Who Owns the Debt?


IMF downgrades global growth forecast



The International Monetary Fund (IMF) has lowered its forecast for global economic growth for this year and next.

The IMF now expects growth of 3.5% this year, compared with the previous estimate of 3.8% which it made in October.

The growth forecast for 2016 has also been cut, to 3.7%.

The downgrade to the forecasts comes despite one major boost for the global economy - the sharp fall in oil prices, which is positive for most countries.

The IMF expects that to be more than offset by negative factors, notably weaker investment.

That in turn reflects diminished expectations about the growth prospects for many developed and emerging economies over the next few years. If business expects weaker growth, there is less opportunity to sell goods and services and so less incentive to invest.

Deflation concerns

The eurozone is a case in point. The IMF does expect the recovery there to continue, but not strongly. It is estimating growth of 1.2% in the euro area this year and 1.4% in 2016.

For the European Central Bank, the immediate priority is to tackle the deflation, or falling prices, now under way.

Speaking to the BBC, the IMF's chief economist, Olivier Blanchard, said deflation was an adverse and worrying force, but it was "not the kiss of death… in itself, it's not going to derail the recovery".

However, he acknowledged that it was possible that deflation could set off the eurozone's debt crisis once again. Falling prices are particular problem for debtors, because their incomes - or for governments, their tax revenues - may fall, but the debt payments often do not.

The slowdown in China is another factor behind the revised forecasts. On Tuesday, official figures showed that China's growth slowed to 7.4% last year, from 7.7% in 2013.

Next year, the IMF growth forecast for China is 6.3%, compared with an average of 10% over the three decades up to 2010.

IMF global economy growth rates & projections (%)

Region 2013 2014 2015 projection and revision 2016 projection and revision

*official Chinese figs show growth at 7.7% in 2013. Source: IMF








Advanced economies







Emerging market and developing economies







Other key economies, ordered by 2013 growth




































Euro area







Mr Blanchard said the IMF was "fairly confident that is going to be an orderly slowdown". The report says that slower growth in China will have important effects in other emerging economies in Asia.

US strength

The sharpest downgrade of all is for Russia, which is forecast to see its economy contract by 3% this year and 1% next. That is the result of the fall in oil prices and what the report calls increased geopolitical tensions - in other words, the crisis in Ukraine and Western sanctions on Russia.

There is also a sharp downgrade for Nigeria, another oil exporter, although even the revised forecast of 4.8% for 2015 still shows strong growth. Without the downgrade, Nigeria's growth would have been very impressive.

There are some exceptions to the pattern of more downbeat forecasts. The major one is the United States, now forecast to grow at 3.6% this year and 3.3% in 2016.

This is well below China's figures, even allowing for the slowdown, but that is to be expected. Emerging economies can grow more rapidly by adopting technology that's already established in richer nations.

For the UK, the forecast for this year is unchanged at 2.7% and is cut slightly to 2.4% for 2016. Mr Blanchard sees the outlook for the UK as favourable, but he said that the weakness of the eurozone could act as "brake" on the British economy.

Crisis over?

So six years on from the most intense phase of the global financial crisis, to what extent have we put it behind us?

Mr Blanchard told the BBC that many countries have, for all practical purposes, done so - notably the US.

But there is another legacy "cramping the style of a number of countries which have very high debt and have to be careful". He says this will take a very long time to rectify. He describes Japan as an extreme example.

His overall assessment: "Some of the legacies are going away. Some of the legacies will take a long time. Things are improving. Not quite as quickly as we would dream, but they do."


Global debt: How worried should we be?



Will we ever really get over the financial crisis? Six years or more on from the start of it, the world economy is still struggling to generate a convincing recovery.

Among the headwinds is debt, the factor that took us into the crisis in the first place.

In the meantime, since the crisis began global debt has actually risen. The hoped-for financial healing has happened only in a few scattered parts of the global economy.

The most recent figures come from the Institute of International Finance (IIF), a group that represents the financial services industry. As of June this year it estimated that global debt, excluding the financial sector, was equivalent to 245% of total global economic activity or GDP. That's up from 214% in September 2008 when the financial crisis was going into its most intense phase.

The IIF describes the continued build-up of debt as "worrisome".

These figures cover debts owed by governments, households and businesses outside the financial sector. They don't cover all countries, but the vast bulk of global debt is included.

Financial companies, such as banks, have reduced their debts. The IIF says that is desirable, but as they are essentially intermediaries between the ultimate lenders and borrowers, "their debt reduction does not influence the assessment of sustainability of the debt burden to the economy".

What deleveraging?

The persistence of the debt problem was highlighted by another recent study by the International Center for Monetary and Banking Studies (ICMBS) and it tells a similar story.

Its language is rather technical, referring to leverage, which in this context is a measure of debt burdens.

Its title gives the key conclusion: "Deleveraging? What Deleveraging?"

To quote the report's assessment slightly more fully: "Contrary to widely held beliefs, the world has not yet begun to de-lever and the global debt-to-GDP [ratio] is still growing, breaking new highs."

If you do include the financial sector for the rich economies, the total figure in the ICMBS report has at least stabilised at 385% of their collective GDP, a level that is nonetheless very close to its all-time high.

Those countries were the source of the bulk of the build-up in global debt levels before the crisis.

Since then, it is the developing world, especially China that has driven the rise in debt. In the case of China, the report describes the rise in debt as "stellar". Excluding financial companies it has increased by 72 percentage points to a level far higher than any other emerging economy. The report says there have been marked increases in Turkey, Argentina and Thailand as well.

Emerging economies are particularly worrying for the authors of the report: "They could be at the epicentre of the next crisis. Although the level of leverage is higher in developed markets, the speed of the recent leverage process in emerging economies, and especially in Asia, is indeed an increasing concern."

Although the most recent financial crisis was in the rich countries we don't have to go all that far back in history to find debt crises in emerging economies that caused tremors, though not full-scale financial earthquakes, around the world.

There were a succession of crises beginning with Mexico in 1996, continuing in Asia, Russia, Turkey, Brazil and then Argentina early in the following decade.

Signs of improvement

There are also some, though not many, more positive signs in the global debt situation.

In the rich countries, the financial sector has reduced its debt.

The UK and the United States account for most of that. In the UK, however, while it has fallen it is still at historically very high levels.

The same two countries have seen significant reductions in household debt, measured as a percentage of GDP.

But government debt has risen in both. For the UK, if you add that still high financial sector debt you get a total just shy of 500% of GDP. To spell it out, that is the estimate from the International Center for Monetary and Banking Studies and it covers households, business, including the banks, and the government.

The British figure is a good deal higher than the US or the average for the eurozone but significantly lower than Japan. On government debt alone, the British figure (for 2013) is lower than the US or, by a small margin the eurozone.

Now there is an argument that debts are less troublesome if they are owed by governments rather than by households. The Nobel Prize-winning economist Paul Krugman wrote: "Families have to pay back their debt. Governments don't - all they need to do is ensure that debt grows more slowly than their tax base."

