Guest Contribution: “Restructuring Debt of African Commodity-Exporters”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate. I would like to thank Sohaib Nasim for valuable assistance on this month’s commentary, as well my others this year.

An estimated 61 countries are currently in debt distress or at risk of it, which is almost one third of the membership of the IMF [32% of 190].  The G20’s Common Framework for Debt Treatment is supposed to facilitate debt restructuring for low-income countries.  But it has made only slow progress.

Many of these countries are in Africa.  Chad restructured its debt in 2021, the first to do so under the Common Framework. Zambia defaulted on its foreign debt in 2020, but has so far been unsuccessful in getting its creditors to agree on how to restructure its debt.  Reluctance of China to participate with other creditors in the traditional Paris Club process is a particular problem in the Zambian case.  Ghana, which defaulted on its external debt in December 2022, has apparently been better able to move forward with restructuring.  Rescheduling of the terms of Ethiopia’s debt was delayed by civil war, but may move forward now.  Angola received 3-year debt relief in September 2020, but remains in trouble.

  1. Volatile export prices can derail debt sustainability

One of the difficulties with debt restructuring is vulnerability to future shocks. As an IMF report on Angola noted, for example, “Although debt is sustainable, significant vulnerabilities remain. Debt dynamics are highly sensitive to further oil-price volatility.”

Consider an IMF-supported package in which the national government agrees to a sufficiently big increase in its primary budget balance and the creditors agree to a sufficiently big write-down, so that the debtor country is forecast to be back on a sustainable path.  Debt is said to be sustainable if the ratio of debt to GDP is expected to decline in the future.  (In the case of external debt, it is common to use export revenue as the denominator instead of GDP.)   There is still a worryingly high chance that unforecastable shocks will in the future render the debt position once again unsustainable.  If the write-down and fiscal adjustment were just barely big enough to restore sustainability (judged by the median of the probability distribution), then the chance that future shocks will put the country back on the wrong side of the sustainability line is up to 50%.

For most African economies, the single biggest source of uncertainty is probably the world price of one or more commodities that dominate their exports.  It is the price of oil, in the cases of Angola, Chad, and Nigeria. The price of copper, for Zambia.  The price of coffee, for Ethiopia. The prices of oil, gold, and cocoa for Ghana.

If the global market for the leading export deteriorates, it could render even recently restructured debt unsustainable.  The price of oil [Brent], for example, fell by 74% [from $138 per barrel to $36] during the second half of 2008.  It recovered, but then fell again by 57% [from $111 to $48] in the second half of 2014.  Such fluctuations wreak havoc with the finances of commodity-exporting countries.  A 50% fall in the price of the export commodity could mean a 50% increase in the Debt/Export ratio.

  1. Commodity bonds to the rescue

This is one problem that has a good potential solution: Denominate (or index), a portion of the external debt in terms of the world price of the export commodity. In the context of restructuring, the old dollar debt could be swapped for new commodity-linked debt.  That way, if the commodity price and therefore export revenue fall, the cost of the debt will automatically fall in proportion, and the debt/export ratio will remain unimpaired.

If three or four commodities make up most of the country’s exports, as for Ghana or South Africa, use them all.  The magnitude of the commodity-linked portions of the debt should be chosen in light of the expected magnitudes of the country’s commodity exports.

Commodity bonds are not a new idea.  Why have they not been widely adopted by commodity-exporting debtors?  Objections are heard from several directions.  Each has an answer.

  1. Who would hold them?

First, potential issuers worry that there would not be enough demand for such bonds. Who would want to take the other side of the trade, finance ministers ask? The answer is that the ultimate potential customers could be the users of the commodities. Airlines and power utility companies use oil products. They have reason to “go long” in oil: the price volatility is a big problem for them, but it is an increase in the oil price that they fear, not a decrease.  Similarly, electronics producers have reason to go long in copper; chocolate makers to go long in cocoa; steel mills to go long in iron ore, etc.

The companies are likely to object that, while they welcome efficient ways to hedge commodity price risk, commodity bonds that carry the credit risk of a particular country are too specialized a niche to be of interest to them.  An airline wants to go long in oil, not long in exposure to Chad, whose credit risk it is not equipped to evaluate.

For this reason, I would propose that the World Bank or other financial institution (possibly a Chinese state bank) should be able to serve as intermediary, to help make the market.  It would lend to Chad, Angola, and Nigeria – which is its job — in terms of oil, in place of lending to them in dollars or euros or their own currencies.

The World Bank is quick to point out that it guards jealously the quality of its balance sheet and its triple-A risk rating, and so does not want to be exposed to the risk of oil market fluctuations.  For this reason, it should perfectly offset its collective exposure to oil markets by selling to investors a highly-rated World Bank bond linked to a standard oil price index.  Similarly, countries that export cocoa, gold, coffee, iron ore, or other commodities would borrow from the intermediary in terms linked to the price of the commodity in question and the intermediary would then lay off that commodity risk in the private markets.

Airlines and chocolate companies may not see themselves in the investing business.  But they need not necessarily hold the World Bank commodity bonds directly in order to be the ultimate holder of the commodity exposure.  Hedge funds or other financial intermediaries could buy the World Bank bonds and lay off the commodity risk in the futures market.  The airlines and chocolate companies could then take the other side of the futures contract, thus hedging their commodity risk on better terms than they can now.   All parties – the borrower, the intermediary, the futures market, and the ultimate buyer – get exposure to what they want, and not a penny of exposure to risk that they don’t want.

