Charles Pembroke /author/charles-pembroke/ Fact-based, well-reasoned perspectives from around the world Wed, 10 Aug 2016 19:21:44 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 Mining Outlook in Zambia Likely to Improve After Election /region/africa/mining-outlook-zambia-likely-improve-election-23320/ Wed, 10 Aug 2016 19:21:44 +0000 http://www.fairobserver.com/?p=61469 The outlook for the mining sector is likely to improve, but the uncertainty surrounding Zambia’s election brings with it the risk of violence. With just a day until Zambia’s August 11 general election, the outcome of the vote remains far from certain. Of the nine presidential candidates standing in the election, just two represent a… Continue reading Mining Outlook in Zambia Likely to Improve After Election

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The outlook for the mining sector is likely to improve, but the uncertainty surrounding Zambia’s election brings with it the risk of violence.

With just a day until Zambia’s August 11 general election, the outcome of the vote remains far from certain. Of the nine presidential candidates standing in the election, just two represent a credible chance of victory: incumbent President Edgar Lungu of the governing Patriotic Front (PF), and Hakainde Hichilema, the candidate of the United Party for National Development (UPND).

Both candidates led in the presidential by-election of January 2015—which was called after President Michal Sata died in office in October 2014—but neither has yet drawn a definitive lead. In the 2015 election, Lungu won by a minimal margin of just 27,000 votes, or 1.6%, and he has faced significant challenges in maintaining his lead.

Since the last election, Zambia has seen a major recalibration of its political landscape with prominent defections from the PF. Lungu, who is from the east of the country, has replaced much of the PF’s core leadership, leaving the party’s traditional northern Bemba-speaking constituency without high-level representation. The UPND, which is looking to change the perception that it can only win votes in the south of the country, has made a concerted effort to appeal to Bemba voters in northern provinces, with the support of several key northern PF defectors. These include Sata’s son, Mulenga Sata, and former Defense Minister Geoffrey Bwalya Mwamba, who is running as Hichilema’s vice presidential candidate.

To overcome these challenges, Lungu will have to appeal to voters from other ethnic groups, notably those represented by smaller parties and the former ruling party, the Movement for Multiparty Democracy (MMD), whose traditional support base is in northwest, central and eastern provinces. However, the MMD is split between those supporting its new president, Felix Mutati—who backs Lungu—and another faction under Nevers Mumba, who backs Hichilema.

There have also been signs of a disagreement between Lungu and former President Rupiah Banda (2008-11), a key MMD figure who played an influential role in Lungu’s 2015 election. Banda has played a minor role in the current PF campaign, and the increasing factionalism within the MMD has made it uncertain how effective the party will be in mobilizing voters in Lungu’s favor.

The fragmentation of Zambian politics has created a highly uncertain electoral outlook with a clear potential that neither candidate will be able to secure enough votes for a first-round victory. Under constitutional changes implemented in January 2016, a run-off vote is necessary if no candidate secures a 50% plus one majority. No presidential candidate has secured this required number of votes in any of the last three general elections or two presidential by-elections, and the narrow lead Lungu held over Hichilema in 2015 suggests this is also unlikely this time.

Electoral fraud could threaten the integrity of the vote and affect the outcome. There have been widespread allegations of irregularities, including alleged bias at the electoral commission and constitutional court in favor of the incumbent. On June 21, the independent newspaper The Post was shut down over alleged tax arrears, in a case that has been criticized by the opposition, human rights groups and foreign donors as politically motivated.

Although it is difficult to predict whether political interference in the democratic process will be sufficient to secure Lungu a first-round victory, existing accusations certainly increase the risk of the opposition rejecting the final outcome in the event of defeat.

More positive outlook for mining sector

Following several years of regulatory uncertainty and difficult operating conditions, the outlook for the mining sector is likely to improve once the election process is finalized, as the winning candidate reacts to economic pressures to improve the competitiveness of the mining sector by reducing taxes and improving power generation.

Neither Hichilema nor Lungu is beholden to a particular ideological position—though Lungu has previously backed populist policies to the detriment of the mining sector—and both are under pressure to increase investment in the mining sector, which contributes around 55% of state revenues. Falling commodity prices have led to more than 10,000 job losses in the Copperbelt mining hub, which both candidates will be under pressure to resolve.