But others, such as American professors Carmen Reinhart and Kenneth Rogoff, argue that beyond a certain point, government debt tends to hold back economic growth. They say the threshold is about 90% of GDP. A significant number of countries, mainly rich ones are close to or above those levels. Their work has been the subject of controversy. While admitting some errors, they have defended it.


In any event, the authors of the ICMBS report argue that there are features of the current situation that make the large debt burden, public and private, more of a problem. They refer to the "poisonous combination of rising leverage and slowing growth".

The point is that debt payments - interest and repayments of the original loan - are easier to keep up-to-date for borrowers with a rising income.

And that brings us to the "poison" that the ICMBS report refers to. Debt is high and economies are growing more slowly than before the crisis, so they are not generating the incomes to service the debt as rapidly as they were.

There has also been a fall in inflation rates in many countries. Inflation can help limit debt burdens. Household incomes, company revenues and government tax receipts all rise but debt payments are often fixed. Low inflation, especially if it is lower than borrowers expected when they took their loan, weakens that process and leaves debt burdens heavier than they would have been.

But there are some who say the picture painted by the ICMBS report is excessively gloomy. You can find some of them in the report itself, which includes a record of a discussion of its findings.

Mark Carey of the US Federal Reserve said he would have toned down a little the size of the disaster we are facing, and that the situation is not as bad as described. He said there is no obvious downtrend in economic growth and pointed out that a great deal of American debt has a variable interest rate. That would reduce the debt burden as inflation falls.

Angel Ubide of DE Shaw Group and the Peterson Institute of International Economics in Washington described the assessment of China as "a bit apocalyptic" and thought it should have been more balanced. He saw a prospect for credit going increasingly to highly productive private firms - which would presumably be able to meet their debt obligations.

Carlo Monticelli of Italy's Ministry of Economy and Finance recalled that China has $4 trillion in foreign reserves. He also noted the large numbers of people still in the countryside who could support further economic growth by moving to industry or becoming more productive farmers. That implies more economic growth to meet the debt payments.

The conclusion: there is not really any consensus on just how worried we should be about the global debt situation or China's in particular. But you can be sure that economic policy officials - in central banks, finance ministries and international agencies such as the IMF - will be watching it warily. You can also be sure that we won't really be shot of the legacy of the financial crisis for a long time yet.


Whatever happened to the Brics economies?



Remember the Brics - Brazil, Russia, India, China and South Africa, the nations that were set to reshape the world economy?

Two of them, China and Russia have the potential to cause some serious and rather unwelcome reshaping in the near future.

In China's case it's the risk that an economic slowdown could turn into something more damaging.

With Russia, it's the possible economic fallout from the conflict in Ukraine.

Four of these five countries - South Africa is the exception - were identified in 2001 as large and fast-growing economies that would have increasingly influential global roles in the future.

Today it's China and Russia that are potentially the most troubling for the rest of the world in the near term.

China's story is one that we would inevitably have had to face sooner or later. Indeed you might say it is remarkable that it hasn't come sooner.

China has recorded extraordinary rates of economic growth for a very long time - an average of 10% a year for three decades.

But there are weaknesses. It's based on very high rates of investment, currently running at 48% of national income or GDP.

When it's so high there's always a danger that many projects will turn out to be wasteful or unprofitable, undermining the finances of the investors themselves and anybody who has lent them money.

Only a handful of countries have higher rates of investment, none of them with much to teach China. They are Bhutan, Equatorial Guinea, Mongolia and Mozambique.

The other element in China's rapid growth is exports.

That is not so reliable these days as the rest of the world struggles to recover convincingly from the financial crisis.

Chinese transition

What the Chinese government wants to do is move towards economic growth that's a bit slower and driven more by selling goods and services to Chinese consumers.

The slowdown is happening. Already this decade, the average growth rate has slipped by more than two percentage points.

The man who dreamt up the term "the Brics", Jim O'Neill formerly of Goldman Sachs, thinks the transition can be managed without too much turbulence.

Others are more wary.

Prof Kenneth Rogoff of Harvard University says China's slowdown is both inevitable and desirable but he warns: "It is not easy to rein in growth gradually without triggering widespread failure of ambitious investment projects."

He says that if Chinese growth collapses the global fallout could be far worse than that caused by a normal US recession.

Russia is a very different story.

Its potential economic impact on the rest of the world in the near future is at heart about political issues.

The conflict in Ukraine has already set back Russia economically.

The sanctions imposed by the west, and the anxiety among investors that there might be more, have aggravated a slowdown that was coming anyway.

Some $85bn (£55bn) has been pulled out of Russia this year, according to Central Bank figures.

Russia is often criticised for having a difficult business environment - red tape and uncertainty about the legal system.

The IMF has made the point before and Jim O'Neill says Russia needs a credible rule of business law.

Russia's problems have already had an economic impact beyond its borders, notably in Germany.

Exports to Russia have fallen sharply, which is one important factor behind Germany's close shave with recession.

Looking ahead, the IMF has also warned that "geopolitical risks", which means the Ukraine crisis and the Middle East, are one of the main threats to a global economic recovery that is already, in the IMF's own words, "weak and uneven".

Indian momentum

Another one of the Brics with clear problems is Brazil, though it poses less of an international danger.

Like Russia, it's an economy where commodities exports have played an important role in the successes of the 2000s. In Russia it was oil and gas.

Brazil has iron ore and agricultural commodities such as soya, coffee and sugar.

Jim O'Neill says that both need to take steps to make themselves less dependent on the commodities business.

They need to improve their labour competitiveness, he says, and to make themselves more attractive for private investment in other industries.

Among the original Brics countries - which did not include South Africa - India seems to be causing rather less anxiety in financial markets and international economic institutions at the moment.

Growth has picked up some momentum this year although it is well short of the highs of the previous decade.

Many investors have welcomed the new government of Narendra Modi, which took office in May.

Jim O'Neill says: "I am more optimistic than I have been for some time about India."

So are the Brics crumbling?

It's worth recalling where this concept came from. It first saw the light of day in a paper written in 2001 by Jim O'Neill.

It wasn't a club, just a convenient way with a nice acronym for spotting important trends.

It was years before the countries started holding annual summits and at that stage it didn't include South Africa. The "s" was just there as a plural.

Catch up growth

The point of the paper was to show the increasingly influential role these countries would play in the global economy over the following 10 years and to argue that international economic co-operation should change to reflect that changing reality. And it has.

Since 2008 one of the key forums for economic policy issues has been the G20 group of countries that includes all the Brics among its members.

The Brics were the largest emerging economies. There was no African country when the idea was first used, and in terms of its economic weight South Africa was well behind the others, and behind some that weren't included such as Indonesia and Mexico.

A follow up paper by two other Goldman Sachs economists took the analysis up to 2050 and suggested that the Brics collectively could be larger than the six leading industrial countries combined by 2039.

