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Blackwater USA | Daily Brief

Hong Kong

  • Hong Kong police allowed a demonstration by the pro-democracy Civil Human Rights Front—for the first time since August—and an estimated 800,000 protesters turned out for it (police say they only counted 183,000 attendees). Either way, it’s the largest rally in Hong Kong in months.


  • Afghanistan’s election commission met with stakeholders about results from the September election (which have not been announced yet), but they failed to break through the impasse holding them up from releasing results. Several candidates had advocated for them to release partial results—and to recount the disputed ones—but apparently they couldn’t even agree on that.
  • A Taliban attack injured the district governor of Chardara (Kunduz) and two bodyguards.


  • Iran released a Chinese-born American graduate student who’d been held since 2016, in exchange for the U.S. releasing an Iranian scientist it’s held since fall 2018. The swap is a sign that the U.S. and Iran are talking about serious issues behind the scenes, even if they’re publicly belligerent.


  • The Islamist ADF attempted another attack on a UN peacekeeping facility in Biakoto, Ituri, but UN peacekeepers repelled it this time.
  • Tanzania signed an agreement to link its Standard Gauge Railway (SGR) with Burundi and DRC, which is a blow to Kenya’s rival SGR. The Tanzanian one will link DRC to Dar Es Salaam port, offering an alternative route for shipping bulk minerals out of DRC.


  • Israeli aircraft bombed Hamas targets in Gaza, presumably putting an end to the meticulously-negotiated ceasefire that Egypt brokered.


  • The WSJ had a good article lamenting Pres. Maduro’s firm grip on Venezuela. It’s pasted below.


  • The Economist printed an article on the challenges that SMB—which previously focused on bauxite—will face with its $15 billion investment in the remote Simandou iron project in Guinea. Article pasted below.

Venezuela’s Nicolás Maduro, Once Thought Ripe for Ouster, Looks Firmly in Place (WSJ)

Caracas at dusk. President Nicolás Maduro’s government has eased import restrictions before the holidays and appears well-

In January, the Trump administration predicted Venezuelan President Nicolás Maduro’s imminent downfall as he wrestled with an energized opposition, debilitating U.S. oil sanctions and international isolation after dozens of nations proclaimed his leadership illegitimate.

Today, Mr. Maduro appears in firm control. The opposition is grappling with a corruption scandal and its efforts to rekindle street protests have fallen flat. Venezuela’s crisis-racked economy is showing subtle signs of improvement. And governments across Latin America are facing their own political turmoil, distracting from once-burgeoning international efforts to remove the Venezuelan strongman from power.

“Maduro is probably feeling better about himself right now than he has in the last several years,” said Fernando Cutz, a former official of the U.S. National Security Council who worked on policy toward Venezuela. “I am less optimistic right now than I have been in the last three years. I don’t see any reason to forecast that 2020 will bring positive change for the people of Venezuela.”

The rosier outlook for Mr. Maduro underscores the difficulty for the U.S. and its allies in ousting a leader who has control of the armed forces and police and readily uses those forces to repress the opposition. It also highlights the excessive optimism of the Trump administration and what critics of the American policy said were unrealistic expectations that pressure tactics would easily force Mr. Maduro and his lieutenants from power.

It wasn’t supposed to be like this. On Jan. 23, Juan Guaidó, the head of the opposition-controlled National Assembly, declared himself interim president. Within days, the U.S. and dozens of other countries recognized him as Venezuela’s rightful president over Mr. Maduro, a leftist autocrat accused of fraudulently winning re-election in 2018.

“Nicolás Maduro is a dictator with no legitimate claim to power, and Nicolás Maduro must go,” Vice President Mike Pence said in April.

Instead, as the months passed, Mr. Maduro hunkered down, and Mr. Guaidó lost momentum as opposition efforts to flip the military and unseat the Venezuelan leader failed. By September, one of Mr. Maduro’s staunchest adversaries in the U.S. was sidelined with the removal of White House national security adviser John Bolton, who told Latin American leaders in August that Mr. Maduro was “at the end of his rope.”

In October, the region was roiled by violent protests in Ecuador, Chile and Bolivia, allowing Mr. Maduro to point to that turmoil to distract from his misrule in Venezuela and the chronic food and medicine shortages it has caused.

Venezuela’s economy, which the International Monetary Fund projected would contract by 35% this year, is performing somewhat less dismally than it has been. Crude oil exports rose to 935,000 barrels per day last month, from 637,500 barrels a day in September, according to website, as tankers docked in Venezuela despite U.S. sanctions aimed at crippling its lifeblood industry.

The government has stopped enforcing price and currency controls and eased import restrictions. The economy is getting a boost from 4 million migrants who have fled since 2015 and are now sending back billions of dollars annually for relatives left behind. The government has quietly permitted dollarization to take hold, with many shoppers fortunate enough to have greenbacks spending them freely.

“There’s been an upturn,” said Osman Bolívar, a telecommunications businessman in Valencia who saw a 35% increase in sales at his stores the last two months. “One hundred percent of the products that we sell are sold in dollars.”

Mr. Bolívar said the economy remains dire and he doesn’t expect major improvements unless there is a political change—a prospect he sees dimming.

“We’ve adapted in order to survive,” he said. “What Guaidó has proposed is just a dream.”

