By Aaron Maasho

Ethiopia and Eritrea are still at each others’ throats. The two neighbours fought hammer and tongs in sun-baked trenches during a two-year war over a decade ago, before a peace deal ended their World War I-style conflict in 2000. Furious veRed Sea, UNrbal battles, however, have continued to this day.

Yet, amid the blistering rhetoric and scares over a return to war, analysts say the feuding rivals are reluctant to lock horns once again. Neighbouring South Sudan and some Ethiopian politicians are working on plans to bring both sides to the negotiating table.

Asmara has been named, shamed and then slapped with two sets of U.N. sanctions over charges that it was aiding and abetting al Qaeda-linked rebels in lawless Somalia in its proxy war with Ethiopia. However, a panel tasked with monitoring violations of an arms embargo on Somalia said it had no proof of Eritrean support to the Islamist militants in the last year.

Nevertheless, Eritrea's foreign ministry wasted little time in pointing a finger of accusation at its perennial rival. “The events over the past year have clearly shown that it is in fact Ethiopia that is actively engaged in destabilising Eritrea in addition to its continued occupation of sovereign Eritrean territory in violation of the U.N. Charter,” the ministry said in a statement last month.

The Red Sea state was referring to Addis Ababa’s open declaration in 2011 in which its late Prime Minister Meles Zenawi said his country would no longer take a “passive stance” towards its rival following Eritrea’s alleged plot to bomb targets in the Ethiopian capital during an African Union gathering of heads of state.

Then foreign minister (and now premier) Hailemariam Desalegn followed up on the rhetoric soon afterwards by disclosing his government’s support to Eritrean rebels. Meles and Eritrean President Isaias Afewerki were once comrades-in-arms, even rumoured to be distant relatives. Ethiopia’s late leader rubber-stamped a 1993 referendum that granted independence to the former province after their rebel groups jointly toppled Communist dictator Mengistu Haile Mariam’s military junta two years earlier.

The love affair did not last long. The pair fell out spectacularly after Eritrea introduced its own currency in 1997 and Ethiopia responded by insisting on trading in dollars. Their economic spat aggravated already simmering border tensions, which culminated in Eritrea deploying its tanks months later and occupying hotly disputed territory that was under Addis Ababa’s administration.

Ethiopian troops breached Eritrea’s trenches nearly a year later and retook contested ground - namely the flashpoint town of Badme – before a peace deal was signed. What then followed is the sticking point that remains today. An independent boundary commission awarded Badme to Eritrea in 2002 but the ruling is yet to take effect. Ethiopia wants to negotiate its implementation and warns that delimitation of the border as per the finding would unreasonably split towns and other geographical locations into two.

Asmara on the other hand insists on an immediate hand-over. The bickering has evolved into a proxy war and diplomatic skulduggery as both sides attempt to bring about regime change in the other. But despite the harsh words, mediation efforts are in the pipeline. Deng Alor, neighbouring South Sudan's Minister for Cabinet Affairs, told Reuters on Wednesday his newly-independent country is about to embark on rounds of shuttle diplomacy between the capitals of Ethiopia and Eritrea. Both countries, he said, have given their blessing.

A handful of Ethiopian members of parliament are also devising a similar initiative, local sources say. Addis Ababa has never ruled out mediation. But even though Eritrea publicly dismisses any idea of a thaw in strained relations before the Badme spat is resolved, recent developments might change its mind, some believe.

Ethiopian analysts think Asmara now realises that its neighbour may easily adopt a more belligerent stance following the sudden death of Meles, who they say stood firm against a potential slide towards full-scale conflict. And of course not all Ethiopians express enthusiasm about an independent Eritrea, the creation of which left their country without access to the Red Sea.

Some diplomats say the chances of both sides making drastic concessions from their current positions remain slim. So will the mediation efforts finally yield a deal?

By Cosmas Butunyi

The dust is finally settling on the storm that was kicked off in South Africa by a controversial painting of President Jacob Zuma with his genitals exposed.

The country that boasts one of the most liberal constitutions in the world and the only one on the African continent with a constitutional provision that protects and defends the rights of  gays and lesbians , had   its values put up to  the test  after an artist    ruffled feathers by a painting that questioned the moral values  of the ruling African National Congress . 

