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African economies are undergoing a transformative period. The energy sector, in particular, holds great potential to revitalize African economies and empower the growth and development. This, is a subject NJ Ayuk dives into in great detail in his sophomore book, Billions at Play: The Future of African Energy and Doing Deals. Now available for pre-order on Amazon, Billions at Play tells us how energy can work better for Africans. With a foreword by OPEC Secretary General Mohammad Sanusi Barkindo, Billions at Playsets out to answer the questions: How did Africa get here and what comes next? How do African countries and societies get the most value from their resources? What exactly can African leaders do to put their countries on a sustainable, profitable path? And how can all parties win in Africa’s energy deals of the coming decades? In a straightforward approach, the Executive Chairman of the African Energy Chamber outlines the fortunes and misfortunes in Africa’s petroleum industry and presents to us that Africa can learn from itself to build competitive economies. In particular, he proposes that: “If African governments, businesses, and organizations manage Africa’s oil and gas revenues wisely, we can make meaningful changes across the continent.” Using his experience and knowledge of the global energy sector, Ayuk challenges key players to be more active in developing their resources and local content skills, and encourages decision-makers to put Africa’s people at the center of economic growth plans. Making the case for the petroleum industry having the power to support and transform emerging economies, he unpacks key issues including what and how Africa can learn from itself, the role of natural gas in Africa’s energy future, effective and sustainable investment strategies, strategic oil and gas revenue management and, the role of women in the African petroleum sector. The latter he insists is vital in the success of Africa’s oil and gas sector. He asserts that the low number of women represented in the global energy sector is an opportunity missed. “I believe this is unacceptable, short-sighted, and, frankly a real stumbling block to African countries that want to realize the full socio-economic benefits that a thriving oil and gas industry can provide.” Ayuk says that, “Africans are more than capable of making our continent successful.” However, global participation in the African energy landscape can produce greater benefits. Speaking on U.S.-Africa relations specifically, he stresses that Africa needs companies that are willing to share knowledge, technology and best practices, and businesses that are willing to form positive relationships in areas where they work. In his foreword, H.E. Barkindo describes Ayuk as a dreamer who has “taken the time to develop a detailed roadmap for realizing that dream” and prompts people all over the world to take the time to read Billions at Play in order to “play a part in making his dream of petroleum-fueled economic growth, stability and improved quality of life happen for Africa.” Billions at Play: The Future of African Energy and Doing Deals is now available for pre-order on Amazon. Order your copy today.
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NJ Ayuk in Billions at Play explains how energy underpins the African dream
Why Margaret Kasule is to blame for the mess at BoU

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Having received numerous complaints about the closure of commercial banks by the Bank of Uganda (BoU), parliament’s committee on Commissions, State Authorities and State Enterprises (COSASE) in November 2017 ordered the Auditor General John Muwanga to undertake a special audit on the closure of seven commercial banks by BoU. As such, Mr. Muwanga carried a special audit of BoU on the closure of seven defunct commercial banks that included: Teefe Trust Bank, International Credit Bank, Cooperative Bank, Greenland Bank, Global Trust Bank Uganda, National Bank of Commerce and Crane Bank Limited. Some of Mr Muwanga’s objectives in the audit of BoU included; to establish whether proper inventory of the assets and liabilities of the banks was undertaken at closure in line with sections 9 (3) of the FIA, 2O04 and section 32 (3) of the FIS, 1993; to establish whether the liquidator (BoU) appropriately managed the sale of assets and accounted for the funds resulting from the sale and whether the Receiver (BoU) appropriately transferred assets under the purchase and assumption agreement as well as to establish; whether the statutory Managers performed the functions in line with the FIS t 993 and FIA, 2004. BoU ‘s legal department, headed by Margaret Kasule is supposed to be the institution’s authority on legal issues, more so to draft legal documents but also is supposed to shield the institution from situations where it is likely to attract legal suits. However, this department has turned out to be useless. The department and more so its head Ms Kasule has turned to be a briefcase for people like Deputy Governor Louis Kasekende, a couple of to top executives plus conflicted lawyers whose purpose is to see that the correct side of the law isn’t upheld but rather protect their loot from the processes of these closed banks and this seem to be the case with the current case of Crane Bank in receivership Versus Sudhir. For instance, when Mr Muwanga, the Auditor General wanted to launch his audit into BoU over the closure of the banks, the institution would first frustrate him that it would amount to sub judice since there was a related case in