Archive for ‘UK’

May 23, 2011

Corporate China’s political shadows

Isabel Hilton in the Guardian says British business should be wary of the opaque Communist party role in China’s corporate culture

It was reported this week that China’s sovereign wealth fund is about to receive new capital from the government, adding billions of dollars annually to its already impressive wallet. As China’s economic power continues to grow and countries around the world compete for Chinese investment, the question facing developed countries is not so much what happens when China rules the world, as what will be the impact when China owns the world?

The China Investment Corporation was set up in 2007 to invest some of the $3tn in foreign exchange reserves that have accumulated through trade surpluses – fuelled in part, critics would say, by an artificially depressed exchange rate. It is currently the world’s fourth largest sovereign wealth fund but is growing fast as the Chinese government pursues its twin goals of securing raw materials and energy, and reducing its holdings of US treasury bonds – no longer seen by Beijing as future-proof.

Until 2000 China’s investments outside Asia were small and largely aimed at energy and natural resources in Latin America and Africa. But now China is on a spending spree, buying into mining interests from Australia to Canada and looking for acquisitions that might give them technology, major brands or market access. [READ THE REST]

Other China news: Economy

Just after the State Council acknowledged that the massive Three Gorges Dam has had a negative social and environment impact, the corporation running the damn announced that they came up short in a recent audit. // China has surpassed India as the biggest market for investment-grade gold, based on newly released statistics for the first quarter of 2011. (Although India is still the world’s largest overall consumer of  products.) … The sudden jump in Chinese demand for gold is thought to be driven by fears of inflation. Analysts expect that demand for gold in China will increase in the future. // More tragedy for  workers, as an explosion at a Chengdu plant killed two workers and injured at least ten. // The New York Times reports on a new fad among China’s super rich: illegal helicopters. // In recent weeks, Internet users in China have complained of increasing difficulty accessing overseas websites, in what many see as part of the ongoing crackdown on free expression. In the Global Times, Fang Binxing, the so-called Father of the Great Firewall, attributes the problem to cost-cutting measures by ISPs.

Other China news: Chinese soft imperialism

South Korean media has reported that North Korea’s heir apparent Kim Jong Eun is traveling in China on his first trip overseas since being chosen to take over power from his father, Kim Jong Il.  // China Confirms Visit by Kim Jong II – Wall Street Journal.

Related articles

read more »

Advertisements
April 14, 2011

Socialism or your money back

A few items from the above-named blog:

China’s ghost cities and the biggest property bubble of all time

A couple of months ago, a lot of people were passing around the news about China’s plan to create a megacity that would be home to 42 million people, the so-called “Turn the Pearl Delta Into One” idea. The reporting was generally favorable, painting a picture of economic growth and opportunity — the narrative of a prosperous China, with a growing middle class, that has become commonplace in recent years.

Unfortunately, the view of China’s urban planning strategies from the ground is less shiny. A riveting report from Dateline, an Australian TV show, reveals a disturbing pattern of development for development’s sake — the construction of gigantic infrastructure projects with no regard for human needs. (Hat tip to WalkableDFW.)

Take the New South China Mall, in Dongguan. The Dateline crew took a tour of the place, which has been 99 percent vacant since it opened in 2005, and the result is one of the most depressing things I have ever watched. Six years after its creation, what is touted as the largest mall in the world sits almost empty. One of the very few stores that’s in business is a toy shop, where the wistful owner spends his days dusting children’s bikes that no child will ever ride. He is lucky if he makes one sale a day. [READ THE REST]

Doom and gloomier

British families are on average £910 worse off than they were two years ago. Rising food, clothing and energy prices mean the average British family will have £910 less to spend this year than they did in 2009.The squeeze – which is considered the worst in peacetime for 90 years – is set to continue with a two per cent fall in household disposable income this year. The fall in disposable income is comparable with the savage post-World War One recession which lasted between 1919 and 1921, as a result of a collapse in manufacturing and international trade.The findings also show the fall in household disposable income is sharper than in the 1930s depression.

