Illegal gold mining costs Uganda millions in lost revenue


Kerry Hall | May 29, 2013

With illegal gold mining rapidly spreading across the country, Uganda is losing millions in revenue.

A radical increase in production has taken place in recent years, reports New Vision.

In 1994, the country put out 225 kilograms of the yellow metal and, in 2000, it was up to 7 tonnes.

A majority of the gold is mined in the western district of Buhweju by small-scale miners from high-grade alluvial deposits, although gold can be found throughout the country.

As a result of Uganda’s central bank deregulating gold sales, local production has increased. Further, gold from the Democratic Republic of the Congo is being brought in to be sold.

The precious metal accounts for 30% of Uganda’s export revenue and, last year, made up $200 milion.

Illegal mining is having such an impact that experts say it must be stopped in order to shore up revenue collection.

A government official said the issue is so alarming that the country exported none of its own gold in April, while Kenya exported 40 kilograms of smuggled Ugandan gold.

In some parts of the country, New Vision reports more than 1,000 illegal gold miners have flooded in. Additionally, illegal buyers are coming in from other countries — like South Sudan, Rwanda, and Burundi — to purchase gold and send it on to countries like the United Arab Emirates, especially Dubai.

Some citizens have said police are not responding to calls for them to act on illegal activities.

Other reports indicate government officials are profiting from illegal operations through illicit tax collection.


Kazakhstan’s Green Zone on Slippery Slope

from IPS..

By Joanna Lillis

ALMATY, May 31 2013 (EurasiaNet) – A group of flashmobbers took to the slopes in southeastern Kazakhstan on a crisp March morning this year to spell out a heartfelt SOS with their bodies.

In this case, SOS could have stood for “save our slopes:” the 70 activists who lay down in the snow to form the letters were protesting controversial plans to build a ski resort in an area of pristine natural beauty near the commercial capital, Almaty. Opponents were also calling attention to apparent conflicts of interest that surround the project and raise the potential for corruption.

The dispute over plans to develop the pristine slopes of Kok-Zhaylau (“green summer pasture” in Kazakh) pits the city government and powerful business interests against environmental activists and concerned citizens, who are fighting to preserve a beauty spot inside the Ile-Alatau national park. Despite the official designation, development in protected territory is legally possible in certain cases.

Supporters assert that the resort will attract tourists from as far afield as India and China, and with them a flood of investment and jobs. They say the project feeds into Kazakhstan’s strategy of promoting infrastructure projects and boosting the tourism sector to wean the economy off its current reliance on oil and gas exports.

“In 30-40 years the oil will finish, and mountain tourism could become the engine of Kazakhstan’s economy,” Bakitzhan Zhulamanov, head of Almaty City Hall’s Tourism Directorate, a driving force behind the project, argued at public hearings in January.

Opponents counter that development will damage the environment and threaten rare flora and fauna.

“What is the chief objective of national parks? To preserve biological diversity; preserve forests; preserve water resources; preserve unique types of Red Book flora and fauna which inhabit the territory of the national park?” asked Sergey Kuratov, head of the Green Salvation environmental group. “Or to develop mountain tourism, exhausting water resources; chopping down forests; annihilating rare fauna; destroying glaciers; ruining landscapes?”

The plans – which Kuratov argues contravene national law and international environmental commitments – are not finalised, but are well-advanced. A feasibility study has been conducted by two companies, Canada’s Ecosign Mountain Resort Planners (an international leader in ski resort design) and the Kok-Zhaylau firm, founded and owned by Almaty City Hall.

According to Ecosign’s website, if plans are approved, 77 ski slopes will be constructed stretching 63 kilometres, with 16 lifts capable of carrying 10,150 skiers at a time. In addition, hotels with a total of 5,736 beds will be built.

The resort is “intelligently planned according to the state-of-the-art international planning and development standards,” Ecosign says.

The goal is to attract a million visitors a year from within a four-hour flight radius of Almaty, spanning areas of India, China and Russia. Opponents argue this target is unrealistic. An influx would undoubtedly change the face of Kok-Zhaylau, whose unspoiled slopes are currently reached by most visitors via a steep three-hour hike.