Elliott Abrams, the top U.S. envoy to Venezuela, said it was “flatly wrong” that the situation was improving for Mr. Maduro or that the opposition was losing momentum. Mr. Abrams pointed to this year’s overall decline in oil production, the continuing humanitarian crisis and recent antigovernment protests. He noted that Western Hemisphere countries recently agreed on sanctions against Venezuelan officials to increase pressure on Mr. Maduro.

“If the situation were stabilizing, Russia and China would be lending more money to the regime, knowing it could pay them back,” Mr. Abrams told The Wall Street Journal. “Instead they are working hard to get money out now and are committing zero new money, because they know the regime’s situation is so precarious.”

Within the opposition, however, a corruption scandal is now causing infighting and undermining its claims to being an honest alternative to Mr. Maduro’s regime. Earlier this month, Venezuelan news website reported that opposition lawmakers, in exchange for alleged kickbacks, lobbied in favor of a businessman under investigation in Colombia for alleged links to the Venezuelan government’s corruption-plagued food program.

The nine lawmakers, members of a congressional oversight committee, reportedly wrote letters supporting the businessman to the office of Colombia’s attorney general, which is conducting the probe. The website said the man has ties to Alex Saab Morán, a Colombian businessman the U.S. indicted in July over accusations he ran global money-laundering operations that diverted hundreds of millions of dollars of state funds into overseas accounts for the Venezuelan regime.

Mr. Saab’s Colombia-based lawyer didn’t respond to requests for comment. Mr. Saab has previously denied allegations of corruption.

“All of this really solidifies Maduro,” said David Smilde, a scholar on Venezuela at Tulane University. “We are seeing a crumbling of this opposition unity that started last January.”

Lawmakers from Mr. Maduro’s Socialist Party and the president’s powerful allies mocked the opposition over the alleged influence-peddling.

“No one is clean in this corruption fight in the opposition,” Diosdado Cabello, a top Venezuelan official, wrote on Twitter. “Accusations will come and go between them, they’re a society of political mercenaries. This is getting good and we will be victorious.”

Mr. Guaidó suspended the accused lawmakers from their congressional responsibilities while opening an investigation into the alleged wrongdoing.

“As a society, we have to say ‘enough,’” he said, speaking of corruption. “As civil servants who have sworn to protect the Venezuelan people, we can’t allow it.”

Luis Vicente León, a leading Venezuelan pollster and political analyst, said the scandal was sure to undermine trust in the now dispirited opposition and further undercut Mr. Guaidó’s approval rating, which had already fallen about 20 points since the start of the year to 40% before the scandal emerged in October.

“There is no way that this won’t have a negative political impact,” he said. “The question is how deep will the negative impact be. You can’t separate the image of the opposition from its main leader.”

Other News

  • An early morning fire at a four-story bag factory in New Delhi killed at least 43 sleeping workers, but another 60 were rescued.

SMB Winning pays $15bn for rights to Guinea’s iron mountain (Economist)

The Chinese-led consortium faces challenges to exploit one of the world’s biggest iron-ore deposits

When prospectors discovered a gargantuan deposit of iron ore in the misty Simandou mountains 17 years ago, many Guineans hoped it would transform their impoverished country. The remote location makes its estimated 2.4bn tonnes of iron ore—valued at perhaps $230bn—hard to mine. Gyrating commodity prices scared off investment. So did lurid corruption scandals involving billionaires, government officials and mining companies.

A new chapter has opened in the saga. An embattled Israeli diamond tycoon, Beny Steinmetz, surrendered his claims to Simandou in February, after ten years of legal battles with Guinea’s government and Rio Tinto, an Anglo-Australian mining giant. Simandou North was put up for tender. Last month the winner was announced: smb, a joint-venture owned by a consortium which includes Winning Shipping, a Singaporean maritime firm, ums, a Guinean-French logistics company, and Shandong Weiqiao, a big Chinese aluminium producer. The entity, in which Guinea’s government holds a 10% stake, will pay $15bn to develop the site, build a new deepwater port and a 650km railway to link the two. Guinea’s parliament is expected to wave the deal through in the coming weeks.

The successful bid is a coup for smb, which is barely known outside the west African nation. It is also a departure from smb’s previous business—bauxite. The firm was founded in 2014 to meet China’s voracious demand for the ore, from which aluminium is smelted. Guinea has a quarter of the world’s proven reserves of the stuff. In 2018 smb exported 36m tonnes of it, worth around $2.1bn, mostly to China, which imports about half its bauxite from smb. Winning’s vessels ferry about 200 shiploads a year to Chinese ports.

The private joint-venture keeps its finances close to its chest but Bob Adam, an expert on mining in Guinea, reckons that after taxes, royalties and operating costs smb is making about $800m profit a year. “They are now the most significant economic enterprise in Guinea,” he says—and the only one among the world’s biggest bauxite producers with a direct link to China.

A shift into iron ore presents challenges. Building a port and a railway through the country’s malaria-infested forest will take years and could cost much more than the estimated $10bn. smb will have to co-ordinate with Rio Tinto and Chalco, a Hong Kong-listed company controlled by Chinalco, a Chinese state-run firm, which jointly control Simandou’s southern blocks. The Boké region (the b in the firm’s name) has been plagued by riots. Many local residents are angered by lack of access to clean water or health care. But China is keen on Simandou’s high-grade iron ore, which emits less pollution when processed, says Eric Humphery-Smith from Verisk Maplecroft, a risk consultancy. It also wants to lock in supply. And it can afford to wait.

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