The Centre for Economics and Business Research forecasts inflation will average 3.9pc in 2011. At the same time, salaries will rise just 1.9pc as unemployment remains high and the public sector makes cut-backs.

Employment lawyers have predicted that older workers and pregnant women will be hit by a fresh wave of job cuts. Paul Griffin, head of employment at DBS Law, said: “The growth of discrimination claims from older workers and pregnant women suggests that employers are now targeting their more expensive staff, despite them being in protected groups. Obviously mistakes are being made in companies as accounts departments win out against human resources.”

Robert H. Frank, an economics professor at the Johnson Graduate School of Management at Cornell University, invented the toil index, a measure of how many hours the median American must work to pay for an average family home in a school district of average quality.
“During the immediate postwar decades the toil burden for meeting the rent of that median-price home actually declined slightly, from 42.5 hours a month in 1950 to 41.5 in 1970, according to my calculations.… By 2000, the median worker had to work 67.4 hours a month to put his or her family into the median home. “

The Libyan weapons shop-window

To take out Moammar Gadhafi’s air defenses, Western powers such as France and Italy are using the very aircraft and weapons that only months ago they were showing off to the Libyan leader. Times change, allegiances shift, but weapons companies will always find takers for their goods. The Libyan no-fly zone has become a prime showcase for potential weapons customers, underlining the power of western combat jets and smart bombs, or reminding potential buyers of the defensive systems needed to repel them.

Almost every modern conflict from the Spanish Civil War to Kosovo has served as a test of air power. But the Libyan operation coincides with a new arms race — a surge of demand in the $60 billion a year global fighter market and the arrival of a new generation of equipment in the air and at sea. For the countries and companies behind those planes and weapons, there’s no better sales tool than real combat. For air forces facing cuts, it is a strike for the value of air power itself.

read more »

April 12, 2011

Sheffield families vs the super rich: who flies more often?

Belle leaves a chauffeur driven Rolls-Royce an...

From David Osler:

MILLIONAIRE Tory Oliver Letwin has come out against building new airports because he doesn’t want ‘morepeople from Sheffield flying away on cheap holidays’. However, I suspect that he has missed the primary sources of additional demand for aviation services.

One of the many interesting findings of the 2011 Wealth Report, produced by property consultant Knight Frank in conjunction with Citi Private Bank, is that all Russians worth $100m or more have increased spending on private jets and yachts over the last five years. The same can be said of 93% of super rich Indians, and 70% of high net worth individuals in the Middle East.

Indeed, the private jet market probably has further to rise, according to Tara Loader Wilkinson in Financial News, who quotes the opinions of a leading jet broker:

[T]he Russian & CIS private jet fleet is forecast to triple by 2019, with 650 deliveries scheduled from 2010 – 2019. Similar high demand is also identified in China where deliveries are expected to grow six fold, from 110 to 700 by 2019.

Nor are these people willing to fly on crap aeroplanes, it seems:

But the newly-monied do not want just any old private jets and yachts. Private bankers say the wave of emerging markets consumers have a competitive streak and when it comes to executive transport, big is beautiful.

“The (emerging markets buyers) are buying the newer, bigger, better jets. These, of course, have a higher ticket price.” said Mary Schwartz, head of Aircraft Finance at Citi Private Bank.

April 8, 2011

War in the Middle East: follow the money

From Der Spiegel:

Weapons Sales to the Arab World under Scrutiny

By Benjamin Bidder and Clemens Höges

Bernhard Zand/ DER SPIEGEL

In recent years, Western countries have made a bundle selling arms to Arab despots. But, as with Libyan leader Moammar Gadhafi, some of yesterday’s buyers have become today’s enemies. Now major weapons exporters must seek a new balance between arms profits and human rights.

