Re: The IMF in Kenya: a Trojan Horse?

[jakaswanga]

What is the IMF game plan in Kenya?
<>
KA ADHI KONSOLT AJUOGA MA JA-IVY LEAGUE.

Thee oracles that ever speaketh for sooth,
Hecatombs I offer to hear the sole truth
For much disturbed is the soul of my land

I need to know whether for the morrow
the armour of war I wear, or garb of party I adorn to merry.
<FROM: consulting oracles from the ivy-league>

Fellas, first is the good news! Tamutamu kama Rwanda Bonds!

RWANDA BONDS ARE HOT.

HERE: allafrica.com/stories/201304290077.html --Rwanda issues 10 yr Green bonds, to raise $ 400M. That is about 6% of her GDP.

And word is the market is hot and they have been snapped up --like the story of hot cakes, which is an apocriphal of course. And therefore serious reading between the lines is required of the financial headline: IT IS A DASH FOR TRASH, as it has been reported. See Bloomberg below.

www.bloomberg.com/news/2013-04-29/what-rwanda-s-bond-sale-says-about-today-s-markets.html

Here is the equivalent Good News from some other 'market crier', selling us as hotter than Kagame's claustrophobic Rwanda, with its 10% of her tiny GDP coughed up by Donor-Aid. Personally I do not think Kenya should ever be mentioned in the same comparison breath with that schizophrenic dungeon ran by Sir Paul-K.

But here is the Kenyan good news, megaphoned by those who have said they know, in the past.
www.businessdailyafrica.com/IMF-says-Kenya-well-placed-for-debut-Eurobond-in-Q4-2013/-/539552/1854304/-/gf5pot/-/index.html

IMF says Kenya well placed for debut Eurobond in Q4 2013

Ragnar Gudmundsson, IMF resident representative in Kenya, told Reuters a peaceful presidential vote in March has helped restore Kenya's image after post-election violence five years ago and would also help secure a lower yield on the new issue.

.......................

Kenya will use proceeds from the sale to retire a $600 million syndicated loan taken out last year at an overall cost of 7 per cent and to fund infrastructure projects. Rwanda, a smaller economy, paid a yield of 6.875 per cent on its bond.

Kenya has yet to finally decide on the timing or details of the Eurobond, plans for which have been delayed several times.

READ: Treasury seeks quicker issue of international bond

Mr Gudmundsson said 10 years would be a "reasonable tenor" and the government could seek up to $1 billion, an amount that would keep the government's borrowing on debt markets within a limit agreed under the IMF's extended credit facility programme.

With inflation running below the government target of 5 per cent, Kenya's economy is expected to grow by 5.5-6 per cent this year and 6-6.5 per cent in 2014, spurred by good rains and falling lending rates, the IMF representative said.

Those %s are of course music to my ears, but...

Always watch that phrase, 'retiring of loans', syndicated or not. These are borrowings in dollars to service or settle 'historical' loans, and the blurb [or selling pitch] that INFRASTRUCTURE AND CAPITAL GOODS investment will be the beneficiary, is a mirrage.

That was the story too soon after independence when many African countries took development loans, only to end up with the famous DEBT BURDEN which mandated, after an epidemic of state bankruptcy across the continent, the entry of the IMF and World Bank as executors of our treasuries. [Executor in the sense of a CEO who runs a recievership]. The SAPs, if you remember.

Also, as part of the script of these tidings of great times ahead, refer to VP Ruto's promise of double-digit growth in 5 years when he stands for re-election. But Oil Bonanzas building castles in the air is a parable Nigeria and other African oil-producers may be keen cautions on.

Now, lets us develop further, this narrative of clouds that bear rain that shall fall, and ruin the party.

Pessimism is not, in my experience and thinking, a bad thing when you are dealing with systems run by Kenyan politicians, IMF economists ---(or World bankers beholden to interests from their own far shores)---- and other human beings dedicated to greed, in a country with a history that worships impunity like The Omena republic of Kavirondo where I come from: That is a cocktail of negatives as effective in sabotage as the Greek heroes who in stealth remained within the walls of great Troy, to forerun her sacking for ever.

And please, as we build our case, and spread out our arguments et al, will you, as a background soundtrack, keep in mind this summary of the debt sustainability analysis by the IMF$W-Bank, as reported by an east african financial leafy.

www.businessdailyafrica.com/IMF-says-Kenya-debt-servicing-increased-by-14pc/-/539552/1766908/-/r9peeyz/-/index.html

Kenya will pay Sh120.471 billion in interest on its public debt in the next financial year, a 14.9 per cent increase from this year, the Division of Revenue Bill shows.

This will be over and above the payment of the principal which will amount to Sh212.515 billion, 7.4 per cent higher than in the current financial year, the bill shows.

A new IMF report, however, shows that Kenya’s Sh1.8 trillion public debt at about 43 per cent in present value terms — time value of money theory says money borrowed today has a higher value in future — is still sustainable and even allows for the issuance of a sovereign debt.

“The dynamics for public debt are now more favourable than under the last debt sustainability analysis. At 43 per cent, the public debt-to-GDP ratio in 2012 was lower than the originally projected 48 per cent,” says the IMF report.

Sawa.

For later comparative analysis, here is a further detail from an earlier study on Kenya's Debt Sustainability analysis. www.imf.org/external/pubs/ft/dsa/pdf/dsacr1148.pdf

Sawa. Now THE GREAT IMF MEA CULPA FOLLOWING EUROZONE DEBACLES.

As I go to press, the International Monetary fund under the perfumed French femme-fatale ---[ask a man named Bernard Tapie, former mayor of Marsaille about that epithet to Christina Lagarde]---- is at the confessors uttering whispers of MEA CULPA, CULPA, as far as her irresponsible role in the Grexit scenario goes. Amongst other chastisement.

www.telegraph.co.uk/finance/financialcrisis/10101660/EU-put-eurozone-safety-before-Greece-during-bailout-IMF-report-claims.html ---Greece forcefully bled for the health of others, sacrificed.

Greece, totally insolvent, hapless, was herded into a receivership regime co-ordinated by the EC, ECB and the IMF, famously known in the Eurozone as the evil Troika. This 'SAP', characterised by severe austerity, further impoverished Greeks and has led to great political turmoil and social disintegration. It also flew in the face of rational economic thinking, whose consensus is much against excessive austerity during deep depressions, as Greece has been structurally undergoing, forcibly. (thanks firstly to her own depraved elite we should hasten to add)

Whatever the cause of the crisis, the standard view of economists is Spend some to get out of the dip --that is why we saw Obama dole out such a Herculean BAIL-OUT package. But do it wisely on long-term investments, that is, Priorities must be right, as Mank of Jukwaa will remind.

NB: Of course there are plenty Americans who will tell you Obama only bailed out Wall-Street, while Main-Street is still down. And the two Streets not being the same, it was a monumental swindle, the evil genius being Henry 'Hank' Paulson, last secretary of Treasury under Dubya.

www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877341,00.html
But to continue with Greece's desire not to we wrung dry, the IMF told otherwise, and was obssessed otherwise. Therefore other explanations have been sought, and have been forthcoming, about this 'hyper insistence' on austerity in not only Greece. {WE will revisit elsewhere, the controversy the IMF ran into when she underwrote the 'Cyxit' template fronted by the the chairman of the European caucus of finance ministers, part of which no longer guaranteed bank deposits in collapsing banks. And how this now has led to a spat between the IMF and the obsessively austere Germans. Germans! Go-d-d-amed Protestant misers! but that is Lutheran severity and Max Weber moralisations of poverty for you!]

www.guardian.co.uk/commentisfree/2013/jun/09/imf-greece-institutional-monstrous-failure --imf in greece failure. Too much austerity.

yanisvaroufakis.eu/2013/06/09/deutsche-welle-is-the-imfs-greek-mea-culpa-motivated-by-anger-over-germanys-undermining-of-banking-union/ ---Imf mea culpa in Greece.

WHY THEN THE SEVERITY? SAVING OVER 'EXPOSED' NEUROZONE BANKS?

The chief reason of Greece's extreme austerity, flying in the face of every orthodox economic wisdom, is understood by not just the sacrificed greeks, to have had as CHIEF PURPOSE, SAVING creditor banks up north in the Neurozone. Nothern Politicians from homelands of these banks that foolishly over-stretched themselves in the South, had asked as much as was politically possible from their own tax-payers to save these banks, banks whose executives earned bonuses greater than those of the thieving Angola-Nigerian elite on oil. Some banks had been nationalised like the ABN-AMRO of the Netherlands ---effectively transferring privately incurred debt to the public domain; others like the super Parisbas-BNP of France, had massive cash infuse, aka recapitalisation, but still the dosage was not enough, so Greece had to bleed. Not to save herself, but to save her creditors. And IMF was enlisted in this venture, effectively becoming a tool of Neuro-zone banks in Greece. Facilitating a gang rape. The public anger is pulpable when Angela Merkel is moustached invariably as Adolf Hitler.

online.wsj.com/article/SB10001424127887324266904578460091914846304.html

BY NOÉMIE BISSERBE: PARIS—BNP Paribas SA said Friday first-quarter net profit plunged, hurt by a drop in investment-banking revenue and higher provisions set aside against bad loans in Italy, as Europe's sovereign debt crisis continues to take its toll on the French bank.

The Paris-based lender, Europe's third-largest listed bank by assets, said net profit fell 45% to €1.58 billion ($2.06 billion) in the three months ended March, down from €2.87 billion a year ago. But profit did beat analysts' forecasts of €1.38 billion and the previous period's figure was boosted by the sale of its stake in real estate company Klépierre SA.

An insight into what the 'over exposure in southern europe' meant to the French Banking sector, and why they had to be racapitalised to avoid the so-called DOMINO effect, shows us why the French IMF top-dogs could not resist being French about it: milking weak Greak for every drop of blood they could ge away with. More tips of the iceberg below.
dealbook.nytimes.com/2011/11/03/bnp-paribas-writes-down-greek-debt-as-earnings-slump/

INVESTMENT BANKING NOVEMBER 3, 2011, 8:51 AM4 Comments

BNP Paribas Writes Down Greek Debt as Earnings Slump --BY DAVID JOLLY

PARIS — BNP Paribas, the largest French lender, announced a sharp decline in third-quarter profit Thursday and said it was writing off 60 percent of the value of all the Greek debt it holds, a belated acknowledgment that the loans are largely unrecoverable.

The bank, based in Paris, said it was setting aside about €2.1 billion, or $2.9 billion, of the value of its Greek sovereign debt. It is writing down about €116 million of exposure to Greek corporate bonds.

The bank said it had also moved to address its exposure to embattled euro zone government debt in the latest quarter, selling €1.9 billion of Greek sovereign debt, €8.2 billion of Italian debt and €2.5 billion of Spanish debt.

So ...
DSK Khan once aiming to be French President and Christine Largarde, appointed by sweetheart Turbo Zarko running for re-election were not going to let French banks collapse because some fwaking greek children need milk and insulin! were they? They laundered the IMF to save France's banks. An abuse that has not escaped notice. And now the payback. But you have to be powerful enough if you are going to intimidate the IMF.

Now the IMF plots to dislodge herself from that trap. MEA CULPA. Credibility in tatters. MEA CULPA. Too in Cyprus, where the IMF endorsed the so-called 'great depositors robbery', ---the 'blueprint' by the dtuch Mr. Euro 'Graveflower' to confiscate 20% of depositos [above x>20G euros] to save the rotten banks, all hell broke loose: No 100% guarantee of deposists by bankfailure in the EU anymore.

The IMF therefore, is an organisation whose word, is as good as any lady of loose morals's protesting her virtues. In church or bed. She is swimming in desperate waters with the BRICS and other new kids on the block more often than not scowling at her. Whatever perfume Christina adorns, the once pheromonic allure only seems to wreak nausea.

But you have to be powerful enough if you are going to intimidate the IMF.

SOME HISTORY OF MISHAPS:

Sometime in the past two years, a whistleblower claimed the IMF had known all along, from decades ago, that the Greek Government was falsifying statistics, but due to 'ingrained financial interests', had slept on the information. A scandal was born ---may be the Germans used this information to blackmail the IMF into supporting their 'Lutheran severity' aka austerity on Greece! ---You partly caused it, you must help solve it our way! Godddamn French double-dealers! [When is the last time you saw a German head the IMF?]

www.businessweek.com/ap/financialnews/D9DTG6380.htm

Greek parliament set to probe faulty statistics

ATHENS, GREECE

A spokesman for Greece's governing Socialists says the party plans to call on parliament to investigate how the previous conservative government relayed faulty fiscal data to the European Union.

Parliamentary spokesman Christos Papoutsis on Tuesday gave no other details on the probe, which could lead to potential prosecution if politicians are found responsible of wrongdoing.

Greece's new Socialist government sharply revised the 2009 budget deficit after winning general elections last October. The deficit revision to 12.7 percent of GDP, from a 3.7 percent forecast months earlier, helped trigger a financial crisis around mounting debts by Greece and several other countries using the euro.

The Socialists have 160 deputies in the 300-seat parliamen

IMF SAD HISTORY IN RUSSIA ictsd.org/i/news/bridgesweekly/93119/

Russia’s economic collapse over the past few weeks has fuelled even hotter debate in an already smouldering discussion around the policies of the International Monetary Fund (IMF), the multilateral lending institution responsible for bailing out–one after the other in the last year–the world’s ailing economies. Earlier this summer, the IMF put together a loan package for Russia totalling US$23 billion: just weeks ago, the IMF was happy to report Russia was on its way to economic recovery thanks to the bailout plan. The self-congratulations were premature: witness the financial debacle that has taken place this past fortnight. Apparently, the IMF based its optimistic prognosis of Russia’s economic recovery on Russian economic data–data now known to be overly optimistic and difficult to verify.

www.guardian.co.uk/commentisfree/2013/apr/17/imf-criticism-uk-austerity-things-bad ---17-April 2013

The failure of the government's economic policy has led to a damningindictment from the International Monetary Fund. In the fund's flagship World Economic Outlook report it lowered the forecast growth for the advanced economies as a whole, but Britain by more than the rest. The IMF repeatedly singled out the British economy for weak growth and negative outlook. Its chief economist, Olivier Blanchard, said the UK chancellor, George Osborne, was "playing with fire".

If the IMF has become a severe critic of Britain's version of austerity, then things must be bad. Within the "troika", including the EU and the European Central Bank, the IMF has been a key architect of those policies in the bailout countries. Visitors to the soup kitchens of Greece, the poor of Cyprus who cannot access their savings and the Irish forced to leave their country must wonder what they have done to incur its

This organisation, the IMF, lowered the growth forecast of the advanced economies as a whole, yet in its appraisal of Kenyan prospects, wrote that given the encouraging international economic outlook, Kenya would find it relatively easy to get credit from the commericial market. That would only imply FROM Western banks, because mighty China and the BRICs mostly do batter ---primitives that they are!

So, the IMF wants to eats her cake and have it at the same time? or what?

BACK TO KENYA. A HISTORICAL PERSPECTIVE WITH THE IMF: SAP

But before we go far, here is even better blurb from the world-bank man in Kenya: economy waiting to take off!

www.nation.co.ke/oped/Opinion/Kenya-economy-is-on-the-runway-waiting-to-take-off/-/440808/1890570/-/item/1/-/12pd9ey/-/index.html

well, its been waiting for that for the past 50 years of independence, so at long last, huraah!

IMF POLICY ADVICE AND HOW WE GOT HERE: CASES: EDUCATION AND HEALTH.

www.pambazuka.org/en/category/comment/34800

The Health Care Crisis

Kenya's health care crisis has been 20 years in the making. Its dimensions are spelled out in the 2004 Poverty Reduction Strategy Paper (PRSP) - a government document written in consultation with the IMF and World Bank and approved by both bodies' boards. Life expectancy declined from 57 in 1986 to 47 in 2000; infant mortality increased from 62 per thousand in 1993 to 78 per thousand in 2003; and under-five mortality rose from 96 per thousand births to 114 per thousand in the same period. The percentage of children with stunted growth increased from 29% in 1993 to 31% in 2003, and the percentage of Kenya's children who are fully-vaccinated dropped from 79% in 1993 to 52% in 2003.[2]
Why this deterioration? As in most African countries, Kenya's health care system was hit hard by the “structural adjustment” policies imposed by the IMF and World Bank as conditions on loans and as prerequisites for getting IFI approval of the country's economic policies. Those policies were introduced in the 1980s, and have left a lasting mark on Kenya's health. As usual with such programs, the emphasis was on cutting budget expenditures. As a result, local health clinics and dispensaries had fewer supplies and medicines, and user fees became more common. The public hospitals saw their standard of care deteriorate, increasing pressure on the largest public facility, Kenyatta National Hospital in Nairobi. As a consequence, that hospital, once the leading health facility in East Africa, began, like so many

other African hospitals, to ask patients' families to provide outside food, medicine, and medical supplies. Most beds at Kenyatta and the regional and local hospitals accommodated two patients. Professional staff have taken jobs - some part-time, some full-time, at private healthcare facilities, or migrated to Europe or North America in search of better pay.

SO WHAT THE THE IMF GAME IN KENYA? ---For which it will utter MEA CULPA-S in the near future?

DEBT SERVICING BY KENYA to EXTERNAL CREDITORS: COULD THIS BE THE RATIONALE? The smoking gun!