Many opponents say they have no objections to building a new ski resort near Almaty (which already boasts several, including a popular spot at Shymbulak), but not inside a national park.

“We’re not trying to get rid of the plans for developing a ski resort, for developing the mountains, because […] we would also love our country to develop, but our position is that we call for all kinds of ski resorts to be placed out of the national park,” Nursultan Belkhojayev, a member of the Initiative Group of Kok-Zhaylau Protection (an unofficial body with no funding), told

Developers “are going to change the habitat of the endemic species” in the park, added group member Zhamilya Zhukenova. This includes the endangered snow leopard – a symbol of both Kazakhstan and the city of Almaty.

According to an open letter to President Nursultan Nazarbayev against the project signed by over 8,000 people, the area is home to 811 types of flora (including 17 listed as endangered by Kazakhstan) and 1,700 types of fauna.

Officials at Kazakhstan’s Environmental Protection Ministry told it has no jurisdiction over Almaty’s municipal government. City Hall’s Tourism Directorate rejected environmental “misgivings” as “verbal assertions without the presentation of any proof,” it told in a written response to a query about the issue. There will be solid environmental safeguards, it added, and international experience will be considered “to reduce to a minimum the impact on the environment.”

The Kok-Zhaylau firm said it was attentive to environmental concerns, but studies had shown that the area selected has the best climatic and geographical conditions for the resort. “We are hearing and listening to public misgivings,” it told in writing. “This is a normal process – the exchange of opinions with society.”

The company said it was preparing to conduct environmental field research, “so at this point public misgivings about the resort’s negative impact on the environment are not supported by facts – the results of ecological studies.”

Zhulamanov has pledged that if research finds that the project will seriously damage the environment, it will be abandoned. He has promised to replant more trees than will be chopped down, and install webcams for real-time public monitoring of construction.

City Hall also is dismissive of concerns about the potential for corruption and cost-overruns, saying that the close scrutiny to which the project is subject guarantees transparency. There is big money involved: as currently envisioned, the state will invest 700 million dollars in infrastructure and seek 2.1 billion dollars in private investment.

Misgivings have also been voiced about potential conflicts of interest. According to a report published in the Alau monthly last September, Zhulamanov, the official propelling the project forward, is a long-time associate of Serzhan Zhumashev, the chairman of Capital Partners, which has built several major infrastructure projects around Almaty, including reconstructing the Shymbulak ski resort.

Capital Partners managing director Aleksandr Guzhavin stepped down to head the new Kok-Zhaylau company founded by City Hall.

Capital Partners did not respond to requests for comment, and in its written response city hall did not answer a question about potential conflicts of interest. The Kok-Zhaylau firm rejected the idea as unfounded in any “official information.”

*Editor’s note:  Joanna Lillis is a freelance writer who specialises in Central Asia.

This story originally appeared on

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Kuwait grants Oman $2.5 billion as development aid

from Your Middle East..


May 27, 2013

Oil-rich Kuwait will finance development projects in Oman worth $2.5 billion as part of pledges made two years ago by members of the Gulf Cooperation Council, the non-OPEC sultanate announced on Monday.

Based on the framework agreement signed by representatives from both countries’ governments in Muscat, Oman will receive the funds in 10 years with $250 million to be granted annually, Oman’s state news agency ONA reported.

The money will be used to finance joint construction and infrastructure projects, said ONA.

Oman and Kuwait are members of the energy-rich GCC along with Bahrain, Qatar, Saudi Arabia and United Arab Emirates.

At a meeting in Riyadh in March 2011, the six GCC states decided to establish a $20-billion fund to finance development projects in Bahrain and Oman, which have limited energy resources.

The measure was taken in the wake of protests that swept several countries as part of the Arab Spring, which also hit Bahrain and to a lesser extent Oman.

Saudi Arabia, Qatar, Kuwait and UAE each pledged $5 billion for the two countries, and the grants are to be spent over a 10-year period.

