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Excerpts: Israel re Congo re diamonds. Saudi unblocks military aid to

Friday, January 13, 2017 7:57
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Excerpts: Israel re Congo re diamonds. Saudi unblocks military aid to
Lebanon.Syria peace talks Jan.23. Egypt’s Economic situation January 11,

+++SOURCE:Al Arabiya 11 Jan.’17:”Diamonds forever:Will Israel stay away from
Congo?,By Daniel Brett,By Daniel Brett Special to Al Arabiya English
Wednesday, 11 January 2017

SUBJECT: Israel re Congo re diamonds

FULL TEXT:“Nothing happens in Congo without Dan Gertler and Gertler can do
nothing without playing the Israeli card,” said an advisor to an
international mining conglomerate. But the net is tightening around the
Israeli billionaire mining magnate who dominates the economic life of the
resource rich but economically impoverished Democratic Republic of Congo

Building an empire in Congo

The Israeli mining magnate has been fundamental in the Kabila family’s
control of the DRC over the past two decades. But the 42-year-old
billionaire, who was the inspiration of for the movie Blood Diamond starring
Leonardo DiCaprio, is now under international scrutiny over corruption.

Meanwhile, his main Congolese ally, President Joseph Kabila, is clinging on
by his fingertips to power. The fragile situation in the Central African
rentier state threatens to drag the Israeli security establishment into a
renewed conflict to defend the billionaire’s interests.

There has always been a quid pro quo relationship between Gertler and
Kinshasa that is heavily weighted to his corporate interests. His political
influence in DRC is said to have begun shortly after his entry in 1997, when
he shored up the government of Laurent Kabila by offering the late president
$20 million to head off a rebellion in the east. The rebels posed a major
risk to the regime as it was attempting to establish itself. In exchange for
this help, his IDI Diamonds firm was given exclusive rights on the purchase
of artisanal diamonds.

The monopoly was ended by Joseph Kabila following his father’s assassination
in 2001. But a deal was struck in which Gertler paid $15 million for the
rights to 88 percent of the output of national diamond producer La Société
Minière de Bakwanga (MIBA). Gertler’s uncle, Shmuel Schnitzer, is honorary
president of the Israel Diamond Exchange.

One Israeli Defense source has also claimed that Gertler paid the Kabila
government $40 million for a former Mossad chief and ex-soldiers to arm,
train and direct Congolese special forces to put down the brutal
Rwandan-backed M23 rebel group in an operation with the United Nations in
2013. According to this source, the materiel was sourced from Israel and

It is claimed the operation was not officially backed by the Israeli
government, but given the scale of Israeli security involvement would have
probably given an informal nod of approval. With a reputation for mass rape
and slaughter, M23 had been operating out of the Virunga National Park in
the unstable North Kivu province. The group’s violent operations were
hindering efforts to develop the region’s potentially massive oil reserves.
Ending the rebellion helped remove a problem for Kabila.

Following in Leopold’s footsteps:

The sums Gertler has spent on consolidating the Kabila regime’s control over
a vast territory are a fraction of the wealth he seems to have accrued
allegedly as a fixer between international capital and Kinshasa. Not since
Belgium’s notorious King Leopold II plundered Congo for ivory and rubber has
a foreigner acquired such control and influence over the country.

Gertler has secured a reputation for buying up mining and oil prospecting
rights from the government, via his high level political connections, and
selling them at huge mark-ups. Over two decades, his position as gatekeeper
has enabled him to dominate the copper and cobalt mining sectors in the
resource-rich Katanga province, giving him personal control over nearly 10
percent of world cobalt production.

