Exclusive: Sudan needs up to $5 billion in budget support to prevent collapse

© Reuters. Sudan's Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum © Reuters. Sudan’s Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum

By Khaled Abdelaziz, Ulf Laessing and Michael Georgy

KHARTOUM (Reuters) – Sudan needs up to $ 5 billion in budget support to avert economic collapse and launch reforms after the ouster of veteran ruler Omar al-Bashir, its finance minister told Reuters.

The country, in crisis since losing most of its oil wealth with South Sudan’s secession in 2011, has only enough foreign currency reserves to fund imports for a few weeks, said Ibrahim Elbadawi, part of a transitional government formed in August.

Sudan has had some support for fuel and wheat imports but about 65 percent of its 44 million people live in poverty and it needs up to $ 2 billion in development funding along with a hoped-for $ 2 billion from Arab development funds, he said.

Outlining reform plans in detail for the first time, Elbadawi said public salaries would need to be increased and a social support network established to prepare for the painful removal of fuel and food subsidies.

Months of demonstrations over price hikes for fuel and bread and cash shortages triggered the uprising against Bashir, who was toppled in April by the military. Protests have continued since, with people killed in clashes with security forces.

“We have started the process (of reforms),” Elbadawi said in an interview on Thursday. “The people of Sudan deserve to be seen in a radically different prism than the international community used to see Sudan, as a country ruled by a pariah state.”

“Now we have a revolution,” he said. Asked how much budget support was needed for 2020 he said: “Some estimates say between three to four billion (US dollars), maybe even five billion.”

The civilian government Elbadawi is part of has taken over for three years under a power-sharing deal with the military. It has drawn slightly more than half of $ 3 billion in support for imports of wheat and fuel offered by Saudi Arabia and United Arab Emirates in April, he said.

A “friends of Sudan” donor meeting is planned for December and the government had agreed with the United States it could start engaging with international institutions while still on a list of countries deemed sponsors of terrorism, Elbadawi said.

The designation, which dates from allegations in 1993 that Bashir’s Islamist government supported terrorism, makes it technically ineligible for debt relief and financing from the IMF and World Bank. Congress needs to approve a removal.

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The first experts from international institutions had arrived in Khartoum to help with reforms and a delegation of the International Monetary Fund (IMF) would come this month for Chapter IV discussions, Elbadawi said. There was no immediate comment from the IMF, World Bank or U.S. State Department.

Part of a roadmap agreed with the IMF and World Bank was that Sudan did not have to pay back $ 3 billion in arrears from international institutions.

“We don’t need to pay anything. What we need to … deliver really is policy,” he said. Sudan is one of the most indebted countries, owing $ 60 billion, which needs to be settled separately.

Sudan would start to increase its tax base and overhaul the civil sector, Elbadawi said. Salaries — eroded by double digit inflation rates — could be raised as much as 100 percent by April.

In the second half of next year a social support network would be set up to allow the lifting of subsidies by June or later. Some donor funding would be used to collect data to allow cash transfers for the needy.

Sudan also wanted to produce bread based on sorghum, a local cereal, to import less wheat. He said he hoped a spread between official and black market would be ended by June. But this week the local pound dropped to 80 for a dollar on the black market versus the official rate at 45.

He said the 2020 budget would have sustainable development targets for education, health care and social spending, suggesting Sudan might move away from the dominant military spending choking development.

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Brexit – report doing the rounds is PM Johnson is preparing for exit talks to collapse

This is being spread about quite widely, but is anyone in any way surprised?

Spectator magazine (in the UK) says Boris Johnson’s government is preparing for Brexit talks to collapse,

  • BJ will blame Ireland and European Union leaders

Spectator magazine citing an unnamed person in Johnson’s office.

I thought this was obvious? The UK government has put forward nothing credible to deal with border issues in Ireland. And the EU is not about to budge on this. This has been the case for, what 3 and a half years? 

Anyway, there you go.   

This is being spread about quite widely, but is anyone in any way surprised?

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Bridge collapse in Taiwan sends oil tanker tumbling onto boats

TAIWAN-ACCIDENT-BRIDGE
This general view shows a bridge after it collapsed in the Nanfangao fishing harbor in Suao township on October 1, 2019. Getty

Taipei, Taiwan — A towering arch bridge over a bay in eastern Taiwan collapsed Tuesday, sending an oil tanker truck falling onto boats in the water below. The search for potential victims involved an air force helicopter and more than 60 army and naval personnel, including divers.

Six people were believed trapped on one of the boats, the National Fire Agency said in a statement. Interior Minister Hsu Kuo-yung told reporters about five people were feared to have been on the bridge when it collapsed. Ten people were sent to hospitals, six of them with serious injuries.

Fishing vessels were helping to search for the missing, Hsu told Formosa TV.