Concluding from my Study case of Greece, the subsequent international loss of credibility facing this body, its Eurozone bias which has even led Russia to call for it to open up more to the BRICS for balance, I posit the IMF is in an existential crisis, and is trying to ride the back of gullible countries like Kenya, buoyed by oil-flow prospects, to ingratiate herself once more in the hearts of western banking finance. Her vital foundation. She has to bore more wells for them, to suck. To expropriate long term. She can only do that if she maintains her proboscis in our treasuries, the proboscis which sucks our life-blood through the instrument of DEBT REPAYMENT AT AUSTERE INTEREST RATES. Mortgaging away the oil revenues even before a drop has flowed. Otherwise the red dragon will clean up shop.

It was this trick it tried to perform in Russia in concert with the infamous oligarchs ---auctioning Russia's vast gas and oil fields in Siberia and beyond-- which made a jaundice-eyed Vladimir Putin step forward with a cold-blooded NYET in his tongue. A snarl that reversed the great motherland robbery by putting the knife to the neck of the the thieving oligarchy that had connived to fully incapacitate the already feeble mind of the weak-hearted Boris Yeltsin with even more alcohol. Thus could he sleep more, as Russia's natural treasures and pensions were pillaged by a few. [See Yegor Gaidar and his SHOCK-THERAPY]. Until Putin salvaged the situation.

NB: This act of salvation by Putin, BAIL OUT of sorts, is the simple reason why many Russians tolerated the ruthless brutality of Vladimir Putin for so long. And why Putin has such visible contempt for the IMF. This was a monster that had fanged deep into Russia's jugular, and it took a therapy that killed the democratic process to get her out!

So when the IMF comes to my shores and starts writing bills on devolution, health disbursements, debt repayments and oil allocation priorities, flogging whatever kind of bonds to provoke the market into a stampeding DASH FOR TRASH, forgive me for handling the proposals as if they were rigged grenades, and I be the hurtlocker [that is a kind of suicidal bomb disposal expert].

When your President and his deputy are in Church praying to God to help your country out, instead of them thinking out solutions, you better take matters in your own head, and see what you can think out yourself. ---To prevent a Vladimir Putin coming to the fore in Kenya!

Prevention, they say, was always better than cure! and chako chon loyo dhi ajuoga! [fore warned is fore armed.]

Kenya spends more on debt servicing [interest payment] than on Education. Education is of course the fuel of industrialisation which Uhuru Kenyatta claims is dear to his heart. [It is important here to take a look at the graph depicting spendings in education [also budgetary allocations to the same as %tages of GDP] in the periods in which states like Taiwan, Korea, Singapore, Malaysia, laid ground for Industrial take-off].

Truly truly I say unto you, watch where I spend your money, there are my priotities.

TO CONCLUDE THIS PART.

NOTE OF CAUTION FROM ELSEWHERE: BEWARE THE BENIGN, O SO BENEVOLENT LIE FOR YOUR SAKE!

www.csmonitor.com/World/Backchannels/2013/0606/IMF-admits-it-got-Greece-wrong.-What-does-it-get-right

Years ago when I worked at Bloomberg I noticed that the World Bank and the International Monetary Fund seemed to, without fail, overestimate economic growth for their customers in good times, and underestimate coming contractions in bad times

Since Bloomberg encouraged us to be data driven and rigorous, I proposed we develop some boiler plate for the brief stories about the latest GDP prediction from the lenders (which we slavishly and uncritically turned into stories within minutes of their landing in our fax machines.) Something like: "The World Bank, which has overestimated coming Indonesian GDP growth six consecutive times, today predicted that Indonesia's GDP will rise by 7 percent in 1997."

Over the years current and former employees of both groups have explained that bias is down to the belief inside the financial institutions that their rosy projections can take on a life of their own by inspiring that elusive beast "investor confidence" and unleashing a deluge of cash upon their clients. They see it as a form of benevolent lying.

A senior editor there shut my proposal down as silly, for reasons I could never quite fathom.

With all these in mind, never forget to look outside the window to have an idea of the real weather. It could be raining cats and dogs while the weatherman over at the TV-studio, or radio, is telling you it is shiny and amicable T-shirt weather, and umbrellas and rain-coats are better left at their holsters home.

www.tradingeconomics.com/kenya/government-external-debt

KENYA GOVERNMENT EXTERNAL DEBT

Government External Debt in Kenya decreased to 826.27 KES Billion in February of 2013 from 833.61 KES Billion in January of 2013. Government External Debt in Kenya is reported by the Central Bank of Kenya. Historically, from 2000 until 2013, Kenya Government External Debt averaged 487.39 KES Billion reaching an all time high of 833.61 KES Billion in January of 2013 and a record low of 361.73 KES Billion in May of 2003. This page includes a chart with historical data for Kenya Government External Debt.

RAISING THE DEBT CEILING TO 1.2 TRS KSH. JAN 2013.

allafrica.com/stories/201301210083.html

THE government can now borrow Sh1.2 trillion from external sources after outgoing MPs passed a motion to raise the country's external indebtedness.

Before breaking, the house passed the motion by Finance minister Njeru Githae seeking to raise the country's external debt ceiling from Sh800 billion to Sh1.2 trillion.

The minister argued that this is necessary to enable the country access the required funds for infrastructure projects such as roads, water and energy.

Githae announced that the country intends to borrow more than Sh350 billion in the next five year from external sources to fund key projects under the Vision 2030 economic plan.

Listen to Githae in the same article, Jan 2013, and fathom his disingenuity, because we know it is to pay salaries of the elite, and not vision 2030 that these monies are headed. And next to that is servicing of debt [borrowing to pay interest rates], and the rest is graft.

Githae raised concern that the total debt is very close to the Sh800 billion ceiling blaming this on the depreciation of the shilling against major currencies which Kenya's debts are denominated.

"It is therefore necessary to raise the ceiling to comply with the law," the minister said.'The minister however assured that the government will retain policy of borrowing on concessional terms maintaining that over 90 per cent of the projected external borrowing will be on concessionary terms.

Githae added that the high ceiling is for planning purposes only arguing that the loans to be contracted will be subjected to scrutiny by the National Assembly as per the Public Finance Management Act.

He explained that the increased debt level will help to avoid the need to have to review the ceiling frequently on account of exchange rate fluctuations.

Kenya's external debts are mostly in US dollars, Euros and Japanese Yen with the exchange rates between these currencies and the shilling fluctuating mostly upwards.

Mostly flactuating upwards. the expectation that informed the law on removing the debt ceiling, is therefore that it would perpetually be obsolete and need to be raised every time, creating the air of a crisis. So let us have a free run at it! toward a fiscal cliff!
www.the-star.co.ke/news/article-9177/kenyas-public-debt-rises-sh16-trillion july 24-2012

According to Treasury's latest debt figures, external debt rose by Sh20.14 billion to stand at Sh721.04 billion, while domestic debt declined by Sh7.18 billion to stand at Ksh 888.86 billion in May 2012. Finance Minister Njeru Githae told Parliament last month that the public debt becomes unmanageable and unsustainable if it goes beyond 50 per cent of the GDP.

The budget committee tabled a report in Parliament the same month decrying the growing public debt. The legislators said the country's public debt to GDP ratio has increased with the Treasury shifting the target from 42 per cent to 45 per cent to 47 per cent and now 48.9 per cent. “This is a worrying trend. Furthermore, public debt has increased on account of maturity of Treasury Bonds. How does Treasury intend to manage debt?” MPs queried in the report.

Githae said that Treasury has put in place a “self imposed rule” of not exceeding debt to 50 per cent of GDP. According to Treasury, the bulk of the money is going to the energy and infrustructure sectors which have recieved more than 37 per cent of the total external loan. This could be a positive pointer that most of the loan receipts are going to develoment projects. The general economic, commercial and labour affairs is the second sector with 22 per cent supporting the balance of payments and bugdetary support, Treasury says.

Official creditors account for 97.9 per cent of the total public and publicly guaranteed external debt, out of which debts owed to multilateral creditors (Sh451.22 billion including Sh3.91 billion guaranteed debt owed to International Development Association) dominate the portfolio (62.6 percent of the total). Bilateral debt stands at Sh254.68 billion (35.3 percent of the total), which includes Sh45.04 billion guaranteed debt. “Supplier credit debt remains relatively unchanged as these debts are not being serviced due to the current disputes with the creditors ,” Treasury assures in respect of controversial contracts such as Anglo-Leasing

- See more at: www.the-star.co.ke/news/article-9177/kenyas-public-debt-rises-sh16-trillion#sthash.8fMq6DhN.dpuf

Actually cumulative debt at more than 50% GDP is neither is not as grievous as Njeru Githae told parliament: his words unmanageable and unsustainable. It depends on who you are and what your prospects are. You will be surprised at how many countries at the G-20 table have debt ratios above 80% GDP and sleeping sound!

But when you are a known banana republic, with banana politicians and Mpigs in parliament earning more than USA senators, creditors have a way of knowing you more than you profess to know yourself. This was the sentiment Njeru was passing across.

Even oil-rich countries can fail to be credit worthy when mismanaged. That is how it is with us humans. Our greed is our achilles heel.

re-cupp.
www.businessdailyafrica.com/IMF-says-Kenya-well-placed-for-debut-Eurobond-in-Q4-2013/-/539552/1854304/-/gf5pot/-/index.html

IMF says Kenya well placed for debut Eurobond in Q4 2013

Spritely growth and falling inflation should ensure strong demand and keen pricing for Kenya's long-awaited first Eurobond, planned for later this year, helping cut its overall debt costs, the International Monetary Fund said on Wednesday.

Ragnar Gudmundsson, IMF resident representative in Kenya, told Reuters a peaceful presidential vote in March has helped restore Kenya's image after post-election violence five years ago and would also help secure a lower yield on the new issue.

African countries' robust growth prospects contrast with those of European economies still struggling to shake off a debt crisis, and investors have snapped up their debt, including a 10-year Eurobond issued by Kenya's neighbour Rwanda last month.


"Now that the authorities have succeeded in taming inflation and bringing down interest rates, the likelihood that they would be able to achieve a lower yield has gone (up), especially following the peaceful political transition," Mr Gudmundsson said.

"The conditions would be right to negotiate a sovereign bond in the last quarter of the year."

END INTRODUCTION TO PART I. OF DEBT BURDENS. LESSONS FROM ABROAD.

Revisit ref. 1. the racket of forging statistics: Greece.

2. www.businessdailyafrica.com/IMF-says-Kenya-well-placed-for-debut-Eurobond-in-Q4-2013/-/539552/1854304/-/gf5pot/-/index.html

===========

[jakaswanga]

The Triad composed of Joseph Kinyua, Henry Rotich, and Uhuru Muigai are in a way veterans of the Kenya treasury. The Son of Jomo is a former minister of finance, Joseph Kinyua a former permanent secretary in the same department, and Henry Rotich, a policy director and macro-economic desk operator therein.

They served variously under Mwai Kibaki. And the following article, if read carefully, will indicate something important they should have learnt under Kibaki, something they perhaps even participated in letting come to pass.


www.africareview.com/Opinion/Why-Uhuru-team-should-be-cautious-on-IMF-boss-visit/-/979188/2137080/-/s8mjk3z/-/index.html

We should always remember that it is not IMF’s primary concern to worry about our economic growth needs or our Vision 2030 targets.

Its major concern is whether it and other foreign creditors will get back what they lend to us. It will give you two per cent of your budget but put conditions that would give it 100 per cent control.

But no sooner is Kibaki’s back turned, and this Triad elevated to power, than we hear such profanities strange tales coming from the very top: President Uhuru himself.

“Your style has won you accolades amongst your peers and IMF member states. Calm, cool, persistent. We add, inclusive and considerate. With calm heads, and partners like yourself, we need to take unconventional decisions to fuel prosperity for our people.”

Read more: jukwaa.proboards.com/thread/8472/why-richard-rotich-missing-action#ixzz2qIhkYgRf

Too, in the light of president Kenyatta’s recent successful ‘’mortgaging’’ trip to Beijin, Why have these three broken down so easily? With the potentials of Oil in Turkana, gas in the Indian Ocean, Rare metals in heaps at the Coast, why is their will so sapped that they surrender in advance, and let Christin Lagarde easily assume command of the Kenyan economy? Why are they so psychologically broken, that they revert to utter dependency complex?

I have concluded Uhuru’s ingratiating speech above, is not the tactful seduction of a wily, cynical operator with a cold-hearted determination to realise [the foudations of] vision 2030, Nay, it is but the sycophantic fawn of a feeble-minded orderly prostrating in tribute; or, at most, the pitch of a retarded child wishing consolation from a guardian mother.

It is a very unripe show of leadership. And I am appalled at the lack of dignity in it, appalled at the self-depreciating squirt, and outraged at the implication of this recidivism which squanders perhaps the most important pillar of Kibaki’s legacy. A mental self confidence of Kenya.

It is a high price to pay for the easing of his ICC woes. This is a coterie of scumbags of unseasoned minds, unworthy of raising the national flag in pride! ----Mashetanis washindue! A traitorous trinity!

[jakaswanga]

Meanwhile, the reality on the ground, is a feudal taxation regime. ---Oparanya of Kakamega wants to tax the several chicken kept by old grandmothers! And buy a corded Prado with the money no doubt!

"Today almost all county governments have raised rates by three times including land and property rates as well as the cost of business permits," said Atwoli in a statement.

"In efforts for business owners to cushion themselves against these exorbitant costs, they are now passing on these costs to the consumer including declaring workers redundant in order to remain afloat."

Atwoli's remarks come at a time when there is public concern over the expenditure of some of the county governments after it emerged that some used more money on personnel allowances, emoluments and lavish spending at the expense of development projects

- See more at: www.the-star.co.ke/news/article-150387/cotu-expresses-concern-over-high-county-taxes#sthash.EYx7cLaO.dpuf

[jakaswanga]

POSITION PAPER: THE CONSEQUENCES OF ZERO TOLERANCE TO CORRUPTION, A BLOODY OPTION.

Kuot Ogwal ok mon dhiang’ modho, the Jaluos say. This works out to, however outward the frog might pump his chest in his pond in territorial assertion, the cow wades in with ease and drinks its fill, oblivious to the croaks of the frog. And that is how, on the surface of it, things look for those of us protesting the IMF in Kenya. The cow Lagarde came, conquered and drank her fill, and off she went galloping away with a self-indulgent belch, --and MOO, in her windy wake. A business well done in Nairobi.

But however much we [rejectionists] are ignored, like stray dogs barking wildly outside the fence of a stately banquet, we raise a din that warns there is an alternative narrative to the happenstance. We are dogs with an elephantine memory, such memory being like that of a camel that internalises a historical event and passes it on to the next generation, as if history were genetics. We therefore discern the foul odour of a past assassin re-incarnated and come back to our shores in disguise to continue her old vile trade, at our expense. Where others like Muigai and his orderly Rotich see only the warm smile of a mother, we detect the open jaws of a croc, waiting for our necks to be sufficiently inside, before snapping shut in a life-cycle-breaking lock. This means our heckling is possessed of a nasty undertone, strident and eerie, the harbinger of doom: the haunting foreboding chill in the spine which dampens the spirit of a party, even as revelers pretend otherwise.

Oh no, we [IMF] rejectionists are not just croaking aimless frogs; not just stray barking dogs; not just tel-tel the bird of bad omens; we are wolves howling with the rising of the moon. Did I say red moon over Africa or werewolf?!

We can not sit back and watch Chief Muigai wa Kamau herd the nation into a straight jacket of poverty designed by the IMF. Mr. Kenyatta in that endeavour awakens forces whose exorcism are beyond his charms. Oh No, Christine Lagarde can not just come to Kenya and, like Circe and her magic wand on the comrades of Odysseus, bewitch Kenyans into her herd of slavish hogs!

O Hermes O Hermes they son of Zeus! Was it molly the wonder
The witch shall be ridden like a B!tch! Tamed by formulas of old

We reject the projected squalor that certainly shall come to pass under the tutelage of the IMF.

We may appear to be barking in the wind, our strained cords subsumed by the harsh, scornful blow of their victorious horns in power; we may appear to have the irrelevance of a Lilliputian kick at the groin of Gulliver; we may even look unwise like the commoner ‘’naying’’ a man-god Pharao , and thereby doomed never to ascend to heaven; but in one respect we have come of age. Our minds have matured, and no force on earth or heaven, can intimidate us. No god, be it Allah or Jehovah, or any other whose named does not readily come to mind, can put down the pride of Kenyan nationalism, at long last flowered and forged with historical purpose.

Physically the super-powers can bomb us to smithereens, but mentally we cower to none. No more. We are liberated from mental slavery, liberated from mental slavishness, intellectual subservience, and free of emotional dependency.

That this independence is not evident in the current ruling class is another story. The story of their announced disappearance from the pinnacle of our society. One way or the other.

It is from this perspective of matured national purpose, that the mental prostrations of Uhuru Kenyatta and his Henry Rotich before such bodies as the IMF, become a spectacle in national humiliation. But it is not in the nature of any dogs to recognise their doggishness! Therefore the concept of national pride, national dignity, national consciousness and purpose, are outside the mental capacities of these human mimics.

Fates! Oh daughters of the Thunderbolt!
Bear me answers on the thread of life.
When they break the heart of a patriot,
Be there a fervor darker in the bowels of hell?
Be there a fury more sinister in the heart of man?
-----------O Fates! Bear me witness!

These men celebrate the vassal status of their land. These men willing-fully do everything to enforce the vassal credentials of their country. It is as if they take some debauched and demented pride in facilitating the rape of their mom. Totally immoral, totally ruthless psychopaths.

