Impatient shareholders are calling on the world’s top firms to start spending some of the eye-popping $2.8 trillion in cash built up since the financial crisis, as analysts warn that their thriftiness could be holding back global growth. Companies now need to rethink their cash strategy to create growth opportunities. Mark Carney, current head of the Bank of England, was more blunt in a 2012 speech as he derided unused corporate cash as “dead money”.
By turning to sanctions in response to Russia’s intervention in Ukraine, Obama reinforced a trend: He – and George W. Bush before him – increasingly have used financial warfare, rather than the overtaxed U.S. military, in crises from North Korea to Iran to Syria. It has made OFAC’s war room something of a front line for the United States and its allies. In interviews, current and former top OFAC officials offered insight into some of the often-secret agency’s inner workings.
The G20′s frustration centres on US failure to ratify the IMF quota and governance reforms agreed by the G20 in 2010. While countries representing nearly 80% of IMF votes have approved the reforms, the required threshold is 85%. The US has a veto with its 16.75% shareholding and the US Congress continues to block the reforms. Joe Hockey said the 2010 IMF reforms are a top priority because they would ‘double the IMF’s permanent resources and lead to a major realignment of voting shares’.
Sunday, a top European Central Bank policymaker described how the bank will approach an asset purchase plan to tackle low inflation in the single currency bloc, saying that such a program “would not be about quantity, but about price.” Eurozone inflation is running at 0.5% far below the ECB’s target of just under 2% over the medium term. Several ECB policymakers have deep reservations about pursuing a US Fed style program of sovereign asset purchases.
Amid increasing tensions with the West, Russia is making progress on long-awaited deals with its eastern neighbor, China. The China Development Bank has confirmed its plans to invest $5 billion in Russia’s Far East, news reports said Friday. Investments will be channeled to regional economic zones and will finance large infrastructure projects, Russia’s Far East Development Ministry said. Russia is ready to take on the transit cargo coming from the Asia-Pacific region to Europe.
Russian state-controlled oil producer Gazprom Neft said it had received positive responses from Asian clients about the possibility of using euros as a settlement currency instead of the dollar. Company head Alexander Dyukov said this week Gazprom Neft had broached the idea of dropping the dollar, traditionally the currency of choice for the global energy sector, in response to a possible new round of Western sanctions over Russia’s annexation of Crimea.
Argentina is struggling with a weakening economy and rapidly rising inflation, which currently stands at roughly 30 percent. Labor leaders are therefore calling for higher pay and lower taxes. A nationwide 24-hour strike, called by the powerful CGT Union, brought large parts of the country to a standstill, public transport came to a halt, flights were canceled, hospitals provided emergency services only and rubbish was left uncollected. Many schools and businesses also remained shut.
Romania plans to become the open door of China to Europe, not only through the Constanta Port (eastern Romania, on the Black Sea shore), but also through the development of such investment projects to prove the high technological level reached by the Chinese economy in the past years, Secretary of State for political analysis and the relation with the Parliament, Radu Podgorean, stated during a visit he paid to the People Republic
The draft pact centers on Chabahar Port, which would allow India and Afghanistan to conduct trade and access Central Asia’s vast energy resources, has been reviewed and approved by Afghanistan and is now awaiting Indian approval, FreshPlaza reported. India considers the pact pivotal, as analysts believe the sea route is the only viable alternative to land trade given the instability of Afghanistan and the reluctance of Pakistan to grant land access to India, which has no direct land connection to Central Asia.
U.S. producers have signed contracts to supply Asian LNG buyers, including GAIL India Ltd., Korea Gas Corp. and Tokyo Electric Power Co., at prices that undercut what Qatar is being paid. Canada, Mozambique, Russia and Tanzania also plan new LNG export plants, according to Bloomberg Industries data. “The global LNG market is going to loosen, and that has a big impact for the Qataris,” says Trevor Sikorski, a gas, coal and carbon analyst at consulting firm Energy Aspects Ltd. in London.
Russia will make Crimea a special economic zone offering tax breaks and reduced bureaucracy to attract investors, Prime Minister Dmitry Medvedev said on Monday. “Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development,” Medvedev told a Russian government meeting on the Black Sea peninsula, whichMoscow has annexed from Ukraine.
It is one of the world’s longest railways — an approximately 11,000-kilometre “modern-day silk road” that traverses Russia and Kazakhstan to link a megacity in the heart of China with a key commercial hub in western Germany. On Saturday, as part of his landmark visit to Germany, Chinese President Xi Jinping is set to visit the last stop on the “Yuxinou” rail line, an industrial feat that promises to revolutionise transport between Europe and Asia.
It’s hard to believe, but Japan’s total economy is smaller now than it was 20 years ago. The country’s story has become an all-too-familiar one: boom, bust, and stagnation. As Nomura economist Richard Koo points out, Japan lost three GDPs worth of wealth when its “Heisei bubble” burst in the early 1990s. The U.S., as point of comparison, “only” lost one during the Great Crash of 1929.
Endowed with particularly fertile steppes of rich black soil, Ukraine became known as the “Breadbasket of Europe” during centuries of foreign occupation. According to the CIA World Factbook, the country produced more than 25% of total agricultural output – grains, meat, milk, and vegetables – for the Soviet Union. Today, roughly one out of four workers in Ukraine subsist on cultivating the land, consistently generating net food surpluses.
