With the US wobbling atop its fiscal cliff, the European Union struggling to control the eurozone crisis and Japan seemingly sunk into permanent stagnation, it would be easy to conclude that the biggest global risks of 2013 come from the developed world.
Not so, says Eurasia, the political risk consultancy. In its predictions for 2013, the group puts emerging markets at the top of the risk rankings. That’s because the advanced economies have proved in recent years that they can manage crises. Emerging markets will struggle to cope with the world’s growing political pressures. Read more
2012 has been a year of power struggles in Egypt. Markets have been volatile in sympathy with the political turmoil and, with arguments raging over a new constitution, a $4.8bn IMF loan is on hold. Raza Agha, chief economist for Middle East and Africa at VTB Capital, explains to Rob Minto the risks of extended political uncertainty in Egypt.
“Don’t forget, revolutions are expensive”, says Dimitris Tsitsiragos. He should know: his responsibilities as a vice president at the International Finance Corporation include north Africa and the Middle East, not least the countries hit by the Arab Spring.
The IFC, the World Bank’s private sector arm, has, in the last five years, boosted its annual commitments to the region by nearly 50 per cent to over $2bn. But, Tsitsiragos says it’s not enough: without more private sector involvement, the region cannot generate the investments required to produce faster economic growth and more jobs. Read more
An air of normality has returned to Bahrain’s central business district and the government is keen to focus on positive matters. But violent protests continue and, as events this week have demonstrated, political reform and economic progress still face severe obstacles. Read more
By Majid Jafar, CEO of Crescent Petroleum.
The threat to stability in the Arab world posed by youth unemployment is such that governments old and new must urgently address the worsening economic environment. If a solution is not found soon, the whole region risks instability or even secondary revolutions. Read more
“The Arab Spring.”
That is how Maha Abouelenein, Google’s head of communications for the Middle East and north Africa (MENA), explained YouTube’s recent explosion in the region.
“The power of citizen journalism made people euphoric about the internet’s possibilities,” Abouelenein told beyondbrics. “It gave them a voice, so they know they can reach an audience.” Read more
Investors have responded with relief to the Egyptian presidential poll result which saw the Muslim Brotherhood candidate Mohamed Mursi confirmed as the country’s first democratically-elected leader.
The Egyptian stock index was up over 7 per cent on Monday, following Sunday’s 3 per cent gain, while benchmark bond yields plunged nearly 40 points. There seemed to be almost as much joy in the market as in Tahrir Square.
But it might not last long. Egypt remains at the mercy of political conflict between the old regime and the representatives of the would-be new order. Read more
Egyptians will have to choose between the Islamist Muslim Brotherhood and a old retainer of the Mubarak administration in next month’s run-off of the presidential election.
As officials counted votes on Friday, the Brotherhood’s Mohamed Morsi was emerging as winner of this week’s first round. Ahmed Shafiq, Hosni Mubarak’s last prime minister, appeared likely to come second. With centrist candidates falling behind, Egyptians seemed certain to face a stark choice in the second round: “revolution” or “counter-revolution”, in the words of one observer. Read more