I talked with @africasacountry about the new nonalignment & polycrisis in global south
-policy induced global recession
-breakdown in West-China-Russia relations.
-societies boil coz of inflation
-explosive electoral politics of dollar debt crisis
podcast:africasacountry.com/2023/01/third-…
2/ Thanks to @africasacountry for interviewing me about my Nonalignment article where I argued stance of middle powers is a bargaining chip
Delhi, Jakarta, Brasilia, etc want tech transfer,military hardware etc. They want to play US & China off each other phenomenalworld.org/analysis/non-a…
3/ Uprising in Sri Lanka illustrates age of "polycrisis"
Mask - Corona crisis.
Bread - Food crisis
Fire - Petrol crisis
Banks - Dollar debt crisis
Debt default is right move for Ghana facing crippling depreciation. Once the success story for foreign investors, as they pull money out to the Core, it is facing Impossible choices between food, electricity & health of its citizens versus bondholders.
5/ Global debt crisis gets worse and worse as Fed hikes interest rates. Private dollar debt holders set to benefit. theguardian.com/world/2022/sep……
Economists write open letter to BlackRock asking them to take a haircut instead of profiting off Zambia’s debt. debtjustice.org.uk/wp-content/upl…
6/ Higher interest rates is blowing up the debt of the 55 most vulnerable countries in the world. Their growth was already whacked by climate & corona crisis.
7/"We may be entering a period where the growing cost of dollar-denominated capital will force African countries to embark on austerity programs of similar severity to those in the 1980s, which had ruinous results for African societies" ht @Alden_Youngphenomenalworld.org/analysis/pessi…
8/ 2023 is going to see a surge og countries defaulting on debt as bond payments come due. Can debtor cartels push IMF to provide liquidity at easy terms?
"if a country is underwater, pouring more water, getting more debt, is not the best way to help" imf.org/en/News/Articl…
9/ Kenya, Ethiopia, Ghana were the most important success stories in Africa. Yet their tax to GDP ratio's bases hardly expanded during boom
10/ Countries should default on their debt & focus on the interests of people rather than bondholders. Sri Lanka defaulted last year
Ghana has stopped payments on its eurobonds & bonds held by domestic creditors. I discuss politics of debt in interview africasacountry.com/2023/01/third-…
11/ In the interview, we discussed how countries in debt crisis are leveraging their nonaligned stance to get better restructuring terms from Western and Chinese creditors. Sri Lanka, Pakistan, Egypt are going to India, China, UAE for credit lines africasacountry.com/2023/01/third-…
12/ In our new Polyrcisis project we track what developing countries are doing to change existing world-order that's against them. They have shortages of money, stuff, technology. West denies them tech to make their own mRNA vaccines or IP-free green tech
13/ Will dollar hegemony weaken after 2022, asked @africasacountry
My answer: G7's Financial war on Russia has changed the calculations of every regional power with interests independent of Washington. Investor-blocs in middle powers will choose autonomy versus toeing the line
14/ Given perfect storm of inflation, monetary tightening, soaring energy and food prices, and debt crisis, we must be prepared for an extended period of global instability. @leee_harris on the UN report that is being read in non-Western capitals with fear prospect.org/world/developi…
15/ That US is the worlds largest producer of Oil is well known. That it produces same carbon emissions as all of Africa, much of central Asia,& South America combined is less known.
"The remaining 2C Carbon Budget is a development budget"-@KenCaldeira
16/ Societies boil when food prices shoot up. What happened after the last Crash - when over 4 dozen countries were disrupted - is a terrifying preview of the chaos that deregulated Chicago & London commodity markets create.
18/The answer to "Do you want to contain China with us?" is probably "yes". But the answer to the question, "do you want to contain China AND Russia with us?" is probably "no"
19/ Nonalignment stance has forced G7 to pay attention to ruffled feathers in G77 & compensate with tech/trade/$. In our Polycrisis panel @AvinashPersau15 pointed out that Loss & Damage at COP27 came about coz developing countries stuck together against US phenomenalworld.org/analysis/money…
20/ Yellen is visiting Africa after Chinese FM visit. "Partial debt reductions would allow a country to invest and grow and pay back some of the reduced debt
Lenders would get less if a country "falls into economic chaos" than if it can invest and grow reuters.com/markets/failur…
21/ Not just Yellen & China's FM visits. S Africa will hold mil drills with Chinese & Russian navies on February 17". Lavrov will visit Eswatini, Botswana & Angola. He returns in Feb to visit Tunisia, Mauritania, Algeria & Morocco. issafrica.org/iss-today/serg…
22/ Painful. "Monetary policy committees in Nigeria, South Africa and Kenya will likely proceed more gingerly in raising borrowing costs, while Mozambique’s is forecast to stand pat and Angola’s will probably remain an outlier and cut rates." ht @malingha bloomberg.com/news/newslette…
23/ How to #CancelTheDebt? Most bonds are governed by English or New York law.
