World

DR Congo and Rwanda agree ceasefire at talks: Angola

An agreement has been struck which could mean the adoption of a ceasefire in the violence-torn east of DR Congo as soon as late Friday, Angola’s Foreign Minister Tete Antonio has said.

The Democratic Republic of Congo’s President Felix Tshisekedi had been meeting Rwandan Foreign Minister Vincent Biruta in Luanda on Wednesday as tensions soared between the neighbours amid bloody militia violence on their border.  

Eastern DRC has witnessed fierce fighting in recent months between Congolese troops and the M23 rebel group.

An agreement was reached for an “immediate ceasefire” in the DRC at 6:00 pm (1600 GMT) Friday, Tete said after the talks. 

The parties also agreed to demand “the immediate withdrawal of M23 rebels from the occupied areas”, he added.  

The clashes have triggered a diplomatic row, with the DRC accusing Rwanda of aiding the rebels, something that its far smaller neighbour denies.

The East African Community (EAC), of which Rwanda is a member, has also vowed to deploy a joint force to quell the violence.

Kenyan soldiers arrived in the DRC earlier this month and Uganda says it will shortly deploy around 1,000 troops. 

The EAC’s chair, Burundian President Evariste Ndayishimiye, and former Kenyan president Uhuru Kenyatta — the EAC’s “facilitator” in efforts to restore peace and security in the mineral-rich region — were also in Luanda.

Rwandan President Paul Kagame was not in attendance at the talks for reasons that were not immediately clear. 

Ahead of the talks, the UN Security Council members called for a halt to fighting, for the M23 to withdraw from occupied areas and for the end to “all external support to non-state armed actors, including the M23.”

The M23, a largely Congolese Tutsi militia, has seized swathes of territory across North Kivu province, edging towards the region’s main city of Goma.

The DRC and Rwanda agreed to a de-escalation plan in July, but clashes resumed the very next day.

On Tuesday, Kinshasa said it would not sit down for talks with M23 rebels until the group withdrew from the areas it controlled.  

The M23 first leapt to prominence 10 years ago when it captured Goma, before being driven out and going to ground. 

It re-emerged late last year, claiming the DRC had failed to honour a pledge to integrate its fighters into the army, among other grievances.

Rwanda, denying the DRC’s charges against it, accuses Kinshasa of colluding with the Democratic Forces for the Liberation of Rwanda (FDLR) — a former Rwandan Hutu rebel group that was established in the DRC after the 1994 genocide.

Grinding inflation clouds 'Black Friday' shopping bonanza

The Black Friday kickoff of the holiday shopping season is expected to bring especially deep discounts in 2022, but one challenge will be finding consumers confident enough to spend.

Grinding inflation in the world’s biggest economy in recent months has cast uncertainty over this year’s festive season, which kicks off the day after Thursday’s Thanksgiving holiday.

A year ago, retailers faced product shortfalls in the wake of shipping backlogs and Covid-19-related factory closures. To avert a repeat, the industry front-loaded its holiday imports this year, leaving it vulnerable to oversupply at a time when consumers are cutting back.

“Supply shortages was yesterday’s problem,” said Neil Saunders, managing director for GlobalData Retail, a consultancy. “Today’s problem is having too much stuff.”

Saunders said retailers have made progress in recent months in reducing excess inventories but that oversupply created banner conditions for bargain-hunters in many categories, including electronics, home improvement and apparel.

Juameelah Henderson always checks for sales, “but more so now,” she said while exiting an Old Navy store in New York with four bags of items.

The clothing chain’s prices were “pretty good,” she said. “If it’s not on sale, I really don’t need it.”

Higher costs for gasoline and household staples like meat and cereal are an economy-wide issue, but do not burden everyone equally.

“The lower incomes are definitely hit worst by the higher inflation,” said Claire Li, a senior analyst at Moody’s. “People have to spend on the essential items.” 

– Diminishing savings –

Leading forecasts from Deloitte and the National Retail Federation project a single-digit percentage increase, but it likely won’t exceed the inflation rate.