Strictly speaking, the Goldman Sachs papers weren't forecasts. They were pictures of what the world might look like if the countries grew as they might.

The growth rates envisaged were much stronger than for the rich countries.

They have the scope to "catch up" by investing rapidly in technology that is already established in more developed economies.

The chart gives an indication of how the Brics still have further to go. It shows GDP (economic output) per person, which gives an indication of the level of economic development.

There are also two factors that mean there's a ready supply of workers for fast expanding industries - growing populations and urbanisation as people move from the countryside to the cities.

In those original projections from Jim O'Neill, Chinese growth over the next 10 years was set at 7%, India 5%, Russia and Brazil both at 4%.

In the event Brazil was just short of its figure, while the others all beat theirs.

But all the Brics have slowed in the current decade, by more than two percentage points each, with the exception of South Africa.

Potential for the future

The IMF has done some research on the slowdown in the developing world.

A significant part of it reflects weaker international demand for their exports and government policies in the countries themselves becoming a restraint on growth as they reversed earlier stimulus policies - cutting spending or raising taxes to reduce borrowing needs.

But there are also factors that affect emerging economies' capacity to grow in the future - that constrain what the IMF calls their "potential growth".

Interest rates are likely to rise gradually from their current ultra low levels in the rich countries - particularly in the US and the UK.

That will affect global rates and make investment more expensive to finance in emerging economies.

Many also have to contend with ageing populations and slower growth in the number of people of working age.

For some that demographic advantage they had previously is now fading.

Russia and China are among that group. That was factored into the Goldman Sachs projections. Jim O'Neill says that more recently their policies in this area have been "surprisingly good".

China is easing its one child policy and, he says, "Russia has had some success in raising life expectancy with much smarter policies about alcohol consumption."

While all the Brics have slowed this decade, the weakest performers now are Brazil and Russia.

Their average growth rates have been below the Asian Brics all along and this year they slowed even further. For 2014 as a whole, the IMF has projected some growth for those two but very little - 0.3% for Brazil and 0.2% for Russia.

Both those figures incidentally are a good deal weaker than what has been predicted this year even for the struggling eurozone, which has been described as haunted by the "spectre of stagnation" by the Bank of England governor Mark Carney.

As for Russia and Brazil, Jim O'Neill is not yet ready to wipe these two nations out of his Bricspicture, but the last few years have certainly been a disappointment.

So it is not time to write off the Brics.

They are showing some cracks for sure, and, to change the metaphor, China in particular is embarking on a high-wire journey as it seeks a different and perhaps ultimately more sustainable form of economic development.

The Brics and how they perform matter for the rest of the world, more so than they did at the turn of the century, which is after all the whole point of the original idea.


Denmark acts over fallout from Swiss currency turmoil


Denmark has cut its key interest rate to prevent the krone from strengthening in the wake of Switzerland's decision to scrap the franc's peg to the euro.

There has been speculation that Denmark could follow the Swiss move by removing the krone's link to the euro.

Denmark cut its deposit rate to minus 0.2% from minus 0.05%. The lending rate was cut from 0.2% to 0.05%.

It makes the krone less attractive to investors, and eases pressure on the central bank to keep buying euros.

Denmark pegs its currency to the euro to help the country's exporters and maintain stable inflation.

But the country's central bank has been forced to intervene to defend the peg as the krone appreciated.

With its top-tier credit rating of AAA, Denmark was seen as a safe place to keep money during the financial and economic crisis.


Denmark first imposed negative rates in 2012, meaning that depositors effectively had to pay to keep their money with the central bank. Monday's rate cut means depositors will pay even more.

The move comes ahead of a possible move this week by the European Central Bank (ECB) to begin an economic stimulus programme for the eurozone, which could put yet more upward pressure on the krone.

If the ECB embarks on a large-scale bond-buying programme, it will increase the supply of euros across the eurozone. That is likely to further depreciate the euro's value against the krone.

"The central bank wanted to cut today and not wait until after the ECB - obviously they're afraid that the upward pressure on the crown would intensify over the next few days," said Niels Christensen, foreign exchange strategist at Nordea, in Copenhagen.

"I'm sure (the central bank) will continue to intervene if the downward pressure in Europe continues," he said.


Striking gold - at a rubbish dump


The closure of Latin America's biggest rubbish dump in 2012 was widely applauded. But little more than two years on, many of the rubbish-pickers who worked there are sorry it's gone, and poorer without it.

More than 2,000 self-styled "treasure hunters" used to trawl the mountains of rubbish at Gramacho, a dump overlooked by Rio de Janeiro's iconic Christ the Redeemer statue.

Sifting through tonnes of waste, the rubbish-pickers - or catadores - searched for recyclable materials they could sell, and sometimes they literally struck gold.

One day Cleonice Bento glimpsed something particularly shiny among the rotten food and plastic bottles.

"I found a Portuguese gold necklace, sold it and built a two-storey house," she recalls. She even had enough money left over to take a holiday from rubbish-picking for another month.

Geraldo Oliveira, a 63-year-old known as Brizola, uncovered a treasure trove of a different kind.

Nestled inside a tube among the rubbish he found $12,000 (£8,000). And then $9,000 (£6,000) more.

"I was scared," he remembers. "So I got a $100 note, buried the rest, and went to a money changer to check it was a true note - and it was!

"The dump was a mother, she provided everything."

Cleonice and Geraldo were just two of the thousands of catadores who lost their jobs overnight in 2012, when Gramacho dump was closed down in the weeks before a UN environmental summit in Rio.

The move was welcomed by environmentalists, politicians and even the majority of the catadores who, despite the fears about the future, agreed the work was dangerous and inhumane.

Today the gate to the old landfill is locked. The methane gas produced from 35 years of waste now supplies green energy to a nearby oil refinery.

The pickers were not abandoned completely. They received compensation and the promise of a new recycling facility next to the old site.

The Polo de Reciclagem de Gramacho is the first of its kind in Brazil, employing former rubbish-pickers who now work in better conditions with regular hours and pay.

"We now have a canteen, a bathroom and a kitchen. We have more comfort and safety," says 62-year-old Cleonice.

But the former catadores earn only a fraction of what many earned on the dump. Cleonice says she now makes 500 reais (£125, $190) a month, a third of what she used to make.

"Despite the working conditions, the dump was a gold mine," says Dione Manetti, a consultant who has worked with rubbish-pickers across Brazil for 20 years.

Sometimes Gramacho rubbish pickers could make 4,000 reais (£1,000, $1,500) a month, he says.

"At the moment we are happy," says Rosinete dos Santos, an ex-catadora who is now financial co-ordinator of the new recycling facility. "But if a new dump opened at the end of the road everyone would be out of here and up to the dump in a flash."

No-one pretends the dump was paradise - it's common for the rubbish-pickers to have mixed, sometimes contradictory feelings.

Serious accidents, illnesses and even deaths were common. And outside the dump the catadores faced stigma and discrimination within Brazilian society.