court. That was the ill-advice of BoU’s legal department, though it would be upheld by the Solicitor General. It would take the courage of Speaker of Parliament Rebecca Kadaga to insist that the Auditor General probes BoU as the exercise had nothing to do with the case in court where BoU/Crane Bank In Receivership had sued Sudhir Ruparelia for allegedly swindling Crane Bank Limited of Sghs397 billion. Further, the Auditor General in his special audit report observes that some of the documentation relating to Teefe Trust Bank specifically the inventory report, loan schedules, customer deposit schedules, statement of affairs and reports supporting assets and liabilities taken over by BoU was not availed him as some were reported missing. The job a serious legal department is to ensure that such documents are kept tightly in case of a legal suit. Yet Ms Kasule and her juniors in the legal department where all ignorant about the whereabouts of several documents during COSASE probe. Further, Kasule during COSASE surprised MPs when she told them that former Minister of Finance, the late Jehoash Mayanja Nkangi closed bank (names withheld) by way of issuing a press release. She would be challenged by the then COSASE Chairman Abdu Katuntu who reminded her that a press release is not a government document used in the closure of any institution. Use of conflicted lawyers in BoU case The Commercial court in December 2017 disqualified Bank of Uganda (BoU) lawyers from sh397b Sudhir Ruparelia’s case, citing conflict of interest. In his ruling, the head of the division, Justice David Kutosi Wangutusi stated that David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations in representing BoU. Section 4 of the regulation provides that an advocate shall not accept instructions from any person in respect of a contentious or non-contentious matter if the matter involves a former client and the advocate as a result of acting for the former client is aware of any facts which may be prejudicial to the client in that matter. This meant that BoU had to hire services of other lawyers to represent it in the main suit. There is no one else to blame for this situation it’s BoU’s legal department that should have done a due diligence on A.F Mpanga Advocated and MMAKS Advocates. Of concern is that taxpayers continue to lose money in such arrangements dues to carelessness of BoU’s legal department. However, according to our investigations, there was no way Ms Kasule would do away with the ‘conflicted’ lawyers given that her former boss at BoU Joseph Bossa who recruited works with Mr. Mpanga at his law firm and mind you, it should be remembered that it is this same Bossa who sourced for Mpanga and MMAKS Advocates as private attorney for BoU. Crane Bank In Receivership suit against Sudhir and Meera Investment Just on Monday, Commercial Court judge, Justice David Kutosi Wangutusi ruled that Crane Bank In Receivership which sued Sudhir Ruparelia and Meera Investments Limited for Shs397 billion violated the law which does not give companies such circumstances to sue. Justice Wangutusi awarded Sudhir and Meera Investments Limited costs of the suit. It was upon BoU’s legal department to know that Crane Bank in Receivership had no right to sue, as per the existing law. Kasule’s department also failed to let her bosses at BoU to know that that even if Crane Bank In Receivership had the right to sue, it had ceased to own property and not existence. “That notwithstanding even if Crane Bank In Receivership could sue, by the 30th June 2017 when they filed the suit they were not in a position to do so. They had ceased to own property and their liabilities and assets had all been exhausted,” said the judge in his ruling. The sum total is that the Respondent at the time it filed this suit was not in existence its lifetime having been terminated when it was surrendered to DFCU Bank whose consideration was the DFCU assumption of the Respondent’s liabilities which assumption was paid by conveying her assets to DFCU Bank, added the judge. Interesting it is Kasule who swore an affidavit on behalf of BoU who helped Crane Bank In Receivership to lodge a case against Sudhir and Meera Investments. That decision by Kasule made the judge to award costs of the suit to Sudhir, which BoU has to pay. But we know BoU uses taxpayers’ purse. So we shall lose that money because of BoU’s legal department’s carelessness in handling legal issues. “I am an adult female Uganda of sound mind and the Legal Counsel of Bank of Uganda which is the statutory receiver of Crane Bank Ltd in Receivership and I swear this affidavit in that capacity,” Kasule swearing an affidavit in Shs397 billion case. From the foregoing Justice Wangutusi said: “There is no doubt that the suit was filed by Bank of Uganda. Since section 96 of the Financial Institutions Act insulated Crane Bank under Receivership from court proceedings, execution or other legal processes the person that should pay costs should be the person who instituted the suit and that is Bank of Uganda. This is so because Crane Bank in Receivership had no capacity to foot the costs and much so the Bank of Uganda that instituted the suit was aware of this incapacity.” The Crane Bank case is just one example, shareholders of National Bank of Commerce and a few others have considered a legal battle to have their bank restored or be compensated. BoU’s legal department still will carry the blame for not advising rightly. The weakness of the department is the reason BoU relies more on the expensive external lawyers who dupe taxpayers. The question arises as to why that department exists?
