keep being paid
is by assuming:

* high growth in dollar GDP, averaging 8.2% a year

* the government collecting around 19-21% of GDP in revenue every
year, ie, revenue growing in line with GDP

* a fall in the average interest rate paid on external debt from
5.1% to 4.1% over the medium term

* a large primary surplus by 2017 of 2.3%, and continual surpluses
after, albeit at a falling proportion of GDP

Any significant failure in these assumptions could cause debt to
increase further out of control, ultimately costing the people of
Ghana more if it continues to be paid. Yet all of these assumptions
are either optimistic or require significant sacrifices.

Escapes from the debt trap

Urgent action is needed to ensure Ghana does not fall into a debt
trap in which government spending continues to fall with negative
impacts for poverty, inequality and economic growth, while debt
stays high.

To avoid this trap debt payments need to be cut. At the moment, all
the costs from irresponsible lending and borrowing, and the decline
in oil and other commodity prices, are falling on the people of
Ghana, and none of them on the lenders. Below we make
recommendations on how the debt trap can be avoided through lenders
sharing in the burden of failed lending and the external economic
shock of falling commodity prices.

In addition, to prevent this trap being created again, there needs
to be greater transparency and accountability in relation to debt
on the part of the government of Ghana and lenders, tax justice to
ensure that more of the revenue generated in Ghana stays in the
country and is available for social spending and public investment,
and a reorientation of the Ghanaian economy away from reliance on
primary commodities.

Below are proposals which we believe the government, political
parties and lenders should discuss with civil society both before
and after the elections in December 2016.

Conduct a debt audit

In this report we have attempted to identify how much debt there is,
who the loans were given by, what they were for and on what terms.
However, the lack of transparency with many loans means this is
difficult to do and much information is not publicly available.
Both the government and all lenders should release details of how
much is owed, to whom, on what terms, and what the money was meant
to be used for (if specified). This could be done through
establishing an independent debt audit commission.

Make lending and borrowing more productive and accountable

Ghana’s debt has increased rapidly without it being clear what the
loans were for, and how projects they were funding were being
monitored and evaluated.

Make adjustment fair

Any reduction in debt payments from measures below will help prevent
Ghana getting further stuck in a debt trap. But government finances
will still need to be improved to ensure sustainable finances which
allow poverty and inequality to be reduced and the Sustainable
Development Goals to be met.

The Ghanaian government should:

* Protect all vital public spending, such as on healthcare and
education, social services and welfare protections, and key
economic infrastructure.

* Increase tax revenues from large companies and rich individuals,
including by ceasing to grant tax waivers, including for public-
private partnership projects, and increasing the capacity of tax
collection authorities to ensure existing laws relating to issues
such as transfer mispricing are implemented.

Hold a debt conference

The change in oil price means that Ghana cannot make debt payments
wthout significant cuts in vital government expenditure, high
economic growth and continued high borrowing. It is unfair for the
suffering caused by the change in global economic conditions to be
born entirely by the people of Ghana and none by the lenders.

The Ghanaian government could call a conference of all its creditors
to negotiate the debt down to a level consistent with meeting the
Sustainable Development Goals. A UN body such as UNCTAD could be
contracted to advise on what a sustainable level of debt would be.
Negotiations have been held between the government and local banks
and some power sector debts, 98 but a much more comprehensive
approach is now needed across external debt.

Default or threaten to default on some of the debt

The Ghanaian government could stop paying some or all of the debt.
For most if not all creditors, it is the threat (or reality) of not
paying which will incentivise them to renegotiate the terms of the
debt. For instance, if some lenders did not respond to requests for
a debt conference, threatening to default or defaulting could make
them more willing to do so. Defaults on different types of debt
come with different implications which we discuss below.

Cancel unjust debts

The details of many loans are unknown, so no assessment can yet be
made of how well the money was spent and how responsibly the
lenders acted to ensure it was invested well. However, this report
has uncovered that the World Bank broke its own rules by disbursing
93% of its money to Ghana as loans when it should have been giving
half grants and half loans. Furthermore, at least $540 million of
debt owed to the World Bank is for projects where the World Bank
itself has said its performance was less than satisfactory (25% of
debt where there is an assessment).

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