"It wasn't difficult to deal with the rubbish. It was difficult not to become rubbish," says Gloria Cristina dos Santos, who is now the recycling facility's coordinator.

"I never told anyone at school I came from the dump. I couldn't make friends because I was so ashamed and for a long time I could not look at myself at the mirror."

Gloria began working there when she was 11. "Back then all the hospital waste was mixed in with the domestic rubbish, so there was a lot of blood, foetuses, dead bodies, animals," she recalls. "It was very dangerous."

Once she stepped on a needle and couldn't work for six months. Then at 15 she was buried under a mountain of rubbish, only surviving after her friends dug her out.

A year later Gloria became pregnant. After struggling with post-natal depression, she tried to commit suicide.

But the same dump that was causing her such sorrow and despair brought her salvation - in the form of Russian novelist Fyodor Dostoyevsky.

Over the years Gloria had carefully curated a small library of books salvaged from the dump. And she credits a passage in Dostoyevsky's The Brothers Karamazov for teaching her how to love her daughter.

"I didn't have any treatment - it was the books that helped me. They saved me," she says. "That was my way of living other lives, of travelling. I was a compulsive reader, I would read four or five books a week, and in the midst of that hard life I was high on books!"

Gloria's brother Tiao dos Santos, who had worked on the dump since he was eight years old, also found inspiration in literary waste - from Renaissance Italy in his case.

"I got [The Prince by] Machiavelli out of the slime, took it home, dried it behind the fridge and ironed it," he recalls.

"And I learned all the skills of The Prince - I didn't read Machiavelli as a Renaissance writer, I read him as a modern one. The game of interests, politics and malevolence was one I knew how to play."

Tiao eventually became a leader of the catadores, founding the first rubbish pickers' association in Brazil 10 years ago and later starring in the Oscar-nominated documentary film Waste Land.

Machiavelli did the rounds. Tiao shared his copy of The Prince with his two closest friends, hoping they too would be inspired and help him fight for better working conditions for the catadores.

"We were a reading group," says Jose Carlos Lopes, known as Zumbi, a rubbish-picker for almost 30 years from the age of nine. "Machiavelli inspired me by his leadership and comradeship across the centuries. He taught me how to be a leader, how to lead from the front."

And it was the catadores' activism that secured the government's guarantee to provide a new recycling facility for ex-catadores to work in.

The plant that stands there is the fulfilment of a dream - but only in part.

For a start there's not enough material to be recycled.

Whereas before the rubbish-pickers could sift through the dump and filter out sellable goods, the new recycling plant relies on companies willing to donate cardboard, paper, aluminium, glass or plastic.

Meanwhile 10,000 tonnes of mixed domestic rubbish are sent to a new dump every day. But there the rubbish is sealed with soil and covered in grass - no catadores are allowed in.

The lack of waste to recycle has caused expansion plans to be put on hold.

Original blueprints for 12 warehouses employing 500 rubbish pickers are still a long way from being realised.

Currently there are just two warehouses and only 50 people are employed.

That's 50 out of the 2,000 who once worked on the dump. The rest have had to find other ways of supporting themselves.

"It's frustrating but it doesn't minimise the size of our achievement," Gloria says. "We managed to make the government see us and be accountable."

She too experiences nostalgia for the old days, though.

"We suffered a lot but we were a family," says Gloria. "We felt we belonged to the dump and we helped each other.

"No-one will tell you that he misses working there but everyone says they miss the companionship we had, because ultimately we felt it was us, catadores, against the rest of the world."

Recreating that same atmosphere as before is part of her vision for the new recycling plant.

"We want to recover that essence. I really believe we will do it. It is my aim in life, my dream," she says.

Brizola was the last catador to leave the dump.

"I stayed up to the very end. I had to see the ending. And I really miss it. It was not only because of the money but because of friendship."

In a small drawer next to his television, he safely keeps a small plastic bag with something precious inside.

"There it is in my hand. Earth from the dump. It carries love… and when I die it will be buried with me."


Guptagate: The scandal South Africa's Zuma can't shake


It is two years since an unusual plane landed at a South African military air force base in Pretoria. The aircraft was a private jet carrying guests from India, heading to a high society wedding at Sun City - the famous casino resort in the hills to the north-west of the capital.

Military officials at the base gave the revellers a VIP welcome.

But the landing was unofficial, and illegal - an abuse of a secure military base. And the incident quickly turned into a major political scandal, when it was alleged that "Number One" - a reference to President Jacob Zuma - had personally authorised the whole affair as a favour to friends.

The president denied the allegation in parliament. An in-house investigation cleared him too, and instead pointed the finger of blame at the president's chief of protocol and two air force officials.

Twist of fate

But in an intriguing twist, charges against those two air force officials have been quietly dropped, while the chief of protocol - who retracted his initial claim that "Number One" had indeed authorised the landing - ended up being given a job as South Africa's ambassador to the Netherlands.

And to make matters even more curious, both air force officers now say they are planning to pursue civil claims that could see President Zuma called to give evidence in court.

The scandal is known here as Guptagate - a reference to the Guptas, an Indian family that has built up a formidable business empire in South Africa, and has repeatedly been accused of wielding excessive influence over President Zuma. Two of his children have been employed in Gupta-owned companies.

Fall guys?

The private jet at the heart of the affair was taking guests and relatives of the Gupta brothers, Atul, Ajay and Rajesh, to the wedding of a 23-year-old niece, Vega Gupta. The Gupta family have since insisted that proper process was followed and permission sought from the appropriate officials.

"It's an appalling act of cynicism," said David Lewis from South Africa's Corruption Watch, referring to the treatment of the three officials blamed for the scandal - former head of state protocol Bruce Koloane, Lt Col Christine Anderson and her colleague Lt Col Stephan Van Zyl. "These people were scapegoated."

"The one who actually took the bullet [Bruce Koloane] clearly took it in exchange for an ambassadorship in Holland. And I bet the same happens to those officials charged with the Nkandla affair," said Mr Lewis, in reference to the various investigations into the lavish state-funded upgrades to President Zuma's private rural homestead in Nkandla.

President Zuma has been "hijacked by certain financial interests - doing the bidding of certain individuals," said political analyst Mcebisi Ndletyana, adding that the episode was characteristic of the "personalised rule" he claimed was undermining South Africa's democratic institutions.

"The power lies with the Gupta family. So you really have a president who is indebted to a particular clique."

President Zuma's spokesman, Mac Maharaj, currently at the World Economic Forum in Davos, said there was "nothing new" in the latest developments, and declined to comment on reports of a future civil case against the president and other officials.


The 10 greatest controversies of Winston Churchill's career


The UK is marking the 50th anniversary of the death of Winston Churchill. He is regarded by many as the greatest Briton ever, but for some he remains an intensely controversial figure.

During Britain's darkest hours in World War Two, Churchill's leadership was vital in maintaining morale and leading the country to eventual victory over Nazi Germany.