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Schools find new exciting ways to make sure children learn
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In districts with historically low learning outcomes, a Twaweza study has identified schools that are performing well despite having no extra access to resources or other privileges. These schools stand out as strong performers in difficult contexts. The schools and their strategies were identified through a rigorous research process called positive deviance. These findings were released by Twaweza in a research brief titled, ‘How are some children learning when most are not? Positive deviance in Uganda’s primary schools’. The brief is based on a qualitative investigation of 17 schools in 10 selected districts. These observations were collected during one week per school in the second half of 2017 and early 2018. The resulting findings were validated in community sessions involving the study schools and others in the area. The inquiry unearthed six critical school and teacher driven strategies to promote learning: Promoting community involvement in schools Ensuring the wider community and parents are engaged in what is going on at school can help children to learn better by inspiring community members to take action directly to enhance learning as well as providing a supportive environment for the school. Schools can encourage the community to get involved through outreach activities and showing thy understand parents’ circumstances. For example, in one school, storage boxes were introduced for P1 and P2 children to safely keep their scholastic items at school thereby reducing the financial burden on parents by preventing repeated loss and other damage. Encouraging a culture of effort, openness and achievement in schools All school actors have to focus on achievement, ensuring children learn. Teachers and learners are encouraged to exert effort, the head teacher and the management committee are transparent in managing school resources, the head teacher leads by example and everyone’s actions are driven by the desire to create a friendly environment that positively nurtures learning for all children. For example, all head teachers in these successful schools taught classes, generally the candidate classes, even though they have many other school responsibilities. This leading by example encouraged greater effort from teachers as well. Ensuring children achieve mastery in schools In these schools that perform well, there is a strong effort placed on ensuring children really understand what they are being taught. The schools have introduced practices with this in mind and this increased effort and energy in turn inspires more creativity and hard work. For example, in many of the schools studied, subject teachers move grades with their cohort of students. This means that teachers understand their pupils better, can support them more effectively and that they cannot blame anyone else for skills gaps. Teacher support and motivation in schools All key players in these school communities appreciate the need for teachers to be supported and motivated to perform. Most schools in the study offer teachers public praise or certificates as a way of recognising and rewarding achievement. The schools also had peer-led professional development sessions to enable teachers to learn from their more experienced peers. For example in one school, the head teacher has performance contracts with all of the teachers to show what they need to achieve. And at the end of the year, the head teacher has a celebration for the teachers whose pupils perform well in the exams. Engaging school bodies Although every school in Uganda has a School Management Committee and a Parent Teacher Association, these can be inactive. These bodies can provide important support to the head teacher for the day to day running of the school and can ensure strong links between school and community. For example, in some of the schools, these bodies play a direct role in assessing the performance of teachers. Teachers caring for and prioritising learner needs At the subject level, there is lots of potential for creative strategies to promote learning. The effort and creativity of individual teachers can go a long way in helping children to learn. For example, in one school, the English teacher asks children to talk about the stories of films they have watched and encourages them to participate in debates in order to master the language. Julius Atuhura, Regional Research Coordinator on What Works in Education at Twaweza, said “The schools in this study are beacons of hope for all of us interested in education. Against all odds, and with no additional resources or special circumstances, these 17 schools are making a real positive difference to children’s learning. Through the actions of committed individuals, children are learning more and better. Let us use the types of strategies unearthed by this research to amplify the voices and experiences of teachers, to influence policy and support more and more children to learn.” Dr. Jane Egau, Commissioner, Teacher Instructor Education