The idea of commodity bonds may sound quixotic.  But they should be “an easier sell” than GDP-linked bonds, which have received more attention and have been put into practice.  The first reason is that they have natural ultimate customers, as noted. The second reason is that the commodity price index is observable in London or Chicago, is not subsequently revised, and is less liable to government manipulation than are GDP or inflation statistics.

Admittedly, the idea of commodity bonds won’t help countries where commodity exports are not important.  Nor will it help if China intransigently refuses to coordinate with Paris Club creditor countries.  But commodity bonds do have the potential to remove from debt restructuring what is perhaps the biggest source of future risk for many countries in Africa, Latin America, and the Middle East.


This post written by Jeffrey Frankel.

72 thoughts on “Guest Contribution: “Restructuring Debt of African Commodity-Exporters”

  1. pgl

    This commodity bond idea is interesting. The following raises another policy option:

    For most African economies, the single biggest source of uncertainty is probably the world price of one or more commodities that dominate their exports. It is the price of oil, in the cases of Angola, Chad, and Nigeria. The price of copper, for Zambia. The price of coffee, for Ethiopia. The prices of oil, gold, and cocoa for Ghana.

    Zambia recently had some success with enforcing transfer pricing as in the Mopani copper mining case. You mentioned China so consider how commodities such as copper are exported to China. A multinational success as Glencore has a Swiss trading affiliate pay the African mining affiliate a price well below market prices so profits can end up in low tax Switzerland. This type of transfer pricing abuse has been a hot topic for over a decade and could be ended if the African governments enforced arm’s length pricing.

  2. James

    Fascinating idea – I wonder if large ag commodity traders would also be a buyer of these commodity bonds – for example – Cargill for cocoa and Louis Dreyfus for coffee. They say on their websites that their mission is to source these materials in a sustainable way. Thanks for posting.

  3. pgl

    “Commodity bonds are not a new idea.”

    Five interesting links – 3 by our guest blogger circa 2011 and the other two from about 20 years ago. I have to admit I have some catching up to do.

  4. JohnH

    A little more context on the situation: “I remember going back to the earliest days of the pandemic when Third World debt had also figured as a major issue. Already at that point, the key reason why the debt issues were not going to be settled is because the West could not come to terms with the fact that it had to deal with China, and that it had to deal equitably with China.

    Because what the West wants to do is precisely to get China to refinance the debt owed to it so that Third World debt repayments go to private lenders.

    And China is basically questioning the terms of all of this, because for example China is saying, “Why should the IMF and the World Bank have priority? Why should its debt not be canceled?”

    And the West is saying, “But this has always been so.”

    And China is saying, “Well, if you don’t want to reform the IMF and the World Bank, then we are not going to accept their priority. If we have to take a haircut, they will also have to take a haircut.”

    They simply do not accept that these institutions, the Bretton Woods institutions, have any sort of priority.

    And this is part of the undermining, as you were saying. This is one of the biggest changes since the First World War. And part of these changes is that the world made at the end of the Second World War by the imperialist powers, who are still very powerful, is now increasingly disappearing.”

    1. pgl

      Dr. Frankel puts up an interesting post regarding African nations facing volatile prices for their key exports and inherent problems with paying debt and what does Jonny boy do? Get up on another totally unrelated soap box and start his usual absurd preaching.

      Come on dude – you have polluted so many other discussions with your trash. Way to go – you have trashed this one too.

    2. pgl

      I knew you would not read Dr. Frankel’s entire post before you started spewing your nonsense so it is clear you did not read the Common Framework link. But here is an important portion of what it noted – which is something else little Jonny boy will ignore:

      Since the start of the pandemic, low-income countries have benefited from some attenuating measures. Domestic policies, together with low interest rates in advanced economies mitigated the financial impact of the crisis on their economies. The G20 put in place the DSSI to temporarily pause official debt payments to the poorest countries, followed by the Common Framework to help these countries restructure their debt and deal with insolvency and protracted liquidity problems. The international community also scaled-up its financial support, including record IMF emergency lending and a $650 billion allocation of special drawing rights, or SDRs—$21 billion of which was allocated directly to low-income countries. The G20 leaders committed to support low-income countries with onlending $100 billion of their SDRs to significantly magnify this impact.

      1. JohnH

        As usual, pgl sides with the banksters. Interesting that Frankel didn’t propose a solution that would treat all lenders equally—a haircut. Kind of reminds me of how Goatherder and O’bomber treated underwater mortgagees—above all, save the banksters.

        1. pgl

          I sided with the bankers? Yea – every time Jonny boy gets lost in a conversation he tosses out some stupid attempt at an insult. Hey Jonny – when China extends a loan, they are bankers. Or do you think Asians are as incompetent at money and banking as you are. Sounds a little racist to me.

      2. JohnH

        It must be music to African debtors ears to hear China push back against Western loan sharks…just another example of how the US is losing influence and why the world is becoming more multi-polar every day. But don’t expects the idiots in the foreign policy to have a clue…they still thinks they write the rules!

    3. Macroduck

      Johnny is arguing that highly indebted countries should not receive debt relief from China until China gets has more power.

      This is rather like Congressional Republicans demanding to get their way, or they’ll crash the U.S. economy.

      Bullies and blackmail. – they go hand in hand.

