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

Africa

Africa scores $50bn in Chinese investment at Beijing forum

Leaders from more than 50 African countries visited China this week for a forum that began with pledges by Chinese President Xi Jinping to create more than one million jobs and invest $50 billion in the continent.

The financing, which China will deliver over the next three years, includes loans, aid, and equity and debt investments, FT reports. Some of the debt will be denominated in Chinese renminbi and sold in China’s domestic market. Indonesia, a guest at the forum, also aimed to sign $3.5 billion worth of deals at the three-day summit, Bloomberg reports. China’s sideline deals included:

•  Refurbishment of the Tanzania-Zambia railway (Bloomberg);

•  Infrastructure arrangements with Chad and Senegal (Reuters);

•  A nuclear energy pact with Nigeria (OilPrice);

•  And more balanced trade with South Africa (Africanews)

The conference, which takes place every three years, offered China a chance to reset its relationship with Africa, which has been characterized by souring loans and mounting defaults in countries that owe Beijing money. Ethiopia, Ghana, and Zambia all count China as their largest bilateral creditor, and recent defaults in each country raised concerns about the sustainability of Chinese financing. China loaned $4.6 billion to eight African countries last year, the highest total since before the Covid pandemic, but far less than the $30 billion that Beijing loaned to the continent eight years ago. 

Algerians vote in subdued presidential election 

Algerians voted for president yesterday in an election that many observers see as a formality for President Abdelmadjid Tebboune to secure another term.

Just two candidates are opposing Tebboune: Abdelaali Hassani Cherif, an Islamist, and Youcef Aouchiche, a socialist. The leftist opposition leader Fethi Ghares will not participate after being arrested last week. Mohamed Hennad, an Algerian sociologist, told the AP that Tebboune’s victory was a “foregone conclusion,” in large part because of Tebboune’s support from the military, which wields significant power, RFI reports.

Meanwhile, neighboring Tunisia, which is preparing for its own presidential election next month, also arrested an opposition leader this week. Police detained presidential candidate Ayachi Zammel on Monday, accusing him of falsifying voter support that qualified him for the election. He denied the allegation and was freed on Thursday, Reuters reports. 

Asia

Tension between China and Philippines continues to rise

Chinese and Philippine Coast Guard vessels smashed into each other last weekend in a part of the South China Sea that both countries claim as their own. The Philippines said China had “directly and intentionally rammed” into its boat, while China said the Philippines had “deliberately” collided with its ship, BBC reports. 

The incident in the Sabina Shoal, an atoll in the Spratly Islands about 75 nautical miles from the Philippines and 630 nautical miles from China, is the latest in a series of escalating incidents in the southern South China Sea. Chinese and Philippine vessels have been involved in incidents at least three times in the area in as many weeks.

The collisions come as the Philippines publicly steps up its efforts to build defense ties with the US and nearby countries. Last week, the Philippines and Vietnam arranged to sign a defense cooperation agreement later this year, Nikkei reports. These and other agreements, including with Japan, have “enraged China,” write Josh Kurlantzick and Abigail McGowan, experts at the Council on Foreign Relations. As a result, “there appears to be little chance of a de-escalation of these tensions anytime soon,” they write.

Azerbaijan’s ruling party solidifies majority in snap election

Azerbaijani President Ilham Aliyev’s party retained its parliamentary majority after winning snap elections held on Sunday that international observers said were far from free and fair.

Aliyev’s New Azerbaijan party won 68 seats in the 125-seat parliament, AP reports, and independents won 45. Turnout was just 37%. The election was “devoid of competition,” according to a statement by the Organization for Security and Cooperation in Europe, which observed the election.

The election comes as Azerbaijan prepares to host the COP29 climate conference in November. The country’s constitutional court ruled in June that the conference allowed Aliyev to call for snap elections, though it did not explain why. Aliyev has been Azerbaijan’s president since 2003, when he took over from his father Heydar, who had been president since 1993. 

Mongolia ignores ICC obligation as Putin visits

Mongolia this week welcomed Vladimir Putin for a state visit, the Russian leader’s first trip to a country that has signed the International Criminal Court’s Rome Statute since it issued an arrest warrant for him over the invasion of Ukraine. ICC signatories are obliged to cooperate with the court’s rulings, but Mongolia gave Putin a sumptuous welcome, the New York Times reports, as members of his entourage hashed out oil deals with their Mongolian counterparts.

