Archive for November, 2012

Opinion&Analysis: Can SA make an impact in the Horn of Africa?

Eritrea and South Africa formally established diplomatic relations in 1994. Eighteen years later, the two states seem to be strengthening their bilateral relations.

In March, Iqbal Jhazbhay, the new South African ambassador to Eritrea, presented his credentials to President Issayas Afeworki. Significantly, Jhazbhay was warmly received by the president only a week after his arrival, which is a very unusual occurrence. This demonstrates the importance that Eritrea accords to South Africa.

Jhazbhay is a member of the international relations sub-committee of the ANC’s national executive committee. He is also a member of the ANC’s international relations rapid response task team, which steers party-to-party relations, including those with the ruling parties of South Sudan, Eritrea and Ethiopia.

In May, Eritrea introduced regular flights to South Africa and in July a South African business delegation visited Eritrea and was received at the highest level. This visit was meant to explore additional areas of trade and investment as Eritrea has large deposits of precious minerals such as gold and copper.

More significantly, in August, Osman Salih Mohammed, Eritrea’s Minister of Foreign Affairs, paid an official visit to South Africa, his second since President Jacob Zuma took office in 2009. During this well-publicised visit, he met Maite Nkoana-Mashabane, South Africa’s Minister of International Relations and Cooperation. They signed a declaration of intent and promised to work towards developing mutual business interests. They also exchanged views on developments in the Horn of Africa, including the stability of Somalia and the negotiations between Sudan and South Sudan.

For Eritrea, building a strategic relationship with South Africa is a top foreign policy priority. Firstly, Eritrea is animated by the long-term economic objective of reviving its declining economy by developing its mining sector, in which South Africa mining companies are increasingly engaged. For instance, Senet, a South African mining infrastructure company, has effectively developed the infrastructure of Bisha, Eritrea’s principal mine. Moreover, South Africa is one of Eritrea’s major trading partners. According to South African sources, in 2010 exports from South Africa to Eritrea amounted to R202m and consisted mainly of mining equipment.

Secondly, from an Eritrean perspective, building an alliance with South Africa has an added value. Indeed, following the loss of diplomatic and financial support from Egypt and Libya, Eritrea views South Africa as a useful African ally. South Africa is serving a second term as a non-permanent member of the UN Security Council. The Security Council had imposed sanctions on Eritrea in December 2009 over concerns that it supported insurgents seeking to destabilise Somalia. In December 2011 it tightened the sanctions in a resolution cosponsored by Nigeria and Gabon. Eritrea wants South Africa to use its membership to back the lifting of the Eritrean sanctions, which were called for by the AU.

Thirdly, Eritrea is expending great diplomatic energy to reengage with the international community, the AU and regional states. For instance, in August 2011 President Isaias made a three-day visit to Uganda.

Fourthly, Eritrea has taken a calculated risk to counter the perceived influence of Ethiopia in the AU. In July, it lent its support to South Africa’s Nkosazana Dlamini-Zuma, who subsequently was elected the AU Commission (AUC) chairperson.

Undeniably, Eritrean–South African relations have received renewed impetus as a result of this tightly contested AUC election. South Africa’s courting of Eritrea was partially informed by the short-term benefit of gaining Eritrea’s vote in the election. The election also unseated Jean Ping, the incumbent from Gabon, who had spearheaded the vote for the sanctions against Eritrea. According to sources in Addis Ababa, South Africa was visibly exasperated by Ethiopia’s backing of Ping. In fact, during the diplomatic campaign it mounted to get Dlamini-Zuma elected, South Africa faced stiff challenges from Nigeria and Ethiopia. These two states did not approve of South Africa’s breaking of the gentlemen’s agreement that the chairperson position should not be contested by the larger African states.

At the forefront of South Africa’s foreign policy seems to be the conviction that there ought to be an AU chairperson who can chart a distinctly independent course in African affairs and become the only voice of the continent on issues of mutual concern. South Africa felt the AU was marginalised in the conflicts in Ivory Coast and Libya. Moreover, the AUC chairperson election betrayed South Africa’s growing ambition to use the AU to enhance its soft power. Indeed, South Africa wanted to gain more visibility as the continent’s leader and more influence in AU decision-making.