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The state of Bahrain’s economy

from Your Middle East..

Bassam Aoun
Last updated: May 28, 2013

Diversifying the economy away from oil revenues, which accounted for $26.1 billion of the government’s $29.9 billion of revenue in 2012, should be a major economic priority for Bahrain, writes Your Middle East’s Public Finance analyst Bassam Aoun.

The situation in Bahrain is a matter of perspective. Socially, the Kingdom has been in the midst of a historical shift in its political dynamic. Sporadic protests against Prime Minister Sheikh Khalifa bin Salman al-Khalifa’s rule, which has been uncontested for 41 years, have thrust this small but divided nation into a state of political flux. Reforms have been discussed, talks have been held, and promises have been made. Underneath the surface, however, these efforts have been criticized as unsubstantial – talks have lacked any significant presence of the ruling family and opposition members remain steadfast in their decision not to concede any of their demands, mostly in fear of appearing anything less than determined to contest monarchy loyalists.

Prince Salman bin Hamad bin Isa al-Khalifa, the crown prince and heir apparent of the Bahraini monarchy, has attempted to diffuse tensions by taking on a proactively reformist role in the exchanges between opposition members and loyalists, all while struggling to maintain several sectors of the economy. Both sides, nevertheless, remain intransigent in their approach to compromise. Evidently, the sociopolitical perspective is still a work in progress.

Protests are ongoing and regularly test the nation’s economic standing by pushing it further to the brink.

At the moment, the political outlook seems dismal, but the economic outlook for the Kingdom, however, is a mixed review. Some sectors have surely been battered by the current situation; tourism, for example, is under pressure due to the demonstrations, which have at times ended in violence. International events, such as the Formula One Grand Prix, have come under scrutiny and have been labeled by opposition supporters as an excuse for the monarchy to fake its legitimacy. The tourism industry is of the essence to the Kingdom’s economic vision, and will require additional attention in the near term.

Public debt is another issue that is going to be on policymakers’ agendas soon. The figure is currently at 35.7% of GDP, according to recent International Monetary Fund consultations with the Kingdom, and is headed for 61% by 2018. The budget deficit, conversely, was better than initially expected; due to higher than expected oil prices, more efficient capital spending, and a reduction of gas subsidies for the industrial sector, the government was able to tighten its belt and limit its deficit to 2.6% of GDP.

Be it a positive development on multiple levels, it was nevertheless considered superficial in the eyes of several analysts. Bahrain’s dependence on its oil market is a crucial deficiency in its current economic plan. Were it not for a relatively high oil price in 2012, its fiscal situation would not have fared as well as it did. The breakeven oil price, i.e. the price per barrel required to balance a national budget, was clocked at a worrying $115 – compared to $94 for Saudi Arabia and under $50 for Qatar. Diversifying the economy away from oil revenues, which accounted for $26.1 billion of the government’s $29.9 billion of revenue in 2012, should be a major economic priority.

Several avenues are available for achieving this goal; capacity building initiatives for the national labor force, the provision of a financially amicable environment for businesses, an increase in foreign direct investment inflows, and the general development of the non-oil sectors, such as the battered tourism industry. By expanding non-oil revenue streams and loosening the commodity’s grip on the economy, Bahraini officials can make significant strides towards diffusing debt pressures, particularly public borrowing costs.

Regardless of the multifaceted hardships the Kingdom is currently facing, one shining light in the domestic economy remains bright. Banks in Bahrain, despite the political instability and somewhat shaky economic outlook, have been healthy.

Bank Alkhair recently announced the success of the first tranche for its sukuk program. The Islamic bond, valued at $750 million, is funding a real estate development portfolio for a Saudi Arabian firm, and offers an exceptional coupon rate of 5.75%. As a wholesale bank, Bank Alkhair is performing better than its retail counterparts; recent national stress tests have revealed a solid degree of resiliency against external shocks for wholesale banks, which is further amplified by the fact that their assets amount to a level equivalent to 480% of GDP. Retail banks, however, are still vulnerable to instability, particularly bouts of political unrest that could shake domestic and foreign confidence in the sector.

