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The Israeli-Palestine conflict and its impact on energy security

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It has been over a week now since the Middle East has continued to brew with what appears to be the fiercest conflict between Israel and Palestine in years. One report notes that the current conflict which seems to have come to a ceasefire after various interventions, is the most severe since the 2014 conflict that resulted in the invasion of Gaza; and is the fourth of its kind since 2008 between the two sides.

In the last nine days since the first rockets were fired and the clashes between the two entities came to a head, both sides have witnessed casualties and loss of property. Beyond this, however, there are concerns about the impact on energy security within Israel and Gaza. According to news reports, Hamas, the Palestinian militant group that rules Gaza, fired a missile that hit the Trans-Israeli oil pipeline between Eliat and Ashkelon, which extends from the Gulf of Aqaba to the Mediterranean, thereby damaging the pipeline and setting a large oil tank on fire.

The missile attack on the oil pipeline also led to Chevron shutting down the Tamar gas platform off the Israeli shore – this definitely means no production until the coast is clear.

In late Q4 2020, with improving relations between Israel and its neighbouring Arab States, a consortium of oil companies in the United Arab Emirates (UAE) held talks about utilizing the Trans-Israeli pipeline to transport oil products from the Persian Gulf to Western markets. In a follow up to that, only last month, Mubadala Petroleum, Abu Dhabi’s government-owned energy investment subsidiary signed a memorandum of understanding to buy 22% of the Tamar gas field for $1.1billion.

The fact that the buyer of such significant interest in Tamar was Arab was a good incentive for other international players considering investing in Israel, as it evinced a level of geopolitical stability and the prevalence of business and commercial interests over political or ethnic interests.

Yet with the current escalated conflicts in the region and the palpable fear that even with the ceasefire, reprisals may be brewing on either side, investors may adopt a wait and see approach before proceeding with investments in Israel, especially for large investments such as these. There is also the concern that the conflict may reignite tensions amongst Israel and its other Arab neighbours, some of whom it had achieved peaceful coexistence with, in recent months, particularly countries like the UAE and Bahrain.

While some pundits insist that this UAE gas field acquisition will still go forward due to economic interests on the Israeli and UAE side, the political risks to the project have now significantly increased and may affect pricing in order to compensate for the risk profile.

Further, in late February this year, Qatar pledge $60 million to build a gas pipeline from Israel to the Gaza Strip in order to end the energy crisis that has crippled the Gaza economy. The project would transition the Strip from the expensive and polluting diesel it uses to produce electricity to low carbon natural gas. The plan is to pipe gas from the deepwater Leviathan field through Israel and into Gaza. With the fighting in the region, the situation of those in the Gaza Strip has not only worsened, but it would also inevitably result in a delay in this project, as one of the key motivations for the project was the fact that there had been no Israeli-Palestinian tensions in seven years, and that Israeli, Palestine, Qatari and European interests had converged to deliver on the project.

Israel has a lot to lose in the recurrent geopolitical crises, particularly with respect to energy security. From joining the Eastern Mediterranean Gas Forum (EMGF) alongside, Egypt, Greece, Cyprus, Jordan and the Palestinian Authority in order to create a regional gas market, to its ambition to become a regional gas leader and exporter of LNG, Israel’s current conflict mode sours the relations it has built within the EGMF and gives its political foes in Ankara cards to play as they move towards ensuring Israel’s gas ambition does not succeed. On the other hand, as it is reported that Qatar bankrolls Hamas in Gaza, whether this would influence talks around Qatar’s gas pipeline funding pledge or not remains to be seen.

Hotflex

Admittedly, while most Arab States have severely criticised the Israeli policies on Palestine during this period, with little action to back up this condemnation, one cannot tell how much economic interests will prevail to determine their continued relations, particularly with respect to Israeli gas. One thing is certain, however, continued conflicts in Israel, the West Bank, East Jerusalem and the Gaza Strip will negatively affect Israel’s internal energy security as well as its ambition to be a regional gas exporter to Europe. The conflict will also significantly affect Gaza and worsen the quality of life of its inhabitants.



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KQ resumes Mumbai flights after 4 months

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KQ resumes Mumbai flights after 4 months


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A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG

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Summary

  • Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
  • The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.

The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.

Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.

“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.

KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.

The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.

Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.

India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.

Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.

India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.

A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.



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Lower import volumes push mitumba prices to new highs

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Lower import volumes push mitumba prices to new highs


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Man pulls a cart loaded with second-hand clothes at Gikomba Market in Nairobi. FILE PHOTO | NMG

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Summary

  • Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
  • Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
  • Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.

Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.

Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.

Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.

The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.

TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.

Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.

The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.

Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.



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Court backs Atwoli union in horticulture membership feud

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Court backs Atwoli union in horticulture membership feud


Cotu boss Francis Atwoli

Cotu boss Francis Atwoli. FILE PHOTO | NMG

Summary

  • A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
  • Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.

Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.

Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.

He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.

“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.

“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.

He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.

“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.

Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.



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