Predictably, economic necessity, not altruism, motivated South Africa to befriend Eritrea. It wants to ensure that its companies get a sizeable share of Eritrea’s potentially lucrative mining concessions and agreements. Yet South Africa’s relations with Eritrea extend beyond AU power politics and economic motivations. South Africa has started focusing on what is happening in the stormy and polarised Horn of Africa and on achieving lasting peace and stability there.

The ANC’s international relations policy discussion document explains that “the damage that the current stalemate (between Ethiopia and Eritrea) has caused to the region and to relations between these related peoples is huge”. It demonstrates that South Africa is prepared to diplomatically engage with the two states and help them negotiate an amenable agreement that could break the stalemate and ultimately lead to an all-inclusive regional security arrangement.

However, it seems South Africa has not fully considered the deep-rooted factors underlying the conflict between Ethiopia and Eritrea. It also does not seem to have realised that a too-intimate embrace of Eritrea may raise Eritrean expectations unfairly. Its relations with Ethiopia could also become strained. Any leaning towards Eritrea, a near-pariah state in the region and continent, will inevitably upset the regional balance and further complicate the Ethiopian–Eritrean conflict.

Berouk Mesfin is a senior researcher with the Institute of Security Studies. This article was first published on http://www.issafrica.org

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Rich Nations let down the poor on Climate Change financing

Monday, 26 November 2012 By Ronald Musoke

The most detailed analysis to date of how well rich nations have kept promises to provide the poorer ones with funds to tackle climate change released Nov 26 concludes that they have collectively failed to fulfill eight substantive pledges.

Published by the London-based International Institute for Environment and Development (IIED) — the study comes as countries prepare for the latest round of intergovernmental climate-change negotiations, which begin in early December in Doha, Qatar.

The wealthier nations promised in 2009 to provide developing countries with US$30 billion by the end of 2012, and said this should be “new and additional” finance balanced between support for adaptation and mitigation activities.

In addition they made pledges about transparency, governance and the need to help the most vulnerable nations first.

But so far, only US$23.6 billion of the US$30 billion promised has been committed. And only 20 per cent of the fast start finance has been allocated to projects that will help poor nations adapt to a changing climate.

Less than half of the fast start finance is in the form of grants. The rest is loans, which means poor countries must repay with interest the costs of adapting to a problem they have not caused.

And rich nations have not provided enough transparent information to prove that their contributions are really new and not just diverted from existing aid budgets.

To examine transparency in more detail, the researchers evaluated donor nations across 24 measures. On the resulting scorecard, no donor nation scored more than 67 per cent.

“Without transparency about how and when rich countries will meet their climate finance pledges, developing countries are left unable to plan to adequately address and respond to climate change,” said co-author Timmons Roberts of Brown University in the United States, whose Climate and Development Lab led the research.

On these measures, Norway has performed best, providing five times its fair share. At the other end of the scale, both Iceland and the United States contributed less than half their fair share.

The broken promises will make it harder for developing countries to take seriously what richer nations say at the UN climate change talks, which take place in Doha from 26 November to 7 December.

However, the researchers say one way to restore trust would be for rich countries to channel their climate finance through funds that the UN Framework Convention on Climate Change (UNFCC) set up as they have a governance structure with equal representation from developed and developing nations.

Also critical will be to fulfill the US$30 billion promise by the end of the calendar year, and to ensure that this money is delivered to support projects in a timely manner.

This is something that, in 2010, all rich countries agreed should be a feature of funds through which they channel their climate finance. Yet, so far, rich nations have channeled only two per cent of the climate finance through these UNFCCC funds.

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Susan Rice: Qualified

by Brent Budowsky

U.N. Ambassador Susan Rice is qualified to be secretary of State and if nominated should be confirmed. The attacks against her are grossly unfair. In my new column “Petraeus: Lessons Learned,” I suggest that war and peace should never be partisan matters, that when America goes to war we should go “all in” and if we are not “all in” before the decision to wage a war, we should not wage that war.

