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Ethiopia National Parliamentary and Local Elections – May 11-17, 2005, Jimmy Carters Report OPEC raises price target to $60 a barrel on back of strong demand growth By Kevin Morrison and Javier Blas in Vienna
he Organization of the Petroleum Exporting Countries unofficially raised its price target to more than $50a barrel, citing firm demand growth, refining bottlenecks and lack of economic damage from high oil prices. Opec ministers agreed to add 500,000 barrels a day to the official quota from July 1 to take it to 28m b/d and in line with real output, and raise quotas by the same amount over the summer if prices increased by at least $2 more above current levels. Sheikh Ahmad Fahad Al-Sabah, Opec president and Kuwait’s oil minister, said the new Opec president and Kuwait’s oil minister, said the new Opec basket of export crudes would have to remain above $50 a barrel for at least seven days before Opec ministers would start discussing any increase in the quota. The new basket, which comes into effect today, is about $48 a barrel. For the new basket to increase above $50 a barrel, this would translate to US and European benchmark crudes of about $57-$58 a barrel or near the record nominal levels reached in April. “The prices are not going to be lower,” said Rafael Ramirez, the Venezuelan oil minister. Energy analysts shared the bullish view on prices. “They [Opec] have just raised their price target, it is no longer around $50, but somewhere closer to the mid $50s,” said Roger Diwan, director of PFC Energy the Washington-based consultancy. Opec’s quota increase did little to clam oil market concerns about whether supply would keep pace with the strong oil demand forecast for this winter. US benchmark crude jumped by as much as $1.70 to $56.70a barrel following the Opec decision and data showing the second decline in a row of US crude inventories. With most Opec countries producing at or very close to full capacity, any increase in supply is expected to come from Saudi Arabia, the world’s largest exporter of oil. An Opec official familiar with Saudi Arabia said he expected it to increase output if the second quota increase goes ahead. Saudi Arabia claims it has another 1.5m b/d in production capacity on top of its current output of 9.5m b/d, but it has not sustainably produced more than 10m b/d since the early 1980s. All Naimi, Saudi Arabia oil minister, said the kingdom’s spare capacity was largely made up of low equality oils, known as heavy and sour crudes, which many refineries cannot use. Opec ministers deflected any blame for the high oil price on to bottlenecks in the global petroleum refining sector. “The conference noted that world crude oil prices remain high and volatile as a result of concern about lack of effective global oil refining capacity.” The cartel said. “For a long time, there was no investment in the refining sector,” said Sheikh Sabah, who added that Kuwait and other Opec members were all planning to increase refining capacity over the next five years. Sheikh Sabah also said the cartel intended to add another 1m b/d to oil production capacity by the end of the year to take total capacity of the cartel to 32m b/d. This compares to the expected demand for Opec oil of about 30.6m b/d. Spitting in the rain South Korea has spent recent years squirreling away foreign exchange reserves. Now, with next egg of $206bn, or 27 percent of gross domestic product, it wants to start spending. The finance ministry announced measures designed to spur dollar outflows in the country’s latest ruse to temper the won’s appreciation. At the top of the list is a bid to pour foreign exchange into local banks, in return for won, to help Korean companies fund overseas investments. That looks pretty ineffectual, since access to capital is not the problem. Korea’s big exporters are flush with surplus cash or have investment banks clamouring to provide funds. Even assuming the central bank succeeds in lending out dollars, through aggressive pricing or longer maturities, it would crowd out the private sector rather than stimulate new investment. The plan to lift the limit on overseas investment by individuals is likely to prove similarly ineffective, as they can already circumvent the current $1m cap. Besides, most Korean retail investors have little incentive to go abroad when their home stock market is cheap and boast in-built mechanisms designed to protect them. The government expects the new measures to result in annual outflows with the annual $25bn net inflow of foreign currency, but a third of recent foreign direct investment outflows. For South Korea, spending is likely to prove tougher that accumulating. Supersonic flight The testosterone-soaked pilots of Top Gun felt the “need for speed”. So do French and Japanese aviation executives, who yesterday resurrected plans for supersonic civil aircraft. The precedents are not encouraging. Developing Concorde cost $30bn. Conceived in an era of $2 barrel oil, its operating economics proved hopeless. The Soviet Union’s Tu-144, nicknamed Concordski due to its suspiciously familiar design, ended up flying mail between Moscow and Kazakhstan. Nasa abandoned its programme in 1999. Its best-case scenario, with demand for 500 aircraft, required $18bn spending upfront. The private sector is capable of funding huge investment: UK water companies will invest $32bn on pipes and sewers over the next five years. But capital intensive technology projects with binary outcomes rarely add up in discounted cash flow models. That is no bad thing. While French and British politicians promoted Concorde and its spiritual successor, Eurotunnel, the private sector revolutionized millions of lives with sub-sonic flights. Mistakes occur. Shanghai’s $1.2bn, 430kph airport train takes eight minutes to get passengers to a