Yet un-intimidated, some need must come up, rise up and say NO. Some have to stand up for Wanjiku and fight her corner. Fight her corner with an equal measure of ruthlessness and blood thirst with which the Kenyan elite have ganged up to extract her out. To historically kill her.

Every headline every day in Kenya is a financial scam. Is a state robbery by those entrusted and oathed to truth and service. ----SGR, NSSF Tassia, Goldenberg, Pipeline, KMC, KFA, NCPB, Bamburi Portland, LAPSSET, Turkana Oil, Rare Metals, Roads and Airports and Ports, all JSC business ----- you name it. And now it is school fees which have been increased arbitrarily by boards! Let alone the thieving counties and their rates!

No, enough is enough. Even the heavens will nod in glee if these horrorS were put to a stop one way or the other. Tolerating wanton plunder must no longer be the price of stability. Corruption must now have a blood price: the blood of the perpetrators. If the adminstrators are the custodians of corruption, then it must be their heads, cut. Wanjiku hunted into a corner, must now hunt back. Merciless. The reaction to the action.

Then, FELLOW CITIZENS, toward a national consensus of zero tolerance to corruption! Death to the corrupt!

[NB: there is already a national consensus of ‘’death to suspected robbers!’’ ---the shoot to kill policy advocated by David Kimaiyo and whose practice has led Abdulmote of Jukwaa to raise this eyebrow --- jukwaa.proboards.com/thread/8910/killing-robbery-suspects-acceptable-trend

It gave me the idea: if our society acquiesces to police shooting to death penny-mbili and five cents robbers sticking up kibanda Mpesas in the estates, we surely wouldn’t mindthe shooting to death of some of these state looters.
Like who? Well, the one at CBK who okayed ksh. 1.5 billion for three CCtv cameras!

I rest my case!

[jakaswanga]

THE FOLLOWING REPORT, read between the lines, tells the story of a swift, ruthless shift in power.

The rouble jumped 4.9% to 55.8 per dollar in Moscow on Monday after Hong Hong-Kong-based Phoenix TV cited China's Commerce Minister Gao Hucheng as saying that expanding the currency swap between the two nations would help Russia.
The rouble has gained 10% over the past two days, paring a sell-off that's made it the world's worst performing currency over the past six months. Unlike Ukraine, where the pro-west government received a $17 billion IMF-led bailout this year, Russia, Argentina and Venezuela are often at odds with the US and its allies, keeping them out of the reach of the Washington-based institution.

That is right, the rouble, besieged by an impi fang, one side the smart US-EU sanctions and the other jaw an orchestrated downward spiral of oil prices, froze on its downward hurtle, and shot up like a bungee elastic at its limit, at the mere suggestion by a Chinese official that the CURRENCY SWAP PROGRAMME would continue.
That currency swap between the two strands of the soon to be Eurasian double-helix, is a dollar by-pass.

Now, folks, since when is it good news to the financial markets, that one will not be trading in the dollar? --aint it that kind of talk that caused the two Arab nationalist despots, Saddam Hussein and Moamar Khadaffi, their sorry lives?

And, whether one believes there is a struggle between powers for the top-dog position or not, certain political realities can not be ignored. Sleeping dogs are free to think of such as this as mere conjecture though

Chinese President Xi Jinping is bolstering the country's influence in the global economy and cutting into the International Monetary Fund's status as the go-to financier for governments in financial distress. While the IMF tends to demand reforms aimed at stabilising a country's economy in exchange for loans, analysts speculate that China's terms are more focused on securing its interests in the resource-rich countries.

That is right! Bloomberg says China is out to grab your local resources while the IMF is your good friend, out for reforms that stabilise your economy!

Read that again: you remember SAP? Stabilisation or Strategic Adjustment was it? That IMF led extortion racket! Those who rejected that medicine went places, like Malaysia and some other Asian tigers. Those fools who swallowed it hook sink and line, like many African countries, got pillaged and marooned in debt-servitude. To date, the Ebola crisis in West Africa has revealed the consequences of having destroyed funding the state health sector. Take your pick of who your lesser enemy could be!





So, Lagarde's coquettish smiles in Nairobi are a crocodile's trap-door jaw! To ensnare cab-sec Rotich like some fly into a spiders web! A rebased Kenyan economy can go A-borrowing in a spree! Launch bonds in euros and dollars! And firmly stay in orbit, away from the EVIL DRAGON!

Any fools in Nairobi!? East Africa's biggest economy which, when oil starts to flow, becomes turbo-charged to compete or go at par with South Africa and Nigeria, the local giants south of the Sahara, must be prevented from getting notions of swapping currencies outside the ''accepted denominations''!
This provides an interesting test for both Uhuru and Ruto. One his chains more or less from the Ocampo slave restraint, the other still fully a slave.


www.slaverysite.com/images/3a32403u - Slave Restraint Hardware - Library of Congress.jpg[/img]
Iron Mask, Collar, Leg Shackles and Spurs Used to Restrain Slaves. Slave restraining devices 1807.

here below is, by figure of speech or metaphor, Ruto's predicament.


From Zanzibar Slave Market.

But suppose they are mental shackles!? How do you go obeying Bob Marley? Emanicipate your minds from ...
None but ourselves can free our .....

China comes to Russian rouble's rescue, puts IMF’s lender status at risk

NEW YORK: Bloomberg Dec 24, 2014, 01.22AM IST

China is stepping up its role as the lender of last resort to some of the world's most financially strapped countries.
Chinese officials signalled on the weekend they Are willing to expand a $24 billion currency swap programme to help Russia weather the worst economic crisis since the 1998 default. China has provided $2.3 billion in funds to Argentina since October as part of a currency swap, and last month it lent $4 billion to Venezuela, whose reserves cover just two years of debt payments. t $2 billion of emerging-market debt, said by phone. "These are China's fellow friends and comrades, and to secure long-term energy could be one of the motivations."

That was the joke for today folks

[jakaswanga]

Aah, talking about safe pairs of hands taking care of business! --just whose business!

Njoroge set to join triumvirate of ex-IMF officials driving Kenya’s economic policy

By GEOFFREY IRUNGU, [e-mail]

Posted Wednesday, June 3 2015 at 20:37

In Summary

Dr Ngugi Njoroge has been at the International Monetary Fund (IMF) for most of his working life, having been at the Ministry of Finance for less than two years.

If Patrick Ngugi Njoroge is confirmed as governor of the Central Bank of Kenya (CBK), he will join a growing list of top fiscal and monetary affairs officials who have their roots in the Bretton Woods institutions.

Dr Njoroge has been at the International Monetary Fund (IMF) for most of his working life, having been at the Ministry of Finance for less than two years.

Treasury secretary Henry Rotich worked at the IMF office in Nairobi between 2001 and 2004 while principal secretary Kamau Thugge was at the same institution for 21 years.

The trio of Mr Rotich, Dr Njoroge and Dr Thugge therefore honed and perfected their skills as economists at the hands of the Bretton Woods institution and can – in that sense –be described as graduates of the “IMF school of economics.”

The President’s chief of staff and head of public service Joseph Kinyua — formerly a permanent secretary at the Treasury — also had a stint at the IMF.

If Dr Njoroge is confirmation will join the triumvirate of former Bretton Woods’ staff now in charge of the country’s fiscal and monetary affawww.businessdailyafrica.com/Njoroge-to-replace-Ndungu-as-CBK-governor/-/539546/2738160/-/v5uo30/-/index.html

Always remember, to get moving anyhow, and going places, the ASIAN TIGERS got rid of the IMF diktats and apparatchiks, calling them robots and mimics and poisons! (Mahathir of Malaysia!)

Last time I checked the GDP of Malaysia, Taiwan, Singapore, and compared to the Africans who implemented SAP to the letter, I thought to myself, is it that Uhuru Kenyatta even as he talks of industrialising Kenya, suffers a sense of intellectual inadequacy, so that his less than distinction Amherst political grade makes hims a hapless supplicant to Yale-Harvard Bretton Woods bluff!?

Fwaka really thinks he is going anywhere toward industrialisation a-pace with an IMF trio running his economic thought!?
The president is tamed and caged, and lost, and the peoples dreams and popular aspirations must escape his fate!

(NB: why did Kibaki bypass Kinyua for Mwiraria at Finance!?) it is a hint question!

[podp]

now what is this?

www.businessdailyafrica.com/IMF-and-World-Bank-raise-the-red-flag-over-Kenya-debt/-/539546/2252232/-/68mp65/-/index.html

IN SUMMARY
Kenya risks rapid debt escalation when planned borrowing for the mega projects in the pipeline are taken into account.
IMF and Worldbank say the country must find alternative means of financing its new infrastructure away from loans.
Kenya’s debt load crossed the 50 per cent of GDP mark late last year to stand at Sh2.11 trillion or 57 per cent of GDP by end of December 2013.

[podp]

www.businessdailyafrica.com/IMF-and-World-Bank-raise-the-red-flag-over-Kenya-debt/-/539546/2252232/-/68mp65/-/index.html

[kelly]

Jul 9, 2015 22:19:30 GMT 3 podp said:

www.businessdailyafrica.com/IMF-and-World-Bank-raise-the-red-flag-over-Kenya-debt/-/539546/2252232/-/68mp65/-/index.html

Is this something that should scare Kenya? Just by looking at the below it seems Kenya and Africa in general are doing just fine, ditto Russia. Japan and US seems to be doing badly and so is most of western Europe. I would like to understand the relevance of this debt to GDP ratio figure to a country's economy, because to me it seems debt is actually not a bad thing by itself, it is what you put it to use for that actually counts and should be measured.

en.wikipedia.org/wiki/Debt-to-GDP_ratio

[jakaswanga]

Jul 10, 2015 7:21:21 GMT 3 kelly said:

Jul 9, 2015 22:19:30 GMT 3 podp said:

www.businessdailyafrica.com/IMF-and-World-Bank-raise-the-red-flag-over-Kenya-debt/-/539546/2252232/-/68mp65/-/index.html

Is this something that should scare Kenya? Just by looking at the below it seems Kenya and Africa in general are doing just fine, ditto Russia. Japan and US seems to be doing badly and so is most of western Europe. I would like to understand the relevance of this debt to GDP ratio figure to a country's economy, because to me it seems debt is actually not a bad thing by itself, it is what you put it to use for that actually counts and should be measured.

en.wikipedia.org/wiki/Debt-to-GDP_ratio

Kelly,

The key word in debt seems to be sustainability. Lets say, that is a realistic potential to repay the debt. It is thus a risk assessment indicator, this debt to GDP ratio. Will the money be lost or not?

Japan 243% (2013), Ethiopia 27.4% (2014).
Population Japan 127M; Ethiopia 100M.

The financial markets are not too worried about that Japan figure. But Ethiopia!

Japan with its high-tech industrial base and highly-skilled labour force sustaining upper-end value-added export products, compared to Ethiopia with its stone-age technology cottage industries like coffee farms, not to mention a parasitic quasi military dictatorship on top of 80% illiteracy, will find it easier to borrow even more money at cheaper rates than Ethiopia.

Debt is not a bad thing as you put it –-true, indeed the purpose of banking is to offer debt, aka credit, to spend today what will be earned tomorrow. A process called investment, or postponing consumption;
but the lender has to have reasonable expectation, even a guarantee or certainty, that the loan will be refunded with profit, and all is not money down the drain. So if one looks at the CREDIT RATINGS, then the African countries who have low debt/gdp rations (and thus appear healthy), do occupy the XYZ end of ratings. (triple A being the aces).

Lending money to a Bananaland is not smart. A bit like lending money to a drunk.


Some people have no debt simply because nobody is foolish enough to lend them any! they are debt free because they are ... junk!

[OtishOtish]

Jul 11, 2015 0:03:16 GMT 3 jakaswanga said:

The key word in debt seems to be sustainability. Lets say, that is a realistic potential to repay the debt. It is thus a risk assessment indicator, this debt to GDP ratio. Will the money be lost or not?

Japan 243% (2013), Ethiopia 27.4% (2014).
Population Japan 127M; Ethiopia 100M.

The financial markets are not too worried about that Japan figure. But Ethiopia!

Kelly:

In addition to Jakaswanga's points, for comparisons on debt:gdp ratios, we should note that:

(1) Japan has not exactly been short of money: it is the world's largest creditor and has been for each of the last 20+ years. Right now, it is owed trillions of $s by other countries.

(2) Compared to countries whose governments keep borrowing from elsewhere, that Japanese debt is almost all (about 95%) money the Japanese government owes the Japanese:

- about 20% is owed to banks (like the Bank of Japan) and other organizations that are in fact owned by the government itself.

- 60% or so is owed to other institutions in Japan.

- around 15% is owed to individual Japanese who have deposited money in banks, etc.

A comparison with, say, Kenya, which is busy borrowing money from elsewhere: the difference between a man who borrows money from his wife---at the end of the day, it's the same family pot---and a man who borrows money from a loan-shark on River Road (in addition to interest, Kenya is paying a lot of money just to insure the SGR loan, because Kung Fu has some doubts about repayment).

In summary: the Japanese government is in a position to borrow as much as it likes and does not need to be concerned about any repayment issues:

* The Japanese people do not mind lending their government money, because they feel it's being put to good use and they are generally confident that they will get it back. In fact there's been a rather funny circle in this (w.r.t. the government's attempts to boost inflation): the government essentially hands out easy money for people to spend, the people save it instead, the government then borrows it.

* Some of the institutional lenders may be nominally private but are in fact either owned or fully controlled by the government; a good example is Japan Post Bank, which is the world's largest holder of domestic savings.

The government's ability to pay back its creditors---and, therefore, the creditors' chances of getting back their money---depends on how well the creditors themselves run their own affairs (and so keep the economy, tax-flow, etc. going)! Undoubtedly, a very nice position for a debtor.

So the Japanese government will never be in the position of having unpleasant folks marching to its door to demand austerity measures or structural adjustment programs; in this case, such unpleasantness would require a population of masochists.

[kelly]

Jakaswanga and OtishOtish,

Sasa nimeelewa (not lewa! )...that is why those 1million per piece toilets' ( I built a similar toilet for my mum in ugunja complete with ceramic bowl for <50K)loans when they come to mature at one point, we will be in deep shit!

[podp]

Jul 11, 2015 0:03:16 GMT 3 jakaswanga said:

[q


Lending money to a Bananaland is not smart. A bit like lending money to a drunk.


Some people have no debt simply because nobody is foolish enough to lend them any! they are debt free because they are ... junk!

when you think for example of SGR....500 B. how much for the LAPPSET projects like port in Lamu, pipeline, road, rail, resort cities, etc.

so there is the bar and happy hour when price is half....

The Greeks, Italians, Spaniards and Irish walk into a bar, where the French and Germans are the bartenders. It’s happy hour, and the Germans and the French are serving half-price drinks. Although everyone quickly drinks too much, the bartenders keep on serving. Eventually, the inebriated customers head home and get into all kinds of trouble -- fights, car accidents, some broken windows.

So who’s to blame? Clearly, the Greeks shouldn’t have drunk so much. However, the French and Germans also shouldn’t have served the Greeks when they were clearly drunk

www.washingtonpost.com/blogs/wonkblog/wp/2015/07/01/the-forgotten-origins-of-greeces-terrible-crisis-will-make-you-think-twice-about-whos-to-blame/?postshare=9831435831454402

and now we have noble 25 B for NYS,

[jakaswanga]

Jun 4, 2015 8:52:49 GMT 3 podp said:

now what is this?

www.businessdailyafrica.com/IMF-and-World-Bank-raise-the-red-flag-over-Kenya-debt/-/539546/2252232/-/68mp65/-/index.html

IN SUMMARY
Kenya risks rapid debt escalation when planned borrowing for the mega projects in the pipeline are taken into account.
IMF and Worldbank say the country must find alternative means of financing its new infrastructure away from loans.
Kenya’s debt load crossed the 50 per cent of GDP mark late last year to stand at Sh2.11 trillion or 57 per cent of GDP by end of December 2013.

This is insane. Earning about ksh. 7M/month between them, we have a man from Yale at CBK and another from Harvard at the MoF (ministry of Finance), and, god forbid, we still need some foreign creditor organisations to say---ACHTUNG, you apes, watch that public wage bill!



This is really an insult!

Dr. FinSec Rotich, you heard that you goat!? The IMF and World Bank are telling you stuff! HOMEWORK! the thinking seems to be you seem to have NOT learnt this stuff at Kennedy School Harvard! And if you did, apparently they deem you have forgotten, and worse, forgotten the SENSE in them. So your sleepy head with its erased brain spots is being slapped awake! –-BEWARE UNSUSTAINABLE DEBTS! your boat is taking in water and you are whistling in the wind, steady as she goes mates, all ship-shape Ahoy! --Yo hoo hoo a bottle of rum! Viva Jubilee! All Hail Uhuruto!

Yawa! (Viva Jubilee!)

Then there is the first mate of MV Shilling, the Opus Dei Yale fellow. he is the fresh annointee at the Central BoK. (Not really fresh if the detail be argued, he is an old hand at the bank alright). He too, Lagarde suggests, seems to have snored through Yale and is a monkey, so the IMF and World Bank have to flag some sense into him: hey, monkey Patrick, that public wage bill ratio to GDP, that is code red, you catch!

Yawa! (Viva Cord!)

You can send them Africans to the best colleges in the world and, once on the job running stuff, you still have to call from Washington or London, to remind them of ABC's, like caring to wash their hands before they eat foofoo in the open market, coz of diarrhoea risks! and brushing their teeth before bed lest they suffocate their wives and turn them off, pre-dawn sex!