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The bridge collapsed about 9:30 a.m. in Nanfangao, a tiny but often-crowded Pacific coast fishing village.

The weather at the time of the collapse was sunny, hours after a typhoon swept across parts of the island. Disaster relief officials would not say if the storm had weakened the bridge or give other details on the potential cause. Government-run Central News Agency said a bridge pier may have collapsed.

Taiwan President Tsai Ing-wen said she hoped all government departments would do everything possible to save people and “keep the number of deaths and injuries as low as possible,” CNA reported.

National Fire Agency spokesperson Su Hong-wei said the tanker’s fall smashed three boats.

Typhoon Mitag had brought high winds and heavy rain to northern Taiwan on Monday night before moving northeast. Flights and ferry services had been canceled Monday.

The 460-feet Nanfangao Bridge is a tourist attraction in Yilan. It was opened in 1998 and was built to replace a lower bridge that prevented large fishing vessels from passing underneath.

According to the company that designed the 18-meter-high (nearly 60 feet) high bridge, MAA Consultants, it’s the only single-span arch bridge in Taiwan supported by cables and the second single arch-cable steel bridge in the world.

Video footage on Twitter showed a large truck almost getting across the bridge and then tumbling backward as the bridge collapsed into the water.

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Forex – Argentinian Peso Collapse Sends Shockwaves Through Markets

© Reuters.  © Reuters.

Investing.com – The dollar surged against higher-yielding currencies on Monday as a plummeting sent shockwaves through emerging markets.

The dollar rose by more than one-third against the peso after a weekend primary for presidential elections in the G20 member later this year showed incumbent Mauricio Macri far behind his biggest rival, the populist Alberto Fernandez.

Fernandez’ running mate is former president Cristina Fernandez de Kirchner, from whom Macri took over as President in 2015. Fernandez is viewed with suspicion by many investors, who remember the capital controls, high inflation and chronic economic problems of de Kirchner’s last administration.

The shock also weakened of other emerging currencies perceived as vulnerable, especially at a time of slowing global growth. The dollar rose by 1.3% against the and by 1.0% against the . Further afield, it also rose by 1.2% against the {{|Turkish lira}} and by 0.5% each against the and .

By 11:20 AM ET (1520 GMT), the peso had recouped some of its losses to trade at 53.50 to the dollar, compared to a rate of 45.25 before the poll.

Macri now faces little choice but to reinstate capital controls, abandoning one of the biggest achievements of his presidency, analysts said.

The peso’s collapse “makes things worse for Macri, as peso stability (was) supposed to arrest political costs of his IMF-supported austerity,” Daniela Gabor, a professor of economics at the University of the West of England, said via Twitter. “Difficult to see how Macri can hold onto power while inflicting such high social costs.”

ARG peso collapse makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

ARG peso collapse makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

Emerging market currencies have been caught this year between slowing global demand for the commodities they export, which puts downward pressure on them, and the promise of lower dollar interest rates, which relieves that pressure. While they have mostly held their own against the dollar so far this year, the Argentinian peso, ruble and lira have all been pulled lower in recent weeks by a weakening .

The yuan was fixed at a new 11-year low against the dollar by the Chinese central bank on Monday, allowing the mainland and offshore rates to weaken a little more.

The , which is seen as a safe haven in times of market turmoil, rose to a new 15-month high of 105.05 before retreating a little to 105.31, a gain of 0.3% on the day.

The , which measures the greenback’s strength against a basket of six major currencies, fell 0.1% to 97.192.

The euro, meanwhile, rose a little as Italy’s political parties tried to stop a push for snap elections that opinion polls suggest would hand power to the populist right-wing Lega party of Matteo Salvini. rose 0.2% to 1.1218. rebounded 0.5% to 1.2092.

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UK Times report May’s government faces ‘total collapse’ over Brexit

Sunday Times newspaper points out opposing factions within the Conservatives:

  • newspaper said at least six pro-European Union senior ministers will resign if UK PM May opts for a no-deal departure from the EU
  • But at the same time, rival ministers who support Brexit were threatening to quit if May decides to stay close to the EU with a customs union or if she sought a long delay to Brexit

The clock is ticking towards the can-kick date of April 12. After having thrown business under the bus now the government chucking itself under. 

Sunday Times newspaper points out opposing factions within the Conservatives:

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Hundreds feared buried, death toll rises after dam collapse

Brumadinho, Brazil – The death toll from the collapse of a dam holding back mine waste in southeastern Brazil rose to 34 on Saturday as searchers flying in helicopters and rescuers laboring in deep mud uncovered more bodies. An estimated 300 people were still missing and authorities expected the death toll to rise during a search made more challenging by intermittent rains.

Romeu Zema, the governor of the state of Minas Gerais, warned that those responsible “would be punished.”

