MinBane

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Archive for the tag “National Debt”

The sorry state of the nation of WaBenzi!

You are now entering into an alternative universe, where we have a nation called WaBenzi. Where the elites was eating of the state reserves, where the elite was there because of their connections with the political elite. A political elite made by patronage and nepotism. This political elite was made out a liberation battle done decades ago, either from a foreign force or from some dictator, whose legacy was murder of ethnic groups or even expelling others. The leader on top would be seen as a hero back in the day, but with lingering time, the party (the Movement) and the President would tarnish his own reputation for lingering on.

While that is happening, the written word is losing meaning in WaBenzi. Because the political are afraid of challenging the President and his party. They might have some newspapers, but their circulation isn’t on the basis for anyone outside many urban townships of the nation. Neither is the social media sites. The intelligence that has been leaked, has made the elite to shut-down, arrest and revoke the licenses of these media houses. Therefore, the media is careful and awaiting approval from the elite before publishing. They are careful with how they address the President and his movement. Because they don’t want to question his rule. At least not too much, because they don’t want to suffer. They got families to feed. Even if there is an inflation, even if the economy is in shambles. Even if the rising debt and lack of foreign exchange is hurting the economy.

The patronage is destroying the state, the lack of institutions that is meaningful is shown from anything from SIM-CARDs, or even as foolish as monitoring porn. The boards are busy bodies, while the state is eating the funds for the top-class. The state owned enterprises are giving away tenders to developers without any oversight of the contractors or their delivery. If this get public scrutiny, the President will offer them a new chance after a short suspension. Because someone he knows are eating of this plate.

In WaBenzi, the elite can get away with murders, they can get away with thefts and even land grabbing. As long as the State House is informed, it doesn’t matter if the house is a colonial masterpiece or a grand-farm. Everything can be taken, even evict whole villages for foreign investors, for factories which is promised on the land. The state can take away land for roads and for rail projects, even if the building is only on planning stage and not even the tenders of building it is open to the public. Therefore, if a garden estate for one of the elites is built there instead, it doesn’t matter. The elite of the Movement can do whatever they want.

The people of WaBenzi is so used, they are used that the President can what he wants and say whatever he wants. He can contradict himself, he does that weekly and yearly. If you followed the President. You know he talks against corruption, but let his ministers who is caught in international fraud walk around like nothing happen. The WaBenzi is so used to lied to, that their ignorance and lack of care is natural. They are tired and praying for the ending of the President. Because the President doesn’t plan to leave.

The WaBenzi are used to that the government talk about fair share of resources and development projects, even if the elite in West is getting more, than the Central, Eastern or Northern Regions. The Western has the best schools, the most Cabinet Members and the best infrastructure. The networks of hospitals and other needed government structures are there, but not in the others in that extent. The schools are decapitated, the police stations are unworthy shacks and the government offices for higher officers are looking like mansions for high-end business-men. The mayors and councilors are well-fed, the police-officers are beating on the public to get fed, the school-teachers are having side-jobs or even farming on the side. The civil servants are asking for kick-backs and fill their plate to do their civic duty, because the salary hasn’t risen in decades. If paid on time, it still would barely be enough for the rent of their home.

The hospital are lacking basics, politician of opposition parties are trying now and then to help out. They use their salaries to buy sheets, beds and even medicine. As the national medicine importer and delivery system is understaffed, lack preparation and even the tools to have enough medicine for all institutions. The lack of funding and governance is hurting the hospitals. As they cannot afford to pay their bills, as black-outs and lack of oxygen are common place.

The Electric company is run by private contractors and also private investments from abroad. The development of the energy companies and the plants are all based on either multi-national funding or possible foreign investments. These are done in random, while the different part of the sector is underfunded and also because of the issues from within, is overpriced, hard to get good rates on the electricity and also often blackouts. This hurts the industries, the public, who has to have generators and cannot trust the government run company to deliver enough and stable enough electricity.

The WaBenzi is hurt by the Western, little Elite whose eating of everyone’s plate. They are grabbing it all, while all part of society is hurting. They are not even caring about the Parliament, where the laws are rubber-stamped and secured in favor of the will of the President. The legislation is to favor his agenda and not the good-will of the people. The Elite is more busy securing tenders and their own future, than securing the better institution and society for the public.