@tim_jones6 suggests legislation in UK/NY to compel private bondholders to take part in debt relief for developing countries. Can Western progressives push legislatures? ft.com/content/889fec…
24/ "Two of the world's most powerful finance officials are visiting Zambia this week, a reflection of the growing concern shared by Western officials about how China and other creditors are handling the African country's debt." reuters.com/world/africa/v…
25/ Thirteen outside powers have 47 military bases in Africa. @FofackHippolyte protests how superpowers, view Africa exclusively through the prism of their economic & geopolitical interests. That undermines home grown solutions and regional integration. project-syndicate.org/commentary/afr…
26/ US Treasury to designate Wagner group as transnational criminal org. Next step could be US Sanctions on any country that have asked Russian military help against insurgents. Central African Republic, Libya, Mali, Mozambique... apnews.com/article/united…
27/ An empire by invitation? "Presidents Nyusi of Mozambique, Mohamud of Somalia,& Bazoum of Niger joined African Union Chair Mahamat in appealing for more US security & counterterrorism aid."
28/ Latest newseltter about to go out on @polycrisis in Africa in minutes. Western-Africa relations, inflation-induced social pressures, debt crises and electoral explosions...
29/ What 'scramble to Africa'?
It is a travesty, as @FofackHippolyte the director of African Export-Import bank points out, that Canada got more FDI in 2020 than fifty-four African countries put together
30/ US investment position is dramatically underweight Africa. Despite lawmakers seeing the continent as big player in the next century,& key to reviving sluggish demand, US plans to invest just $55 billion over the next 3 years phenomenalworld.org/analysis/dont-…
31/ Debt crisis gets worse
-Steep interest bill from Central banks raising rates
-Strong dollar means country pay more in weaker currency
-Higher import bills of food & energy
Result? Societies boiling & Political explosions. My chat with @africasacountry
32/ "True decolonization means overcoming intra-regional disputes to build lasting regional unity and sovereign integration among the peoples of the Global South ...in the spirit of Bandung" - @ecuarauz
33/ “Dollar power” has also given US governments the ability to use the world’s system of Dollar-denominated reserves to pursue its perceived national geopolitical interests—as seen in the recent decisions to freeze Afghan & Russian Dollar reserves"
Thread
34/Africa has a mountain of debt,estimated at $645 billion. Growth needs cancellation.
China has been adamant that multilateral development banks, as well as private creditors like BlackRock, which is the largest owner of Zambian bonds,accept losses too. phenomenalworld.org/analysis/dont-…
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The market: Electricity hungry BigTech created a credits "system is akin to buying the right from a fitter colleague to say you have cycled to work, even though you arrived by a car that runs on petrol." @CamillaHodgson ft.com/content/2d6fc3…
“The market will solve climate”
The market: Oil Pipelines are ESG and low carbon! This giant tub of ice-cream won't make you fat because the tub is made of zero-calorie material & by athletes.
Netanyahu assassinates Haniyeh in Tehran & Hezbollah’s Shukr in Beirut. We are on cusp of regional war in Middle East. Forces are being deployed, Defences readied, Redlines of targets communicated.
2/ In Israel's corner are US, UK, Egypt, Saudis, Jordan &Abraham Accord (informal milvalliance) with oil Kingdoms - UAE, Bahrain.
They have communicated to Israel that they will defend Israel if it is attacked by Iran axis but will not participate in a war initiated by Israel
3/ "US is expecting the anticipated Iranian attack may be similar to the barrage of ballistic missiles & drones launched against Israel on April 13...But this attack could be larger...including the possibility of a coordinated attack with Iranian proxies from multiple directions"
The vibe shift, on the ground, in swing state Wisconsin
" Kamala Harris electrified the crowd in her first campaign rally as presumptive Democratic nominee. "I haven’t felt anything like this in many, many years,possibly since President Obama’s first run" therecombobulationarea.news/p/in-west-alli…
For 2yrs, gap between sentiment & economics widen. Did Kamala end vibecession? @kylascan
"There's layers to the cake:
How people expect things to be (expectations)
How things are supposed to be (theory)
How things are (reality)"
2/ Ecology: With super hot oceans, we are very worried about this Atlantic hurricane season. THIRTY storms are predicted plus minus 5, depending on el nino
3/London, Zurich, Bermuda are home of reinsurance.
Insurance model rely on risks being 1 Uncorrelated 2 Calculable 3 Paid for by mkt returns elsewhere
But #globalwarming upends Insurance
It correlates risks (global!); creates catastrophic fat-tails; and crimps returns everywhere.
what reading one book by Brett Christophers does to a mf
‘while it is possible to prevent businesses from doing profitable things, it is impossible to make them do things they consider insufficiently profitable’. Why do all this 'market failure' nonsense ft.com/content/b2b6fb…
Brett Chrisopher's work on Rentier Capitalism has been eyeopening. Asset Managers like Blackrock now run the roads we drive on; the pipes that supply our drinking water; the farmland that provides our food; electricity & heat. Nice profile
Under capitalism, profit expectations drive companies’ invstmt decisions. Building solar/wind & selling the electricity they generate, however, generally is not a very profitable business What sort of returns do investors earn, asks Brett Christophers time.com/6958606/climat…
Yes, BJP still sets the terms in the Indian parliament. But it will not have the decisive electoral majority of 2019-2024 lok sabha where it ran bills with zero opposition or consultation. After this election it will have to respect India’s opposition and democracy
India's stock market slides. Their logic?
BJP not winning in a landslide -> forced to have a NDA coalition government that will inevitably have to be more pro-welfare
--> hence the BJP cannot do nakedly pro-rich liberal reforms --> Oops, sell sell sell
Adani's reversal tells you everything.
"In 9yrs of Modi’s tenure, Adani’s wealth grew from $8bn to $137bn. In 2022 alone, he made $72bn, which is more than the combined earnings of the world’s next 9 billionaires" ht @AnnPettifor