The consumer price index has been up about eight percent on an annual basis, which means that a similar size increase in holiday sales would equate with lower volumes.

US shoppers have remained resilient throughout the myriad stages of the Covid-19 pandemic, often spending more than expected, even when consumer sentiment surveys suggest they are in a gloomy mood.

Part of the reason has been the unusually robust state of savings, with many households banking government pandemic aid payments at a time of reduced consumption due to Covid-19 restrictions.

But that cushion is starting to whittle away. After hitting $2.5 trillion in excess savings in mid-2021, the benchmark fell to $1.7 trillion in the second quarter, according to Moody’s.

Consumers with incomes below $35,000 were affected the most, with their excess savings falling nearly 39 percent between the fourth quarter of 2021 and mid-2022, according to Moody’s.

Accompanying this drop has been a rise in credit card debt visible in Federal Reserve data and anecdotally described by chains that also report more purchases made with food stamps.

“We’re seeing continued pressure,” said Michael Witynski, chief executive of Dollar Tree, a discount retailer that has seen “shifts” in shoppers, “where they’re very consumable and needs-based focused to try and make that budget work and stretch it over the month.”

– Mixed picture –

Earnings reports from retailers in recent days have painted a mixed picture on consumer health.

Target stood on the downcast side of the ledger, pointing to a sharp decline in shopping activity in late October, potentially portending a weak holiday season.

The big-box chain expects a “very promotional” holiday season, said Chief Executive Brian Cornell.

“We’ve had a consumer who has been dealing with very stubborn inflation for quarter after quarter now,” Cornell said on a conference call with analysts. 

“They’re shopping very carefully on a budget, and I think they’re looking at discretionary categories and saying, ‘All right, if I’m going to buy, I’m looking for a great deal and a great value.'”

But Lowe’s, another big US chain specializing in home-improvement, offered a very different view, describing the same late-October period as “strong” and seeing no evidence of consumer deterioration.

“We are not seeing anything that feels or looks like a trade down or consumer pullback,” said Lowe’s Chief Executive Marvin Ellison.

Consumers like Charmaine Taylor, who checks airline websites frequently, are staying vigilant

Taylor thus far has been thwarted in her travel aspirations due to  exorbitant plane ticket prices. Taylor, who works in child care, isn’t sure how much she’ll be able to spend on family this year

“I’m trying to give them some little gifts,” Taylor said at a park in Harlem earlier this week. “I don’t know if I’ll be able to. Inflation is hitting pretty hard.”

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European Space Agency names new astronauts, agrees record budget

The European Space Agency announced five new career astronauts as well as history’s first astronaut recruit with a disability on Wednesday after adopting a record budget to fund its projects.

The two female and three male career astronauts “will start working immediately,” ESA director-general Josef Aschbacher told a ministerial council meeting in Paris.

From more than 22,500 applicants, the agency chose France’s Sophie Adenot, Spain’s Pablo Alvarez Fernandez, Britain’s Rosemary Coogan, Belgium’s Raphael Liegeois and Switzerland’s Marco Sieber.

“I’m European but from the UK,” Coogan told the ceremony. Though Britain has left the European Union, it remains in the ESA.

The new recruits start training next year and are not expected to blast off into space on a mission until 2026.

They will join the astronauts from the ESA’s previous 2009 astronaut class, which include Britain’s Timothy Peake and France’s Thomas Pesquet. It is from that previous class that an astronaut will be selected to go to the Moon as part of NASA’s Artemis mission.

“No one is retiring today,” Pesquet said, advising the new recruits to “hang on tight”.

The ESA also announced the first astronaut recruit with a physical disability, British doctor and Paralympian John McFall, who will join a separate “parastronaut feasibility programme”.

The 41-year-old’s right leg was amputated after a motorcycle accident at the age of 18. He became a sprinter, winning bronze at the 2008 Paralympics.

“It had been quite a whirlwind experience, given that as an amputee I’d never thought being an astronaut was a possibility,” he said.

The ESA also established an astronaut reserve of six women and five men who passed the selection process and can be called up in future if needed.