In 2002 Churchill saw off the likes of Shakespeare, Darwin and Brunel to be voted the greatest ever Briton.

But in a career spanning some 70 years, he had more than a few moments of controversy.

"There's a danger in Churchill gaining a purely iconic status because that actually takes away from his humanity," says Allen Packwood, director of the Churchill Archives Centre.

"He is this incredibly complex, contradictory and larger-than-life human being and he wrestled with these contradictions during his lifetime."

Here are 10 of the most common debates that have raged about Churchill's legacy.

1. Views on race

In April last year, Labour candidate Benjamin Whittingham tweeted that Churchill was "a racist and white supremacist".

Sir Nicholas Soames, Churchill's grandson, was outraged. And Whittingham's Conservative opponent Ben Wallace labelled the comments "ignorant" and "incredibly insulting". The tweet was deleted and the Labour Party said: "[It] does not represent the view of the Labour Party. He apologises unreservedly if it has caused any offence."

But there have previously been suggestions that Churchill held racist beliefs.

In 1937, he told the Palestine Royal Commission: "I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place."

Churchill certainly believed in racial hierarchies and eugenics, says John Charmley, author of Churchill: The End of Glory. In Churchill's view, white protestant Christians were at the top, above white Catholics, while Indians were higher than Africans, he adds. "Churchill saw himself and Britain as being the winners in a social Darwinian hierarchy."

"The mitigation would be that he wasn't particularly unique in having these views," says Richard Toye, author of Churchill's Empire, "even though there were many others who didn't hold them."

Soames thinks it is ludicrous to attack Churchill. "You're talking about one of the greatest men the world has ever seen, who was a child of the Edwardian age and spoke the language of [it]."

And Churchill's views on race were incomparable to Hitler's murderous interpretation of racial hierarchy, Toye says. "Although Churchill did think that white people were superior, that didn't mean he necessarily thought it was OK to treat non-white people in an inhumane way."

2. Poison gas

Churchill has been criticised for advocating the use of chemical weapons - primarily against Kurds and Afghans.

"I cannot understand this squeamishness about the use of gas," he wrote in a memo during his role as minister for war and air in 1919.

"I am strongly in favour of using poisoned gas against uncivilised tribes," he continued.

These quotes have been used by critics such as Noam Chomsky to attack Churchill.

But the controversy is misplaced, says Warren Dokter, author of Winston Churchill and the Islamic World. "What he was proposing to use in Mesopotamia was lachrymatory gas, which is essentially tear gas, not mustard gas."

Churchill's 1919 memo continued: "The moral effect should be so good that the loss of life should be reduced to a minimum. It is not necessary to use only the most deadly gasses: gasses can be used which cause great inconvenience and would spread a lively terror and yet would leave no serious permanent effect on most of those affected."

In another memo about using gas against Afghans, Dokter says, Churchill questioned why a British soldier could be killed lying wounded on the ground while it was supposedly unfair "to fire a shell which makes the said native sneeze - it really is too silly".

But some still criticise the British air attacks used to quell rebellious tribes in the region.

And it's important to note that he was in favour of using mustard gas against Ottoman troops in WW1, says Dokter, although this was at a time when other nations were using it.

3. Bengal famine

In 1943, India, then still a British possession, experienced a disastrous famine in the north-eastern region of Bengal - sparked by the Japanese occupation of Burma the year before.

At least three million people are believed to have died - and Churchill's actions, or lack thereof, have been the subject of criticism.

Madhusree Mukerjee, author of Churchill's Secret War, has said that despite refusing to meet India's need for wheat, he continued to insist that it exported rice to fuel the war effort.

"[The War Cabinet] ordered the build-up of a stockpile of wheat for feeding European civilians after they had been liberated. So 170,000 tons of Australian wheat bypassed starving India - destined not for consumption but for storage," she said upon release of the book in 2010.

Churchill even appeared to blame the Indians for the famine, claiming they "breed like rabbits".

"It's one of the worst blots on his record," says Toye. "It clearly is the case that it was difficult for people to get him to take the issue seriously."

"Churchill viewed it as a distraction," he explains. Preoccupied with battling Germany in Europe, Churchill didn't want to be bothered by it when people raised the issue.

"We have this image of Churchill being far-sighted and prophetic," says Charmley. "But what he does tragically in the case of the Bengal famine is show absolutely zero advance [since] the Irish famine 100 years earlier."

It was a horrendous event but it needs to be seen within the context of global war, says Packwood.

"Churchill is running a global war at this point and there are always going to be conflicting priorities and demands," he says. "It's an incredibly complex and evolving situation - and he's not always going to get everything right."

Arthur Herman, author of Gandhi & Churchill, has argued that without Churchill the famine would have been worse. Once he was fully aware of the famine's extent, "Churchill and his cabinet sought every way to alleviate the suffering without undermining the war effort", Herman wrote.

It was a failure of prioritisation, says Toye. It's true that Britain's resources were stretched, he says, but that's no excuse given the relatively small effort it would have taken to alleviate the problem.

4. Statements about Gandhi

Churchill had strong views on the man now widely respected for his work in advocating self-determination for India.

"It is alarming and nauseating to see Mr Gandhi, a seditious Middle Temple lawyer, now posing as a fakir… striding half-naked up the steps of the Vice-regal Palace," Churchill said of his anti-colonialist adversary in 1931.

"Gandhi should not be released on the account of a mere threat of fasting," Churchill told the cabinet on another occasion. "We should be rid of a bad man and an enemy of the Empire if he died."

It's unfashionable today to question Gandhi's non-violent political tactics. He is venerated in much the same way as Churchill is in the UK. But for years he was a threat to Churchill's vision for the British Empire.

"He put himself at the head of a movement of irreconcilable imperialist romantics," wrote Boris Johnson in his recent biography of Churchill. "Die-hard defenders of the Raj and of the God-given right of every pink-jowled Englishman to sit on his veranda and… glory in the possession of India."

"Churchill was very much on the far right of British politics over India," says Charmley. "Even to most Conservatives, let alone Liberals and Labour, Churchill's views on India between 1929 and 1939 were quite abhorrent."

He was vociferous in his opposition to Gandhi, says Toye, and didn't want India to make any moves towards self-government to the extent of opposing his own party's leaders and being generally quite hostile to Hinduism.

Churchill's stance was very much that of a late Victorian imperialist, Charmley adds. "[Churchill] was terribly alarmed that giving the Indians home rule was going to lead to the downfall of the British Empire and the end of civilisation."

Younger Tories like Anthony Eden regarded Churchill with great mistrust during the 1930s because of his association with hard-line right-wingers in the party, he says.

"People sometimes question why on Earth did people not listen to Churchill's warnings about Hitler in the late 1930s," says Charmley, "to which the short answer is that he'd used exactly the same language about Gandhi in the early 1930s."

5. Attitudes towards Jews

In 2012 there were objections to a proposed Churchill Centre in Jerusalem on the basis that he was "no stranger to the latent anti-Semitism of his generation and class".

