What we’re watching: Argentina’s super minister, the China-Zambia debt deal and the death of a Ukrainian grain trader
Can a “super minister” save Argentina?
Argentina’s embattled President Alberto Fernández has appointed Sergio Massa, the influential leader of the lower house of parliament, to head a new “super ministry” that Fernández hopes will help pull the country out of a deep economic crisis. Massa, Argentina’s third economy minister in less than a month, will oversee economic, manufacturing and agricultural policy. He has his work cut out for him with soaring inflation, farmers demanding tax breaks and a recent run for the peso. Massa must also convince the IMF that Argentina will honor the terms of its $44 billion debt restructuring deal. There’s a political angle, too: he’s (arguably) the strongest candidate the left-wing Peronist coalition has to run for president next year if the unpopular Fernández drops out of his bid for a second term. Massa is one of the few politicians who can navigate the ongoing rift between the president and his powerful vice president, Cristina Fernández de Kirchner. If the new “super minister” does a good job, he will be in pole position for a presidential election in 2023; if it fails, the Peronists in power will have a good chance of staying in power.
China grants debt relief to Zambia, paving way for others
Zambia’s creditors, led by China, will give the cash-strapped African country enough debt relief to unlock a $1.3 billion IMF loan it desperately needs to get back into the black. This is the first time that Beijing has coordinated with other governments to restructure a low-income country’s debt instead of collecting it on its own. This is good news not only for Zambia, but also for other countries that owe a lot to China, such as Sri Lanka, which has already defaulted, and Pakistan, which could be next. Zambia, the first country to default after the COVID strike, is often cited as a glaring example of China’s so-called debt trap diplomacy. But President Hichilema Hakainde, elected in late 2021, has managed to leverage the country’s vast copper reserves to reassure both the IMF and China (the latter wary of the poor optics of squeezing African countries. agreement also puts pressure on private creditors to give more breathing space to heavily indebted nations struggling with high inflation and a strong US dollar. But there is a catch: private investors will have to accept at least as much debt. debt relief than official creditors.
The latest news from Ukraine
Russia’s war in Ukraine escalated on several fronts over the weekend, particularly with heavy shelling in the southern city of Mykolaiv that killed businessman Oleksiy Vadatursky. The death of Vadatursky, head of one of Ukraine’s main grain export companies, comes just as grain shipments are finally set to resume on Monday from its Black Sea ports. Meanwhile, Ukraine claimed to have killed dozens of Russian soldiers near Kherson, crucial for Kremlin supply lines in the Donbass region. But Kyiv also had to play defense, as President Volodymyr Zelensky ordered the mandatory evacuation of civilians in the eastern province of Donetsk, indicating that fighting is likely to intensify there. Finally, Russia was forced to cancel Navy Day in Crimea after its Black Sea Fleet was attacked by a drone from inside the Russian-occupied peninsula hours after President Vladimir Putin announced a new security doctrine with global maritime ambition and declaring America as Russia’s greatest enemy.