Daily Press Cuttings

Friday 27th October 2000

FT: Argentina: Argentina's political and economic turmoil has begun to reach beyond the country's borders, as regional governments grow concerned that the Argentine crisis could derail their own fragile recoveries. Analysts are openly speculating that Argentina may default on its foreign debt next year, and on a possible devaluation of the currency, which has been tied to the US dollar for ten years. Argentina needs to raise nearly $20 billion to finance itself till the end of next year. Côte d'Ivoire: Violent clashes erupted in towns across Côte d'Ivoire yesterday as thousands of supporters of Alassane Ouattara, the former prime minister, took to the streets to demand a re-run of presidential elections from which he was excluded. Japan: Feature article by Gilliam Tett looks at the Japanese government debt mountain. By the end of the year it is forecast that the government will owe about Y650 000 bn (US$ 6 trillion) or 130 per cent of gross domestic product. Bond markets seem unconcerned, but this week's calm must not lead it into complacency. Diamonds: Thirty six countries attending a conference in London yesterday pledged action to tackle the problem of diamond sales being used to fuel conflict but did not endorse the UK's proposal to regulate the diamond trade in a treaty sponsored by the UN.

The Guardian: Environment: Leading climate scientists now agree that human pollution, mainly from fossil fuels, has added substantially to global warming in the past 50 years and that the earth is likely to get far hotter than previously predicted, with immense consequences for people and wildlife. The report from the UN-sponsored Intergovernmental Panel on Climate Change suggests that in one hundred years time the upper range of warming could be as high as 6 C above 1990 levels. USA/HIPC: Britain yesterday welcomed news that Bill Clinton has won backing from Congress to pay the USA's $435 million contribution towards global debt relief efforts. International development secretary, Clare Short, said: "I am relieved and delighted that Congress at last recognised that debt relief for the poorest countries is essential to tackling poverty. I hope that this means congress will give increasing support to other international development efforts." Côte d'Ivoire: Côte d'Ivoire's new civilian president Laurent Gbagbo promised yesterday to form a national unity government and revamp his country's armed forces. But as the violence continued he ruled out new elections and reform of the controversial constitution. Money laundering: Article looks at the plans of Swiss Banks UBS and Credit Suisse to blow away Switzerland's reputation for banking secrecy and money laundering. They will follow a diligence code that is likely to be tougher than legal standards in most of the countries where they do business.

Wall Street Journal: Oil/Iraq: Iraq may be about to worsen the global oil crisis, possibly triggering a world-wide release of strategic oil stocks and forcing Saudi Arabia to go to the limits of its output capacity to prevent an oil shortage. The reason is a simmering dispute with the UN over the politically charged issue of pricing Iraqi oil in euros instead of dollars.

The Economist: Survey of Mexico, where the PRI has at last been voted out of government. But 71 years of one-party rule will take time to get over.

Thursday 26th October 2000 (Summary by Justin Alexander and John Garrett)

FT: Côte d'Ivoire: Laurent Gbagbo, Côte d'Ivoire's newly-elected civilian leader, was swept to power yesterday after the country's military regime collapsed under a wave of civilian protests. It is the first time in Africa that a popular uprising in support of an elected civilian leader has toppled a military regime. Announcing that he would form a new government within hours, Mr Gbabgo, leader of the Popular Front party, claimed the presidency after elections at the weekend. Troops joined with demonstrators on the streets of the capital Abidjan, and the French warned General Guei to respect the result of Sunday's elections. Nigeria: Letter from Ann Pettifor, Director of Jubilee 2000, saying that Nigeria needs substantial debt cancellation, not just the rescheduling on offer from the Paris Club. If Nigeria had not been removed from HIPC in 1998 (just as the transition to democracy began), the G7 would be committed to 100% bilateral cancellation and substantial multilateral cancellation. For the sake of Africa's future, creditors must put their hands in their pockets. Debt cancellation now would give Nigeria a much-needed democracy dividend. Corporate Insolvency: The World Bank and IMF are backing an initiative by Insol, the international body representing insolvency professionals, to harmonise corporate insolvency laws internationally. Zimbabwe: President Mugabe has threatened to arrest former Rhodesian prime minister Ian Smith on charges of genocide from the war of independence in the 1970s. Africa/Food Safety: A World Bank study concludes that EU food safety standards, estimated to save 2 lives in a billion, are likely to cost Africa $700m in lost exports. The restrictions on aflatoxin levels, a fungus linked to liver cancer, will reduce exports to the EU (the main market) of cereals, dried fruits and nuts from Chad, Edypt, Gambia, Mali, Nigeria, Senegal, south Africa, Sudan and Zimbabwe, by 64%. Peru: President Fujimori confined most of Peru's army to barracks amid unconfirmed reports that he had ordered the capture of former intelligence chief Vladimiro Montesinos "dead or alive".