For weeks, the storm ignited by the painting  called  ‘The Spear’, raged on, sucking in Goodman Gallery that displayed it and City Press, a weekly newspaper that had published it on its website. The matter eventually found its way into the corridors of justice, where the ruling ANC sought redress against the two institutions. The party also mobilised its supporters to stage protests outside the courtroom when the case it filed came up for hearing. They also matched to the gallery and called for a boycott of City Press , regarded as one of the country's most authoritative newspapers. 

 The controversy  has cooled down now that the newspaper  has  removed the artwork from its website, the gallery pulled it down  after it was defaced. The ANC  has withdrawn its lawsuit.

Throughout this drama, one issue that came up frequently in the huge debate that it kicked off, was the issue of artistic licence, specifically in Africa.

“We say No to abuse of artistic expression”, a placard screamed during one of the protests called by the ANC outside a court in Johannesburg after a case the ruling party had filed came up for hearing.  

In other parts of Africa novelists such as Ngugi wa Thiong’o of Kenya, playwright Wole Soyinka of Nigeria, and poet Jack Mapanje of Malawi have been locked up in the past for their critical writings.  

Where does much of Africa stand when it comes to artists challenging the ethos by which much of the continent is guided?.   What role should art play in African society?   Can art be used in modern Africa to correct ills of society?. What of African playwrights and novelists who have  been thrown behind bars for too much scrutiny of national governments.

(Libyan leader Muammar Gaddafi reads during a mass prayer during a celebration to mark the birthday of Prophet Mohammed in Agadez March 30, 2007. REUTERS/Samuel De Jaegere)

On a tidy campus in his capital of Tripoli, dictator Muammar Gaddafi sponsored one of the world's leading Muslim missionary networks. It was the smiling face of his Libyan regime, and the world smiled back.

The World Islamic Call Society (WICS) sent staffers out to build mosques and provide humanitarian relief. It gave poor students a free university education, in religion, finance and computer science. Its missionaries traversed Africa preaching a moderate, Sufi-tinged version of Islam as an alternative to the strict Wahhabism that Saudi Arabia was spreading.

The Society won approval in high places. The Vatican counted it among its partners in Christian-Muslim dialogue and both Pope John Paul and Pope Benedict received its secretary general. Archbishop of Canterbury Rowan Williams, spiritual head of the world's Anglicans, visited the campus in 2009 to deliver a lecture. The following year, the U.S. State Department noted approvingly how the Society had helped Filipino Christian migrant workers start a church in Libya.

But the Society had a darker side that occasionally flashed into view. In Africa, rumors abounded for years of Society staffers paying off local politicians or supporting insurgent groups. In 2004, an American Muslim leader was convicted of a plot to assassinate the Saudi crown prince, financed in part by the Society. In 2011, Canada stripped the local Society office of its charity status after it found the director had diverted Society money to a radical group that had attempted a coup in Trinidad and Tobago in 1990 and was linked to a plot to bomb New York's Kennedy Airport in 2007.

Now, with the Gaddafi regime gone, it is possible to piece together a fuller picture of this two-faced group. Interviews with three dozen current and former Society staff and Libyan officials, religious leaders and exiles, as well as analysis of its relations with the West, show how this arm of the Gaddafi regime was able to sustain a decades-long double game.

Yet Libya's new leaders, the same ones who fought bitterly to overthrow Gaddafi and dismantle his 42-year dictatorship, are unanimous in wanting to preserve the WICS. They say they can disentangle its religious work from the dirty tricks it played and retain the Society as a legitimate religious charity - and an instrument of soft power for oil-rich Libya.

Read the full story here.  For a full PDF version with pix and graphics, click here.
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“What I found interesting was uncovering who knew what, when. As soon as one constructed a timeline, it was evident that the EU guidelines had not been followed, even as those involved claimed to be guided entirely by these guidelines,” said Bergin. “That was probably the most interesting and rewarding because the rules were designed to protect people.”

As our story shows, Arcelik was informed by the London Fire Brigade some of its Beko fridges could pose a fire risk years before it informed its customers. When the company did take action, it decided to send out letters and did not follow EU suggestions to use the media to alert consumers to possible dangers.

The British press had not investigated whether Arcelik’s behavior constituted a breach of EU or UK regulations and Bergin believes Arcelik’s effective stonewalling, and newspapers’ disinterest in small stories like domestic fires, stopped the national press from digging deeper into the faulty fridges.