– New budget –

The new astronauts were named after two days of tough talks by ministers from the ESA’s 22 member states meeting in Paris to decide on the agency’s future funding. 

They settled on a budget of 16.9 billion euros ($17.5 billion) for the next three years, a 17-percent increase from the 14.5 billion euros agreed at the last ministerial council meeting in 2019. 

But it was well short of the 18.5 billion requested by Aschbacher.

“With inflation being so high, I have to say that I’m very impressed by this figure,” Aschbacher told the meeting. 

Aschbacher said the increased funds were necessary for Europe not to “miss the train” in the face of competition in space from the United States and China.

French Economy Minister Bruno Le Maire hailed a “great success” that was “beyond expectations”.

Negotiations about each country’s contribution continued until the last moment before the announcement.

The biggest contributors were Germany with 3.5 billion euros, France on 3.25 billion euros and Italy at 3.1 billion euros.

However the total committed remains far below NASA’s budget of $24 billion for 2022 alone.

Earth observation programmes, which monitor climate change back on Earth, had a six percent funding increase to almost 2.7 billion euros.

Robotic and human exploration’s budget jumped 36 percent to 2.7 billion, while telecommunications rose 19 percent to 1.9 billion euros.

– Rocket boost –

The budget for rocket launcher systems was increased by a third to 2.8 billion euros. 

Launchers, which were a subject of delicate negotiations, are crucial for Europe to be able send missions into space without outside help.

The ESA has struggled to get off the ground since Russia withdrew its Soyuz rockets earlier this year in response to European sanctions over Moscow’s invasion of Ukraine.

The job has been made more difficult by delays to its flagship Ariane 6 rocket, which was supposed to have its maiden flight in 2020 but will now blast off at the end of next year.

The ESA has even had to resort to using the Falcon 9 rockets of its rival SpaceX to launch two upcoming scientific missions.

The negotiations were given a boost on Tuesday when France, Germany and Italy announced their support for Ariane 6, the smaller Vega-C launcher and European-made micro and mini launch systems.

The ExoMars mission, which has been left without a ride after Russia withdrew its rockets, will go ahead with US help, Aschbacher said.

Zelensky to address US, as Russian strikes batter Ukraine power grid

Ukrainian President Volodymyr Zelensky was set to address an urgent meeting of the UN Security Council Wednesday, as Russian strikes left the country’s energy system in tatters.

“Murder of civilians, ruining of civilian infrastructure are acts of terror. Ukraine keeps demanding a resolute response of international community to these crimes,” Zelensky said in a tweet.

He will address the emergency debate — requested by Kyiv and due to start at 4:00 pm (2100 GMT) in New York — via video-link, diplomats told AFP.

The Ukrainian energy system has been torn apart and millions have been subjected to long periods without electricity after weeks of Russian bombardments, with the World Health Organization (WHO) warning the country’s priority this winter would be “survival”.

The Ukrainian military said Russian forces had fired around 70 cruise missiles at targets across the country on Wednesday and also deployed attack drones.

The Russian strikes caused widespread blackouts in neighbouring Moldova.

Ukrainian Foreign Minister Dmytro Kuleba said the latest Russian salvo was a response to a decision by the European Parliament to recognise Russia as a “state sponsor of terrorism” over its nine-month invasion of Ukraine, and its call for the 27-nation EU to follow.

“Being unable to win in a fair fight with the Ukrainian army, Russia wages a cowardly war of terror against civilians,” Kuleba said, urging Kyiv’s Western backers to supply more air defence systems.

The strikes on Wednesday piled pressure on the Ukrainian grid, disrupting power supplies in southern and eastern regions, with water and electricity cuts in the capital Kyiv and elsewhere.

– Burnt out cars, corpses –

“Three people were killed as a result of today’s rocket attacks on the capital. Among them is a 17-year-old girl,” Kyiv Mayor Vitali Klitschko wrote on Telegram, adding that 11 residents were injured.

AFP reporters at the scene of one strike in Kyiv saw the burnt out remains of two cars and the bodies of two people killed in the blast.

Ukrainian police told local media that six people were killed across the country.

