By Taras Kuzio
After the fall of president Viktor Yanukovich, the Euromaidan leadership turned to Ukraine’s eastern oligarchs to take charge of the Donbas region. Rinat Akhmetov, one of the world’s 50 wealthiest people, was offered the governorship of Donetsk, now at the centre of clashes between Ukrainian forces and pro-Russian separatists.
Akhmetov turned the job down and it went instead to Serhiy Taruta, a fellow billionaire who recently told the FT the region’s youth saw a “brighter future in integration with the EU” than in following Crimea into Russia’s embrace.
Akhemtov, however, has preferred to bide his time and trade his support with Kiev and Moscow. Continue reading »
By Sašo Stanovnik of Alta Invest
Just one year ago, after public protests and a corruption scandal had brought down Slovenia’s centre-right government, a little-known former civil servant stepped to the fore. To the surprise of many, Alenka Bratušek successfully concluded negotiations to form a centre-left coalition, becoming the first woman prime minister of Slovenia in the process.
It was a brave – or possibly foolhardy – act. Continue reading »
By Roland Nash of Verno Investment Research
As the conflict between Russia and the west for influence in Ukraine unfolds, finance has found itself in the unfortunate position of sitting squarely in the front line. From the acceptance by Viktor Yanukovich of a $15bn loan from Russia to the freezing of oligarch bank accounts in the US and Europe, finance has been used as a tool to push the political agenda of both sides.
The immediate consequence has been a fall in the value of Russian assets, the latest of many that have plagued Russia over the past 20 years. If a market correction is the only impact, recent weeks will prove little more than another example of how Russian markets have a tendency to overreact to newsflow. But there could well be a more far reaching impact – and perhaps with rather different consequences from those intended by the US and EU. Continue reading »
By Taras Kuzio
Viktor Yanukovich has been a state official all his working life, first in transport, then as a regional governor of Donetsk, twice as prime minister under presidents Leonid Kuchma and Viktor Yushchenko and finally as president. Corruption has always plagued the Ukrainian state but the extent of rapacious greed fundamentally increased after Yanukovich was elected. He and Nikolai Azarov, his prime minister, did not focus on economic growth but on asset stripping and corporate raiding. Continue reading »
By Ferenc Gyurcsány, former prime minister of Hungary
There is a Hungarian folk tale about a fair, where a trader fools a man into buying a blind horse. The new owner mounts his steed, only for it to gallop straight into a wall. The horse trader stretches wide his arms and explains that the horse isn’t blind, but brave.
Faithful followers of Viktor Orbán, the Hungarian prime minister, similarly apologise on behalf of their leader when confronted with government policies that have led to multitudes of conflicts – conflicts which typically baffle outsiders. Continue reading »
By Paul Bloxham of HSBC
Global commodity prices are significantly higher than they were a decade ago. Indeed, despite having fallen around 20 per cent in the past three years, they remain over 110 per cent above their 1990s average, in inflation-adjusted terms.
This rise in commodity prices over the past decade was largely driven by higher metals and energy prices. As the emerging economies, particularly China, urbanised and industrialised they needed to build more roads, bridges and housing, which supported strong demand for hard commodities and energy. In turn, rising commodity demand occurred against a backdrop of weak supply due to underinvestment in mining capacity, which drove prices higher. Continue reading »
By Bruce Misamore, former CFO of Yukos
As the world flails about looking for ways to get Russia’s attention over the Ukraine and Crimean crises, and Vladimir Putin looks on impassively, the UK has a unique opportunity to take a long overdue and meaningful action: delist Rosneft from the London Stock Exchange. Continue reading »
By Dr Assimakis Komninos of University College, London and Professor Anne Perrot of University Paris I Pantheon – Sorbonne
It will come as a surprise to many companies doing business in Mexico to learn that they may soon become subject to a controversial competition law, with consequences from price regulation to forced divestitures of their assets even when they have not engaged in anti-competitive behaviour. Today, a bill was sent to Congress that would substantially amend Mexican competition law, creating one of the most sweeping competition regimes in the world. Continue reading »
By Amitava Chattopadhyay of Insead
Emerging market economies have experienced hard times of late. In India, FY13 GDP growth was the slowest in 10 years and the rupee hit a record low against the US dollar. Many foreign companies are retracting their investments and leaving the government struggling to turn back the tide. Other EM giants Brazil and China have also come under the spotlight as national growth rates plateaued and fell throughout the first quarter of 2014.
