Uganda holds key rate with eye on growth, inflation

KAMPALA (Reuters) - Uganda's central bank held interest rates on Thursday, treading a path between managing inflation and supporting an economic upturn it said would likely lead it to cut borrowing costs in the coming year.
With the country's currency under pressure, traders and analysts had mostly expected the Central Bank of Uganda to leave the key lending rate at 12 percent - ending a run of growth-boosting cuts that began last June when the base rate was 21 percent.
The bank said leaving rates unchanged would allow it to encourage economic growth while keeping inflation - which ticked up in December - around its medium-term target of 5 percent.
The bank also said the economy had grown faster than projected since the first quarter of 2012.
The Ugandan shilling weakened slightly after the rate announcement, falling 0.1 percent to 2697/2707 per dollar, a day after the central bank intervened to prop it up after it fell to a five-week low against the dollar.
Annual inflation rose last month to 5.5 percent from 4.9 percent in November, which the bank said was due to seasonal demand.
The bank's policy stance was "accommodative and supportive of economic growth as well as anchoring inflation expectations around the medium-term target," its acting deputy governor Justine Bagyenda told a news conference.
It had cut rates by 50 basis points in early December, citing sluggish economic growth.
Bagyenda said on Thursday that annualised economic growth in the last three quarters of 2012 had, at 5.2 percent, been "much higher than previously projected".
However, private sector credit growth remained subdued partly on account of the high lending rates on shilling loans, he said.
With rates of economic and credit growth likely to pick up later in 2013, "I expect a further reduction in lending rates," he added.
Analysts also saw room for further easing, and said the decision to hold rates this time was not surprising.
"The decision was in line with our expectations," said Mark Bohlund, a senior economist for IHS Global Insight.
"We still see potential for further monetary easing in the first half of 2013 as we are forecasting inflation to dip again amid sluggish domestic demand and limited pressure from food and energy prices."

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Botswana GDP growth at 1.1 pct q/q in Q3 2012

JOHANNESBURG (Reuters) - Botswana's economy grew by 1.1 percent quarter-on-quarter in the third quarter of 2012 after rising by a revised 0.3 percent in the second quarter, data from the Central Statistics Office showed on Thursday.
On a year-on-year basis growth was at 5.7 percent in the third quarter compared with a revised 8.5 percent in the previous quarter.

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Benazir Bhutto's son takes up the family trade in Pakistan