This is why I (along with many commanders in the Army and Marine Corps) advised AGAINST going to war in Iraq. Regarding Benghazi, there should be independent investigation and accountability but not witch-hunts or Watergate committees, which embody the brand of politics voters rejected in the elections of 2006, 2008 and 2012.

Ambassador Rice did absolutely nothing wrong on Benghazi. She appeared on television and repeated the intelligence information she was given. I know far more about intelligence matters than most here, more than I am even allowed to publicly discuss, from earlier presidencies. Ambassador Rice was sent to give interviews and gave them; she was given intelligence information and spoke honorably about what she was told. Whatever mistakes were made were not her responsibility. She is not culpable as former Secretary of State Condoleezza Rice was when Rice spoke of “mushroom clouds” involving the alleged WMD in Iraq.

I did not oppose Rice’s nomination to be secretary of State and Senate Democrats joined Senate Republicans in confirming her. Senate Republicans should join Democrats in confirming Ambassador Rice if President Obama nominates her.

I warn Senate Republicans if they threaten to filibuster a Cabinet nomination for unfair partisan reasons they will guarantee a Senate majority will move to end these abuses of filibusters once and for all.

Let me emphasize as well that in my opinion, the most able and qualified person in America to be secretary of State is Senate Foreign Relations Committee Chairman John Kerry (D-Mass.). Kerry would be one of the most extraordinarily qualified nominees ever for secretary of State. He would be confirmed by large bipartisan majorities of senators for secretary of State, Defense or any other position.

It is no reflection on Ambassador Rice that Kerry is uniquely qualified to be secretary of State with a level of experience, contacts, depth and both diplomatic and military knowledge that are unprecedented since President Truman named Gen. Marshall to lead at Foggy Bottom.

If Ambassador Rice is nominated, I would strongly support her. The election is over. It does no service for Republicans to continue electioneering politics over the secretary of State position barely hours after the polls have closed, and if they do, Republicans will be reminded again why they suffered major losses in the national elections of 2006, 2008 and 2012. Voters want this partisanship ended. Let’s end it.

The Hill Magazine

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Blind to changes in Africa

Old Habits Die Hard


A large number of investors from Europe maintain negative perceptions of Africa as a risky investment destination, a recent survey by global professional services firm Ernst & Young reveals.

Analysts at Ernst & Young, in their second “Africa attractiveness survey”, challenge what they term a “stubborn perception” that continues to hamper efforts to attract investment in Africa.

The recently published survey highlights Africa’s growing economic competitiveness and the outlaying investment opportunities in infrastructure development and the abundant natural resources.

E&Y also highlights the positive impact that economic integration will bring to Africa’s growing economic cake, clearly stating that its “unbridled optimism” does not mean sweeping under the carpet the challenges that the continent is still grappling with.

E&Y admits that “Afro-pessimism … has been dominant for too long” and offers that Africa’s is a “positive story that demands telling and re-telling”.

“We have been subjected to negative stories about Africa for far too long,” Ernst & Young says.

The survey reveals that while awareness of Africa’s qualities are changing, the continent is still being viewed as a “relatively unattractive destination compared to most other geographical regions”.

Perceptions, though, amongst investors with a presence on the continent have changed for the better and they rank Africa’s attractive above every other region except Asia. Those surveyed who do not have a presence on the continent have “overwhelmingly negative” perceptions of Africa.

“In fact, for these respondents, the continent is viewed as by far the least attractive investment destination in the world. They cite risk factors such as political instability, corruption and security as major obstacles,” E&Y says.

E&Y analysts challenge these perceptions and argue that reforms, progress and growth are repositioning Africa as a continent and in terms of the individual countries, which are viable alternatives to other emerging market investment destinations.

