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By Matt Gamser and Paul Lee

A new wave of financing innovations is democratising access to capital, especially for those most vulnerable among small, medium and micro-enterprises (SMMEs). Are governments and large financial institutions ready to embrace these innovations and enable the necessary regulatory reforms to support the growth of entrepreneurs across Asia?

Raising capital has always been one of the greatest challenges for the growth and sustainability of SMMEs. The International Financial Corporation estimates that the total unmet need for credit by SMMEs globally ranges from US$2.1tn to US$2.5tn. In East Asia alone, the credit gap is a massive US$900bn to US$1.1tn. 

Ethiopia, Africa’s biggest coffee producer, will benefit from unusually dry weather in Brazil that has lowered the output and helped lift the price of Arabica beans. Arabica prices surged to a three-year high – to over 200 US cents per pound – in October, which is expected to lift Ethiopia’s coffee export earnings by 25 per cent to $900m this year.

But Ethiopia is missing an opportunity to make a lot more money from arabica, which originated in the country’s highlands, and is considered the superior of two main varieties of coffee bean (the other, robusta, is more bitter and tends to be used to make instant coffee). 

** FT News **

* US accuses allies of buying Isis oil | US Treasury accuses allies of buying smuggled oil and helping fund Islamist group

* Japan blighted by zombie housing | Shrinking population and ‘scrap and build’ culture lead to 8m empty homes 

** FT News **

* US accuses allies of buying Isis oil | US Treasury accuses allies of buying smuggled oil and helping fund Islamist group

* Weak exports weigh on S Korea GDP | Rising consumption offsets slowing shipments to China as economy expands 3.2% 

** FT News **

* Hungary to impose world’s first internet tax | Latest unorthodox economic policy of president Viktor Orbán and his Fidesz party

* Drinks with Russian soldiers in Lugansk | Vodka and Celine Dion in the Weeping Willow in eastern Ukraine 

** FT News **

* Drinks with Russian soldiers in Lugansk | Vodka and Celine Dion in the Weeping Willow in eastern Ukraine

* Apple chief in China security talks | Cook meets officials after reports that state-sponsored hackers targeted iCloud users 

If there’s one subject on which policymakers around the world seem to agree, it’s that foreign direct investment is a Good Thing.

The annual tables of inward foreign direct investment (FDI) are treated by governments of rich and poor economies alike much as football fans treat rankings in the English Premier League, crowed over by countries in the leading pack and quietly forgotten by those in the relegation zone.

There is no doubt that FDI can do a lot of good: it can add to an economy’s productive capacity and import not just capital but technology, production skills and better management. China, which not only welcomed FDI but witnessed intense competition between different provinces to attract it, stands as a shining example. 

Last month Ricardo Hausmann, a normally mild Harvard academic, set off the equivalent of a financial bomb. The economist suggested that Venezuela had already defaulted on many of its suppliers, its oil service contractors, and its citizens. So who or what might come next?

When Hausmann suggested Wall Street, the market reaction was huge. Indeed Venezuelan bonds, undercut by the falling oil price, have been dropping ever since. Yet it turns out that Venezuela’s latest default has been, in fact, to China. Given that Beijing is one of Caracas’ closest allies, this is surprising. It is also bullish for Wall Street. 

** FT News **

* Israeli MP calls for new Palestine models | Naftali Bennett says notion of Palestinian state next to Israel is inapplicable

* Peugeot turnround boosted by China sales | Latin American operations are still struggling 

** FT News **

* Russia slaps conditions on Ukraine gas | Fears energy stand-off could hit supplies to Europe

* Asia bourses follow Wall Street higher | Solid Japan export data buoy Nikkei, Hang Seng also stronger 

** FT News **

* Total chief dies in Moscow air crash | Private jet carrying Christophe de Margerie hit snow-clearing machine

* Pistorius given five years in jail | Former athlete sentenced for culpable homicide for the manslaughter of his model girlfriend 

** FT News **

* Turkey allows Kurds to relieve Kobani | Shift in policy as US carries out air drop of weapons to city’s defenders

* Total chief dies in Moscow air crash | Private jet carrying Christophe de Margerie hit snow-clearing machine 

** FT News **

* Russia widens crackdown on McDonald’s | The latest salvo subjects almost half of the US group’s outlets in Russia to regulatory probes

* Rousseff admits to Petrobras wrongdoing | Brazil’s president looks to put a corruption scandal at the state-owned oil company behind her 

By Paul Hodges of International eChem

Two months ago, very few people believed that markets were about to tumble. But on 18 August we published our Great Unwinding analysis. Since then, its forecasts have begun to come true, as the impact of policymaker stimulus begins to unwind.

Oil and commodity prices are falling sharply as supply/demand once again becomes the key driver for prices; the US dollar is strengthening and liquidity is tightening across the world; equity markets risk sharp falls, as investors realise they have overpaid for future growth and rush for the exits; China’s economy is slowing fast as the new leadership implements the World Bank’s ‘China 2030’ plan; interest rates are becoming volatile as some investors seek a ‘safe haven’, while others worry that stimulus policy debt may never be repaid. 

** FT News **

* Abe weighs tax rise against economy | Japan’s PM says consumption levy would be ‘meaningless’ if it encouraged deflation

* Russia widens crackdown on McDonald’s | The latest salvo subjects almost half of the US group’s outlets in Russia to regulatory probes