However, despite turbulent times in their home markets, the outlook for EM corporations is rosy. Continue reading »
By Gilles Verniers
The Bharatiya Janata Party campaign, led by Narendra Modi, its frontrunner candidate for prime minister, has been marked lately by internal dissensions over state-level alliances and candidate nominations. Some of its historic leaders have been dislodged from their strongholds to accommodate other faction leaders, including Modi himself.
While dissension and factionalism are a constant feature of party politics in India – the BJP being no exception, despite a stronger core ideology – the internal unrest within the party expected to win the coming general election is of a different kind, and proceeds from the qualms generated by the unilateral control exerted by Modi over the party’s direction. Continue reading »
By Taras Kuzio of the University of Alberta
Russia’s Ministry of Foreign Affairs (MFA) has said that Russia reserves the right to intervene in eastern Ukraine in defence of ‘persecuted’ Russian speakers. This, and Russia’s annexation of the Crimea, will not be not welcomed throughout the former USSR, where Russian speakers are scattered in enclaves. After all, in the autumn of 2008 none of Russia’s allies, even the pro-Russian Belarus and Kazakhstan, followed Moscow in recognising the independence of the two Georgian territories of South Ossetia and Abkhazia. Continue reading »
By Ben Aris of bne
Crimea is due to hold a referendum this weekend that will probably result in the Russophile region breaking away from the rest of Ukraine, with terrible consequences for Russia’s relations with the rest of Europe.
Meanwhile, the EU is pelting full speed towards disaster. The interim Maidan government said it would likely sign off as soon as next week on the Association Agreement that Viktor Yanukovich, then Ukraine’s president, failed to sign in November.
These momentous decisions are equally illegitimate. Continue reading »
By Dalibor Rohac, of the Cato Institute, in Kiev
Beside the professional security in front of the building of Ukraine’s Cabinet of Ministers, a small group of volunteers from the Maidan is holding guard, a reminder that the political elite is there to serve the people, not the other way round. Inside, in a quintessentially post-Soviet boardroom with heavily draped windows and photographs of stern-looking former Ministers, a senior government official tells our group that they are “a government of kamikazes.” Continue reading »
By Andrew Alli of the Africa Finance Corporation
The scale of Africa’s infrastructure investment deficit is well known. According to the World Bank, the continent suffers a shortfall of approximately $40bn per annum. This must be addressed if Africa is to attain its growth and development potential.
The scale of the opportunity for investors in African infrastructure is staggering and the returns impressive for investors and the economies involved. Yet in spite of the opportunity, improving macroeconomic conditions and progress on governance, investors have participated with caution and in small doses. It is clear that a lot more is required to promote infrastructure investment opportunities and to eliminate the risks, both real and perceived, that have dissuaded investors. Continue reading »
By Samuel George of the Bertelsmann Foundation
On February 18 the Republic of Argentina submitted a petition to the US Supreme Court requesting a judicial review of a 2012 decision from the New York Second Circuit Court. That ruling found illegal Argentine payments on restructured sovereign debt if the country did not also service investors who had not accepted the haircut on the non-performing bonds.
If the Second Circuit Court ruling stands, it will set a precedent that holdouts could eventually be paid in full. Bondholders may become increasingly reluctant to accept haircuts on sovereign securities, thus complicating the ability of a distressed country to restructure its debt. Continue reading »