Sir Martin Gilbert, Churchill's official biographer, countered that "he was familiar with the Zionist ideal and supported the idea of a Jewish state".

But being anti-Semitic and a Zionist are not incompatible, says Charmley.

"Churchill with no doubt at all was a fervent Zionist," he says, "a fervent believer in the right of the Jewish people to a state of their own and that state should be in what we then called Palestine."

But he also "shared the low-level casual anti-Semitism of his class and kind", he says. If we judged everyone of that era by the standards of 21st Century political correctness, they'd all be guilty, he notes. "It shouldn't blind us to the bigger picture."

A 1937 unpublished article - supposedly by Churchill - entitled "How the Jews Can Combat Persecution" was discovered in 2007. "It may be that, unwittingly, they are inviting persecution - that they have been partly responsible for the antagonism from which they suffer," it said. "There is the feeling that the Jew is an incorrigible alien, that his first loyalty will always be towards his own race."

But there was immediately a row over the article, with Churchill historians pointing out it was written by journalist Adam Marshall Diston and that it might not have represented Churchill's views at all accurately.

"Casual anti-Semitism was rampant," agrees Dokter, "[but] it's inconceivable to pitch him as anti-Semitic."

In a 1920 article, he wrote: "Some people like Jews and some do not; but no thoughtful man can doubt the fact that they are beyond all question the most formidable and the most remarkable race which has ever appeared in the world."

6. Attitudes towards Islam

Paul Weston, chairman of the Liberty GB party, was arrested last year on suspicion of racial harassment after reading aloud some of Churchill's thoughts on Islam.

Weston was quoting from Churchill's 1899 book The River War, in which he wrote: "How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia [rabies] in a dog, there is this fearful fatalistic apathy.

"Improvident habits, slovenly systems of agriculture, sluggish methods of commerce and insecurity of property exist wherever the followers of the Prophet rule or live."

Snippets of these quotes now accompany Churchill's face in numerous internet memes purporting to show his anti-Islam stance.

"That was probably the most common view shared by British people of Churchill's era and I've no doubt that he believed exactly that," says Charmley.

But Churchill had a much more nuanced stance on Islam, Dokter says. The 1899 book was written in specific reference to the Mahdists of Sudan, immediately following the war there in which Churchill fought.

It was recently revealed that Churchill was sufficiently fascinated with Islam for his family to be concerned at one point that he might convert.

And in 1940, his cabinet set aside £100,000 for the construction of a mosque in London in recognition of the Indian Muslims who fought for the British Empire. He later told the House of Commons: "Many of our friends in Muslim countries all over the East have already expressed great appreciation of this gift."

"His relationship with Islam is far more complex than most people realise," Dokter suggests, noting that Churchill went on holiday to Istanbul and played polo in India with Muslims.

7. Treatment of strikers

Churchill's reputation as being anti-union primarily stems from an incident in 1910.

His handling of the Tonypandy Riots that year was the source of much controversy and invited ill-feeling towards him in south Wales for the rest of his life.

His grandson even had to defend Churchill's actions as late as 1978, when Prime Minister James Callaghan referenced "the vendetta of your family against the miners of Tonypandy".

The riots had erupted in November 1910 in the south Wales town because of a dispute between workers and the mine owners, culminating in strikes that ultimately lasted almost a year.

When the strikers clashed with local police, Churchill - then home secretary - sent in soldiers.

Allegations that shots were fired by the soldiers were unfounded, explains Toye. In fact he'd sent a memo expressly denying that the use of violence was a possibility.

Yet it made him a "pantomime villain" in the area ever since, Louise Miskell, a historian at Swansea University, told the BBC in March 2014.

But a year later soldiers were again called in, this time to strike-related riots in Liverpool. On this occasion the soldiers did fire their weapons and two people were killed.

And in later years his contempt for unions became more pronounced, says Charmley.

In 1919, under Churchill, by now Secretary of State for Air and War, tanks and an estimated 10,000 troops were deployed to Glasgow during a period of widespread strikes and civil unrest amid fear of a Bolshevist revolt.

The Tonypandy incident is comparable to Margaret Thatcher's later struggles with miners, Charmley suggests. One could argue that had Churchill not moved in troops the situation could have been much worse and he would have been criticised even more, he says.

In Boris Johnson's biography, he promotes the more liberal side of Churchill as the "begetter of some of the most progressive legislation for 200 years".

"Together with [former PM David] Lloyd George, he deserves the title of Founder of the Welfare State."

He supported quite radical social reform, adds Packwood, but it was more in the form of Victorian paternalism and he was a die-hard opponent of communism who saw the hand of it behind the Labour movement during the 1920s.

"For someone who has this terrible reputation with the unions," says Packwood, "he actually goes on to run two very conciliatory governments."

8. Sidney Street siege

Not long after the Tonypandy Riots, Churchill was under fire for rash involvement of a different sort.

The siege of Sidney Street was a gunfight in London's East End in January 1911. Some 200 police surrounded the hideout of a gang of Latvian anarchists led by "Peter the Painter", who had killed three policemen the month before.

A long gun battle ended with the deaths of two of the gang, after Churchill had ordered firefighters not to put out the burning building they'd been hiding in until the shooting had stopped.

But the controversy for Churchill arose from the appearance that he'd been issuing orders and directly meddling in police operations.

Arthur Balfour told the Commons: "He and a photographer were both risking valuable lives. I understand what the photographer was doing but what was the right honourable gentleman doing?"

For Churchill's opponents it was an example of rashness and instability, says Toye. A newsreel film had caught him in the midst of the action.

A contemporary wrote in a letter that "I do believe that Winston takes no interest in political affairs unless they involve the chance of bloodshed", explains Charmley.

"Churchill liked a photo opportunity before the word had been invented," says Charmley.

9. Role in Ireland

In January 1919 Churchill assumed the role of Secretary of State for War and Air. Eleven days later the Irish War of Independence began.

Churchill's role in Ireland is most associated with deploying the controversial "Black and Tans" to fight the Irish Republican Army (IRA). Named after their uniforms, these temporary constables soon developed a reputation for excessive violence.

In Churchill: The Greatest Briton Unmasked, Nigel Knight claims that Churchill repeatedly refused to stand down the Black and Tans and even advocated the use of air power in Ireland.

But it would be unfair to label Churchill as anti-Irish, says Toye.

Although Churchill was against home rule for Ireland and initially implemented harsh repression, he was also an early advocate of partition, Toye explains. Churchill played a key role in the Anglo-Irish Treaty of 1921, which ended the war.

"It comes back to his character, which is: 'In war, resolution, in peace, magnanimity'," says Packwood. "When he felt that there was a fight he would push very hard [and] when he thought there was a chance of peace and dialogue he was also at the forefront of that."

Churchill had expressed support for home rule as early as 1912.

He also recognised the role that Irish personnel serving in the British armed forces played in both WW1 and later in WW2, adds Toye.