The WaBenzi has strict laws on political gatherings, the laws are to secure that no-one will ever have the power or possibly can topple the President. No one should be able to create a protest or demonstrations that could take him down. He has the army and the police on his side. They are keeping people at bay, even invade the Parliament to get his will served. The Courts are listening to him and the orders are happening to his service. Opposition leaders can easily find themselves behind bars, the ones who voices against the Movement will easily get into trouble. That is the state of WaBenzi. Where the thieves and murders walk free and the opposition is the real criminals. Therefore, the trust in the Police and Security Organizations are not there. Because they are misusing their powers to arrest innocent people, activists and youths who are standing up against the President. He cannot manage that.

The government is usually fixing issues that doesn’t matter that much and making sure to make a stamp. Has some sort of campaigns, and making taxes on ordinary stuff, but not making sure the taxation is used properly. That is because the existence of the regime is because they feed the elite. The WaBenzi elite needs the President and the President needs the elite. The chronic patronage and nepotism combined with grand corruption is like daily. The Executives, the funds misused and the mismatch behind the use on programs and what is left to the public is staggering. The President claps his hands and gladly take his percentage of it too.

This is just a story about WaBenzi, how a country became a hostage of an elite that lives on the goodwill of the President. They are there and don’t want change, because they eat. Even if the people starve, even if they cheat on levels of poverty, even if the elite cheats on the amount of people living there and how many projects they have for development. The aid is still coming, the United Nations will still show up and pay for the supper of the poorest of the poor.

While this continues, the liberator who promised to never rig elections. The President has appointed and made sure the Commission who controls the elections are in his favor. The Election Laws are always amended and changed just before. So that the so-called opposition has another disadvantage. Not only that the state is busy giving away gifts to the public during rallies, even busing them to the stages if they have too. Paying off the popular musicians to perform and also pay-off journalists to write favorable coverage. The President is also busy paying the clan-leaders, the religious leadership and even some appointed leadership in the districts. They are getting cars and houses, as a token of their good work and making sure the President is elected again.

The President is also busy using the army and police to harass the opposition in the run-up to the election. Even make them illegal to make a point. The ministers and the Security Organization will defend it as constitutional and say the opposition are making war, not only campaigning. The President will use vile language and say people are fools if they trust anyone else. The Police will bar people, will be more into politics during campaigns, than actually doing police work. The Police will defend their monitoring and the micro-managing of the people. This is all to install fear and secure the President, that people will not really challenge the Presidency.

So after months of campaigning, the elections usually ends with days of tensions. While the Commissions are cooking the numbers, the ballots and the paper-trail, the police is busy chasing the opposition and the civil society. Offices are raided, the media are under attack, the internet is blocked and the observers are watching idly by, while silently saying the process has to move-on and electoral laws can be changed later. It is still progress for society. That WaBenzi had an election, even if it was rigged and the President took total control. He left nothing to coincidence. The public of WaBenzi was props to buy legitimacy for the Presidency, the Commission was another tool and the international observers was there. Just to secure the display of elections was shown. That people could que and wait in line before being registered to vote. Even if there was pre-ticked ballots. Even if the police officers was working and making sure the district got the right result. As the Police arrested people entering or even being party officials registered to be looking over the tally and getting copies from the return officers at the Polling Stations. That doesn’t matter. Because the result has to be in favor of the incumbent President in WaBenzi.

That is just WaBenzi, we are all happy that this what WaBenzi has to offer. This is what the WaBenzi gives of governance, of institutions and of lacking taxation without representation. We are all looking idly by, why the WaBenzi is taken for granted. The President knows this and lives on, happy and ready.

If you demonstrate or try to strike, he will catch and make a treacherous human being, because no one has the power to question the power of the army and the liberation. Even if the liberator only liberated himself and his cronies. The rest has to be hostages in the President’s will and President’s vision. That is the decision of the President, who can get away with anything and no-one cares. Therefore, the nation of WaBenzi is misused and the people are too. Every single day. Peace

Confidential reports stern warnings about the Italian national bank debt ratio and possible damaging scenarios when restructuring it!

italianbank

The Astellon Capital Partners report on the Italian nation debt is troublesome, as the reports are indicating troubled waters ahead for controlling the debt and repayment on the defaulted loans. This will create other higher issues than only the Greek debt and interest-rates from Brussels and Berlin. The Italian and Rome problem will cause monetary effects for all of Europe, as the debt are like his:

“1980 –1995: Debt / GDP increased by 64%, due to high interest rates levied by Bank of Italy to fight inflation and promote exchange rate stability of Lira within European Monetary System, precursor to the Eurozone” (…)”1995 –2015: Debt / GDP increased by 11%, due entirely to debt servicing costs as Italy ran a primary fiscal surplus over this period” (Astellon Capital Partners, P: 2, 2017).

