Day: December 13, 2022

Washington – The capital city of the United States of America (USA), Washington, will host as of this Tuesday the US-Africa Leaders´ Summit, which will assess new directions for the strategic partnership between the US and African countries.

The three day-event, in a initiative of the US President Joe Biden, will count on the participation of at least 49 African leaders and important businesspeople, who will analyse the state of cooperation and identify new areas for partnership in a mutually beneficial framework.

The summit, which will be attended by the Angolan Head of State, João Lourenço, is a response of the North American State to consolidate its space in Africa at a time that investments from China, Russia, France and Turkey are increasing on the continent.

To this end, the Washington Summit will have on the table issues that mark the world today, such as peacekeeping, good governance, democracy and security, climate change, energy and food security.

For the USA the meeting will specifically enable the discussing of new strategies to work with African governments, taking into account the upcoming challenges in the cradle continent, which continues to face huge challenges regarding peace and security.

In the same way, the summit opens space for seeking of the best answers from the USA in sustainable health and conservation, climate adaptation, energetic transition domains as well as inclusive growth of the communities and information Technologies.

Concretely, the Washington Summit will have several panels such as the Youth and Diaspora Forum as well as other panels in which various ministers will participate.

In this first working day, attention will be focused on the Eximbank Annual Congress, which will be attended by more than 100 participants, among them President João Lourenço, one of those invited to speak.

The Business Forum is scheduled for Wednesday (14), a meeting in which the Angolan Head of State will address in the panel related to the theme “Building a Sustainable Future: Partnerships to Finance African Infrastructure and Energy Transition”.

Another important event will be the Leaders’ Summit, scheduled for Thursday (15), which will discuss strategic partnerships for Agenda 2063, or the African Union (AU) agenda.

African Growth and Opportunity Act (AGOA) on the agenda

The Washington Summit will be particularly be focused on the economic component, representing a new paradigm in the way the US cooperates with the African continent.

In this regard, one of the programmes to be closely analysed during the meeting will be the African Growth and Opportunity Act (AGOA), enacted in 2000, which has been at the centre of US economic policy and trade engagement with Africa.

The programme, turned to qualified countries in sub-Saharan Africa, provides tax-free access to US markets for over 1.800 products and more than 5.000 qualified for tax-free access under the Generalized System of Preferences programme.

It is a policy with stringent eligibility requirements that demands each interested country to continue reforms in order to establish an economy based in the market which guarantees progress in the areas of the rule of law and political pluralism.

To this end, countries must remove barriers to US trade and investment, enact policies to reduce poverty, combat corruption and protect human rights in order to access new market opportunities.

In this regard, AGOA has helped boost economic growth, promoted economic and political reform, and improved U.S. economic relations in the region, with 36 countries eligible for the programme’s benefits so far this year.

Several analysts understand that African states are not yet making the most of AGOA, which means that there are advantages which give rise to great debate on the subject.

America with open arms

Speaking about the summit, President Joe Biden said it will demonstrate America´s enduring commitment to Africa and highlight the importance of US/Africa relations and increased cooperation on shared global priorities.

In a message to African leaders, the American statesman wrote that the event will build on shared values to better promote new economic engagement; reinforce US-Africa commitment to democracy and human rights.

In the same way, Joe Biden stressed that it will help to mitigate COVID-19 and future pandemic impact by enabling collaborative work to strengthen regional and global health, promoting food safety, peace and security, as well as to respond to the global climate crisis.

Mr Biden assured that he looks forward to working with African governments, civil society, diaspora communities in the United States and the private sector to continue to strengthen the shared vision for the future of US/Africa relations.

On his turn, the Angolan Foreign minister, Téte António, said that the summit represents the turning of a page in the US/Africa relationship, stressing that with this initiative, the US is reformulating its way of relating to Africans.

“The United States paradigm was another annual meeting with the African Union Commission. There were some summits, which did not have the substance and details like this one. It is a very comprehensive and sui generis summit, due to the way it is organised”, said the official.

The Angolan minister believes that the summit is also an opportunity for Angola to promote its image and gain credibility with international bodies.

In this regard, Téte António said that the Angolan President, João Lourenço will be taking advantage of the Summit to make economic diplomacy through contacts with several business people.

“The important thing in these international conferences is not only to be present at the sessions where important issues are discussed, but also to see what you can bring in the corridors and achieve”, expressed Téte António.

Source: Angola Press News Agency

Law enforcement officials and financial services regulators have filed a raft of criminal and civil charges against Sam Bankman-Fried, the founder of the bankrupt cryptocurrency exchange company FTX, alleging wide-ranging fraud that eventually brought down the company, which was valued at $32 billion earlier this year.

The Department of Justice on Tuesday morning unsealed an indictment charging Bankman-Fried with eight criminal counts, including conspiracy to commit wire fraud, actual wire fraud, money laundering, and violation of laws governing donations to politicians and political parties.