The revolutions in the Arab world caught British Prime Minister David Cameron off guard. For some time, diplomats had been planning a trip for Cameron that would take him to several countries in the Middle East. In fact, it was meant to be more of a trade mission, with Cameron’s delegation consisting largely of high-level executives from Great Britain’s weapons industry.

But then came the revolutions in Arab countries and the fighting in Libya. Ignoring them was impossible, and Cameron added a six hour stopover in Cairo to his already tight schedule. It was almost exactly a month ago that he visited Tahrir Square in the center of the city, the focal point of mass demonstration which ultimately forced Egypt’s aging leader, Hosni Mubarak, out of office.

“Meeting the young people and the representatives of the groups in Tahrir Square was genuinely inspiring,” Cameron said. “These are people who have risked a huge amount for what they believe in.”

From Egypt, Cameron flew on to Kuwait, where he got down to the real purpose of his trip: selling weapons to Arab autocrats. When members of parliament back home attacked him for this lack of tact, the prime minister insisted there was nothing wrong with such business transactions and that, in any case, his government made weapons buyers pledge to not use them to violate human rights under any circumstances. Great Britain, he said, has “nothing to be ashamed of.”

Britain, though, has exported over €100 million ($142 million) in weapons to Libyan dictator Moammar Gadhafi in the last two years alone. Included in those shipments are sniper rifles that may currently be in use against the Libyan opposition. Furthermore, Gadhafi’s terror police are British-trained. Indeed, British officials were forced to hastily revoke 50 arms export licenses to Libya and Bahrain.

Friends of Convenience

Cameron now finds himself in a tight spot shared by many Western politicians. Policies that seemed fine prior to the revolutions are now questionable. Regional paradigms are shifting and, at a time when populations are throwing off the yoke of oppression, Realpolitik is a poor guide to Western policy.

Until recently, the West had been arming despots in the Arab world with a series of ever-larger, billion-dollar deals that served to stabilize their regimes. Some are close allies when it comes to Iran and al-Qaida, making questions about human rights and democracy secondary.

In addition, many of the region’s potentates were convenient partners for the West: They had their people more or less under control, and some provided oil. Even Gadhafi proved useful by keeping poor African refugees out of Europe. Likewise, many of the rulers bought whatever the West’s defense industry put up for sale.

The Ascent of German Arms

This was certainly also the case with Germany’s defense industry. According to the Stockholm International Peace Research Institute (SIPRI), though it still lags far behind the United States and Russia, Germany has become the world’s third-largest weapons exporter in recent years.

Indeed, SIPRI statistics show that, over the last decade, the German defense industry’s share of the global arms market has doubled to 11 percent. In 2008, the total value of these arms sales amounted to just under €6 billion. Germany primarily supplies high-tech items, such as submarines and military electronics. German defense corporations — such as EADS, Rheinmetall and Heckler & Koch — together employ roughly 80,000 people.

German military wares are so good that even Russia has become a reliable customer. Although Russia’s own products are perfectly suited for guerilla warfare in Africa, Russian Defense Minister Anatoly Serdyukov admits that they no longer meet “modern requirements.”

For this reason, Russia plans to order military hardware worth nearly €500 billion by 2020, including many items from the West. The Russian army would like to replace its T-90 tanks for the German Leopard 2, and Rheinmetall is to provide armored plating for other Russian vehicles. Even Russia’s mobile military camps will soon be “made in Germany.” Kärcher Futuretech, a company based in Winnenden, near Stuttgart, manufactures the finest in field kitchens and water purification systems.[…]

From Le Monde Diplo:

by Samir Aita
[…] Monarchies in the Arab world have been absolute, and life-long presidents (with hereditary office) ruled the republics, because they created a supreme power above both state and post-independence institutions (1). They set up and controlled their own security services to ensure that their powers would endure; the services escaped parliamentary or government supervision, and their members could reprimand a minister and impose decisions. It costs money to run such services, and the clientelist networks of one-party states. The funds derive not from public budgets, as do those for the police and the army, but from different sources of revenue. (The New York Times recently reported that Muammar Gaddafi had demanded in 2009 that oil firms operating in Libya should contribute to the $1.5bn he had promised to pay in compensation for the Lockerbie terrorist murders – or lose their licences. Many paid. And Gaddafi’s immediate cash holdings of billions of dollars are thought to be funding his mercenaries and supporters to defend him.)

read more »

April 5, 2011

Libya and the British state

Important analysis of what the Libyan intervention tells us about the British state.