The Times: USA/HIPC: The US Congress has finally agreed to hand over half a billion dollars to the international debt initiative, removing a major stumbling block to delivering relief to the world's poorest nations. US policy-makers agreed on Tuesday to president Clinton's request for $435 million for debt relief, which ended months of political wrangling. The decision was warmly welcomed by campaigners, who had claimed that US delays were jeopardising the entire international poverty relief programme. “This is a real victory,” Ann Pettifor, Director of Jubilee 2000 UK said. “We can now breathe a sigh of relief with the joint financing finally in place and get on with reducing the debts of the poorest countries. There is no excuse not to fully implement the plans agreed by the richest nations in Cologne in 1999.”

The Guardian: Cote d'Ivore: The popular revolt which ousted the military government yestarday was directly inspired by the success of the Serbians in forcing Milosevic to respect the result of democratic elections.

The Independent: UN: Ruud Lubbers, the former prime minister of the Netherlands, was unexpectedly nominated as UN high commissioner for refugees. Africa: Independent leader says that the breeze of Belgrade is sweeping through the African continent, leading to the overthrow of leaders such as General Robert Guei in Côte d'Ivoire and increased pressure on Robert Mugabe in Zimbabwe. The paper calls for the breeze from Belgrade to become a tempest. Environment: Marine biologist have issued their sternest warning yet about the parlous state of the world's coral reefs and say their destruction could lead to an unprecedented migration of island-dwellers whose home and livelihoods are in danger of being washed away. Warmer sea temperatures, pollution and over-fishing are being blamed for the destruction of coral.

IHT: Philippines: About 30 000 people marched Wednesday in Philippines cities, urging president Joseph Estrada to resign because of his alleged involvement in gambling scandal. Money laundering: A group of major international banks, stung by the growing reputation of the banking industry as a haven for ill-gotten gains, is pledging to form a global front against money-laundering. They plan to issue guidelines to toughen their practices to shut off dirty-money deposits by organised crime and corrupt political leaders. Switzerland's largest bank, UBS AG, is leading the effort, which initially will require banks to bring the activities of their offshore banking subsidiaries in line with tougher rules on financial crime.

Wednesday 25th October 2000 (Summary by Justin Alexander, John Garrett and Nigel Harris)

Bloomberg: US/HIPC: U.S. House and Senate negotiators forged an agreement on a budget bill that includes $435 million for a global effort to reduce poor nations' debt, a victory for President Bill Clinton and a move that could unlock funds from other countries. Lawmakers increased the foreign operations bill, which contains most U.S. aid to developing countries, by about $1.5 billion to $14.9 billion. That brings the measure to within ``whispering distance'' of Clinton's request, said Nancy Pelosi,

the ranking Democrat on the House foreign operations subcommittee. Debt-relief backers, a coalition that includes everyone from Republican Representative Spencer Bachus of Alabama to rock star Bono to Pope John Paul II, say the initiative is essential. Countries like Niger and Chad are spending so much money servicing

foreign debt they have little left over for health and education, they say. “This is a first step toward freeing up funds that could be used to save lives,'' said Dan Driscoll-Shaw, the national co-ordinator of Jubilee 2000, a group that spearheaded the drive to

wipe out the debt of the world's poorest countries.