Five years after the assassination of Pakistan’s former Prime Minister Benazir Bhutto, her son Bilawal Bhutto Zardari made his first major speech today aimed at galvanizing supporters of the Bhutto family-led Pakistan Peoples Party.
The speech, delivered in the family’s hometown of Garhi Khuda Bux in Pakistan’s Sindh Province, was attended by thousands of party supporters gathered to mark the anniversary of Benazir Bhutto’s death. Days after her 2007 assassination, the then 19-year-old Bilawal was elected as the party’s chairperson, though his role has been largely symbolic until now.
As Mr. Bhutto Zardari takes a more active role in his party, it is a reminder that Pakistani politics have long been dominated by influential families and that one's position in government is often determined by family ties.
While many of the Pakistan Peoples Party's voters, particularly in rural areas, are happy that the party is led by Benazir's son, nepotism in politics and government has increasingly become a sore point for urban, middle class voters who are less supportive of the PPP. Of late, most political scandals in Pakistan have involved family members of leading politicians, including the Chief Justice's son, who is accused of taking money from a prominent businessman.
“If you look at any mainstream political party in Pakistan, it is seen as a family business at every level, passed down from father to son – and occasionally daughter – to grandson,” says Cyril Almeida, an assistant editor at Pakistan’s leading daily Dawn. “It is the nature of politics out here. Society puts a premium on personality rather than performance; and so last names matter.”
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The Pakistan Peoples Party was founded in 1967 by Zulfikar Ali Bhutto, a charismatic yet controversial leader, who was deposed in a military coup and executed on charges of abetting murder. After he was imprisoned, his widow Nusrat Bhutto led the party, followed by his daughter Benazir, who chaired the party until her death. Though grandson Bilawal was elected to lead the Pakistan Peoples Party, his father Asif Ali Zardari was also elected co-chairperson before he became president of Pakistan in 2008, and has largely run party affairs.
The trend of family-dominated politics is prevalent across the subcontinent.
In India, members of the Gandhi/Nehru dynasty have led the Congress Party and the country as prime ministers for decades. Sheikh Hasina, the twice-elected prime minister of Bangladesh, is the daughter of the country’s founder, and her leading rival Khaleda Zia is the widow of a former president. The other leading political party in Pakistan, the Pakistan Muslim League, features a number of members of the Sharif family in prominent positions, and many major politicians in Pakistan have a similarly strong lineage.
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Mr. Almeida points out that in the case of Sindh Province, where the Pakistan Peoples Party has long held sway, there is a “cult of personality and a client-patron relationship in politics,” and Bilawal leading the party was a “a connection to the original person who energized political support.” In some way, he says, the parties are just trying to capture that original energy the name still garners to affect political change.
In his speech, Bhutto Zardari did mention his bloodline, but also reaffirmed the party’s vision, including providing basic needs to every citizen and opposition to terrorist groups. He recalled the assassinations of prominent party leaders such as Punjab Governor Salmaan Taseer and Federal Minister for Minorities Affairs Shahbaz Bhatti, who were killed in 2011 for their opposition to misuse of the country’s controversial blasphemy laws.
Still, says journalist Sohail Warraich, the author of an extensive tome on the assassination of Benazir Bhutto and who was on stage as Bhutto Zardari spoke on Thursday, “You have to know how to handle people. Both Zulfikar Ali Bhutto and Benazir Bhutto made their way [in] politics” by proving they had what it took to govern, he says.
Mr. Warraich acknowledges there are many challenges ahead for the aspiring politician, despite his name and because of his name: He still has to answer for the PPP-led government’s failures in governance.
“Even abroad, you see the Kennedy family etc, people do have these feelings of attachment toward them [family names]. But the real test is in politics. Benazir, after 1988 [when she became prime minister], was assessed on how she conducted politics, not just because of Zulfikar Ali Bhutto,” he says. “Bilawal will also be tested on the same.