terminal that is a 45-minute cab ride from the city center. However, the message that prestige is not always progress may be getting through. A planned $48bn link between Beijing and Shanghai has been abandoned. That leaves Nasa, with its annual $16bn budget. When it comes to net present value, space is the final frontier. OPEC Symbolic gestures do not move markets. By its own admission, increase in the Organization of the Petroleum Exporting Countries’ output quota will have little impact on crude prices. With members producing flat out, the quota is about as relevant as the weather forecast for the Arabian Desert. But, while Opec is happy to appear supportive of moderation, its behaviour suggests it is targeting higher price levels than six months ago. Last December, when falling New York futures prices approached $40 a barrel, Opec promised production cuts, not merely quota adjustments. In May, rumblings from Opec about output emerged when futures prices fell to $47. The cartel could not claim it was facing sharper price declines for its own grades of oil. The discount for Middle Eastern crude narrowed sharply since December. To be fair, Opec is concerned about how far prices could rise. The cartel produced at full stretch in the second quarter, the lowest period of demand, in an attempt to build stockpiles. But it also appears to want a price floor of about $45 in New York futures terms. To gauge Opec’s intentions investors should watch its reaction when prices are falling, not rising. Meanwhile, with the US oil product markets tight, China growing strongly, Russian supply growth falling and the US hurricane season under way, it will take more than Opec rhetoric to prevent futures prices from hitting $60. Philips Gerard Kleisterlee says he sees “lighter demand”. Unfortunately, the Philips boss is not talking about demand for lightbulbs but warning of a lack of demand for pretty much everything else made by the Dutch conglomerate. Consumers in Europe, which contributes two-fifths of group sales, are buying fewer televisions, shavers and coffee makers. Their caution, given the deteriorating economic background, can hardly come as a surprise – expect, it seems, to Philips, which reaffirmed medium-term targets this month only to row back on short-term expectations. Hence the 6 per cent drop in its shares. Everyone agrees on the solution: to invest in stable and growing businesses, principally medical systems, while paring back the cyclic lower margin consumer operations. In that context, it is reassuring that Philips believes its medical arm can continue to expand rapidly while increasing margins beyond the current 14 per cent. But this portfolio shift is taking a painfully long time to produce results. In this electronics still accounted for a third of sales and increased revenues faster than the medical division.
weak second quarter means group earnings will be substantially lower in 2005. They are forecast to bounce back next year, though Philips’ record is not inspiring. The current management is making the best of a bad hand. But with the shares on nearly 17 times forward earnings, there is not need for investors to play along.
The conditions of any free press are clear on defamation and label. One should be responsible for one’s expressions. Any labels or accusations made, unless substantiated, can be sufficient ground for a law suite, and the law can punish those responsibleThis unscrupulous individual and his likes must be out of their minds to attack one of our heroes. This is senseless, to say the least. Sheikh Al Amoudi is a true son of Ethiopia, who continues to play a pivotal roll in improving the life of thousands of marginalized people in a section of the Ethiopian society, through productive investments, and carefully targeted social development programmes. Has this senseless individual done anything comparable to Sheikh Al Amoudi? What has he done at all for Ethiopia, never mind the comparison to the Sheikh?
live in Sweden and I know how much the people here love and respect him for the great investments he has made. He has created the employment of over 15,000 people, and the Swedish government bestowed on him the highest national decoration to express their appreciation for his contribution to the country. Sweden is a democratic country with one of the most independent press in the world. Nevertheless, I can assure you, no one would find anything to defame in such an important person for expressing his political views or belonging to this or that political party. Every citizen has that right. Sheikh Al Amoudi’s investments in Sweden are purely for business interest. His investments in Ethiopia, however, are mostly not in the context of capitalistic “return on investment” view. He simply wants to help his country get out of poverty. In Ethiopia anywhere from 200 to 300 thousand people, are in one way or another dependent on Al Amoudis generous investments. To Sheik Mohammed I want to say only one thing: you are a friend in need, our true friend and we all love you. Please disregard and ignore these silly attacks. I call on all true children of Ethiopia to take the necessary action on all individuals who engage in such malicious propaganda and defamation exercise, not just on the Sheikh, but on any one else. Eng. Berhe Hagos Stockholm, Sweden. In July, Britain will be hosting the G8 summit and the issue of how to alleviate poverty in Africa will be on the agenda. Former Africa correspondent Colin Blane looks at what steps might be taken to try to solve the problem.
There is a corner of Addis Ababa I have been avoiding for the past 14 years. I have been in the Ethiopian capital quite a few times since 1991, but I somehow never felt the need to go back out on the Debre Zeit road, to revisit that doom-laden place where I used up all the luck of a lifetime in a single morning.
