Here is a great article on the appeal – and the risks – to investors in frontier markets. The article makes the critical point that the frontier markets universe extends far beyond the 25 countries included in the MSCI Frontier Markets Index. This means, though, that getting into these markets is likely to be more challenging, especially for individual investors, since many of the most attractive opportunities are likely to be in non-listed companies, whether through direct investment or over-the-counter share purchases
By Helen Burnett-Nichols, Reposted from Fundweb
Frontier markets, such as those in Africa, Asia and the Middle East, offer opportunities and an alternative investment universe as economies grow and systems stabilise, writes Helen Burnett-Nichols.While compelling growth stories abound in the world’s frontier investment markets, uncertainty around rapidly evolving political situations as well as ongoing corporate governance and liquidity problem seem to be keeping some investors on the sidelines.
Often characterised by having some form of political or macroeconomic risk or under-developed capital markets, it appears the frontiers space may be losing out to perceived safer options elsewhere in the world, following a number of periods of volatility over the last 18 months.
If existing parallels between the U.S. experience in Indochina and our current entanglement in Afghanistan weren’t already enough, the Afghanistan war (Operation Enduring Freedom) now has its own version of the My Lai massacre. The only surprise is that nothing like the Sunday murder of 16 Afghan civilians by a U.S. Army Staff Sergeant had previously occurred in 10 years of fighting.
For all his campaign promises to close the Guantanamo Bay prison and end our military adventures in Iraq and Afghanistan, Barack Obama has pursued a course almost indistinguishable from that of George W. Bush. But of late, he has started to sound more like Richard Nixon. In a speech he gave yesterday in the Rose Garden, the President said, “So make no mistake, we have a strategy that will allow us to responsibly wind down this war. We’re steadily transitioning to the Afghans who are moving into the lead, and that’s going to allow us to bring our troops home…And meanwhile, we will continue the work of devastating Al Qaeda’s leadership and denying them a safe haven…I am confident that we can continue the work of meeting our objectives, protecting our country and responsibly bringing this war to a close.” This sounds eerily like Nixon’s “peace with honor” and “Vietnamization of the war.”
It can’t be long before we are treated to images of American diplomats being helicoptered out of the U.S. Embassy in Kabul as the Taliban move into the city. In 1972 we brought our troops home from Vietnam, under the pretext that the Vietnamese – and the Cambodians as well – could now shoulder the responsibility for their own defense. It took another three years before the Khmer Rouge and the North Vietnamese Army seized Phnom Penh and Saigon, respectively during which corrupt governments in both countries, rather than trying to defend their people, engaged in an unseemly scramble to amass as much loot as they could before the party ended.
The Karzai government is easily the equal of Lon Nol’s Cambodian regime when it comes to incompetence and corruption, while the Afghan Army is, if anything, less capable than its historic Southeast Asian counterparts, and also infested with Taliban sympathizers. Once NATO forces withdraw, I suspect it will take far less than three years for the Taliban to take over. Tragically, that might be the best possible outcome, the worst being a return to all-out civil war between north and south.
It is time for us to leave. Now.
The Economist has just launched a new online debate on the proposition that “creating green jobs is a sensible aspiration for governments.” Van Jones, President Obama’s former special adviser on green jobs, argues in favor; Andrew P. Morriss, a Professor of Law and Business at the University of Illinois law school, presents the counter-argument. The real debate over green jobs programs is whether they really create new jobs or simply divert jobs from existing industries to new ones, and whether the social and economic benefits of creating these jobs outweigh the cost. Here is my contribution to the debate: [click to continue…]
When I see the decisions the U.S. Government, the European Union and others have recently taken with respect to international trade, I feel like the Claude Rains character in the classic film Casablanca, who says “I am shocked - Shocked! – to find gambling going on in this establishment,” just as one of the casino employees hands him his cut of the evening’s take.
Days after President Obama imposed a 35% duty on low-end tires imported from China comes the news that the European Union has just hit imports of steel pipe from China with a 40% anti-dumping tariff. This was ground-breaking in its own way. Normally, companies need to demonstrate lost sales attributable to the alleged dumping before their governments will raise duties, but in the words of Georg Berrisch of Covington & Burling, the law firm representing the European steel pipe producers, “The case shows that industries must not necessarily wait for injury to occur…to take measures against an onslaught of dumped Chinese imports.” This sounds very much like George W. Bush’s justification for invading Iraq. [click to continue…]