Yawa!

Imagine the look on Wolfang Schauble's face, or Jens Weidmann's face, were Christin Lagarde to tell them what to do with the German economy! Or what to mind about their policies!

They would remind her of her dismal tenure as French finance minister under Sarkozy, and how her failures led to France now lagging far, far behind, leaving Germany as the solitary economic powerhouse of the Eurozone. --I know enough about the tribal politics of the EU to know the don'ts.

But these African goats and monkeys, Yale or Harvard, they are still the whiteman's burden. O boy! Simplicities like bad recurrent expenditure %s are still rocket science where their masters must look over their shoulders to mark! –-talk about patronising and condescending Big Brothers!

Yawa!

This is Boko Haram!

But what can the two Kenyan boys do? Only last month they were on their knees receiving a few hundred million from Lagarde to shore up the shilling. When you are a beggar, you tend not to have fire in your balls, do you. So all that rests Rotich and Njoroge is to smile politely at Lagarde, and say, yes mum, we will do our best. And then swallowing hard, if the president gives another of his wild directives, what do we do? Resign?

And that now is what makes a man a monkey or a goat. Never doing the right thing.

Friday, July 10, 2015

Shilling extends losses as govt intervention fails to stop rout

On Tuesday, the CBK raised the Central Bank rate by 1.5 percentage points to 11.5 per cent, a month after the rate had been raised by a similar margin to help prop up the shilling from extended weakening against the dollar.

What did Dr. Njoroge say about interest rates on his inauguration? Now he is fiddling like he is in panic!

The shilling Friday surpassed the 101 mark to the dollar, extending its losses despite a more-than-expected interest rate hike by the Central Bank on Tuesday.
At around 1:30pm, forex traders quoted the shilling at 101.20/30 to the greenback, weaker than 100.80/90 at which it closed trading on Thursday.
The weakening is attributed to surging demand from manufacturing, energy and telco corporates, with the situation worsened by foreign investor flight from emerging markets such as China and South Africa and frontier markets such as Kenya, Uganda, Tanzania and Nigeria.

I guess the two brilliant boys sure need somebody to steady their hands at the wheel!

Where would we be without Mother Christin and her prompts!?

[jakaswanga]

In the light of the performance of the Treasury principal secretary --PS for permanent secretary we used to say-- Dr. Kamau Thugge, sitting before the Parliamentary Accounts commission chaired by Rarieda Nico Gumbo, I find enough need in my head to go through some jarring thunderstorms in the horizon, harbingers which the state economist played deaf to. Instead, as we have seen and recorded elsewhere, Kamau berated the Auditor General, Eduard Ouko's office, for its intellectual poverty and shameless public display of ignorance, when it raised the alarm on the sustainability of the Kenyan public debt, and, further, warned of a runaway 'credit appetite' at the treasury. Suspicion is the treasury big shots are oblivious of the long-term consequences of interest rates and the currency's which, outside the control of the borrower, are the denominations of the debt repayment scheme.

Then there is the IMF of course. Kamau Thugge, I will quote later, used the public statements of the IMF to underpin his position that all is ship-shape in Nairobi and AHOY fair winds we sail! (Thinking of Greece and Ukraine and the role of the IMF in their financial collapse, I find that very foolish of Dr. Thugge. Then of course the explosive detail that Rotich and Njoroge (CBK) are IMF prototypes!) Neither can I remember anywhere on the debt-ridden earth where the IMF ever excelled at debt management for debtors.) Nay, the truth be told, the IMF is a creditor's instrument. Thugge, like his other two mates, is a creditor's man, or instrument.

Treasury’s dollar-denominated debt rises by Sh219bn

Thursday, August 6   2015.

By CHARLES MWANIKI, [e-mail]


The National Treasury building in Nairobi. PHOTO | FILE 

In Summary

The National Treasury's dollar exposure rises rose Sh219bn in the first four months of the year.
Kenya’s dollar-denominated debt rose Sh219 billion in the first four months of the year, exposing the country to higher interest costs following weakening of the shilling against the green back.
The rise was largely informed by a stronger dollar and the sovereign bond issue.
Central Bank of Kenya (CBK) monthly economic report for April shows the dollar-denominated portion of the total external debt of Sh1.33 trillion ($13.6 billion) in April was equivalent to 56.3 per cent. It previously stood at 45.1 per cent in December 2014 when the external debt stood at Sh1.17 trillion.

The increase came as the debt denominated in Japanese Yen and Euro declined from 12.1 per cent and 29.9 per cent, respectively, to 9.6 per cent and 23.6 per cent during the period. The net change in total foreign debt was Sh156 billion.

“The rise in the US dollar-denominated component is attributed to the proceeds from the tap sale of the sovereign bond issued in June 2015...the growth in external debt during this period was largely attributed to exchange rate revaluation,” said CBK in the report.
Kenya issued the tap sale at the end of last year, raising Sh73.8 billion to add to the Sh176 billion ($2 billion) raised in the initial Eurobond sale in June 2014.

The principal and interest repayments for external debt are made in the currency of denomination. The shilling has depreciated to the dollar to the tune of about 11.5 per cent this year, and the yen by 8.4 per cent, while against the Euro the shilling remains flat exchanging at 109.8 units.

The stronger dollar and yen, therefore, pushed up the debt load in local currency terms on account of revaluation.

According to the CBK data, debt owed International Development Association, Kenya’s largest multilateral lender, amounted to Sh382 billion ($3.9 billion) or 29.4 per cent of total external debt while that owed Japan, the largest bilateral lender, amounted to $800 million, or 5.8 per cent of the total external debt as at the end of April.
The stake of the total external debt attributable to the central government stood at Sh1.28 trillion (97 per cent), with government guarantees to parastatal accounting for the remainder.

READ: Kenya’s dollar-denominated debt rises in six months

The increase in total debt load, taking into account that domestic debt has also grown in the first seven months of this year by Sh95 billion to Sh1.402 trillion, has raised concern over the strain the repayments will have on the economy in coming years.

Ratings agency Moody’s said on Monday that Kenya’s debt, at about 50 per cent of gross domestic product, remains manageable for now, but that continued wide budget deficits would begin to seriously erode the government’s debt servicing capacity.

“In our view, the authorities’ decision to seek IMF assistance with its two stand-by arrangements and their fiscal consolidation over the next four years are signals that the government recognises its fiscal vulnerabilities as well as the need to build capacity to avoid a more difficult outcome,” said Moody’s.

Another international ratings agency, Fitch, announced two weeks ago it had put Kenya’s credit rating — long-term foreign and local currency issuer default ratings — on a negative outlook from stable.

Down on MAIN STREET, assorted payments are late. All the way to the counties. CASH CRUNCH is the buzz word. A symptom Dr. Thugge glosses over.

Worrisome.

By JOHN NJAGI. Tuesday, October 6, 2015

Treasury PS faults Auditor-General's public debt claims

www.nation.co.ke/business/Treasury-PS-faults-Auditor-General-s-public-debt-claims-/-/996/2901536/-/6tvu99/-/index.html



Treasury PS Kamau Thugge during a Public Accounts Committee hearing on Anglo Leasing contracts at Parliament Buildings in Nairobi last year.

Treasury PS Kamau Thugge Tuesday contested an assertion by the Auditor-General that the country’s debt level was unsustainable, and dismissed it as lacking any concrete evidence.

The PS went on to read to members of the Public Accounts Committee (PAC) of the National Assembly an opinion of the International Monetary Fund (IMF), which stated despite the country borrowing heavily to fund infrastructure development, it was still able to manage its debts.
On his part, the Auditor-General, had raised a red flag on the country’s growing appetite for borrowing, noting that Sh483 billion had been borrowed in one year only, and that the country was likely to experience financial stress when some of the loans mature.

Mank! are you there!?

[jakaswanga]

Very alarmist! running out of cash! desperate when you go to lenders, they smile like sharks! waving Fitch and Moody circulars at you! grinning for a ripping victim!

[] Why Kenya has run out of cash



Treasury building that hosts the finance ministry.Photo/HEZRON NJOROGE

BY OLIVER MATHENGE. October 9, 2015

The government has used almost half of the revenue collected in the last three months to service the public debt, Parliament's Budget Office has announced.
According to a report presented to MPs yesterday, the total revenue collected by the government by September 30 was Sh269.7 billion against a target of Sh421.3 billion.
The Star exclusively reported yesterday that the government was undergoing a cash crisis, with the Treasury delaying salary disbursements and other expenditure.

The report, presented to the Mutava Musyimi-led Budget Committee, shows that Sh132.5 billion of the Sh269.7 billion collected between July and September serviced the public debt.
According to the 2015/1016 Budget estimates, the government expects to spend Sh397 billion in settling the national debt.
"The mandatory expenditures are the first charge on the Exchequer receipts and hence the higher the public debt, the less the flexibility in sharing of available resources," the National Assembly Budget Committee was told.

The report says that the total Exchequer issue was Sh313.3 billion, with 45 per cent going to the Consolidated Fund Services that are used to, among other things, pay debts.
The report shows that 37 per cent of the allocation was to finance ministerial recurrent estimates, 7.7 per cent went to development and 9.9 to the counties.
The report paints a grim picture of the government's prospects to collect Sh1.68 trillion in the 2015/2016 financial year to finance its Sh1.94 trillion Budget.

www.the-star.co.ke/news/why-kenya-has-run-out-cash#sthash.pZ7IgPF2.dpuf

Half of 3 month revenues used to service debt!

That is a debt colony. Calculate what remains for HEALTH, INVESTMENT, EDUCATION, and the other so-called socio-economic vitals that need must.

let us hope that star figure is fiction! for anybody will know the economic situation of his household, if 50% of his income goes to debt servicing --which is not necessarily REPAY! (servicing can merely be jargon for offsetting the interest rate!)

Hallo Rotich, you there? (he is Peru).

[jakaswanga]

THE DEBT HOLE WHERE KENYA IS STUCK IS NORMAL, MAN-MADE AND DELIBERATE!

Prelude: not greek tragedy but carthiginian wipeout in the making.

This adjective PUNITIVE: Philip Ochieng' are you there!? Let me humour you a bit, imitation being the best form of flattery.

It comes from the Roman name for Carthaginians, the inhabitants of Carthago. Punici. The Carthaginians thought they could free themselves from Roman (debt servitude and political bondage) by appeasement. The Romans grinned at this good fortune of naturally surrendered slaves, and demanded they totally disarm, demobilise and embrace everlasting peace. Carthago paid off the debt and did that bidding. –--Like Muamar Gaddaffi or Saddam Hussein giving up their nuclear programs in exchange for re-integration into the community of civilised nations. (Don't i love that grin on the Persian's bearded face when he calls Obama his best friend forever!)

After Carthago had disarmed, and embraced pacifism to become the Switzerland of the Old World, the Romans pressed by the realities of economics –-stuff like sovereign default and public wage/war bills--- saw a golden goose waiting to deliver its golden egg for the asking across the sea.

'Don't break your word on me!' cried the distressed pacifist Punici, watching Roman armour gather ominously.
'Don't answer Rome back, dogs, nor guess her intentions! it is in the stars Carthago must cease!' thundered the elder senator Cato.

It was PUNITIVE when Roman armour entered Carthage. No, that concept was developed later to describe the rampage. Not even a stray dog was left alive. The Carthiginian peace terms became historical legend, and certain European economists would later unearth these punitive conditions to attempt to destroy Germany forever at the treaty of Versailles after her World War 1 defeat.

Germans recognised it instinctively and it would soon lead to one of the most monstrous and rapid mobilisation and modernisation for war in modern history.

I like to think of the IMF diktats on Africa as punitive! Christin Lagarde is a hysterical Furiae who sees the salvation of a diminishing, sinking France (for which is responsible as ex finance come economics minister), as only possible if Africa is rendered hapless to be pillaged in a PUNITIVE fashion, like the Romans did with Carthago after ideologically Trojan-horsing her!

Part 1. ON A LIGHTER NOTE NOW.

My love for cartoons was kindled when I was learning English. Reading was still a very laborious exercise for me. My uncle at the railways brought home an old Indian newspaper, obviously left behind long ago by some Asian. There was a front page drawing of a crowd of Indians at an open-air bus station. Everybody had an umbrella except one person. The man standing next grinned at him: 'you sure work for the met department, don't you!?'
Pleasantly surprised the umbrella-less man responds wide: 'Sure! How did you know!?''

What a pleasant surprise not everybody believes their nonsense, was the caption under! Hence whenever I travel to a country whose language I do not understand, I always look at the cartoons, to get the national joke.



HOW do debts denoted in foreign currency's work for the soft-currency economies like our shilling Kenya!? Must they always lead to one result!? Is there never a happy ending!? Is there no variation in the tale, the tale as told below in this clip.

Borrowing too much too fast Africa’s growing debt challenge

BY Jocelyne Sambira, Tuesday, October 27th 2015

It has been a rough year for the West African countries most affected by the Ebola virus that has ravaged their communities and crippled their economies, disrupting agriculture and trade.

Forecast to lose a combined $1.6 billion (Sh163.2 billion) in predicted economic growth in 2015, the people of Guinea, Liberia and Sierra Leone breathed a collective sigh of relief when the International Monetary Fund (IMF) forgave a combined $100 million (Sh10.2 billion) in loans, shortly after disbursing $130 million (Sh13.3 billion) in aid last September.

The intention was to free up funds for relief and recovery efforts. But with the need to overhaul their health systems, these countries are once again accumulating debt — like the $160 million (Sh16.3 billion) interest-free loan awaiting approval by the IMF executive board.

The acquisition of new debt is an emerging pattern among beneficiaries of the world’s most comprehensive debt reduction programme to date. The 1996 Heavily Indebted Poor Countries (HIPC) Initiative, supplemented by the 2005 Multilateral Debt Relief Initiative, has helped 35 sub-Saharan African countries cancel $100 billion (Sh10.2 trillion) in external debt. These internationally co-ordinated relief programmes, managed by the World Bank, IMF and the African Development Bank, were designed to find a sustainable solution to Africa’s debt burden.

www.standardmedia.co.ke/business/article/2000180797/borrowing-too-much-too-fast-africa-s-growing-debt-challenget:

IMF forgave $100M. Forgave you said!? HIPC!?

But from the world of academia there are other statistics.

Western Asia and Africa experienced the strongest increase in net outward resource transfers in 2010.

Net resource transfers from developing countries are expected to increase moderately along with the projected widening of current-account imbalances (see chap. I). This continuation of the pre-crisis pattern in which poor countries transfer significant resources to much richer nations also reflects the need felt by developing countries to continue accumulating foreign-exchange reserves as self-protection against new global economic shocks.
Instances of global financial market turbulence, enhanced exchange-rate volatility among the major reserve currencies and the short-term surges and volatile private capital flows have added to high macroeconomic uncertainty and the perceived need for self-protection during 2010.

After a sustained period of over two decades of NET OUTWARD RESOURCES TRANSFER, especially from poor West African countries, they were forgiven $100M debt! And foreing 'AID' comes in too! And still the net flow is OUT!

Ululu WTF yawa! (would this be the period at which Dr. Patrick Njoroge and Kamau Thugge and Henry Rotich were African consultants for the IMF!)

I am looking for data and graphs which prove these debts do not always astronomically surge, but sometimes cheapen in price for Wanjiku, such that she is not FORGIVEN, nor, destitute, forced to crawl on her belly for debt relief!

Meanwhile as I search, I have the following to remark. (I do not like being robbed of $100, then being forgiven my ksh100 debt to the robber!)

So methinks like in the case of weather forecasts, it is civilised to respect meteorologists, but still prudent to look outside through the window to see if the real weather contradicts the ace model on TV!


honest weather forecast.

Prudence can be a bad habit. Can erode respect for authority into scorn and ridicule.

Currency depreciation = Expropriation.
Inflation = Depreciation in the value of labour.

Inflation is when prices rice, except that of labour. Labour is the defining factor in production. So when the productivity of the labour has stayed the same, but its compensation decreased, the question arises, who siphons off this nominally free labour?

Banks and bankers who own money are a good guess, from there the old word usury.

The astronomical profits registered by banks –-purely by the instrument of sky-high interest rates, should tell a tale in Kenya of a killing being made. And who is being killed!? The one and only who really has to live off his labour, and not parasite the labour of another in some way.

I went to the library to check out the technical meanings of a few technical terms bandied around by economists. Stuff like Quantitative Easing, Inflation, Stagflation, price index, Liquidity, Collateral, perfect market, and a few more I have heard recently used as holy mantras to explain the global crisis, and lurched on by local gurus in their programmed incantations.

I wanted to have a street-wise understanding of the said, the way I developed one in Biology long ago. There the teacher talked of Coitus, Menstruation, Lactation, defecation etc; what on translation to lived experience worked out to, correspondingly in reverse order: sh!tting, milk production, monthly period, fcucking.

The results of this exercise have surprised me. But worse, convinced me Kenya is going nowhere (and certainly not industrialising) while paying 50% of her revenues to debtors and engaging in other hair-brained shenanigans at the treasury.
This obvious fraud presided upon by a highly intelligent and trained team is what has killed me. I walk into the nearest public dispensary and I do not see a health service. So I go look at the comparative statistics on the correlation between public health and economic breakthrough. (many countries have been there before and left data!)

And I know we are living a lie, even if we change, rebase, the definition of public health.

Continued

[jakaswanga]

continued:

So the models can say one thing, and reality pontificate another, one being quite the opposite. Once in a while that is hilarious, mostly it is tragic.