      1. JohnH

        Dicky did’t bother to read the piece I cited. The point is that China doesn’t need more power. It already has the power to block a deal favourable too the Paris Club and Wall Street investors: “ Already at that point (during the pandemic), the key reason why the debt issues were not going to be settled is because the West could not come to terms with the fact that it had to deal with China, and that it had to deal equitably with China.

        Because what the West wants to do is precisely to get China to refinance the debt owed to it so that Third World debt repayments go to private lenders.”

        Frankel misses that point, too: “ help if China intransigently refuses to coordinate with Paris Club creditor countries.” The point is that the Paris Club is intransigently refusing to deal with China and other bi-lateral lenders on an equitable basis.

        Such brilliant minds…so little comprehension…

        1. Macroduck

          Johnny! So original! Pretty much the only response you ever manage is to claim that you something which you can’t actually know. This person hasn’t read some dreck you’ve linked to. That person believes in bank fairies. Whole professions don’t understand how their profession works.

          You can’t manage to make a point, so you lie about the points others have made. Kinda pathetic.

          Johnny, every lender has the power to refuse to renegotiate debt, unless the terms of their loan say otherwise. In the case that any lender refuses to renegotiate, all others will, too. China’s position is that it be exempted from a haircut while all others take the haircut. It doesn’t have the power to enforce that position. That’s the power China wants, dimwit. It’s a pernicious position, because the loans cannot be repaid on existing terms. There will either be renegotiation – agreed-upon default – or default without negotiation. Those are the choices. Idiot.

          1. JohnH

            Ducky: ” China’s position is that it be exempted from a haircut while all others take the haircut.” Does Ducky have any links? Ducky often claims to know what the Chinese think with no substantiation.

          2. pgl

            May 1, 2023 at 5:12 am

            What a teeny little weenie reply. Jonny boy has never been interested in a substantive exchange. No – little Jonny boy is nothing more than your run of the mill troll.

        2. pgl

          “Dicky did’t bother to read the piece I cited.”

          This from the troll who normally does not read his own links past the headline?

        3. pgl

          Frankel misses that point, too?

          Dude – try reading the link Dr. Frankel provided. Oh wait – I highlighted the key portion you missed and you still did not read it?!

      2. pgl

        Someone should ask little Jonny boy if he gets concepts like covenants, senior debt v. subordinated debt. After all – these basic concepts are at the core of these discussions. But of course Jonny boy tosses out stuff he never understood all the time.

        1. JohnH

          pgl tosses out these “concepts like covenants, senior debt v. subordinated debt” without having the foggiest idea of how they pertain to the current situation.

          Forbes has an excellent explanation of how Western banks exploit the African market: “The current debt crisis has its origins in a broken system founded on a double standard. In our modern system, the world’s wealthy countries play by one set of rules – and the world’s poorest play by another. In recent months, I’ve spoken with several African finance ministers who bemoan the architecture of a global financial system that has left them paying more for debt than other countries simply – and ironically – because their countries are among the world’s poorest.

          It’s not that African countries are playing on an uneven playing ground – they’re basically being asked to play an entirely different sport. When borrowing funds, African countries are automatically charged an additional premium of 2.9% just for being in Africa. In 2020, emerging markets spent roughly 8% of their GDP servicing debts. In advanced economies, that rate barely reached 1%. During the pandemic, 41% of African countries received a downgraded credit rating, compared to just 5% of high-income countries.

          Why is the system organized this way? In short, because there are three credit ratings agencies – S&P, Moody’s and Fitch – which tell investors how to price African governments’ risk. These agencies, which rate over 90% of the market, often overestimate the risk in these markets and set higher rates than necessary for African countries. The problem is compounded by the fact that the credit ratings agencies have relatively limited expertise in low-income country markets, face little competition, and in they eyes of many are not impartial – and as profit-making institutions, their incentives are not as strongly aligned with impartiality as they should be.

          The officials I’ve spoken to aren’t asking for a leg up. They just want a chance to compete in a fair system – rather than one that is designed to keep African nations at the back of the line.”

          And, yes, China has forgiven $billion in loans to African countries.

          1. pgl

            Gee little Jonny boy managed to name the three credit agencies. Wait China has a credit rating agency but little Jonny boy did not know that. Now I challenged you on some basic concepts here and once again little Jonny boy could not address even the basics. Which is what I thought little Jonny boy would do.

          2. pgl

            Hey Jonny boy – try reading your own link. I did. Here is what you missed or choose to misrepresent. African debt is near $70 billion. Now your article never said China forgave any of it but let’s say they forgave $1 billion to be generous. The article notes that China has 13% of this debt or nearly $10 billion. And at double digit interest rates.

            This person who chose to link to blames both the West and China. But of course little Jonny boy wants to pretend China is pure and noble. No – little Jonny boy is a liar too stupid to read his own links.

          3. pgl

            “In short, because there are three credit ratings agencies – S&P, Moody’s and Fitch – which tell investors how to price African governments’ risk.”

            Actually there are FIVE credit rating agencies including a respectable one out of Canada. Yea little Jonny did not know that and he did not know about China’s credit rating agency – Dagong Global Credit Rating Agency:


            Dagong Global Credit Rating Agency (Dagong) was originally branded as a Chinese national representative credit rating agency. Its international expansion in the US and the EU, in order to challenge the biggest international credit rating agencies, was unsuccessful and achieved little of significance. Dagong’s business suffered a complete halt because of a one-year suspension by the Chinese financial regulators. Its ratings heeded China’s geopolitical interest and China’s strategic plans of economic development rather than signalling the credit risks of debt instruments. Dagong’s ratings had a significant political bias towards countries which were China’s economic and political allies or supplied raw materials to China. Dagong officially became a state-owned credit rating agency following a reconstruction by the Chinese state in 2019. This article concludes that this new ownership may exacerbate the geopolitical characteristics of Dagong and poses a challenge to the international financial market.

