Global News Journal

Beyond the World news headlines

Post card from Dubai

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This is one in a series of post cards by Reuters reporters across Europe, Middle East and Africa.

ENERGY
Oil prices determine the pace of prosperity. The oil-price boom 2002-2008 allowed countries to invest hundreds of billions of dollars in infrastructure and diversification. They also amassed billions in sovereign wealth funds, which has lifted their profile on the international stage. As oil prices recede, so does the pace of growth and wealth accumulation, although most states possess enough stored wealth to cushion the downturn.
RISK: Prolonged downturn topples GCC states’ ambitious plans.

TRANSPARENCY
Rulers or agendas can shift with little warning by decree overnight. Crises are resolved – or not — behind closed doors, leaving the beneficiaries and the victims uncertain. Who will benefit from Dubai’s rescue plan? Authorities say they will disburse the money in secret. The state’s central role in the economy means that foreign players can be left hanging when times turn tough while local cronies prosper. Major investment policies can shift unannounced. Compliance with reporting regulations is spotty. 
RISK: Investors may be badly surprised by moving targets, changing agendas and legal regimes.

FINANCIAL CRISIS
Few major risks here, relative to the developed world, with a few exceptions. The economies in Kuwait, Bahrain and the UAE will suffer but Saudi will chug along and Qatar will prosper.
RISK: Bank-systemic problems may dampen growth.

Post card from Russia

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This is one in a series of post cards from Reuters reporters across Europe, Middle East and Africa.

Who rules the world’s biggest energy producer? That’s the question that is bugging many people in Russia as the country’s two leaders – PM Vladimir Putin and President Dmitry Medvedev — try to cope with the worst economic crisis since the 1998 domestic debt default.

Post card from Ukraine

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This is one in a series of post cards from Reuters reporters across Europe, Middle East and Africa

Ukraine’s famous instability, verbose politicians and haphazard legislation present the investor – and the journalist – many red herrings. While talk of impeachment of President Viktor Yushchenko ring alarm bells, constitutionally it is nonsense. As CDSs go off the rails, Ukraine’s sovereign debt repayments are small and manageable. As Prime Minister Yulia Tymoshenko calls for the central bank governor’s blood, he is still at the helm. And while Yushchenko and Tymoshenko fight like Itchy and Scratchy, the country – to the amazement of some – has yet to collapse. 

Post card from Prague

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This is one in a series of post cards from Reuters correspondents across Europe, Middle East and Africa, recounting how the financial crisis is playing out in the capitals where they are based.

The Czechs appear to be riding out this crisis but it’s a matter of where you live.

Post card from Turkey

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This is part of a series of post cards from Reuters reporters from across Europe, Middle East and Africa.

Political risk is set to fall in Turkey if the government plays its cards right

Turkey’s ruling party posted its worst election result since 2002 in March local polls as voters penalised the AK Party and Prime Minister Tayyip Erdogan for failing to address a weakening economy, corruption allegations and a perception that the government was losing touch with voters. In a rare move, Erdogan, a tough politician who keeps tight control of levers of power in Turkey, admitted his party had underestimated the global crisis and promised to focus on the economy, including speeding up finalising a deal with the IMF. He also promised to reach out to the opposition over EU reforms. If he sticks to his promises, the economy will begin to improve, but probably not fully until 2010, and political risk will fall.

Post card from Lebanon

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This is one of a series of post cards by Reuters reporters looking at how the financial crisis is playing out for ordinary people across Europe, Middle East and Africa.

On an Easter break in south Lebanon with visitors from Britain, we see scores of election posters lining the highway ahead of the June 7 parliamentary poll — the first big test of stability here since a Qatari-brokered deal last year calmed an internal crisis that had dragged Lebanon towards renewed civil war. Vague slogans on the slickly produced adverts promise change, democracy, resistance (to Israel) and much else beside. But the election will change little. Power might shift a bit
between Lebanon’s dominant alliances — one backed by the West and Saudi Arabia, the other by Syria and Iran. But voters have scant choice as the sectarian power-sharing system allows party leaders to do deals that stitch up most seats in advance.

Indonesia: To hell and back

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By Dean Yates

(The author lived in Indonesia from 1992-1995 and 2000-2005, with various assignments in between)

It was not that long ago that Indonesia was lurching from crisis to crisis, even drawing some (misplaced) predictions it could go the way of the former Yugoslavia and break apart. These days it rarely makes the front page. It has a steady president in Susilo Bambang Yudhoyono, probably the freest press in Southeast Asia and political violence appears to be a thing of the past. The last major bomb attack blamed on Islamic militants was in 2005.

from MacroScope:

Stealing Steinbrueck’s show?

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Peer Steinbrueck, the front man in Germany's fight against the financial crisis, has a new challenge on his hands: Karl-Theodor zu Guttenberg. The young economy minister, in the job for only a month, is already proving to be a thorn in Finance Minister Steinbrueck's side. The telegenic 37-year-old is coming up with policy initiatives that challenge Steinbrueck's plans, and draw media attention away from him.

This is new territory for Steinbrueck. Until last month, he was able to capitalise on the low profile of former economy minister Michael Glos to make himself Germany's primary spokesman on matters financial and economic -- and the man Chancellor Angela Merkel turned to for leadership on these issues. Glos's shock resignation last month opened the way for Guttenberg to make the step up from Bavarian politics to the national stage, and he hasn't looked back.

Location still counts in central and eastern Europe

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Poles and Czechs, their economies still relatively robust  despite global recession, are up in arms about what they see as international investors’ tendency to tar them with the same brush as their more troubled neighbours such as Hungary, Ukraine and Latvia.

But if history is any guide, investors are unlikely to be impressed, at least in the shorter term.

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