March 18, 2011

Chart of the week: Britain’s export gap with the BRICS

Will Straw writes:

Sky News and the Financial Times report that Peter Mandelson will later today outline a £27 billion export gap with the BRIC countries (Brazil, Russia, India and China). The finding comes from a piece of research that my colleagues Sarah Mulley, Amna Silim, and I have done for ippr on the future of globalisation and Britain’s place in the global economy.

The chart below – part of a presentation to be made later today by ippr Director, Nick Pearce, prior to Peter Mandelson’s keynote speech on globalisation – shows the actual volume of Britain’s exports to the four BRIC countries compared to the potential volume if export performance matched Britain’s global share of trade.

[READ THE REST]

Below the fold, recent(ish) trade news from The Gabber:

read more »

March 17, 2011

The UK: oilier than ever

Daniel Elton writes:

The Cameron administration has a firm aspiration to be the ‘greenest government ever‘, but the reality is turning out to be quite different. Alongside having a transport secretary who advocates gas-guzzling changes to public policy, and continuing to encourage road-building in a time of austerity, it turns out that the person almost certain to head up the coalition’s environment and energy policy is a former BP policy advisor.

Deep-sea-oil-drilling

Ben Moxham is currently working at the Riverstone private equity group which focuses on energy investment. In line with civil service practice, he has been put forward on a short list of one by civil servants for approval by the prime minister and Nick Clegg.

Moxham was previously director of policy of BP’s alternative energy department and part of the team pledged to move BP  ‘Beyond Petroleum’. However, the initiative concerned environmental campaigners as ineffective. [READ THE REST]

March 16, 2011

Arming the dictators: How the west profiteers from anti-democracy actions in the Middle East

In its broadest sense, the arms industry encom...

Image via Wikipedia

Saudi Arabia uses UK-made armoured vehicles in Bahrain crackdown on democracy protesters

Saudi Arabia has sent scores of UK-made armoured personnel carriers into Bahrain to aid the government’s bloody suppression of pro-democracy protesters. The armoured vehicles, marketed as Tacticas, were manufactured by BAE Systems Land Systems Division in Newcastle Upon Tyne with final assembly taking place in Belgium (Jane’s Armour and Artillery 2009-10 pp. 664)

The Saudi Arabia National Guard (SANG) ordered 261 of the vehicles in 2006 for delivery in 2008. Saudi forces entered Bahrain in a convoy of the Tacticas on 13 March, at the invitation of the Bahrain’s ruling al-Khalifa family. It seems that the Saudi forces are being held in reserve, leaving the front-line repression of protesters by Bahrain’s military and security forces.

Saudi Arabia has been a major market for market for UK arms since the 1960s. The majority of contracts have been through the controversial Al-Yamamah arms deals of the mid-1980s, and their successor, the Salam Project, which involved arms giant BAE Systems (formmerly British Aerospace). However, the Tactica purchase was not part of either package but a separate contract with SANG.

Bahrain is also a market for UK arms. In the first nine months of 2010, the UK approved export licenses for over £5 million worth of arms including tear gas and crowd control ammunition, equipment for the use of aircraft cannons, assault rifles, shotguns, sniper rifles and sub-machine guns. In response to an earlier crackdown on 18 February 2011 the UK government revoked 24 individual licences and 20 open licences to Bahrain.[…]

Arms made in Newcastle used by Saudis to suppress protests

Saudi Arabia has sent scores of UK-made armoured personnel carriers into Bahrain to aid the government’s bloody suppression of pro-democracy protesters. The Campaign Against Arms Trade (CAAT) has criticised the UK government for allowing the sale of the armoured vehicles, made by BAE Systems.