Egypt is considering opening a Russian industrial zone for the manufacture of agriculture equipment, a partnership that would help Egypt meet its domestic demands and allow for surplus machinery to be exported. The industrial zone would also build grain silos, a benefit for both countries, which rely heavily on farming, said the website of the Egyptian ministry of industry, foreign trade and investment. The free trade zone would exempt the countries from customary tariffs.
The European Central Bank could buy loans and other assets from banks to help support the eurozone economy, Germany’s Bundesbank said Tuesday, marking a radical softening of its stance on the contested policy. The ECB has cut interest rates to a record low, and promised to keep them low for some time, having also flooded the banking system with cheap crisis loans. But the eurozone economy is still weak, and inflation remains stuck well below the central bank’s target.
Responding to rumors that Jiangsu Sheyang Rural Commercial Bank, Sheyang county’s largest bank (link in Chinese) with 44 branches, is in financial trouble, depositors have been flocking to branches in at least three villages since March 24. Another bank in the farming county, the Rural Commercial Bank of Huanghai, was also bombarded with wary savers wanting to take their money out, according to state media. Residents waited in droves in the rain outside bank branches to take their money out.
The Turkish Petroleum Corporation (TPAO) has earned 12 billion dollars from the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline since 2005 when oil from Baku was first pumped, Turkish Minister of Energy Taner Yildiz said on Monday.
During his speech in the Turkish province of Adana, Yildiz underlined the importance of BTC pipeline for the region and stated that TPAO has 6.5 percent of the shares in the BTC crude oil pipeline.
Veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which it can use against the U.S.
Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse: Indeed, one of the main pillars for U.S. power is the petrodollar, and the U.S. is desperate for the dollar to maintain reserve status.
While the turmoil surrounding Ukraine wasn’t enough to derail a strong U.S. stock rally, the East-West conflict could bode ill for the global economy, says Mark Schofield, head of interest rate strategy at Citigroup. “All-in-all, it feels as if we may be heading into a summer of grumbling discontent, rather than the steady and progressive U.S.-led recovery that had become the consensus view around the start of the year,” Schofield writes in a commentary obtained by CNBC.
G4S is based near London and is traded on the stock exchange there. Though it remains generally unknown to the public, it has operations in 120 countries and more than 620,000 employees. The fact that such a huge private entity is a security company is a symptom of our times. Most G4S employees are lowly guards, but a growing number are military specialists dispatched by the company into what are delicately known as “complex environments” to take on jobs that national armies lack the skill or the will to do.
Now, experts say, the Egyptian economy is increasingly shaped by the opaque desires of the ruling generals. And the military’s business activities appear to be expanding – from the manufacture of basic items such as bottled water and furniture into mega-infrastructure, energy and technology projects, analysts say. “We’re dealing with a brand new economy that’s now run by ‘Military Inc’,” said Joshua Stacher, an Egypt expert at Kent State University who has studied the military economy.
The Siberian land mass is officially 52,000 square kilometres bigger after an enclave in the Sea of Okhotsk was recognised as part of Russia’s continental shelf. The decision comes from the UN Commission on the Limits of the Continental Shelf. The treasure trove includes hydrocarbon resources exceeding one billion tonnes, believes Donskoy.
The United States is equally concerned about the integrity of Chinese telecommunications technology. Chinese telco giants Huawei and ZTE have been barred from the United States over concerns that the Chinese government would use these companies as a ‘Trojan horse’. Snowden’s revelation highlights the importance of protecting critical telecommunication infrastructure from cyber intrusion not only from terrorists but also state actors. These restrictions have big implications for international trade and investment.
Recent monetary problems in Kazakhstan cast a shadow over the very viability of the “ruble zone” and the almost-quantum entanglement between post-Soviet economies is now under scrutiny. With a low Russian ruble, Ukraine de facto defaulting and a recent devaluation in Kazakhstan, the economic side of President Vladimir Putin’s Eurasian integration project just took a serious blow. Countries like Armenia and Kyrgyzstan, in talks to join the Customs Union, might also find it a hard pill to swallow
Crowds in Crimea queued outside banks as the countdown to this weekend’s referendum to break away from Ukraine and join Russia sowed panic, confusion and fear of a looming legal vacuum. Local pro-Moscow officials have tried to reassure locals, saying there will be no problem with pensions or salaries and that the banks have sufficient cash for everyone. But details on how the financial system will work if Crimea severs ties with mainland Ukraine were sketchy.
China’s default risk has risen beyond that of Ireland, having been on par with France and Japan a year ago, as Premier Li Keqiang said financial leverage is making the economy’s outlook more complex. Five-year contracts protecting against non-payment on government debt climbed to 99 from 63 a year earlier, almost double the 49 for Japan and 51 for France, CMA credit-default swap data show. That compares with 88 for lower-rated Ireland, which exited a bailout in December.
Russian government officials and businessmen are readying for sanctions resembling those applied to Iran after what they see as the inevitable annexation of Ukraine’s Crimea region, according to four people with knowledge of the preparations. Iran-style retaliation from the West, which would include freezing Russia’s foreign reserves, banking assets and halting lending to companies, is being treated as an unlikely worst-case scenario, according to the people who asked not to be identified as the talks are under way.
Italy and France were the major euro area countries put on the European Commission’s economic “watch-list” over fears about persistently high debt and deficit levels. The two countries were among 14 nations deemed to have “macro-economic imbalances” in their economy by the EU executive in a series of reports on 17 countries published on Wednesday. Italy “must address its very high level of public debt and weak external competitiveness,” the commission said,
Depositors wanting to withdraw money from a rural bank in eastern China’s prosperous Jiangsu province ahead of the Lunar New Year holiday found the doors locked, their money gone and employees offering a simple explanation. “We’ve lent out all the money. There’s none left,” an employee told Reuters, repeating the explanation given to depositors weeks earlier. Word had spread that at least three rural cooperatives were running short on funds.