Protests are ongoing, even to this day, and regularly test the nation’s economic standing by pushing it further to the brink. Oil prices have remained relatively high over the past few years, thereby buoying Bahraini finances. However, given the political transitionary period it is now undergoing, a slowdown in the petrochemical industry coupled with additional financial duress in the banking sector could prove overwhelming for the Kingdom. Once the Bahraini authorities make significant strides towards diversifying away from oil dependence, which they have already begun to do, the long term outlook will concurrently improve.

Bassam Aoun @HeyItsBassam Bassam Aoun is currently based in Abu Dhabi and holds a BA in Economics from the American University of Beirut and an MPP (Master of Public Policy) from the University of Chicago. He has written for the Chicago Policy Review and is interested in economic and fiscal policy in the Middle East.

Argentina’s Beef Industry: A Fall From Grace

from The Argentina Independent..

by Sabrina Hummel, 30 May 2013

Argentina has long been famed for its high-quality, melt-in-your-mouth beef – the crown jewel in its agricultural exports, and its global namesake.

Since 2002, Argentine exports of beef have risen steadily. This is due in part to an increasing demand for animal protein, coupled with the country’s increased competitivity following the devaluation of the peso that year.

In 2005, Argentina was the world’s third largest beef exporter. The following year, however, marked the beginning of a startling trend reversal. As Argentine beef exports soared, a number of factors, policies, and market forces combined to engender Argentina’s dramatic fall from grace, threatening to render the booming industry an anachronism. By 2012, it had slumped to 11th place in global export ranks.


Argentine beef exports reached their second highest record in 2005, exporting 745,000 tonnes of beef, accounting for 23.8% of total production. The domestic market absorbed the remaining 2.39m tonnes.

Meanwhile, a rising demand for all the various cuts of meat alongside the compulsory retention of female cows (for slaughter and impregnation) in order to meet future needs, added to inflationary pressures precipitated by the increasing price of beef. Beef prices are given the greatest weighting in the basket of indices used to arrive at consumer spending in the city and suburbs of Buenos Aires – 4.5% of the national consumer price index (CPI).

The result? A wave of government intervention in the industry which the report described as being wholly “anti-cattle” (“antiganadera“). The government’s intervention in the agrarian sector, specifically the meat packing industry, is thought to have negatively impacted the normal operation of the value chain, distorting the market.

Government Policy: The Beef Ban

The increased local demand for beef due to a general economic improvement meant that supply was not keeping up with demand, and so prices rose. The government, seeking to lower the price of beef, a staple in the Argentine diet, quickly intervened in the market. It obliged farmers to sell locally at a more affordable price but at the cost of losing exports and its accompanying revenues.

Victor Tonelli, a consultant for the meat industry, explains how “for every 2.5 tonnes [of meat] exported one tonne is sold in the domestic market at only 50% of its export price”. Thus, farmers were forced to both privilege the domestic market over the export one, and to then sell at less profitable prices.

In March 2006 the government imposed its most drastic measure yet: banning beef exports for 180 days (excluding pre-arranged shipments and the Hilton Quota – high quality meat destined for the EU). The ban was intended to “make beef more affordable to ordinary Argentines by transferring some 600,000 tonnes of it from the export sector to the local market,” according to The Economist.On 26th May this was replaced with a quota for the months of June-November that equalled around 40% of the amount of beef exported in the same period in 2005. 

Since 2005, beef exports have fallen 76%, whilst between 2009 and 2012 they dropped by 71%.


As exports fell, the amount of meat absorbed by the domestic market rose, thus keeping farm and meat prices stable – all of which was financed by a rigorous ‘destocking’ process.

As destocking continued into 2009, Argentina’s overall cattle supply decreased. In 2007, the amount of cattle stood at 57m heads. By 2012 the figure was just 51.7m. The reduced supply of cattle resulted in a sharp spike in the price of beef, leading to yet another round of retention of female cows. As a result, cattle supply fell, unable to meet the growing demand, further driving up the price of beef.