The vehicles, marketed as Tacticas, were manufactured by BAE Systems Land Systems Division in Newcastle-upon-Tyne with final assembly taking place in Belgium.[…]

Britain reviewing crowd control weapons exports, says Hague

Britain is reviewing its arms exports to the Middle East and north Africa, which have included crowd control weapons and small arms to Bahrain and Libya, the foreign secretary, William Hague, said on Wednesday.

Exports recently cleared for export to Bahrain include more than 100 assault rifles, over 50 sub-machine guns, stun grenades, tear gas ammunition, riot control agents, and components for “military devices for initiating explosives”, according to the latest official figures.

The Guardian reported last month that the British government had approved the sale to Libya of a wide range of equipment for use against civilians, including teargas and “crowd control ammunition”, as well as sniper rifles.

Export licences increased significantly and were valued at more than £200m over the first nine months of last year, according to figures compiled by the Department for Business, Innovation and Skills for the Foreign Office.[…]

Bahrain Crisis: Is U.S. Military Assistance Hindering Democracy?

The increasingly violent crackdown on anti-government protesters in Bahrain has rekindled debate over whether U.S. military aid is being used to crush popular uprisings.

The Obama administration launched an investigation last week into the possibility that U.S. arms and training money were used by Bahraini security forces in violent crackdowns on protesters. The outcome of that probe is not yet known, but the Bahrain situation is stirring up uncomfortable questions about the effectiveness of military aid and to what extent U.S. assistance undermines emerging democracies, said Marine Corps Lt. Col. Christopher L. Naler, a federal executive fellow at The Brookings Institution, in Washington, D.C….

His own research revealed some troubling numbers. Between 2006 and 2011, annual U.S. assistance to Bahrain ranged from $5 million to $18 million. And even though the U.S. government can choose to allocate the aid to non-military programs, in this case it earmarked every penny to the security sector, Naler said. “This is one that caught me by surprise.” […]

Britain under fire for selling arms to Bahrain

The British Government has been heavily criticised for allowing arms sales to a number of Arab governments that have cracked down on pro-democracy protests in recent weeks, killing scores of people and injuring thousands more in demonstrations across the region….

David Cameron and other leading Conservative cabinet ministers have long standing ties to Bahrain. A year before last May’s General Election, the then Leader of the Opposition received a “gift of a fountain pen and half suite cufflinks and studs, provided by His Majesty Sheikh Hamad bin Isa Al Khalifa,” the King of Bahrain. The present is listed in the Register of MPs’ interests. Defence Secretary Liam Fox registered travel expenses worth £1,400 paid for by the Bahrain government….

Denis MacShane said that the idea of civilians dying because of British manufactured arms made him feel “physically sick”. “With the protests spreading across the Middle East, I am very concerned that once Britain is going to be caught on the wrong side of history again, defending the indefensible,” he said.

The Foreign Office policy to date chimes with a determination at the top of government to put commercial interests at the heart of British foreign policy. Within weeks of entering Downing Street last year, David Cameron embarked on one of Britain’s biggest ever trade delegations, to India, during which the two governments announced a deal between BAE Systems, Rolls-Royce and Indian aerospace group Hindustan Aeronautics to supply 57 Hawk trainer jets….

Britain’s ingrained position in the Middle Eastern arms market is further underlined by the expected presence of at least 92 British companies at a pan-Middle East arms fair, scheduled to be opened in Abu Dhabi on Sunday. The chairman of the IDEX event, Sheikh Sultan Bin Tahnoon Al Nahyan, a member of the Abu Dhabi ruling family, and the chairman Abu Dhabi National Exhibitions Company, says on its website: “Over the recent years significant investment in resources and facilities at our host venue… have enabled IDEX to sustain its reputation as the largest defence exhibition in the Middle East and North Africa region.”[…]

German arms used to crush protests in Bahrain: MP

German weapons are being used to suppress peaceful protests in Bahrain, said a senior legislator of the opposition party The Left (Die Linke) here Wednesday.