In recent years, he has turned his attention to oil exploration in the
country’s potentially highly lucrative yet risky frontier prospects. Gertler’s
Oil of DRC start-up has found reserves estimated at 3 billion barrels of oil
in Lake Albert. Put into context, his concessions potentially contain more
oil than Syria or the UK. Oil production from the reserves would boost DRC’s
economy by 25 percent, thereby consolidating Gertler’s power base in the

To get these commodities out of the country, Gertler has also secured an
interest in infrastructural development, giving him control over the economy’s
most strategically important sectors and amassing himself a huge net worth
worthy of an entry into the Forbes Billionaires list.

Many of these assets are owned by the Gertler Family Trust or grouped under
the Fleurette Group, which owns stakes in various Congolese mines through at
least 60 holding companies in offshore tax havens such as the British Virgin
Islands. Placed beyond public scrutiny, Fleurette’s investments are regarded
by critics as asset stripping with his acquisitions made at a fraction of
their true value.

Gertler and Congo’s web of corruption: Gertler believes the criticism of his
political role in DRC is unjust. Instead, he told Bloomberg that he should
be awarded the Nobel Peace Prize for his role. However, the symbiotic
relationship between Gertler and President Kabila is looking into the abyss
as Congolese society becomes increasingly angry at his attempts to bend the
constitution to lengthen his tenure.

At the same time, global corruption investigations are closing the net on
the billionaire, leaving him vulnerable to prosecution and a post-Kabila
political backlash in DRC. The DRC is said to have suffered huge losses in
revenue due to the alleged undervaluation of state assets in various
privatisations, many involving Gertler.

In September, Och-Ziff Capital Management Group agreed the pay over $400
million in a settlement with US authorities over its alleged payment of
Gertler to allegedly bribe Congolese officials to the tune of $100 million
for mining rights. No charges were brought against Gertler by the Justice
Department or the US Securities and Exchange Commission (SEC).

Two months later, Gertler’s nemesis Global Witness, an NGO that fights
corruption in the global natural resources industry, reported that the state
mining company Gecamines signed over royalty rights to the Israeli
plutocrat. Royalties amounting to up to $880 million that were due to
Gecamines from Glencore’s KCC copper project in southeast Congo were
assigned to an anonymous Cayman Islands company called Africa Horizons,
which is part of Fleurette Group.

It is unclear what, if anything, was paid to Gecamines, whose earnings could
make a significant fiscal contribution to alleviating poverty in one of the
world’s poorest countries. The NGO has accused Glencore of knowingly
entering loss-making deals to appease the billionaire as the DRC’s central
power broker.

According to Bloomberg, in December the UK’s Serious Fraud Office (SFO)
began investigating Gertler and four former Eurasian Natural Resources Corp.
(ENRC) executives as part of a three-year probe into the Kazakh company’s
acquisition of DRC copper and cobalt mining projects.

The deals may have violated UK fraud and bribery laws, for which individual
offenses carry penalties of as long as 10 years in prison or an unlimited
fine. The IMF had, in 2012, cancelled a $532 million loan to DRC for
Gecamines’ failure to disclose the transfer of its stake in another ENRC
project to a BVI-registered company controlled by Gertler.

While Gertler’s business empire sinks into international controversy, DRC
has been teetering on the brink of a third civil war after Kabila failed to
step down at the end of his two-term limit in December. Protests erupted
across the country, prompting the Catholic Church to step in to broker an
agreement between the government and the opposition.

This would see the president standing down at the end of 2017 after
presidential elections, a scenario that most Congolese do not think he will
do voluntarily. Besides, Kabila’s hugely popular challenger – the wealthy
businessman and former Katanga governor Moïse Katumbi – is in exile in
Belgium, having been convicted in absentia for corruption and sentenced to
36 months’ imprisonment.

If Kabila, his family and allies leave power, any successor is likely to
confront endemic corruption to diminish his influence. Documents from the
Pulitzer Center on Crisis Reporting suggest that Kabila and his family
control 120 mining permits and have direct and indirect links to a wide
variety of businesses including banks, farms, fuel distributors,
pharmaceutical suppliers and airlines. Stripping away Kabila’s business
empire could involve an anti-corruption drive that could sweep up Gertler
and other friends of the President.