and Training (TIET) department, Ministry of Education and Sports (MoES) on behalf of the minister of state for Primary Education, Rosemary Seninde appreciated the findings of the report. He quoted part of Minister Seninde’s speech as: “As policy makers, we are keen on solutions that are implementable therefore understanding in very precise terms about; which strategy or practice costs lowest … in delivering better learning in schools so that as government we encourage such strategy being promoted for adoption as we work to plan to implement the other strategies. Answering these questions is helps us to bridge the gap between research, policy and practice.” Commenting Twaweza’s efforts the minister further said in a speech read for her that: “It is such efforts and readiness to seek workable solutions that advance the spirit of collaboration and partnership. I encourage all stakeholders to emulate initiatives that not only highlight problems or challenges, but also are a part of problem solving.” Commenting on the findings of the report, Filbert Baguma, the General Secretary of Uganda National Teachers Union (UNATU) urged stakeholders in the education sector to be practical in delivering service. “We know what has been going wrong but we need to move from lamentations to actions,” said Baguma. Other officials at the launch of the report findings called for the recognition of teachers who perform better in their work. “Our teachers need to be recognized for their work. We encourage the DEOs to write letters of appraisal to best performing teachers, as well as supporting their work. This works as motivation to them,” said, Moses Wambi, the Deputy Principal, Bishop Willis Core PTC. “We need to create mentorship programs for teachers to help them lead schools better, ” added Dr. C.T. Mukasa Lusambu, the Commissioner Basic Education, MoES. While Paul Kiirya Bidhampola, Head Teacher, Bigunho Primary School said that the role of the school management committees and Parents Teachers Associations is to mobilise communities to support school activities.
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Kenya welcomes Ugandan bird with water salute
Jomo Kenyatta International Airport officials have this afternoon treated Uganda Airlines aircraft to a water salute.
This was upon landing, a few minutes into 12 noon on a maiden flight from Entebbe International Airport.
The flight had on board top government officials and journalists.
Commercial flights start officially August 28, 2019.
Tuesday’s maiden flight to Nairobi was flagged off by the Prime Minister, Dr. Ruhakana Rugunda who said the country plans to play a critical role in the geopolitical and economic stability of East Africa as a region.
“Today, we stand here as witnesses to this historic moment were our national airline takes to the skies. I am glad some of us have had the honor to be associated with this great day. The country will always remember it. As a nation, we are strategically placed and with our airline, our neighbors will easily access our market and connect to their destinations,” he said before the plane took off to the skies from Entebbe International Airport.
“As we launch commercial flights, two of the four Bombardier aircraft were successfully delivered and approved to fly. The other two will be delivered next month as scheduled. The airbuses will be delivered later in 2020,” he said.
Uganda Airlines effective from tomorrow will make commercial flights to Nairobi, Juba twice daily, Mogadishu three times daily, Dar-es-Salaam and Kilimanjaro once a day, Bujumbura and Mombasa thrice a week.
The company will begin with two months promotional fares of Nairobi Return USD 278, Juba Return USD 225, Mogadishu Return US$ 590, Dar Return USD 286, Bujumbura Return USD 292, Mombasa Return USD 325, Kilimanjaro Return USD 311 inclusive of taxes.
In April, government received the first two of the four Bombardier CRJ900 regional Aircrafts that were ordered by Uganda National Airlines Company in July 2018.
The third jet will be delivered this month and the fourth plane is expected in September 2019. The commercialization of the airline will start on 28 august to various destinations in Kenya, Burundi, Democratic Republic of Congo (DRC), Ghana, Nigeria, Rwanda, Somalia, South Africa, Sudan, Tanzania, Zambia, Zimbabwe and Zanzibar.
Established in May 1976, Uganda Airlines, started operations in 1977 and was liquidated in May 2001 after efforts to privatize the company failed due to massive debts it had incurred.
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Sheik Amil Kinene walks free from illegal incarceration, Court acquitted him in 2017
The Court of Appeal has released, Sheik Amil Kinene, from illegal detention in Luzira upper prison, a place where he has spent two years on non-existent charges.
In 2017, the International Crimes Division of the High Court in Kampala, acquitted Sheik Amir Kinene, his brother Hakim Kinene Muswaswa, Abdulhamid Mubiru Sematimba, Hamza Kasirye, Twaha Ssekitto, Rashid Jjingo, Musa Issa Mubiru and George William Iga of charges related to the gruesome killing of Muslim clerics and terrorism.