A Kremlin aide was quoted on Tuesday as saying that if the United States were to impose sanctions on Russia over Ukraine, Moscow might be forced to drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks. Sergei Glazyev, who is often used by the authorities to stake out a hardline stance but does not make policy, was cited by RIA news agency as saying Moscow could recommend that all holders of U.S. treasuries sell them if Washington freezes the U.S.. accounts of Russian businesses and individuals.
South Korea adopted a quasi- quantitative easing (QE) under the three-year economic innovation plan to stabilize mortgage loan market, whose fast growth was feared to dent private consumption. The Finance Ministry, Bank of Korea (BOK) and Financial Services Commission (FSC) on Thursday unveiled a joint plan to speed up the restructuring of household debts, which topped the psychologically dangerous level of 1,000 trillion won (about 940 billion U.S. dollars) last year. The plan came as part of follow-up actions to the three-year economic innovation plan, announced by President Park Geun-hye
The Greek port of Piraeus could become one of Europe’s top five container-shipping hubs as the government spurs logistics activities in a bid to kick-start economic growth, said Development Minister Kostis Hatzidakis. Piraeus, now the 11th-largest container-shipping port in the European Union, is expanding as China-based Cosco Pacific Ltd. (1199) operates one of two piers, builds a third and prepares to offer cargo-train shipping to multinational companies. “Piraeus could become one of the four to five biggest ports in Europe very soon,” Hatzidakis said in a Feb. 20 interview in Brussels.
Among the complaints of the Venezuelans that have taken to the street by the tens of thousands over the past couple weeks is the government’s inability to stem high inflation. It’s easy to see why people are angry; official figures put the country’s annualized inflation rate at 56%, which is among the highest in the world. And there’s reason to believe even that high number is a drastic underestimate of Venezuela’s actual inflation rate. The problem with Venezuela’s official rate is that it doesn’t account for the country’s highly active black market, according to Johns Hopkins economics professor Steve Hanke.
With more than $50 billion in U.S. exports in FY 2012, the Export-Import Bank of the United States (Ex-Im Bank) is one of the satellite industry’s largest supporters. As one of the country’s fastest growing industries, satellite accounts for a total of 60 percent of all exports financed by the Ex-Im Bank. On Thursday, Feb. 20, at the Washington Space Business Roundtable event, Fred Hochberg, chairman and president of the Ex-Im Bank spoke about the effect that the satellite industry has on the United States economy.
The US government has taken another important step in helping to reintegrate Myanmar (referred to as Burma for official purposes) into the global economy. On 6 February 2014, the Export-Import Bank of the US (Ex-Im Bank) announced the opening of financial support for qualified short-term and medium-term US export sales to Myanmar. Over the past 18 months, the US has substantially removed sanctions on business with Myanmar and has expanded economic and trade support on a step-by-step basis in response to political and economic reforms.
China’s holdings of US Treasurys dropped to the lowest levels in two years after China dumped $47.8 billion in paper—equal to about 3.6% of its Treasury holdings as of November—bringing its total holdings to $1.27 trillion. Not that this should come as a shock. Yi Gang, a deputy governor of China’s central bank, hinted at the move when he announced in late November that the country no longer benefits from increasing its foreign reserves.
Though this news is likely to stoke fears of a US bond market sell-off, it’s way too early to judge whether this is a fluke or a new PBoC strategy.
Russian energy giant Gazprom provided a record share of 29.9% of gas supplies to the European and Turkish markets in 2013. Gazprom broke a record set in 2011 of 150 billion cubic meters of gas, or a share of 27%, according to reports of Interfax, as cited by dnevnik.bg. The data is provided in a prospectus published due to a new Eurobond issue by Gazprom. The document cites an official evaluation of Gazprom of the European gas market in 2013, which amounted to 451 bcm, of which Gazprom supplied 161.5 bcm.
Spain’s public debt rose to an unprecedented high of $1.317 trillion in 2013, or around 94 percent of GDP, according to Bank of Spain data on Monday, nearly three times as much as it was before the start of the crisis in 2008. The historical series showed that this was the highest level since records began, though it managed to come in slightly below the government’s target of 94.2 percent of GDP for last year. The figure was also an 8.7 percent increase on the previous year’s figure, the Bank of Spain said.
Foreign buyers of U.S. Treasury securities increased their holdings to a record in December even though the two largest holders of U.S. government debt — China and Japan — reduced their shares. The Treasury Department says total foreign holdings rose 1.4 percent in December to $5.79 trillion, surpassing the old record set in March of $5.73 trillion. Foreign holdings had fallen from April through July before rising again in August. China, the largest foreign buyer of Treasury debt, reduced its holdings to $1.27 trillion in December.
If the Alliance were a country, it would be the world’s eighth-largest economy and seventh-largest exporter. Amid all the bad news in the region, the presidents of Chile, Colombia, Mexico, and Peru met with little fanfare in Cartagena last week to seal an economic pact launched in 2012. They call their project the Pacific Alliance, and it will soon include Costa Rica and possibly several other countries. The four founding members are the most successful economies in Latin America; they boast the region’s highest economic-growth rates and lowest inflation rates.
