China Trade & Employment, Mexico & Argentina Talk Free Trade, EAC Currency In The Works

August 8, 2016

The Guide to Corporate Establishment in Myanmar

ASEAN Briefing

  • The IMF projects Myanmar to be the world’s fastest growing economy in 2016, with GDP forecast to advance by 8.6 percent.

  • Still considered a frontier economy, Myanmar is at a young but developing stage for foreign direct investment (FDI) within ASEAN. Not only does the nation offer fertile land, bountiful resources, and a strategic geographic location.

  • But the Government is increasingly committed to encouraging foreign investment through major economic and political reforms.

  • The reform process began in 2011 and has successfully increased trade and FDI, contributing to 8.3 percent real GDP growth in the 2013/14 fiscal year, which topped the preceding year’s 7.3 percent growth.

 

Holding up Half the Sky? Assessing the Current State of Female Employment in China

China Briefing

  • Female employment in China used to be moving in a positive direction.

  • In the late 1970s, almost ten years after Chairman Mao famously remarked that “women hold up half the sky”, about 90 percent of working-age women in cities were participating in the workforce.

  • In 1980, China was one of the first countries to ratify the United Nations International Convention on the elimination of all forms of discrimination against women (CEDAW).

  • In 1992 and 1994, gender equality was integrated into Chinese law, with the Law on the Protection of Rights and Interests of Women and the Law on Maternal and Infant Health Care being signed into practice, respectively.

 

China Introduces New Transfer Pricing Rules, India Set to Implement National Education Policy…

China Briefing

  • On June 29, China’s State Administration of Taxation (SAT) issued a new document which introduces a three-tiered documentation framework that will replace its current transfer pricing documentation rules.

  • The new document revised some terms and further clarified the requirements for reporting companies, as well as the information they need to submit.

  • The Ministry of Human Resources Development (MHRD) of the Government of India recently announced its intent to establish a new National Education Policy (NEP).

  • The higher education aspects of the policy are of particular interest to foreign educational institutions.

 

An oil boom made it the most expensive city in the world. Now it’s in crisis.

Frontier Markets Compendium

  • As the price of oil rose earlier this decade, this city did as well, and Luanda would become, its government announced, “a new Dubai.”

  • But as oil prices have crashed, the impact on one of Africa’s richest and most unequal countries has been devastating.

  • On a continent where natural resources have driven generations of boom and bust, Angola has a remarkable and frightening distinction.

  • It is more dependent on commodity exports than just about any other nation in sub-Saharan Africa and now it’s paying for that reliance in tragic ways.

 

Saudi to establish $1.1bn fund to encourage investment in smaller firms

Frontier Markets Compendium

  • Saudi Arabia will establish a $1.1 billion fund to develop its venture capital industry and support the creation of small and medium-sized companies, the cabinet has said, as the kingdom tries to strengthen its economy in an era of cheap oil.

  • The cabinet approved a plan for the Public Investment Fund, Saudi Arabia's top sovereign wealth fund, and the Ministry of Commerce and Investment to establish the new fund, according to a statement carried by state news agency SPA.

  • The fund will invest in venture capital operations and private assets on a commercial basis in order to encourage investment in smaller firms, which Riyadh hopes will create jobs as low oil prices force cuts in state spending.

  • The cabinet also told the ministry to remove obstacles to growth of the venture capital industry in Saudi Arabia, where the sector has so far played only a minor role, and to facilitate the entry of foreign venture capital firms into the country.

 

Thousands of Indian Workers Are Stuck in Saudi Arabia as Kingdom’s Economy Sags

Frontier Markets Compendium

  • The Indian government is struggling to support thousands of its citizens who have lost their jobs in Saudi Arabia, India’s minister of external affairs said on Monday.

  • This is a new indication of how the drop in global oil prices has affected the Arab world’s largest economy and those who rely on it for their livelihoods.

  • More than 10,000 Indians have recently lost their jobs in the kingdom, and many are stuck there, some unable to feed themselves after not having been paid in months, the minister, Sushma Swaraj, told the upper house of India’s Parliament.

  • Saudi Arabia and its wealthy Persian Gulf neighbors have long been top destinations for millions of poor laborers, most of whom work in construction, transport and other low-paying sectors.

 

Bosnian-EU agreement paves way for big IMF loan

Frontier Markets Compendium

  • Bosnia’s rival leaders have agreed on the conditions set by the European Union for accepting the country’s membership application.

  • This has cleared the way for a much-needed IMF loan deal, which was delayed three weeks ago.

  • The autonomous Serbian Republic in Bosnia had opposed two important reforms: a deal expanding a trade agreement that Bosnia has with Croatia to cover all members of the EU, and an effective coordination mechanism with Brussels.

  • Sources close to the IMF have said the next meeting of the executive board, which could consider the approval of a three-year €550m loan agreement for Bosnia, could be held in September.

 

Why big drug firms are seeking new markets in Africa

Frontier Markets Compendium

  • Faced with a saturated market and a drop in profits, big pharmaceutical companies are looking to the sub-Saharan African market to sustain their businesses as operations get tough in major markets.

  • The Big Pharma is also seeking to diversify from traditional tropical disease medicines, such as anti-malarials, and anti-retrovirals — for which sub-Saharan Africa has been a huge market — to drugs for non-communicable diseases such as diabetes, hypertension & cancer.

  • Merck Serono, the world’s oldest pharmaceutical, chemical and life sciences company, is leading the drive into the sub-Sahara Africa market, seeking partnerships and training medical personnel in Kenya, Uganda, Tanzania, Ethiopia and South Africa in oncology.

  • The programme will then be rolled out to the rest of Africa. The University of Nairobi will host the training which will initially involve nine physicians.