The Tabliq sheikh was however not released upon acquittal as others gained their freedom. He has been held on fresh charges of aiding and abetting terrorism a charge that was consolidated into the terrorism of which he was acquitted in 2017. Court establishes that charges over which he’s been held are non-existent.
Yesterday court of Appeal judges led by Deputy Chief Justice, Alphonse Owiny-Dollo, Cheborion Barishaki and Elizabeth Musoke were surprised to hear the a person who was acquitted is still under detention.
They ordered directorate of public prosecution (DPP) and the officer in charge of Luzira upper prison to appear before court and explain why Amir Kinene is still incarcerated.
“Court acquits someone but you are still detaining him. The judgement was clear, why would you detain him,” the deputy chief justice asked
FUFA Super Cup: KCCA take on Proline in UPL curtain raiser
With only two days to the start of the 2019/20 StarTimes Uganda Premier League season, KCCA FC and Proline FC will battle for the 2019 FUFA Uganda Super Cup tomorrow.
The Uganda Super Cup is a match played before a new season, between the Uganda Premier League champions and Stanbic Uganda Cup champions of the previous season.
KCCA won the Uganda Premier League last season while Proline won the Stanbic Uganda Cup, beating Bright Stars 5-4 in penalty shootouts after a one-all draw in normal time.
KCCA are the Super Cup holders, having beaten Vipers 4-2 in penalties last year following a goalless draw. Goalkeeper Charles Lukwago was the hero of the day saving two spot kicks.
Earlier this week, KCCA lost the Pilsner Super 8 cup to Vipers in Wankulukuku and will be eager to get their hands on this trophy and add it to their cabinet before the season officially gets underway.
Proline are seeking to win the Super Cup for the first time ever while KCCA to win it for the third consecutive time.
The match acts as season curtain raiser for the upcoming 2019/20 Uganda Premier League campaign that gets underway on Thursday 29, 2019 with Kyetume hosting SC Villa at Namboole in a night game.
The Super Cup match will be played at StarTimes Stadium in Lugogo at 4pm.
Wednesday 28, August 2019
FUFA SUPER CUP
KCCA FC vs. Proline FC
StarTimes Stadium, Lugogo (4:00 pm)
World Bank, partners donate US$ 50m to WHO for fight against Ebola in DRC

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The World Bank and the World Health Organization (WHO), along with the Congolese government and other key partners, are working in close partnership on the Ebola Crisis Response in the Democratic Republic of the Congo (DRC). Central to this partnership is the assessment of the financing needs, and deployment of resources, with the goal to put an end to the current deadly outbreak. That is why World Bank alongside partners, has today announced US$50 million in funding to be released to WHO for its lifesaving operational work on the frontlines of the outbreak. According to WHO the funding will close the financing gap for its emergency health response in DRC through to the end of September 2019, and is calling on other partners to mirror the generous support from World Bank in order to fund the response through to December. The funding comprises US$30 million from the Pandemic Emergency Financing Facility (PEF) and US$20 million from the World Bank. The US$50 million in grant funding is part of the larger financial package of approximately US$300 million that the World Bank announced last month to support the fourth Strategic Response Plan for the DRC Ebola outbreak. “WHO is very grateful for the World Bank’s support, which fills a critical gap in our immediate needs for Ebola response efforts in DRC, and will enable the heroic workers on the frontlines of this fight to continue their lifesaving work,” said Dr. Tedros Adhanom Ghebreyesus, Director-General, World Health Organization. “We keenly await further funding from other partners to sustain the response through to the end of the year.” The DRC government, working in collaboration with the World Bank, WHO, and other key partners, has finalized the Fourth Strategic Response Plan (SRP4), which outlines the total resources needed for the DRC Ebola Crisis Response from July to December 2019. The financing announced today is part of the World Bank’s previously announced financial package of up to US$300 million and covers over half of SRP4’s needs, with the remainder requiring additional funding from other donors and partners. “The World Bank is working closely with WHO, the Government of DRC, and all partners to do everything we can to put an end to the latest Ebola outbreak,” said Annette Dixon, Vice President, Human Development at the World Bank. “The partnership between our organizations and the Government is critical for responding to the emergency as well as rebuilding systems for delivery of basic services and to restoring the trust of communities.” The Government of DRC requested US$30 million from the PEF Cash Window to be paid directly to WHO. The PEF Steering Body approved the request bringing the PEF’s total contribution to fighting Ebola in DRC to US$61.4 million. The PEF is a financing mechanism housed at the World Bank; its Steering Body is co-chaired by the World Bank and WHO, and comprises donor country members from Japan, Germany and Australia. The quick and flexible financing it provides saves lives, by enabling governments and international responders to concentrate on fighting Ebola—not fundraising.