Reflecting these economic realities, Lungu has already been forced to roll back on some of the more populist policies introduced at the beginning of his presidency. In May 2016, the government introduced a scaled mineral royalty to replace a far more punitive fiscal regime introduced by Lungu in January 2015 that had sparked outcry from miners. Under the earlier fiscal regime, royalties were set at 20% for open-pit mining and 8% for underground mining, which were later shifted to 9% and 6% respectively in June 2015. With the new scaled royalty framework, royalties will be set at 4% when the copper price is below $4,500 per ton, 5% between $4,500 and $6,000 per ton, and 6% when the price is above $6,000 per ton.

In light of Zambia’s continuing economic difficulties, Lungu will likely maintain this more conciliatory position toward the mining sector once the vote has passed. Although Zambia’s Chamber of Mines welcomed the introduction of the scaled royalties system, it continues to lobby for a more competitive tax regime to reflect the high costs of doing business that are associated with Zambia’s weak infrastructure and power generation capacity.

Hichilema, meanwhile, has traditionally taken a more business-friendly stance than his political rival, criticizing the government’s inconsistent fiscal policy and calling for a more competitive tax regime. In either outcome, the need to attract fresh mining investment will likely result in greater incentives, including further tax cuts to bring Zambia’s royalty rates closer to comparable economies (neighboring Democratic Republic of Congo’s copper tax is 2%, for example), and a focus on diversifying electricity sources to improve power generation capacity.

High risk of violence, particularly if result is disputed

Past Zambian elections have shown a high propensity for violence between rival cadres of different parties, and the coming election is likely to see clashes both during and after the vote. There have already been several incidents of violence reported, mostly between rival PF and UPND supporters in the capital Lusaka, the mining hub of Copperbelt and the Bemba-speaking northern provinces, particularly Muchinga. In June, the inspector general of police warned of a “proliferation” of weapons being carried by the public, while police have also used live fire on political activists during periods of unrest, illustrating the high risk to bystanders.

The reports of electoral fraud and the closely fought nature of the election will increase the likelihood of further clashes, particularly in the event the result is disputed by the losing side. Although these will mostly continue to be concentrated among rival supporters, a disputed outcome raises the possibility of a much more severe stand-off.

Lungu has already stated he is prepared to forcibly put down any opposition supporters who contest the result and, in a possible signal that he is preparing for worsening electoral unrest, he appointed his ally air force commander, Eric Mwaba Chimese, as joint military head of staff in May. That role is normally a position reserved for the army command. The allocation of the post to a Lungu loyalist has been seen as an effort to tighten his grip on the security services ahead of possible unrest after the vote.

Hotspots for unrest will continue to focus on Copperbelt and northern provinces, Lusaka and the UNPD’s Southern Province. Although most of the unrest will focus on attacking rival supporters, polling stations and government offices and vehicles, rather than directly at the mining sector, there is a strong risk of roadblocks and other disruption that could impact staff safety and movement to and from facilities.

*[This article is based on a report published by .]

The views expressed in this article are the author’s own and do not necessarily reflect 51Թ’s editorial policy.

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Downed Russian Jet Ratchets Tensions Between Ankara and Moscow /region/europe/downed-russian-jet-ratchets-tensions-between-ankara-and-moscow-31012/ Wed, 25 Nov 2015 16:15:10 +0000 http://www.fairobserver.com/?p=55327 Russia has a number of options open to escalate the situation without taking direct military action. Turkey’s downing of a Russian Sukhoi Su-24 on November 24, after it had allegedly violated Turkish airspace while carrying out offensive operations over Syria, has resulted in a sharp escalation of tensions between Moscow and Ankara. The plane crashed… Continue reading Downed Russian Jet Ratchets Tensions Between Ankara and Moscow

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Russia has a number of options open to escalate the situation without taking direct military action.

Turkey’s downing of a Russian Sukhoi Su-24 on November 24, after it had allegedly violated Turkish airspace while carrying out offensive operations over Syria, has resulted in a sharp escalation of tensions between Moscow and Ankara. The plane crashed in an area known as Jabal al-Turkman in the Syrian province of Latakia, which has been the scene of heavy fighting in recent months between Syrian forces backed by Russian warplanes and local , for whom Ankara has previously expressed solidarity.

Low-level tensions have been simmering since the start of Russia’s intervention in Syria in September, with Turkey having repeatedly complained of . The tensions have threatened to spill over into existing areas of cooperation between the two countries, including the major Turkish Stream gas pipeline that is intended to deliver gas to Europe while bypassing Ukraine. This sudden and dramatic escalation of tensions has posed concerns for the future of such cooperation.

