US to sell Saudi Arabia arms worth $60bn in biggest deal

Posted in Broader Middle East , United States | 15-Aug-10 | Source: The Peninsula

WASHINGTON: A proposed US weapons sale to Saudi Arabia of F-15 fighter jets also includes as many as 132 Apache attack helicopters and UH-60 Black Hawk helicopters that bring the total value of the package to around $60bn, according to a government official familiar with the plan.

The Pentagon and State Department about two weeks ago informally notified congressional committees that handle arms sales of the planned transaction, the official said.

"I think it would be the largest ever," said William Hartung, director of the New York City-based New America Foundation's Arms and Security Initiative.

"Other deals that used to be considered large," like the $9bn sale of 72 F-15s to the Saudis in 1992-93 or the kingdom's $9bn acquisition of US AWACS surveillance aircraft in 1981, "aren't even in the ballpark, even allowing for inflation," Hartung said.

The package includes 84 F-15s at a cost of $30bn and helicopter sales totalling about $30bn that include spare parts, training simulators, long-term logistics support and some munitions.

The Saudis would buy about 72 UH-60 Black Hawk helicopters and as many as 60 AH-64D Longbow Apaches, the official said. The Longbow is the US Army's premier anti-tank helicopter, capable of firing laser-guided or all-weather air-to-ground missiles. The Longbows are in addition to 12 that Congress in 2008 cleared Boeing to sell to the Saudis.

The proposal fits the Obama administration's strategy of buttressing the defence capabilities of Middle East allies to counter Iran's growing offensive missile might and suspected nuclear weapons programme. It would be part of the Gulf Security Dialogue started by the Bush administration.

The Longbow Apache has been sold to Egypt, Israel, Greece, Kuwait, the United Arab Emirates, the Royal Netherlands Air Force, Singapore and Taiwan.

The Pentagon intends to formally notify the Senate and House foreign affairs panels by mid-September of the final arms package, the official said.

"In the past, a record-setting deal to a region of tension like the Persian Gulf would have drawn considerable congressional opposition," Hartung said. "That does not seem to be the case this time around."

"Other foreign policy issues from Iraq and Afghanistan to the consideration of the new START treaty, seem to have taken up most if not all of the attention Congress can or will spend on foreign policy matters," Hartung said. The Senate is scheduled to consider the new Strategic Arms Reduction Treaty with Russia when it returns next month from its summer recess.

Saudi Arabia's last significant US weapons purchase was 72 F-15s in 1992, a transaction valued at as much as $9bn. The last planes in that contract were delivered in November 1999.

The kingdom spent $36.7bn worldwide on arms and support activities from 2001 to 2008, according to the nonpartisan Congressional Research Service.

DRC waits on funding for world's largest hydropower project

22 MAY 2013 09:49 - GUARDIAN REPORTER

The World Bank and other financial institutions are expected to offer finance and 

South Africa has agreed to buy half of the power generated.