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Relief as Uganda Airlines makes maiden flight to Jomo Kenyatta international airport
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Uganda Airlines has made its maiden flight to Jomo Kenyatta international airport (JKIA) in Nairobi, Kenya, a month after being granted Air Operator Certificate (AOC) from Uganda civil aviation authority (UCAA). The maiden flight was flagged off by the Prime Minister, Dr. Ruhakana Rugunda who said the country plans to play a critical role in the geopolitical and economic stability of East Africa as a region. “Today, we stand here as witnesses to this historic moment were our national airline takes to the skies. I am glad some of us have had the honor to be associated with this great day. The country will always remember it. As a nation, we are strategically placed and with our airline, our neighbors will easily access our market and connect to their destinations,” he said before the plane took off to the skies from Entebbe International Airport. “As we launch commercial flights, two of the four Bombardier aircraft were successfully delivered and approved to fly. The other two will be delivered next month as scheduled. The airbuses will be delivered later in 2020,” he said. Uganda Airlines effective from tomorrow will make commercial flights to Nairobi, Juba twice daily, Mogadishu three times daily, Dar-es-Salaam and Kilimanjaro once a day, Bujumbura and Mombasa thrice a week. The company will begin with two months promotional fares of Nairobi Return US$ 278, Juba Return US$ 225, Mogadishu Return US$ 590, Dar Return US$ 286, Bujumbura Return US$ 292, Mombasa Return US$ 325, Kilimanjaro Return USD 311 inclusive of taxes. But the passengers can pay in Ugandan currency as well. In April, government received the first two of the four Bombardier CRJ900 regional Aircrafts that were ordered by Uganda National Airlines Company in July 2018. The third jet will be delivered this month and the fourth plane is expected in September 2019. The commercialization of the airline will start on 28 august to various destinations in Kenya, Burundi, Democratic Republic of Congo), Ghana, Nigeria, Rwanda, Somalia, South Africa, Sudan, Tanzania, Zambia, Zimbabwe and Zanzibar. Established in May 1976, Uganda Airlines, started operations in 1977 and was liquidated in May 2001 after efforts to privatize the company failed due to massive debts it had incurred. Its revival now means Uganda Airlines will have to compete with Africa’s best such as South Africa Airways, Ethiopian Airways, Kenya Airways, RwandAir and others on the continent, not forgetting International ones such as Emirates Airways, Qatar Airways and Turkish Airways among others that land at Entebbe International Airport.
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Brazil rejects aid from G7 countries to fight wildfires in Amazon
Brazil on Monday rejected aid from G7 countries to fight wildfires in the Amazon, with a top official telling French President Emmanuel Macron to take care of “his home and his colonies.”
Nearly 80,000 forest fires have broken out in Brazil since the beginning of the year — just over half of them in the massive Amazon basin that regulates part of Earth’s carbon cycle and climate.
G7 countries made the $20 million aid offer to fight the blazes at the Biarritz summit hosted by Macron, who insisted they should be discussed as a top priority.
“We appreciate (the offer), but maybe those resources are more relevant to reforest Europe,” Onyx Lorenzoni, chief of staff to President Jair Bolsonaro, told the G1 news website.
“Macron cannot even avoid a foreseeable fire in a church that is a world heritage site,” he added, referring to the fire in April that devastated the Notre-Dame cathedral. “What does he intend to teach our country?”
The presidency later confirmed the comments to AFP.
Brazilian environment Minister Ricardo Salles had earlier told reporters they had welcomed the G7 funding to fight the fires that have swept across 950,000 hectares (2.3 million acres) and prompted the deployment of the army.
But after a meeting between Bolsonaro and his ministers, the Brazilian government changed course.
“Brazil is a democratic, free nation that never had colonialist and imperialist practices, as perhaps is the objective of the Frenchman Macron,” Lorenzoni said.
