Venezuela is going to the dogs. The only way to stop this is nothing short of a complete overhaul of economic policy, which has been informed by misguided and outdated ideas. That’s the central message of a kind of manifesto signed by 26 prominent opposition economists, published just days before important legislative elections due to be held this Sunday.
Economic stagnation could drag on for some time yet, they warn, if Hugo Chávez’s “radical socialist” policies are not rectified – a conclusion that contrasts strongly with another recent paper released by economists who are more sympathetic to the Venezuelan leader. Read more
Brazil’s Bovespa was dragged down by falling commodities prices but Mexican stocks gained as upbeat US data boosted heavyweight Cemex, the top US cement supplier. Read more
No sooner had the FT gone to press on Monday evening with a report that Brazil was likely to use its sovereign wealth fund to fight the appreciation of its currency, the real, than the finance ministry announced it was preparing to do just that.
Here, with no further comment, is what Tony Volpon at Nomura had to say in a note to clients on Tuesday: Read more
Natural disasters have dominated headlines this year, and so it wasn’t a surprise that the 2010 Clinton Global Initiative kicked off today in New York with a series of pledges to help millions of people in Haiti, Pakistan and the US’s Gulf Coast.
“In the previous decade, insurance payments [for natural disasters] were three times what they had been in any previous decade,” Bill Clinton, the former US president, said, warning that the number of disasters “will accelerate with the changing of the climate”. Read more
Many Argentines are understandably reticent about putting their money in bank accounts. In 2001, as the country saw the world’s biggest sovereign default, deposits were frozen to halt a run on the banks. When people could get their hands on their cash again, the peso had been brutally devalued. Many found their savings largely wiped out.
All this has led to a cash-is-king economy. Shops routinely offer discounts to people paying in cash. Many Argentines line up every month to pay utility bills in cash at banks and special payment centres. Read more
Polish stocks reached a five-month high on Tuesday, as regional sentiment withstood rising global caution ahead of a meeting of the US Federal Reserve.
Central and eastern European currencies continued their strong run, with four currencies hitting one-month highs against the dollar. However, the Russian rouble slipped slightly, approaching a six-month low against the dollar. Read more
The Bombay Stock Exchange index Sensex on Tuesday surpassed the 20,000 point mark for the first time since January 2008, when India’s benchmark index hit an all time high at 21,078.
In the finale of the day’s trading the Sensex crossed the landmark level just seconds before the closing bell and drew cheers from the investors standing outside the BSE’s building on Dalal Street. Read more
For the past six months, one of the big risks hanging over the Chinese real estate market has been that the government will introduce a property tax for the first time. And sure enough, China Business News, a leading newspaper, reported on Tuesday that the government is readying a tax which will be announced shortly after October 1 – just as Chinese will be enjoying a week-long national holiday. Read more
The Gulf is known for its stable autocracies with entrenched rulers, but its international banking fraternity is starting to look decidedly different of late.
Deutsche Bank today announced that Henry Azzam, a long-standing luminary of the Middle East banking community, has stepped down as chief executive to become the German bank’s non-executive chairman for the region. He is the latest of a long list of Dubai-based banking chieftains that have left executive positions recently. Read more
The debate over poverty and development can often seem detached from the world of business and investment. But surging interest in emerging markets is changing that. Some of the countries where westerners are building factories, wooing consumers or snapping up shares also face big developmental challenges. Think India, Nigeria or Egypt.
How those challenges are tackled – whether it’s health, education, infrastructure or job creation – will have a big influence on how emerging markets evolve. That’s why a renewed debate on the pros and cons of aid, sparked by a UN summit on the Millennium Development Goals, matters to the broadest possible audience. Read more
A shouting match? No, that would be an exaggerated description of the exchanges between Washington and Beijing over China’s currency policy. Both sides want to control tension as they grapple with one of today’s key economic imbalances.
