Global Business

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    Why the pressure for higher minimum wages is gaining traction in Africa

Why the pressure for higher minimum wages is gaining traction in Africa

On 1 May this year, while observing Labour Day celebrations, Kenya’s President, Uhuru Kenyatta, announced an 18 per cent hike in the minimum wage, the country’s most ambitious raise in just about a decade and one that scaled up the minimum wage to Kes 20,296 – about US$ 196.8. (Computation based on the gazetted minimum wage for Nairobi, Mombasa […]

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    The Southern African wild card: High foreign debt, weak currencies and default risk

The Southern African wild card: High foreign debt, weak currencies and default risk

The dawn of 2017 seems to have pried open a can of worms in Southern Africa. In just about four months, Mozambique, not too long ago displaying strong economic growth and bullish investor sentiment, has defaulted in servicing a $60 million coupon payment for its ‘Tuna Bond’. The plunge in oil prices has sent banks in Angola clutching at the […]

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    What the South African anti-foreign riots say about the country’s economy

What the South African anti-foreign riots say about the country’s economy

As anti-immigration protesters take the streets of South Africa’s capital, Pretoria, it is instructive to look at the nation’s economy.

South Africa’s economic performance since the 2008/09 global recession is disturbing. The economy’s growth seems stunted, posting 1.3 per cent year-on-year change in 2015[1] and a more measly average of 0.8 per cent in the first three quarters of 2016[2]. Per capita income […]

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    How much more damage can the Trump government do to the Cuban economy?

How much more damage can the Trump government do to the Cuban economy?

The new Trump government is threatening to reverse the US-Cuba rapprochement begun under Obama, but how much damage would this actually do to the Cuban economy?

The announcement in December 2014 that diplomatic relations would be re-established undoubtedly marked a turning point for Cuba. Over the rest of president Obama’s second term, a series of executive actions and bilateral agreements […]

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    Ghana won’t be able to fix its economy if it uses last decade’s rule book

Ghana won’t be able to fix its economy if it uses last decade’s rule book

Ghana’s 2008 general election remains one for the history books. The electorate voted out a government (the New Patriotic Party) that had presided over:

a decline in the number of the unemployed masses (averaging a 7.9 per cent year-on-year fall in the number of unemployed between 2001 and 2008);
a more stable monetary environment with a decline in annual […]

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    Where mining takes place, food production takes a hit in Ghana

Where mining takes place, food production takes a hit in Ghana

The device you are using to read this blog contains at least a dozen different types of minerals, many of which most likely come from modern large-scale mines in developing countries. As these mining operations tend to be located in poor rural locations, the question of how neighbouring populations are affected by their expansion becomes an interesting one. The […]

The Chinese have transitioned directly to a mobile-only era

China’s middle class group is already the size of the US population and is expected to double within seven years. In addition to its large population size and significant disposable income, this new middle class is also characterised by its quick adoption of mobile applications in their everyday activities.

According to CNNIC (China Internet Network Information Center) data, at the […]

Social finance: a new frontier for development in Indonesia

Jakarta – Gatot Subroto, by Dino Adyansyah, under a CC-BY-2.0 licence
Introduction

It is estimated that Asia Pacific countries face an annual development financing shortfall of about $44 billion. So if development challenges are to be tackled effectively, the slack in finances needs to be picked up by the private sector. This would bring market incentives for financial gain closer to public […]

Redesigning Argentina’s economic landscape

Buenos Aires, la ciudad contada, by Hernán Piñera, under a CC-BY-SA-2.0 licence
Most people know Argentina as the land of tango, Malbec, and some of the greatest soccer players of all times. But Argentina is also famous for being home to some of the most diverse and extreme landscapes of the world—from subtropical rainforests and Iguazu Falls in the north to the […]

Navigating the new anti-money laundering normal

Money laundering, by The Preiser Project, under a CC-BY-2.0 licence
A series of recent news events have highlighted the continued focus of global regulators on money laundering and compliance failures at international financial institutions — and made it clear this focus is only likely to intensify in the months ahead. This makes it more crucial than ever that institutions have the […]

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    Chinese leaders walk a tightrope on market reforms amid slowdown