Israel’s response to Kabila’s fall:The mining baron may be tempted to secure
backing from his Israeli connections to shore up the Kabila regime in one
form or another, including the possibility that he could rule through his
twin sister Jaynet Kabila or another puppet. A step towards a Mobutu-style
tyranny would precipitate another deadly conflict in a country that has lost
a million lives due to past civil wars and foreign interventions.

The forces that were deployed to put down foreign-inspired rebellions in
eastern DRC could be deployed against the Congolese opposition, bankrolled
by Gertler and allegedly with the tacit approval of the Israeli security
establishment. Such a scenario would drag Israel into a renewed conflict in
the Great Lakes region.

Why would Israel get involved in Congo with such high stakes? In an article
for the Jerusalem Post last April, Yossi Melman stated that a pro-Africa
parliamentary lobby had been established in the Knesset to promote Israeli
interests in the continent. Interests fall into three main areas: the
political-diplomatic interest in preventing anti-Israel UN resolutions, the
promotion of economic ties and the strategic and military interest in
advancing arms sales and combating terrorism.

Israel has traditionally trained and equipped the military guards around
African dictators in the pursuit of these objectives. Since the early 1970s,
Israeli military industries and former military and intelligence officials
have, with the backing of the Israeli security establishment, provided
security assistance and arms to African dictators, including DRC’s former
dictator Mobutu Sese Seko.

Dan Gertler is intimately associated with Israel’s military, economic and
political elite. He is close to several Israeli politicians, especially
Defense Minister Avigdor Lieberman, founding leader of the right-wing
Yisrael Beiteinu party. He could seek to utilise these links to maintain DRC’s
status quo.

However, there are signs that Israel is losing patience with its roving
billionaires. In December, Gertler associate Benny Steinmetz – who also
earned his billions from diamond mining in Africa – was put under house
arrest under suspicion of bribery and money laundering in a long-running
dispute over the $20 billion Simandou project in Guinea. He has yet to face
charges and denies wrongdoing. Gertler may face a similar fate if his
corporate activities come under the spotlight of investigation.

Meanwhile, the Foreign Ministry has taken a greater role in international
relations, eating into the power of the Defense Ministry, which has operated
as a state-within-a-state. The involvement of diplomats in relations with
Africa has moderated the more militaristic inclinations of the past.

In this context, diplomats will be cautioning the Israel not to involve
themselves in the quagmire of Central African politics on Gertler’s behalf,
mindful of the long-term damage this could do to its diplomatic leverage in
Africa. In this case, Israel may warn the security establishment and
associated freelancing mercenaries to abandon Gertler to secure influence in
a post-Kabila scenario.
Daniel Brett is a British journalist specializing in the politics and
economics of Africa and the Middle East. He can be contacted via his
LinkedIn profile.

+++SOURCE:Naharnet (Lebanon)11 Jan.’17:”Report:Saudi Arabia Unblocks
Military Aid to Lebanon”,by Agence France Presse

SUBJECT: Saudi unblocks military aid to Lebanon

QUOTE:”Saudi’when and how we have to to wait see’ “

FULL TEXT:Saudi Arabia and Lebanon have agreed to hold talks on restoring a
$3-billion military aid package that Riyadh froze last year, a Lebanese
source told AFP on Tuesday[10 Jan].

“The blockage is lifted,” said an official in the delegation of President
Michel Aoun, who held talks in the Saudi capital with King Salman earlier in
the day.

“It’s finished. There is truly a change. But when and how, we have to wait
to see,” the official said, adding “a new page” had been turned and the aid
was “going to move.”

The king’s son, the powerful Defense Minister and Deputy Crown Prince
Mohammed bin Salman, will discuss with his Lebanese counterpart how to move
forward with the package, said the official, who asked for anonymity.

However, other sources from the Lebanese delegation downplayed the
official’s remarks.