FT: Vulture funds/Jubilee 2000: Joshua Chaffin looks at the dispute between Peru and the hedge fund Elliott Associates. Last month Elliott Associates pushed Peru to the brink of default on $3.7 billion in its Brady bonds. The country narrowly averted disaster by agreeing to pay more than $58 million to settle a dispute over defaulted bank loans that Elliott had purchased for just half their face value four years ago. Such investors as Elliott's are known as “vultures” to their many detractors, preying on poor countries when they are at their most vulnerable. “These people are trading in human misery,” said Liana Cisneros of Jubilee 2000, a non-profit organisation that promotes debt relief for poor nations. “Elliott Associates are picking over the bones of the Peruvian economy like a pack of vultures. It may be just business to them but to the children of Peru it is school-books, medicines and clean water.” Peru: Political turmoil in Peru intensified yesterday over ht return of the disgraced former presidential aide and spy chief, Vladimiro Montesinos, from exile in Panama. The 62-year-old president Fujimori, has never looked so vulnerable, apparently outmanoeuvred by his former right-hand man, Mr Montesinos and the latter's military cohorts. Côte d'Ivoire: General Robert Guei, Côte d'Ivoire's military leader, pitched his country into crisis yesterday after dissolving the National Electoral Commission and unilaterally declaring himself winner of Sunday's presidential elections. The announcement was followed shortly afterwards by the eruption of shooting in several parts of the main city, Abidjan, as supporters of Mr Gbagdo took to the streets, claiming their candidate had been robbed of victory. EU/Colombia: The EU yesterday announced $321 million worth of aid to the Colombian government's anti-drugs and development programme. Colombian officials also sought to allay European concerns over the country's human rights record and over the US component of Plan Colombia, as the programme is known. Africa/UK: Letter from Dele Oguntimoju responding to Prime Minister Tony Blair's speech at the UN Millennium Summit: “What can we do for Africa?” He can lead by example by initiating an inquiry into the role played by the UK banks involved in the $4 billion looting of Nigeria. US: The US posted a record budget surplus of $237 billion in the fiscal year ended September 30^th. Diamonds: Russia and South Africa are snubbing an international conference today that aims to push efforts to tackle “conflict diamonds”.

The Independent: South Africa/AIDS: President Mbeki's government yesterday launched a new strategy for dealing with AIDS. Written for health professionals, the nine policy guideline booklets are based on the premise that HIV leads to AIDS, firmly laying to rest speculation to the contrary by Mbeki. They contain no pledge to manufacture or import affordable generic “anti-retrovirals.” “We have never said that HIV does not lead to AIDS” the health minister Manto Tshabalala- Msimang said in reply to a question from a foreign journalist. “Why don't you assist us in calling for debt to be cancelled and assist us to build the laboratories we need to monitor the people you want us to put on anti-retrovirals.” UNAids estimates that 20 per cent of South Africans are HIV positive and that up to half of all the country's teenagers will die from AIDS-related illnesses.

The Guardian: Uganda/Ebola: Death toll climbed to 60 yesterday, out of 165 suspected cases. WHO spokesman Valery Abramov said several reported cases in refugee camps have been misdiagnosed, and genuine cases were confined to Gulu. He said the epidemic could last 3 months, though WHO officials on the ground believe it could be contained in just a month.

IHT: Côte d'Ivoire: French Foreign Minsiter Hubert Verdrine said "We are witnessing an attempted coup" and the EU would not accept the attempt to deny voters their choice. Gen Mathias Doue, No.2 in the junta has resigned. Peru: President Fujimori has rejected calls for his resignation and insisted that the armed forces are under his control and will not stage a coup. Military leaders want an amnesty for their human rights violations before they allow elections next year. Fujimori is thought to have met with his former inteligence chief Vladimiro Montesinos, just returned from brief exile, who is widely believed to be the most powerful man in Peru and is accused of authorising torture and death squads.