In any case one learns to look outside the window to see if it is raining even as the best models of the Mets say dry and clear blue sky, with angels visible floating all over. Carry that umbrella, even if the projected growth is a turbo 6.5%, revised from a grand-prix +7%.

I find that kind of exercise important for my sanity. No, not philosophical skepsis, but just a bit of mental exercise, questioning, and more thinking efforts pondering the hidden bits of the puzzle, before going off to have a drink on it, –--for a bit of aphrodisiac, wife willing. Therefore is it be, taking this local example, that when I catch Dr. Evans Kidero has paid his long term associate lawyer, JSC table-mate and EACC suspected partner in earlier crimes, Professor Tom Ojienda of the Mumias KPMG muzzled report, the lofty sum of ksh. 30M from public koffers, for a case the law genius cracked in a few days for settlement outside the courts, I can have a better understanding and cast a critical look at the various models of measuring the 'value of labour' in an economy where 30M is a fortune even to a bank branch!

In other words, I can say front out, the mighty professor is a scammer to boot. A clearing house for contraband cash looted by smart-schemes from not Mumias sugar this time, but jua-kali Nairobians. Mesays the Kenyan constitution does not have a complexity in reading which would require an intellectual exertion the value of 30M to unravel in a few weeks, the bill charged to Wanjiku. It is irrational and must be smoked out for what it is: a mini NYS-Waiguru situation! Blatant theft. So we have to demystify the praxis which rationalises such a raw act of theft.

Show me the mind whose quality of labour is worth by public service 30M in one week out of a $50 bn GDP @ 42 million people, and I will show you Almighty Jesus riding back to planet earth on project salvation. We have seen our super competent matriarch Anne Waiguru win international prices for heavy-duty performance, only to be unearthed as a primitive thief who bills Wanjiku a bar of soap for O No, God, I don't like insulting beauties from Mount Kenya! –-gin kayuocha!

In the El Niño response strategy, a copy of which the Sunday Nation has obtained, the government plans to spend Sh 37.5 million to buy 1,000 bar soaps – which comes to Sh37,500 per piece.
Meanwhile, the retail price of a bar soap in most supermarkets in Kenya is not more than Sh250 on the extreme.
The cost of the bar soaps rekindles the memories of the Sh109,000 for the “non-carcinogenic” wheelbarrows that Bungoma County Government had purchased.
In the same budget proposals, the government will be paying National Cereals and Produce Board (NCPB) Sh50 million in “agency and management fees” for unspecified tasks, raising questions why the government should pay its own department for public work!

Lucky me! It is the government, not my Anne! Smart girl who knows when she is beaten.

HOW A SYSTEM OVERSEES its own CRIMES.

1. The delusion of Racial superiority.

The water –-volume-- allocation in the West Bank to an Israeli settler is?
The water allocation to a Palestinian in the same area is??

What is the 'praxis' which justifies this 'imbalance'?

Yes, it is called COLONIALISM.

And, Behold, take a look at ISRAELI MILITARY POWER, and the insane depths of brutality to which it must descend against the occupied who resist, to recognise what it takes to maintain such an imbalanced system of justice. (colonially constructed reality)

2. The delusion of SUPER HUMAN TECHNICAL POWERS

Now –-in another constructed reality, post independence, you can believe Ojienda is a genius at law fighting Wanjiku's corner, and all glory to Kidero for an inspired choice of warrior, ma koro omiyo yawneuru yo, ye other dummy city hall lawyers wallowing in pedestrian legal knowledge. Or, on the other hand, perhaps too one could think and suspect, huh!? comparatively on a full day's work, how long does it take a top Kenyan brain surgeon to earn 30M by expended doc's labour!? –--which cuddly Lupita Nyong'o earns in a nano second in a pixel shoot!

How many working Nairobians are needed to raise 30M in two weeks!? (without debt).

(The financial geography of Nairobi is available at the Kenya institute of monetary studies. Perhaps the department of statistics too at any local college!)

Here is the Kenyan salary survey data Notice the average monthly salary in Kenya is ~150K! (he he he! this statistic average! when you see every young man out of school is a bodaboda loafer! And agriculture is the biggest sector in employment! it surely limps some!)

continued.

3. the delusion of MAXIMUM REWARD FOR MAXIMUM RISKS

THE CASE OF IMPERIAL BANK, and fraudulent CEO's. As another model.

[jakaswanga]

FRAUD WITHOUT CONSEQUENCES, and the myth of business risks.

3. THE CASE OF IMPERIAL (DUBAI OR CONTINENTEAL) BANK: fraudulent CEO's. As another model.

The imperial bank collapsed. So that will be lots of depositors in Limbo. Now in a free market system banks can collapse. No guarantees. It is a risk we take, depositing our life's savings somewhere. But, tough luck for departments of economics, a history of banking bankruptcy's tells a story which economic theory does not tell you since Adam Smith.

And in the banking business the risk is always on somebody else's money! that aint capitalism! that is a parasites racket, a criminal's paradise. A big easy.

Imperial Bank’s 53,000 account holders’ tales of pain and despair

Imperial Bank depositors were Thursday denied access to their money for the third day in a row, leaving most with stalled business transactions and unable to meet their financial obligations.

A large fraction of the 52,398 depositors, reduced to paupers by a stroke of the pen on Tuesday, were forced to take up new loans at exorbitant rates to meet immediate financial needs.

But of the deceased master thief we gather

His company Imaran Real Estate in partnership with Tune Hotels — associated with Malaysian tycoon Tony Fernandes who owns the English football team Queens Park Rangers — is building a Sh2 billion hotel in Nairobi’s Westlands

Adam Smith is blunt: Greed is the motive of business!

Question: let it run free, or curtail it!? –--Greed is good! intones Michael Douglas in a Wall-Street block buster! (Greed for love, greed for knowledge! Greed for power! Greed captures the essence of the evolutionary spirit!)



So, deductively, what happens when a society will not punish criminal greed –-like wanton theft at the top? What happens if police greed is legendary, or, indeed, when the police academy breeds the greediest of the lowly lot? (this is a wink at Kiganjo as Harvard business school!)

My answer: you get The republic of Nigeria. A rotting giant. And you also get a BANKING CRISIS, wall street and world. Because you do stuff like repeal the Glass-Steagall Act; you overliberalise and let speculators gamble with other peoples salary deposits and pensions and futures; and you start to –-QE in series--- manufacture paper money (no productivity collateral) to cover up the losses and continue the pyramid scheme and casino capitalism that banking then has become.

On the street level in Nariobi, that translates to Bank Managers stealing outright from the depositos. That is now the case of the Imperial Bank and the rest (of the banks) that were deliberately collapsed before it in Kenya. (The Githunguri of Lillian Towers and the fortunes of the National Bank of Kenya would be a powerful case study too!)

These are the obvious and easy ones.

Unravelling and showing how the CBK is nothing but a bigger variant of Imperial Bank may require, at a first take, the kind of mythical intellectual exertion Ojienda apparently brings to the table at law. But on a second take, all it takes is just a tenacious follow-up of straightforward logic and a thinking arrangement of the facts the best way they can make sense.

First, the imperial bank as a case of straightforward theft:

TEST-TUBE CASE OF A BANK ROBBERY, FROM THE OWNERS SIDE.

Imperial Bank officials accused of swindling Sh34 billion, 20 firms listed in fraud

BY SAM KIPLAGAT October 27, 2015

Senior Imperial Bank officials allegedly siphoned Sh34 billion from the institution, that was placed under receivership, between 2002 and September 2015.
Receiver manager Peter Gatere accused former group MD Abdulmalek Janmohamed and other senior officials of embezzling the funds.
The MD died from cardiac arrest on September 15.
The funds were transferred to 20 companies and individuals named as respondents in the case, Gatere said in documents filed in court on Tuesday.
An affidavit filed by lawyer George Oraro says; “The respondents herein have clearly been unjustly enriched or benefited from the illegal transfers of these vast sums to them on the order of the deceased and other senior officers of the bank."

www.the-star.co.ke/news/imperial-bank-officials-accused-swindling-sh34-billion-20-firms-listed-fraud#sthash.p6yA1UOS.dpuf
Receiver manager Peter Gatere accused former group MD Abdulmalek Janmohamed and other senior officials of embezzling the funds.
The implicated individuals and companies are as follows;
10. Zulfikar Haiderali Jessa
11. Nasir Haiderali Jessa
12. Nargis Jessa
13. Nadir Azizali Jessa
14. Firoz Jessa
15. Salim Jessa
16. Irfan Shamshadin Jessa
17. Nashiv Haiderali Jessa

Jessa, Jessa, Jessa ---a smart family scheme to enrich themselves by impoverishing depositors who had placed their market faith in their business acumen.

So they have made a fortune from the bank. yes. How!? They duped the depositors!? arguably! They worked hard as is the rule under market forces? arguably. Took risks which went bad, and that is business, don't no!? cannot say --the matter is sub-judice!

However, the important thing is, the existence of a praxis, a constitutional or judicial framework, in which there are enough loopholes for genius lawyers (like ha ha ha!) to earn super keep, making sure these fraudsters get away with the loot, scot free! No need stepping aside here!

Sh!t happens. Small scale depositors will obviously be ruined. But ruin of the lesser children of god is the lifeline of capital, no!?
Here is the hooker's detail

A large fraction of the 52,398 depositors, reduced to paupers by a stroke of the pen on Tuesday, were forced to take up new loans at exorbitant rates to meet immediate financial needs.

They were forced to do what!?

Take up NEW loans at EXORBITANT rates to meet IMMEDIATE financial etc etc!

Does that sound like the Kenyan Treasury facing a cash crunch and FORCED to borrow both locally and internationally at SKY-HIGH interest rates to meet immediate etc etc!

So I said the theft at Imperial Bank and the ruin of small depositors there, is but an open and transparent example of the bigger, murkier game at Central Banks across debt colonies. And our Kenya is of course a pontiff example therein.

The CBK is merely a custodian of monies earned by the citizens. The treasury is more like the CEO of Dubai Bank or is it Imperial or continental bank!? (what is in a name!?) And these guys and institutions have proven themselves dishonest creeps who have done bad stuff with public money, and now, facing ruin, Wanjiku has to go deeper into debt to pay off debt. They have delivered us to the IMF torture chamber, and there shall we learn the word PUNITIVE in practice!

A. Loans that were enacted at sh.80 to the dollar, have to be repaid at over a rate of ksh.100 @$. (depreciation of the shilling in the meantime, between 20-25%)
So that takes most of the Eurobond the doctors said would finance local productive capacity. But now the story is getting indebted to pay debt. Vicious circle!? Continuing to dig while in a hole!?

NB: The rest of the (foreign currency) reserves disappeared shoring up a downwardly spiralling shilling.
Howbeit when the currency was devaluing, the doctors of economics said that was good for OUR EXPORTS. A weak shilling increased international competitiveness, leading to a foreign currency boom, a healthy balance-sheet on trade deficits, current account surpluses, a general upsurge effect and more jobs. More jobs, that is good growth. A feel good factor … like in ..

–-O God I feel high! High O I Kayaman!
Floating on the holy weed, riding the daily reef!
O God I feel high, flying all the way to Heaven!

But predictions based on economic models these days look like those of priests on the date of the return of Jesus Christ. Keep on postponed, though of course they did a statistical trick, rebase, which officially propelled the Kenyan economy into a MIDDLE INCOME category. Why do I call it a trick, because it allows for a much more brutal debt reparation regime. Not to mention shoring up the shilling has now cleaned up any reserves if there were ever any! (the shilling appears ready to depreciate to its logical dead end, toilet paper.) –-Prriiz Priiiz Shirringi, stop going down!

The reality now is of a Kenya without the hyped advantages of the famous Eurobond, neither bonus nor trickle-down effects thereof, but a hamstrung treasury (cash strap), a debt reparation nightmare which admittedly gobbles up 50% of the KRA purse, a bubble bust, and a political temperature disturbingly shaky.
The bankers now own us. We are too big to have debt relief nor debt write offs. We must go into debt to pay debt. We bear children unto debt, bonded, like low-caste Indian untouchables in the rural areas of that democracy.

I insist if Rotich, Thugge and Njoroge do not arrest this situation pronto, they must give way the kienyeji way.
What will the infrastructure binge add to the economy at this rate debt expropriation? What will the tickets in the SGR have to cost to be debt-rationalised? That nation has an idea, roll through this blog of cartoons.
www.nation.co.ke/oped/Cartoon/-/454986/454986/-/156q6i6z/-/index.html

continued.

[podp]

Oct 29, 2015 8:58:14 GMT 3 jakaswanga said:

FRAUD WITHOUT CONSEQUENCES, and the myth of business risks.

3. THE CASE OF IMPERIAL (DUBAI OR CONTINENTEAL) BANK: fraudulent CEO's. As another model.


continued.

Eurobond (Eurobonds?) and all that corruption business with the Ministry of Devolution and Planning is going to be the Anglo Leasing of the Jubilee administration.

Second proposition: Since the presidency appears to be in an advanced state of paralysis, there is some safety in assuming that not much is going to be done to investigate or catch the thieves and therefore, by that mere fact, the entire government will be involved in covering up grand corruption.

Third proposition: And flowing from the foregoing, if Jubilee retains power in 2017, it is not because it is in the circumstances deserving of another chance, but because the opposition is bure.

www.nation.co.ke/oped/Opinion/Inconsistent-Eurobond-story-a-pointer-of-grand-corruption/-/440808/2934944/-/w9dqx8z/-/index.html

[jakaswanga]

How do governments deal with cash crunches!?

1. They put up a public show of denial, but behind the scenes some real measures have to be taken. They borrow left right and centre, and from every Tom Dick and Harry. They pester friends in private, and some rich, 'friendly' state my spring in –---like China did with a stricken Zimbabwe.
2. They call upon an emergency credit facility. (that is an emergency loan by say the IMF in our case. The EU has several, eg. European Financial Stability Facility!)
3. The state could confiscate liquidity, that is seize money from where it is a sitting duck.
4. I suppose taxing the citizens to the bone is always on the cards. …,

This number 3 means impounding the deposits of banks at the central bank and issuing debt paper (IOU, bond) to the various banks. ----(this is not yet seizing individual deposits like happened in Cyprus during the banking crisis there!)
Also, big reserve accounts like Pensions and Health Insurances can be raided and looted, as the government uses this liquidity to pay off its immediate obligations –---salaries of soldiers for instance. No, you cannot do to Shabaab-pressed soldiers what you do to unionised go-slow teachers in Kenya.

WHICH CASH CRUNCH KENYA!?

So you heard the government of Kenya had a cash crunch, or has a cash crunch!? Don't believe it!

1. Rotich the cabinet secretary for finance has said that is fiction. Aden Duale, the loudest trunk of them Mpigs, has seconded him. He is in the information loop you know. And none other than William Ruto the deputy president has weighed in. State finances are ship-shape.

That appears to be the bleating line for all the sheep to mbeee-hehhe in the choral cacophony that now deafens the city of sychophancy.

If you are not yet reassured by the above. Then you are a lost case. I on the other hand will wait a moment in healthy patience. The DP sounded a touch confused. I gotta look around before I believe him.

Friday, October 30, 2015

Eurobond cash is safe, William Ruto says

Mr Ruto said the country’s economy is strong despite the cash crunch. He said internationally recognised institutions such as the International Monetary Fund and the World Bank have given Kenya’s economy a clean bill of health. He described those saying the country’s economic situation is headed in the wrong direction as “laymen in matters of (the) economy”.

“Such leaders have no economic capacity or knowledge to claim that the country’s economic situation is headed in the wrong direction,&#148; said the Deputy President, who is on a tour of Kwale and Kilifi counties.
www.nation.co.ke/news/Eurobond-cash-is-safe-William-Ruto/-/1056/2936300/-/r7yyyoz/-/index.html

The economy is strong despite a cash crunch!? That is possible. But is it so in the case of beloved Kenya!? Sceptics abound, and not all of them without economic capacity nor knowledge to underwrite their doom thoughts!
The Kenya Association of Manufacturers, KAM, on a take from the frontline, would meet DP Ruto's definition of know-nothings on the economy.

www.the-star.co.ke/news/state-cash-crunch-hurt-private-sector-jobs-kam#sthash.kkKv5jVI.dpuf

State cash crunch to hurt private sector jobs - KAM -

MARTIN MWITA October 28, 2015

MANUFACTURERS are concerned their could be job losses in Kenya as the effects of the cash crunch in government extends to the private sector.
The manufacturing sector yesterday said it has already suffered unfavourable macroeconomic conditions due to “depressed global economy”, hence the situation in the country needs to be resolved.
According to the Kenya Association of Manufactures, the sector which has employed more than 250,000 people needs finances to run factories and cover its costs.
KAM CEO Phyllis Wakiaga said manufactures are believed to be making profits yet they are making losses. Contractors and suppliers have not been paid for services and goods rendered to government for more than six months, according to the Kenya Private Sector Alliance.
“It is prudent that this situation is quickly resolved to ensure that production goes on and also keep track with the vision of making Kenya globally competitive,” said Wakiaga in a statement. “If this situation is not resolved, unfortunately we are likely to see workers being laid off because companies will be unable to pay them,” she added.

See more at: www.the-star.co.ke/news/state-cash-crunch-hurt-private-sector-jobs-kam#sthash.kkKv5jVI.dpuf

The manufacturers and entrepreneurs may have no PhD's from wherever, but as those running real businesses in real time, when they have not been paid six months for rendered services, they say they risk closure, and will lay off workers.
Could of course be alarmist and scaremongers! motivated by narrow, sectarian interests.