The continued pressure of the Italian debt is showed with the average primary balance since 1995 have been 2, 1% and the average interest costs of the GDP have been 5, 5%. “Italy among the most fiscally sound member states in the Eurozone, yet also among the most burdened by interest costs” (Astellon Capital Partners, P: 3, 2017).

These numbers are not really positive at all, as the high interest rate by the Bank of Italy together with the rise of debt servicing that increased 11% alone in a decade. That the Italian state have the amount of costs of interests amounting to 5,5% says lots of the economic pressure on the budgets and fiscal policies within the government structures. This does not like a prosperous and strong economic situation.

The report continues with more worrying numbers that the Italian labour costs are 11% higher than rest of the EU average. Certainly also that the average productivity of the labour are 12% lower than the Eurozone average. So you got higher paid workers that work less, which also isn’t strengthening the economy.

That the Italians bank’s they have deflated badly loans that has gone from under 5% in 2005 to the running value of close to 15% in 2016. So that the European Central Bank have bought into the government debt issuance: “2014 –2019: At current government debt net issuance rates and announced QE levels, ECB will have been responsible for financing 100% of Italy’s deficits from 2014 –2019”. This is if the debt is: “Assumes €50bn annual run-rate of government net debt issuance” (Astellon Capital Partners, P: 6, 2017). That is a hefty sum when considering all the other fiscal issues that already put forward.

“Substantial increase in non-bank net purchases of Italian debt required ECB and Italian Banks acquired 88% of government debt net issuance since 2008. Over next six years non-banks will need to increase purchase activity to 7x that of past nine years” (Astellon Capital Partners, P: 7, 2017). So a nation that struggles with high paid performance with low productivity are suddenly needed to get the workforce to 7 times higher purchase activity, meaning the production and selling has to increase seven-fold if the state should have ability to sustain the defaulted debt that has increased and the debt the ECB has bought. Together with the Italian Bank gold-reserve which is lower than the stated and needed figures to be sufficient. The bank has gold-reserves by today’s value about €100bn, but by the ECB agreement need to collateralised that needs to be up to €350bn. That the report claims to be only 25%; while the assets are dwindling too and that is also worrying!

The Assets have from 2011 gone from being around 0% or none, to 2016 when the assets of the Italian bank is now in 2016 -20%. Because this have come a German proposal to avoid an new Argentine Bank collapse case. As the Italian Bank are required independent assessments of debt sustainability.

The great risks for Italy and the Italian republic are these scenarios. Like the hedge funds can buy into with high risks and yields through BTP yields during the 2016-2017. Second scenario in 2018 is that the ECB or European Central Bank will be a marginal buyer of the government bonds and buying debts. Third scenario is that the Italian Banks becoming net-sellers and therefore losing their assets with less of profits in the 2016-2017. Last scenario is unilateral re-profiling or re-domination or some form of Greek-Haircuts by 2017-2018, that means trade-offs and cutting taxes to try to revamp the economy (Astellon Capital Partners, P: 21, 2017).

With these numbers and situation, there are certain men in ECB and in Italy that is worried. The strength and sovereign nation of Italy has to find ways of restructuring the debt and assets. What is certain is that the debtors cannot take it easy on this one. The Italian debts and reserves are worrying as the debt has to restructure and the focus on how the Italian republic has to get more productivity and create more production so the taxes and debt per GDP can go down. This will be painful for the Italian state and their government institutions, together with all the debt and bad-debt that the state has to cover, because the banks cannot afford to lose all of these fiscal funds. There have to be a revolution of something if the Italian republic and its workforce are able to 7 times higher purchase activity. That will not come easy and how they will ever achieve that must be by a unicorn arriving and spinning the Fiat wheels of Torino more than ever before; even getting the world more hooked on Milan fashion design or Illy coffee. Peace.