Daily Folha de S.Paulo reported Saturday that the dam’s mining complex, owned and operated by Brazilian mining company Vale, was issued an expedited license to expand in December due to “decreased risk.”

Dam Collapses in Brazil
A woman cries as she sees the damages caused by the mining waste a day after the collapse of a dam from an iron-ore mine belonging to Brazil’s mining company Vale in Brumadinho on January 26, 2019. / Getty Images

Preservation groups in the area say the approval was unlawful.

In addition to the 34 bodies recovered as of Saturday afternoon, 23 people were hospitalized, said authorities with the Minas Gerais fire department. There had been some signs of hope earlier Saturday when authorities found 43 more people alive. Company officials also had said that 100 workers were accounted for.

But the company said in a statement Saturday afternoon that 251 workers were still missing, while fire officials estimated 296 were still unaccounted for.

Scores of families in the city desperately awaited word on their loved ones. For many, hope was fading to anguish.

“I don’t think he is alive,” said Joao Bosco, speaking of his cousin, Jorge Luis Ferreira, who worked for Vale. “Right now I can only hope for a miracle of God.”

Residents are seen in an area next to a dam owned by Brazilian miner Vale SA that burst
Residents are seen in an area next to a dam owned by Brazilian miner Vale SA that burst, in Brumadinho, Brazil January 25, 2019. WASHINGTON ALVES / REUTERS

Israel was sending a mission to help with rescue operations and provide aid, according to a statement Saturday from Israeli Prime Minister Benjamin Netanyahu’s office. Netanyahu made the help offer during a call with President Jair Bolsonaro, who has been an enthusiastic ally of Israel. Bolsonaro, who assumed office Jan. 1, did a flyover Saturday of the area affected by the dam collapse.

Vale workers were eating lunch Friday afternoon when the dam collapsed, unleashing a sea of reddish-brown mud that knocked over and buried several structures of the company and surrounding areas. The level of devastation quickly led Bolsonaro and other officials to describe it as a “tragedy.”

“It’s distressing, maddening,” said Vanilza Sueli Oliveira, who was awaiting news of her nephew. “Time is passing. It’s been 24 hours already. Time is passing. I just don’t want to think that he is under the mud.”

The rivers of mining waste raised fears of widespread contamination.

According to Vale’s website, the waste, often called tailings, is composed mostly of sand and is non-toxic. However, a U.N. report found that the waste from a similar disaster in 2015 “contained high levels of toxic heavy metals.”

Vale CEO Fabio Schvartsman said he did not know what caused the collapse. About 300 employees were working when it happened.

“The principal victims were our own workers,” Schvartsman told a news conference Friday evening, adding that the restaurant where many ate “was buried by the mud at lunchtime.”

After the dam collapsed Friday afternoon, parts of Brumadinho were evacuated, and firefighters rescued people by helicopter and ground vehicles. Several helicopters flew over the area on Saturday while firefighters carefully traversed heavily inundated areas looking for survivors.

Rooftops poked above an extensive field of the mud, which also cut off roads. The flow of waste reached the nearby community of Vila Ferteco and a Vale administrative office, where employees were present.

On Friday, Minas Gerais state court blocked $ 260 million from Vale for state emergency services and is requiring the company to present a report about how they will help victims. On Saturday, the state’s justice ministry ordered an additional $ 1.3 billion blocked.

Another dam administered by Vale and Australian mining company BHP Billiton collapsed in 2015 in the city of Mariana in Minas Gerais state, resulting in 19 deaths and forcing hundreds from their homes.

Considered the worst environmental disaster in Brazilian history, it left 250,000 people without drinking water and killed thousands of fish. An estimated 60 million cubic meters of waste flooded rivers and eventually flowed into the Atlantic Ocean.

Schvartsman said what happened Friday was “a human tragedy much larger than the tragedy of Mariana, but probably the environmental damage will be less.”

Sueli de Oliveira Costa, who hadn’t heard from her husband since Friday, had harsh words for the mining company.

“Vale destroyed Mariana and now they’ve destroyed Brumadinho,” she said. “I need answers. I am desperate.”

On Twitter, President Bolsonaro said his government would do everything it could to “prevent more tragedies” like Mariana and now Brumadinho.

The far-right leader campaigned on promises to jump-start Brazil’s economy, in part by deregulating mining and other industries.

Environmental groups and activists said the latest spill underscored a lack of regulation, and many promised to fight any further deregulation by Bolsonaro in Latin America’s largest nation.

The latest spill “is a sad consequence of the lessons not learned by the Brazilian government and the mining companies responsible for the tragedy with Samarco dam, in Mariana, also controlled by Vale,” Greenpeace said in a statement.

“History repeats itself,” tweeted Marina Silva, a former environmental minister and three-time presidential candidate. “It’s unacceptable that government and mining companies haven’t learned anything.”

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