French, Belgian, Chinese, Brazilian and African engineers have, over 60 years, all hoped to
dam the Congo. But decades of civil war, corruption, and the Democratic Republic of
Congo's (DRC) reputation as a failed state have limited the hydropower developments
at Inga Falls to two relatively small dams, built in 1972 and 1982. These, dubbed Inga 1 and 2,
have a theoretical capacity of 1 400MW but produce only about half that.
A new $20-billion development to generate a further 4 800MW was announced over the
weekend in Paris with work planned to start in October 2015. According to the DRC government,
working with European and other consultants, five further stages at Inga Falls could eventually
have a capacity of 40 000MW – the equivalent of more than 20 large nuclear power stations.
This would make the complete Grand
Inga development the largest hydro project
 in the world, generating twice as much as
the Three Gorges dam in China. In theory,
 say its backers, it could provide 40% of
Africa's electricity needs.
The attraction of developing hydropower
on the Congo, says the government,
is that unlike most of the world's great
dam projects it would not require tens of
 thousands of people to be relocated,
nor would it block the river and result in significant environmental consequences. Because
the Congo River around Inga is so vast and falls nearly 100 metres over a short distance,
water can be diverted to create a massive new lake without disturbing its main flow.
Financing
"The impact on land use is very limited. The development can be progressive and carried
out in a series of further phases, eventually providing 40 000MW of power," says the technical
data for the proposed development.
The African Development Bank, World Bank, French Development Agency,
 European Investment Bank and Development Bank of South Africa have all shown interest
in financing the next stage of the project. No developer has been chosen but Chinese,
Korean and Spanish companies are said to be in the forefront.
Key to the project is South Africa's commitment this week to buy 2 500MW of capacity.
"We have affirmed our commitment to the project by already provisioning for this purchase
in our budgetary plan," said South Africa Ministry of Energy official, Garrith Bezuidenhoudt.
But the prospect of the local population getting power from Inga in the next 20 years is remote.
Less than 10% of the population currently has electricity, with nearly all Inga 1 and 2 power
going directly to multinational mining companies in the Katanga "copper belt". It is expected
 most Inga 3 power would travel 1 500 miles to power-hungry South Africa or large mines
in Congo.

Bad track record
Giant hydropower schemes in Africa have a bad track record. "Projects such as Inga 1 and
2 have not unleashed economic development, but have been major contributors to African
countries' unsustainable debt burden," said US-based International Rivers network which
has led opposition to major dams around the world for 20 years.
In a letter last week to the World Bank president, Jim Yong Kim, International Rivers and
18 other civil society organisations and networks from Africa, Europe and the United States
said the reality of large-scale dams seldom matched their expectations, mostly adding
to debt problems and allowing powerful companies to cheaply exploit and export Africa's
vast natural resources.
According to the groups, the International Energy Agency (IEA) has found that because
of the continent's low population density, grid-based electrification, including through
large hydropower projects, is not cost-effective for much of rural sub-Saharan Africa.
"Distributed renewable energy solutions such as wind, solar and micro hydropower
projects are much more effective at reaching the rural poor. According to the IEA report,
70% of the world's unelectrified rural areas are best served through mini-grids or
off-grid solutions," said the letter.
"In the DRC, the World Bank and other financiers have invested billions of dollars in
the construction and rehabilitation of the Inga 1 and 2 hydropower projects and
associated transmission lines over the past 40 years. After all this investment,
85% of the electricity in the DRC is consumed by high-voltage users, while only 6% to 9%
of the population has access to electricity. We are concerned that the bank's
proposed focus on large hydropower projects will write off electricity access for
the majority of Africa's poor." – Guardian News and Media 2013 

Nigeria Ranked Top 20 economies by 2050.

Nigeria Minister of Finance, Dr. Ngozi Okonjo-Iwealareuters

Nigeria to be Ranked 13th among World’s Top 20 Economies by 2050, says PricewaterhouseCoopers Report.

PricewaterhouseCoopers (trading as PwC), a major international  accountancy and multinational professional services firm has issued a report that predicted that Nigeria will be ranked one of  top 20 largest economy in the world by 2050. With a projected GDP of almost $4 trillion by 2050, 6 percent growth and vibrant youthful population, Nigeria's economic future looks very promising and reassuring. But does Nigeria has what it takes to make it happen?

The report published by the Pricewaterhouse Coopers (PwC’s) macroeconomics team was based on the modeling approach that is anchored on the utilization of the  World Bank GDP data up to 2011 and  "medium term projections for real GDP growth between 2012 and 2017. We then use our long-term economic model to estimate trend growth rates from 2018 to 2050." PricewaterhouseCoopers projections are based on the below specific paradigm tabulation:

· Growth in the population of working age (based on the latest UN population projections).

· Increases in human capital, proxied here by average education levels across the adult population.

· Growth in the physical capital stock, which is driven by capital investment net of depreciation.