            There is so much little Jonny boy does not know even if this arrogant but STOOOPID troll tries to mansplain the world to the rest of us. Funny thing – his mansplaining always tends to bite little Jonny boy in the rear end.

          4. pgl

            “When borrowing funds, African countries are automatically charged an additional premium of 2.9% just for being in Africa. In 2020, emerging markets spent roughly 8% of their GDP servicing debts. In advanced economies, that rate barely reached 1%.”

            This shocks little Jonny boy? How effing dumb can one be? A credit rating of BB gets one a 3% credit risk premium. And when a nation has 8% of its national income going to servicing debt, one would expect a credit rating at BB or worse.

            Yea little Jonny boy pretends he gets financial economics but I fear the boy little boy never learned to tie his own shoe laces.

          5. pgl

            “When borrowing funds, African countries are automatically charged an additional premium of 2.9% just for being in Africa.”

            Aswath Damodaran is likely never going to let little Jonny boy on the campus of New York University and Dr. Damodaran gets this issue:

            Country Default Spreads and Risk Premiums

            Notice that the nations Dr. Frankel mentions in his post all of them have credit ratings worse than CCC. Dr. Damodaran notes the default risk premium for nations with such poor credit ratings and they are far higher than 2.9%.

            Yea – Jonny boy thinks he knows things. No – little Jonny boy knows nothing.

          6. JohnH

            Pgl is intent on defending the neo-colonial banksters and their usurious red-lining of African nations.

            And as you can see in his rants, he’ll smear and misrepresent the opinions of anyone who doesn’t defend the banksters and their entitlement to red-lining. At least Ducky can acknowledge discriminatory pricing…though he sees nothing wrong with it.

          7. pgl

            May 1, 2023 at 2:20 pm
            Pgl is intent on defending the neo-colonial banksters and their usurious red-lining of African nations.

            Jonny boy repeats his childish and dishonest little smear but that is all this worthless troll has? Not a word on the substantive issues I raised. Oh wait – Jonny boy does not understand this issue either. Go figure!

  5. ltr

    March 25, 2023

    Zambia commissions Chinese-built hydropower plant to tackle power deficit

    CHIKANKATA, Zambia — Zambian President Hakainde Hichilema officially commissioned a Chinese-built hydropower plant, following the switching on of the plant’s fifth generator on Friday.

    The five generators at the Kafue Gorge Lower Hydropower Station, constructed by the Chinese firm Sinohydro Corporation Limited, added a total of 750 megawatts to the country’s national grid.

    Noting that China and Zambia completed the power station in “an ingenious way,” Hichilema said the project showed the friendly relationship between the two countries, and his government is committed to further growing the relationship with China.

    Hichilema added that the completion of the project was not only good for the country’s energy sector but for the economy as a whole as energy is critical to drive an economy.

    Chinese Ambassador to Zambia Du Xiaohui said that the project was an important symbol of China-Africa friendship and cooperation.

    China, he said, will continue to contribute to the all-weather, all-dimensional and high-quality cooperation with Zambia.

  6. pgl

    The story on Zambia’s default (late 2020) stated:

    ‘Zambia is Africa’s second-largest copper producer, and as copper prices have plummeted over the past three years, servicing repayments on its estimated $11 billion debt pile has become increasingly difficult.’

    Right after this story was published, copper prices soared. Hopefully this helped out in its ability to repay its debt.

  7. ltr

    April 5, 2023

    China, Tanzania remember deceased Chinese experts assisting Tanzania

    DAR ES SALAAM — Tanzanian senior government officials on Monday joined the Chinese community living in the country at the Tomb-Sweeping Day memorial ceremony for Chinese experts who died during the construction of the Tanzania-Zambia Railway and the implementation of other China-Tanzania cooperation projects.

    The somber ceremony was held at the Chinese experts’ cemetery at Pugu on the outskirts of the commercial hub of Dar es Salaam.

    Speaking after observing a minute of silence in respect of the deceased Chinese experts, Deputy Minister for Works and Transport Atupele Mwakibete said the construction of the 1,860-kilometer railway line from Dar-es-Salaam in Tanzania to New Kapiri Mposhi in Zambia was very challenging.

    Mwakibete said the construction of the railway line required heroism and ingenuity by both the Chinese people, represented by their great engineers and workers, and the Tanzanian and Zambian peoples, who joined the Chinese for the construction of this railway line which passes through difficult terrain.

    “It is clear as we are looking back at this most tremendous mammoth engineering project achievement, that was ever performed by China in Africa in the 1970s, we should not forget to remember also those who died for its accomplishment,” Mwakibete added.

    Suo Peng, charge d’ Affaires ad Interim of the Chinese embassy in Tanzania, said more than 50,000 Chinese engineers and workers participated in the construction of the railway with their sweat, blood and lives, which symbolizes the everlasting friendship between China and Africa.

    “The construction of the railway has vividly explained the true meaning of the statement that ‘China and Africa have always been a community with a shared future,'” said Suo….