“It takes a great deal of time…Stonewalling often can be very effective, unfortunately, and we live in a country where the libel laws are so restrictive that even suggesting a company has behaved inappropriately poses big risks for news organizations,” he said.

Bergin was the invited to Arcelik’s British headquarters after the company realised Reuters was investigating the story – as far as we know the only British journalist to visit.

“A few weeks into it, it was quite clear to them that we were putting the time and effort into the story that meant we would quite likely come up with a compelling account of what happened and that we understood the rules, that we were making investigations in many different sources…Simply stonewalling wasn’t an option in the face of our persistence.”

–Reporting by Clare Kane

Malnourished children presented at a clinic in North Korea during a guided tour of a disaster-hit province. (Reuters/Tim Large)

Could a malnourished eight-year-old really look like a three-year-old? Were the 28 orphans in the primary school clinic really so stunted by years of hunger that they had the bodies of toddlers, as the authorities claimed?

Or had they been assembled here for our benefit, infant imposters wheeled in to add poignancy to North Korea’s appeal for food aid?

Western nutrition experts who have worked in the country for years assured me that such extreme stunting was absolutely the norm.

"You see seven-year-olds who like they're two," said one. "You see 13 years-olds who look like they're seven."

In any other country, it never would have occurred to me to question the word of doctors as we visited room after room of children with gaunt faces, emaciated limbs and weeping skin infections. But this was North Korea, the most closed and secretive society on earth.

And although government authorities gave us unprecedented access to hospitals, schools, orphanages and collective farms, our journey into North Korea's bread basket was tightly controlled. At times it felt stage-managed.

Was it paranoia to wonder if what we were seeing was sometimes stagecraft?

Our trip marked the first time a major Western news organisation had been allowed to document hunger and suffering in rural North Korea, where the Wood Food Programme estimates 6 million people need food assistance and a third of children are malnourished or stunted.

From the start, there were strings attached.

Back in July, Thomson Reuters Foundation, which runs the AlertNet <http://www.trust.org/alertnet> global humanitarian news service, received an email from a senior official at North Korea’s Economy Trade and Information Center, part of the foreign trade ministry. It was an appeal for food aid <http://www.trust.org/alertnet/news/north-korea-asks-alertnet-to-help-mobilise-food-aid> to AlertNet’s network of about 500 international relief organisations, as well as a plea for a donation from the Foundation.

We wrote back, declining to give a donation but saying we’d be happy to come and report on the hunger crisis. The official answered that we could only do that if we brought an aid agency willing to donate food or money.

We asked around and learned that Medecins Sans Frontieres was keen to explore the possibility of working in North Korea again. The international medical charity had pulled out in the late 1990s following a disagreement over the monitoring of aid. Of course, there could be no relief programme without a proper needs assessment, they said -- a message we relayed to the North Korean authorities.

That’s how we found ourselves on a ground-breaking – if at times surreal – reporting trip to the North Korean countryside.

The authorities set the itinerary. They made the rules. No taking pictures through the minibus window as we drove. No photographing portraits of North Korea’s “Great Leaders”, which festooned walls and billboards everywhere we went. No visiting informal markets, which many people rely on as the country’s public food distribution system crumbles

Journalists are used to relying on “fixers” to help them get interviews, provide translations and explain the lay of the land. But in this case, our fixers were also our government “guides”, “minders” and “controllers”.

Everywhere we went, ordinary people ran for cover when they saw our cameras and notebooks. Nobody in the street made eye contact. Reuters photographer Damir Sagolj gives a personal view of what it was like to work under these conditions in his blog, Eyes from behind the mirror <http://www.reuters.com/article/2011/10/07/idUS19142664920111007> .

When we interviewed farmers, doctors and flood survivors, we were inevitably surrounded by a gaggle of officials who took notes on everything asked and everything said. Other officials seemed to take notes on the note-takers.

Stunted North Korean child stands with a shovel in shrivelled corn field in a disaster-hit part of the country (REUTERS/Tim Large)

To be fair to our hosts, they did try to accommodate many of our requests, showing a surprising degree of flexibility in a country where everything has to be approved in advance by officials higher up the chain.

We wanted to film farmers beginning the all-important rice harvest. After much to-ing and fro-ing, we were allowed to train our cameras on men, women and children sowing late crops in an already-harvested field. Could it be that our minders didn’t want the world to see images of lush-looking paddies full

of rice?