Russia has systematically targeted Ukraine’s energy infrastructure, causing severe damage to around half of the country’s power facilities.

The WHO has cautioned that winter will be “life-threatening” for millions of people as a result.

Lviv mayor Andriy Sadovyi said half of the western city was without electricity, but that scheduled outages were continuing.

Neighbouring Moldova said it was suffering widespread blackouts caused by the barrage and its EU-friendly president, Maia Sandu, accused Russia of leaving her country “in the dark”.

Ukraine’s nuclear energy operator Energoatom said Wednesday’s strikes had disconnected all three nuclear power plants still under Ukrainian control from the grid and forced the plant in Zaporizhzhia — controlled by Russian forces — to be powered by back-up generators.

 In Zaporizhzhia earlier on Wednesday, Russian strikes smashed into a hospital in the city of Vilniansk, killing a newborn baby in the maternity ward.

– ‘Grief fills our hearts’

Emergency services said a woman and doctor also in the building had survived, as official footage showed workers wearing protective helmets trying to dig out a man trapped waist-deep in rubble.

“Grief fills our hearts,” said Oleksandr Starukh, the head of the Zaporizhzhia region, in the wake of the attack.

Vilniansk is around 45 kilometres (28 miles) from the frontline, and was targeted in Russian strikes last week that killed 10 people.

Moscow claimed to have annexed Zaporizhzhia alongside three other Ukraine regions last month despite not having full control of the territory.

The fresh strikes were only the latest to hit Ukrainian medical facilities since Russia invaded on February 24.

The WHO has warned that attacks on the energy grid are causing severe disruptions at Ukrainian hospitals.

An infamous attack last March on a hospital in the war-battered coastal city of Mariupol left at least three dead in an attack widely condemned by Ukraine and its allies, which Moscow insisted was “staged”.

In the Kharkiv region, Russian strikes on a residential building and a clinic left two people dead, the governor said.

– ‘Attacks and atrocities’ –

The WHO has recorded more than 700 attacks on Ukraine’s health facilities since Russia’s invasion began, it said this week.

The move by European legislators to recognise Russia as a “state sponsor of terrorism” is a symbolic political step with no legal consequences.

Kyiv has for months called on the international community to declare Russia a “terrorist state,” and the Strasbourg parliament’s decision will likely anger Moscow.

The resolution approved by EU lawmakers said the “deliberate attacks and atrocities carried out by the Russian Federation against the civilian population of Ukraine… and other serious violations of human rights and international humanitarian law amount to acts of terror.” 

Ukraine praised the decision, with Zelensky calling for Russia to be “held accountable in order to end its long-standing policy of terrorism in Ukraine and across the globe.”

Separately, Ukraine’s security service announced it had seized “pro-Russian literature” and cash, and interrogated dozens during raids on several Orthodox monasteries that spurred a backlash from the Kremlin.

The SBU said it had probed 850 people including Russian and Ukrainian citizens.

UK retailer Boohoo denies 'slave' labour claims

British online fashion retailer Boohoo on Wednesday denied allegations that staff in a UK warehouse worked in harrowing and health-threatening conditions and regarded themselves as “slaves”.

The Times newspaper, in an undercover investigation, reported that workers at Boohoo’s facility in Burnley, northwest England, complained of racism, sexual harassment, poor safety equipment, inadequate training and “gruelling” targets.

However, a Boohoo spokesperson said that it “does not believe the picture painted is reflective of the working environment at our Burnley warehouse”.

Boohoo “is taking every claim very seriously”, the spokesperson said, adding that making sure workers are safe and comfortable is the company’s “highest priority”.

The Times, whose undercover reporter worked at the warehouse for one month, said each staff member walked the equivalent of a half-marathon (13 miles, 21 kilometres) per shift.

Night-time summer temperatures reached up to 32 degrees Celsius (89.6 degrees Fahrenheit) and frequently collapsed, it alleged.

The daily added that Burnley employees are paid £11 ($13.25) per hour in shifts that are up to 12 hours long. 

Each staffer must fetch 130 items every hour, it said.