“The issue of the Saudi grant was discussed but no decision has yet been
taken to unblock the aid,” LBCI television quoted the sources as saying.

Earlier in the day, Lebanon’s National News Agency said Aoun asked King
Salman for “continued support for the army in the face of terrorism and the
other security challenges, including the issue of the grant.”

“The Custodian of the Two Holy Mosques, King Salman bin Abdul Aziz, said he
will follow up on the issue with the competent ministers,” NNA added.

In February, the kingdom halted the military aid program to protest what it
said was “the stranglehold of Hizbullah on the (Lebanese) state.”

The program, funded by Riyadh, would provide vehicles, helicopters, drones,
cannons and other military equipment from France.

After Aoun’s election, France’s foreign ministry said it was in “close
dialogue” with Lebanon and Saudi Arabia in hope of a deal.

+++SOURCE:Naharnet(Lebanon) 11 Jan.’17:”Syria Peace Talks in Astana Set for
January 23,by Agence France Presse

SUBJECT:Syria peace talks Jan.23

by Naharnet Newsdesk 4 hours ago

FULL TEXT:Talks on Syria’s political future will take place in Kazakhstan’s
capital Astana on January 23, a source in the Russian foreign ministry
confirmed to AFP on Wednesday[11 Jan].

“At this time there is no indication that the meeting will be postponed. The
date of January 23 is set,” the source said of the negotiations to be hosted
by Russia and Turkey between the Syrian government and rebel groups.

+++Jordan Times 11 Jan.’17:”Egypt’s cost-of-living soars as currency dives”,by

SUBJECT:Egypt’s economic situation

FULL TEXT:CAIRO — Annual consumer price inflation in Egypt’s cities soared
to a second straight eight-year high in December, hitting 23.3 per cent on
the back of the government’s decision to float the pound, effectively
halving its value.

Core inflation also jumped to 25.86 per cent in the urban areas, the central
bank said on Tuesday[10 Jan].

Urban consumer inflation hit an eight-year high of 19.4 per cent in
November, the month when Egypt abandoned its currency peg of 8.8 to the US
dollar in a dramatic move that has since seen the currency depreciate
roughly by half.

It accompanied the November 3 move with a 300 basis point interest rate hike
to fight inflationary pressures.

Despite the hike, inflation has risen sharply and is expected to climb
further this year as the government pushes on with economic reforms,
including fuel subsidy cuts and the implementation of a value-added tax.

Those moves were required to secure a $12 billion International Monetary
Fund loan.

In cities and towns, food and beverage inflation touched 28.3 per cent in
December. Healthcare inflation stood at 32.9 per cent while transportation
was 23.2 per cent.

“Egypt now is in the eye of the policy restructuring cycle, and the price is
higher inflation and an overall fiscal deficit pending a structural change
in government spending and general re-pricing of goods and services,” Arqaam
Capital said in a research note.

“A reversal of over 50 years of comprehensive government support will take
time,” it said, predicting inflation to remain high in the first half of the
year, averaging 20 per cent in 2016/17 before declining to 18 per cent in

President Abdel Fattah Al Sisi is under increasing pressure to revive the
economy, keep prices under control and create jobs to avoid a backlash from
the public.

Sisi predicted last month that the Egyptian pound would strengthen in the
coming months and promised to ensure basics were available and affordable.

The government has expanded its social security network and some 70 million
Egyptians have access to state subsidised bread.

But Egypt’s non-oil business activity shrank for the 15th consecutive month
in December as inflation caused purchase costs to rise at a near-record

Economists expect the rising inflation to erode spending power, hit economic
growth and prompt further hikes to interest rates, which are already up to
15.75 per cent.

Egypt’s central bank has held interest rates steady at two monetary policy
meetings since the flotation and some economists expect further rate hikes
this year. The monetary policy committee is due to meet again on February
Sue Lerner – Associate iMRA


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