Addressing the German parliament during a live debate on the upheavals in the Arab world, Wolfgang Gehrcke pointed out that part of the weapons deployed by Bahrain’s security forces against anti-government protesters were supplied by Germany.

The foreign policy spokesman of The Left party called for an ‘immediate end’ to the delivery of German arms to the Bahraini regime. Germany’s overall arms export to the Near-and Middle East hovers around 1.1 billion euros and includes other recipient countries like Egypt, Bahrain, Saudi Arabia, Kuwait and the United Arab Emirates. In 2009, the United Arab Emirates was among the three leading recipients of German weapons, according to the latest report released by the German government.

The tiny Persian Gulf sheikdom was ranked second after the US in terms of total German arms exports last year which stood at 5.04 billion euros. Germany sold around 540.7 million euros worth of military hardware to the UAE, among them radar and steering systems, torpedoes, simulators, missiles, hand grenades, armored vehicles, tank spare parts, automatic cannons. amphibious vehicles and trucks.

Meanwhile, another Persian Gulf country, Saudi Arabia, was listed sixth in the overall export of German weaponry with 167.9 million euros.[…]

March 9, 2011

Douglas Carwell on defence procurement

Tank

Here’s British Conservative MP Douglas Carswell on the corporatist con trick that is defence procurement today.

Imagine a world in which a small clique of big corporate contractors was able to secure the lion’s share of Britain’s defence equipment spend. Suppose these privileged suppliers not only benefited from rules that excluded rival bidders, but had themselves helped draft those rules to make it so.

You don’t need to imagine such a world. This is, more or less, the basis on which defence procurement has been done in Britain under successive governments for years.


 

March 7, 2011

British corruption, Big oil and the Libyan dictators

London School of Useful Idiots

Click on the pic for the story. More from Bob:

Jonathan Freedland has an excellent article on the West’s bipolar disorder when it comes to Arab tyrants. Inter alia, he mentions the appalling apologetics of the London School of Economics establishment, including Baron Anthony Giddens’ 2007 belief that Libya would become the Norway of the region without regime change (see also Andrew Coates) and [former Financial Service Authority head] Howard Davies’ bizarre equation between Gaddafi and George Soros. It turns out that Saif Gaddafi’s LSE PhD (lauded by Lord Desai and acknowledging David Held) is at least partly based on plagiarism. I think LSE founder Beatrice Webb, who whitewashed Stalin’s dictatorship, would be proud. [UPDATE: I wrote that last night and was glad to see hear this morning that Davies has resigned, my second schadenfreude moment. Also read Stephen Pollard on British universities and blood moneyUpdate 2: Just read Jim’s post on same topic, which links to more from Nick Cohen. See also Marko on why hostile democracies are better than friendly dictatorships.]

But while Colonel Qaddafi has been happy to receive the British elite in his Tripoli villa or desert tent, Saif has proved a much more committed Anglophile, being entertained by the good and the great of British society on frequent visits.

Two years ago, he bought a £10 million house, complete with suede-lined cinema, in north London. He has overseen central London property purchases by the Libyan Investment Authority (LIA) amounting to at least £300m.

But it has been his relationship with Prince Andrew, the Duke of York who acts as Britain’s international trade envoy, that has raised the most eyebrows.

The prince has hosted events at both Buckingham Palace and St James’s Palace in London for the dictator’s son. In addition to heading trade missions to Libya, the prince has also made three private visits there in recent years as Saif’s guest.

A friend of the prince was quoted in the Daily Mail yesterday as saying: “He and Saif became incredibly close. Both enjoy having a good time and they had fun together. Andrew could open doors with his royal status and Saif could open other doors with his family’s money.” This closeness led Chris Bryant, the shadow justice minister, to demand in the Commons on Monday that Prime Minister David Cameron sack the prince as trade envoy. “Isn’t it increasingly difficult to explain the behaviour of the UKTI [UK Trade and Investment] special ambassador for trade …?” asked Mr Bryant, a former foreign office minister. “Isn’t it time we dispensed with the services of the Duke?”