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India gang rape spurs national dialogue

The Indian government’s crackdown on the anti-rape protests that have continued for nearly two weeks in New Delhi has only aggravated public anger and concern about women’s safety.
The protests were sparked by the gang rape and brutal assault of a 23-year-old student on a bus in the elite South Delhi district on Dec. 16.
As the girl battles for her life in a Singapore hospital, Indians are debating how to make the country safer for women. Ten days after the incident, it dominates newspaper headlines and op-ed pages, pushing to the margins stories like the retirement of cricketer Sachin Tendulkar, the popular Indian sportsperson, highlighting just how much the case has affected people.
Sexual harassment is rampant in India, and the public has been largely apathetic to women’s plight, but many are hoping the attack could be a turning point in the way India treats women.
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Calls for capital punishment, including the chemical castration of rapists, have died down, with various women’s groups decrying them. Given that in 94 percent of rape cases the rapist is known to the victim, Nilanjana S. Roy, writing in the Hindu, she wonders if the protestors would be okay with death penalty for fathers, uncles, neighbors, and Indian security forces in conflict zones.
The Monitor reported that India is considering a fast-track court process to expedite rape cases and step up punishment for sexual violence on the heels of the bus rape incident.
Beyond the law, what needs to happen, writes Shilpa Phadke, author of a book on women’s safety in Mumbai, has to do with how Indians use their streets: “We are safer when there are more women (and more men) on the streets. When shops are open, when restaurants are open, when there are hawkers and yes, even sex workers on the street, the street is a safer space for us all.”
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The outrage that this case has spurred might finally bring about a cultural change in India, Stephanie Nolen of The Globe and Mail suggests in a report:
Women assaulted leaving bars or late at night or while wearing Western clothes have been chastised by police, judges and politicians for bringing their misfortune on themselves. This time, however, there is a current of defiance in the protests, noted Subhashini Ali of the All India Democratic Women’s Association. A young woman in central Delhi on Tuesday carried a sign saying, “Stop telling me how to dress, start telling your sons not to rape.”
But rape is still not seen as a men’s issue, Ms. Ali said. “I don’t think many people are asking that question yet [of how men are being brought up and how it shapes their attitude toward rape].”
“But that’s where we have to go.”
And that should start with using sexual education in schools as a means to counter systemic patriarchal attitudes, writes Ketaki Chowkhani in Kafila, a collaborative blog that I work with.
That need for an emphasis on social change rather than law enforcement was also highlighted by Praveen Swami in The Hindu newspaper. India could learn a lot from the United States, he writes, where the incidence of rapes have fallen:
“The decline in rape in the U.S. has mainly come about not because policing has become god-like in its deterrent value, but because of hard political and cultural battles to teach men that when a woman says no, she means no.”
Meanwhile, the crackdown on the protests in Delhi has drawn sharp reactions and much anger across the Internet. On Facebook, graphic designer Sangeeta Das narrated her experience of the protests on Dec. 23, republished on the Kafila blog:
“There were many volunteers distributing biscuits and water to every protestor. We were talking ... on how to tackle the violence on women and children starting from ourselves, our homes, and communities. We were simply talking ... when the police, hundreds of them ... charged at us from behind, without any warning.”
Meanwhile, the media have drawn the government’s ire. On Sunday, the same day one journalist was killed in Manipur when police opened fire on protestors, the government issued an advisory to news channels to show “maturity and responsibility” in their coverage of protests:
No programme should be carried in the cable service which is likely to encourage or incite violence or contains anything against maintenance of law and order or which promotes anti-national attitude.