So don’t expect fireworks when Barack Obama and Wen Jiabao, the Chinese prime minister, meet on Wednesday in New York. And although China formally rejects US complaints, it is also making some concessions. Read more
By Francesca Ficai of mergermarket
China is extending its telecoms and power network with an ultra-high-voltage grid scheduled for 2020. One Belgian company thinks that’s a sure sign that demand for overhead conductors, which are used in power cables, will leap.
Bekaert is already Belgium’s biggest investor in China: it is the world’s biggest producer of the steel cord for reinforcing tyres, and has about a third of the Chinese tyre reinforcement market. Now it has expanded into overhead conductors, paying $24m for a controlling stake in Xingyu Metal Products. Read more
Two decades ago, Leszek Balcerowicz (pictured) was an architect of the reforms that transformed Poland from a socialist state to a market economy. Today he’s worried that the market economy is under threat – from Poland’s ostensibly-liberal government.
In an open letter published in Poland’s leading dailies today, Balcerowicz blasts prime minister Donald Tusk for actively intervening in the pseudo-privatisation of a power company. Read more
By William Easterly
The Millennium Development Goals tragically misused the world’s goodwill to support failed official aid approaches to global poverty and gave virtually no support to proven approaches.
Economists such as Jeffrey Sachs might argue that the system can be improved by ditching bilateral aid and moving towards a “multi-donor” approach modelled on the Global Fund to Fight Aids, Tuberculosis and Malaria. But current experience and history both speak loudly that the only real engine of growth out of poverty is private business, and there is no evidence that aid fuels such growth. Read more
Taiwan’s ambition to become an attractive destination for foreign investment is unstoppable, not least as it works to build new economic ties with its northern neighbor, China.
The deals that were made at this year’s Taiwan Business Alliance Conference are testament to Taiwan’s goal. In what turned out to be more than just talk-shop, foreign investors at the conference showed they are willing to put their money where their mouth is. T$108bn (US$3.4bn, GBP2.2bn), to be exact. But, as some participants warned, Taiwan still has a ways to go in easing restrictions for foreigners. Read more
In spite of continued tension between China and Japan, Asian stocks gained on Wednesday, ahead of a US Federal Reserve meeting. India’s Bombay Sensex confirmed its position as the best performer of the world’s ten biggest stock markets in 2010 – inching over the 20,000 mark for the first time since January 2008.
A manufacturer of Calvin Klein bras has scrapped plans to build a new factory in China, saying that lower wages make southeast Asia a better bet. Read more
* Airline profits may be triple initial estimate, say IATA
* Chinese SMEs prefer to trade in Asia-Pacific
* Bharti adds Huawei to vendor list for 3G
* India receives Commonwealth Games warning
* Obama: China has not done enough on yuan Read more
Some revelations from Sahara India Pariwar that are surprising, to say the least. A business empire founded on a grass-roots savings scheme in India’s northern states, it is apparently bidding for debt-ridden Metro-Goldwyn-Mayer, co-owner of the James Bond movie franchise.
If this proves to be anything more than a publicity stunt, there could hardly be a more vibrant illustration of the rise of emerging markets on the global business stage. Read more
Chinese entrepreneurs like to talk about ‘Win-Win’ – deals or situations that benefit both sides. But Jack Ma, one of the country’s most iconic business leaders, is finding himself stuck in what can only be described as a lose-lose situation. As documented by the public shouting match between Alibaba Group, Ma’s e-commerce empire, and Yahoo Inc, the US internet company, the tie-up between the two companies has turned into a nightmare. Read more
By Girija Shivakumar in New Delhi
International makers of fast-moving consumers goods such as Nestle, Unilever, and Colgate-Palmolive, as well as and India’s own ITC, have been looking intently at India’s 1.1bn people as a major source of future revenue growth.
But with India now reeling from sky-rocketing food price inflation and thus rising input costs, companies are facing a bitter choice between hiking prices to maintain profitability – which risks driving consumers into their rivals’ arms in a highly competitive market- or holding prices steady, and watching profits erode. Read more