As The Economist explains, “the government’s efforts to force the beef price down hurt farmers so much that it recoiled”. In effect, demand for beef remained the same, but only 80% of the supply remained. This was also due in part to the 2009 drought which killed around a million animals, further pushing up the price as production slowed and demand kept pace.

Export Tax

In 2006, the government imposed a hefty 15% (increased from 5%) export tax on beef further hindering the ability of Argentina to compete with its Mercosur trading partners (Brazil, Uruguay, and Paraguay) whose beef is not subject to export taxes, and the world at large.

It is worth noting, however, that in April 2012, the government reduced the export tax on processed meat. The tax was lowered from 15% to 5%, representing a “transfer of US$12.5m to the meat processing plants” with the aim to increase export volume by 5% and thus rejuvenate the meat industry – offsetting perhaps the losses incurred since 2005, including the closure of 130 factories and job loss of 15,600 workers. It is too early to tell, however, if this has had the desired effect

Mercosur and Beyond

Argentina is no longer a world leader in beef exports, ranking a paltry 11th place globally. Of the four countries that make up the Mercosur trading block, Argentina finds itself in last place.

According to the statistics from the Sociedad Rural Argentina’s (SRA) Economic Research Institute, in 2012 Brazil came in first place, exporting 1.3m tonnes of beef. Uruguay came in second place, with 350,000 tonnes whilst Paraguay overtook Argentina to come in at third place with 210,00 tonnes. Argentina, relegated to fourth place, exported just 183,000 tonnes.

The Ciccra’s April report described the historic low as “disappointing”.

Luis Miguel Etchevehere, head of the SRA, concurred citing the last ten years as a “wasted decade”, during which years of artificially cheap beef “destroyed the competitivity of the industry” and resulted in the loss of 12m heads of cattle.

Adding to the industry’s woes is the fact that, despite being the largest EU beef quota holder with 44% (29,375 tonnes), the country failed to fill last year’s quota. In fact, it shipped only 64% of its allocated amount – 18,800 tonnes.

The domestic market, on the other hand, continues to enjoy unparalleled privilege, something which experts do not see changing in the near future. In 2012, the domestic market retained 93.6% of all the beef produced, the highest figure in 53 years.

In sharp contrast to its ailing neighbour, sales of Uruguayan beef to the international market look set to increase. It ranked 7th place in 2005 and by 2012 had fallen by only one place. Firstly, Uruguay has been able to gain market share in countries where Argentina has failed to do so, such as Mexico, the US, China, Korea, and Vietnam. Secondly, it is exporting more meat to Europe via the new High Quality Beef 620 Quota –it is one of only five exporting countries that meet the stringent criteria.

Uruguayan beef is not treated with growth hormones and its farmers are able to verify the age of the cattle through a sophisticated tracing system.

July 2012 saw the annual volume under this quota rise from 20,000 tonnes to 48,200. The ascendance of this new EU beef quota may soon render the old Hilton Quota -whose suppliers include Argentina, Brazil, Uruguay, Paraguay, Canada, and New Zealand- obsolete.

Brazil’s rise to the top, both within Mercosur and worldwide, is nothing short of miraculous. In the 1990s Brazil was a net importer of beef, but by 2012 it shot up to second place in beef export rankings, just below Australia. This is due in part to the increase in heads of cattle from 173.8m to 187m between 2005 and 2012.

The Rise of Soy

Whilst beef exports have largely been slowing down, as of 2011 Argentina found itself in third place in export rankings of soybean – a cheaper, faster alternative to livestock production. Grain cultivation has taken off, partly offsetting the decline in the more traditional institution of beef exports.According to a report entitled ‘Agribusiness in Argentina No. 1′ compiled by Price Waterhouse Cooper, in 2011 the country produced 54,500 tonnes of soybean -accounting for 21% of world production- and exported 13,088 tonnes making up 14% of total world exports. Soybean oil and soybean meal pellets are both at number one in terms of world export rankings at 4,430 and 24,914 tonnes apiece.