The online retail group has annual sales of almost £2.0 billion per year, and its chief executive was paid a £1.3 million bonus this year.

Boohoo had already been rocked last year by allegations that one of its suppliers in Leicester, central England, paid workers much less than the national minimum wage.

The group’s suppliers were meanwhile accused also of underpaying staff in Pakistan.

Boohoo benefited from an online sales boom during the pandemic, during which it expanded aggressively to snap up brands belonging to collapsed UK retail giants. 

It bought fashion labels Burton, Wallis and Dorothy Perkins from Arcadia, as well as assets of failed UK department store Debenhams.

The company employs about 5,000 people worldwide, according to its website.

Record number of children miss measles vaccine: global report

A record high of nearly 40 million children around the world missed a measles vaccine dose in 2021, according to a new report Wednesday that found immunization levels had failed to rebound from disruptions caused by the Covid-19 pandemic.

The research, which was jointly published by the World Health Organization (WHO) and the United States Centers for Disease Control and Prevention (CDC) said the decline was a major setback in eliminating the deadly disease.

WHO chief Tedros Adhanom Ghebreyesus noted the irony in the fact that  while vaccines against Covid were developed and deployed in record time, routine immunization programs were badly impacted, leaving millions at risk.

“Getting immunization programs back on track is absolutely critical. Behind every statistic in this report is a child at risk of a preventable disease,” he said in a statement.

According to the report, 25 million children missed their first dose while 14.7 million missed their second.

Measles is almost entirely preventable through vaccination.

But because it is so contagious, an estimated 95 percent of a population needs to be vaccinated with two or more doses in order to create herd immunity to achieve and maintain elimination.

In 2021, only 81 percent of children globally received their first dose and 71 percent received their second.

It was the lowest global coverage rate of the first dose since 2008.

The five countries with the highest number of infants who did not receive their first dose were Nigeria, India, Democratic Republic of the Congo, Ethiopia and Indonesia.

No WHO region has achieved and sustained measles elimination, and the virus can quickly spread across borders. 

Since 2016, ten countries that had previously eliminated measles experienced outbreaks and reestablished transmission.

Measles is characterized by high fever and a telltale rash — though part of what makes it so dangerous is that it can be contagious for days before the rash emerges.

Complications can include pneumonia and swelling of the brain, which can cause permanent disability.

Between 1 and 3 in every thousand children die from respiratory and neurologic complications.

Scottish govt vows UK independence push despite court setback

Scotland’s leader vowed Wednesday to turn the next UK general election into a de facto vote on independence, after judges blocked her bid to hold a new referendum without London’s approval.

First Minister Nicola Sturgeon said the ruling by the Supreme Court in London exposed the “myth” that Scotland could voluntarily leave the United Kingdom.

The unanimous ruling torpedoed the Scottish nationalist government’s push to hold a second plebiscite next October — nearly a decade after Scots narrowly opted to remain in a pre-Brexit UK.

Sturgeon, who leads the Scottish National Party (SNP), said she respected the ruling, but accused Westminster of showing “contempt” for Scotland’s democratic will.

The SNP-led government will now look to use the UK election due by early 2025 as a “de facto referendum” on separating after more than 300 years, Sturgeon told a news conference.

“We must and we will find another democratic, lawful and constitutional means by which the Scottish people can express their will. In my view, that can only be an election,” she added.

Outside the court, David Simpson, 70, who first voted for the SNP in 1970, said he was still hopeful of achieving independence in the future.

“This is not the end of the road,” he told AFP. “There is nothing impossible.”

In Edinburgh, campaigners holding a Saltire flag emblazoned with the words “Scottish not British” said their voices had been stifled.

“Nobody is letting us have our say,” said Gerard Clarke, 74.

Protester David Turner said the rejection would only strengthen support for going it alone.

“They might try to stop it but it’s now a one-way path to independence,” he added.

Campaigners, however, were met with anti-independence supporters at a rally outside the Scottish parliament waving placards including one reading: “We want to stay in the UK.”

In the UK parliament in London, Prime Minister Rishi Sunak called the ruling “clear and definitive” and called for politicians north and south of the border to work together.