Regulatory and economic reforms that started at the turn of ‘90s are continuously reshaping the continent, E&Y contends. The continent is now far more stable than it was decades ago and a raft of economic reforms and increased financial prudence in the public sector are contributing to lower inflationary pressures, low debts and budget deficits and the strengthening regulatory and legal systems means that most economies are opening up to doing business with international partners.

E&Y says these structural changes are helping invigorate markets and commerce, creating an environment that is increasingly conducive to business and investment. Improvements in political governance, the commodities boom, rising levels of disposable incomes, rapid urbanization and a developing services sector have contributed to a continued and a sustainable growth path for Africa, E&Y analysts say.

Of those surveyed, 60 percent said that their perception of Africa as a place to do business has improved over the last three years, though 11 percent said their perceptions had deteriorated. Some 73 percent of respondents anticipated Africa’s attractiveness to improve over the next three years while only four percent believed it would deteriorate.

Of those who believe that Africa’s growth prospects in the near-term are significantly positive, half have a dedicated strategy in place and 92 percent have an active presence on the continent. But in as far as Africa is compared to other regions, the perception gap is still strong, E&Y says.

“When comparing Africa to other regions, both developed and emerging, Africa is viewed as relatively unattractive, in comparison to most other regions in the world, comparable only to former Soviet states as an investment destination,” E&Y says.

In relation to other regions, the continent still has a lot of work to do to improve global perceptions. While investors with a presence in Africa rank only Asia as a relatively “most-attractive investment destination”, those without a presence are overwhelmingly negative “to the extent that it actually distorts the overall result”, E&Y says.

“In fact, for those respondents with no business presence in Africa, the continent is viewed as by far the least attractive investment destination in the world.

“Breaking these negative perceptions down to account for regional differences, potential investors from Europe are the least positive about Africa’s relative investment attractiveness.

North America investors are somewhat less so, ranking Africa as more attractive than Middle East, and Asian investors rank Africa ahead of the former Soviet states and Central America and on a par with Eastern Europe.”

Negative perceptions are centered around political risk factors, corruption, weak security, ease of doing business, local access to finance, tax regulations, and bottlenecks to movement of goods and people across borders.

The survey also reveals that even though FDI into Africa year-on-year rose by 27 percent, the whole of Africa only attracted a miniscule 5.5 percent of global FDI in 2011 up from 4.5 percent the previous year.

Africa attracted fewer FDI projects than India and a little more than half as many as China. Since 2003, Africa has only attracted 4.3 percent of global FDI projects, compared with India’s six percent and China’s 10.5 percent.

“One key factor is the perception gap between negative historical beliefs about the continent, and the positive reality of the African continent growth story over the past decade. As a result, many investors still seem to approach Africa with greater caution than they do other rapid growth markets and regions,” E&Y analysts say.

E&Y analysts challenge the overall negative perception of a politically unstable, corrupt and challenging business environment. They argue that the continent’s democratization is real and is characterized by a significant decline in armed conflicts across the continent.

While corruption is undoubtedly a major challenge in Africa and across the world, E&Y says the “perceptions that corruption is rampant across the continent, or that African countries are inherently more corrupt than other rapid growth markets, do need to be challenged”.

They cite Transparency International’s corruption ranking which recently ranked 14 African countries higher than India and 35 higher than Russia.

Based on a 2011-12 weighted average score on “irregular payments and bribes”, Botswana, Cape Verde and Rwanda all rank ahead of the United States. The three countries, as well as Gambia, Mauritius, Namibia and South Africa, rank ahead of Brazil and China. Sixteen African countries including Ethiopia, Mozambique and Zimbabwe, rank ahead of India and 19 are ahead of Russia. E&Y analysts have some choice words of advice to would-be investors in Africa.

“There are no doubt those that will accuse us of unbridled optimism, pointing to the very real challenges that still remain.

“Yes, we are optimists, but we are realistic optimists ‑ our perspective is deliberately a half full glass rather than a half empty one.

“This is partly a response to the Afro-pessimism that has been dominant for too long, but mainly because we believe that it takes a positive mindset to success in Africa. If you set out expecting difficulty and risky, you will find it.”

