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Daily Archives: Jan 4, 2012
It’s hard to imagine an unpopular president inviting his better loved predecessor for a cosy chat on policy – especially when that former leader has iconic status in the country and is seen as a shoo-in in elections next year if she decides to run.
Yet that is just what Sebastián Piñera did this week, when he met Michelle Bachelet, current head of UN Women for two hours of talks at the La Moneda palace. He has been holding talks with other past presidents too, but it is Bachelet who is seen as the left’s best hope to succeed the billionaire businessman, who is barred by law from seeking a second consecutive term.
What do you do if you are a big Chinese company that has been given marching orders by Beijing to seek growth overseas? Where do you go? Head to Europe and the US — which are both facing the spectre of a prolonged downturn?
China Telecom, for one, doesn’t think this is such a daft idea.
The company — China’s third largest mobile operator — on Wednesday announced plans to launch a UK mobile phone business. But here’s the twist. Rather than compete with established UK operators, the plan is to target Chinese residents as well students and tourists from China.
Hungary’s new central bank act has led to outcry from the IMF, the European Central Bank, the European Commission and the National Bank of Hungary itself.
The act, rightly, is perceived as part of a broader power grab by prime minister Viktor Orbán from any institution or individual that serves as a check on government policy. It is also the latest in a series of attempts to undermine the current governor, András Simor.
And the dictum is certainly appropriate for Mexico’s politicians, paid about three times as much as their counterparts in the rest of Latin America and more than in most European countries – Spain, for example, even though the average Mexican earns only a fraction of the average Spaniard.
It may not be as sensational as hurling a shoe at a statesman but Indonesians are turning to their favorite footwear as a symbol of simmering frustration against the country’s corrupt elite.
The peaceful protesters are tapping widespread unease about standards of public behaviour in the country. But the extent of corruption – and an acceptance in the investor community that Indonesia cannot advance quickly without it – suggests their struggle will be a hard one.
After a dismal 2011 which saw the Indian auto industry slump to a standstill for the fiscal year ending in March 2012 (after growth rates of nearly 30 per cent during the previous two years), the launch of the Delhi Auto Expo on Wednesday was a source of optimism. Whether it is misplaced is another matter.
Gone was the talk of high interest rates and labour unrest and the downward spiral of a once-vibrant industry. Instead, industry insiders could focus on the lights, cameras, and concept cars that defied all logic. And more importantly, a chance to show off brand new shiny models that might save the industry, after November sales figures showed the first growth in five months.
Anyone who has ever visited an Indian governmental office and seen the civil servants slowly scratch out information in massive red ledgers, the shelves behind them sagging under the weight of many more, knows that data collection in India can be, shall we say, archaic.
That was in evidence this week when local media reported that the Reserve Bank of India had revised down its export figures by $6bn in its balance of payments statement for the quarter ending in June 2011. The correction was likely based on data provided by the commerce ministry, which last month announced it had overestimated export figures from April to October by $9bn, according to the Times of India.
Hungary cancelled a bond swap auction on Wednesday as the forint hit a record new low against the euro and fears grew about the country’s planned bid for International Monetary Fund/ European Union financial aid.
Gyula Pleschinger, a senior economy ministry official, did nothing to calm markets by telling the WSJ that “it would not be a tragedy” if there were no IMF/EU deal. The forint fell below 320 to the euro before recovering a little to 319 to trade about 1 per cent down. These are dangerous times for Hungary – and for its CEE neighbours.
This post is the seventh of a series – 12 for 2012 – that beyondbrics is running on key emerging markets topics for the new year.
By Stanislaw Gomulka, chief economist at the Business Centre Club
The sharp declines in emerging currencies have generated bad headlines with fund managers complaining about the losses imposed on their emerging market investments. But currency depreciation will bring benefits next year, as these countries adjust to the coming global slow down, in the form of boosting export competitiveness. In Poland this is already happening.
Struggling with another bout of flooding, Thailand received a spot of good news on Wednesday. As elsewhere in the region, inflation is falling faster than expected.
A spot of cheer amid all the gloom? Or a bit of wishful thinking? Entitled Unfashionably Bullish, a Citigroup report published on Wednesday on the Middle East and North Africa (MENA) paints a surprisingly rosy picture of the region’s equity markets.
The authors argue that investors are exaggerating the region’s political risks - including the threat of a possible Iran war - and underestimating the growth prospects of some of the region’s companies, notably in transport, investment services and consumer markets.