A good many interviewees were openly coached. I asked one doctor about cases of malnutrition in his clinic. He said they’d stood at about 3 percent of admissions all year. A senior official took him aside and then his answer changed. “I would like to say that since the floods, cases of malnutrition have gone up 8 percent.”

Yes, it was all about the floods. The narrative presented to us with solemn repetition was a story of a proud but disaster-prone country forced to reach out for aid after floods compounded catastrophic damage to crops caused by a savage winter.

To be sure, we saw plenty of evidence of devastation caused by the heaviest summer rains in years, two typhoons and successive inundations: broken bridges, crumpled houses, ruined maize crops.

But the floods were only the latest natural shock in a saga of chronic food shortages that are as much political as they are rooted in natural disasters.

Experts say North Korea’s hunger crisis has its roots in years of farm mismanagement as well as slumping aid and trade amid the fallout of Pyongyang’s nuclear and missile programmes. Fears that aid could be diverted to feed North Korea’s million-strong army have also made donors wary. Meanwhile, a botched currency devaluation and rising global commodities prices have slashed commercial food imports.

Skeptics say Pyongyang may be stockpiling food to give out at next year’s 100th birthday celebrations of “Eternal President” Kim Il-sung. Others say North Korea may be hoarding food ahead of a possible underground nuclear test, which would likely provoke another round of sanctions.

None of which negates the very real and upsetting hunger we saw.

Looking over the dozens of images we took of sick and malnourished children, I felt a twinge of guilt for even doubting the doctors and nurses who were evidently doing their best with almost no medicines and little food in the larder.

Tragic to say, many of the kids we saw will die. There is simply no treatment for them.

Today Gilliams was arrested on charges of running a $4 million investment scam.

Time to re-read the original story, which detailed allegations by Ohio businessman David Parlin that Gilliams used some of Parlin’s money to sponsor a glitzy black-tie charitable event in Philadelphia attended by rappers and local politicians.

Federal authorities began investigating Gilliams soon after the Reuters story was published, according to people familiar with the matter who declined to be identified.

Matt will be keeping track of the case as it plays out.

For months now we've been hearing a lot about the $14 trillion in debt owed by the U.S. government. But there's been far too little talk about the almost equally high debt tab owed by U.S. consumers.

The Federal Reserve recently reported that total outstanding debt owed by U.S. consumers was $11.4 trillion, down from its third-quarter 2008 peak of $12.5 trillion. At that pace, it could take years for U.S. consumers to delever, or in plain English--reduce the debts they owe on their homes, credit cards, autos and student loans. But when it comes to the staggering sum of consumer debt in this country, it's pretty clear that time is not on our side.

In fact, the longer it takes for consumers to pay-down their debts, it simply means demand for homes, autos and other big ticket goods will remain lax. And that means the unemployment rate won't get much lower than its current 9 percent rate anytime soon. In fact, with all the signs pointing to a double-dip recession, unemployment could very well inch higher in the next few months.

In our Special Report, "A "great haircut" to kick-start growth, we take a look at one radical measure for speeding-up the process of consumer deleveraging, which involves some sharing of losses by banks, bond investors and borrowers. Jennifer Ablan and myself found a growing number of economists, analysts and even some institutional investors who are craving for a creative solution to the consumer debt woes plaguing the U.S. economy.

Our story doesn't discuss the mechanics for instituting a great haircut to jump start the economy. The specifics of just how to spread the losses around is a subject for a later day and is something that can be dealt with at the negotiating table. But hopefully our story, which you can read here, will get the discussion rolling.

Here is the PDF version of the story with interactive graphics.

Click here to view the embedded video.

UBS chief Oswald Gruebel’s decision to resign after the bank said a rogue trader lost as much as $2.3 billion was not just a response to the immediate crisis. It was also an admission that the bank’s latest scandal has effectively undone all his efforts over the past two years to lobby against tougher bank regulations.

The alleged rogue trades have killed any remaining ambitions UBS might have to compete with the titans of Wall Street. They also cast a huge shadow across the entire industry and make tough new regulations far more likely, as the 67-year-old hinted in a memo to staff after he quit. “That it was possible for one of our traders in London to inflict a multi-billion loss on our bank through unauthorised trading shocked me, as it did everyone else, deeply. This incident has worldwide repercussions, including political ones,” he wrote.

