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By Ken Stibler, Noah Berman and Nojan Rostami. Executive editor: Dan Keeler

Africa

Kenya lays out plan for carbon revenues

Kenya unveiled a proposal this week to take 15% of revenue from onshore carbon-credit sales and 25% for offshore projects.

Under recently published draft regulations the country will also require developers of carbon-credit projects to share revenue with host communities. Onshore community-based projects will be required to share 40% of aggregate earnings in the previous year, the regulations stipulate.

Kenya estimates that it needs $17 billion to implement measures aimed at reducing carbon emissions by one-third over the next six years and adapting to a warmer climate, Bloomberg reports. The country expects to finance 21% of its climate needs through domestic programs and the remainder through development partners. 

Carbon credit projects are gaining popularity across Africa. In August, Zimbabwe announced it would take 30% of revenue from such projects, requiring developers to share a quarter of revenue with host communities. Globally, the carbon-credit market could be worth $50 billion by 2030, according to consultancy McKinsey.

IMF approves Mozambique disbursement

The IMF’s executive board approved a $60.7 million disbursement to Mozambique on Monday.

The fund highlighted recent favorable changes, including a plan to create a sovereign wealth fund to manage revenue from exploiting the country’s natural resources, declining inflationary pressures and increasing promise from liquified natural gas exports. But despite the positive outlook, “significant risks remain, mainly due to adverse climate events and the fragile security situation,” IMF Deputy Managing Director Bo Li said in a press release.

The IMF approved a three-year program for Mozambique in 2022 amid fallout from the Covid-19 pandemic and the war in Ukraine. The fund said the arrangement aims to support Mozambique’s economic recovery “while fostering higher and more inclusive growth through structural reforms.” The extended credit facility includes about $456 million, with $273 million disbursed so far.

US agrees to extend Africa trade deal 

The US reached a preliminary agreement with African nations to extend the African Growth and Opportunity Act (AGOA) by another decade, South Africa’s trade minister said this week.

AGOA, which provides preferential access to the US market for more than 30 African nations, is set to expire by the end of 2025. Trade under the agreement represents more than one-third of total US-bound exports for participating African countries.

Earlier this year, the US suspended the Central African Republic, Gabon, Niger and Uganda from the deal, citing human rights concerns.

The extension of the agreement will now be subject to approval by the US Congress.

Asia 

Bangladesh reelects PM 

Bangladesh’s Prime Minister Sheikh Hasina won a fourth consecutive term in office this week in what foreign observers described as a stage-managed election that attracted an unusually low turnout, VoA reports.

Hasina’s party, the Awami League, won 225 out of 300 parliamentary seats in an electoral contest boycotted by the opposition Bangladesh Nationalist Party and 62 other parties. The victory gives Hasina another five years in office. 

The BNP criticized the election as an insult to Bangladesh’s democratic aspirations, the Dhaka Tribune reports. Some foreign governments agreed. “The US shares the view with other observers that these elections were not free or fair and we regret that not all parties participated,” US State Department spokesperson Matthew Miller said in a statement. 

The criticism has raised concerns about Bangladesh’s apparel industry, an economic engine that depends heavily on exports to the US. If Washington responds punitively to Bangladesh’s election the country’s economy could suffer, Al Jazeera reports.

Spat with India casts shadow over Maldives revenue

What began as an effort by Indian Prime Minister Narendra Modi to promote tourism to sparsely populated Indian islands has spiraled into a tiff with potentially major economic implications for the nearby Maldives.

Last week, Modi posted photos of himself snorkeling, urging tourists to visit the Lakshadweep islands, a territory of India. Government officials in the Maldives, which is 100 miles south of Lakshadweep, soon pushed back on social media against what they perceived as an attempt to draw tourism away from the island nation. That prompted uproar from Indian government officials and celebrities, spurring a sharp drop in bookings to the Maldives, which counts on tourism for 30% of its GDP

EaseMyTrip, a major Indian travel site, has suspended flight bookings to the Maldives, and Indian travel software company Rategain recorded a 40% drop in Maldives bookings over two days this week, CNBC reports.

Amid the row, Maldives President Mohamed Muizzu, who campaigned on a platform of “India Out,” upgraded his country’s ties with China. 

Middle East

Saudi Arabia moves to attract foreign talent 

Saudi Arabia this week launched a new residency program to help attract foreign talent and investors, Reuters reports. The program, “Saudi Premium Residency,” will allow members to own real estate, conduct business and obtain work permits for themselves and family—at a price.

With five categories, organized by profession will cost as much as $213,320. An annual plan is also available for $26,665. The program resembles rival UAE’s multiple pay-to-play residency schemes, such as its “Golden Visa” for foreign investors, or its “Green Visa” program, launched in 2021 to attract skilled foreign professionals, and can be seen as yet another move by Saudi Arabia to out-compete its neighbors. 

Another move by Saudi Arabia in its economic rivalry, a requirement for Saudi government contractors to relocate their regional headquarters to Riyadh, officially came into effect last week as the Saudi Cabinet confirmed the new contracting regulations.

Dubai’s Al Habtoor Group files arbitration claim against Lebanon

The Al Habtoor Group, a UAE private investment company, filed a notice of investor-state arbitration against Lebanon this week, claiming some $1 billion in expropriation losses. Al Habtoor’s claim relates to a portfolio of assets held in Lebanese banks and real estate that it says suffered “significant losses and damages” due to the government’s economic and security failures. 