Five of us had driven to report on a fire at an ammunition dump. As we tried to find cover to film from, there was an explosion so huge it shattered the windows of buildings two miles away. Shacks were demolished. Trees left scorched and blackened. One of my colleagues was killed. Another was badly injured as rockets and bullets flew through the air. All these years later, it is still hard to understand how any of us survived the blast. A couple of weeks ago, I agreed to go back to the scene to talk through what happened with a young man, Salim Amin, whose late father Mohamed lost his arm in the explosion. Mo Amin, of course, was the cameraman whose pictures of the 1984 famine in Ethiopia helped provoke such a worldwide outpouring of emotion and financial generosity. Walking back round the ammo dump with Mo's son, I found bulldozers levelling the vast site and tipper trucks driving away the remains of long-abandoned jeeps and tanks. Men with pickaxes foraged among the rubble. A guard wore body armour in case of accidental detonations. A small heap of rusting grenades and artillery shells were all that was left of a stockpile which had previously stretched hundreds of metres in every direction. In the days of the dictator Mengistu this was once Africa's biggest, most lethal ammuni-tion store.
Over the next few months, it will be filled in and flattened, turned over to a peaceful, civilian purpose. Blocks of flats for families going up where there used to be concrete bunkers for weapons.
Fair trade This year, Africa could be on the agenda again as it was in 1984. In the 21 years since Mo Amin's pictures and Michael Buerk's script pricked the conscience of a global audience, the gap between Africa and the rest of the world has widened. Africa is the only continent which is getting poorer as the Asian economies expand and Europe and the United States consolidate. UK Prime Minister Tony Blair has set up a Commission for Africa which recommends that the world's wealthiest nations
Affordable drugs In Kenya, an elderly coffee farmer complained about corruption. He told me poor prices were bad enough but that local middle-men had taken his crop last year and failed to pay him for it. "I hate them," he said. He wanted honest officials and fairer trade. In Ethiopia, a primary school headteacher explained that his classes were overflowing with 70 to 80 pupils each, no computers and no laboratory equipment. He needed more teachers and more investment. In Uganda, I met doctors working flat out to tackle the medical emergency of HIV/Aids. One told me the impact of the virus on Africa was so great it was dragging down the economy of the whole continent. It is expected there will be 19 million Aids orphans in Africa by 2010. More affordable anti-retroviral drugs are needed and better funding for health education. Indignation The man credited with the idea of a Commission for Africa is Bob Geldof, the rock musician, now Sir Bob, who bullied and cajoled millions into giving money for Ethiopia back in the 1980s. I watched him address a conference at the Scottish Parliament in Edinburgh, with the Gleneagles summit just a few weeks away. In a speech fizzing with indignation, Bob Geldof argued that poverty was still killing 50,000 Africans every day. The leaders of the world's rich nations will be meeting in the luxurious surroundings of one of Scotland's finest golfing hotels to consider what to do.
Ethiopia National Parliamentary and Local Elections – May 11-17, 2005, Jimmy Carters Report
The Carter Center has had a long
and deep involvement in Ethiopia, beginning in 1988 when I responded to a
joint request from the International Red Cross and the UN High
Commissioner on Refugees. Dictator Mengistu Haile Meriam was refusing to
permit food, water, and medicine to be delivered to Ethiopian camps that
housed refugees from Somalia and Sudan. The U.S. had withdrawn our
ambassador, and there was no Western leader who could deal with him.
Within an hour, he and I had worked out a solution to the problem, with
international represent-atives delivering the supplies under Ethiopian
military es-corts.
The promise of Eritrean democracy
has not been realized, and Eritrea has been involved in the Sudan conflict
since 1994, invaded Yemeni islands in 1995, and a serious border dispute
with Ethiopia erupted in 1998 that cost 100,000 lives. Since 1992, The
Carter Center has helped Ethiopia write a constitution, arrange for
enlightened war crimes trials, eradicate Guinea worm, control river
blindness and trachoma, and increase food grain production. We have also
assisted in preparing curricula and training students at seven new public
health institutions.
The most highly publicized event
was the expulsion of observer teams from the National Democratic
Institute, International Republican Institu-te, and the International
Found-ation for Electoral Systems. Although I appealed personally to the
Prime Minister, he refused to reverse the decision. This left our Center
(50 persons), the European Union (160 persons), African Union (31
persons), and several others as international observers, a total of about
330. All of us had unimpeded access to opposition leaders, polling sites,
and other aspects of the electoral process.
A number of domestic observer
groups were disqualified by the National Election Board (NEB), but this
decision was reversed by the Supreme Court. Unfortunately, this decision
came late in the electoral process, greatly hindering the efforts of
domestic observers to mobilize in rural areas. There have been continuing
reports from the opposition of intimidation and from the ruling party of
attempts to disrupt the electoral process. We and other international
observers have investigated as many of the complaints as possible and
found a few of them to be justified and called on the NEB to investigate
fully such complaints.
The major campaign issues raised
by the opposition during more than a dozen televised public debates have
been the government's: a) willingness to live peacefully with Eritrea as
an independent nation and not part of Ethiopia; b) refusal to permit
private ownership of land; c) emphasis on development in the rural areas;
and d) respect for ethnic minorities as political entities. All these
issues are advent-ageous for the opposition in the urban areas, and such
basic changes would require a revolutionary constitutional tra-nsformation.
Other inevitable issues have been education, economic growth, transport-ation,
and electoral questions. Opposition
parties continued to report intimidation, harassment, and incidents of
violence and say they will challenge the election results in some areas.
Observers are investigating these reports. |