Last week saw an uptick in the number of reported IT problems, slip-ups, and complications. Among the more mind-boggling was the revelation that Fifth Third National Bank of Cincinnati informed its customers last week via a letter that, “We inadvertently reported that you filed bankruptcy to the following [four major U.S.] credit bureau reporting agencies.”What the Fifth Third National Bank’s letter didn’t tell its customers was that their “bankruptcy” status was sent to the credit bureaus Experian, TransUnion, Equifax, and Innovis last October because of an erroneous software update to its IT systems.
Syria’s new 25-year energy deal with Russia, a key ally of embattled President Bashar Assad, could open the way for Moscow’s eventual move into the gas-rich eastern Mediterranean. The Dec. 25 agreement gives Russia’s state-controlled Soyuzneftegas exclusive exploration, development and production rights over 850 square miles of Syria’s Exclusive Economic Zone in an area known as Block 2 roughly between the coastal cities of Banias and Tartous. The deal gives the Russians, one of the world’s leading energy producers, their first real foothold in the Levant Basin, considered to be rich in natural gas.
Frustrated and discouraged by the ever-shifting Cabinets that rarely deliver on their promises, reform-hungry Jordanians increasingly view the pandering monarch with a skeptical eye. And the global financial crisis, waves of refugees from neighboring Iraq and Syria and failed economic reforms have hit the country hard. Food prices have skyrocketed, economic growth has been halved and unemployment stands officially at 12 percent, and unofficially hovers around 30 percent. So far, public outrage has been limited to weekly Friday protests in cities such as Amman, Maan and Karak.
If it is carefully set up and well managed, the AIIB should be able to attract shareholding from Asia Pacific governments committed to their new APEC Framework on Connectivity, as well as from some private sources. If APEC governments on both sides of the Pacific participate in the new infrastructure development bank, the AIIB could be transformed into an Asia Pacific Infrastructure Investment Bank, which could invest in projects to upgrade connectivity among all Asia Pacific economies.
Speculation is swirling about the financial health of Brokbiznesbank, Ukraine’s 18th largest bank by assets, as lines of customers formed in front of its retail customer service department in Kyiv on February 11. This follows widespread reports the previous day about clients experiencing problems withdrawing money from ATM machines and a major client, Ukraine’s largest construction company Kyivmiskbud, switching to a state-owned bank. A bank failure, warn analysts, could mark the start of a shift to a full-blown crisis in Ukraine.
The Egyptian army controls almost 45 per cent of the country’s economy, German newspaper Die Welt claimed.In a report entitled “The Egyptian army is Egypt’s real economic power” the newspaper said following January 25 revolution which ousted President Hosni Mubarak, the military junta led by 75 years old Field Marshal Hussein Tantawi took over power and worked with all of its strength to protect its lucrative economic interests that made the military establishment a business empire and one of the most important factors influencing the country’s economy.
THE worsening political and economic circumstances in Ukraine has prompted the Fitch Ratings agency to downgrade Ukrainian debt from B to a pre–default level CCC. This is lower than Greece, and Fitch warns of future financial instability. “Intensification of political and economic stress is such that default on government debt becomes probable,” Fitch said in an e-mail. On the brink of default, the Ukrainian economy has taken a further beating as protests drag on in the capital Kiev. Foreign debt is $140 billion, nearly 80 percent of the country’s gross domestic product.
The post office isn’t known as the most efficient or reliable business in America. It can’t run its operations at a profit, it’s got serious financial troubles, and just try mailing a package on a Saturday without waiting in line for 30 minutes. The idea, most recently floated in a white paper by the U.S. Postal Service’s inspector general and supported in theory by Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt.,estimates that the money-losing agency could make $8.9 billion a year by offering limited banking services to the tens of millions of people who are not served by traditional banks.
China appears to be buying an expensive insurance policy for natural gas imports from Central Asia with its plans to build a pipeline through Tajikistan and Kyrgyzstan. Since 2006, China has invested heavily in developing gas imports from Turkmenistan, opening its Central Asia Gas Pipeline (CAGP) across Uzbekistan and Kazakhstan at the end of 2009. So far, state-owned China National Petroleum Corp. (CNPC) has built two strands of the CAGP and plans to complete a third on the 2,000-kilometer (1,242-mile) route to Xinjiang this year.
A so-called bad bank is also a semi-technical term that describes a special division at a financial institution that happens to be packed with toxic assets, unwanted loans or entire business units hived off from a banking group’s “core” operations. Banks euphemistically dub these units “non-core,” “non-strategic” or a host of other names, steering investors away from considering them part of a bank’s future (and generating increasingly impenetrable earning reports in the process).
Iran and Iraq – at least theoretically – hold considerable reserves of crude oil and jointly have the potential to match Riyadh’s crude output capacity. The US’ EIA says that Saudi Arabia has a proven oil reserve of about 267 billion barrels, far ahead of Iran’s 151 billion barrels worth of reserves and Iraq’s 143 billion barrels of proven reserves. But combined, Iran and Iraq would have the capacity to possibly shift the balance of power, as this could challenge Riyadh’s capacity to stabilize the markets. And this carries ominous consequences too – for the global crude markets – some are now arguing.
A bill being debated in Brussels would force UK citizens to disclose ‘reams’ of private, financial information on a public register New legislation planned in Brussels is set to heap fresh costs and paperwork on families’ financial planning, as well as leaving their affairs open to unwanted public scrutiny. A European law is being drafted whose original aim was to prevent corporate money-laundering. The objective, supported by the UK, was to force companies to disclose on a register the money and other assets held inside trusts or equivalent legal arrangements.