Although about 60 percent of the Amazon is in Brazil, the vast forest also spreads over parts of eight other countries or territories, including the French overseas territory of Guiana on the continent’s northeast coast.
Hundreds of new fires have flared up in the Brazilian part of the forest, data showed Monday, even as military aircraft dumped water over hard-hit areas.
Smoke choked Porto Velho city and forced the closure of the airport for nearly two hours as fires raged in the northwestern state of Rondonia where firefighting efforts are concentrated.
Bolsonaro — a climate-change skeptic — has faced criticism over his delayed response to the fires at home and thousands have taken to the streets in Brazil in recent days to denounce the destruction.
The blazes have also fueled a diplomatic spat between Bolsonaro and Macron, who have locked horns repeatedly over the past week.
The French president has threatened to block a huge new trade deal between the European Union and Latin America unless his Brazilian counterpart takes serious steps to protect the fast-shrinking forest from logging and mining.
Bolsonaro reacted by blasting Macron for having a “colonialist mentality,” and days later endorsed vicious personal comments about the French president’s wife posted online, driving their relationship to a new low.
In another sign of tension, Bolsonaro skipped a meeting last month with visiting French Foreign Minister Jean-Yves Le Drian, saying that he had instead gone to the hairdresser.
Monitoring global financial stability
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By Tobias Adrian, Dong He, Nellie Liang, and Fabio Natalucci
“It’s awful. Why did nobody see it coming?” asked Queen Elizabeth II in November 2008 during a visit to the London School of Economics, wondering why nobody had predicted the Global Financial Crisis. The bewilderment wasn’t unique to the British monarchy; across the world, many asked the same question. Ten years on, it remains difficult to forecast financial instability. However, progress is afoot to improve the understanding of important links between the financial sector and the economy. We now understand better how financial vulnerabilities can amplify negative shocks and hurt output and employment. Twice a year, the IMF comes out with its latest analysis of global financial stability risks in the Global Financial Stability Report, where it continues to initiate improvements in a framework for financial stability monitoring. The current approach, described in a new IMF paper, involves a systematic assessment of financial vulnerabilities for financial firms and markets, and business, household and government borrowers, and a summary financial stability risk measure in terms of forecast GDP growth depending on financial conditions. The two-part approach enhances transparency and provides a path to better communication among financial regulators and central banks, and ultimately policymaking. We now understand better how financial vulnerabilities can amplify negative shocks and hurt output and employment. How it works In the framework, cyclical financial stability risks go up as lenders and borrowers increase risk-taking in response to loose financial conditions. Greater collective risk-taking leads to a buildup of financial vulnerabilities, such as high borrowing or maturity mismatch of financial firms. Vulnerabilities will amplify shocks and lead to tighter financial conditions and reduce economic growth. This process is mutually reinforcing as vulnerable financial firms are forced to reduce their debt when asset prices fall, leading to further declines in asset prices and economic growth. The first part of the current approach involves a “bottom-up” monitoring matrix of indicators, defined by types of vulnerabilities across types of lenders and borrowers in the financial system. Financial vulnerabilities include inflated asset valuations; greater leverage and funding mismatches of banks and other financial firms; and greater indebtedness among nonfinancial borrowers, including households, businesses, and governments. The chart below shows this matrix in a graphic form, including snapshots of the degree of vulnerabilities for lenders and borrowers at different points in time. It illustrates the high vulnerabilities of banks and nonbank financial firms globally and the high indebtedness of households in many countries at the time of the crisis, and the substantially stronger positions now. Over time, this matrix may evolve as the monitoring framework should adapt to capture vulnerabilities that may emerge in new forms.
The second part of the approach is a “top-down” summary measure of financial stability risk—“Growth at Risk” or GaR—measured by downside risks to projected GDP growth depending on financial conditions. The key innovation of GaR is that the entire distribution of forecast GDP growth is linked to financial conditions, which capture the underlying price of risk in the economy. In other words: When forecasting GDP growth, think in terms of probabilities. It is important to consider not only expected growth but risks to expected growth. The chart below shows how the probability distribution of forecast global GDP growth shifts in reaction to financial conditions at three different points in time. Global financial conditions for the two quarters before the April 2019 GFSR were tighter than in 2018:Q3 and, as a result, the downside risks to forecast year-ahead GDP growth increased somewhat.
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