crisis & conflict

By Majid Jafar of Crescent Petroleum

Hampered by broken promises, unfulfilled potential and worsening governance, 10 years on from the US-led invasion, Iraq has failed to live up to its promise.

The country’s vast oil resources – over 140 billion barrels proven – were once seen as a guarantor of a smooth political transition. Yet production and exports are little more than a decade ago, and less than half where they had been expected to be by this stage.

Far from being a source of unity, oil has become a central point of dispute between Iraq’s quarrelling leaders, with oil revenues also fuelling corruption and mismanagement on a scale unimaginable in the heady days when Saddam’s regime fell. Read more

Clashes between Malaysian security forces and the followers of a Philippine Muslim royal family leader trying to reclaim Sabah have been confined so far to two remote districts in North Borneo but the economic side effects of the conflict are already evident in the Philippines’ southernmost province, Tawi-Tawi. Read more

The conflict in Mali has intensified following the onset of a major French military intervention and promises by Islamists to retaliate against western targets across the region. What might be the economic spillover effects of the conflict?

Mali may not play an integral role in the world economy, but many of its neighboring countries do as suppliers of key petrochemicals and minerals – so the potential for disruption from the conflict is more significant than it might at first seem. Read more

Brics and mortarRio de Janeiro, the picturesque Brazilian city and host for the 2014 World Cup finals and the Olympics two years later, has long had a reputation for violence.

About 1 in every 24 people were victim of some kind of crime last year in Rio state, and despite recent improvements, many wealthy families still bulletproof the windows of their homes for fear of getting caught in crossfire between nearby favelas.

But it looks like there may be another danger awaiting unsuspecting tourists: manholes. Over 60 manholes have erupted since last year, according to calculations by local media, after underground gas explosions caused the heavy metal covers to come flying off and sent flames high into air. Read more

I have, as usual, succeeded in spending a day in Davos without attending a single public session. But I have managed to speak to several interesting people about the world economy.

My sense is that optimism has returned. Even Dr Doom – Nouriel Roubini – has become notably less pessimistic. China and India are here in force and radiating the good will of those whose time has come.

 Read more

By Ranjit Lall and Robin Wigglesworth

Whether or not it heralds a new era for the country, last week’s ousting of Tunisia’s president Zein al-Abidine Ben Ali has made investors in the Arab world decidedly skittish.

Is there a real risk of unrest breaking out elsewhere in the region? Renaissance Capital thinks so. The Russian investment bank argues that, largely for demographic reasons, countries in North Africa and the Middle East are more susceptible to wars and revolutions than others. Read more

Lebanon is trying hard to limit the shock of the collapse of its government.  Saad al-Hariri, the prime minister, was on Thursday asked to stay on as caretaker by president Michel Suleiman.

The government dissolved on Wednesday after 11 Hezbollah ministers resigned over a long-running investigation into the killing of Hariri’s father. According to Reuters, analysts are down-playing the possibility of armed conflict – which would pit a Syrian-backed Hezbollah against a US-backed Hariri. But in Beirut, nothing can be taken for granted. Read more

For foreign investors, frontier markets don’t come much wilder than south Sudan. But what happens in that land-locked expanse of scrub also matters to people who’ve ploughed their money into more “civilised” places next door, such as Egypt and Kenya, as a new report reminds us.

Frontier Economics has looked at the economic cost of renewed conflict in Sudan, a danger that is weighing on the region as southerners prepare to vote in a referendum on independence on January 9. It concludes that if the referendum sparks conflict and if it runs for ten years – two big ifs – Sudan’s neighbours could lose over $25bn in GDP, while Sudan itself could lose $50bn. Read more

North and South Korea have exchanged artillery fire in the worst border incident in years, with two South Korean marines killed and about 20 other people injured. Markets in the region were plunged into turmoil, with the South Korean won leading other Asian currencies down and shares falling. Read more