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Putin signs antiadoption law, throwing pending adoptions into confusion

President Vladimir Putin signed the Dima Yakovlev Act into law Friday, banning all adoptions of Russian orphans by US citizens as of Jan. 1 and throwing dozens of currently ongoing adoptions into confusion.
The mood among workers in the almost 40 Russia-accredited adoption agencies, which have survived repeated bouts of political tensions and ever-tightening regulations over the years, was near despair Friday.
"We have two cases of adoption in court and we're just asking ourselves the same question, what will be next?" says Lyudmila Babich, of the Cold Spring, New York-based Happy Families Center.
"We have no text of this law, nor any explanations of what's supposed to happen now. So, we're waiting," she says.
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Any hope that Mr. Putin might impose some restraint upon a measure that even members of his own cabinet have criticized as possibly illegal and diplomatically disruptive were dashed Thursday when Putin explicitly endorsed the adoption ban and other tough measures against US citizens working in Russia in televised remarks.
"I see no reason not to sign the law," Putin said.
He added that he would also sign a presidential decree to improve procedures for adopting Russian orphans and abandoned children domestically, and also boost measures to help children with serious disabilities and health problems – who were previously the major pool of orphans made available for foreign adoption.
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About 1,000 Russian children were adopted by US families in 2011, down from the annual average of 3,000 or so in the past decade, and only a small portion of the 120,000 Russian children who are considered eligible for adoption. Under Russian law, a child can be offered to prospective foreign parents only after having been rejected three times by Russian families.
FRAMED AS 'SELLING' CHILDREN
Russian nationalists argue that it's a shame for Russian children to be "sold" abroad, and several of the lawmakers who championed the Dima Yakovlev bill argued they will sponsor further efforts to ease the plight of Russia's huge numbers of institutionalized children.
Putin lent his support to the harshest critics of international adoption Thursday, by casually likening Russian children taken into US families to economic refugees.
"There are probably many places in the world where living standards are higher than ours. So what, are we going to send all our children there?" Putin said with sarcasm. "Maybe we should move there ourselves?"
The new law is a sudden about face from Russia's previous position. Russia's foreign ministry spent years negotiating a detailed US-Russia adoption accord, which regulates virtually all aspects of the adoption process, and came into effect just last month.
"I just don't understand how they can completely change the whole system for international adoptions, suddenly, all at once like this," says Svetlana Pronina, head of Child's Right, a Russian nongovernmental group that works for children's rights.
"It looks to me like children have become hostages to the political situation, and this is not a wise way to approach the needs of Russian children," she adds.
"How is it that our authorities were able to ratify a major agreement with the US about adoptions just a few months ago, and now they decided to abolish it? What sense is there in this?" she says.
ONE YEAR'S WARNING IGNORED
The law is slated to come into effect on Jan. 1, though the US-Russia bilateral accord stipulates that either side must give one year's warning before withdrawing from the deal.
The original idea of the Dima Yakovlev law was to frame a symmetrical response to the US Magnitsky Act, which targets sanctions at about 60 Russian officials allegedly involved in the 2009 prison death of whistleblowing anticorruption lawyer Sergei Magnitsky.
That law would have levied visa and financial penalties on alleged US human rights violators, such as CIA officials involved in "black site" secret prisons, Guantanamo prison guards as well as US adoptive parents who abused their Russian-born children.
But after a series of amendments last week, the adoption ban was put front-and-center, along with measures that may lead to the closure of any NGO that receives US funding and stiff restrictions on US passport-holders (including thousands of dual US-Russia citizens) engaging in activities deemed "political" by authorities.
PENDING ADOPTIONS A QUESTION
No one is sure what will happen with the approximately 50 cases of US-Russia adoption that are currently at various stages of completion.
Pavel Astakhov, the Kremlin's ombudsman for children's rights, who has been a strong supporter of the ban, says all current adoptions will be halted and the children re-assigned.
"There are 52 such children," Mr. Astakhov told the independent Interfax agency Friday.
"I believe they must be adopted in Russia, with the regional governors taking personal responsibility for them," he added.
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Ilya Ponomaryov, the lone Duma deputy who voted against the Dima Yakovlev bill in all three readings, says there should now be absolutely no doubt about who was behind the adoption ban from the outset.
"The Duma has no independent will, it simply does what the executive branch tells it to," Mr. Ponomaryov says. "Now it's clear that this was Putin's initiative all along."

