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Zambia seeks $8bn debt relief

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President Hakainde Hichilema’s government secured the $1.3bn IMF loan, two years after Zambia became the first African country to default in the pandemic © Xinhua/Shutterstock

Zambia is asking for more than $8bn of relief on its debts to Chinese lenders, private bondholders and other creditors, according to an IMF analysis, in a restructuring widely seen as a test of Beijing’s willingness to absorb losses on loans it has extended to developing countries. After securing an IMF bailout last week, Zambia plans to reduce its debt payments by $8.4bn over the next three years, according to a fund analysis that was published on Tuesday.

Further debt adjustment is likely later on, it added. President Hakainde Hichilema’s government secured the $1.3bn IMF loan, two years after Zambia became the first African country to default in the pandemic following what the fund called “years of fiscal profligacy”. The country’s debts quadrupled between 2014 and 2019 amid a surge in infrastructure borrowing under Edgar Lungu, the former president, who lost elections last year to Hichilema.

With Lusaka owing about $6bn of its $17bn in external debt to Chinese lenders, China is its biggest creditor. Beijing’s handling of Zambia’s bailout is seen as a litmus test for how it deals with defaults by other developing economies, such as Sri Lanka and Bangladesh. In recent decades, China has surpassed the World Bank as the biggest foreign creditor to less developed countries. Loans are expected to sour as growth slows and global interest rates rise. The IMF offered the bailout after bilateral creditors, including Chinese lenders, agreed in principle to debt relief. But Zambia must now negotiate the details of how to restructure those loans, which include $3bn of dollar eurobonds.

Zambia must cut down the amount that it spends on servicing debts from nearly two-thirds of revenues to about 14 per cent in 2025, and it should maintain this ratio for most of the next decade, the IMF said. “This would imply some additional cash debt relief [on top of the $8bn] will be needed over 2026-31,” the fund added. The “initial read is no big surprise”, said Kevin Daly, investment director at Abrdn and a member of a committee representing Zambian bondholders, though he added that he had expected a larger adjustment over a shorter time horizon.

Lusaka hopes to finish talks with official lenders by the end of the year and will then start talks with private creditors. Zambia will ask creditors to agree to either outright writedowns of debt or to accept an extension of the term of their loan repayments. Analysts have said that Beijing is likely to favour lengthening the time it takes to repay the debts instead of taking a more visible haircut. Bondholders, who would prefer to take haircuts, have expressed concerns that they will have to sign up to the terms favoured by China.

Chinese banks and other institutions extended loans to Zambia to build airports, roads and other projects that the country struggled to repay as the economy slowed and corruption mounted under Lungu. In addition to the debt relief, Zambia is bracing for what the IMF called “a large, upfront, and sustained fiscal consolidation” to bring public finances under control.

Hichilema’s government has agreed to eliminate fuel subsidies and to cut agricultural subsidies. It has pledged to protect social spending. Zambia has also cancelled $2bn of mostly Chinese project loans that were in the pipeline and yet to be disbursed. Under the terms of the bailout, the IMF expects Lusaka to limit new external loans to those from concessional creditors, such as multilateral lenders, over the next few years.

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Indonesia Passes New Law To Criminalize Sex Outside Of Marriage

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GETTY There were protests against the new code on Monday

Indonesian lawmakers passed a sweeping new criminal code on Tuesday that criminalizes sex outside marriage, as part of a tranche of changes that critics say threaten human rights and freedoms in the Southeast Asian country.

The new code, which also applies to foreign residents and tourists, bans cohabitation before marriage, apostasy, and provides punishments for insulting the president or expressing views counter to the national ideology.

“All have agreed to ratify the (draft changes) into law,” said lawmaker Bambang Wuryanto, who led the parliamentary commission in charge of revising the colonial-era code. “The old code belongs to Dutch heritage … and is no longer relevant.”

The world’s largest Muslim-majority nation, Indonesia has seen a rise in religious conservatism in recent years. Strict Islamic laws are already enforced in parts of the country, including the semi-autonomous Aceh province, where alcohol and gambling are banned. Public floggings also take place in the region for a range of offences including homosexuality and adultery.