At the request of U.S. prosecutors, Bankman-Fried, 30, was arrested on Monday evening at his home in the Bahamas, where the headquarters of FTX is located. The U.S. and the Bahamas have an extradition treaty, and Bankman-Fried is expected to be transferred to U.S. custody in the near future. ‘House of cards’

Earlier Tuesday, the Securities and Exchange Commission issued its own set of civil charges, also accusing Bankman-Fried of “years-long fraud” that included hiding information from investors, diverting customer funds to a hedge fund he owned, using other customer funds to make political donations, and to purchase hundreds of millions of dollars in real estate.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”

Also on Tuesday, the Commodity Futures Trading Commission filed a lawsuit against Bankman-Fried.

Rapid rise, rapid fall

In the short time since its founding in 2019, FTX grew to be one of the largest cryptocurrency exchanges in the world, and Sam Bankman-Fried — often referred to as “SBF” — became one of the industry’s most recognizable figures. He was a regular speaker at business conferences, gave testimony before Congress, and was seen by many as a model cryptocurrency executive.

The list of investors who plowed billions of dollars into FTX is long and distinguished, including Sequoia Capital, SoftBank Group, Tiger Global Management, and Third Point Ventures.

Earlier this year, Bankman-Fried positioned his company as a savior for the broader crypto industry when a broad selloff of cryptocurrencies left many firms in the space reeling. FTX extended lines of credit to crypto lender BlockFi and crypto broker Voyager Digital in an effort to help them weather the storm. Both BlockFi and Voyager eventually filed for bankruptcy protection.

Signs of trouble

In September, news reports began raising questions about the relationship between FTX and Alameda Research, a hedge fund owned by Bankman-Fried which was supposed to be a completely separate corporate entity from FTX.

However, it gradually became clear that the two companies were actually closely connected. Media reports began to reveal that a large share of Alameda’s assets was tied up in an illiquid crypto token called FTT, which was issued by FTX. Over several days in early November, customers rushed to pull their money from accounts with FTX, sending the company into a massive liquidity crisis and forcing it to stop processing customer withdrawals.

After several days of attempts to arrange a rescue package, including a briefly considered sale of FTX to Binance, its largest competitor, FTX, Alameda, and more than 100 affiliated companies filed for bankruptcy.

On Tuesday, the Justice Department and the SEC alleged that Alameda actually had “virtually unlimited” access to funds held by FTX on behalf of its customers.

The charges against Bankman-Fried claim that Alameda illegally used those funds to invest in highly illiquid cryptocurrency tokens, as well as to make “undisclosed venture investments, lavish real estate purchases, and large political donations.”

Before its collapse, cryptocurrency investors around the world had placed billions of dollars in their accounts with FTX. In large part because of transfers to Alameda, FTX is facing an estimated shortfall of $8 billion.

‘I made a lot of mistakes’

Against the advice of his attorneys, Bankman-Fried has given a number of interviews to news organizations since his company declared bankruptcy. His contention has been that, while he may have made mistakes, he never intended to defraud anyone.

In early December, Bankman-Fried told The Wall Street Journal that he could not account for money that FTX customers transferred to Alameda Research.

In an appearance at a conference sponsored by The New York Times, he said, “Clearly I made a lot of mistakes. There are things I would give anything to be able to do over again. I did not ever try to commit fraud on anyone. I was excited about the prospects of FTX a month ago. I saw it as a thriving, growing business. I was shocked by what happened [in November.]”

His claims contradict the allegations leveled by prosecutors in the indictment unsealed Tuesday, which accuse Bankman-Fried of “willfully and knowingly” defrauding investors and customers.

‘Utter failure’ of controls

Last month, control of FTX and its constituent companies was turned over to John Ray III, an attorney and corporate insolvency specialist who has been brought on to manage multiple companies facing bankruptcy, including the failed energy giant Enron in the early 2000s. His primary task will be to assemble all the remaining assets of FTX in an effort to recover some of the money its customers lost in the exchange’s collapse.

Ray appeared at a hearing held by the House Financial Services Committee on Tuesday, during which he described a company that lacked even the most basic corporate governance structures and was run by a small cabal ill-equipped for the job of running a multi-billion dollar corporation.

In prepared testimony, Ray said, “[N]ever in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever.”

In the broadest sense, Ray said, the company’s failure was the result of the “absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets.”

Under questioning, Ray said that the asset recovery process will take months to complete, and will not make FTX customers whole. “At the end of the day, we’re not going to be able to recover all the losses here,” he said.

The committee had also expected to hear from Bankman-Fried on Tuesday, but the FTX founder’s arrest on Monday made that impossible.

Lawmakers angry

The allegations of fraud and mismanagement at FTX have raised calls in Washington for action by Congress to rein in the cryptocurrency industry, which operates under a poorly defined set of regulatory rules.

House Financial Services Committee Chair Maxine Waters on Tuesday said that she was “deeply troubled” by the revelations coming out about FTX. At the same hearing, U.S. Representative Patrick McHenry, who will take over the chairmanship when Republicans assume control of the House next month, criticized Bankman-Fried but said that he still sees “promise” in digital assets.

Others were less tolerant of the industry, with Representative Brad Sherman, a Democrat, calling the entire industry “a garden of snakes.”

Industry representatives urged lawmakers to tread carefully when it comes to establishing new rules for cryptocurrencies.

