The Great Debate UK
from The Great Debate:
A lot can happen in a year. This time last year, U.S. businesses and NGOs bemoaned the Obama administration's perceived indifference to Africa. Now, they’re trying to find out how to catch the wave of interest. Major new initiatives, including Power Africa and Trade Africa, unveiled during President Obama’s first true trip to Africa this summer, as well as a reinvigorated push to renew the African Growth and Opportunity Act fully two years before it's due to expire, have given U.S.-Africa watchers a lot to consider. But what -- and when -- is enough for U.S. policy in Africa? What more can be done in the year ahead? How do things really shake out for investors, civil society and Africans? Here are three additional areas the Administration should consider as it deepens its commitment to the continent:
1. Invest in Africa’s equity and commodity markets. Despite all the interest in Africa’s economic growth and investment potential, it’s still very hard to invest on the continent. Of its less than 30 stock markets, only a few exchanges really offer modern processes and back-end technology to facilitate daily transactions. As Todd Moss from the Center for Global Development notes in a recent paper, some African exchanges trade less in a whole year than New York does before “their first coffee break.” As a result, for institutional investors who need to take large positions or who have fiduciary requirements for daily liquidity, Africa remains almost entirely off-limits. In an era of algorithmic and high-speed trading, Africa’s antique market infrastructure is a major barrier to entry for much needed foreign direct investment.
Innovation is perhaps most evident in commodity exchanges. A number of projects in East Africa are taking off -- including the East Africa Exchange (EAX), a private initiative founded by Heirs Holdings, Berggruen Holdings and 50 Ventures, which was launched in January this year. The eponymous Eleni LLC, a consultancy focused on developing private exchanges, builds off the rapid success of Ethiopia’s commodity exchange and the work of Eleni Gabre-Madhin, its founder. Both efforts build the critical architecture necessary for productivity growth in economies that still remain predominantly agrarian.
2. Disrupt Dodd-Frank. Two obscure sections of the Dodd-Frank Act, 1502 and 1504, concern conflict minerals and transparency in Africa. Despite a lot of fanfare in their passing, Section 1502 has been pilloried by almost everyone since: NGOs, academics and the private sector. DF-1502 requires nearly all of the 5,994 publicly listed companies in the U.S. to scrutinize their supply chain and ensure they don’t contribute to the conflict in the Democratic Republic of Congo. According to estimates in a Tulane University study, the cost of implementing the DF-1502 is close to $8 billion. What’s more, no clear guidance exists for how to comply, so companies have mostly taken scattered shots in the dark hoping the Securities and Exchange Commission, the end regulator, takes notice. Section 1504, for its part, was remanded by a U.S. District judge in July and sent back to the SEC for further review. Even if well-meaning, the two sections impose unique challenges for investors on the continent, and as others have argued, risk exacerbating the problems they sought to solve.
from Hugo Dixon:
Rarely has a UK prime minister done so much damage to himself in a single week as David Cameron has with his mishandling of a vote authorising military action against Syria. Cameron may cling onto power after his stunning parliamentary defeat on Thursday night, but he will cut a diminished figure on the domestic and international stage. In the process, he has also damaged Britain’s influence.
Cameron’s litany of errors began with his decision to recall parliament from its summer holidays in order to give the green light to British participation in a military strike designed to punish Bashar al-Assad’s murderous regime for its alleged use of chemical weapons against its people last week. The decision to get parliament’s approval was right, even if not constitutionally necessary. The mistake was to rush things before all the evidence of Assad’s culpability had been gathered and published. In France, which is also contemplating military action, the parliamentary debate is scheduled for next week.
from David Rohde:
In an extraordinary series of disclosures this week, Obama administration officials said that the United States will launch only cruise missile strikes in Syria. The attacks will last roughly two or three days. And the administration’s goal will be to punish President Bashar al-Assad, not remove him from power.
