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Commentary | Five Moments That Defined 2018

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From the rapprochement between North and South Korea at the Winter Olympics in January to December’s frantic news agenda, 2018 has had no shortage of surprises. Below are my key picks for the defining moments of the year.

Elon Musk, Mars, and a roller coaster year for billionaires

On Feb. 6, Elon Musk’s Falcon Heavy rocket blasted into space from Florida and sent a cherry-red Tesla roadster hurtling toward Mars. It was a powerful statement about the influence and ambition of a new generation of tech billionaires.

Overall, however, 2018 would be a rough year for the group, and Musk was no exception. By July, he was embroiled in a high-profile spat with a British cave rescue diver over a miniature submarine he had hoped would help rescue 12 boys trapped underground in Thailand, just one of a series of increasingly negative headlines.

Facebook founder Mark Zuckerberg – once touted as a potential U.S. presidential candidate – had scarcely a better year, his firm plagued by its own stream of scandals and political headwinds.

Google, whose chief executive Sundar Pichai became the latest tech chief summoned before Congress, faces a mutiny from some workers on multiple topics, including his dealings with the U.S. and Chinese governments. Amazon founder Jeff Bezos faces mounting criticism over working conditions and low tax payments.

Yet none of this looks set to stop tech firms from continuing to radically disrupt the world – indeed, many of their founders appear to believe their mission is to do so. Expect these battles to grow in 2019, particularly if new technology such as artificial intelligence and driverless cars accelerate change.

Trump fires advisers, tightens his grip

One billionaire learning his way around the political system in 2018 was U.S. President Donald Trump. After reports of growing frustration with some of his most senior officials, March saw him fire Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster. Both had been viewed as moderating influences on Trump, with successors Mike Pompeo and John Bolton perceived as less prone to questioning him.

December’s departure of White House Chief of Staff John Kelly leaves Defense Secretary James Mattis the key restraining influence.

Overall, Trump seems increasingly keen to trust his own judgment rather than that of establishment-based gatekeepers or Republican insiders.

POTUS woos Kim and Putin. Elsewhere, diplomacy unravels.

In Singapore in June and in Helsinki in July, Trump upset many in his own administration with the warmth of his meetings with North Korean leader Kim Jong Un and Russian President Vladimir Putin. The friendliness of the summits stood in stark contrast to the G7 gathering of Western and Allied leaders in Canada, also in June. There, Trump appeared more isolated than ever before on topics including climate change, protectionism and relations with Russia. The G7 leaders were unable to agree on a communiqué, with the six non-U.S. members making their own statement independent of Washington.

Events at the G7 pointed to a wider malaise in international diplomacy. World leaders at November’s Asia-Pacific Economic Cooperation summit in Papua New Guinea also failed to agree on a communiqué, this time due to divisions between China and the United States and its allies over trade.

Military posturing is also on the rise. Russia, China and NATO each held their largest wargames in recent history this summer, while confrontations between jets and warships in the South China Sea and Europe have also increased markedly.

Khashoggi killed as authoritarian states take the gloves off

The world’s authoritarian states appeared at least equally as focused on stifling dissent and opposition. Nowhere was that clearer than in the case of Saudi journalist Jamal Khashoggi, who was murdered and reportedly dismembered in his own country’s consulate building in Istanbul. Like the suspected Russian nerve agent assassination attempt on a former double agent in the UK town of Salisbury the previous year, the killing sparked international outrage and some diplomatic isolation of Riyadh – but little in the way of convincing apology from those believed responsible.

A string of autocratic governments appear increasingly dismissive of human rights, openly taking draconian action against critics and enemies alike. Russia is continuing its ruthless military campaign against remaining rebel enclaves in Syria, and a Saudi-led coalition has persisted in its war in Yemen – at catastrophic cost to civilians, where millions now face starvation.

China is cracking down on its Muslim Uighur minority, with a U.N. report citing estimates Beijing has interned up to one million in “reeducation camps.” Such steps suggest authoritarian rulers like China’s Xi Jinping and Russia’s Putin may not feel as secure as they appear – or that they believe such brutal tactics are simply necessary to retain their grip.U.S. President Donald Trump and North Korea’s leader Kim Jong Un leave after signing documents that acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst

G20 meets as Paris burns

November’s G20 gathering in Argentina was perhaps the year’s most successful multilateral gathering, with world leaders managing to agree on a largely bland communiqué on reform of global trade. Trump’s meeting with China’s Xi brought some temporary relief from the two countries’ trade war, even as Ukraine tensions and Mueller’s Russia probe made a Trump-Putin meeting impossible. There was still no shortage of disagreements on show, however – and as the leaders met, riots in Paris were grabbing global headlines.

Almost every Western leader in Argentina returned home to an existential political crisis. French President Emmanuel Macron has since bowed to some of the demands of the “yellow vest” protesters, particularly over fuel tax, but that has not been enough to stem the unrest. German Chancellor Angela Merkel has signaled she will shortly leave politics, although she has seen some success in appointing a protegé to lead her party. Trump went back to Washington to face the fallout from former lawyer Michael Cohen’s admission of lying to Congress about a Trump Tower project in Moscow; British Prime Minister Theresa May has so far failed to find a Brexit deal she can get through Parliament.

Many of these impasses stem from a much wider crisis in Western nations, with rising wealth gaps and often mounting discontent and hardship among the poorest. Solving those issues will be tough – and more disruption feels inevitable through 2019 and beyond. – Reuters

  • Peter Apps

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Coca Cola South Africa Improves SME Role In Value Chain

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Coca Cola Beverages South Africa (CCBSA) launches an R20 million fund for small supplier development and procurement, annually, for the next five years.

This was announced by the Financial Director, Walter Leonhardt at Gallagher Convention Centre at the third annual Supplier Development Conference.