 

EAC traders to use local currencies within region

Frontier Markets Compendium

  • The use of the dollar in regional trade is expected to fall after the central banks of the five East Africa Community member states agreed on direct convertibility of national currencies, to protect them from weakening against the green buck.

  • The move will enable traders transact without having to convert national currencies into dollars first as the central banks seek to cushion businesses from foreign exchange shocks that accompany dollar movements.

  • This will be the second major onslaught on the dollar in the region after the setting up of Chinese currency Renminbi — commonly known as the Yuan.

  • The central banks have already opened reciprocal accounts with each other, the basket from which payments of dues in a different currency are made.

 

The Future of U.S.-Saudi Relations

Frontier Markets Compendium

  • The relationship between the United States and Saudi Arabia has come under unprecedented strains in recent years.

  • U.S. President Barack Obama has openly questioned Riyadh’s value as an ally, accusing it of provoking sectarian conflict in the region.

  • Many Americans continue to believe that the Saudi government was involved in the September 11, 2001, attacks, although the 9/11 Com­mission found no evidence of institutional or senior-level Saudi support.

  • The Senate has even passed a bill that would allow Americans to sue the Saudi government in U.S. courts for its alleged support of terrorism.

 

Argentina and Mexico pledge to reach “absolute integration and free trade”

MercoPress

  • After signing 17 bilateral agreements at the government house (Pink House), president Mauricio Macri and his Mexican counterpart Peña Nieto, agreed on the need of reaching “an agreement of absolute integration and free trade” between Argentina and Mexico.

  • “Being Argentina and Mexico two of the largest Latin American economies, we share the path to develop the growth opportunity,” the Mexican head of state said. Mexico and Argentina are the second and third largest economies of Latin America.

  • ”Today we decided to deepen these agreements so we can aim at reaching a better integration and free trade between both countries,” said president Macri.

  • Macri received Peña Nieto at the Government House, and then held a bilateral meeting also attended by members of their presidential cabinets.

 

Temer hails beef agreement with the US; expects sales to reach US$ 1b next year

MercoPress

  • The agreement opening the doors of the U.S. market to fresh and frozen meat produced in Brazil was reached last week in Washington after 17 years of negotiations between the two countries.

  • Temer said that, besides generating more foreign currency income, the export of Brazilian meat to the United States ”will have international repercussions ... (and) will help conquer other (markets).“

  • Nevertheless, he specifically emphasized that it will help create new jobs in Brazil at a time when some 11 million people are unemployed in Brazil.

  • Brazil is one of the world's largest exporters of beef and last year it earned some US$6 billion from such sales.

 

UBS optimistic about evolution of Brazilian economic activity in second half of 2016

MercoPress

  • UBS asserted that the second half of 2016 will bring about a visible improvement in economic activity in Brazil, chiefly due to interim president Michel Temer's assumption of office in May this year.

  • Since then, Temer's economic team has pushed through policy aimed at bringing Brazil closer to stabilizing its national debt.

  • Brazil's new political landscape has boosted its national currency, the Real, according to UBS.

  • While the Brazilian Central Bank (BCB) has recently announced that it will further reduce its exposure in foreign exchange swaps, UBS says that this is, “Unlikely to change the trend towards a stronger real.”

 

China’s leading role in Argentina reviewed and confirmed by Macri

MercoPress

  • Argentina’s diplomatic relations with China were upgraded to “strategic integral alliance” status in the president Cristina Fernandez de Kirchner administration.

  • Nevertheless, the more than 20 deals signed by CFK with China were questioned by president Mauricio Macri, claiming they were filled with irregularities.

  • Argentina and China have an asymmetric trade relationship, something acknowledged by the two administrations and one of the challenges highlighted by Guelar.

  • Argentina registered last year a US$5 billion deficit in bilateral trade with China. Exports to China totaled almost US$5 billion, while imports hit US$10 billion, a sizeable disparity.

 

US and Brazil agree to open each others’ beef market

MercoPress

  • USDA acknowledged some news that broke a few days ago, that for the first time since 1999 the U.S. will allow imports of fresh and frozen Brazilian beef.

  • The Food Safety and Inspection Service (FSIS) “recently determined that Brazil's food safety system governing meat products remains equivalent to that of the United States and that fresh (chilled or frozen) beef can be safely imported from Brazil,” USDA said.

  • “The Government Accountability Office is still reviewing the methodology used during the decision-making process,” NCBA President Tracy Brunner said.

  • “Furthermore, USDA has failed to provide the detailed and documented science-based review of the risk evaluation protocols for determining an animal health status - information requested by the U.S. beef industry and Congress last year in order to alleviate serious animal health concerns.”

 

Lula appeals to UN claiming he is victim of abuse of power by a judge and media in a corruption investigation

MercoPress

  • Lula, once a leftist icon and Brazil's most influential politician, is under investigation for allegedly benefiting from a massive kickback scheme at Petrobras, once the country's largest corporation and pride of the country.

  • British lawyer Geoffrey Robertson, who has defended boxer Mike Tyson and WikiLeaks founder Julian Assange, joined Lula's Brazilian lawyers in filing the petition to the U.N. Human Rights Committee.

  • As president from 2003 to 2011, Lula campaigned to help Brazil win the 2014 World Cup and next month's Summer Olympics.

  • The 39-page petition lashes out at federal Judge Sergio Moro, who presides over most cases in the Petrobras investigation and has ordered the arrest of dozens of high-level construction executives in recent years.

Tags: argentina, bosnia, brazil, china, eu, mexico, political, politics, risk, saudi, trade, weekly
Posted in Global, Macro Economics, Macro Economics