Nevertheless, when Al-Shabaab hit the tourist industry at the coast and workers were massively laid off, we know the pain that caused. The compounded hard currency loss is now stated as one of the causes of the non existent cash-crunch!

It is clear William Ruto has no historical experience of this economic pain, nor does he possess a bureaucratic capacity to recognise and comprehend the social consequences of these layoffs. To him, building a 2 billion citadel, a cash crunch is fiction.

How about the bit in which the DP President says Internationally recognised institutions –IMF and WB-- have given Kenya a clean bill of health!?

Again the Hustler of Hustlers has not been on his homework respective the treasury. That Phd in zoology in Chiromo does take a man's time off econs I say.

1. The world bank has been revising her earlier blurbs on the Kenyan economy. It is the detail of the reasons why, where the beef is. More about that later.

2. The IMF itself is a case apart. In something akin to panic this month, this body deployed a team of technical experts to Nairobi at an emergency pace, after realising her trio of indigenous boys, Thugge Rotich and Njoroge, do not have a firm hand on the tiller, and were wont to act like witless laymen.
3. The IMF quickly processed and put on standby an additional loan to calm the markets, and actually Kenya has been more or less a permanent IMF patient. The IMF is a death-row Priest!

In February 2015, the IMF already set aside a precautionary loan. Meanwhile it praised Kenya sky-high. They knew they were talking horsesh!t. The crunch was coming, The numbers from the treasury in Nairobi were not lying. (then after suspending business with Kenya in the John Githong'o fall-out, they never came clear again on which indicators they used to resume business with Kenya! of course they changed the definition of corruption to read 'favourable business climate!)

In June there was the PRECONDITION to shore up the shilling with the loan

IMF gives Kenya Sh67.5 billion loan to tame shillings free fall

BY Paul Wafula. Monday, June 15th 2015

The volatile shilling has got a major boost after Treasury said that it had secured Sh67.5 billion precautionary loan from the International Monetary Fund (IMF) to cushion it against shocks. National Treasury Cabinet Secretary Henry Rotich said the Government had secured a precautionary Stand-by Arrangement and a Stand-by Credit arrangement with the IMF for Special drawing rights (SDR) of 488.52 million or $688.3 million. Rotich said the credit facility which translates to about Sh67.5 billion at current exchange rate is necessary to mitigate against shocks that could derail the Jubilee government’s development agenda. “We intend to draw on the facility only in the event of an exogenous domestic or external shock,” Rotich said in the Budget statement delivered to parliament on Thursday.

www.standardmedia.co.ke/business/article/2000165705/imf-gives-kenya-sh67-5-billion-loan-to-tame-shilling-s-free-fall:

Treasury CS Henry Rotich reads the budget at Parliament last week. Central Bank is counting on the foreign exchange reserves and a precautionary facility to stem shilling's volatility.

businesstoday.co.ke/news/news/1422953176/kenya-gets-ksh64-billion-emergency-loan-imf

International Monetary Fund (IMF) has given a Ksh6.4 billion ($700 million) to Kenya as a precautionary loan as the country continues undergoing economic reforms, AFP has revealed.

According to the website, IMF approved a $497.1 loan under its Stand-By Arrangement facility and another $191.2 million under its Stand-By Credit facility. Both are one-year loans that the IMF said Nairobi does not plan to draw on "unless external shocks lead to an actual balance-of-payment need."

WHAT IS A WAIVER!?

The shocks came, the shilling started to shrivell. There were delays too in the debt service payments. (temporary is the word to watch!)

IMF gives Kenya extra time to pay delayed loans

BY RICHARD MUNGAI September 28, 2015

THE International Monetary Fund has completed its first review of Kenya's 12-month standby arrangement and credit facility performance and granted the country waivers on the temporary delays in its debt service payments.
- See more at: www.the-star.co.ke/news/imf-gives-kenya-extra-time-pay-delayed-loans#sthash.BbLbpvGt.dpuf

A temporary delay in debt service payment!?
Technical word is DEFAULT1?

Now, what kind of guy defaults on his debt obligations!? A hard-up fella!? May be. And this waiver is granted even after Kenya had used the emergency facility, or war-chest, availed in February.

In February 2 2015, the lender approved $688.3 million (Sh72.45 billion) as Kenya's quota under the stand-by arrangement and standby credit facility, which would be given in two equal tranches upon completion of semi-annual program reviews.
It availed $535.3 million (Sh56.35 billion) immediately for the National Treasury to draw on in the event that exogenous shocks lead to an actual balance of payments need.

The circumstances leading to the default, ---leading to the request for a waiver, requires an explanation. Here is a hint.

Zhu said the state requested waivers on the basis that net international reserves had declined, following the decline of capital flows, persistent fall in tourist arrivals, and occasional Central Bank's interventions to contain exchange rate volatility since April.
The missed debt targets include the indicative target on net international reserves for end-June and the indicative target on Central Bank's net domestic assets.

Somewhere above there is also a side hole the Eurobond disappeared into. And added to that is the tale of 50% of KRA revenues channelled to debt management. And now the presidential prerogative of slapping taxes on consumer goods!

What now, had not the Americans taken over the funding of the LINDA-NCHI in Somalia!? anybody know how much it costs per day!? Including the Somali border wall from Kilifi to Mandera!?

William Ruto should do a lot of shutting up on economics. Or the DP have a serious homework session to come toe to toe with reality. But lucky him, he has one of those constituencies which, even after all the names of the men and women who fixed him are known and confessed, they still believe the ICC fix was an act of God! Trials of faith like the devil and Jesus in the wilderness!

But here is a man who has done his homework: IMF acting chair of review committee: Min Zhu

These arrears reflect a coordination failure among government’s entities rather than inability to pay, and the authorities have adopted corrective measures. Strengthening capacity at the National Treasury’s debt management office and the introduction of the Treasury single account should be decisively implemented.

Kenya's situation is that of the rich man who forgot his wallet and cards at home. He can not pay for his purchases at the supermarket, nor clear his last week's shopping which he promised to next visit but that he has forgotten his wallet does not render him broke, does it!?

Fwacka Zhu is lying and he knows it. They way they have been lying about Ukraine, and the way they lied about Greece.

Rotich and co, desperate, facing the option of delayed military salaries, were contemplating confiscating banking deposits. That would trigger a banking crisis in Kenya amongst other things. That is why the technical team flew from Dar-Es-Salaam to Nairobi to take charge.Avert foolishness.

William Ruto: pleasestop being such an obvious fwackhead! you have a reputation to keep as a formidable politician you know! Some of us are really out there trying to convince Jaluos to vote for you when you run for PORK. But now everytime you open your mouth you are a goat, as if being a Singh is not enough! Featherweight!

Government cash crunch hits private companies

Last updated on 17 Oct 2015 09:15
www.standardmedia.co.ke/m/story.php?articleID=2000179872&story_title=Government-cash-crunch-hits-private-companies

According to private sector lobby group, Kenya Private Sector Alliance (KEPSA), contractors and suppliers have not been paid for services and goods to government for more than six months. Now, the private sector is cautioning that continued lack of spending by Government is directly hurting local companies, which are in turn being forced to cut back their spending.
“Demand is completely depressed and everybody is sitting on stocks because nobody is ready to sell their goods on credit or extend their credit past the limits they have already done,” explained KEPSA chairman Polycarp Igathe.

With Kenya’s recurrent expenditure estimated at 50 per cent of the country’s national budget each year, the State is the largest consumer of goods and services produced locally.
Mr Igathe, who is also the CEO of oil marketer Vivo Energy, said all sectors of the private sector are reeling from the Government’s spending cuts.
“The Government needs to start paying businesses for the services and products they have supplied and this will ease the tension that is in the system,” he explained.
“In the energy sector, for example, we used to pump seven million litres of fuel each day but since the cash crunch we are now doing five million litres,” he said.
The 28 per cent fall in sales, Mr Igathe, said would directly lead to cost cutting measures putting jobs and significant investments at risk. “You are sending the wrong message to private sector when you withhold money owed to businesses for over 180 days and this looks like we are in a short term recession and we need to sort it out.”
National Treasury Cabinet Secretary Henry Rotich on Thursday admitted to Parliament that the Government was experiencing a cash crunch on account of depressed revenue collections and corrective measures to strengthen the shilling.

In the current fiscal year 2015/2016, Kenya Revenue Authority collected Kshs.269.7 billion. This was Kshs.12 billion less of the targeted amount. Of the Kshs.269.7 billion collected, approximately 49% (Kshs.132 billion) was used to repay the debts. That is a direstrait of prioritized debt-servicing, yet revenue shortfall.

This is also a definition of a cash crunch.
Given the current economic performance, debt is the temporary cushion. The bottomline when the credit binge ends, is awesome austerity. Greece has been there.
This kind of sh!it is guaranteed to happen to an economy mismanaged, pillaged by parasites and mutilated by cannibals –-like Kenyan Mpigs!

The Kenyan Mpigs apart from being the best paid in the World, now want their wives too to join the jet set at our cost! It is a death wish methinks. On that Africa is always game.

How do countries deal with cash crunches!?

International third world consensus is IMF and World Bank are up for reform. Like the United Nations Security council with its 5 vetos, with the European Union having 2, while Indian, Latin America and Africa zero. It is therefore dangerous for an a young aspiring president of a big African economy who once mouthed Pan-Afric slogans and flirted with the relevant realities of China when the West threatened only essential contacts, to unqualifiably herald the IMF and WB as international bodies of good world-wide repute!

These Kenyan politicians, they remind one of the saying: them that God hates, God gives mindless leaders!

[jakaswanga]

CRISIS, WHAT CRISIS? --(I am rushing to bring this series to an end, to create space for drink!)



HOW ABOUT HIGH INTEREST RATES breaking the backbone of the economy and more?

That is a good one for a start. We keep Dr. Patrick Njoroge in sight.

How about, for a second, punitive LOCAL interest rates as AS EXPROPRIATION and economic sabotage? (given zero or negative interest rates in Europe and the USA)

Sub-zero interest rates have floor nearby, albeit a shaky one

Oct 28, 2015

Zero is clearly not the floor for central bank interest rates, but there's still a lower limit nearby, however shaky it may be.
For anyone assuming official interest rates would not or could not go below zero, it's been a sobering year. Four central banks in Europe have broken the taboo and are experimenting with the slightly puzzling concept of negative interest rates.
The European Central Bank as well as the Swiss, Swedish and Danish central banks all now employ negative deposit rates - charging their commercial banks for holding reserves on deposit as yet another way of forcing them to lend more.

i call that a banking crisis! (the model has broken down!)
That is the Metropolitan Motherland. How about at the periphery, the semi-colonies like in Africa? What is up with the interest rate thereabouts!?



www.standardmedia.co.ke/article/2000181080/kenyans-new-loan-rates-huge-burden-for-us

Things fall apart for Kenyans as loans burden bites

By Standard Team

Funds borrowed at about 15 per cent months ago have now been re-priced at anywhere between 24 and 30 per cent. For most, that could translate to double the amount repayable every month. The notices from banks warned: "Due to the prevailing challenging economic conditions and subsequent tightening of the monetary policy by the Central Bank of Kenya (CBK), it has become necessary for the bank to review its current pricing mechanism on our Kenya Shilling credit facilities. "As a result, effective 19th November 2015, the margin applicable on your credit facility will be increased and the effective new rate and monthly instalment will be as indicated below. The monthly instalment is indicative as it is dependent on the outstanding loan balance,"

www.standardmedia.co.ke/article/2000181080/kenyans-new-loan-rates-huge-burden-for-us

–---------------------------

Former Nairobi Central Business District Association chairman Timothy Muriuki runs two companies in Nairobi. One deals in construction while the other is a trading company. He was shocked when he was informed by his bank that the interest on his Sh30 million overdraft had just been raised from 16 to 20 per cent.

As if things could not get worse, the Government, which is one of his biggest clients, was slow in paying for services rendered.
"Our profit margins have been wiped out by the higher finance costs," said Mr Muriuki during an interview with The Standard. He is sceptical of Deputy President William Ruto's promise that the interest rates would come down by next week.

www.standardmedia.co.ke/article/2000181077/things-fall-apart-for-kenyans-as-loans-burden-bites
–---------------------
As if on cue, the Kenyan deputy president William Ruto told off Raila Odinga, saying he did not have the expertise to tell Kenyans about the country’s economic health or lack of it. Ruto maintained that internationally recognized institutions like the international monetary fund and World Bank had given Kenya’s economy a clean bill of health.

Haya. Here too in the distant provinces of the empire, the model is in sh!t!

Interest rates are a powerful tool to manipulate the market we learn. The FED'S Yellen is sticking to her Zero interest rates yardstick, and, we read, other central banks in the homes of capital in the West, are descending unto the unkown: Investors and banks pay for the privilege of parking their money in the prestigious vaults like the Bundesbank's, or Danish bank. The idea was cheap money should lead to more and easier loans to jump start businesses in the stalled Eurozone economies. But it aint working, why? So the captains design a scheme to force banks to lend, force people to spend. From there the negative interest rates in the Motherlands.

Crisis time. The IMF has to cook up a scheme to find some host to be sucked. Idle capital is a death sin to mature capitalism. And Quantitative Easing, that great experimental policy, is after all the injection of worthless capital into the system. That worthless capital needs to extract value some place to have meaning or the pyramid scheme will collapse. And who else did they find if not the African continent, willing as usual for a bad deal? O yeah, her elite already corrupted and co-opted and socialised unto quisling roles, stupendously rewarded, strategically placed at commanding heights.

Issue eurobonds!? Yes we do, then they push the rates on the bonds up! and depress your currency. Then you need loans from them at a price to keep the cycle. That is why the proceeds of the Eurobond for Kenya did not even come home to be converted to local investment; out there they went straight away within Goldman Sachs accounts in the same branch to clear foreign debt! And now because of the apparent cheap –-QE'd--- money abroad (the trap of zero low interest rates) Rotich is going to borrow abroad. Then the trap door slams shut!

And dr. whizzkid Patrick Njoroge at CBK? This is why the IMF installed you in Nairobi!? a trusted hand to take care of business as it were? Because i believe you read the game, like the Jose Mourinhos of Chelsea when they are still on top of the game.

Miguna Miguna gave us the phrase peeling back the mask! Goddam Opus Dei Mask he did not mean I guess!

Your deliberate reckless interest rates are wiping out the Kenyan businesses, small medium or big. Your interest rates are bankrupting Kenyan entrepreneurs; are ruining the middle class that use these financial services. In other words you are destroying the BUDDING CAPITALIST CLASS OF KENYA.

By design.(consider the dairy industry: Danone and nestle and a host of EU dairy companies have enough capacity in Europe to saturate the African market. They wouldn't want competition growing up independently, would they!?)

You there Njoroge or you want me to spell it on the wall for you!? A businessman goes to sleep and wakes up to find his interest rates moved from 16% to 30% overnight, effective immediately. Gotcha!

You tell me this economics is still a rational discipline, a science?

Man, this is war on local talent. This is extirpation. This is a wipeout, a scorched-earth policy. And you are the econometrist in charge –-- i call you stuff banned on jukwaa any day!

Jukwaa is a family blog even if respectable men like Otishotish are mpango wa kando practitioners with zest!

[jakaswanga]

This is a-must read. –--MICHAEL HUDSON: The IMF Changes its Rules to Isolate China and Russia.

Found it in my mailbox attachs from my international circle of mart-alec alerts, and rushed to Jukwaa immediately, breaking my 'posting fast'. –---Currently I aint posting because, having backslided as the born-again Christians say, the levels of merry-making (imbibed) toxins in my bloodstream are not conducive to clear thinking –-which I think Jukwaa demands. After tomorrow I will detoxify and enter a long period of self-impose prohibition. Verily I say unto you dears, and do I swear with deep faith, that, instead of drinking myself silly, henceforth will I be eating puzzy, an activity I discovered is sinful but very compatible with clear thinking, since it its aftermath, instead of a headache called a hangover, is a retaliatory deepthroat draining di.ck. The resultant peace of mind from such an exchange of oral services is, doubting Tom speak up or silence forever, very conducive to racing mental gears as is compulsory in hot debate.

And the future of IMF is such a debate. I will be back when my mind clears up from the mist of Scotch.
Meanwhile: In June 2015, a commentator wrote

That this is a blatantly political decision showing a willingness to lend to a country that is bankrupt, hardly needs saying. What the IMF is in effect doing, since it is not willing to increase the amount it is lending, is fund Ukraine at the expense of its creditors. It is a significant — and dubious — departure from IMF practice. However the political pressure from the Western powers that control the IMF for it to continue its support for Ukraine has overridden all other considerations.

But now, here is Michael Hudson: verbatim. It is quite a perspective.

The IMF Changes its Rules to Isolate China and Russia

By Michael Sunday, December 20, 2015
Articles, Globalism and its Institutions
IMF, Washington Consensus, Imperialism Permalink -----Michael Hudson

A nightmare scenario of U.S. geopolitical strategists is coming true: foreign independence from U.S.-centered financial and diplomatic control. China and Russia are investing in neighboring economies on terms that cement Eurasian integration on the basis of financing in their own currencies and favoring their own exports. They also have created the Shanghai Cooperation Organization (SCO) as an alternative military alliance to NATO.[1] And the Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank tandem in which the United States holds unique veto power.

