Is Peru’s $20bn energy accord with Brazil turning sour?
The news that Odebrecht of Brazil has pulled out of building Tambo 40, a 1,278 megawatt dam in Peru, is the third setback for the scheme this year.
Tambo 40 is one of six hydroelectric projects planned for Peru’s Amazon under the 6,000MW accord signed by former presidents Alan García and Luiz Inácio Lula da Silva. Read more
Hugo Chavez may like to indulge in a bit of fist-shaking at the gringos every now and again, but often he can inadvertently be quite useful to what he likes to call the “evil empire”.
Most recently, he has helped to power a recovery in Miami’s depressed real estate market by driving a growing number of rich Venezuelans to buy up property in that hotbed of expatriate latinos, thanks to an absence of investment options at home. Read more
Egypt hiked its key interest rates on Thursday – an unorthodox move given that inflationary pressure is easing and growth remains sluggish. So what is forcing the central bank’s hand?
The answer, Capital Economics argued, is Egypt’s deteriorating reserves position and the intensifying pressure on the Egyptian pound, which the central bank has been trying prop up by intervening in the FX market. Read more
If you were a sovereign wealth fund where would you invest your money? How about Africa? And more exactly: infrastructure in Africa.
That at least is where Qatar’s sovereign wealth fund is putting its money. On Thursday it agreed to plough $1bn into a 50-50 joint venture with Morocco to help the north African country fund major development projects, Reuters reported. Read more
Welcome, Walmart. Bienvenue, Carrefour.
In one of India’s most radical pro-liberalisation moves in years, the country’s cabinet opened up the doors of its $450bn retail sector to foreign players late Thursday, which is expected to boost investment and help tame persistently high inflation.
But before every city has a Tesco there will be a lot of opposition to overcome – not least from India’s army of small shopkeepers. Read more
It’s time to bid farewell to the Brics. Rolling China, India, Brazil and Russia into a clever acronym once offered an easy account of the redistribution of global power. But slotting rising states into neat categories betrays a western-centric world view that now obscures more than it illuminates.
For one thing, they are not all the same. United by impressive economic growth rates, the Brics are divided by politics: two authoritarian regimes sit alongside two democracies. Even then, Beijing and Moscow look uncomfortable bedfellows. Points of stress (think of Russia’s emptying and resource-rich east) are easier to identify than coincidences of strategic interest. Read more
Clue: it’s not Venezuela.
Answer after the break. Read more
India threw open its $450bn retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia’s third-largest economy, according to Reuters.
Food minister K V Thomas said the government would allow 51 per cent foreign direct investment in multi-brand retail, paving the way for retail giants like Walmart and Tesco to enter the market. Read more
Ali Babacan: Bloomberg
By Stefan Wagstyl in London and Daniel Dombey in Istanbul
A new battle line between the Turkish state and the country’s banking sector has been drawn this week with the launch of a competition investigation into 12 of Turkey’s top banks.
For the government’s supporters Ankara’s stance on banks is a plus: the authorities getting tough with anti-competitive practices in business. For critics it’s a minus: the administration growing too big for its boots. Read more
By Gábor Takács
Hungary’s centre-right Fidesz government has been under attack of late for its decision to turn to the IMF. Among the attacks was a post on beyondbrics this week by András Bíró Nagy, who wrote of “a political failure that calls into question the ability of Viktor Orbán and his government to steer Hungary through the present crisis”. Read more
Will Google TV save Samsung’s troubled TV business? The world’s top TV maker said this week it was close to an agreement to make a TV using Google’s software next year.
Samsung hopes smart TVs will help lift the razor-thin margins of its TV business amid intensifying competition from lower-cost Chinese rivals, as flatscreen TVs have evolved from luxury items into a relatively cheap, mainstream commodity. Read more
In a move that will shock no one, Standard & Poor’s has downgraded Egypt for the second time in five weeks. S&P lowered Egypt’s foreign and local currency sovereign credit ratings to ‘B+’ from ‘BB-’ citing renewed political turmoil and the continuing depletion of the country’s foreign reserves. Read more
* Brazil suspends Chevron over oil spill
* Nikkei hits lowest level since April 2009
* Yemeni leader agrees to stand down
* Renminbi threat to dollar could be stalling Read more
Ewald Nowotny, Austria’s central bank governor, had soothing words when he spoke to beyondbrics about new rules curbing Austrian banks’ future lending to central and eastern Europe.
The countries affected are not so sure. In his usual trenchant way, Romanian president Traian Basescu (pictured) warned on Thursday the new regulation was not “fair play”, and might even reflect a “mistake or a misunderstanding of its impact”. Mojmir Hampl, deputy governor of the Czech central bank, told a newspaper Prague was not informed in advance. Europe’s central bankers may all be in the same boat. But not everybody gets a paddle. Read more
Raiffeisen Bank International shares jumped nearly 8 per cent with relief on Thursday after it announced a fall in third-quarter profits and a cut in its medium-term earnings outlook.
The bank had already indicated that the news wouldn’t be great. But investors were glad to see that after all the recent shocks in European banking, there weren’t any more nasty surprises. Read more
When the UN climate talks resume next week in Durban, South Africa, all eyes will be on China, the world’s biggest carbon emitter and second-largest economy.
But as negotiators try to hammer out an agreement, they may be banging heads together for little reward – because China has already decided exactly what it is going to do. Read more
The recent appointment of the prime minister’s son, 35-year-old Nguyen Thanh Nghi, as Vietnam’s youngest vice-minister has raised eyebrows in a regime that is struggling to attract the talent it needs to overcome a deepening economic crisis.
It is a depressingly familiar tale and comes just days after an investment firm headed by Nguyen Thanh Phuong, the prime minister’s daughter, moved into the banking sector with the support of one of the country’s biggest state-owned banks. Read more
Thursday’s top picks from the beyondbrics team: Vietnam’s growing economic strains ; Egypt’s uncertain path to liberal democracy and why the Muslim Brothers may be the real winners of the current upheavals; why the renminbi’s threat to the dollar as a global reserve currency may be stalling; and how South Africa has taken a dangerous step away from democracy. Read more
After the tumult of February demonstrations through the crackdown of March and the dark days of effective martial law through June, Bahrain has something to chew on.
The Bahrain Independent Commission of Inquiry’s damning report into systematic abuses against pro-democracy protesters earlier this year is an historic moment – never before has an Arab state opened its doors to such rigorous scrutiny. Read more