[The Southern Times]


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Shamus Cooke doesn’t believe that Obama is firm and serious enough to see through the rich “paying their fair share” when it comes to fixing the ever ballooning U.S. deficit. Cooke also believes that Obama’s “tax the rich” is only a campaign ploy, “demagoguery”. I hope not. “Democrats and the Fiscal Cliff” is a good article in support of the working poor of the U.S.


Professor Mekonen Haddis

November 12, 2012

The Coming “Historic Betrayal”

Democrats and the Fiscal Cliff

Literally the day after the election a sudden “urgency” gripped the nation: the imminent danger of the so-called “fiscal cliff” — the national automatic tax increases and spending cuts due in January. The media screamed that the suddenly approaching fiscal cliff would trigger a recession, forcing Democrats and Republicans to consider a “grand bargain” budget deal to avoid disaster.

Of course the fiscal cliff was looming throughout the presidential campaign; politicians simply agreed not to talk about it, since they shared — more or less — the same very unpopular “grand bargain” solutions: austerity cuts to Medicare, Medicaid, Social Security, and other popular social programs.

Yes, Obama talked incessantly about the rich “paying their fair share” during his campaign, but he greatly exaggerated his willingness to make this happen, as well as the real differences between the Republicans and Democrats when it came to fixing the deficit.

This fact is revealed by the pro-corporate grand bargain that Obama nearly brokered last summer to fix the fiscal cliff.

The New York Times explains:

The White House agreed to cut at least $250 billion from Medicare in the next 10 years and another $800 billion in the decade after that, in part by raising the eligibility age. The administration had endorsed another $110 billion or so in cuts to Medicaid and other health care programs, with $250 billion more in the second decade. And in a move certain to provoke rebellion in the Democratic ranks, Obama was willing to apply a new, less generous formula for calculating Social Security benefits, which would start in 2015.

There you have it. Obama was already guilty of everything he accused the Republicans of during his presidential campaign. His “tax the rich” demagoguery was mainly for show, the exact same promise he broke after the 2008 election.

Some Democrats are already preparing to help Obama break the 2012 promise. The New York Times reports:

Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, extended an olive branch to Republicans, suggesting Thursday that he could accept a tax plan [to fix the deficit] that leaves the top tax rate at 35 percent [leaving the Bush tax cuts for the wealthy in place].

And although Obama has vowed to stay firm over taxing the rich (this time), his toughness is only skin deep, and comes with dangerous strings attached.

For example, Obama only wants to tax the rich enough to be able to sell the grand bargain to the American public; any grand bargain will include historic cuts to cherished national programs like Medicare, Medicaid, and Social Security, and Obama wants to avoid some of the outrage by claiming that the rich were forced to share in the “sacrifice” too.

This is the “balanced approach” to deficit cutting that Obama discusses, meaning that he wants to raise some revenue from the rich while also making gigantic cuts to social programs.

But in a society racked by massive inequalities, this kind of “balance” is ludicrous. The rich, the banks and other corporations have accumulated trillions of dollars that, if taxed at high enough rates, would easily make ANY cuts to social programs unnecessary.

The nation is not broke, but much of the money has floated to the top. And while Obama is striving to pass a largely symbolic “tax the rich” measure as part of his grand bargain, he’s doing so only to push forward the massive cuts.

This is the political context that makes the demands “No Cuts, Tax the Rich” incredibly necessary not only to Labor and community groups but to all working people, who would be able to unify and fight these austerity cuts by organizing nationally coordinated demonstrations and putting forth the pro-worker solution of No Cuts, Tax the Rich to address the Fiscal Cliff and all future austerity budgets, whether they occur on a city, state, or national level.

AFL-CIO President Richard Trumka has already put out a call to working people to organize and “fight like hell” to prevent any cuts to Social Security, Medicare and Medicaid.

Labor and community groups must immediately stop celebrating Obama’s election victory and quickly start mobilizing their members against his anti-worker agenda, lest they spend the next four years crying about the coming “historic betrayal.”

Shamus Cooke

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