Reference:

Astellon Capital Partners – ‘Q1 2017 Notes No. 24 – Ciao a tutti: An orderly restructuring of Italian debt’

PBO: Kenya is borrowing without all requisite policies in place (Youtube-Clip)

“The government is borrowing without proper revenue planning or policies that factor in revenue growth challenges. This, according to Parliament’s Budget Office, coupled with the growing need to finance projects, will see the level of Kenya’s debt increasing in the coming year, which is already a cause for concern for some” (Kenya NTV, 2016)

Opinion: Jubilee Government, are they fiscal responsible for their current running debt?

Kenyatta Ruto 09.08.2016

Today is a day where I have questions and they are big because when you crunch the numbers for the last three fiscal years and estimated debt ratio it’s start to be worrying. It isn’t a sweet and tender way of asking. I know, but the numbers and the citizens will have to repay the amounts of borrowed cash at one point. As the Japanese will not deliver second-hand vehicles to the hospitals forever like they did during either this or last week in Kenya; Kenyan Government shouldn’t base their budget on handouts, but on tax-monies. The budget now is worrying as the levels of budget that are borrowed as it is going directly to portfolios that are day-to-day business instead of giant infrastructure development.

Why do I say that? Because each year you can question the ratio between the debt and the development projects; like in 2013/2014 the debt we’re 330bn, but the development 224bn. That is a 100bn used on day-to-day instead of building roads to Ethiopia or planning the Standard Gauge Railway. Take look!

In the 2013/2014:

At the fiscal year ending the 25th July 2014 the budget debt we’re 330,440,692,719.35. That means there 330bn debt, which we’re 25.8% of the National Revenue. National Government budget spent on development we’re 224,355,607,699.00 or 224bn.

In the 2014/2015:

At the fiscal year ending 24th July of 2015 the budget debt we’re 400,249,353,175.10. That means there 400bn debt, which we’re 25.1% of the National Revenue. National Government spent on development we’re 270,320,838,230.00 or 270bn.

In the 2015/2016:

At the fiscal year ending the 22nd July of 2016 the budget debt we’re 683,479,898,203.50. That means there 683bn debt, which we’re 36.9% of the National Revenue. National Government spent on development we’re 333,170,357,469.90 or 333bn.

So as you see, the FY 2013/2014 isn’t the worst. FY 2014/2015 is the start of loose government spending. The Jubilee all of sudden borrow 400bn and spends 270bn. That is 130bn that is used on day-to-day business, with loaned fiscal funds instead of the ordinary tax-base that the government should be fixated on. So with the last year FY 2015/2016 the Jubilee went all out in the stratosphere and borrowed from any bank or institution possible; as the debt we’re 683bn and the development we’re 333bn. That is 350bn that are used to day-to-day business and not development. The question remain why the sudden giant loan ratio towards the last year before election and why the lack of projects to use the newly granted funds.

The fiscal responsibility seems weak and not there when a government can splash this kind of funds and use this amount of debt on day-to-day instead of big projects and infrastructure projects needed. I am sure DP William Ruto has more friends that can be sub-contractors for some Chinese infused borrowed road projects around Kisumu. But, the ability to sustainable development with the steady rise of debt is worrying. That the IMF and World Bank is saying the debt ratio is still feasible should be worrying. As the IMF and World Bank never had control of the worst years before the Greece defaulted and needed saving grace from the world around it. The worst comes to worst when the Kenyan Government starts to default and reach it’s limit they have to have a mercy on the Jubilee and the counterparts who are paying for loose fiscal behaviour. The worst comes to worst with the giant amount of added fiscal funds might give the economy a edged inflation and bank rates that weakens the Kenyan Shilling as the deficit between reality and what is really used.

You can wonder why the Jubilee wants to hedge up so much loans and government debt. When the FY 2013/2014 and FY 2014/2015 we’re the net domestic borrowing around 300bn, but by FY 2015/2016 it become 500bn. That is a jump of 200bn of Domestic Borrowing. That should also be questioned together with the ratio already in the budget. This doesn’t seem like a healthy fiscal policy. The public should question the use of the borrowed domestic and total ratio of debt. The governance levels and accountability of the funds should be asked from Opposition and also the Auditor General. The Inspectorate of Government the IGG or Ombudsman should hassle the hustling Jubilee who has gained these funds and been responsible for the allocated budget and inquired for the option for loans to development and day-to-day use.

What do you think? Peace.   

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