SNP leaders were scornful, arguing Sunak lacked a democratic mandate of his own after he was made prime minister only via the votes of Tory MPs.

– ‘Mandate’ –

The Supreme Court’s Scottish president, Robert Reed, said the power to call a referendum was “reserved” to the UK parliament under Scotland’s devolution settlement.

Therefore “the Scottish parliament does not have the power to legislate for a referendum on Scottish independence”, Reed said.

Sturgeon’s SNP-led government in Edinburgh wanted to hold a vote next October on the question: “Should Scotland be an independent country?”

The UK government, which oversees constitutional affairs for the whole country, has repeatedly refused to give Edinburgh the power to hold a referendum.

It considers that the last one — in 2014, when 55 percent of Scots rejected independence — settled the question for a generation.

But Sturgeon and her party say there is now an “indisputable mandate” for another independence referendum, particularly in light of the UK’s departure from the European Union.

Most voters in Scotland opposed Brexit. 

Scotland’s last parliamentary election returned a majority of pro-independence lawmakers for the first time.

Opinion polls, however, indicate only a slight lead for those in favour of a split.

– Scotland not Kosovo –

Lawyers for the Scottish government wanted a ruling on the rights of the devolved parliament in Edinburgh if London continued to block an independence referendum.

The Scottish government was seeking to create its own legal framework for another referendum, arguing that the “right to self-determination is a fundamental and inalienable right”.

But the Supreme Court rejected international comparisons raised by the SNP, which had likened Scotland to Quebec or Kosovo.

Reed said international law on self-determination only applied to former colonies, or where a people is oppressed by military occupation, or when a defined group is denied its political and civil rights.

None of that applied to Scotland, he added.

He also rejected the SNP’s argument that a referendum would only be “advisory” and not legally binding.

Any such vote would carry “important political consequences” regardless of its legal status, the judge said.

The SNP ran in the 2021 Scottish parliamentary elections on a promise to hold a legally valid referendum after the Covid crisis subsided. 

“As long as there is breath in my body, I refuse to give up on the basic principle of democracy,” Sturgeon said, announcing the SNP will hold a special conference in the New Year to prepare its independence push.

UK defends Brexit deal despite economic woes

Finance minister Jeremy Hunt on Wednesday defended the UK’s post-Brexit trade deal with the EU, despite growing criticism about its economic impact, and rejected claims he was pushing for closer European ties.

Hunt, who voted to remain in the European Union at the 2016 referendum, was rumoured to be the source of a report last weekend that the government was eyeing a “Swiss-style” deal with Brussels.

But he scotched talk he was the “senior government figure” quoted in the article, which has threatened to reopen deep divisions in the ruling Conservatives over the form Brexit should take.

The government supports the trade and cooperation agreement (TCA) struck with the EU, he told the influential cross-party Treasury Committee in parliament.

“We think it is an excellent agreement,” he added.

“We do not support, we would not contemplate, I do not support, I have never contemplated, any agreement which means moving away from the TCA.

“That means we are not negotiating or deciding the regulations that we want as sovereign equals, paying unnecessary money to the EU or indeed compromising on freedom of movement.

“That has always been my position as Chancellor (of the Exchequer).”

He added: “With respect to the story in the Sunday Times, if you’re saying was the Treasury, was I, the source for any suggestion we should seek to renegotiate the TCA to move it towards an agreement more like the agreement with Switzerland, the answer is no.”

– Tough going –

Former UK prime minister Theresa May proposed a similar deal, which was roundly rejected by lawmakers, and which contributed to her downfall in 2019.

May’s successor, Boris Johnson, railroaded his own “harder” Brexit deal through parliament on the back of a landslide 2019 general election win fought on a campaign to “get Brexit done”.

But despite promises of greater freedoms to set policy and chart its own course in the world, the UK has found post-Brexit life tough going, even without the shock of the Covid pandemic.

The Bank of England and the government’s independent spending watchdog have both said Brexit has hurt the UK economy and plunged it to the brink of recession.

On Tuesday, the Organisation for Economic Co-operation and Development forecast the UK economy would contract more than any of the world’s seven most advanced nations next year.