Mr Cameron responded that he was not aware of the prince’s connections with Saif but said he would be “very happy to look into them”.

Questions are also being asked about Mr Blair’s closeness to Saif and his father – which many blame for the release of the Lockerbie bomber, Abdelbaset al Megrahi in 2009 – and also that of Lord (Peter) Mandelson, the former business secretary and éminence grise of the Labour Party during its 13 years in power.

Days before al Megrahi’s release, Lord Mandelson and Saif were both guests at the Corfu villa belonging to billionaire financiers Jacob and Nat Rothschild.

[Saif keeps his pet tigers]  at his villa on a hillside overlooking Tripoli, along with his hunting falcons, sporting guns and other  trappings essential to the life of a  desert princeling. Saif often emerges from his encounters with the big cats bloodied and bruised, yet cheerfully game for a re-match. It may help to explain why, in his campaign to release Lockerbie bomber Abdelbaset Al Megrahi, he found Labour ministers were mere pussycats.

Saif has a house close to Bishop’s Avenue, the so-called Millionaire’s Row, in Hampstead, north London. The Georgian style, newly-built property has eight bedrooms, an indoor pool, sauna and a cinema lined in suede-covered panelling.
It cost him £10million. In Britain, Saif moves in exclusive circles. He and Prince Andrew have a mutual close friend, the Kazakh-born socialite and businesswoman Goga Ashkenazy.

She recently helped arrange Saif’s visit to Kazakhstan where he met the president, Nursultan Nazarbayev, and senior figures in the energy industry.

Prince Andrew has made a number of visits to Libya as Britain’s ambassador for trade and has spent time with Saif in Tripoli. In return, the prince has hosted Saif at Buckingham Palace and Windsor Castle. […]

Mandelson and Saif got along famously and the subject of Al Megrahi, who was still in jail, was raised. Mandelson insists there was no negotiation. Also at Waddesdon Manor was Nat Rothschild, Lord Rothschild’s son. Nat and Saif are great pals. They also have a friend in  common, Oleg Deripaska, the controversial Russian oligarch who was the last man standing after the bloody war for control of Russia’s aluminium industry in the 1990s.

Deripaska, it will be recalled, was part of the infamous summer gathering at the Rothschild house on Corfu in 2008 when Mandelson and George Osborne, then chancellor-in-waiting, were guests. Saif has also stayed with the Rothschilds on Corfu and, on a separate occasion, met Mandelson there.

Deripaska has a valuable interest in Porto Montenegro, a vast marina and superyacht project in the Bay of Kotor on the Adriatic. The driving force behind the scheme is Peter Munk, the 83-year-old billionaire head of the world’s biggest goldmining concern, Barrick Gold.

Jacob and Nat Rothschild are also investors in the Montenegro venture which, Munk says, will become the new Monaco. When Saif threw a huge party to celebrate his 37th birthday he held it close to his friends’ Montenegro development, inviting some of the world’s leading business figures, including Munk, a few very powerful Russians and Lakshmi Mittal, the British-based steel tycoon.

The party was seen as an effort to give a boost to the profile of his friends’ marina project. His closeness to Nat Rothschild and Deripaska is also believed to be behind Libya’s decision to invest heavily in Deripaska’s aluminium concern, Rusal.

The Libyan Investment Authority took a $300million (£185million) stake in Rusal when it was floated in Hong Kong last year.

The Rothschilds were Deripaska’s advisers and separately Nat invested $100million (£62million) in the company, the world’s largest producer of aluminium. Saif was also involved in an ongoing plan for Rusal to produce aluminium on a major scale inside Libya.

And Chris Bryant in the Mail again, bringing the story more up to date:

read more »