· Total factor productivity growth, which is driven by technological progress and catching up by lower

income countries with richer ones by making use of the latter’s technologies and processes.

The key point here is that it is a microeconomics projections based on econometric forecasting with sound empirical data. The probability advantage is there, but the certainty may not be there, for the outcome is not written on the stone. The bulk of the work must be done by Nigeria to become a powerful and sustainable economy by 2050.Nigeria must diversify her economy away from oil. An economy based on export of natural resources, oil in case of Nigeria is not the wave for the economy of 21st century. Moreover, all corners of the world are overflowing with oil and the coming of the nosedive of oil price and glut are inevitable.

At the interim, Nigeria's natural resources especially it's large earning from crude oil can do a whole lot of good when it is put into a good use especially in the provision of durable infrastructures. Oil can be an engine of development, PricewaterhouseCoopers report put it this way, "Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions (e.g. as regards rule of law and political governance) and hence support long term productivity growth – the potential is there, but it remains to be realized in practice."  This report reinforces that Nigeria vibrant and mammoth population is a thing of joy, when properly managed and geared into optimum productivity and wealth creation. But the youths must be encouraged and incentify to shy away from life of crime and violence.

Nigeria must keep her young and growing population educated and healthy. Poor educational facilities and inferior technological curriculum for schools will not cut it. Nigerian workforce must be familiarize with modern technology and technical know-how for them to take the advantage of the future opportunities. Nigeria must be able to compete with China and India for investments and capitals.

Nigeria realization of this prediction is also based on having a sound macroeconomics fundamental which includes low to moderate inflationary rate, a stable currency and implementation of an attractive and incentive-orientated fiscal policy that is commerce, investment and trade friendly. Nigeria needs a sustainable political economy stability that is rooted and planted on peace and prosperity. Naira can be safeguard and not be open for aggressive speculators to weaken it. Nigeria should accumulate an intimidating foreign reserve as a war chest to stabilize naira which is doable with arrays of export products other than oil.

.

According PwC report, "The world economy is projected to grow at an average rate of just over 3% per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.". In this case, Nigeria has a good prospect because her economy is projected to grow at 6 percent or even more  in the future and Nigeria has the advantage because many sectors of the economy that needs to be improve and can attract more capitals and investments.

While China and India are making their biggest gains by 2050, many other economies including Brazil, Poland, Mexico, Indonesia, Vietnam and South Korea are becoming economic powerhouses on their respective regions and on global economic theater. The PricewaterhouseCoopers report stated that:

"China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third ‘global economic giant’ by 2050, a long way ahead of Brazil, which we expect to move up to 4th place ahead of Japan. Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by  around 2035 at market exchange rates. Emerging economies such as Mexico and Indonesia could be larger than the UK and France by 2050, and Turkey larger than Italy. Outside the G20, Vietnam, Malaysia and Nigeria all have strong long-term growth potential, while Poland should comfortably outpace the large Western European economies for the next couple of decades".

Nigeria policy makers should see this report as a clarion call to be ready and alert to put her house in order and to set her priorities right. The path to a powerful economy by 2050 is paved with discipline, hard work and supreme dedication. The problems of corruption and mismanagement must not be given the room to side track this radiant projection.

2050 Projected  GDP at PPP  (2011 US$bn)

1. China 53,856

2. US 37,998

3. India 34,704

4. Brazil 8,825

5. Japan 8,065

6. Russia 8,013

7. Mexico 7,409

8. Indonesia 6,346

9. Germany 5,822

10. France 5,714

11. UK 5,598

12.Turkey 5,032

13.Nigeria 3,964

14. Italy 3,867

15. Spain 3,612

16. Canada 3,549

17. South Korea 3,545

18.Saudi Arabia 3,090

19. Vietnam 2,715

20. Argentina 2,620            (Source: PwC)

BRICS reach deal over development bank which will change the balance of power

Deal by emerging nations meeting in South Africa one of several moves to challenge Western-backed monetary institutions.

