By Olly Buston and Peter Nicholls
Many people think that slavery ended with the demise of the barbaric trans-Atlantic trade 150 years ago. But modern forms of slavery still exist. According to the Global Slavery Index, an estimated 35.8m people are victims of forced labour, human trafficking or debt bondage, more than at any other moment in history. That’s 35.8m people who are more or less completely controlled by another for their use or profit. An astonishing two thirds of these people live in the Brics economies of Brazil, Russia, India and China, with 14m people living in slavery in India alone.
The International Labour Organisation estimates that $150bn of illegal profits are generated each year by the use of modern slavery worldwide. One third is made through forced labour. The reality is that slavery exists in the supply chains of many of the products that we consume. This means consumer pressure has a major role to play in defeating this terrible crime. Read more
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Days ahead of hosting a high-profile international investment conference, Egypt has announced it is slashing its top tax rate in an apparent bid to enhance its appeal to potential investors.
The top rate for corporates and individuals is to be reduced from 25 per cent to 22.5 per cent. But the decision also means the abolition of an additional 5 per cent “millionaire’s tax” levied on annual incomes above one million Egyptian pounds, or $133,000. That levy, introduced last year and intended as an exceptional measure for three years only, had brought the top rate to 30 per cent.
“This definitely makes Egypt more attractive to foreign investors,” said Angus Blair, president of the Signet Institute, a Cairo-based economic think tank. “I thought it was a mistake last year when the tax rate was increased. It was not the appropriate time. Egypt is now more investor-friendly than last week.” Read more
By Diana Gapak, Daniyar Kosnazarov and Gavin Bowring
Often likened to being “between a rock and a hard place”, Central Asia’s relatively isolated position has required it to maintain consistent and balanced good relations with two giant neighbours, China and Russia.
Nevertheless, its high degree of integration with Russia has jolted the region’s local economies, the result of their twin exposure to the protracted Ukrainian crisis and the slump in commodity prices, manifested through tanking local currencies and reduced inflows of remittances from workers abroad.
Anxiety has further gripped post-Soviet states in recent months, with the recent 35 per cent slump in the Azerbaijan manat and a 34 per cent devaluation in Turkmenistan, often considered the economy with the least direct exposure to Russia. Concerns are spreading in Kazakhstan of an additional devaluation of the tenge (following last year’s 20 per cent decline) amid calls for early presidential elections. Read more
By Eduardo Bolio and Jaana Remes, McKinsey
Since the 1980s, both national and international observers have predicted time and again that economic growth in Mexico is just about to take off. But it hasn’t, and others have quickly gained ground and overtaken Mexico. In 1980, for instance, Mexico’s GDP per capita was almost double South Korea’s and 30 per cent higher than Taiwan’s. Today, South Korean per capita GDP is twice Mexico’s and Taiwan’s is almost three times as much. China, which had one-twelfth of Mexico’s GDP per capita in 1980 could surpass Mexico by 2018.
The important factors that stoke rapid growth in emerging economies exist in Mexico: a young and growing labor force, abundant natural resources, and access to export markets (in Mexico’s case a strategic location next to the United States and membership in NAFTA provide uniquely privileged access). In addition, Mexico has opened up its economy to trade and foreign investment, installed extensive reforms. Since 2000, it has also been able to boast sustained macroeconomic and fiscal stability. Read more