Many critics have partly blamed the fallout from Brexit, which saw the UK withdraw from the European single market and customs union, and end free movement between member states.

Switzerland has far closer ties with the bloc through bilateral agreements allowing access to the single market, a high degree of free movement and by paying into EU coffers.

But on Monday, British Prime Minister Rishi Sunak ruled out pursuing “any relationship with Europe that relies on alignment with EU laws” as eurosceptic Tories warned of backsliding.

The European Commission says no Swiss-style deal is on the table.

Hunt last week hiked taxes and slashed spending, to try to reverse unfunded tax cuts by his predecessor Kwasi Kwarteng, under short-lived premier Liz Truss, that sparked markets chaos and worsened a cost-of-living crisis of high energy bills and inflation.

Hunt also suggested on Wednesday that support for householders would not be extended beyond early 2024, even if energy bills remain elevated.

Ecuador: a new nerve center for global drug trade

Ecuador has become an unlikely hub for the global drug trade, flooding the world with Colombian cocaine while bloodshed rages between a complex tapestry of local gangs backed by Mexican and European mafia.

“The cocaine that leaves Ecuador’s ports goes to the whole world, mainly the United States and Europe, but also Asia and Australia,” said Chris Dalby, an investigator with organized crime think tank Insight Crime.

Ecuador is not known to have large plantations of drug crops, laboratories for refining cocaine, or major drug cartels. 

Instead, it has become a staging ground for foreign mafia, upping the stakes for local gangs who are brutally killing each other as they jockey for valuable alliances and control of drug routes.

In September, the United States listed Ecuador among the top 22 drug-producing or transit countries in the world.

Geography and corruption are among the main reasons that one of Latin America’s smaller countries has evolved into a hotspot of transnational organized crime.

Ecuador borders the world’s two largest cocaine producers, Colombia and Peru, who produce 1,400 and 400 tonnes of the drug respectively, according to UN estimates.

Its major Guayaquil port, from where most of the drugs are shipped abroad — often in containers of bananas or in legal shipments by front companies — is seen as having weaker controls.

– History with Colombian guerrillas  –

Ecuador is “a natural exit point for Colombian cocaine,” Dalby told AFP.

This is largely because it has long been a haven for Colombian armed groups, such as the Marxist Revolutionary Armed Forces of Colombia (FARC) guerrillas.

Before a 2016 peace deal that led to its demobilization, FARC controlled Colombia’s coca-growing areas for decades and acted as a go-between for farmers and drug traffickers. 

Ecuadoran gangs would move the drugs “from the border to various ports,” said Dalby.

However, in recent years patterns of criminal activity in the region have changed, the International Crisis Group (ICG) said earlier this month.

Cocaine production has boomed in Colombia, where dissident FARC rebels who did not lay down arms have started to produce cocaine in the south, and move it into Ecuador by “river or by road” themselves, said Dalby.

According to the ICG, Ecuador’s move to dollarize its economy in 2000, and weak financial controls, also made it a “hotspot for laundering illicit profits.”

According to a UN report, Ecuador was home to the third-highest number of cocaine seizures in 2020, with Colombia in first place, followed by the United States.

– Global mafia operation –

So who else has a finger in the pie?

A study by the Colombian Observatory of Organized Crime (OCCO) said that Ecuadoran criminal groups had also forged alliances with powerful families who control drug crops in Peru.

A network of rivers link Peru with southern Ecuador, easing the smuggling of goods and people.  

Mexico’s powerful Sinaloa and Jalisco New Generation cartels also operate in Ecuador. There is also an increased presence of Balkan mafia in the country.

The Mexican and Balkan cartels have alliances with Colombian armed groups who organize the transport of drugs to Ecuador.

Mathew Charles, who authored the OCCO study, told AFP there had been a “fragmentation” of the drug business between buyers and sellers.

Before, Italy’s feared ‘Ndrangheta mafia strongly influenced the Colombian drug business.

The foreign mafia have forged alliances with local gangs such as the Chone Killers, the Choneros, Aguilas, Latin Kings or Los Lobos.