The BRICS grouping of emerging powers have reached a deal to establish a development bank that would rival Western-backed institutions. "It's done," South African Finance Minister Pravin Gordhan said after meeting with his counterparts from Brazil, Russia, India and China. BRICS FACTS Economic data shows that the grouping of Brazil, China, India, Russia and South Africa now account for 25 percent of global GDP and 40 percent of the world's population. China has become the informal leader of the group. With a GDP of $8.25 trillion in 2012, the IMF estimates that the Chinese economy will climb by a whopping 8.2 percent in 2013.It remains the globe's most-populated country, with 1.34 billion inhabitants. Brazil: With a GDP of $2.425 trillion in 2012, Brazil is the world's seventh largest economy. It holds only a modest place in world trade activity, however, and experienced sluggish growth of one percent last year. Russia: Ranking ninth on the list of the world's biggest economies, Russia accumulated a GDP of $1.953 trillion in 2012, boosted mainly by its gas exports, making it the world's eighth largest exporter. India: Despite its population of 1.24 billion, India remains a smaller player among the world's economies, falling into a 10th place with a GDP worth 1.946 trillion. South Africa: Smallest of the BRICS economies is South Africa. Placing 41st world exporters, the country has a GDP of $390 billion and a population of 50.5 million. "We made very good progress, the leaders will announce the details," he added, just hours before the opening of a BRICS summit in the South African port city of Durban on Tuesday. But Russian Finance Minister Anton Siluanov said that the group's ministers were unable to agree on some of the details of the project. "A decision on the location of the bank and funding still needs to be made," he told reporters in Durban, adding that further steps would be required before the BRICS development bank could be created. Together the BRICS account for 25 percent of global GDP and 40 percent of the world's population. But members say institutions such as the World Bank, the International Monetary Fund and the UN Security Council are not changing fast enough to reflect their new-found clout. Disputes remain over what the new bank will do, with all sides trying to mould the institution to their own foreign or domestic policy goals, and with each looking for assurances of an equitable return on their initial investment of about $10bn. China and Brazil also signed an agreement at Tuesday's meeting to do billions of dollars of trade in their local currencies, as the BRICS nations work to lessen their dependence on the US dollar and euro. Finance ministers Lou Jiwei of China and Guido Mantega of Brazil signed the deal, amid the continuing euro crisis and little signs of growth in the West. 'Positive headway' Xi Jinping, who has underscored the growing importance of the group by making Durban his first summit as China's president, had earlier expressed hopes for "positive headway" in establishing the bank. South African President Jacob Zuma has lauded the summit as a means of addressing his country's chronic economic problems, including high unemployment. "BRICS provides an opportunity for South Africa to promote its competitiveness," Zuma said in a speech on the eve of the summit. "It is an opportunity to move further in our drive to promote economic growth and confront the challenge of poverty, inequality and unemployment that afflicts our country." In a keynote speech in Tanzania on Monday, Xi pledged Beijing's "sincere friendship" with the continent, and a relationship that respects Africa's "dignity and independence". If initiatives such as the bank succeed it would send a loud message to the US and European nations that the current global balance of power is unworkable.

OPIC approves $288 million for two wind power projects

03/24/2013

By RECORDER REPORT

The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a total of $288 million in financing for two wind power projects poised to deliver much-needed electricity to Pakistan and Peru. Affirming OPIC's commitment to support efforts by Pakistan, OPIC President and CEO Elizabeth L. Littlefield said OPIC it would help diversify its energy production to include important contributions from renewable energy sources, says a press release issued on Saturday.

"The wind power projects will enable both countries to take advantage of their massive renewable energy potential to help meet unmet demand for electricity," Ms Littlefield continued. "We are thrilled to partner with innovative US companies to bring these highly-developmental projects to realisation. "The provision of clean and reliable electricity is an essential building block of any economy," she added.