CCBS is the South African-based subsidiary of Coca-Cola Beverages Africa (CCBA).

Leonhardt said the purpose of this fund is to assist young upcoming black entrepreneurs in the Coca-Cola value chain.

“We are, today, launching the CCBSA supplier fund of access to funding. To address the issue of access to funding which most SMEs experience,” said Leonhardt.

This will enable the entrepreneurs’ procurement process to be easier.

“It is to help them buy equipment, fund working capital and to help them overcome something we have identified as a challenge for upcoming businesses, which is access to capital on quit lenient terms,” said Leonhardt.

Budding entrepreneurs can visit their website to find out how they can access the funds.

There were over 120 suppliers of CCBSA in attendance.

Managing director of CCBSA Velaphi Ratshefola said they spent R2.35 billion last year, supporting 567 black-owned suppliers, of whom, 265 were black female owned suppliers.  

“So for me, it is clear that this is working. We have helped create a very inclusive economy. We need to play our part and we need to ensure that only through an inclusive growing economy we can create a stable environment where businesses can flourish.

“If we do not have a stable environment, a stable economy, we will have a lot of disturbances which are never good for business,” said Ratshefola.                      

“So for all of us, we should not do it just for social reasons, we must do it for the success of businesses and imperative,” said Ratshefola. 

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Zimbabwe Central Bank Borrows $985 Million From African Banks

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Zimbabwe’s Reserve Bank has borrowed $985 million from African banks to purchase fuel and other critical imports with current reserves covering imports for just four weeks, underscoring the severity of dollar shortages, governor John Mangudya said.

The southern African nation last month ditched a discredited 1:1 dollar peg for its surrogate bond notes and electronic dollars, merging them into a lower-value transitional currency called the RTGS dollar.

Mangudya said the central bank borrowed $641 million from the African Export and Import Bank, $152 million from Eastern and Southern African Trade and Development Bank, and $25 million from Mozambique’s central bank, among others.

The loans, which would be repaid from future gold earnings, have a tenure of between three and five years and attract an interest of up to 6 percent above the Libor rate, Mangudya said.

Gold is Zimbabwe’s single biggest mineral export earner, accounting for a third of its $4.2 billion earnings last year after a record output, central bank data shows.

“These loans are well structured facilities contracted last year. They will be paid from future (gold) export receivables,” Mangudya told a parliamentary committee.

The central bank takes 45 percent of dollar sales from gold producers and half from other miners to fund imports like fuel and power and repay foreign loans.

But the miners only have 30 days to keep their dollar balances in local foreign currency accounts, after which they must sell them. The companies have asked the central bank to extend the period they may keep their dollars to 90 days, according to mining executives.

OVERDRAFT LIMIT

Unable to get funding from foreign lenders like the International Monetary Fund and World Bank due to arrears of more than $2.4 billion, Zimbabwe has looked to financiers from the continent and local banks to shore up its budget.

The central bank chief said Zimbabwe had just $500 million in reserves, enough to purchase four weeks’ worth of imports.

Mangudya said government borrowing from the central bank reached $2.99 billion in December, about three times its permissible overdraft limit.

President Emmerson Mnangagwa’s government has promised to curb borrowing in 2019 under reforms to revive the southern African economy, after the budget deficit soared last year following a spike in spending ahead of elections.

Finance Minister Mthuli Ncube said last week that the local RTGS dollar, Zimbabwe’s new de facto currency, will be backed up with fiscal discipline and the government would allow it to fluctuate but would manage excessive volatility.

On the interbank forex market on Monday, one U.S. dollar fetched 2.5 RTGS dollars, the same rate as on Feb. 22 when the central bank sold some dollars to banks. That compares to a rate of 3.5 RTGS dollars per U.S. dollar on the black market. -Reuters

-MacDonald Dzirutwe

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Volvo To Limit Car Speeds In Bid For Zero Deaths

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Volvo Cars said on Monday it will introduce a 180 km per hour (112 mph) speed limiter on all new vehicles as the Swedish automaker seeks to burnish its safety credentials and meet a pledge to eliminate passenger fatalities by 2020.

While Volvo, whose XC90 flagship SUV currently has a top speed of 212 km/h, has made progress on its so-called “Vision 2020” target of zero deaths or serious injuries, Chief Executive Hakan Samuelsson said it is unlikely to meet the goal without additional measures to address driver behavior.

“We’ve realized that to close the gap we have to focus more on the human factors,” Samuelsson said. Volvo did not elaborate on the data but said its passenger fatalities were already well below the industry average before the goal was announced in 2007.

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In addition to the speed cap, Volvo plans to deploy technology using cameras that monitor the driver’s state and attentiveness to prevent people driving while distracted or intoxicated, two other big factors in accidents, Samuelsson said.

The company is also looking at lower geo-fenced speed limits to slow cars around sensitive pedestrian areas such as schools, while seeking to “start a conversation” among automakers and regulators about how technology can be used to improve safety.

Volvo, which is owned by China’s Geely, announced the new speed limitation policy on the eve of the Geneva auto show, where its new Polestar performance electric-car brand is showcasing its second model, the Polestar 2.

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While Volvo buyers often choose the brand for its safety, Samuelsson conceded that the speed cap could be a turn-off for a few in markets such as Germany, where drivers routinely travel at 200 km/h or more on unrestricted autobahns.

“We cannot please everybody, but we think we will attract new customers,” the CEO said, recalling that the roll-out of three-point seat belts pioneered by Volvo in 1959 had initially been criticized by some as intrusive.

“I think Volvo customers in Germany will appreciate that we’re doing something about safety,” he said. -Reuters

– Laurence Frost; additional reporting by Esha Vaish

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