A previous draft of the code was set to be passed in 2019 but was postponed after nationwide protests prompted Indonesian President Joko Widodo to intervene. In a televised address at the time, Widodo said he decided to delay the vote after “seriously considering feedback from different parties who feel objections on some substantial content of the criminal code.”

In the lead-up to Tuesday’s vote, rights groups and critics warned that the new code would “disproportionately impact women” and further curtail human rights and freedoms in the country of more than 270 million people.

Human Rights Watch Indonesia Researcher Andreas Harsono said the laws are “a setback for already declining religious freedom in Indonesia,” warning that “non-believers could be prosecuted and jailed.”

“The danger of oppressive laws is not that they’ll be broadly applied, it’s that they provide an avenue for selective enforcement,” he said.

Under the laws, sex outside marriage carries a potential one-year prison term, and the crime of blasphemy, already on Indonesia’s books, could now lead to a five-year prison sentence.

Rahmat Purnama, from the University of Indonesia’s law faculty, said the laws would be implemented after a transitional period of three years.

Source: CNN

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Elon Musk Hopes to Test a Brain Implant in Humans Next Year

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In this still image from the Neuralink presentation video on YouTube, a presenter, lower left, described how a monkey used a wireless transmitter to “type” characters on a keyboard.Credit...Neuralink

Neuralink, the startup Elon Musk founded to link our brains directly to computers, showed progress Wednesday in two medical areas: helping blind people to see and helping people with spinal cord injuries to walk or use their hands.

The company, one of five that Musk leads, is working on technology to drop thousands of electrodes thinner than a hair into the outer surface of human brains. Each electrode is a tiny wire connected to a battery-powered, remotely recharged, quarter-sized chip package that’s embedded into a spot that once held a circle of skull. The chip, called the N1, communicates wirelessly with the outside world.

The technology is still far from the initial medical uses, much less Musk’s ultimate vision of using Neuralink to hang out with superintelligent AIs. But the company is making significant progress, including applying with the Food and Drug Administration to begin human trials it hopes to start within six months, the company said at a “show and tell” event lasting more than two hours.

“Our goal will be to turn the lights on for someone who’s spent decades living in the dark,” said Neuralink researcher Dan Adams, who’s working on the effort to repackage camera data into a brain-compatible format and pipe it directly to the visual cortex.

Musk has some cred when it comes to revolutionary tech. His electric-vehicle company Tesla is profoundly changing cars and his SpaceX outfit is transforming space access with reusable rockets. His reputation as a tech genius has taken a beating, though, with the chaos at Twitter after his $44 billion acquisition. Musk’s Boring Company, which aims to revamp auto transportation with tunnels, also hasn’t lived up to its promises yet.

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US President Joe Biden turns 80 Today: New Generation’ of Democratic Leaders Takes Control in Congress

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President Joe Biden will celebrate his 80th birthday on Sunday, marking the first time a sitting president has reached that milestone while in office and fueling speculation about how his advancing age will affect his political future.

Biden — who was the oldest person to assume the presidency in January 2021, just 61 days after his 78th birthday — has said he intends to make another White House bid, even as his age-adjacent peers, including 82-year-old House Speaker Nancy Pelosi, have made the decision to step away from leadership in order to make way for a younger generation.

“My intention is that I will run again. But I’m a great respecter of fate and this is ultimately a family decision. I think everybody wants me to run but we’re going to have discussions about it. And I don’t feel any hurry one way or the other to make that judgment.” he said last week, after helming what many say is the most successful midterm election for a sitting president’s party in decades, though noting that those results would not have an impact on his decision to run again.

PHOTO: President Joe Biden greets guests before speaking at an event at the White House complex, Nov. 18, 2022, in Washington, D.C.

Biden is the oldest person to serve as commander in chief in the nation’s history. Should he seek reelection in 2024 and win, the president would be 86 by the end of his second term. He has said he’ll talk over his future with his wife and the rest of his family over the holidays.

Biden has said he is hoping that he and his wife “get a little time to actually sneak away for a week around between Christmas and Thanksgiving” and that his decision to run for reelection will likely “be early next year we make that judgment.”

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