More than just a disparity of voting rights in the IMF and World Bank is at stake. At issue is a philosophy of development. U.S. and other foreign investment in infrastructure (or buyouts and takeovers on credit) adds interest rates and other financial charges to the cost structure, while charging prices as high as the market can bear (think of Carlos Slim’s telephone monopoly in Mexico, or the high costs of America’s health care system), and making their profits and monopoly rents tax-exempt by paying them out as interest.
By contrast, government-owned infrastructure provides basic services at low cost, on a subsidized basis, or freely. That is what has made the United States, Germany and other industrial lead nations so competitive over the past few centuries. But this positive role of government is no longer possible under World Bank/IMF policy. The U.S. promotion of neoliberalism and austerity is a major reason propelling China, Russia and other nations out of the U.S. diplomatic and banking orbit.

On December 3, 2015, Prime Minister Putin proposed that Russia “and other Eurasian Economic Union countries should kick-off consultations with members of the SCO and the Association of Southeast Asian Nations (ASEAN) on a possible economic partnership.”[2] Russia also is seeking to build pipelines to Europe through friendly secular countries instead of Sunni jihadist U.S.-backed countries locked into America’s increasingly confrontational orbit.

Russian finance minister Anton Siluanov points out that when Russia’s 2013 loan to Ukraine was made, at the request of Ukraine’s elected government, Ukraine’s “international reserves were barely enough to cover three months’ imports, and no other creditor was prepared to lend on terms acceptable to Kiev. Yet Russia provided $3 billion of much-needed funding at a 5 per cent interest rate, when Ukraine’s bonds were yielding nearly 12 per cent.”[3]

What especially annoys U.S. financial strategists is that this loan by Russia’s National Wealth Fund was protected by IMF lending practice, which at that time ensured collectability by withholding credit from countries in default of foreign official debts, or at least not bargaining in good faith to pay. To cap matters, the bonds are registered under London’s creditor-oriented rules and courts.

Most worrisome to U.S. strategists is that China and Russia are denominating their trade and investment in their own currencies instead of dollars. After U.S. officials threatened to derange Russia’s banking linkages by cutting it off from the SWIFT interbank clearing system, China accelerated its creation of the alternative China International Payments System (CIPS), and its own credit card system to protect Eurasian economies from the threats made by U.S. unilateralists.

Russia and China are simply doing what the United States has long done: using trade and credit linkages to cement their diplomacy. This tectonic geopolitical shift is a Copernican threat to New Cold War ideology: Instead of the world economy revolving around the United States (the Ptolemaic idea of America as “the indispensible nation”), it may revolve around Eurasia. As long as global financial control remains grounded in Washington at the offices of the IMF and World Bank, such a shift in the center of gravity will be fought with all the power of an American Century (and would-be American Millennium) inquisition.

Any inquisition needs a court system and enforcement vehicles. So does resistance to such a system. That is what today’s global financial, legal and trade maneuvering is all about. And that is why today’s world system is in the process of breaking apart. Differences in economic philosophy call for different institutions.

To U.S. neocons the specter of AIIB government-to-government investment creates fear of nations minting their own money and holding each other’s debt in their international reserves instead of borrowing dollars, paying interest in dollars and subordinating their financial planning to the U.S. Treasury and IMF. Foreign governments would have less need to finance their budget deficits by selling off key infrastructure. And instead of dismantling public spending, a broad Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in banking and monetary policy.

Imagine the following scenario five years from now. China will have spent half a decade building high-speed railroads, ports, power systems and other construction for Asian and African countries, enabling them to grow and export more. These exports will be coming online to repay the infrastructure loans. Also, suppose that Russia has been supplying the oil and gas energy for these projects on credit.

To avert this prospect, suppose an American diplomat makes the following proposal to the leaders of countries in debt to China, Russia and the AIIB: “Now that you’ve got your increased production in place, why repay? We’ll make you rich if you stiff our adversaries and turn back to the West. We and our European allies will support your assigning your nations’ public infrastructure to yourselves and your supporters at insider prices, and then give these assets market value by selling shares in New York and London. Then, you can keep the money and spend it in the West.”

How can China or Russia collect in such a situation? They can sue. But what court in the West will accept their jurisdiction?

That is the kind of scenario U.S. State Department and Treasury officials have been discussing for more than a year. Implementing it became more pressing in light of Ukraine’s $3 billion debt to Russia falling due by December 20, 2015. Ukraine’s U.S.-backed regime has announced its intention to default. To support their position, the IMF has just changed its rules to remove a critical lever on which Russia and other governments have long relied to ensure payment of their loans.

The IMF’s role as enforcer of inter-government debts

When it comes to enforcing nations to pay inter-government debts, the IMF is able to withhold not only its own credit but also that of governments and global bank consortia participating when debtor countries need “stabilization” loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, as in Greece this year). Countries that do not privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored “regime change” and “democracy promotion” Maidan-style. The Fund’s creditor leverage has been that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. That is how the dollarized global financial system has worked for half a century. But until now, the beneficiaries have been U.S. and NATO lenders, not been China or Russia.

The focus on a mixed public/private economy sets the AIIB at odds with the Trans-Pacific Partnership’s aim of relinquishing government planning power to the financial and corporate sector, and the neoliberal aim of blocking governments from creating their own money and implementing their own financial, economic and environmental regulation. Chief Nomura economist Richard Koo, explained the logic of viewing the AIIB as a threat to the U.S.-controlled IMF: “If the IMF’s rival is heavily under China’s influence, countries receiving its support will rebuild their economies under what is effectively Chinese guidance, increasing the likelihood they will fall directly or indirectly under that country’s influence.”[4]

This was the setting on December 8, when Chief IMF Spokesman Gerry Rice announced: “The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors.” Russian Finance Minister Anton Siluanov accused the IMF decision of being “hasty and biased.”[5] But it had been discussed all year long, calculating a range of scenarios for a sea change in international law.

Anders Aslund, senior fellow at the NATO-oriented Atlantic Council, points out: The IMF staff started contemplating a rule change in the spring of 2013 because nontraditional creditors, such as China, had started providing developing countries with large loans. One issue was that these loans were issued on conditions out of line with IMF practice. China wasn’t a member of the Paris Club, where loan restructuring is usually discussed, so it was time to update the rules.

The IMF intended to adopt a new policy in the spring of 2016, but the dispute over Russia’s $3 billion loan to Ukraine has accelerated an otherwise slow decision-making process.[6]

The target was not only Russia and its ability to collect on its sovereign loan to Ukraine, but China even more, in its prospective role as creditor to African countries and prospective AIIB borrowers, planning for a New Silk Road to integrate a Eurasian economy independent of U.S. financial and trade control. The Wall Street Journal concurred that the main motive for changing the rules was the threat that China would provide an alternative to IMF lending and its demands for crushing austerity.

“IMF-watchers said the fund was originally thinking of ensuring China wouldn’t be able to foil IMF lending to member countries seeking bailouts as Beijing ramped up loans to developing economies around the world.”[7] So U.S. officials walked into the IMF headquarters in Washington with the legal equivalent of suicide vests. Their aim was a last-ditch attempt to block trade and financial agreements organized outside of U.S. control and that of the IMF and World Bank.

The plan is simple enough. Trade follows finance, and the creditor usually calls the tune. That is how the United States has used the Dollar Standard to steer Third World trade and investment since World War II along lines benefiting the U.S. economy. The cement of trade credit and bank lending is the ability of creditors to collect on the international debts being negotiated. That is why the United States and other creditor nations have used the IMF as an intermediary to act as “honest broker” for loan consortia. (“Honest broker” means being subject to U.S. veto power.) To enforce its financial leverage, the IMF has long followed the rule that it will not sponsor any loan agreement or refinancing for governments that are in default of debts owed to other governments. However, as the afore-mentioned Aslund explains, the IMF could easily

change its practice of not lending into [countries in official] arrears … because it is not incorporated into the IMF Articles of Agreement, that is, the IMF statutes. The IMF Executive Board can decide to change this policy with a simple board majority. The IMF has lent to Afghanistan, Georgia, and Iraq in the midst of war, and Russia has no veto right, holding only 2.39 percent of the votes in the IMF. When the IMF has lent to Georgia and Ukraine, the other members of its Executive Board have overruled Russia.[8]
After the rules change, Aslund later noted, “the IMF can continue to give Ukraine loans regardless of what Ukraine does about its credit from Russia, which falls due on December 20.[9]

The IMF rule that no country can borrow if it is in default to a foreign government was created in the post-1945 world. Since then, the U.S. Government, Treasury and/or U.S. bank consortia have been party to nearly every major loan agreement. But inasmuch as Ukraine’s official debt to Russia’s National Wealth Fund was not to the U.S. Government, the IMF announced its rules change simply as a “clarification.” What its rule really meant was that it would not provide credit to countries in arrears to the U.S. government, not that of Russia or China.

It remains up to the IMF board – and in the end, its managing director – whether or not to deem a country creditworthy. The U.S. representative can block any foreign leaders not beholden to the United States. Mikhail Delyagin, Director of the Institute of Globalization Problems, explained the double standard at work: “The Fund will give Kiev a new loan tranche on one condition: that Ukraine should not pay Russia a dollar under its $3 billion debt. … they will oblige Ukraine to pay only to western creditors for political reasons.”[10]

The post-2010 loan packages to Greece are a case in point. The IMF staff saw that Greece could not possibly pay the sums needed to bail out French, German and other foreign banks and bondholders. Many Board members agreed, and have gone public with their whistle blowing. Their protests didn’t matter. President Barack Obama and Treasury Secretary Tim Geithner pointed out that U.S. banks had written credit default swaps betting that Greece could pay, and would lose money if there were a debt writedown). Dominique Strauss-Kahn backed the hard line US- European Central Bank position. So did Christine Lagarde in 2015, overriding staff protests.[11]

Regarding Ukraine, IMF executive board member Otaviano Canuto, representing Brazil, noted that the logic that “conditions on IMF lending to a country that fell behind on payments [was to] make sure it kept negotiating in good faith to reach agreement with creditors.”[12] Dropping this condition, he said, would open the door for other countries to insist on a similar waiver and avoid making serious and sincere efforts to reach payment agreement with creditor governments.

A more binding IMF rule is Article I of its 1944-45 founding charter, prohibiting the Fund from lending to a member state engaged in civil war or at war with another member state, or for military purposes in general. But when IMF head Lagarde made the last loan to Ukraine, in spring 2015, she merely expressed a vapid token hope there might be peace. Withholding IMF credit could have been a lever to force peace and adherence to the Minsk agreements, but U.S. diplomatic pressure led that opportunity to be rejected. President Porochenko immediately announced that he would step up the civil war with the Russian-speaking population in the eastern Donbass region.

The most important IMF condition being violated is that continued warfare with the East prevents a realistic prospect of Ukraine paying back new loans. The Donbas is where most Ukrainian exports were made, mainly to Russia. That market is being lost by the junta’s belligerence toward Russia. This should have blocked Ukraine from receiving IMF aid. Aslund himself points to the internal contradiction at work: Ukraine has achieved budget balance because the inflation and steep currency depreciation has drastically eroded its pension costs. But the resulting decline in the purchasing power of pension benefits has led to growing opposition to Ukraine’s post-Maidan junta. So how can the IMF’s austerity budget be followed without a political backlash? “Leading representatives from President Petro Poroshenko’s Bloc are insisting on massive tax cuts, but no more expenditure cuts; that would cause a vast budget deficit that the IMF assesses at 9-10 percent of GDP, that could not possibly be financed.”[13]

By welcoming and financing Ukraine instead of treating as an outcast, the IMF thus is breaking four of its rules:
1. Not to lend to a country that has no visible means to pay back the loan. This breaks the “No More Argentinas” rule, adopted after the IMF’s disastrous 2001 loan.
2. Not to lend to a country that repudiates its debt to official creditors. This goes against the IMF’s role as enforcer for the global creditor cartel.
3. Not to lend to a borrower at war – and indeed, to one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan.
4. Finally, not to lend to a country that is not likely to carry out the IMF’s austerity “conditionalities,” at least without crushing democratic opposition in a totalitarian manner.

The upshot – and new basic guideline for IMF lending – is to split the world into pro-U.S. economies going neoliberal, and economies maintaining public investment in infrastructure n and what used to be viewed as progressive capitalism. Russia and China may lend as much as they want to other governments, but there is no global vehicle to help secure their ability to be paid back under international law. Having refused to roll back its own (and ECB) claims on Greece, the IMF is willing to see countries not on the list approved by U.S. neocons repudiate their official debts to Russia or China. Changing its rules to clear the path for making loans to Ukraine is rightly seen as an escalation of America’s New Cold War against Russia and China.
.
Timing is everything in such ploys. Georgetown University Law professor and Treasury consultant Anna Gelpern warned that before the “IMF staff and executive board [had] enough time to change the policy on arrears to official creditors,” Russia might use “its notorious debt/GDP clause to accelerate the bonds at any time before December, or simply gum up the process of reforming the IMF’s arrears policy.”[14] According to this clause, if Ukraine’s foreign debt rose above 60 percent of GDP, Russia’s government would have the right to demand immediate payment. But President Putin, no doubt anticipating the bitter fight to come over its attempts to collect on its loan, refrained from exercising this option. He is playing the long game, bending over backward to behave in a way that cannot be criticized as “odious.”

A more immediate reason deterring the United States from pressing earlier to change IMF rules was the need to use the old set of rules against Greece before changing them for Ukraine. A waiver for Ukraine would have provided a precedent for Greece to ask for a similar waiver on paying the “troika” – the European Central Bank (ECB), EU commission and the IMF itself – for the post-2010 loans that have pushed it into a worse depression than the 1930s. Only after Greece capitulated to eurozone austerity was the path clear for U.S. officials to change the IMF rules to isolate Russia. But their victory has come at the cost of changing the IMF’s rules and those of the global financial system irreversibly. Other countries henceforth may reject conditionalities, as Ukraine has done, as well as asking for write-downs on foreign official debts.

That was the great fear of neoliberal U.S. and Eurozone strategists last summer, after all. The reason for smashing Greece’s economy was to deter Podemos in Spain and similar movements in Italy and Portugal from pursuing national prosperity instead of eurozone austerity. “Imagine the Greek government had insisted that EU institutions accept the same haircut as the country’s private creditors,” Russian finance minister Anton Siluanov asked. “The reaction in European capitals would have been frosty. Yet this is the position now taken by Kiev with respect to Ukraine’s $3 billion eurobond held by Russia.”[15]

The consequences of America’s tactics to make a financial hit on Russia while its balance of payments is down (as a result of collapsing oil and gas prices) go far beyond just the IMF. These tactics are driving other countries to defend their own economies in the legal and political spheres, in ways that are breaking apart the post-1945 global order.

Countering Russia’s ability to collect in Britain’s law courts

Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting by suing in the London Court of International Arbitration, under whose rules Russia’s bonds issued to Ukraine are registered. Reviewing the excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt “odious,” made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as a means of reinforcing the financial, energy and trade sanctions passed after Crimea voted to join Russia as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[16]

A kindred ploy might be for Ukraine to countersue Russia for reparations for “invading” it and taking Crimea. Such a claim would seem to have little chance of success (without showing the court to be an arm of NATO politics), but it might delay Russia’ ability to collect by tying the loan up in a long nuisance lawsuit. But the British court would lose credibility if it permits frivolous legal claims (called barratry in English) such as President Poroshenko and Prime Minister Yatsenyuk have threatened.

To claim that Ukraine’s debt to Russia was “odious” or otherwise illegitimate, “President Petro Poroshenko said the money was intended to ensure Yanukovych’s loyalty to Moscow, and called the payment a ‘bribe,’ according to an interview with Bloomberg in June this year.”[17] The legal and moral problem with such arguments is that they would apply equally to IMF and U.S. loans. They would open the floodgates for other countries to repudiate debts taken on by dictatorships supported by IMF and U.S. lenders.

As Foreign Minister Sergei Lavrov noted, the IMF’s change of rules, “designed to suit Ukraine only, could plant a time bomb under all other IMF programs.” The new rules showed the extent to which the IMF is subordinate to U.S. aggressive New Cold Warriors: “since Ukraine is politically important – and it is only important because it is opposed to Russia – the IMF is ready to do for Ukraine everything it has not done for anyone else.”[18]

In a similar vein, Andrei Klimov, deputy chairman of the Committee for International Affairs at the Federation Council (the upper house of Russia’s parliament) accused the United States of playing “the role of the main violin in the IMF while the role of the second violin is played by the European Union, [the] two basic sponsors of the Maidan – the … coup d’état in Ukraine in 2014.”[19]
Putin’s counter-strategy and the blowback on U.S.-European relations

Having anticipated that Ukraine would seek excuses to not pay Russia, President Putin refrained from exercising Russia’s right to demand immediate payment when Ukraine’s foreign debt rose above 60 percent of GDP. In November he even offered to defer any payment at all this year, stretching payments out to “$1 billion next year, $1 billion in 2017, and $1 billion in 2018,” if “the United States government, the European Union, or one of the big international financial institutions” guaranteed payment.[20] Based on their assurances “that Ukraine’s solvency will grow,” he added, they should be willing to put their money where their mouth was. If they did not provide guarantees, Putin pointed out, “this means that they do not believe in the Ukrainian economy’s future.”

