Two behemoths of the global economy finally reach a deal to resolve a trade dispute that has rumbled on for a decade. Good news, right? No. The settlement of Brazil’s WTO case against the US over cotton subsidies, announced last week, raises the profoundly disturbing possibility that yet another part of the multilateral governance of trade is now being undermined.
The issue dates from 2004, when Brazil won a famous victory at the WTO’s dispute settlement process against US subsidies to cotton farmers, the first big victory for an emerging market country. The arbitration panel authorised Brazil to retaliate with trade restrictions totalling $830m. Washington dragged out the case by every means possible – first appealing against the decision, then wrongly claiming it had changed its subsidies to comply with the ruling, then saying that the matter could only be dealt with in the multilateral so-called “Doha round”, and then finally and absurdly, paying Brazilian cotton farmers nearly $150m per year in protection money from 2010 onwards to avert trade sanctions. Read more
Last week it was a Moroccan bank issuing international bonds, and now it’s the government that has global investors in its sights. The North African country plans to launch a €1bn ($1.36bn) eurobond over the next few weeks, sealing a crown as the the continent’s second-largest sovereign eurobond issuer. No prizes for guessing number one (South Africa). Read more
By Philippe de Pontet and Riccardo Fabiani of Eurasia Group
The investor and geopolitical impacts of the French-led intervention against Islamist militants in Mali will reverberate far beyond the country’s porous borders. Indeed they already have, as the grisly kidnapping of dozens of expatriates in BP’s southern Algerian gas field has shown.
Mali will continue to be the epicenter of combat, casualties, and French preoccupation, but the real risks to multinationals and foreign citizens will play out elsewhere in a vast region that spans North Africa, West Africa and the largely ungoverned Sahel which lies at crossroads of the two. Read more
The past year was a difficult one for many Arab countries undergoing historic political and economic change – Egypt, Jordan, Libya, Morocco, Tunisia and Yemen. The environment is challenging, but the underlying hope remains the same – a new society based on greater openness, greater opportunity and greater equality, writes Christine Lagarde, managing director of the International Monetary Fund, in the FT .
The first building block of a more inclusive economy must surely be macroeconomic stability. Unfortunately, this has come under threat in some countries – from slowing global growth, growing social tensions and rising political pressures. Read more
Egypt’s stock market seems to have stabilised since its dramatic 9.6 per cent fall on Sunday, triggered by the latest round of political turmoil. On Monday, the EGX30 index rose 2.6 per cent and was trading flat in the early afternoon, Cairo time, on Tuesday.
But the political confrontations of the last few days are a reminder that Egypt’s leaders are a long way from giving priority to the economy. The International Monetary Fund programme announced last week is anything but a done deal. Read more
Algeria’s powerful armed forces, which already run Africa’s biggest defence budget, have requested a 14 per cent spending increase for next year, as the country prepares for security threats on its southern border.
The Algerian defence ministry, still mostly run by the ageing generals who fought for the country’s liberation from France 50 years ago, has requested a $10.3bn budget for 2012, according to the South African news outlet, DefenceWeb. So what’s on the shopping list – and from whom? Read more
Escalating disputes between labour unions and employers in north Africa are threatening to derail economic recovery after the uprisings that ousted long-ruling dictators in the region, writes Farah Halime.
Emboldened by the spirit of political change, thousands of workers in Egypt and Tunisia have staged a series of protests and are now in deadlocked talks with companies over demands for a minimum wage. Read more
Economies in north Africa have suffered a sharp drop in direct foreign investment since last year’s Arab uprisings, and they have been hit hard by the eurozone crisis. What can they do to rekindle investors’ interest?
Source: Egyptian Exchange
Egyptian president Mohamed Morsi’s brief honeymoon with the markets seems to be over.
Egyptian stocks, which rallied on his election only two weeks ago, plunged 4.5 per cent on Monday, wiping out nearly a third of the gains of the gains made since June 24 when Morsi was confirmed as the country’s first democratically-elected leader. 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
Libya barely has a functioning government. Armed militias that overthrew Muammer Gaddafi last year still roam the land. And some eastern Libyans want to bolt from the union. But people still have to eat…
Despite political and security worries, Tunisia’s largest food retailer has announced plans to expand operations into Libya. Monoprix Tunisia, an affiliate of the French supermarket giant, will begin opening 10 new stores this year in Libya, the company announced last week, according to the official Tunisian news agency. Read more
The north African nation of Algeria has hired an American company, Itron, to upgrade the metering system for its electricity power network.
US firms play a relatively major role in Algeria’s economy, but mostly in developing the oil and gas industry, rather than utilities. Read more
Qatar’s top bank has purchased a major stake in one of Libya’s leading privately held financial institutions. The deal strengthens the commercial ties between two countries already bound together politically in the wake of the Arab Spring uprisings.
Following months of negotiations, Qatar National Bank, the energy-rich Arabian Peninsula kingdom’s largest financial institution, paid an undisclosed sum for a 49 per cent stake in the Bank of Commerce and Development. Read more
By Stephen Snyder of Ergo
US Secretary of State Hillary Clinton visited Algiers on Saturday and gave Algerian President Abdelaziz Bouteflika a free pass on two major issues of contention between the two countries: his government’s upcoming rigged elections and his support for Bashar al-Assad in the worsening crisis in Syria.
In the midst of a regional tour to promote democracy-building and rally international support for intervention in Syria, Clinton’s sudden silence on these issues in Algeria spoke volumes. At the root of this silence is Algeria’s position as a cornerstone in the global oil and gas market. Read more