Britain, Ireland: Stirring up troubles.
Also: Pakistan, Morocco, Algeria, Zambia, India, Brazil, Papua New Guinea and Israel.
BRITAIN. IRELAND. Stirring up troubles.
A controversial bill raises human rights concerns.
The House of Lords reviewed amendments to the Northern Ireland Legacy Bill on Tuesday. Dublin said it opposed the proposed law, which would grant immunity to many involved in the Northern Ireland Troubles from the 1960s to 1998.
INTELLIGENCE. The Bill was first introduced in May 2022 and aims to examine over 1,000 unsolved killings from the 30-year sectarian conflict. In exchange for cooperation, the Bill offers conditional amnesty to those accused of killings. The UK believes immunity is critical to gather information, but Ireland accuses the UK of breaching victims’ rights. The Northern Ireland Veterans movement, representing 200,000 veterans, has announced support for the Bill.
FOR BUSINESS. While many of the barriers separating Catholic and Protestant areas are being dismantled in Northern Ireland, Belfast remains divided. Yet trade ties between Northern Ireland and Ireland have boomed post-Brexit, in part due to the Northern Ireland Protocol on trade. As the new Windsor Framework is enacted between Ireland and Great Britain (in phases up to 2025), the UK is hoping that inter-union trade will also surge.
PAKISTAN. Power failure.
Rising frustration at the price of energy spills over.
Nationwide protests continued across Pakistan on Tuesday over rising electricity costs. Islamabad, which has withdrawn energy subsidies, said the International Monetary Fund has tied its hands on the matter.
INTELLIGENCE. Pakistan almost defaulted on sovereign debt repayments in June but managed to obtain an emergency $3 billion IMF loan, enabling it to meet obligations. But the loan came with conditions, including that the government must cut energy subsidies and tax the power sector. This, combined with a weak rupee affecting power-related import costs, means already angry citizens are suffering. Power costs have doubled in the past three months.
FOR BUSINESS. The IMF places strict conditions on countries receiving loans and expects Islamabad to honour its commitment to withdraw unsustainable subsidies. Difficult reforms are needed in the power sector. Consumers have for years received underpriced power, while maintenance and network inefficiencies result in large transmission losses. Power prices may be permanently higher, but it is a tough pill to swallow for Pakistanis suffering 28% inflation.
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MOROCCO. ALGERIA. Jetting into conflict.
A fatal incident at a tourist resort sparks anger.
Morocco’s National Council for Human Rights condemned the shooting last week by Algerian defence forces of Moroccan tourists at a resort near the border. The tourists were on jet skis and inadvertently glided into Algerian waters.
INTELLIGENCE. Algeria’s Ministry of National Defence has admitted to shooting the tourists, who were staying at the resort town of Saidia. Protests have flared in Morocco since the shooting. Morocco and Algeria have no diplomatic relations and a tense history. The critical issue is a long-running dispute related to the Western Sahara. Algeria supports the Polisario Front, which is fighting for Western Sahara's independence from Morocco.
FOR BUSINESS. The border between Algeria and Morocco through the Sahara Desert has remained entirely closed since 1994 and there is no direct trade between the two countries. The incident is a blow to tourism efforts in Morocco, which wants to promote itself as an exotic but relaxing getaway for Europeans. Morocco previously had the lion’s share of tourism to Northern Africa, but tourism figures are only just starting to recover after the pandemic.
ZAMBIA. INDIA. Not mine for the taking.
Lusaka reverses a previous attempt at expropriation.
Zambia’s mining minister on Tuesday agreed to hand back control of Konkola Copper to Vedanta Resources, an Indian firm. Zambian officials, under the former government of Edgar Lungu, seized the mine in 2019.
INTELLIGENCE. Lungu had accused Vedanta of a lack of investment when Zambia seized ownership, using its 20% stake to put the mine in provisional liquidation. But the mine subsequently struggled to operate under state control, which was compounded by a dip in copper prices during COVID-19. Vedanta has pledged to spend more than $1.2 billion over five years to increase copper output and provide $250 million for local creditors.
FOR BUSINESS. Zambia defaulted on its sovereign debt in 2020 during the pandemic, leading to a ratings downgrade and leaving creditors with significant losses. Zambia, which became infamous after independence for botched nationalisations, is Africa’s second-largest copper producer and needs a copper-led recovery to help pay back restructured debts from the default. A sustained recovery in global prices since 2021 is likely partly behind the move.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
BRAZIL. Bonding together.
Brasilia targets funding for green and social projects.
Brasilia on Tuesday outlined to investors its plans to issue its first so-called ‘sustainable sovereign bond’ in the latter part of 2023. The funds raised would be used for environmental projects and social services.
INTELLIGENCE. The bond is part of President Lula da Silva’s green agenda. Brazil hopes to raise over $1 billion from the instrument, with issuance to take place between the end of September and November. Funds will be allocated to 17 predefined areas including greenhouse gas emissions reduction, deforestation mitigation and hunger alleviation. The green finance sector has endured scandals in recent years, including allegations of fraud and misrepresentation.
FOR BUSINESS. Officials said the issuance will form the framework for future Brazilian bond operations. Investors will, naturally, watch with interest. Globally, climate and green bonds are becoming more common. Cumulative issuance of green bonds since 2007 has reached $1 trillion, despite additional transaction costs, including reporting and tracking. For Brazil, this bond is also about highlighting its green credentials and diversifying its investor base.
PAPUA NEW GUINEA. ISRAEL. And did those feet in ancient time.
Israel pays for a presence in Jerusalem.
Papua New Guinea opened its embassy to Israel in West Jerusalem on Tuesday. It becomes just the fifth country to send an ambassador to Jerusalem, which straddles Israel’s border with the West Bank.
INTELLIGENCE. PNG, a highly Christian nation with an evangelical streak, joins the US, Kosovo, Guatemala, and Honduras as the only countries with a presence in Jerusalem. All other countries have their embassies in Tel Aviv. Israel will reportedly pay for the embassy for the first three years, an offer clearly too good to refuse for PNG, which originally joined a 2017 UN vote to condemn the Trump Administration’s recognition of Jerusalem as Israel’s capital.
FOR BUSINESS. It is unusual for a host country to pay for a foreign embassy’s operations. PNG is perhaps the only country in Israel with such an arrangement. Bilateral trade is worth just $1 million per year, but Israeli investment in agribusiness in PNG is impactful, and Israelis built PNG’s first dairy farm in 2017. Fiji has reportedly been eyeing a move to Jerusalem in return for similar agribusiness investments (and perhaps free rent as well).
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