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BLACKWATER USA | DAILY BRIEF


China


*       Exiled Uighurs lobbied the International Criminal Court to

investigate China for genocide and crimes against humanity related to its

policies against minority Muslims in Xinjiang.

*       Google, Facebook, and Twitter all announced they would temporarily

stop processing data requests from the China-aligned government in Hong Kong

because they don't want to be complicit in arrests of pro-democracy online

activists.

*       U.S. SecState Pompeo warned Americans against using the

video-sharing app TikTok, which is owned by China-based ByteDance, over

concerns ByteDance shares data with the Chinese government. Pres. Trump is

reportedly considering banning the app in the U.S. (it's already banned in

India).

*       New research from the World Bank shows that poor countries may not

have as much Chinese debt as previously thought: in some cases, Belt and

Road loan agreements that were announced to great fanfare did not actually

turn into loans. An Economist article pasted below has more.




U.S.


*       The Trump administration sent the World Health Organization (WHO)

notice that it would withdraw from the agency effective July 6, 2021. A U.S.

departure would be devastating for the WHO: the U.S. provides 24% of WHO

funding. However, a spokesman for UN SecGen Guterres said it's not clear

whether Trump can unilaterally withdraw without Congressional approval.

*       Phoenix police killed a 28-year-old man in his car on Saturday,

sparking reinvigorated protests against police brutality.




Afghanistan


*       A district police chief in Ghazni was killed in a Taliban attack,

and a suicide attack in Nangarhar killed four police (that one may have been

the Taliban or IS).

*       Another attack on a district police headquarters in Kandahar's Shah

Wali Kot killed at least three police. The Taliban has not claimed this one

yet, but was probably responsible.




Iran


*       A new explosion at a factory near Tehran killed at least two people.

Iran says the blast was caused by "human error," rather than sabotage.




Technology


*       Google's 4G "internet balloons" took off over Kenya for the first

time. The internet service this test run provides will span 19,000 square

miles (50,000 sq. km.) and serve 35,000 customers.




UK


*       The UK introduced a new stimulus package to incentivize residents to

dine out with 50% discounts on restaurant meals from Monday to Thursday, and

£1,000 ($1,250) cash bonuses to businesses that rehire furloughed workers

and keep them on though January.

*       The UK imposed travel and financial sanctions on 47 people-including

Russians involved in the killing of Sergei Magnitsky, Saudis accused of

assassinating Jamal Khashoggi, and officials in Myanmar who persecuted

Rohingya refugees. These were the first sanctions the UK has imposed since

leaving the EU, and the NYT thinks British officials hope they will "cast

the [UK] as a human rights defender."

*       That said, the UK then immediately resumed arms sales to Saudi,

which had been paused over concerns the weapons would be used for human

rights abuses in Yemen.




Other News


*       Brazil's Pres. Bolsonaro, who called COVID-19 "a measly cold" and

has been criticized for his handling of the pandemic, tested positive for

the virus after showing symptoms.






The poorest countries may owe less to China than first thought (Economist)


Still, China lends more than the members of the Paris Club combined




The four-lane, 62km toll road being built between Masiaka, a business hub in

Sierra Leone, and Freetown, the country's capital, promises shorter journey

times, fewer accidents and smoother drives. It is nonetheless controversial.

Awarded to China Railway Seventh Group, the project added over $160m to the

country's foreign debt, according to the China-Africa Research Initiative

(cari) at Johns Hopkins University. The work has suffered delays, which the

company blames on the pandemic and the need to compensate property owners,

reports the Concord Times, a local newspaper. The firm has also complained

that some lorries pass by the toll booths, not through them.



Projects like these have mushroomed across Africa and other developing

countries in the past 15 years. "It's no secret...China is by far the

largest bilateral creditor to African governments," said Mike Pompeo,

America's secretary of state, in June, blaming it for creating an

unsustainable debt burden. Plenty else is, however, secret. China does not

typically divulge how much it has lent to whom or on what terms. Nor is it a

member of the Paris Club of government lenders, which tries to co-ordinate

debt forgiveness among its members, making sure that no lender takes

advantage of the magnanimity of another.