Tellingly, in 2010, of the six most significant manufactured products of agricultural origin (MOA) Residues in Food Industry (largely made up of pellets, soy flour, sunflower meal, corn flower and wheat flower) ranked top, accounting for just under 40%, with meat in third place at roughly 7%. The shift from meat to grains seems unlikely to halt.

The Future 

There is hope. According to a report by the United States Department of Agriculture (USDA), beef production is set to rise this year, following on from a rise in production that began in 2012.

Beef production could increase by up to 5% reaching a total of around 2.75m tonnes. Such an increase would put Argentina back on the map, landing it squarely in sixth place in world rankings for beef production. The USDA report also intimated that beef exports in turn could rise by around 7% from 187,000 tonnes in 2012 to 200,000 tonnes by the end of the year. Production in April this year was already up 21.1% compared with the same month last year.

However, whether intentional or not, various government policies such as its high export tax and the privileging of the domestic market over the export market all contributed to a certain extent the dramatic decline in Argentina’s once thriving beef sector.

The farmers’ point of view, as expressed by the SRA, is that they ought to be paid the full value of their goods, since “the full price of [of meat] is the incentive which the farmers need to continue to invest [in the industry] in the medium term and long term, and in what is ultimately a high risk environment”.

In essence, exporting of beef has become less profitable than other agricultural activities.

As a result, Argentine farmers have simply turned to another agrarian model in the hopes of recouping lost profits: soy, which can be harvested twice a year and carries far less risk than rearing livestock – newborn cattle for example take three years to bring to market.

Hand in hand with the rising supremacy of soy is the decline in grass-fed cattle in favour of feedlot cattle – a low cost form of factory farming. This has allowed farmers to increase the efficiency with which they rear their cattle, and, at the same time, free up land to cultivate the more profitable grains.

Thus, the timeless image of cows grazing idly on the vast swathes of the Pampas – roughly the size of France – is becoming more and more a thing of the past. Grain-fed, feedlot cattle are becoming an industry norm. Around a third of all Argentine beef now comes from cattle, which, at some point or other, have been reared in this manner. 

The demise of the beef industry then is not quite as imminent as the Cassandras would have you think. Perhaps one way of looking at the events of the last decade is to see that Argentine farmers, faced with barriers to entry in the export market (through a combination of government policy and global macroeconomic forces) have instead seized upon another agricultural opportunity afforded by the global commodities’ boom.

Promising projections from the USDA suggest that, despite the upheavals, beef may yet make a comeback.

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Ukraine seeks trade deals to east and west

from AsiaTimesOnline..

By Oleg Varfolomeyev

May 30, 2013

Ukraine has been moving closer to both an association and free-trade deal with the European Union, as well as observer status in the Russian-led Customs Union of Russia, Belarus and Kazakhstan. Neither of the two statuses promises full integration. Because of this, Kiev believes they are not mutually exclusive. Ukrainian Foreign Minister Leonid Kozhara has said Ukraine sought to join all the Customs Union agreements that did not contradict its obligations to the EU.

After the release from prison of prominent opposition politician and former Interior Minister Yuriy Lutsenko in April, Ukraine started to receive positive signals from the EU. This culminated in the approval by the European Council, which is the union’s collective presidency, of a visa facilitation agreement on May 13 and of proposals for European Council decisions on the association deal signing on May 15. Although both decisions are technical, their approval is important as it shows that Ukraine is on the right track. The two steps would have been unthinkable last year, when Ukraine-EU relations were in a deep freeze.

The visa facilitation deal should make it easier for Ukrainian journalists, politicians and businessmen to apply for EU travel visas. Ukraine is still far from qualifying for visa-free travel, but the deal encourages certain EU countries to make travel for Ukrainians less difficult. The document approved in Brussels on May 15 is a necessary preparatory step, without which the association and free-trade deal signing would have been impossible next November as scheduled.

In spite of its technical character, the step is seen as recognition of the progress made by Ukraine since the announcement by the EU last December that the association agreement could be signed in November 2013, according to Ukraine’s newly appointed foreign relations and integration commissioner, Kostyantyn Yeliseyev.