10. Cash for influence

"In return for a fee of £5,000 two oil companies, Royal Dutch Shell and Burmah Anglo-Persian Oil Company [later BP], asked him to represent them in their application to the government for a merger," Gilbert's official biography stated.

By modern British political standards, the 1923 payment would be considered highly inappropriate.

Churchill, whose "political career was in the doldrums" at the time, according to a history of British Petroleum, agreed to use his parliamentary influence to raise the issue in return for money.

"But I'd be careful about calling it a bribe," Toye says. "He accepted all sorts of gifts, which in today's culture of full disclosure would get you expelled from the Commons. But those rules were not in place at the time."

The Register of Members' Interests was introduced in 1975. "You can argue that it was a conflict of interest, you can even argue that it was wrong, but you can't call it a bribe in the sense that it was actually illegal," Toye says.

"Politicians' links with business and the media weren't under the same level of scrutiny as they were then," says Packwood, "he was operating in a slightly different ethical environment."

Winston Leonard Spencer Churchill, 1874-1965

  • Born 30 November 1874 at Blenheim Palace in Oxfordshire. Attended Harrow and Sandhurst before embarking on army career, seeing action in India, and Sudan
  • Became Conservative MP in 1900, but in 1904 joined the Liberal Party. Cabinet member from 1908, he was First Lord of the Admiralty from 1911 until the disastrous Dardanelles expedition in early part of WW1. Served on Western Front for a time, before rejoining government from 1917-1929
  • Opposition to Indian self-rule, warnings about the rise of the Nazis and support for Edward VIII left Churchill politically isolated during 1930s. After WW2 broke out, he replaced Neville Chamberlain as prime minister, where his reputation as inspirational wartime leader was cemented
  • Lost power in 1945 election but was returned to power in 1951, and continued as prime minister until 1955. Died 24 January 1965 and was given a state funeral

More from BBC History

More from the Magazine

In October 2014 British planes were involved in their third air campaign over Iraq in 23 years. The RAF bombed Iraq more than 90 years ago - and that controversial strategy has had a huge impact on modern warfare and the Middle East.

The 1920s British air bombing campaign in Iraq (October 2014)


Ebola crisis: 'Too slow' WHO promises reforms


The World Health Organization (WHO) has set out plans for reform, admitting that it was too slow to respond to the deadly Ebola outbreak in West Africa.

At an emergency session in Geneva, director-general Margaret Chan said Ebola had taught the world and the WHO how they must act in the future.

She said the corner had been turned on infections but warned over complacency.

More than 8,500 people have died in the outbreak, the vast majority in Sierra Leone, Guinea and Liberia.

Contingency fund

Dr Chan said: "This was West Africa's first experience with the virus and it delivered some horrific shocks and surprises.

"The world, including WHO, was too slow to see what was unfolding before us. Ebola is a tragedy that has taught the world, including WHO, many lessons about how to prevent similar events in the future."

Dr Chan said that although disease outbreaks would continue to deliver shocks, "never again should the world be caught by surprise, unprepared".

The reforms announced included a "dedicated contingency fund to support rapid responses to outbreaks and emergencies".

There would also be improvements in international co-ordination and greater support for countries that needed to respond quickly to emergencies.

This would also require vaccines and drugs to be brought to the market more speedily.

Liberia announced on Friday that it was down to just five confirmed cases - there were 500 a week in September. Guinea and Sierra Leone have both also experienced falls in infection rates.

Dr Chan said the worst-case scenario had been avoided, but warned: "We must maintain the momentum and guard against complacency and donor fatigue."

WHO figures show 21,724 reported cases of Ebola in the outbreak , with 8,641 deaths.


Greece debt repayment in full is 'unrealistic', says Syriza


It is unrealistic to expect Greece to repay its huge debt in full, the chief economics spokesman for the victorious Syriza party has told the BBC.

"Nobody believes that the Greek debt is sustainable," Euclid Tsakalotos said.

The far-left Syriza, which won Sunday's general election, wants to renegotiate Greece's €240bn (£179bn; $270bn) bailout by international lenders.

EU leaders have warned the new Greek government that it must live up to its commitments to the creditors.

Syriza leader Alexis Tsipras - who was sworn in as prime minister on Monday - is expected to unveil his new cabinet later on Tuesday.

'Dangerous Europe'

"I haven't met an economist in their heart of hearts that will tell you that Greece will pay back all of that debt. It can't be done," Mr Tsakalotos said.

He said that EU leaders needed now to show that they were willing to work with Syriza.

"It's going to be a very funny and a very dangerous Europe with very strong centrifugal political forces if they signal that after a democratic vote they're not interested in talking to a new government.

"It will be a final signal that this is a Europe that can't incorporate democratic change and it can't incorporate social change."

But Mr Tsakalotos stressed that it would be "my worst nightmare if the eurozone collapses because Greece falls".

"And if Greece falls and is removed from the eurozone - the eurozone will collapse. We said from the beginning the eurozone is in danger, the euro is in danger, but it isn't in danger from Syriza... it is in danger from the very policies of austerity".

Analysis: Robert Peston, BBC economics editor

If Syriza were to win its negotiations with the rest of the eurozone, other anti-austerity parties would look more credible to voters. The victory of protectionist Marine le Pen in France's presidential election would be an interesting test of markets' sangfroid.

And if Syriza were to lose in talks with Brussels and Berlin, and the final rupture of Greece from the euro were to take place, investors might well pull their savings from any eurozone country where nationalists are in the ascendant.

So why are investors not in a state of frenzied panic? Why have the euro and stock markets bounced a bit? One slightly implausible explanation is that investors believe the eurozone would actually be stronger without Greece, so long as no other big country followed it out the door.

More likely is that they believe reason will prevail, and Berlin will sanction a write-off of Greece's excessive debts.

Robert Peston: Full analysis

A turning point for the EU?

Tears of joy at Syriza party

What next?

Mr Tsipras earlier stressed that he wanted negotiation - not confrontation - with international lenders.

"The new Greek government will be ready to co-operate and negotiate for the first time with our peers a just, mutually beneficial and viable solution," he said.

The troika of lenders that bailed out Greece - the European Union, European Central Bank, and International Monetary Fund - imposed big budgetary cuts and restructuring in return for the money.

'Little support'

Meanwhile, EU Commission President Jean-Claude Juncker warned that Greece cannot expect any reduction of its debt commitments.

He said it "is not on the radar" of the commission.

German government spokesman Steffan Seibert stressed it was important for Greece to "take measures so that the economic recovery continues".

Jeroen Dijsselbloem, president of the Eurogroup, said on Monday: "There is very little support for a write-off in Europe."

Syriza's victory has caused some concern in the financial markets.

In a volatile start to the week the euro briefly touched an 11-year low against the dollar early on Monday, before recovering to trade almost 0.7% higher against the US currency.


Ebola crisis: Oxfam calls for recovery Marshall Plan


Oxfam has called for a multi-million dollar Marshall Plan-type scheme to help the three West Africa countries worst affected by Ebola to recover.