Many, therefore, have wondered how China would play its part in the

debt-relief initiative agreed in April by the g20 group of big economies.

That initiative will allow 73 of the world's poorest countries to delay

payments on loans from g20 governments, freeing up resources to fight the

pandemic. China, a prominent g20 member, signed up. But would it offer the

same terms as the others? And if so, how would they know? Proving China is

doing its bit is hard if you do not know how much it has lent.




Recent weeks, however, have yielded a pleasant surprise. To help monitor the

g20 initiative, the World Bank told its board it wanted to reveal more data

about the government debts of the eligible countries. Though its board is

dominated by its bigger shareholders, including China, the bank's plan faced

little resistance. And so after cross-checking its numbers, the bank has now

disclosed what eligible governments owe to bondholders, multilateral bodies,

private foreign lenders and other governments. The countries covered by the

data owed $104bn between them to China at the end of 2018. The total

includes soft loans from China's government, semi-soft loans from "policy

banks", such as China Development Bank, and profit-seeking loans from

state-owned commercial lenders. The same countries owed $106bn to the World

Bank and $60bn to bondholders.




The data, say Deborah Brautigam and Yufan Huang of cari, are a "gold mine".

Prior to the release, they had to scour public announcements of loan

pledges, cross-checked with reports from Chinese embassies or ministry

documents in the borrowing country. Their work fed into a broader set of

estimates by Sebastian Horn and Christoph Trebesch of the Kiel Institute for

the World Economy and Carmen Reinhart of Harvard University, who in May

became the World Bank's chief economist.




In addition to aiding research, the data should also help the public in

developing countries, says David Malpass, the World Bank's president.

Governments-and "this is not unique to developing countries"-sometimes enter

into contracts that do not serve the public interest, he points out.

Transparency "helps align" these contracts with "the interests of the

people".








The new figures confirm Mr Pompeo's observation that China is by far the

biggest bilateral creditor to Africa, and in many poor countries elsewhere

(see chart 1). It accounts for about 20% of the total foreign debt owed by

the 73 governments eligible for the g20 initiative (and about 30% of their

debt service this year). That is more than all of the Paris Club lenders,

including America, Britain and Japan, combined. But it is also smaller than

the estimate of over 25% based on figures from Mr Horn, Ms Reinhart and Mr

Trebesch. Indeed their estimates for individual countries often exceed the

bank's by large margins (see chart 2).








What explains the gap between Ms Reinhart's research and her new employer's

data? Some of it may reflect the difference between announcements and

disbursements. Just because China says it will lend money, does not mean the

entire sum is paid at once (or ever). But even when Mr Horn, Ms Reinhart and

Mr Trebesch look at the bank's figures on commitments, rather than incurred

debt, they find some loans missing, suggesting incomplete data.




Another reason for the gap may be that the bank excludes some debt owed by

state-owned enterprises and special-purpose vehicles but not guaranteed by

the government. In other contexts the bank does consider scenarios in which

state-owned firms fail or public-private partnerships sour, requiring the

government to step in. Counting these as public debt brings the bank's

estimates closer to the Horn-Reinhart-Trebesch figures.




Such thought experiments could sometimes stretch the definition of public

debt, though. The financing raised for Sierra Leone's controversial toll

road, for example, is supposed to be repaid from toll, not tax, revenues. It

would only burden the government if those tolls fell short. The World Bank

does not seem to count it as government debt-but it is included by cari.




The bank's figures for Chinese lending are not always below outside

estimates. For Burkina Faso, the Central African Republic and Liberia they

are much higher. This, reckons Ms Brautigam, is because they include loans

from Taiwan. China's critics, including Mr Pompeo, may suspect that its true

lending is higher than the bank suggests. But even they would not want to

chalk up to the People's Republic what is properly owed to Taiwan.

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