The Times: South Africa: The government tried to counter opposition pledge of free HIV drugs by claiming Democratic Alliance wanted to use black people as experimental “guinea pigs.” Tony Leon, the Democratic Alliance leader, made a local election commitment to provide free anti-Aids drugs to HIV-positive pregnant women and rape victims. Government has refused to make such therapies available because it believes they are toxic.

Tuesday 24th October 2000 (Summary by David Chapkin & John Garrett)

Wall Street Journal: IMF/US: US Treasury official, Tim Geithner, warned yesterday against European suggestions that the Group of Seven nations lay out binding rules on when private investors must help in the kind of multibillion dollar rescue operations the IMF put together for South Korea, Brazil and other countries in 1997 and 1998. Some Europeans, including the Bank of England, would like the IMF to declare debt standstills under well-defined circumstances, a move akin to granting court protection in a bankruptcy case. The Clinton administration agrees that governments will sometimes be unable to pay but is wary of fixed rules partly out of fear that investors, whose risk in current crises has been passed onto the taxpayer, would simply stop investing in the developing world. AIDS/Senegal: Six months after 5 major pharmaceutical companies declared their intention to make HIV drugs more affordable to poor countries, the first price-cutting agreement has been struck with Senegal, with Uganda expected to follow. Negotiations confirmed that drugs will be sold in Senegal at about 90% off the retail prices quoted in the US, France and other wealthy nations or about $1.60 a day. Senegal, has fewer than 2% of its adult population infected with HIV, making it one of sub-Saharan Africa's least affected countries.

The Independent: Peru: Peru's vice-president Francisco Tudela resigned yesterday as a storm deepened over government plans to tie promised elections to an amnesty for human rights abuses and the shock return of the former spy chief Vladimiro Montesinos. The political turmoil punished financial markets, hitting Peru's Brady bonds in New York and its sol currency. Côte d'Ivoire: Because only 30% of the country's 5.5 million registered voters had cast ballots, neither of the two candidates claiming victory, General Guei or Laurent Gbagbo, look likely to achieve the legitimacy of a decisive victory. The two parties that generally reap 75% of the vote were banned from taking part in the election.

Daily Nation: Kenya: In response to the drought crisis, the IMF has seen fit to relax certain aid conditions and provide an additional $52 million with $26 million becoming immediately available. The Fund is now willing to allow the government to spend more and collect less revenue and will waive penalties for failing to meet requirements on Kenya's foreign debt arrears. The IMF's latest move brings the total lending to Kenya under the Poverty Reduction and Growth Facility to $247 million.

FT: Nigeria: FT leader says that if warning were needed about Nigeria's fragility, it came last week. At least 100 people died in fighting in Lagos, the country's commercial capital. The warning could hardly be more timely. The Paris Club is meeting this week to discuss the government's requests for the rescheduling of $20 billion owed to official creditors, their share of Nigeria's external debt of at least $30 billion. The FT says that creditors are nevertheless right to demand evidence of reform before providing help. Reaching an agreement in Paris will not be easy. But last week's violence should concentrate the minds of both sides on the dire consequences of failure and the huge benefits of success. DFID/poverty reduction: Reducing inequality in poor countries would promote economic growth and poverty reduction, says a report today by the Department for International Development. The report states that “it is possible to change the distribution of assets and income and this matters not only to increase the well-being of the poor but to promote growth in the economy as a whole.” Arms/UK: Letter from Oxfam's director David Bryer, arguing that Britains's £30 million sales of arms to the Middle East should be stopped.

The Guardian: Italy: Francesco Rutelli, the telegenic mayor of Rome, vowed to unify the government centre-left coalition and reverse Mr Berlusconi's, the centre-right candidate's lead in the polls with an American-styled campaign blitz.

Voice: Cuba: The new US bill passed by Congress which would let Cuba buy food and medicine from the US was greeted with dismay by Cubans because of the finance and travel curbs contained in the bill's small print. Instead of advancing trade between the countries, it will limit business due to the restriction it places on Washington and US banks to fund food sales requiring Cuba, in the circumstances, to pay in cash or get credit for purchases from a third country.