The crash has prompted fierce rhetoric and contradictory claims by both sides, threatening to escalate the dispute to an ever more dangerous level. In its response to the incident, Ankara claimed it began issuing warnings to the Russian jet when it came within 15 kilometers of the Turkish border and says the firing of the missiles was an “automatic response” once the plane had violated its airspace. Turkish officials released radar images that they say show the flight path of the Russian jet, claiming it passed over its southern province of Hatay, where it was shot down. US officials have since said they believe the Russian jet violated Turkish airspace, but that it was only a matter of “seconds” before it was shot down.

Russian President issued a strong , angrily denying allegations of an incursion and warning of “serious consequences” for the relations of the two countries. He went on to describe the incident as a “stab in the back” and to accuse Turkey of providing financial and military assistance to the Islamic State (IS). Russian Foreign Minister Sergei Lavrov has cancelled a planned visit to Turkey and has advised his citizens not to travel to the country, citing the terrorist threat. Russia’s state tourism agency, Rostourism, has also recommended suspending sales of tour packages to Turkey.

The impact on relations

Since Russia began formal military operations in Syria in September, commentators and analysts have issued repeated warnings of the risk of this kind of confrontation, in the absence of military-to-military coordination between Russia, US-led coalition forces and the ground defenses of Syria and neighboring countries. Turkey had already that entered Turkish airspace in October, while in 2012 the Syrian armed forces downed a Turkish F-4 reconnaissance jet after it violated Syrian airspace. With little likelihood of any improved level of coordination or delineation of areas of operation, there will remain a risk of both accidental and intentional aerial confrontations between the various parties engaged in Syria as the conflict continues.

Unlike previous incidents, however, the downing of a Russian plane by Turkish forces has potentially far wider geopolitical consequences. The incident marks the first time since the 1950s that Russia has publicly acknowledged that one of its planes has been shot down by a NATO member state, and the urgent reflect the seriousness with which Ankara is treating the situation. Putin’s reputation as an erratic and sometimes aggressive actor on the world stage has evidently drawn serious concerns within Turkey over what sort of hostile reaction they might expect, and there is a degree of unpredictability over how the situation will play over the coming weeks and months.

While making predictions over how the situation will develop is difficult at this stage, it should be noted that it is hardly in Moscow’s interests to escalate the crisis significantly. The Kremlin is already facing strained relations with the West over that have led to and efforts to isolate Russia internationally. As a core NATO member state, Turkey poses a far more formidable adversary to Russia than was the case with Ukraine in early 2014.

Moscow is also in no position to sever relations with another country that separates it from its main energy market in Europe. The planned Turkish Stream gas pipeline that will allow Russia to circumvent Ukraine to deliver gas to Europe has already faced difficulties over issues, including the cost charged by Moscow for gas deliveries, which in resolving. A serious deterioration in relations could jeopardize this and other strategic energy projects, including a planned Russian-built nuclear power plant in Turkey, with negative consequences for both countries.

Notwithstanding these considerations, Moscow now has a number of options open to escalate the situation without taking direct military action. This could include retaliation against Turkish businesses in Russia in the form of sanctions or more informal types of disruption, such as delays in processing visas or business permits for Turkish companies. More extreme measures could include increasing the price of Russian gas to Turkey, or halting flights by Turkish airlines to Russian airports, as occurred with Egypt following the Sinai plane crash in October. Moscow may also be tempted to retaliate indirectly by increasing support for Kurdish rebel groups in Syria, who are allied to likeminded groups in Turkey, namely the Kurdistan Workers’ Party (PKK).

Russian business interests in Turkey may also face retaliatory discrimination as bilateral tensions rise over the incident. Protests have already taken place outside the Russian Consulate in Istanbul in the hours after the downing of the Russian plane, and worsening public sentiment toward Turkey’s Russian community could influence public tendering of projects to Russian businesses.

Undoubtedly, the incident will have wider consequences for cooperation between Russia and NATO in resolving the Syrian conflict and tackling IS. In the , there were hopes in Europe for renewed cooperation with Russia over these issues. For now, however, it is likely that any goodwill that may have emerged from the Paris attacks has been squandered. Any hope of reinvigorating multilateral cooperation on Syria will depend heavily on the reactions of leaders in the US and Europe and their willingness to take a more conciliatory response to help de-escalate the situation.

By moderating their criticisms of Russia, American and European leaders would give Putin the flexibility to let the crisis gradually dissipate over time without losing face in front of his domestic audience.

*[This article is based on a report published by .]

The views expressed in this article are the author’s own and do not necessarily reflect 51Թ’s editorial policy.

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