Lebanon has been experiencing a multidimensional economic crisis for years, most visibly felt in an acute liquidity shortage, which has manifested in this arbitration dispute as Al Habtoor claims it’s unable to access tens of millions of dollars held in Lebanese banks. 

Europe

Tussle between Poland’s Tusk and former administration intensifies 

An increasingly heated confrontation between President Andrzej Duda and newly-elected Prime Minister Donald Tusk has led to the arrest of two members of parliament in Poland. The MPs, Mariusz Kamiński and Maciej Wąsik, were taken into custody at the presidential palace, where they had sought refuge under Duda’s protection. 

This incident is the latest in a deepening legal and political battle between various Polish institutions that remain controlled by the recently ousted PiS party and the new liberal government. The conflict so far has engulfed PiS-appointed officials at the central bank, state media company, legislature and presidency. 

• Poland’s top court shields central banker from prosecution (FT)

• Why the EU cares about Poland’s constitutional confrontation (FT)

Tusk’s liberal government has demonstrated a stringent commitment to reestablishing democratic norms in Poland. However, the resistance from PiS and its supporters, and potentially the EU, suggest political risk will remain elevated while also illustrating the difficulties of dislodging entrenched party-governments in Eastern Europe.

Latin America

Milei’s honeymoon ends early as Argentina’s markets wobble

Argentina’s financial markets have run into turbulence just a month into mew President Javier Milei’s term. Despite a promising start, bond prices are falling, and the peso is weakening, reflecting investor skepticism about the government’s new debt strategies. 

Milei, a libertarian leader, confronts significant hurdles: inflation nearing 200%, potential social unrest, and the task of re-negotiating a $44 billion deal with the IMF. His ambitious reform plans, which include privatizing state entities and raising taxes, face resistance in a Congress where his coalition lacks a majority. Legal challenges are complicating efforts to deregulate the economy.

Additionaly, the country risk index has risen to a seven-week high and the disparity between the official and parallel peso-dollar exchange rates is widening, reversing a narrowing trend seen after December’s devaluation. Despite these challenges, the Argentine central bank has accumulated nearly $4 billion in foreign reserves since Milei’s inauguration and the local stock market has performed robustly, boosted by privatization discussions surrounding the state-owned oil firm YPF. 

Disgruntled gangs blamed for Ecuador’s surge in violence

A wave of gang violence rocked Ecuador this week, catapulting the country’s rising violence onto the international stage. The series of kidnappings, murders, and murders—including the storming of a TV station—took place after the leader of the Los Choneros gang disappeared from prison, prompting a national manhunt. Simultaneously a rival gang’s boss escaped from prison, leading to what newly elected President Daniel Noboa declared as a state of internal conflict. 

The sudden violence is reminiscent of that employed by the Gulf Clan in Colombia to put political pressure on governments after they tightened security or extradited gang members to the US, for example. Last week Noboa had announced a referendum on adopting additional —much stricter—security measures. 

Ecuador has received offers of US and Argentina military assistance and is seeing a rare political unity, however the country faces the prospect of a protracted three-way conflict. In addition to fighting the government, Los Cheneros are fighting their rivals, the Los Lobos, over lucrative cocaine smuggling routes.

What We’re Reading

Ethiopia opens arms wide to Pakistani businesses (Africa Intelligence)

Ethiopia’s currency quandary places IMF deal on ‘knife’s edge’ (Bloomberg)

Nigeria’s opposition split as former governors support Tinubu (The Africa Report)

IMF and US pledge further support for Egypt amid economic crisis (The New Arab)

China-Africa lending ‘to snap seven-year decline’ (Bloomberg)

AI ads are sweeping across Africa. (Semafor)

Bhutan opposition party wins election amid economic challenges (Nikkei)

Myanmar imposes new income tax on workers abroad (Nikkei)

Thailand’s Phuket booms as wealthy Russians seek a new home (Nikkei)

Leaders of Philippines and Indonesia hold talks on South China Sea (Reuters)

Papua New Guinea leader declares state of emergency after riots (NYT)

North Korea poised to admit first known tourists since 2020 (Reuters)

Kazakh markets shun mobile payments to avoid sales tax (Radio Free Europe)

China’s imports of Mongolian coal set to rise as transport improves (Reuters)

Jordan secures $1.2 billion IMF loan for economic stability and growth (The Media Line)

Oman kicks off tender for 500 MW of PV (PV Magazine)

Bahrain’s Foulath Holding signs $2b iron ore deal with Emirates Steel (Zawya)

Iraq and Iran create alliance that could reshape the global energy landscape (Oilprice.com)

Iranian economy buoyed by ‘dark fleet’ oil shipments to China (Radio Free Europe)

Serbia’s escalating corruption threatens EU dreams (FrontierView)

Turkey, Bulgaria and Romania to sign Black Sea demining deal (AFP via France24)

Protestors in Transnistria denounce Moldova’s new export tax (BalkanInsight)

Russia’s oil drilling boom shows Moscow’s resilience to Western sanctions (Bloomberg)

Plane detained in France sheds light on Nicaragua’s opportunistic role in US migrant crisis. (The Guardian)

The dwindling of the Panama Canal boosts rival trade routes (The Economist)

Venezuelan workers protest ‘starvation wages’ and demand ‘decent’ income (La Prensa Latina)

Argentine FM holds meeting with Chinese envoy to soothe ties (Mercopress)

Emerging market debt issuance hits record as borrowing costs fall (FT)