Russia spent the end of last year battling the EU for control over Ukraine. But should the Kremlin have been paying more attention to what was going on its southern border instead? In the last three months, the Chinese have swept through Central and Eastern Europe (CEE) and Central Asia, buying up Russia’s backyard in a string of billion-dollar deals. However, instead of flying directly to Russia’s northern capital, President Xi went on a whirlwind tour of Central Asia. It was like a visit from Santa Claus as Xi distributed billions of dollars of deals along the way.
A surge in cocaine trafficking has transformed Guinea into West Africa’s latest drug hot spot, jeopardising President Alpha Conde’s efforts to rebuild state institutions after a military coup and attract billion of dollars in mining investment. Locals and Latin Americans long-accused of smuggling are operating freely in the country, some with high-level protection from within Conde’s administration. Counter-narcotics agents from the United States and other countries, meanwhile, concentrated on smugglers in neighbouring Guinea-Bissau, a tiny former Portuguese colony dubbed by crime experts Africa’s first “narco-state”.
Land-locked Laos is one of the poorest countries in the world, but it has one thing in abundance: access to the massive Mekong River. The country’s hydropower potential has earned it the nickname “the Battery of Asia” and made it a magnet for investment from its neighbors: Thailand, southeast Asia’s second-biggest economy; Vietnam, a strategic Communist ally since the 1970s; and China, which is writing checks that put the rest to shame. Guan Huabing, Beijing’s ambassador to Laos, announced today (Jan. 30) that China’s cumulative investment in Laos now stands at $5.1 billion, edging out Thailand and Vietnam.
The financial media was buzzing yesterday after a BoA/Merrill Lynch report called the Jan. 27 bailout of a 3 billion yuan ($465 million) investment product in danger of going bust a “Bear Stearns moment.” The report’s author, rates strategist Bin Gao, was referring to the US Federal Reserve’s Mar. 2008 rescue of the investment bank Bear Stearns, which had saddled itself with mortgage-backed securities. If you accept that analogy, the implication is that China’s “Lehman moment” —the equivalent collapse of a much larger bank or investment product—is nigh.
Iraq is poised to flood the oil market by tripling its capacity to pump crude by 2020 and is collaborating with Iran on strategy in a move that will challenge Saudi Arabia’s grip on the Organisation of Petroleum Exporting Countries. “We feel the world needs to be assured of fuel for economic growth,” Hussain al-Shahristani, Deputy Prime Minister for Energy in Iraq told oil industry delegates attending a Chatham House Middle East energy conference. Iraq’s intention to challenge Saudi Arabia’s status as the “swing producer” in the OPEC cartel could see a dramatic fall in oil prices if Baghdad decides to break the group’s quotas and sell more of its crude on the open market.
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system. “The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.” Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis.
The Chinese ambassador in the Belarusian capital in enjoying a special status. That’s because it’s unlikely any other country is prepared to make the kind of infrastructure investments here that China is planning. There are, for example, the Minsk International Airport, hidden behind the trees, and a highway that connects Minsk with Moscow in one direction and with Berlin in the other. High-speed rail is also planned, and there are rumors that 600,000 Chinese people will be migrating to Belarus. It’s not clear where the Chinese companies plan to market their wares, now that they will have a foothold just 300 kilometers from the EU and Russia.
A shockwave is looming in China’s multi trillion dollar “shadow banking” system, with an unprecedented default only days away on a $500 million investment product sold to hundreds of people. Staff at China’s biggest bank ICBC pushed the “Credit Equals Gold #1 Trust Product” by promising returns of 10 percent a year, far more than traditional deposits, investors say.The situation is a test case for cleaning up the risky “shadow banking” system in the world’s second-largest economy.
Britain could buy weapons from its former Cold War foe for the first time under a landmark defence treaty, the Telegraph can reveal. Defence chiefs are preparing to sign a deal that would see British defence companies working jointly on projects with the Russian arms industry. The treaty allows arms companies to buy kit from Russia – and Russian diplomatic sources said they hope one day to see British soldiers carrying the Red Army’s famous Kalashnikov rifle as a result. The deal covers ‘unclassified’ technology, so it is unlikely to allow co-operation on advanced battlefield equipment such as missile systems.
The peso sank 3.5 percent to a record low of 7.14 per dollar yesterday, according to Banco de la Nacion Argentina, and has plunged more than 25 percent in the past 12 months. That’s its worst selloff since the devaluation that followed the default. Currencies from only three countries in the world have fallen more: war-torn Syria, Iran and Venezuela. Power outages like the one that sunk Kanaza’s shop into darkness are becoming more frequent, deepening the economic slump, after the nation’s grid atrophied under a decade of government-set electricity price controls.
In homes and offices, many more people were frustrated in front of computers, not being able to gain access to their accounts because of server overloads. “It’s national chaos. The incident itself should never have occurred in the first place regardless of any excuses,” Lee said. The cardholders of three credit card firms hit hard by Korea’s largest financial data theft case rushed Tuesday to cancel or reissue their customers’ credit and debit cards. Some 20 million people had information stolen from KB Kookmin Card, NH NongHyup Card and Lotte Card.
Members of the Gas Exporting Countries Forum discussed setting up a common bank to finance joint investment projects, the new head of the group said. The bank was discussed at an earlier meeting of the 13-nation group and “has not been followed up recently,” Iran’s Mohammad Hossein Adeli said in interview today from the group’s headquarters in Qatar’s capital Doha. “The idea of helping each other in investment, in financing projects, and in long-term plans for investment is something that has already come up,” he said.