– Prison HQ –

The battle for control among local gangs plays out in Ecuador’s prisons, mainly in Guayaquil.

In the city’s main prison complex, Guayas 1, each of the 12 blocks is controlled by a different gang.

Since last year, almost 400 inmates have died in several cities, most of them in Guayaquil, which has also been hit by car bombs and shocking scenes of bodies dangling from bridges.

According to OCCO, the war has been made bloodier by the fact that Mexican gangs often pay their local counterparts for their services with weapons rather than cash.

The mafia groups bribe the police, military, and prosecutors, and have turned to the kind of vicious violence typically seen in Colombia, Mexico, and other countries, where high-level officials targeting them, are killed.

Embattled Credit Suisse expects Q4 pre-tax loss

Credit Suisse predicted a surprise fourth-quarter pre-tax loss of up to $1.6 billion as the beleaguered bank undertakes a radical overhaul, sending stocks tumbling again on Wednesday.

Shaken by repeated scandals, Switzerland’s second-biggest bank unveiled a rejig in late October but accepted its accounts would take a hit of up to 1.5 billion Swiss francs ($1.6 billion) in the final three months of the year.

At the close, the group’s shares were down 6.1 percent at 3.62 Swiss francs, while the Swiss stock exchange’s main SMI index was up 0.2 percent.

At an extraordinary general meeting, shareholders approved capital increases worth around four billion Swiss francs in order to fund the restructuring plan.

Chairman Axel Lehmann called it an “important step in our journey to build the new Credit Suisse”.

“This vote confirms confidence in the strategy, as we presented it in October, and we are fully focused on delivering our strategic priorities to lay the foundation for future profitable growth,” he said.

The increase in share capital is expected to boost Credit Suisse’s CET1 ratio, which compares a bank’s capital to its risk-weighted assets.

The bank suffered a net loss of 273 million Swiss francs in the first quarter, then nearly 1.6 million in the second quarter and four billion in the third.

The scale of fourth-quarter losses “will depend on a number of factors including the investment bank’s performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real-estate sales”, the Zurich-based bank said in a statement.

Credit Suisse said in October that it expected to incur restructuring charges and software and property impairments of around 250 million Swiss francs in the fourth quarter as part of its overhaul.

– Question of trust –

The bank’s reorganisation is aimed at dramatically reducing the scale of its investment bank, in a bid to repair the damage following a series of scandals.

In addition to revamping its investment banking unit, the bank announced measures including slashing 9,000 jobs and a capital injection from the Saudi National Bank.

However, the restructuring takes place in an unfavourable context for the banking sector.

Its investment bank suffered the backlash of the “substantial industry-wide slowdown” in capital markets and reduced activity in the sales and trading markets, it said.

“The bank expects these market conditions to continue in the coming months.”

Andreas Venditti, an analyst at Swiss investment managers Vontobel, said the “massive net outflows” in wealth management — the bank’s core business alongside its Swiss domestic banking — “are deeply concerning — even more so as they have not yet reversed.

“Credit Suisse needs to restore trust as fast as possible — but that is easier said than done.”

Flora Bocahut, an analyst at the US investment bank Jefferies, added: “Today’s update confirms our concerns that the Credit Suisse ship is yet to stabilise, and it’ll get worse before it potentially gets better.”

– Archegos, Greensill shocks –

Credit Suisse’s capital-guzzling investment banking arm has been the source of heavy losses which plunged its accounts into the red — eclipsing its more stable activities such as wealth management or its Swiss domestic banking services.

Credit Suisse’s investment bank suffered a loss of 3.7 billion Swiss francs in 2021 and backed that up with a 992 million Swiss franc loss in the first half of 2022.

It was hit by the implosion of US fund Archegos, which cost Credit Suisse more than $5 billion.

Meanwhile its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds.

Credit Suisse is one of 30 banks globally deemed too big to fail, forcing it to set aside more cash to weather a crisis.

While many industry experts think a bankruptcy highly improbable, these rumours helped drag its share price down to a low of 3.158 Swiss francs on October 3.

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