    1. pgl

      Ah ltr – we get you are the chief spokesperson for Xi but maybe you might have noticed what Dr. Frankel said about the troubles African nations have had with debt to China. OK – the Chinese are helping them with investments but this comes with debt and interest obligations. HELLO?

      1. ltr

        “Ah — – we get you are the chief spokesperson for Xi…”
        “Ah — – we get you are the chief spokesperson for Xi…”
        “Ah — – we get you are the chief spokesperson for Xi…”

        [ Bullying to intimidate, always but always. ]

          1. pgl

            Is ltr trying to telling us that China is offering up subordinated debt at interest rates that are very low? Yea – she has the ability to understand banking issues that is only a tad above the stupidity we get from JohnH.

        1. ltr

          “Is — trying to telling us that China is offering up subordinated debt at interest rates that are very low? Yea – she has the ability to understand banking issues that is only a tad above the stupidity we get from —–.”
          “Is — trying to telling us that China is offering up subordinated debt at interest rates that are very low? Yea – she has the ability to understand banking issues that is only a tad above the stupidity we get from —–.”
          “Is — trying to telling us that China is offering up subordinated debt at interest rates that are very low? Yea – she has the ability to understand banking issues that is only a tad above the stupidity we get from —–.”

          [ Bizarre attempts at intimidation, always but always. ]

    2. ltr

      April 10, 2023

      West’s ‘rhetorical trap’ about Chinese financing in Africa is exposed

      China’s Foreign Ministry on Monday said that China is not a source of so-called “debt traps” for African countries, but instead a partner that helps Africa and developing countries elsewhere to reduce poverty, saying that US and Western politicians’ “rhetorical trap” is fully exposed, which is losing appeal.

      Responding to recent remarks by some US officials and officials of the World Bank that blame China for debt issues in Africa, Wang Wenbin, a spokesperson for the ministry, said that those comments are untenable.

      Wang said that China is committed to providing support for the economic and social development of developing countries, including African countries, and has always carried out investment and financing cooperation with developing countries based on equality and mutual benefit.

      “China is not the source of ‘debt traps’ for African countries, but a partner helping African countries and other developing countries get out of the ‘poverty trap’,” Wang said.

      Western officials, particularly those in the US, have been smearing China’s cooperation with African countries and other developing nations. David Malpass, president of the World Bank, said in a recent interview with the BBC that he was “concerned about some of the loans China has been making to developing economies in Africa.”

      US Vice President Kamala Harris and US Treasury Secretary Janet Yellen have also taken aim at China for debt issues in Africa. When talking about Zambia’s debt problem, Yellen has previously called China a “barrier” to debt reform in Africa, according to media reports.

      Such remarks have been firmly rejected by Chinese officials, who dismissed them as rhetorical traps that aim to sabotage China’s cooperation with African countries and other developing nations.

      “Some US and Western politicians have created various rhetorical traps in an attempt to disrupt China’s cooperation with developing countries. Their tricks have been seen through by the vast number of developing countries and the international community, and there is less and less of a market for them,” Wang said on Monday.

      Chinese officials have also pointed out that multilateral lenders and commercial creditors are the biggest debt holders in many developing nations, while China has made contributions to help ease the debt burdens of developing countries….

      1. JohnH

        I’d say that China has won the soft power battle with the West in Africa…slam dunk. Yellen, neocons, and liberal interventionists are all in total denial. They still believe what their propagandists are saying in the mainstream media.

        1. pgl

          Slam dunk? Me thinks little Jonny boy has been watching the NBA playoffs thinking it is a seminar in banking.

        2. GREGORY BOTT

          Lol, China won that……not really. Africa is irrelevant. But considering China finances evangelism……whoops.

          1. pgl

            Africa is very relevant. Which means everyone here wants your worthless trolling to go somewhere else.

        3. ltr

          Fifty-two of fifty-four African countries are part of the Belt and Road Initiative; with Eswatini and Somaliland the exceptions. Egypt and Algeria have applied for BRICS membership, along with South Africa. BRICS has a development bank that is now being led by Dilma Rousseff, the former President of Brazil.

          1. pgl

            Dilma Rousseff was impeached in 2016. Do you want to let us know why she was impeached? Didn’t think so.

        4. ltr

          A manner of diplomatic visit that has occurred repeatedly:

          April 28, 2023

          Diplomats from 14 countries visit Xinjiang

          URUMQI — Envoys from 14 countries, including Brazil, Iran, Indonesia, Pakistan, Ecuador and Senegal, visited northwest China’s Xinjiang Uygur Autonomous Region from April 24 to 28 at the invitation of China’s Ministry of Foreign Affairs.

          Consuls general of 14 countries, stationed in different cities across China, visited the regional capital city of Urumqi, as well as Kashgar, Turpan and other locations in Xinjiang to experience first-hand the social and economic development of the region.

          They said that Xinjiang’s achievements are remarkable, and that people of all ethnic groups live in harmony and happiness. They noted that the various lies fabricated by certain Western media are completely inconsistent with the reality of Xinjiang….

    3. ltr

      January 13, 2023

      From nothing to iconic landmark — Africa CDC headquarters testament of China-Africa friendship

      ADDIS ABABA — Looking at an iconic twin tower sitting on a once derelict land full of garbage in the southern suburbs of Addis Ababa, the capital of Ethiopia, local resident Wakjira Totofa said: “It’s really like a dream.”