“Following the failure of FTX International, it’s understandable that lawmakers want to do something, but they should be wary of passing legislation in haste that would do more harm than good,” Kristin Smith, executive director of the Blockchain Association, wrote on Monday. “Instead, Congress should take its time to investigate the issues we’ve seen and work closely with the crypto industry to find solutions that benefit everyone.”

Source: Voice of America

Yiwu, a city in China’s Zhejiang province, produces more than half the world’s Christmas ornaments purchased by the billions of people who celebrate the holiday.

China’s “zero-COVID” policy, coupled with global pandemic fears, dulled the local export-fueled year-round glitterfest. Christmas orders fell by 50% in 2020, according to the official Global Times with raw material costs and labor shortages hindering a recovery in 2021, which saw only a 10% to 20% increase in sales over the previous year.

Then, faster than elves could hitch those nine reindeer to Santa’s sleigh, a day after Beijing began lifting zero-COVID restrictions on December 3, a Zhejiang trade delegation departed for Germany and France to launch the “Thousand Missions and Ten Thousand Enterprises to Expand the Market and Grab Orders Action.” The goal: Sell enough stuff to help spark China’s economy back to pre-pandemic growth.

They hit a snag. “It seems like the Europeans’ and Americans’ purchasing power is so weak now. If the markets there are weak, China’s economy is definitely suffering too,” said Steven Gao, a businessman in Zhejiang province who exports Christmas ornaments and other trinkets to Europe and the U.S.

Beyond pandemic aftereffects such as not-yet-normal supply chains, Gao blames the bleak economic prospect on President Xi Jinping’s recent policies, particularly his focus on “common prosperity” during the 20th party congress, which met in October in Beijing and gave him a third term. The phrase refers to an official effort to address income inequality, a push often linked to personal wealth accumulated by founders and executives in sectors such as tech.

“Many of my rich friends are thinking about moving to other countries,” said Gao, 45, who asked to use a pseudonym to avoid attracting official attention when he spoke with VOA Mandarin on Tuesday. “They are afraid their wealth will be seized. This lack of faith, combined with pandemic control, led to the slide of economic growth.”

According to a CNBC report on December 4, U.S. manufacturing orders in China are down 40%, according to the latest CNBC Supply Chain Heat Map data, and Chinese factories are expected to shut down two weeks earlier than usual for the Lunar New Year that falls on January 22, 2023.

When Xi presided over a December 6 meeting of the Politburo of the Communist Party, China’s second-highest decision-making body, he emphasized the need to stabilize the economy and to attract foreign investment.

After the gathering, the official Securities Times reported on December 7 that the Suzhou Bureau of Commerce planned to charter flights to France and Germany after a “successful trip” to Japan returned with guaranteed orders worth more than 1 billion yuan, or $142 million.

A similar flight organized by the Suzhou province government took off for Europe on December 9. “Racing against time, grabbing more orders and opportunities … these are the most crucial tasks the Chinese companies took on when boarding the plane,” editorialized the official Global Times news outlet which pointed out “Yiwu… has been the starting point of numerous international trade channels linking the entire world.”

Alibaba, China’s biggest e-commerce platform, recently launched a special operation code-named “Digital Hybrid Trade Show” to start at least 100 overseas exhibitions in the near future, Securities Times reported on December 12. The exhibitions cover more than 10 important foreign trade target markets, including the United States, Germany, Britain, Japan, Singapore and Australia.

Some analysts, however, believe that China’s response to the pandemic may have made it less attractive to foreign businesses for manufacturing and investing.

The state news agency Xinhua reported that those in the December 6 meeting stressed that stability is Beijing’s top priority in an international economic environment marked by “high winds and waves.”

Zhao Chunshan, chief adviser of the Asia-Pacific Peace Research Foundation, a private think tank in Taiwan, told VOA Mandarin that “Capitalists are running away. No one dares to invest, causing economic instability. If there is a problem in the economy there is no way to stabilize.”

Zhao says that local governments with high debt loads must look outside China rather than to the central government for stability.

“China’s central government has no way to solve local debts,” he said. “The central government’s allocation alone is not enough. They have to attract foreign investment and business on their own. To some extent, the central government also gives localities such authority.”

In an interview with VOA Mandarin, Lai Rongwei, an assistant professor at the Center for Liberal Studies at Taiwan’s Longhua University of Science and Technology, said the fact that provinces and cities are scrambling to form groups to go abroad reflects the fears of local officials.

“China’s measures to seal off cities have led to a severe shortage of supplies, including medicine,” Lai said. “The debt of local governments is already huge, and the lack of revenue in the past years has made the situation even worse. People actively going abroad shows a great deal of panic, fearing that the economic downturn can’t be alleviated, and the risks are becoming bigger.”

But Lai said that after the pandemic lockdowns, China is no longer as attractive to foreign investors as it used to be.

“Foreign investors must take into account the cost of investment,” Lai said. “Cities could be shut down and power cut off any time when there’s an order from higher authorities. … Private enterprises find it hard to survive, and now the governments are looking for solutions from foreign investors.”

Source: Voice of America