The OPIC credit facility would help build a 50MW wind power plant in Gharo-Ketti Bandar Wind Corridor, designed to generate 133 Giga Watt hours of emission-free electricity annually. Using GE Wind turbines, the Sapphire Wind Power plant would help Pakistan diversify its power generation beyond reliance on high-priced fuel oil by tapping vast renewable energy potential, which the corridor alone possesses generation capacity of over 132,000MW - virtually equal to the world's entire installed wind capacity for 2010.

To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in US exports and supported more than 277,000 American jobs.

Talking about the OPIC financing the CEO AEDB, Arif Alauddin stated that he has been trying for OPIC funding for Pakistan projects for some time, and is glad to see it coming now. OPIC is already funding a SSJD Energy's 12MW Baggass based Renewable Energy Project in Pakistan.

In the wind sector, following Sapphire, Fina Energy of Turkey is the next project in the OPIC pipeline for Pakistan. CEO AEDB also stated that RE has already become the sector attracting the largest investment of any sector in the country. He expects that in the next two years Thatta alone will attract more than $2 billion in wind sector. This amount is expected to increase as soon as the solar tariff is announced.

Tony Blair expands his African empire into mineral-rich Guinea

Tony Blair has added to his burgeoning African empire. The former prime minister can now count himself as official adviser to the president of Guinea, a hot, steamy republic in west Africa in possession of vast mineral resources.

Image 1 of 2

Tony Blair with Alpha Conde, the president of Guinea Photo: AFP/GETTY

By Robert Mendick, Chief reporter

8:30AM GMT 11 Mar 2012

The agreement coincides with a deal to explore new mining opportunities signed by the government of Guinea and a Middle East investment fund, which also employs Mr Blair as an adviser on business matters.

That contract potentially opens Mr Blair up to accusations of a conflict of interest — as an adviser to both parties.

Guinea is the fourth state in Africa — after Rwanda, Liberia and Sierra Leone — to invite Mr Blair and his entourage into government. The formal partnership between Guinea and Mr Blair’s charity, the African Governance Initiative (AGI), was sealed at the end of last year after six months of negotiation.

Mr Blair can now include Alpha Conde on his list of African rulers with whom he is close. Mr Conde, a political science professor, came to power in 2010, the first time Guinea had elected its president freely and fairly since gaining independence from France more than 50 years ago.

Guinea, despite being one of the poorest and most corrupt countries on earth, may prove to be the jewel in AGI’s crown. After years of brutal, dictatorial rule, Guinea, which has a population of just 10 million in an area the size of the UK, has huge potential for growth.

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Guinea is the world’s biggest producer of bauxite, used to make aluminium, and is set to become the third largest source of iron ore. There are also significant deposits of diamonds, gold and uranium. Bauxite reserves are estimated at 25 billion tons while there are a further four billion tons of iron ore.

AGI is currently deploying a team on the ground in Guinea’s ramshackle capital Conakry to instil good governance among its ministers and bureaucrats. Significantly, it will also involve itself in attracting foreign investors.

AGI’s website boasts of the charity’s determination “to attract the sustainable investment to build strong economies for the future”. One West African diplomatic source told The Sunday Telegraph: “AGI’s dealings are part business and part charity. While some people in his organisation are pushing the shepherding bit of his operation, others are doing business on the mineral resources side of things.”

A source in Guinea praised Mr Blair’s efforts. “I believe their commitment is genuine,” said the source. “In Guinea, it has already led to improvements in decision-making and coordination of policy.”

Mubadala Development Company, a £20 billion sovereign wealth fund set up by the Abu Dhabi government, signed the “collaboration agreement” with Guinea in November. It includes investing in new bauxite and iron ore mines.

Mubadala is well known to Mr Blair. His private consultancy Tony Blair Associates has been a paid adviser to the company since 2009.

It has been speculated that Mr Blair, who has seven properties to run including a town house in London and a country estate in Buckinghamshire, earns around £1 million a year from Mubadala, although a source at the company suggested that sum was too high.