      “We never thought we would see such a magnificent building in a short period,” said Totofa, a civil servant who lives in the neighborhood of the building hosting the headquarters of the Africa Centers for Disease Control and Prevention (Africa CDC).

      Totofa has witnessed the dramatic change from “nothing to something” on his daily commute. The first phase of the project, started in December 2020 by the China Civil Engineering Construction Corporation, was completed on Wednesday.

      Gao Jiajia, project manager of the construction team, said that since the start of the project, only a few of the 330 Chinese workers on the site have taken leave. They chose to race against time even though the COVID-19 pandemic and the conflict in northern Ethiopia have brought unpredictable challenges to the construction of the project.

      “I feel immensely honored that we have fulfilled China’s solemn commitment,” Gao said….

  8. pgl

    Since I do not drink soda, this will not affect me but no Coke or Pepsi? Oh my:

    For the Sudanese, the ongoing conflict between two warring generals in Khartoum threatens their lives and their stability. For Americans, it might mean less soda.

    Sudan is the world’s largest producer and primary supplier of gum arabic, a resin from the acacia tree that’s used in sodas, candy, and even make-up products. About 70% of the world’s supply originates in Sudan, Sky News reported.

    The conflict now threatens the production and distribution of that key ingredient, and could mean shortages of dozens of everyday products, Reuters reported.

    “For companies like Pepsi and Coke, they can’t exist without having gum arabic in their formulations,” Dani Haddad, marketing and development director of Agrigum, a leading global supplier, told Reuters.

    1. Moses Herzog

      I’m mostly a Shasta guy. Though lately because it’s about 20cents cheaper per two liter bottle I’ve gone over to RC cola that I add Torani cherry syrup to. Maybe a bottle or two of Sunkist soda. 98cents a bottle kids. I like Barq’s when I can get it under a dollar, but it’s higher price lately.

      Anyone recommend some cheap generics?? Happy to take suggestions.

      1. pgl

        When I lived in LA with a car – I visited Trader Joe’s all the time and often bought Hansen’s. Of course I always picked up a case of Two Buck Chucks (Charles Shaw wine).

        1. Moses Herzog

          I’ve seen Hansen’s (and in the supermarket I most like to frequent) but never can seem to force myself to pick it up because no caffeine. I guess I will pick up a 6-pack next time I’m out there. I haven’t looked lately but I think 60/40 it’s still there in the aisle. Unique flavors if I recall correctly.

          1. pgl

            I hear that Monster (which Hansen sold so much of that the name of the company) is loaded with caffeine. Alas – I never really got into energy drinks even if I was a team helping out Red Bull back in the day.

    1. pgl

      “A bill in the Legislature would cap interest rates for payday loans at 36%”.

      36%? When they are companies getting loans with interest rates less than 3.6%? DAMN!

    2. JohnH

      I couldn’t agree more. “When we take care of our own society, then we can start worrying about people half-way around the world.”

      1. ltr

        “I couldn’t agree more. ‘When we take care of our own society, then we can start worrying about people half-way around the world.’ ”

        October 4, 2014

        A Brutal Process
        By ERIC FONER

        Slavery and the Making of American Capitalism
        By Edward E. Baptist

        For residents of the world’s pre-eminent capitalist nation, American historians have produced remarkably few studies of capitalism in the United States. This situation was exacerbated in the 1970s, when economic history began to migrate from history to economics departments, where it too often became an exercise in scouring the past for numerical data to plug into computerized models of the economy. Recently, however, the history of American capitalism has emerged as a thriving cottage industry. This new work portrays capitalism not as a given (something that “came in the first ships,” as the historian Carl Degler once wrote) but as a system that developed over time, has been constantly evolving and penetrates all aspects of society.

        Slavery plays a crucial role in this literature. For decades, historians depicted the institution as unprofitable and on its way to extinction before the Civil War (a conflict that was therefore unnecessary). Recently, historians like Sven Beckert, Robin Blackburn and Walter Johnson have emphasized that cotton, the raw material of the early Industrial Revolution, was by far the most important commodity in 19th-century international trade and that capital accumulated through slave labor flowed into the coffers of Northern and British bankers, merchants and manufacturers. And far from being economically backward, slave owners pioneered advances in modern accounting and finance….

        Eric Foner is the DeWitt Clinton professor of history at Columbia.

        1. Macroduck

          I’m sure Xi has his accountants working full time figuring out whether China’s current practice of slavery is profitable. We can’t rely on public outcry against the enslavement of Uyghurs to end the practice, since China’s press is prevented from reporting anything but rainbows and unicorns.

          1. JohnH

            Funny how Ducky loves to cry “Uighurs” whenever China’s growth, prosperity and geopolitical power are noted.

            It’s also funny how Ducky can never be bothered to note how Navajos got treated during the pandemic or how many Black men are routinely subjected to the prison-industrial complex.

          2. pgl

            April 30, 2023 at 2:21 pm

            Poor little Jonny – were you cheering for the Knicks and got all boo hoo after that brutal 4th quarter? Your emotional problems are getting absurdly pathetic.

          3. Moses Herzog

            It’s not that I don’t sympathize with the Navajos health problems or mortality rate. But I don’t know that the American government can take full-responsibility for any cultures antiquated notions of what medicine is. At some point, we have to move beyond sucking on tree bark and using tobacco.

            I’m not saying they don’t have the right to use those things, but they have to accept the results of the behavior.