Untenable debt burdens, snowballing youth unemployment and water crises rank as leading concerns for global experts. The World Economic Forum released its ‘Global Risks 2014’ report after surveying 700 people, including top business leaders. It assessed 31 risks, but the following risks emerge as urgent threats for many people across the world in 2014: Advanced economies remain in danger of fiscal crises, sparked by extremely high debt burdens, rising interest rates and inflationary pressures.
The risk of Thailand defaulting on its debt is the highest since August as anti-government protests prompt money managers to sell the nation’s assets. The cost of protecting the nation’s debt soared after investors including Wells Fargo Inc. pulled more than $4 billion from Thai stocks and bonds since Oct. 31, as rallies clogged up Bangkok roads and clashes claimed eight lives. Pacific Investment Management Co., Goldman Sachs Group Inc. and Kokusai Asset Management Co. reduced debt holdings before protests first erupted in late October, regulatory filings show.
The Turkish currency plunged to a new low against the dollar Thursday as the government grappled with its worst crisis in years, sparked by a corruption probe targeting top political and business figures. The lira hit 2.20 to the dollar, extending a slide that has seen it lose nine percent of its value since the scandal erupted in mid-December, and over 20 percent since May. Although Prime Minister Recep Tayyip Erdogan has sought to curtail the probe, analysts are concerned the crisis could further savage Turkey’s economy.
The new year is only two weeks old and the loonie has already fallen 3.1%, making it the worst performing primary currency. The reasons for the decline are many. One is that the greenback has gained in value as the Federal Reserve starts to back away from its massive monthly bond purchases. But recent Canadian economic data has disappointed markets, particularly reports last week showing a rising trade deficit and December employment data showing the loss of 46,000 jobs. “People are starting to get the view the Bank of Canada is certainly not going to be raising rates, but might actually turn more dovish or even open the door to rate cuts,”
The British government has pledged that it will assume all U.K. government debt in the event Scotland votes for independence — a move meant to reassure markets ahead of what is likely to be heated campaign. The Treasury issued a paper Monday declaring that the “continuing” U.K. government will honour the contractual terms of the debt if Scotland votes to break away in a Sept. 18 referendum. And independent Scotland would still need to pay its “fair and proportionate share” of the U.K.’s outstanding stock of debt, the Treasury added.
Chile’s police special forces took the port of San Antonio by force yesterday to allow non-striking workers access to the San Antonio International Terminal. The move comes in response to strikes that began on Jan. 3 which have paralyzed trade from the major port, particularly for the fruit industry. San Antonio Port Workers Front (FTP) leader Julio Castillo said police had exercised excessive repression in the city to gain access. “A night of repression from the police special forces was experienced. People from STI don’t want to go to work but they are forced to,” Castillo was quoted as saying.
The troika of international lenders “held a gun to the head” of Cyprus and Portugal and showed little sympathy for social measures, an MEP looking into its work has said. “Both countries had very little room for manoeuvre in negotiating the terms of the bailouts. What they said basically was that ‘a gun was held to our head’, especially in Cyprus,” Juergen Klute, a left-wing German MEP, told this website. “And the troika had very little interest in social measures, they were only concerned about cutting back the deficit,” he added.
In 2007, Iceland was celebrated for attaining the world’s highest standard of living according to the U.N.’s annual Human Development Index report. In less than a decade, the tiny North Atlantic island had transformed from a traditional fishing and tourism-based economic backwater into a finance and banking powerhouse, rocketing the country’s wealth and living standards to enviable new heights. Sadly, Iceland’s economic boom was an illusion based on a reckless credit and asset bubble that led to a terrifying financial crisis when it popped in 2008.
The Japanese government has two to three years to curb expenditures or face a possible crisis, according to Robert Feldman, the head of Japan economic research at Morgan Stanley MUFG Securities Co. The government is doubling the nation’s 5 percent sales tax in two steps from this year, as a more than 4 percent jump in welfare expenditures and debt servicing costs next fiscal year is set to outpace revenue growth, according to the Ministry of Finance budget plan.
Somaliland, the self-declared sovereign state in the north of Somalia, is finalising a multi-million dollar deal to develop a port at Berbera, on the Gulf of Aden. “After six months of negotiations, an agreement has been put on the table, which is highly exciting, from one of the world’s best port operators,” says human rights lawyer Jason McCue, who is assembling investors for the $2.5bn logistics hub. “The moment is there for Somaliland.” McCue declined to comment on the exact size of the port investment, saying only that it would be “hundreds of millions” and the largest foreign direct investment in Somaliland’s 22 year history.
Militias in eastern Libya said this week they would sell oil from seized facilities to foreign companies and protect arriving tankers, leaving government officials scrambling to keep the country unified as multiple groups demand autonomy and threaten to pull the country apart. As Tripoli has steadily lost ground in certain quadrants of the country’s east, rebels have put the nation at risk economically. Libyan oil revenue is already down because of the capture of three port terminals in August. The insecurity in the east and the disruptions in Libyan oil exportation are putting the government in a precarious position.
The stakes could not be higher for China, the largest investor in South Sudan’s oil sector, as fierce fighting continues between forces loyal to President Salva Kiir and those of his former deputy. Some of the largest oil fields China operates are in areas controlled by fighters backing Riek Machar, the country’s vice-president until he was sacked in July. Oil production has already dropped by 20% since the onset of the conflict three weeks ago and more than 300 Chinese workers have been evacuated. The spectre of their Libyan experience also weighs heavily on the Chinese minds.