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US embassy evacuated as rebels surge in Cental African Republic

Rebels are closing in on the capital of the impoverished Central African Republic, threatening to topple the weak government and push yet another African nation into civil war, failure, or outright collapse, The Associated Press and other news outlets are reporting.
The former French colony joins a string of countries stretching from Mali and the Ivory Coast to Congo and South Sudan where war and turmoil have created waves of refugees and power vacuums for warlords or criminal groups to exploit. Several of the countries are former French colonies, raising questions for Paris about whether to get involved in the conflicts.
The United States evacuated its embassy in the CAR capital Bangui overnight, sending the ambassador and around 40 other staff to Kenya due to the deteriorating security situation, the AP reports. The United Nations has also ordered around 200 non-essential staff to depart, as well.
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A day earlier, President François Bozizé, who seized power in a 2003 coup, urged the US and France to intervene, according to Radio French International. Hundreds of demonstrators pelted the French Embassy with stones earlier this week, demanding that France intervene militarily to halt the rebel advance, Reuters reports.
“We ask our French cousins and the United States of America, the great powers, to help us to push back the rebels … to allow for dialogue in Libreville [Gabon] to resolve the current crisis,” President Bozize said.
“There is no question of allowing them to kill Central Africans, of letting them destroy houses and pillage, and holding a knife to our throats to demand dialogue,” he said.
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The rebel fighters are a coalition known as Seleka that have captured four regional cities and towns, including a diamond mining hub, since taking up arms on Dec. 10. They accuse Bozizé of not upholding peace deals meant to end several regional uprisings.
The conflict has posed yet another challenge to French foreign policy, particularly in its former African colonies. There are around 250 French military advisers in the CAR, but French President François Hollande said yesterday that troops wouldn’t get involved. "If we are present, it is not to protect a regime, it is to protect our nationals and our interests, and in no way to intervene in the internal affairs of a country," President Hollande was quoted by AFP as saying. "Those days are gone."
That’s a contrast from Hollande’s predecessor, Nicholas Sarkozy, who took a more aggressive approach, sending French military troops, for example, to help oust Ivory Coast leader Laurent Gbagbo amid fighting that followed a disputed presidential election. French jets played a major role in the air campaign in Libya that ultimately led to Col. Muammar Qaddafi’s defeat.
Landlocked and poor despite substantial mineral wealth, including uranium, the CAR has been unstable for most of its 52 years of independence. It is also sandwiched between countries that have been roiled by war for years, often fueled by access to mineral and natural resources. The Democratic Republic of Congo has seen on- and off-again war involving as many as nine other countries and other armed groups for nearly two decades. The fighting in South Sudan predates its independence in 2011, a struggle involving oil resources, among other things.
Also fueling the turmoil is Joseph Kony, the notorious leader of the Uganda-based Lord’s Resistance Army, who is believed to be hiding in southeastern Central African Republic. Mr. Kony, indicted by the International Criminal Court for his role in the brutal fight in Uganda, is the focus of a global manhunt. US military advisers have been dispatched to Uganda to help search for him.
Further west, France has been resisting calls for greater involvement in civil war in Mali, where Islamist rebels have seized the northern part of the former colony, and imposed harsh sharia law. That has raised fears of a power vacuum, allowing Al-Qaeda-linked terror groups a base for operations.
The United Nations Security Council last week approved a resolution that authorizes a US- and European-backed African force to rebuild Mali's military and to prepare it for a possible offensive against the separatists and extremists. The French-sponsored resolution also authorized military intervention by a 3,300-strong force of soldiers from the Economic Community of West African States, under the training and command of Gen. Francois Lecointre, who has experience in Africa and Bosnia.