Chinese leaders walk a tightrope on market reforms amid slowdown

Nanjing Road-Shanghai, by Khalid Albaih, under a CC-BY-2.0 licence
In August 2015, Chinese leaders announced policy changes aimed at making their currency more attuned to market forces. At first glance, the move seemed to fulfil a pledge made by President Xi Jinping in 2013 to give markets a “decisive” role in the economy. But the government coupled its plans with a […]

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    How Chinese firms reacted when told to change their share ownership structures

How Chinese firms reacted when told to change their share ownership structures

Lujiazui Finance and Trade Zone, by Suvcon, under a CC-BY-2.0 licence
You probably know that many new rules were put in place soon after the 2008/2009 financial crisis in order to prevent excessive risk taking and ethically questionable transactions by the financial sector. Did the banks follow the rules? The obvious answer would be yes, at least for many people. Banks […]

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    India’s reforms to attract investment present opportunities for European firms

India’s reforms to attract investment present opportunities for European firms

Mumbai, by Walkerssk, under a CC0 licence
Since independence in 1947 until 1991, India’s policy towards foreign direct investment (FDI) was ad hoc, and lacked consistent direction and proper institutions (Sahoo 2006; Sahoo et al. 2013). As a result, FDI inflows into India were negligible. However, following the balance-of-payments crisis in 1991, the comprehensive structural economic reforms included steps to […]

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    Why is there so little foreign direct investment in the Western Balkans?

Why is there so little foreign direct investment in the Western Balkans?

Western Balkans, by Olahus, own work, under a CC BY-SA 3.0 licence, via Wikimedia Commons
It is now more than quarter of a century since the demise of socialist economies in Europe was put in motion by the fall of the Berlin Wall. In many parts of Central and Eastern Europe, the transition from socialist planning to market capitalism is all but […]

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    Can North Africa’s energy challenges become opportunities?

Can North Africa’s energy challenges become opportunities?

Algerian desert, by Magharebia, under a CC-BY-2.0 licence
It is in Europe’s interest to foster stability, security and prosperity in North Africa. But so far Europe’s attempts to promote economic and political reform in the region have failed. The aftermath of the so-called ‘Arab Spring’ demonstrated the limitations of the EU’s leverage over economic and political developments in North Africa. But […]

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    Foreign investment in critical areas like nuclear power need a formal vetting process

Foreign investment in critical areas like nuclear power need a formal vetting process

Hinkley Point A power station, by Rick Crowley, under a CC BY-SA 2.0 licence
One of the first decisions taken by Theresa May as prime minister was to delay deciding on the £18 billion Hinkley Point nuclear power project. Because it was a centrepiece project as part of former chancellor George Osborne’s “Golden Age” of closer bilateral ties with China, the […]

The malling of America may be history

Mall of America interior, James Patterson, under a CC BY 2.0 licence, via Wikimedia Commons
Is the great American suburban shopping mall a dinosaur?

If you visit the site of Northland Center in suburban Detroit, you come away thinking so, because Northland was a trend-setter throughout its life cycle. It was the world’s largest shopping center when it opened in 1954, just as […]

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    Hinkley Point C nuclear station: an expensive solution to a cheap problem

Hinkley Point C nuclear station: an expensive solution to a cheap problem

Colour Scheme, by Mark Robinson, under a CC-BY-NC- 2.0 licence
The UK will soon break ground on its first new nuclear power plant in more than 20 years now that PM Teresa May has signed off on Hinkley. While clearly a political decision, given the involvement of both French and Chinese companies, my colleagues and I at Bloomberg New Energy Finance […]

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    Nigeria in recession: the devaluation came a day late, a dollar short

Nigeria in recession: the devaluation came a day late, a dollar short

Nigeria – Five Naira (₦5), (cropped), by Shardayyy, under a CC-BY-2.0 licence
In January 2016, I tabled a prognosis for Nigeria anchored on the premise of an economy set to tread a tight rope between soaring inflation and deceleration of its growth momentum. Seven months later, inflation had inched to a high of 17.1 per cent and the economy had […]

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    Now Indonesia has a sovereign wealth fund – and it won’t be the last

Now Indonesia has a sovereign wealth fund – and it won’t be the last

Key players in international finance

Sovereign wealth funds (SWFs) are large state owned investment funds. With assets under management of about US $7 trillion globally, SWFs have become key players in international finance – even surpassing the combined size of global hedge funds and private equity firms.

In the vast majority of cases SWFs were funded by the proceeds of oil and […]