Putin hasn’t let the ICC arrest warrant get in the way of his foreign travel, especially in Asia. He has visited Azerbaijan, China, North Korea, Vietnam, and Uzbekistan since March, and he has sought to restore ties with Afghanistan under Taliban rule, with Russian officials hosting a delegation from the Afghan Chamber of Commerce and Investment in Moscow this week, TOLOnews reports.

However, Russia has also been excluded from some regional gatherings. Last month, Kazakh President Kassym-Jomart Tokayev called for a “regional security architecture“ for Central Asian states, RFE/RL reports. He did not mention Russia. 

Middle East

Oil output cuts hobble Saudi economy

Saudi Arabia’s economy shrank last year on the back of weak oil demand and production cuts, the IMF said this week. The multilateral said the economy had contracted by 0.8%, although the non-oil sector grew by a “robust” 3.8%, driven mostly by state-directed investment and private consumption.

• Saudis aim to slash red tape to boost foreign funding (Bloomberg)

The Fund also voiced concern about a moderate weakening in Saudi Arabia’s current account balance due to recent heavy borrowing, investment-related imports and lower oil exports. Growth in tourism has helped moderate the drawdown in the account balance, and Saudi Arabia this week announced it is scrapping licensing fees for hotels, resorts and other tourism-related projects in an attempt to attract more investment, Reuters reports. 

The country’s leadership has been pushing hard to reduce reliance on hydrocarbons, but oil remains its main economic engine. This week, oil giant Saudi Aramco said it was still actively hunting for M&A opportunities as it continues to grow its oil business. 

Iran warns Russia against interfering in border dispute with Azerbaijan

In a sign that it wants to preserve its foreign and national security policy autonomy, Iran this week warned Russia against getting involved in a border dispute with Azerbaijan, the Guardian reports. The dispute centers on Azerbaijan’s long-held goal of building a land corridor to Turkey by claiming territory held byArmenia, a claim that Russia recently endorsed.

Iran’s warning to Russia comes amid concerns within Iran’s security establishment about the countries’ deepening ties, which include a potential “strategic cooperation agreement” that would extend the two countries’ political and economic alignment beyond the current status quo of arms sales and cooperation on sanctions evasion. Arms sales continue apace and Iran is expected to imminently ship Russia ballistic missiles—a notable escalation in the types of weaponry being exchanged.

Iran has received much-needed payment in the form of money and gold for its weapons sales as well as “cooperation” such as enhanced cyber warfare capabilities. Those capabilities have been put to use in hacking operations intended to disrupt US elections, although Iran apparently remains vulnerable to attacks itself, having had to pay millions in ransomware this month after a massive cyberattack threatened to cripple its banking sector.

Europe

Turkey makes painful progress on inflation

Turkey’s inflation has finally begun to cool as high interest rates help rein in consumer and business spending, Bloomberg reports. Annual inflation eased to 52% in August, down from 62% the previous month, but high borrowing costs have also taken a toll on the economy.

GDP growth decelerated to 2.5% in the second quarter, the weakest pace since the coronavirus pandemic. The cooling is evident across multiple sectors, with manufacturing activity contracting for the fifth consecutive month in August and consumer spending losing momentum. 

Coming off several months of world-beating performance, the country’s benchmark stock index tumbled 8..2% in August. A combination of rising bank rates for savers and eroding corporate profits have prompted both foreign and domestic investors to pull out of Turkish equities.

Ukraine faces IMF-led push to overhaul wartime economy 

Ukraine is bracing for pressure from the IMF to overhaul its economic policy amid a scheduled review of its $15.6 billion loan program, Bloomberg reports. Sources familiar with preliminary discussions indicate that IMF staff are pushing for further currency devaluation, interest-rate cuts, and enhanced tax-raising efforts to address the country’s budget deficit.

Ukraine’s currency, the hryvnia, has already depreciated by over 10% since last October when the fixed exchange rate was abandoned, and the central bank fears additional devaluation could jeopardize price stability. Raising taxes is also proving politically challenging, as evidenced by the recent parliamentary failure to pass legislation increasing the “military levy” on personal income.