        2. ltr

          October 3, 2014

          Harvesting Cotton-Field Capitalism
          Edward Baptist’s New Book Follows the Money on Slavery
          By FELICIA R. LEE

          “Have you been happier in slavery or free?” a young Works Project Administration interviewer in 1937 asked Lorenzo Ivy, a former slave, in Danville, Va. Ivy responded with a memory of seeing chained African-Americans marching farther South to be sold.

          “Truly, son, the half has never been told,” he said.

          This anecdote is how Edward E. Baptist opens “The Half Has Never Been Told: Slavery and the Making of American Capitalism,” an examination of both the economic innovations that grew out of the ever-shifting institution of slavery and the suffering of generations of people who were bought and sold.

          Mr. Baptist, a history professor at Cornell, said in an interview that his book represented his decade-long effort to blend these two aspects. Published in September, “The Half” joins a new wave of scholarship about the centrality of slavery — and the cotton picked by slaves — to the country’s economic development.

          Mr. Baptist shows the ways that new financial products, bonds that used enslaved people as collateral and were sold to bondholders in this country and abroad, enriched investors worldwide….

      2. ltr

        “I couldn’t agree more. ‘When we take care of our own society, then we can start worrying about people half-way around the world.’ ”

        April 27, 2023

        Defense spending was 55.6% of federal government consumption and investment in January through March 2023. *

        $966.9 / $1,739.8 = 55.6%

        Defense spending was 20.8% of all government consumption and investment in January through March 2023.

        $966.9 / $4,646.1 = 20.8%

        Defense spending was 3.7% of GDP in January through March 2023.

        $966.9 / $26,465.9 = 3.7%

        * Billions of dollars

        1. JohnH

          “T he Pentagon’s increasing reliance on private contractors in the post-9/11 period raises multiple questions of accountability, transparency, and effectiveness. This is problematic because privatizing key functions can reduce the U.S. military’s control of activities that occur in war zones while increasing risks of waste, fraud and abuse. Additionally, that the waging of war is a source of profits can contradict the goal of having the U.S. lead with diplomacy in seeking to resolve conflicts. More broadly, the outsized influence of defense contractors has resulted in a growing militarization of American society..

          Meanwhile, the “greatest and most expensive military ever” can’t find enough ammo for its proxy in Ukraine. Democrats are staunchly opposed to the appointment of an inspector General for military aid for the Ukrainian kleptocracy. Pgl could care less about DOD’s inability to pass an audit. And economists in general are very, very quiet about the issue of butter vs. DOD wate, fraud and abuse.

          1. pgl

            “This is problematic because privatizing key functions can reduce the U.S. military’s control of activities that occur in war zones while increasing risks of waste, fraud and abuse.”

            As someone who opposed this privatization push that began in the early 1990’s spearheaded by Dick Cheney – I have asked you specifically when you are going to call out Putin’s even more brutal privatization of his war crimes in Ukraine. So far you have refused to do so. And we know why – you are enjoying the horrific war crimes when children are murdered and old ladies are being raped. Yea – you are one loyal Putin poodle.

          2. GREGORY BOTT

            Lol, military aid in total aggregate is irrelevant. Will Putin even exist by December?. The Balto Slav Soviets want him gone.

  9. pgl

    A certain CEO is currently making headlines after an employee reportedly leaked a company Zoom call where she broke the news to her team that they won’t be receiving any bonuses. But what’s raising eyebrows is the fact that the same CEO, Andi Owen of MillerKnoll, was able to reward herself with a whopping $1.2 million bonus atop her $3.8 million salary. In the leaked video, Owen can be heard urging her employees to “leave pity city” and stop complaining about the bonus situation, sparking a wave of justifiable outrage online. In an attempt to redirect her employees’ attention, Owen made a bold statement during the Zoom call. She urged them to shift their focus towards achieving the company’s $26 million sales target, rather than pondering over their lack of bonuses. Owen then asked for her team’s commitment toward this goal, urging them to leave their bonus-related worries behind. As per various reports, Owen’s total earnings for 2022 amounted to a staggering $4.9 million, with a considerable portion of it ($1.2 million) coming from her bonus. While her bonus for the current financial year is yet to be determined, the previous year saw her receive a slightly lower bonus of around $1.1 million.

    I can see a CEO getting a nice bonus if sales and profits are up but come on – sales and profits are up because the staff did their job well. But she basically tells the staff to stop having a pity party? Lady – if they get ticked off at this behavior of yours, your company will soon be toast and your pay will be zero.

  10. Macroduck

    Commodity bonds would have much the same effect as futures contracts, that of assuring the value of future output. In the case of bonds, ithr guarantee is in terms or future bond parments. That seems a good idea, though far from a complete solution.

    Consumption and borrowing vary with income. The borrowing part can be addressed with commonly bonds, for tose who produce the commodity and have the ability to issue commodity bonds. That’s not often everyone in a country. It only addresses the part of commodity-driven income fluctuation financed through borrowing.

    Smoothing consumption as well as bond payments over commodity cycles would be a further step toward avoding financial crises. Sovereign wealh funds and other automatic stabilizers can help with that. They amount to taking away the punchbowl. Problem is, politicians like punchbowls.

  11. pgl

    Republicans found a tax increase they support!

    Republicans finally found a tax increase they can support. The party, united for decades around the view that net tax increases are unacceptable, on Wednesday advanced debt-ceiling legislation that would raise taxes by more than $300 billion over a decade, according to official congressional estimates. The bill, which passed in the GOP-controlled House and won’t survive the Democratic-led Senate, would repeal clean-energy tax credits that Congress created last year. The changes would shrink breaks for wind energy, solar power, hydrogen and electric vehicles, effectively raising taxes on some manufacturers, car buyers and others.