But those clear efforts to placate opponents of military action appear to be failing. Warnings of “another Iraq” are fueling opposition to the use of force on both sides of the Atlantic. And the Obama administration’s contradictory record on secrecy is coming back to haunt it.
from The Great Debate:
When President Barack Obama delivers a speech at the Lincoln Memorial Wednesday, on the 50th anniversary of the March on Washington, he will inevitably be compared to Martin Luther King Jr., whose oration that day framed the moral purpose of the civil rights movement.
But there are huge differences between the prophetic icon and the political prodigy that reveal the competing and, at times, conflicting demands of the vocations they embraced. If we fail to understand the difference between the two, we will never appreciate the arc of their social aspiration -- or fairly measure King and Obama’s achievements.
We are at the stage of the financial cycle where central banks turn into circuses and central bankers become the circus performers. The market is transfixed by the show, watching every move and trying to anticipate what trick or shock will come next.
What is interesting about this particular circus is that the Ringmaster is about to leave, their replacement is turning into a whole new show of its own.
from The Great Debate:
In China, the political lens is focused on Bo Xilai, the disgraced former commerce minister and party chief of megalopolis Chongqing. While Bo’s contestation of the charges of bribery and abuse of power gripped the attention of the social media this week, Bo will probably not be a free man again and certainly not a public figure.
What the trial can’t undo is Bo’s legacy—which opened new channels for popular and elite dissent that is likely to haunt China’s new leadership.
–Amanda Jobbins is Group Chief Marketing Officer of The Sage Group. The opinions expressed are her own.–
Start-ups are hot on the business news agenda. Their importance to the UK, and the economic recovery, has been emphasised by the vocal support David Cameron’s government has repeatedly voiced for start-up initiatives. The decision to employ Facebook’s former Vice President Joanna Shields as CEO of Tech City is a clear demonstration of the government’s investment, while the Conservative Party launched its own ‘Start Up Hub’ competition in Manchester earlier this year, which provides entrepreneurs with an opportunity to showcase their ideas.
The new governor of the Bank of England has shaken things up at the Old Lady. Not only has he brought a touch of glamour to the Bank, he is considered a George Clooney look-alike by some, but he has dramatically altered the way that the Bank does things. Since he arrived a little over a month ago we’ve had statements released after meetings and now the Bank has adopted forward guidance.
But has this central banker with a twinkle in his eye run into a brick wall at the BOE? The forward guidance that he announced during the August Inflation Report went down like a lead balloon. The markets immediately challenged the Bank’s pledge to keep interest rates low until 2016, UK Gilt yields at one point rose to their highest level since before he joined as Governor, and the pound also jumped sharply.
from The Great Debate:
In the space of two years, ordinary Egyptian citizens have organized and led two revolutions that caused two distinct dictatorial regimes to fall. These were street-led revolutions against autocratic regimes that had the support of the U.S. and were thus seen to be invincible.
Although a large majority of Egyptians regard the two events as movements within a single revolution, they were very different in motive and structure, just as the two regimes differed radically from one another. The 2011 revolution, which brought down Hosni Mubarak, was led by the upper-middle class, who recognized the need for large-scale social change to address widespread unemployment, an ailing economy, and rampant political corruption. The more recent revolution was a movement for all, brought about by Mohamed Mursi’s government and its inability to address the root causes of discontent -- poverty, inequality, the decline of living standards -- and their focus, instead, on securing their own grip on power.
from The Great Debate:
Driven by its bailout loan terms, the Greek Parliament recently voted to lay off 25,000 more public employees. The public has responded with demonstrations while striking public sector workers try to disrupt air and rail travel, law enforcement and medical care.
How did Greece get to this point, where creditors dictate what jobs the government should cut as a condition for continued bailout loans, and where its outraged citizens take to the streets? What are the chances that Conservative Prime Minister Antonis Samaras’ newest plans to fire or cut salaries of thousands of government employees will work?