Although the garments are destined for the US, Europe and Japan, South Korean companies reap much of the financial gain, playing the role of middleman between laborers and Western brands. Korean-owned factories employ legions of low-wage workers, churning out clothing for fashion-hungry markets. Now, South Korea has emerged as a behind-the-scenes actor in the crackdown. The embassy admits that in recent weeks it has been running a backdoor campaign to protect Korean business interests. This campaign has included turning to the brutal and battle-hardened Cambodian military to implement security measures.
The idea of building private cities is a divisive one. Many of the country’s elite advanced the concept as something new to spur economic growth. The cities would facilitate foreign investment and development, which would reduce the influence of criminal networks. Those opposing the concept, however, variously rejected the proposition as a neoliberal gift to the rich, a continuation of oligarchic rule and a threat to democratic governance. These objections came in the context of economic policies that have exacerbated inequality, poverty and unemployment.
While the eurozone crisis in 2013 lingered in most countries, Germany seemed to be doing better than ever. It had low unemployment, high productivity and exports so strong that the European Commission asked it to do more to help ailing periphery countries in the single currency bloc. With Germany having to pay the lion’s share of any EU bailout, the German taxpayer stood and will continue to stay at the forefront of all policy decisions on the euro.The EU commission watered down a proposal to cap CO2 emissions and delayed its implementation until 2021 after Germany’s environment minister, with auto lobbyists snapping at his heels, said Nein.
Germany’s effort to making a show of military force in Africa are aimed not just at crisis resolution in conflict areas but also at promoting and marketing German weaponry. However, this effort is not independent from the French rivalry factor. When Germany achieved reunification in the 1990s, it began trying to play a more active role in the international arena. Germany’s interest in Africa has grown in recent years, in line with the continent’s increasing geo-economic and geopolitical importance. After the breakup of the Soviet Union, on the grounds of European Union integration, Germany based its Africa policy on those of the EU.
When the leaders of Mexico and China met last summer, there was much talk of the need to deepen trade between their nations. Down on Mexico’s Pacific coast, a drug gang was already making it a reality. The Knights Templar cartel, steadily diversifying into other businesses, became so successful at exporting iron ore to China that the Mexican Navy in November had to move in and take over the port in Lazaro Cardenas, a city that has become one of the gang’s main cash generators. This steelmaking center, drug smuggling hot spot and home of a rapidly growing container port in the western state of Michoacan occupies a strategic position on the Pacific coast, making it a natural gateway for burgeoning trade with China.
South America’s second largest country is under a state of emergency and teetering on martial law as a result of government inefficiency and Mother Nature joining forces. Power outages and water shortages are impacting thousands of individuals, with the young, infirm and elderly most at risk. The heat wave, which has averaged 38 degrees Celsius (100 degrees Fahrenheit), has caused some people to be without water or electricity for as long as fourteen days. Because of the aging water system, which has not been upgraded since the ’80s, water is unavailable during power outages when electricity cannot reach the pumps.
Saudi Arabia is giving the Lebanese army $3 billion in aid, Lebanon’s President Michel Suleiman said on Sunday, calling it the largest grant ever to the country’s armed forces. Some of the money was likely to be spent on weapons from France, Suleiman indicated in a televised address. One of the few institutions not overtaken by the sectarian divisions that plague the country, Lebanon’s army is ill-equipped to deal with internal militant groups, particularly the Shi’ite Muslim guerrilla and political movement Hezbollah. “His Highness suggested that weapons would be purchased from France, and quickly.”
Qatar and Morocco have signed an aid deal worth $1.25 billion, part of a five-year package of financial assistance extended by Gulf states to the North African kingdom to help it weather ‘Arab Spring’ protests. Four Gulf states — Qatar, Saudi Arabia, Kuwait and the UAE — agreed in 2012 to provide aid worth a total $5 billion to Morocco in the period 2012-2017 to build up its infrastructure, strengthen its economy and foster tourism. Each of the four countries has committed $1.25 billion to Morocco for the whole five year period. The aid is very welcome to King Mohamed — who signed the accord with the visiting emir of Qatar — as he seeks to quell social discontent.
Last year, for the first time ever, China ranked No. 1 in the world among nations expressing interest in buying U.S. firms, according to the U.S. Treasury. Meantime, while the U.S. military says its evolving Air-Sea Battle concept of waging war isn’t aimed at any specific nation, officers privately acknowledge that the key potential foe that falls within its crosshairs is China. A new private report pegs the cost developing of that capability at $524.5 billion through 2023. The Treasury Department requires foreign companies to notify the U.S. Treasury’s Committee on Foreign Investment in the U.S. (CFIUS) to assess what impact such sales might have on U.S. national security.
The Syrian government of President Bashar al-Assad has received substantial imports of Iraqi crude oil from an Egyptian port in the last nine months, shipping and payments documents show, part of an under-the-radar trade that has kept his military running despite Western sanctions. Assad’s government has been blacklisted by Western powers for its role in the two-and-a-half year civil war, forcing Damascus to rely on strategic ally Iran – itself the target of Western sanctions over its nuclear program – as its main supplier of crude oil.
Somaliland:A Special Paramilitary Unit known as the “oil protection unit” Formed to Guard oil installations
“The introduction of the special trained and equipped units whose mission is to guard and protect oil installations and Genel personnel in order to fulfill our shared aims”, stated the Energy minister. We shall work with our partners we shall embark on a major public awareness and engagement with the community and to establish a security protective force known (oil protection unit) as the to protect to ensure the safety of Genel employees while performing their job before any major operation begins.