There is no evidence that as an unpaid adviser to the Guinean government, Mr Blair or his team were in any way involved in the Mubadala agreement with Guinea. Nor is there any suggestion that Mr Blair has profited personally from the deal.

On Mr Blair’s role in Mubadala, a spokesman for the fund said: “He is one of many valued advisers on business matters to Abu Dhabi.

“Tony Blair does not receive any remuneration from Mubadala in respect of Guinea and has no commercial interest in the Mubadala connection there.”

Mr Blair’s spokesman said: “All the work he does for AGI is pro bono, he has no commercial interest connected with any of the work he does for AGI in these countries and indeed he supports the charity with his own money.”

AGI described Mr Blair as a “leading advocate” for Africa who believed its future depended on a thriving private sector.

The AGI spokesman said: “He [Mr Blair] frequently discusses the development of AGI’s partner countries with other governments, companies, philanthropic foundations and development agencies. He has no commercial interest in any such discussions and all the work he does as patron of AGI is on a pro bono basis.”

Mr Blair first visited Conakry last June and returned there in December to formally agree AGI’s tie-up with Guinea.

AGI is run from Mr Blair’s London headquarters in Grosvenor Square by Kate Gross, a former adviser to Mr Blair when in Downing Street, while its country head in Guinea is Shruti Mehrotra, previously a campaigner with anti-corruption charity Global Witness.

Mr Blair and Mr Conde appear to have struck up a good friendship.

Mr Blair has said he was “attracted by the vision” of Mr Conde, while for his part Mr Conde declared in December: “The first thing that Tony Blair brings is his expertise; second, the experts who he has put at our disposal; third he helps us see that it’s not just enough to define priorities, we need timetables to deliver them.”

A month earlier, Mubadala announced it had signed “agreements to explore new investments and partnerships in strategic sectors such as bauxite, alumina and iron ore”. A press release issued at the time noted the deal would “deliver significant benefits to the economies of both the Republic of Guinea and United Arab Emirates”.

It is not known if Mr Blair was involved in Mubadala’s decision to move into Guinea. Another acquaintance of Mr Blair also has an interest in the country. Oleg Deripaska, oligarch and friend of Lord Mandelson, owns a bauxite mine and a smelting plant in Guinea through his company Rusal, the world’s largest producer of aluminium.

Rusal also held talks in November with Sierra Leone’s president, Ernest Bai Koroma, over a new bauxite mining project. Separately Mr Blair is an adviser to Mr Koroma.

Mr Blair has previously benefited from Mr Deripaska’s largesse. Another of Mr Blair’s charities — an environmental campaign group called Breaking the Climate Deadlock — was given £300,000 by Mr Deripaska in 2009.

Mr Blair has been linked to Rusal through another of his advisory roles.

In 2009, JP Morgan, an investment bank which pays Mr Blair about £1 million a year, tried to put together a deal in which Rusal would be refinanced through a £3 billion loan from the Libyan Investment Authority.

JP Morgan linked the deal to a trip being made by Mr Blair to Tripoli to see Col Muammar Gaddafi — although Mr Blair denies any knowledge of the JP Morgan negotiations, which later fell through.

A Rusal spokesman said last week: “Tony Blair has never participated in any negotiations regarding Rusal’s business and has never been an adviser or consultant to the company.”

A source added: “They are adamant they have had no dealings with him in Africa.”

Africa is only one part of Mr Blair’s growing empire. Mr Blair — or companies associated with him — also has consultancies with the governments of Kuwait and Kazakhstan, and the Swiss insurance group Zurich Financial Services.

In January is was disclosed that a management company set up by Mr Blair had an income of more than £12 million but paid tax of just £315,000 on profits of more than £1 million.

Mr Blair’s total fortune has been estimated as between £30 million and £40 million, although Mr Blair’s aides deny it is that high.