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In 2013, possibilities for stability from Somalia to South China Sea

The international news of any year is a disparate affair, a global chronicle of courage, calamity, and close calls. The interconnectedness of events is not always clear.
But looking ahead to 2013, whether in Syria, South America, or the South China Sea, policymakers have a common New Year's wish: for unity to usher in and consolidate political and economic stability.
EUROPE TURNS TOWARD INTEGRATION
After another year in the depths of a debt crisis that has tested the viability of the European Union, leaders made a major step forward at the end of the year: agreeing to give the European Central Bank oversight of the biggest banks in the Union.
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Skeptics dismiss the agreement as a watered-down initiative of common-denominator compromises and delays. But it paves the way for an eventual banking union, and caps off a year of expressed commitments to deeper integration.
"The decision of European heads of state to create a banking union and a fiscal union still needs to be implemented. But that was a genuine game changer in a sense," says Jan Techau, director of Carnegie Europe at the Carnegie Endowment for International Peace in Brussels. "It is by no means perfect and is not seen in action yet; but if this comes, that will create momentum for more political integration."
IN AFRICA, A NEW DAWN FOR SOMALIA?
In Somalia, Al Qaeda was on the run in 2012 after four years in control of the country's south, pushed out of all of its major urban strongholds by African Union military offensives.
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Somalia's Western allies – also its financiers – have begun proclaiming a new dawn. International commercial flights now land regularly at Mogadishu's refurbished airport. Investors from the large Somali diaspora are returning home. Aid workers have ever-greater access to the millions of people still in grave need.
But analysts are wary. A large number of rank-and-file fighters may have deserted Al Shabab, but hard-line commanders remain. Many of them, trained in Pakistan with Al Qaeda, are regrouping in Somalia's north.
"The Somali government is going to need very quickly to show that it brings dividends, health, education, road repairs, to the population, or they may well turn back to supporting Shabab," one Western diplomat focused on Somalia says in an e-mail. "There is a very narrow window to prove the government is the better option. Probably less than nine months. The early part of 2013 will be crucial."
Meanwhile, across the continent in Mali, events moved in the opposite direction in 2012. An ethnic Taureg rebellion spiraled into a takeover of the north by Islamist militants, while the army ousted Mali’s democratically elected president. Malians hope that in 2013 their country can reunite and that democracy will be restored. If not, Western and African leaders fear Mali could become a failed state.
Some Malians say only force can dislodge the Islamists, while others place hope in dialogue. Meanwhile, worry is growing that ethnic grudges might transform a possible intervention into a tragedy of unintended consequences.
“Families affected by crisis may seek vengeance,” says Mohamed Ag Ossad, the director of Tumast, a Tuareg cultural center in Bamako. “The state should take things in hand before there’s an ethnic war.”
This month soldiers loyal to coup leader Captain Amadou Sanogo removed Mali’s interim prime minister – a brazen show of force that the US said endangered national dialogue and delayed a government recapture of the north, according to a statement on Dec. 11. Members of the security forces are also accused of beating, detaining, and killing critics of the army, as well as Tuareg and Arab men, said a December 20 report by Human Rights Watch.
For Moussa Mara, an accountant and district mayor in Bamako, such problems underline the need to reestablish democratic rule by holding presidential elections that were derailed by this year’s coup. “Crisis can be an opportunity for our country,” he says. “If we’re intelligent.”
MIDDLE EAST: TO THE VICTORS, MORE DIVISIONS?
As pressure has mounted against Syria's embattled president, Bashar al-Assad, many are starting to ask what will come of the opposition Free Syrian Army should the regime fall.
A number of Syria experts warn that without a plan to disarm opposition groups, they risk destabilizing the country.
"What do you do with the men with guns? The men who don't have jobs.... We've seen this in Libya, and we also saw it in Iraq," says Aram Nerguizian, a Syria expert at the Center for Strategic and International Studies.
The vast majority of Free Syrian Army units in Syria say they will put down their weapons and let democracy determine their future after Mr. Assad. Still, a number of observers worry that there is a possibility armed groups may want an undue stake in Syria's government, and the challenge for 2013 will be to incorporate them into civilian life.
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In Israel and the Palestinian territories, positions on both sides hardened as the window for a two-state solution rapidly closed. Israel moved further to the right heading into January elections, while Palestinians became more assertive with a perceived victory against Israel in the November Gaza conflict and an overwhelming vote recognizing Palestine as a state at the United Nations.
Israeli Prime Minister Benjamin Netanyahu has repeatedly invited the Palestinians to return to the negotiating table without preconditions at any time and indicated that the Palestinians’ failure to do so shows they are not serious about peace. But Palestinians say they cannot afford to negotiate while Israel steadily expands settlements in the West Bank. Nearly 10 percent of Israeli Jews now live over the 1967 borders, which the recent UN resolution recognized as the basis for a future Palestinian state.
In 2013, Palestinians want to see an end to settlement expansion before it is too late to implement a two-state solution. “We are witnessing today a very crucial moment … a moment of irreversibility,” says Mustapha Barghouthi, a former Palestinian presidential candidate and democracy activist.
Israelis, for their part, seek Palestinian recognition of Israel as a Jewish state, as well as assurances that a peace deal will mark the end to the conflict and not merely a stepping stone to regaining all of historic Palestine.
EAST ASIA'S SYMBIOTIC TIES
In a year when China made several neighbors nervous over its territorial claims, Beijing's most alarming spat was with Japan over a handful of uninhabited islands known in China as the Diaoyu and in Japan as the Senkaku. Although a war over the issue is highly unlikely, it has come to be seen as not altogether impossible, as tensions have risen in recent months.
But it is the economic fallout already under way that analysts say the two must address immediately. "China is Japan's biggest market, and Japan is a very important source for China to learn new science and technology," says Zhou Weihong, a Japan expert at Beijing Foreign Studies University. If the second-largest economy in the world [China] and the third-largest [Japan] are not getting along, "that is bad news for the rest of the world," Professor Zhou says. "There are big enough motives for both sides to want to improve their relationship."
THE REACH OF CHáVEZ
The biggest story of 2012 in Venezuela was the reelection of President Hugo Chávez in October, despite significant gains made by the opposition. But now, facing illness, Mr. Chávez might not be able to stand for his Jan. 10 inauguration – and may have to step down.
Venezuela is holding its breath – as is the region that sees Chávez as a beacon of the left, some of whose members, like Cuba, depend heavily on his largess. Within the oil-rich country, political tensions will flare in 2013 until a new leader is selected, while daily problems such as crime and inflation mount, says Caracas-based political analyst Jose Vicente Carrasquero. "Over time, we will adjust under a new government," he says, "and surely after this process of transition we will discover a new way of doing politics in Venezuela, something that we need."
* Also contributing: staff writers Peter Ford in Beijing and Christa Case Bryant in Jerusalem; correspondents John Thorne in Mali, Tom Peter in Aleppo, Syria, and Mike Pflanz in Somalia.

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