• Zelenskyy suffers backlash as reshuffle triggers power-grab accusations (Politico)

The IMF’s push for reforms comes as Ukraine seeks to secure additional funding, including a potential $50 billion in loans backed by frozen Russian central bank assets. Despite receiving approximately $122 billion in aid from allies, the country still faces a $15 billion budget gap for the coming year. 

Latin America

Colombian fuel protests magnify economic malaise

Colombian truckers have launched widespread protests against a recent diesel price hike, paralyzing major cities and threatening fuel supplies, Reuters reports. The government’s decision to increase diesel prices by 1,904 Colombian pesos ($0.46) per gallon has sparked widespread discontent, with industry groups arguing that the move will raise transport costs and hurt national competitiveness. 

Finance Minister Ricardo Bonilla said the price hike was necessary to trim “unsustainable” government subsidies that are costing 1 trillion pesos monthly.

As the standoff continues, major cities are warning they face food and fuel shortages and state-run oil giant Ecopetrol says hydrocarbon production could be disrupted. The cancellation of classes in Bogota and disruptions to public transport further highlight the far-reaching economic impact of the protests.

Costa Rica struggles to keep spending in check

Costa Rican government spending is surging as the country grapples with a slowdown in revenue growthand rising spending demands, Fitch reports. The ratings firm says the Central American nation’s spending growth of 8.5% is outpacing its increase in revenue, which came in at just 1.6%.

The trend doesn’t threaten to undermine Costa Rica’s credit profile, Fitch adds, but it does “suggest tempered positive momentum in the sovereign rating observed over the past two years,” the firm said. However, the government is considering relaxing fiscal targets and postponing a planned Eurobond issue.  

Global

BRICS evolves with interest from Global South 

The development bank run by the rapidly expanding BRICS coalition offered membership to Algeria this week, one day after offering South Africa a $1 billion loan for water and sanitation projects. 

The New Development Bank’s move to admit Algeria echoes moves by the broader BRICS coalition to admit new members across the so-called Global South. On Thursday, Turkish President Recep Tayyip Erdogan’s party confirmed that Turkey has formally applied to join the bloc, France24 reports.

In Asia, Malaysia and Thailand have each made efforts to join BRICS in recent months, and in Latin America, Colombia has applied to join the group.  

What We’re Reading

Ghana cocoa regulator to raise state-guaranteed prices for farmers by 45% (Africanews)

Gridlock in Nigeria amid fuel shortages and price hikes (BBC)

Ugandan police shoot opposition leader Bobi Wine (NYT)

DRC receives first batch of mpox vaccines after EU donation (NPR)

The mpox outbreak ‘won’t derail economic growth’ in East Africa (FrontierView)

Angola’s oil dependency leaves thin margin for China debt service (The Africa Report)

South Africa signals more support for energy groups after Total exits gas project (FT)

Erdogan says Turkey wants deeper ties with Egypt on natural gas, nuclear energy (Reuters)

Libya partially resumes oil production as political standoff eases (Reuters)

African countries ‘losing 5% of GDP to climate change’ (World Meteorological Organization)

How Bangladesh’s tech industry navigated an unprecedented political crisis (Rest of World)

Iran slaps Pakistan with ‘final notice’ over unfinished gas pipeline (Nikkei)

Myanmar junta says it will hold census next month to prepare for 2025 election (The Diplomat)

US military says Yemen’s Houthis attacked two crude oil tankers in Red Sea (Reuters)

EU salvage crew abandons rescue attempt on Greek oil tanker struck by Houthis (Bloomberg)

Pezeshkian chooses Iraq for first trip as Iran’s president (Tehran Times)

Bahrain to impose 15% minimum tax on large multinationals starting 2025 (Zawya)

Oman signs concession agreement to boost oil and gas exploration (Offshore Technology)

Middle East fintech funding jumps 650% from 2020 to 2023 (Al Monitor)

Russian taxes ‘unfair to oil companies’ (Rigzone)

New funding requirement ‘will drive Polish banks into new borrowing’ (Fitch)

Serbian protests escalate over proposed lithium mine (FT)

Brazil considers taxing big techs if revenue falls short (Reuters)

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