China’s interbank lending rate has hit its highest level since June, despite regulators’ attempts to calm concerns over a potential cash crunch. The seven-day repurchase rate rose to as much as 9% on Friday, even though China’s central bank made an emergency capital injection the day before. The rate is a key gauge of how much is available in short-term funds for the country’s banks to lend to one another. The turmoil caused China’s benchmark stock index to fall by more than 2%. Chinese stocks have posted nine days of declines, amounting to their worst losing streak in nearly two decades.
Sources told The Express Tribune that a Pakistani delegation recently attended a meeting of the SCO in Moscow that formed the energy club. Under this forum, Pakistan is expected to get financing for gas import projects like the Iran-Pakistan pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline and LNG supplies to overcome the energy crisis. According to sources, all member countries of the energy club would give their inputs, which would be picked by donor nations for financial support.
Wang Jing, the Chinese billionaire behind the plan to build a waterway across Nicaragua to rival the Panama Canal, is on an international infrastructure binge.
While Ukraine digs itself deeper into political crisis, Beijing Interoceanic Canal Investment Management (BICIM) has been quietly getting on with business. The Wang-controlled BICIM has agreed to invest US$10 billion in the construction of a port and economic zone in Sevastopol, Ukraine’s second largest port. The Sevastopol deep water port will improve China’s shipping access to Europe, cutting thousands of kilometres off the Asia- Europe journey.
The Baku-Tbilisi-Kars railway, which is being built upon the initiative of Azerbaijan, Turkey and Georgia, is among the most important transportation projects in reviving the Silk Road on the Caspian Transit Corridor. The project would not only connect Azerbaijan and Turkey but also connect the Caucasus and Europe, Middle Asia and Europe and “at the end it could connect the East with Europe,” Osmanli said. Completion of the 826-kilometre railway is scheduled for 2014, and it will be able to transport 1 million passengers and 6.5 million tonnes of freight at the first stage.
France is pushing its European partners this week to create a fund to pay for overseas military interventions, like the operation France is leading in the Central African Republic. Other European governments aren’t too excited about the idea. The dispute exposes a divide between France, which has several military bases abroad and argues that Europe has a responsibility to former colonies in Africa, and countries like Germany that are wary in today’s economic times of intervening and spending taxpayer money abroad.
European finance ministers have reached the basis of an agreement to wind down failing banks and share the costs, Eurogroup President Jeroen Dijsselbloem told CNBC following a 16-hour marathon negotiating session in Brussels. The agreement is expected to begin with a Cyprus-style “bail-in” process in which major depositors in failing banks are tapped first in an effort to support the lender. Then, if more cash is needed, national resolution funds would be used. And if further funds are needed, these would be pooled from across the region over the next five to 10 years, forming the basis of a common fund.
“The rapid growth of both Indian and Chinese economies has led to increasing reliance on energy and raw materials transported by sea. This has focused sharp attention on the criticality, for both economies, of uninterrupted use of the sea-lanes for trade and energy transportation. Thus, while the PLA Navy makes forays into the Indian Ocean, the Indian Navy has newfound commitments in the South China Sea,” says former Indian Navy chief Admiral Arun Prakash on the dynamics at play.
Earlier in October, Putin stated strongly that Russia would never “surrender” its Arctic area. Indeed, Temp airfield located on Kotelny Island, the largest of Russian islands in Novosiberian region, is being reactivated. The airfield has been operational beginning in 1949 then, 20 years ago, its activity was suspended, and the infrastructures preserved for future use. Since then, Russian policy towards Arctic has become more aggressive and one of the elements of that policy is to reinstate the aforementioned airfield for Russian Air Force planes.
The EU intends utterly to eclipse Nato, backed by the two legally binding 2009 Defence Procurement Directives, which enhance the power of the European Defence Agency (EDA). This is becoming an embryo EU defence ministry. EDA’s statute enables decisions to be taken by majority voting, and where any single state can threaten a veto, a subset of member states can act unilaterally as a bloc in the name of the whole of the EU (so called “structure cooperation”). However, EU Defence is not so much about defence, as protectionism of Continental defence industrial interests, whose technology rather lags behind their US counterparts.
The Trans-Anatolian gas pipeline (TANAP) will have a huge impact on Europe if Turkmenistan and Iraq also become suppliers, energy expert and vice director of the Italian Institute for International Political Studies Paolo Magri told AA. When asked whether the recent deal between Iranians and the UN Security Council’s permanent members and Germany (P5+1 countries) will lead to Iran also becoming a TANAP supplier, Magri expressed it is too early to make assessments on the matter.“Iranian oil was extremely relevant to Europe. Sanctions are preventing us from importing. If Iran comes to back to the market, it will be a big support to these corridors,” he said.
Miriam Etter, a volunteer who runs the food bank, admits that many locals in the area are shocked to hear that some residents are in need of emergency food handouts. But it’s an evident and growing need for some people across the U.K. Based on unofficial data there are up to 600 food banks in the country, more than half of which are operated and run with the assistance of the charity the Trussell Trust, including the one at Westminster Chapel.The Trussell Trust says that there has been a 170% rise in the numbers turning to food banks for emergency provision in the last year.
The Chinese, investing heavily in Africa to secure its oil and other raw materials for their expanding economy, are spearheading a new era of railroad building to unlock the continent’s interior. This is an echo of the long-gone colonial empires when a century ago British and French engineers first opened up Africa to plunder its riches. The railroad frenzy is being accompanied by a massive push to build several major ports along the coast of East Africa to accelerate exports across the Indian Ocean, mostly to China, India and Japan, as well as lay down a network of oil and gas pipelines to these ports.