More than 8,500 people have died in the outbreak, the vast majority in Sierra Leone, Guinea and Liberia.

Oxfam GB chief executive Mark Goldring said: "The world cannot walk away now that, thankfully, cases of this deadly disease are dropping."

The charity said investment from wealthy countries was crucial.

The Marshall Plan was the post-World War II project for European recovery.

It was officially known as the European Recovery Programme and launched in the name of the then American Secretary of State, George Marshall, in 1947.

Oxfam wants an international pledge to agree recovery plans, with financial support given by wealthy countries.

'Double disaster'

It said financial help was needed for three areas - providing cash to families affected by Ebola, investing in jobs and also supporting services like health, education and sanitation.

Mr Goldring, speaking on a visit to Liberia, said: "People need cash in their hands now, they need good jobs to feed their families in the near future and decent health, education and other essential services. They've gone through hell, they cannot be left high and dry.

"The world cannot walk away now that, thankfully, cases of this deadly disease are dropping. Failure to help these countries after surviving Ebola will condemn them to a double disaster.

"The world was late in waking up to the Ebola crisis, there can be no excuses for not helping to put these economies and lives back together."

The charity said a survey of 1,648 people in three Liberian counties found 73% of families had seen their income decline following the outbreak, with some struggling to buy enough food as a result.

Its survey found that 60% said they had not had enough food in the past seven days, with a quarter saying this was due to a drop in income and a fifth saying this was due to high food prices.

The price of rice has risen 40% above its seasonal average in Liberia, Oxfam said.

Vaccine hope

The World Bank has estimated nearly 180,000 people have lost their jobs in Sierra Leone since the outbreak began, with half of the heads of households in Liberia currently out of work.

Food prices have also been rising, adding to families' problems, Oxfam said.

Meanwhile, details have been given of a large-scale trial of vaccines against Ebola.

The US-funded programme will begin in Liberia and will initially see 600 people getting the vaccine.

BBC international development correspondent Mark Doyle said: "Because of the tragedy of the Ebola epidemic in West Africa, and the threat it poses to the whole world, a vaccine that would normally take 10 years to develop is being tested after just two.

"And a small west African nation, Liberia, is playing a vital role in trying to solve a potential global health disaster."


Ebola crisis: World 'dangerously unprepared' for future pandemics


The world is "dangerously unprepared" for future deadly pandemics like the Ebola outbreak in West Africa, the president of the World Bank has warned.

Jim Yong Kim, speaking in Washington, said it was vital that governments, corporations, aid agencies and insurance companies worked together to prepare for future outbreaks.

He said they needed to learn lessons from the Ebola crisis.

More than 8,500 people have died, most in Sierra Leone, Guinea and Liberia.

"The Ebola outbreak has been devastating in terms of lives lost and the loss of economic growth," Mr Kim told an audience at Georgetown University.

"We need to make sure that we get to zero cases in this Ebola outbreak. At the same time, we need to prepare for future pandemics that could become far more deadly and infectious than what we have seen so far with Ebola. We must learn the lessons from the Ebola outbreak because there is no doubt we will be faced with other pandemics in the years to come."

'Insurance policy'

Mr Kim said the World Bank Group had been working with the World Health Organisation (WHO), other UN agencies, academics, insurance company officials and others to work on a concept of developing a financial "pandemic facility".

He said he expected a proposal for this to be presented to leaders of developed and developing countries in the coming months.

Mr Kim said the proposal would probably involve a combination of bonds and insurance plans but that, in some ways, the facility could be similar to a homeowner's insurance policy.

"This could work like insurance policies that people understand, like fire insurance," he said.

"The more that you are prepared for a fire, such as having several smoke detectors in your house, the lower the premium you pay.

"The more that countries, multi-lateral institutions, corporations and donors work together to prepare for future pandemics - by building stronger health systems, improved surveillance and chains of supply and transportation, and fast-acting medical response teams - the lower the premium as well.

"That would benefit donors and others who would pay the premium, but the greatest benefit would be that market mechanisms would help us to push improvements in our preparedness for epidemics."

He said that one possible outcome of a pandemic facility would be a stronger World Health Organisation. He said disease-control agencies in developing countries could also develop greater capacity.

Mr Kim said informal talks on the subject had also been held at last week's World Economic Forum in Davos, Switzerland.

Slow response

His talk, "Lessons from Ebola: Toward a post-2015 strategy for pandemic response", was the inaugural Global Futures Lecture at Georgetown.

Correspondents say there is general acknowledgement among governments and global health agencies that the international response to the Ebola crisis was belated and disorganised.

The WHO recently announced a series of reforms, admitting that it had been too slow to respond to the outbreak in West Africa.

At an emergency session in Geneva, director-general Margaret Chan said Ebola had taught the world and the WHO how they must act in the future.

She said the corner had been turned on infections but warned against complacency.

Reforms announced included a dedicated contingency fund "to support rapid responses to outbreaks and emergencies".

There would also be improvements in international co-ordination and greater support for countries that needed to respond quickly to emergencies.


Post-traumatic stress 'evident in 1300BC'


Evidence of post-traumatic stress disorder can be traced back to 1300BC - much earlier than previously thought - say researchers.

The team at Anglia Ruskin University analysed translations from ancient Iraq or Mesopotamia.

Accounts of soldiers being visited by "ghosts they faced in battle" fitted with a modern diagnosis of PTSD.

The condition was likely to be as old as human civilisation, the researchers concluded.

Prof Jamie Hacker Hughes, a former consultant clinical psychologist for the Ministry of Defence, said the first description of PTSD was often accredited to the Greek historian Herodotus.

Referring to the warrior Epizelus during the battle of Marathon in 490BC he wrote: "He suddenly lost sight of both eyes, though nothing had touched him."

But Prof Hughes' report - titled Nothing New Under the Sun - argues there are references in the Assyrian Dynasty in Mesopotamia between 1300BC and 609BC.


In that era men spent a year being toughened up by building roads, bridges and other projects, before spending a year at war and then returning to their families for a year before starting the cycle again.

Potential triggers for post-traumatic stress disorder

  • Military conflicts
  • Natural disasters
  • Serious road accidents
  • Sexual assaults
  • Muggings

How is PTSD diagnosed?

Prof Hughes told the BBC News website: "The sorts of symptoms after battle were very clearly what we would call now post-traumatic stress symptoms.

"They described hearing and seeing ghosts talking to them, who would be the ghosts of people they'd killed in battle - and that's exactly the experience of modern-day soldiers who've been involved in close hand-to-hand combat."

A diagnosis and understanding of post-traumatic stress disorder emerged after the Vietnam War. It was dismissed as shell shock in World War One.

Prof Hughes said: "As long as there has been civilisation and as long as there has been warfare, there has been post-traumatic symptoms. It's not a 21st Century thing."


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 Who Cleans Up After?


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Trevor Batten
 <trevor at tebatt dot net>
 Baclayon 2013