Implicit was that if the West continued encouraging Ukraine to fight against the East, its government would not be in a position to pay. The Minsk agreement was expiring and Ukraine was receiving new arms support from the United States, Canada and other NATO members to intensify hostilities against Donbas and Crimea.
But the IMF, European Union and United States refused to back up the Fund’s optimistic forecast of Ukraine’s ability to pay in the face of its continued civil war against the East. Foreign Minister Lavrov concluded that, “By having refused to guarantee Ukraine’s debt as part of Russia’s proposal to restructure it, the United States effectively admitted the absence of prospects of restoring its solvency.”[21]

In an exasperated tone, Prime Minister Dmitry Medvedev said on Russian television: “I have a feeling that they won’t give us the money back because they are crooks … and our Western partners not only refuse to help, but they also make it difficult for us.” Accusing that “the international financial system is unjustly structured,” he nonetheless promised to “go to court. We’ll push for default on the loan and we’ll push for default on all Ukrainian debts,” based on the fact that the loan

was a request from the Ukrainian Government to the Russian Government. If two governments reach an agreement this is obviously a sovereign loan…. Surprisingly, however, international financial organisations started saying that this is not exactly a sovereign loan. This is utter bull. Evidently, it’s just an absolutely brazen, cynical lie. … This seriously erodes trust in IMF decisions. I believe that now there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?[22]

And there the matter stands. On December 16, 2015, the IMF’s Executive Board ruled that “the bond should be treated as official debt, rather than a commercial bond.”[23] Forbes quipped: “Russia apparently is not always blowing smoke. Sometimes they’re actually telling it like it is.”[24]

Reflecting the degree of hatred fanned by U.S. diplomacy, U.S.-backed Ukrainian Finance Minister Natalie A. Jaresko expressed an arrogant confidence that the IMF would back the Ukrainian cabinet’s announcement on Friday, December 18, of its intention to default on the debt to Russia falling due two days later. “If we were to repay this bond in full, it would mean we failed to meet the terms of the I.M.F. and the obligations we made under our restructuring.”[25]

Adding his own bluster, Prime Minister Arseny Yatsenyuk announced his intention to tie up Russia’s claim for payment by filing a multibillion-dollar counter claim “over Russia’s occupation of Crimea and intervention in east Ukraine.” To cap matters, he added that “several hundred million dollars of debt owed by two state enterprises to Russian banks would also not be paid.”[26]

This makes trade between Ukraine and Russia impossible to continue. Evidently Ukraine’s authorities had received assurance from IMF and U.S. officials that no real “good faith” bargaining would be required to gain ongoing support. Ukraine’s Parliament did not even find it necessary to enact the new tax code and budget conditionalities that the IMF loan had demanded.

The world is now at war financially, and all that seems to matter is whether, as U.S. Defense Secretary Donald Rumsfeld had put matters, “you are for us or against us.” As President Putin remarked at the 70th session of the UN General Assembly regarding America’s support of Al Qaeda, Al Nusra and other allegedly “moderate” ISIS allies in Syria: “I cannot help asking those who have caused this situation: Do you realize now what you have done? … I am afraid the question will hang in the air, because policies based on self-confidence and belief in one’s exceptionality and impunity have never been abandoned.”[27]
The blowback

America’s unilateralist geopolitics are tearing up the world’s economic linkages that were put in place in the heady days after World War II, when Europe and other countries were so disillusioned that they believed the United States was acting out of idealism rather than national self-interest. Today the question is how long Western Europe will be willing to forego its trade and investment interests by accepting U.S.-sponsored sanctions against Russia, Iran and other economies. Germany, Italy and France already are feeling the strains.

The oil and pipeline war designed to bypass Russian energy exports is flooding Europe with refugees, as well as spreading terrorism. Although the leading issue in America’s Republican presidential debate on December 15, 2015, was safety from Islamic jihadists, no candidate thought to explain the source of this terrorism in America’s alliance with Wahabist Saudi Arabia and Qatar, and hence with Al Qaeda and ISIS/Daish as a means of destabilizing secular regimes in Libya, Iraq, Syria, and earlier in Afghanistan. Going back to the original sin of CIA hubris – overthrowing the secular Iranian Prime Minister leader Mohammad Mosaddegh in 1953 – U.S. foreign policy has been based on the assumption that secular regimes tend to be nationalist and resist privatization and neoliberal austerity.

Based on this assumption, U.S. Cold Warriors have aligned themselves against democratic regimes seeking to promote their own prosperity and resist neoliberalism in favor of maintaining their own traditional mixed public/private economies. That is the back-story of the U.S. fight to control the rest of the world. Tearing apart the IMF’s rules is only the most recent chapter. Arena by arena, the core values of what used to be American and European social democratic ideology are being uprooted by the tactics being used to hurt Russia, China and their prospective Eurasian allies.

The Enlightenment’s ideals were of secular democracy and the rule of international law applied equally to all nations, classical free market theory (of markets free from unearned income and rent extraction by special interests), and public investment in infrastructure to hold down the cost of living and doing business. These are all now to be sacrificed to a militant U.S. unilateralism. Putting their “indispensable nation” above the rule of law and parity of national interests (the 1648 Westphalia treaty, not to mention the Geneva Convention and Nuremburg laws), U.S. neocons proclaim that America’s destiny is to prevent foreign secular democracy from acting in ways other than in submission to U.S. diplomacy. Behind this lie the special U.S. financial and corporate interests that control American foreign policy.

This is not how the Enlightenment was supposed to turn out. Industrial capitalism a century ago was expected to evolve into an economy of abundance worldwide. Instead, we have American Pentagon capitalism, with financial bubbles deteriorating into a polarized rentier economy and a resurgence of old-fashioned imperialism. If and when a break comes, it will not be marginal but a seismic geopolitical shift.
The Dollar Bloc’s Financial Curtain

By treating Ukraine’s repudiation of its official debt to Russia’s National Wealth Fund as the new norm, the IMF has blessed its default. President Putin and foreign minister Lavrov have said that they will sue in British courts. The open question is whether any court exist in the West not under the thumb of U.S. veto?
America’s New Cold War maneuvering has shown that the two Bretton Woods institutions are unreformable. It is easier to create new institutions such as the AIIB than to retrofit the IMF and World Bank, NATO and behind it, the dollar standard – all burdened with the legacy of their vested interests.

U.S. geostrategists evidently thought that excluding Russia, China and other Eurasian countries from the U.S.-based financial and trade system would isolate them in a similar economic box to Cuba, Iran and other sanctioned adversaries. The idea was to force countries to choose between being impoverished by such exclusion, or acquiescing in U.S. neoliberal drives to financialize their economies under U.S. control.

What is lacking here is the idea of critical mass. The United States may arm-twist Europe to impose trade and financial sanctions on Russia, and may use the IMF and World Bank to exclude countries not under U.S. hegemony from participating in dollarized global trade and finance. But this diplomatic action is producing an equal and opposite reaction. That is the Newtonian law of geopolitics. It is propelling other countries to survive by avoiding demands to impose austerity on their government budgets and labor, by creating their own international financial organization as an alternative to the IMF, and by juxtaposing their own “aid” lending to that of the U.S.-centered World Bank.

This blowback requires an international court to handle disputes free from U.S. arm-twisting. The Eurasian Economic Union accordingly has created its own court to adjudicate disputes. This may provide an alternative to Judge Griesa’s New York federal kangaroo court ruling in favor of vulture funds derailing Argentina’s debt settlements and excluding that country from world financial markets.

The more nakedly self-serving U.S. policy is – from backing radical fundamentalist outgrowths of Al Qaeda throughout the Near East to right-wing nationalists in Ukraine and the Baltics – then the greater the pressure will grow for the Shanghai Cooperation Organization, AIIB and related institutions to break free of the post-1945 Bretton Woods system run by the U.S. State, Defense and Treasury Departments and their NATO superstructure of coercive military bases. As Paul Craig Roberts recently summarized the dynamic, we are back with George Orwell’s 1984 global fracture between Oceania (the United States, Britain and its northern European NATO allies as the sea and air power) vs. Eurasia as the consolidated land power.

Footnotes:

This is stuff to discuss with our ace kid, Patrick Njoroge at the central bank!

[jakaswanga]

THE GRAND MEA CULPA OF THE IMF ON GREECE

But what does in mean for Africa? Kenya?

If the Iraq war about non existent weapons of mass destruction was a tale of Western deceit, oil greed and patriotic arrogance bordering on delusion -(if not outright stupidity as the Chilcot report in Britain has meekly narrated more than a decade later), the report by the independent evaluation office of the IMF on the Fund's behaviour on Greece is another rendition why these international bodies do not work in the main.

NB: Practically said, China replaced the IMF (& the WB) long ago as the mover of meaningful project loans to the developing world. The IMF has been reduced to a portfolio manager or an arm-twisting debt collector. A shakedown artist in business only because inept bureaucrats (and their corrupted political bosses) in Africa facilitate the loot of African treasuries to subsidise Northern banks permanently in a crisis. The looted figures are mind-boggling in deed -–-$150 bn in two decades in Nigeria, 30% GDP/year in Kenya, and just about the same in Chad, Niger, Angola, Sumbiji, etc etc. Now Libya's sovereign fund built by Gadaffi, EUR250 bn, is gone. Some say to keep France and Italy afloat.

Here is a further hint from our own beloved Kenya.

Only 1% of Kenya's budget ‘used well’-Auditor General

Jul. 29, 2016. By OLIVER MATHENGE

The national government is on the spot once again after the Auditor General reported that only one per cent of the Sh1.2 trillion expenditure during the 2014-15 financial year was incurred lawfully and in an effective way.
www.the-star.co.ke/news/2016/07/29/only-1-of-kenyas-budget-used-well-auditor-general_c1394704

The report also shows only 3.41 per cent of a total revenue of Sh1.08 trillion during the 2014-15 financial year was collected and fairly recorded.
The Auditor General says out of the total expenditure of Sh1.2 trillion, only Sh12.7 billion or 1.05 per cent was incurred lawfully and in an effective way.

This kind of mental and moral collapse, Yale or Harvard graduates or not running the Nairobi treasury, is what wilfully facilitates the shake-down, sharky role the IMF still plays at our shores.

We will harvest gold medals in long-distance races at the Olympics anyday, but obviously the simple math of financial management stays beyond our unconscionable faculties. Me infers we will need a shock therapy to the conscience.
It could also be people like Rotich and Njoroge, bred ... conditioned and finished off at the IMF school, are just saboteurs planted to facilitate mismanagement to keep the IMF relevant. The kind of traitors they used to call sleepers in spyland. Stuff like Manchurian candidates.
for

1. NB: Elsewhere around the globe, average brains which went to good but not USA-IMF ivy-league schools, are running their economies and their countries Turbo to higher realms of success, but when I gape around Africa with its $10 trillion natural resource horde, the best brains from Ivy-League IMF schools report FAIL FAIL FAIL!
And then looms the monster Boko Haram. At the heart of Africa.

2. Rotich and Njoroge and Kamau Thugge, the formidable Brain Trust: if this Ouko accountant and his office are NOT an imbecile horde of mathematical nincompoops, NOR know-nothings about how to tab state finances correctly, and they could never add it up as far as book-keeping goes, wherefore the percentages they state above ARE valid and credible, then, I am afraid, I have to call on the Homa Bay declaration on you. –-The Homa Bay declaration wants complicity by negligence in the theft of public goods declared a CAPITAL OFFENCE. And then we do a coup-traumatised Tayyip Recep Erdogan: bring back the death sentence.

The report says during the 2014-15 financial year, a number of ministries, departments, commissions and funds did not make documents in support of expenditures totalling Sh7,321,277,260 available..
“...which was a significant improvement compared to the previous year, where Sh66,782,697,987 was unsupported,” the report says.
“In absence of the records and documentation, the propriety of the expenditure of Sh7,321,277,260 could not be ascertained and therefore these public funds may not have been utilised lawfully and in an effective manner.”

The MDAs affected include Agriculture (Sh2.4 billion), Devolution (Sh2.1 billion), Stores and Service Fund (Sh1.3 billion and Health (Sh402 million).
Ouko says during the 2014-15 financial year, a number of ministries, departments, commissions and funds also incurred Sh14,4 billion expenditure, whose value for money could not be established.

And so Rotich and Ouru Kenyatta will fawn like lapdogs at the feet of Christin Lagarde for EMERGENCY LOANS, and Rotich be a cry-baby every so often at the parliament looking for authorisation for SUPPLEMENTARY budgets, or a further raise of the DEBT CEILING, not to mention a cash-strap orchestrated desperate lurch for BOND ISSUANCE across the globe –--Euro, dollar, Sukuk, Ipon, Rand, Sh!t, poopooh, Smegma, Mucus, Cum!

There is no bond the Kenyan treasury heard of we did not become a sucker for!

Now let us see what the IMF has been doing within Europe itself. The tribalism within the common European home aka EU is worth a note.

While the fund’s actions were understandable in the white heat of the crisis, the harsh truth is that the bailout sacrificed Greece in a “holding action” to save the euro and north European banks. Greece endured the traditional IMF shock of austerity, without the offsetting IMF cure of debt relief and devaluation to restore viability.
A sub-report on the Greek saga said the country was forced to go through a staggering squeeze, equal to 11pc of GDP over the first three years. This set off a self-feeding downward spiral. The worse it became, the more Greece was forced to cut – what ex-finance minister Yanis Varoufakis called "fiscal water-boarding".

www.telegraph.co.uk/business/2016/07/28/imf-admits-disastrous-love-affair-with-euro-apologises-for-the-i/

The upper white tribes of Europe sacrificed (immolated!) the lower subtribe of Greece. But even as they did that, the racism of the European IMF elite too was radical.
Those from Asia and Africa are CLEARLY incensed. Eh, Rotich Thugge Njoroge, eh, Africans are 1. happy? 2. Unhappy but don't dare show it 3. No idea what the Asian$Latin fuss is all about!

The report by the IMF’s Independent Evaluation Office (IEO) goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system.

The three main bailouts for Greece, Portugal and Ireland were unprecedented in scale and character. The trio were each allowed to borrow over 2,000pc of their allocated quota – more than three times the normal limit – and accounted for 80pc of all lending by the fund between 2011 and 2014.
Below: Greece, Ireland and Portugal accounted for 80pc of IMF lending for three years

2000% of allocated quota? 80% of loans went to Europe! The rest of the world 20%!

May be having China EXIM Africans didn't bother with IMF politics. We all know in our hearts IMF is a screw on our thumbs, ever tightening.
Nevertheless the IMF had effectively become a Eurozone rescue bank! Euro privatised! A European Monetary Fund, not International!
(it was Commandeered by a powerful insider clique, the way some people used to say the CBK had become a Central Gikuyu Subsidy Bank under the Mwai Kibaki John Michuki tandem, thus explaining the meteoric rise of some Mumbi banks, rather than by raw entrepreneurial ability!)

29 July 2016
The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.
This is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.
Many documents were prepared outside the regular established channels; written documentation on some sensitive matters could not be locatedIEO report
It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.

But it is a mark of mature ideology that it can be this scathing with itself. It recognises complacency is certain death in a competitive, cut-throat global playing field. –-Would, this self-critical depth in Nairobi. –-No astonishing admissions! Everytime hakuna matata song, even when the kitchen is burning next to the granary!

In an astonishing admission, the report said its own investigators were unable to obtain key records or penetrate the activities of secretive "ad-hoc task forces". Mrs Lagarde herself is not accused of obstruction.
“Many documents were prepared outside the regular established channels; written documentation on some sensitive matters could not be located. The IEO in some instances has not been able to determine who made certain decisions or what information was available, nor has it been able to assess the relative roles of management and staff," it said.
The IMF remained upbeat about the soundness of the European banking system... this lapse was largely due to the IMF’s readiness to take the reassurances of national and euro area authorities at face valua IEO report
The report said the whole approach to the eurozone was characterised by “groupthink” and intellectual capture. They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen.

Africa is now rising. I dread the words intellectual capture and group-think! Better we carefully critique each step before we step up on it. Some stairways are rotten even as they rise. Careful climbs are wise.

“Before the launch of the euro, the IMF’s public statements tended to emphasise the advantages of the common currency," it said. Some staff members warned that the design of the euro was fundamentally flawed but they were overruled.
“After a heated internal debate, the view supportive of what was perceived to be Europe’s political project ultimately prevailed,” it said.
This pro-EMU bias continued to corrupt their thinking for years. “The IMF remained upbeat about the soundness of the European banking system and the quality of banking supervision in euro-area countries until after the start of the global financial crisis in mid-2007. This lapse was largely due to the IMF’s readiness to take the reassurances of national and euro area authorities at face value,” it said.
The IMF persistently played down the risks posed by ballooning current account deficits and the flood of capital pouring into the eurozone periphery, and neglected the danger of a "sudden stop" in capital flows.

Africa does not exist for this IMF, save as an after thought.

What do the IMF veterans manning the Nairobi treasury think? What are they really up to? Who do they really work for?

Of course you gotta wonder and think it out for yourself. His Excellency the president of the republic too. They immolated Greece deliberately. Think they would hesitate to immolate Kenya to serve their own defined higher ideal?

Watch your rats HE Uhuru Kenyatta, that is if your majesty are serious about the future of Kenya! It is of course possible the presidency is the greatest IMF plant of all around Africa!

I am haunted by the Lenana 1904 Ogirimiti. When Lenana and later Segu in 1911 signed away Maasai best lands forever. I can not help having a hollow feeling on some days, that these IMF veterans at African treasuries are our modern day Lenanas, signing away Africa's futures in these secretive loans they obsess!

Once bitten twice shy I be. Call me paranoid, I think myself mentally vigilant. And I am game. Catch me twice with the same trick!?