After a round of job cuts, the recent events sparked some gallows humor in the banking world. As one senior banker in Zurich put it:

“The joke going around is that Gruebel didn’t need to sack 3,500 people to save 2 billion. He could have just sacked ONE.”

UBS had only recently started to win back the trust of its wealthy private banking clients after risky bets on subprime mortgages came close to felling it in the financial crisis of 2008, as this graphic shows:

What happens in Nevada, stays in Nevada. Literally. Especially when it comes to Nevada shell companies.

That’s the gist of our latest special report in the SHELL GAMES series, “Nevada’s big bet on secrecy.”

The story takes a close look at how changes to Nevada’s incorporation laws a decade ago have made it a haven for U.S. shell companies, as well as a hub for current executives of mass-incorporators who previously went to prison, in large part for using Nevada shell companies for illegal activities.

The state’s liberal incorporation laws – which allow for nominee officers and directors and a higher degree of liability protection than any other state – are a magnet for questionable corporate behavior, it appears.

“Nevada’s Big Bet on Secrecy” had some immediate impact: Ross Miller, Nevada’s Secretary of State, said in August that he planned to introduce a bill which would bar former felons from running mass-incorporators. In September, his office announced a new Corporate Ownership Fraud Task Force, in collaboration with the Internal Revenue Service and the Nevada Attorney General’s office, based in part on data contained in questions posed by Reuters.

The data are sure to raise eye-brows. Reuters found four former felons who run or until recently ran three mass-incorporators in the state which have formed or represented more than 14,000 companies. Over 3,000 of those firms have been the subject of state and federal tax liens and civil judgements, or have been named in federal civil and criminal litigation.

We also detailed a March study by two professors at the University of Virginia which shows that Nevada had the nation’s highest rate of financial restatements and fraud allegations or investigations involving publicly-traded companies on average each year between 2000 and 2008.

What’s more the state is home to almost half of all publicly-traded shell companies tracked by financial consultancy Private Raise. Public shells have drawn fire for helping foreign firms access a backdoor to trading on U.S. stock exchanges, with less scrutiny from regulators and investors.

Nevada’s reputation – via its gambling hub Las Vegas — for being an anything-goes oasis extends to the world of opaque corporate ownership, too

Read the story in multimedia PDF format here.

Here are the previous stories in the series:

    A little house of secrets:   http://link.reuters.com/wug23s

    China’s shortcut to Wall St: http://link.reuters.com/sep93s

    Bonds that turned to dust:   http://link.reuters.com/vep93s

And some video from Nevada:

Today’s special report from Detroit, “Crunch time for America’s richest union,” takes a close look at the finances of the historic United Auto Workers union.

Over its 76 years, the UAW has built up a more than $1 billion war chest that has proven to be its big stick at the negotiating table and on the political stage.

Most of the UAW’s wealth sits in its strike fund, which stood at $763 million at end 2010. That money can only be used to fund strikes unless UAW representatives approve a change to the constitution, a step possible every four years.

The sheer size of the strike fund hides the weakening of the UAW’s finances, particularly since 2007, a period when the U.S. auto industry nearly collapsed and membership fell by about a fifth.

At first glance, the UAW’s financial reports show that overall cash receipts and disbursements have fallen almost exactly in tandem. But a deeper look shows that since 2007, the UAW has relied more and more on selling its investments to offset the sharp drop in dues, its largest source of annual funding.

As shown in the graphic below, in 2007 dues represented more than half the UAW’s incoming revenue, while investment and assets sales were just over 6 percent, according to U.S. Labor Department filings. By 2010, dues composed 43 percent of the UAW’s income, while sales of investments and assets were 23 percent.

Union officials say the UAW can’t rely on selling off its investments indefinitely. Their response includes steps to cut costs and to recruit new members by organizing the “transplant” auto plants run by Japanese, Korean and German automakers.

The UAW also sees the period of 2007 to 2009 as a kind of anomaly that won’t be repeated because of the crisis in Detroit during those years.

Those were “horrible years for a lot of people, and it took more assets to operate as a union than it will in the future,” UAW Secretary-Treasurer Dennis Williams said in an interview at the union’s headquarters in July.

There’s also a sidebar on the UAW’s golf course, ”Trouble at Black Lake: the UAW’s property exposure.”

To read the story in multimedia PDF format, click here: http://link.reuters.com/tuj83s