At the same time, the EU is making it clear that Ukraine has no time to rest on its laurels. Brussels expects Kiev to promptly address the problem of selective justice, pass laws to adapt Ukraine’s legal system to EU norms, in particular related to corruption and the justice system, and improve the election system. While Ukrainian and EU officials agree that Ukraine has made some progress in all three areas, this is not enough. EU envoy Jan Tombinski told a conference in Kiev on May 16 that if he were to decide now whether the association agreement would be signed, he would say “no”. He called on both the opposition and the ruling party to respect legal rules and procedures and to take more responsibility for their decisions.

Tombinski’s skepticism is not surprising. On selective justice, the foreign ministry made it clear recently that former prime minister Yulia Tymoshenko would not be freed from prison; furthermore, the ministry denies that there is a problem of selective justice in Ukraine. At the same time, Foreign Minister Leonid Kozhara admitted that Tymoshenko’s imprisonment is the biggest problem in relations with the EU.

Regarding the legal system, Ukraine’s National Security and Defense Council Secretary Andriy Klyuyev promised recently that the parliament would pass all the laws required by the EU by the end of May. Finally, regarding the election system, Kiev is not hurrying to amend electoral legislation, and the parliament has thus far failed to schedule repeat elections in the five constituencies where the results of last year’s parliamentary elections were cancelled.

The situation with the Russia-Belarus-Kazakhstan Customs Union is less clear. Ukrainian Prime Minister Mykola Azarov said on April 23 that an agreement had been reached in principle that Ukraine would attain observer status in the Customs Union. A month later, the Ukrainian government commissioner for cooperation with Russia and the Commonwealth of Independent States (CIS), Valery Muntyan, said Russia, Kazakhstan and Belarus agreed to give Ukraine observer status in their Eurasian Economic Union (EEU) from January 1, 2015, when the EEU would come into being.

At the same time, he said, Ukraine could not become an observer in the Customs Union as that institution’s founding documents did not provide for such a status. However, after meeting with the leaders of Russia and Kazakhstan in Astana on May 29, Ukrainian President Viktor Yanukovych said a memorandum on Ukraine’s observer status in the Customs Union would be signed at the upcoming CIS summit in Belarus on May 31. When exactly Ukraine will become an observer remains unknown.

Meanwhile, a poll conducted by the Kiev-based think tank Razumkov on June 20–25 showed that 41.7% of Ukrainians would prefer membership in the EU, while 32.7% would prefer Ukraine to join the Customs Union; 12.3% want both. Whereas the EU attracts Ukrainians by its social protection system, the rule of law, democracy development and financial resources, those who prefer the Customs Union prioritize common history and culture with its other members, the belief in a similar mentality and access to cheap natural resources.

Thus, although in President Viktor Yanukovych’s stronghold, the southeast, the Customs Union is more popular, the ruling Party of Regions will have to take public opinion into account if it wants its leader to be re-elected as president in 2015.

Oleg Varfolomeyev is a journalist based in Kiev, Ukraine. He covers economic and political developments in Ukraine and Belarus for analytical network CEEMarketWatch and also writes regularly for a number of other Western sources. He received a Master’s degree in Political Science from Central European University in Budapest, Hungary.

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Tunisia intervenes to lift dinar from record low

from The Daily Star (Lebanon)..

By Bloomberg

May 31, 2013

Tunisia’s central bank said it intervened in the country’s foreign exchange market this month to support the local dinar after it fell to a record low. The North African country’s regulator sold the equivalent of 863 million dinars ($524 million) to the market in the week to May 17, it said in an emailed statement Wednesday.

The dinar advanced 0.8 percent to 1.6475 a dollar as of 5:32 p.m. in the capital Tunis, the highest level on a closing basis in three weeks, according to BNP Paribas MENA prices on Bloomberg.

The central bank said it was forced to step in on demand from mobile phone operator Tunisiana and state-owned energy and oil companies. The dinar has slid 13 percent since a revolt ended Zine al-Abidine Ben Ali’s 24 years of rule more than two years ago, and prompting the government to seek an IMF loan.

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