IHT: Indonesia: An Indonesian court ordered the release from police custody of the East Timorese militia leader Urico Guterres ruling that his detention was illegal. Mexico: The fortunes of the PRI who lost the presidential election in July after ruling Mexico for seven decades, were revived slightly yesterday when they won, amidst allegations of fraud, the key and hotly disputed governor's race in the state of Tabasco.

Monday 23rd October (Summary by Justin Alexander, David Chapkin, & John Garrett)

IHT: IMF: A study conducted by Morris Goldstein, a 25-year IMF veteran reveals that the scope and depth of the Fund's conditions in connection with the bailouts of various countries, in particular Indonesia and Russia, were excessive and that the Fund clearly strayed outside their area of expertise when they intervened as drastically as they did. “If the operations worked perfectly, few would complain, but they often do not work perfectly.” Compliance with the Fund's lending conditions in Indonesia was a negligible 20% and the IMF, it was agreed, had little success raising growth rates for its African clients. Although the IMF managing director, Horst Köhler has pronounced his aversion to some of the heavy demands made of borrowers, Mr Goldstein points out that the pressure to use the fund as a lever to bring about changes in developing countries comes primarily from the Group of Seven industrialised nations, with the US foremost. Philippines: President Estrada facing impeachment charges for allegedly taking bribes from gamblers suggested Sunday that he might agree to an early election if there was public support. He also called on the armed forces to repel any group that might try to seize power. Zimbabwe: Zimbabwe intends under its fast track procedure to resettle landless blacks on at least 2,000 white-owned properties by the year's end.

The Guardian: Uganda/Ebola - The death toll in the Ebola outbreak has risen to 54. The new cases were identified around Gulu, 225 miles north of Kampala.

FT: Côte d'Ivoire: A low turn-out in yesterday's Côte d'Ivoire presidential elections aimed at restoring democracy looked set to heighten uncertainty over the country's future. General Robert Guei, leader of the junta that took power last Christmas in the country's first ever coup, faced four rival candidates. However the two main parties called for a boycott as General Guei handpicked election officials and refused to allow the main opposition candidates to run. The US and European Union cut their financial support for the election when they realised the election was flawed. Debt/Commonwealth: When typhoons or earthquakes strike small states, their first call for help may soon be to Lloyd's of London rather than the International Red Cross in Geneva. Under a new insurance scheme, 42 of the most vulnerable countries to obtain insurance to cover the cost of servicing their external debt, official and private, should they be hit by “hurricane, tropical storm, typhoon, mudslide, flood tidal wave or volcanic eruption.” The policy has been developed by the newly established Commonwealth Disaster Management Agency (CDMA), incorporated in London and Liberty Syndicate, part of the Liberty Mutual Group of companies. Zimbabwe: Comment from Victor Mallet and Tony Hawkins on the outlook for Zimbabwe. It is not yet possible to predict when Robert Mugabe's 20-year rule over Zimbabwe will end, but the events of recent days have made clear that it is his government's economic mismanagement that will be his undoing. Nigeria/UK: Much of the $4bn looted in General Abacha's 4 year rule was laundered through UK banks. Money laundering legislation meant that many of the suspicious transactions were reported to the National Criminal Intelligence Service, an agency of the Home Office. However the NCIS did not act to freeze the accounts, and Britain has told Nigeria that it cannot help in recovering the looted money until charges are laid. Philippines: President Estrada has been urged to called a snap presidential election after allegations that he received £6m in payoffs from an illegal lottery game. Mr Estrada's alleged gambling has shocked a nation where a third of the population live on under $1 a day, but he denies any wrongdoing and intends to continue his term which runs until 2004. EBRD: Hanna Gronkiewicz-Waltz, has resigned as governor of the Polish Central Bank, to take up a job as a vice-president of the European Bank for Reconstruction and Development.