By Jonathan Fenby of Trusted Sources
Tuesday’s announcement that former Politburo Standing Committee member Zhou Yongkang is to be investigated for corruption shows just how important the drive launched by Xi Jinping at the end of 2012 has become, with implications that stretch beyond the political power play into the economy. It is an important weapon in the simultaneous and wider reform programme with potential positive impact on the huge state sector and the investibility of its big listed companies. Continue reading »
By Dalibor Rohac of the Cato Institute
One can only hope that Vladimir Putin’s war against Ukraine, which has claimed, among others, the lives of the passengers of flight MH17, will come to an early end. But is it possible that the conflict, for all the suffering and senseless destruction it has brought, could have a silver lining?
The past 20 years, during which many Ukrainians thought of their country as a bridge between the West and the East, without any obvious enemies, were years of complacency and failed economic policies, which ultimately resulted in the capture of the government by special interests. Continue reading »
By Ben Simpfendorfer of Silk Road Associates
The Yuecheng in Beijing’s southern suburbs is a pleasant looking senior living home. Its main living room is full of books, potted plants, and mahjong tables. Its bedrooms are bright and well equipped and little different from the rooms that many might be used to seeing in Europe or the US.
Indeed, to the casual observer, the Yuecheng appears to be a pin-up for the commercial opportunities of selling to China’s growing ranks of elderly people. But that’s why it’s also misleading. Continue reading »
By Ievgen Vorobiov of PISM
Three months of the Russia-led proxy war in Ukraine have claimed the lives of hundreds of Ukrainian servicemen and civilians. Until now, Western media have lazily ignored the complexity of the security crisis, while public opinion in the West has had more pressing concerns than an unfolding war on the edge of the European Union. EU politicians have had an easy ride in pretending to handle it.
But the downing of flight MH17 by pro-Russian militants is slowly changing perceptions in the West. It is still a war in a “faraway nation” but now with a dramatic number of foreign civilian casualties. If you had told a western European diplomat two weeks ago that EU citizens would be the next victims of Russia’s slowly-unfolding massacre in Ukraine, they would have dismissed you as paranoid and manipulative. Not any more. Continue reading »
By Mat Youkee of UK Colombia Trade
Colombia’s oil and gas industry – the key driver of the country’s growth over the last decade – is stuttering. In 2012 it reached its goal of producing 1m barrels per day, up from 600,000 bpd in 2008. But in 2014 attacks by insurgents on a key pipeline hit production figures and delays in obtaining drilling permits have prevented the development of new projects.
Most worryingly for the long-term health of the industry, however, has been a lack of major new discoveries. A handful of junior firms have made significant finds but much of the recent growth in production has been the result of optimizing previously discovered deposits, either by bringing online marginal fields or by boosting recovery rates through the application of new technology. At current production levels, the country’s 2.4bn barrels of proven reserves will last less than seven years. Continue reading »
By Lucy O’Carroll of Aberdeen Asset Management
The Bretton Woods conference aimed to reshape the international financial system and end the protectionism that, in the view of the US and UK, had contributed to the drift towards the Second World War. Seventy years on, does the recently formed Brics Bank – set up by a group of emerging economies – threaten the legacy of Bretton Woods? Continue reading »
By Stuart Larkin of the Institute of Southeast Asian Studies
Following his “flipping the switch” on political reform, Thein Sein, Myanmar’s president, has embraced the international donor community – of bilateral and multilateral agencies led by the Asian Development Bank, the World Bank and the IMF – in an agenda of good governance and economic liberalisation. Early reforms have spurred economic growth to around 8 per cent and both government and donors have extrapolated this trend out to 2030 and the attainment of middle income status almost as if it is already in the bag. Not wanting to be seen as a spoiler, neither side has an interest in deviating from this new economic narrative. Continue reading »
By Mario Pezzini of the OECD
The year 2010 was a turning point. What we didn’t know at the time – but what new data just released have shown us – was that 2010 was the year when the share of non-OECD countries in the global economy surpassed that of OECD countries, at purchasing power parity. The rate of this shift has been remarkable: just 10 years earlier these countries accounted for 40 per cent of the global economy. The shift is being led by China and India, which together account for almost a quarter of the global economy. Continue reading »
By Taras Kuzio of the University of Alberta
Vladimir Putin, Russia’s president, has tough decisions to make this week that will have a profound impact on his legacy and on Russia’s future. His two choices are both unpalatable for the anti-Ukrainian strategy he has pursued since last November. Then, he led Viktor Yanukovich, Ukraine’s president at the time, to turn away from Europe, supplied weaponry for Ukraine’s security forces used against protesters, occupied Crimea and launched a proxy war to break up Ukraine by detaching the so-called “New Russia” (Tsarist Russia’s name for east Ukraine). Continue reading »
By Mark Tierney of Crabtree Capital
The International Air Transport Association has just produced a terrific new report: Transforming Intra-African Air Connectivity. The study, according to Tony Tyler, IATA’s boss, “demonstrates beyond doubt the tremendous potential for African aviation if the [regulatory] shackles are taken off… The additional services generated by liberalization between just 12 key markets will provide an extra 155,000 jobs and $1.3 billion in annual GDP… Aviation is a force for good, and plays a major role in helping to reach the African Union’s mission of an integrated, prosperous and peaceful Africa.” Continue reading »
By Paul Hodges of International eChem
Strange things are happening in China’s polyethylene (PE) market. Despite a slowdown in the economy, demand is surging.
Our research suggests that PE, like copper and iron before it, is the latest instrument of China’s ‘collateral trade’, in which spurious imports are helping to drive one of the world’s great credit bubbles.
It can only end badly. Continue reading »
By Shaomin Li of Old Dominion University
Saturday evening at a concert hall parking lot, the cars move like sharks, hunting for a parking space. When they find one, some drive in head-on, while some make the effort to reverse.
Obviously, reversing in takes more time and effort than driving in head-on. But it makes it easier, quicker, and safer to exit. So we may conjecture that people who take the trouble to back their cars in demonstrate an ability to delay gratification: they are happy to invest more time and effort now to enjoy the fruits of their labour later. Continue reading »
By Sunil Sanghai of HSBC
The days of hot and smart money are over. An increasing number of long-term foreign investors are betting heavily on a bright future for India. They were already doing so before the decisive election result in May and we expect this momentum to grow and grow.
Around this time last year, India’s economy seemed to be in a state of flux. The rupee was at an all-time low, inflation was stubbornly high and the equity market was shackled. Foreign institutional investors often looked confused, sucking hot money out of the markets one day only to pour it back the next. Continue reading »
If ever the phrase “it was the best of times, it was the worst of times” could be applied to Indonesia, it would be to President Yudhoyono’s ten years in power from 2004-2014. Arguably, his first term was the best five-year period of economic reform and revitalisation in the history of the country, while his second term was possibly the worst.
As Indonesia, Asia’s fifth-largest economy, speed-walks towards presidential elections on July 9, it’s probably time now to start looking beyond the elections. What kind of economic-reform program could the newly-elected president pursue to re-ignite our sharply slowing economy?
As it turns out, President Yudhoyono’s first term in 2004-2009 showcases what can be accomplished in Indonesia, given enough political will, and given enough desire to execute and implement. Here’s a sampling of bold, determined and successful reforms from 2004-2009. Continue reading »
By Morten Jerven of the Simon Fraser University
Measuring GDP is like standing on most bathroom scales: they may be wrong by a little or a lot, and that hardly matters if what interests you is whether you are gaining or losing weight. But if you are interested in comparing yourself with your friends or neighbours, accuracy matters a lot. Continue reading »