Emerging Markets Daily - August 12
Vietnam's Big Digital Economy Plans, OPEC+ and the White House, China's Long-Term Regulatory Crackdown, Taliban Continues March, Peru Political Instability
The Top 5 Emerging Markets Stories from Global Media - August 12
Vietnam Announces Ambitious Digital Economy Goals
Bloomberg
“Vietnam, which has one of the smallest e-commerce markets in Southeast Asia, is in a hurry to catch up.”
“Hanoi wants the digital economy to represent 20% of Vietnam’s gross domestic product by 2025, the government website reported, citing a draft decision by the prime minister. The National Party Congress, which meets every five years, has set a target for the digital sector to make up 30% of GDP by 2030.”
“It’s an ambitious reach: Vietnam’s digital economy currently accounts for just 8.2% of GDP, the news website VietnamNet reported in July, citing a Ministry of Information and Communications official. Euromonitor International estimates e-commerce represented a mere 3% of Vietnam’s retail market last year, the smallest slice among Southeast Asia’s major economies.”
“Officials want 80% of the population to have online payment accounts by 2025, according to the government’s post. That’s also when they want half of e-commerce transactions -- many of which are still conducted in cash -- to go cashless.” Yuan Quynh Nguyen reports.
OPEC+ Can Resist White House Calls for More Oil Production as Gas Prices Drop
Arab News
“US President Joe Biden’s calls for OPEC+ to pump more oil may be short-lived as political pressure eases along with gasoline prices over the coming months. US gasoline prices rose 2.4 percent in July from the previous month, taking their 12-month advance to 41.8 percent, according to inflation data. The daily national average price at the pump was $3.19 on Aug. 11.”
“However, that price is set to decline by almost 12 percent to an average of $2.82 a gallon in the fourth quarter, according to US government forecasts. The continued progress of the Delta coronavirus variant could lead to further demand destruction and an even bigger drop.”
“Global oil demand is expected to grow slower than previously forecast this year and may lead to surplus supply in 2022 as the spread of the delta variant prompts lockdowns in major consuming countries, the International Energy Agency said Thursday.”
“Demand surged in June as mobility increased in North America and Europe. But it ‘abruptly reversed course’ in July as the Delta variant undermined deliveries in China, Indonesia and other parts of Asia, the IEA said in a monthly report.” Arab News reports.
China Signals Its Regulatory Crackdown Will Go On for Years
Bloomberg
“China released a five-year blueprint calling for greater regulation of vast parts of the economy, providing a sweeping framework for the broader crackdown on key industries that has left investors reeling.”
“The document, jointly issued late Wednesday by the State Council and the Communist Party’s Central Committee, said authorities would ‘actively’ work on legislation in areas including national security, technology and monopolies. Law enforcement will be strengthened in sectors ranging from food and drugs to big data and artificial intelligence, the document said.”
“…Investors have been seeking to make sense of a regulatory onslaught in recent weeks that has roiled markets, particularly after authorities banned profits in the $100 billion after-school tutoring sector. Over the past year Chinese authorities have launched anti-monopoly probes into some of the nation’s largest tech companies such as Alibaba Group Holding Ltd., while also mandating cybersecurity reviews for foreign listings -- a measure that has created problems for Didi Global Inc.” Bloomberg News reports
Speed of Taliban Advance Surprises Biden Administration, Dismays U.S. Allies
The Wall Street Journal
“When President Biden this spring announced the decision to withdraw U.S. forces from Afghanistan, his administration expected the Afghan military to defend key cities and perhaps battle the Taliban to a stalemate.”
“Before the current Taliban offensive, U.S. officials said they didn’t expect the takeover of any provincial capital until fall at the earliest.”
“Instead, a carefully planned strategy carried out by the Taliban has produced swift battlefield advances, allowing insurgents to seize a succession of provincial capitals since Friday. Three more fell Tuesday, bringing the total to nine, including several major cities.”
“The latest U.S. intelligence assessment said Kabul could fall to militants in as soon as a month, officials said. U.S. officials now worry that Afghan civilians, soldiers and others will flee the city ahead of a Taliban assault.” Vivian Salama, Nancy A. Youssef and Gordon Lubold report
Peru Political Instability Rising As Leftist President Takes Office
Washington Post
“At his swearing-in ceremony on the 200th anniversary of Peruvian independence last month, Peru’s first campesino president condemned the ‘racial regime’ imposed by the conquistadors that continues to divide Latin American societies today.”
“To hammer the point home, Pedro Castillo promised not to use the presidential residence, known as the ‘House of Pizarro’ after its founder, Francisco Pizarro, who led the subjugation of the Incas. The leftist president, a 51-year-old former schoolteacher from rural Peru, insisted it was time to ‘break with colonial symbols.’”
“But now, just two weeks into his historic presidency, Castillo’s inexperience, and his appointment to senior government positions of Marxist hard-liners, some implicated in criminality, have left this country that went through three presidents in one month last year once again on the brink of a political meltdown.”
“The chaos has sounded the starting gun on an existential battle between the executive and an antagonistic, conservative-dominated legislature, with increasing talk of either the impeachment of the president or the dissolution of congress.” Simeon Tegel reports.