  12. Macroduck

    Commodity bonds, transfer pricing remedy, sovereign wealth funds, the new bond texts devised to get around hedge fund blackmail of Argentina – which is the model for China’s blackmail – these are all workable improvements to commodity producers’ (and some consumers’) financial situations.

    In each case, a rent-seeking intermediary is eliminated, either directly or indirectly. Can’t say enough about rent-seeking in today’s economy.

  13. pgl

    Oil prices may be volatile but the profits of the larger oil multinationals just keep rolling in:

    il giant BP is expected to report its second-highest first-quarter profit in more than a decade next week, despite a dip from last year’s massive spike. Analysts expect the company to report that underlying replacement cost profit – the way the company prefers to measure its earnings – reached 4.27 billion dollars (£3.4 billion) in the first three months of the year. Apart from last year’s 6.2 billion dollars, it would be the single best first quarter that the oil major has had since 2012 when it made 4.7 billion dollars.

  14. pgl

    Will Clarence Thomas say this was a “hi tech” roasting?

    Saturday night at the White House Correspondents’ Association Dinner, attended by journalists, celebrities, politicians, and even the President of the United States, host Roy Wood Jr. mocked many of the aforementioned notables. None, however, more effectively than the jurist whose actions concealing possibly millions of dollars in lavish, all-expenses-paid luxury vacations, travel, lodging, clothing, and even a real estate gift have led many to demand his resignation or impeachment.
    “Anti-CRT policies are an attack on Black history and an attempt to erase the contributions of Black people,” Wood said in the now-viral video (below). “You are trying to erase Black people, and a lot of Black people wouldn’t mind some of that erasure as long as that Black person is Clarence Thomas,” the comedian continued, as some expressed nervous laughter.

    “A billionaire named Harlan Crow is flying Clarence Thomas all over the world on unreported trips like a Instagram [sic] model taking Clarence to the Maldives and the beaches and all – paid for his momma’s house – a billionaire paid for Clarence Thomas momma’s house,” Wood remarked as he pounded the podium. “I gotta give it up to billionaires, billionaires, boy, y’all, y’all. Y’all always come up with something new to buy. Like just when you think of everything you could buy on Earth, a billionaire will come up with a new thing. Y’all buy space rockets, you bought Twitter. This man bought a Supreme Court justice,” Wood declared, again to some nervous laughter. “Do you understand how rich you have to be to buy a Supreme – a Black one on top of that. There’s only two in stock, and Harlan Crow owns half the inventory. We can all see Clarence Thomas, but he belongs to billionaire Harlan Crow. And that’s what an NFT is.”

  15. Macroduck

    Off topic, beginning to look like the Spring offensive is nigh –

    “A huge fire in the Crimean port city of Sevastopol on Saturday has been put out after what was reported to be a Ukrainian drone strike on fuel tanks at a Russian navy depot.”

    Create supply shortages with too little time to replace them.

    “There is a realistic possibility the Russian missiles that struck Ukraine on Friday were an attempt to intercept Ukrainian reserve units and military supplies that were recently given to the country, the MoD said on Saturday.”

    Russia is trying to do the same, targeting men and materiel.

    “Russian occupying authorities in southern Ukraine said on Saturday that Ukrainian forces were subjecting the city of Novaya Kakhovka to “intense artillery fire” that had cut off electricity. ”

    Cut down on behind-the-lines support for Russian troops.

    “The head of Russia’s Wagner mercenary force, Yevgeny Prigozhin, has threatened to withdraw his troops from the battle for the city of Bakhmut due to high casualty rates.”

    Prigozhin complains too much, but this story suggests Ukrainian forces are intensifying pressure. The cynic in me thinks this story might be cover for redeployment of Wagner forces in anticipation of Ukrainian attacks elsewhere.


    JohnH,what is your last name bro. Putin supported neocons. Much like Tucker Carlson, don’t hide from me. Vlad’s mother wasn’t balto Slavic either. He always identified with the I2 white russians.

  17. pgl

    Joe Tacopina may be the dumbest lawyer God ever created:

    Reacting Donald Trump attorney’ Joe Tacopina bid to get the E. Jean Carroll rape and defamation trial thrown out as a mistrial, former U.S. Attorney Joyce Vance slapped aside his reasoning. Tacopina claimed in a Monday morning filing that Judge Lewis Kaplan has been tying his hands as he attempts to defend the former president from accusations he sexually assaulted the former journalist in a department store dressing room decades ago.ABC7 reported, “Defense attorney Joe Tacopina said the judge has mischaracterized elements of the case and improperly shut down certain lines of questioning during cross-examination. Tacopina said he should have been allowed to explore why C oll did not pursue security camera footage from the store and why Carroll did not go to the police following the alleged rape.” In a series of tweets, Vance said the mistrial gambit will fall flat on its face — and for good reason. Including a screenshot of the Trump attorney’s filing, Vance wrote, “A little courtroom theater from Trump’s attorney Joe Tacopina, who is moving for a mistrial because of comments the judge made etc. This won’t result in a mistrial, but they are setting up an argument they’ll make in appeal if the jury finds against Trump.”

    Tacopina has already ticked off the jury and now this loud mouth blow hard is insulting the judge?

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