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Emerging Markets Daily - December 19
Shipping Costs to Rise Again in '22, Giant Rave in Saudi Desert Pushes Boundaries, Turkey's Scramble for Africa, Chile Elections, India's CEO's Bullish on Growth
The Top 5 Stories Shaping Emerging Markets from Global Media - December 19
Shipping and Logistics Costs Expected to Keep Rising in 2022
Wall Street Journal
“Companies are bracing for more steep increases in shipping and logistics prices next year after supply-chain costs soared in the scramble to move goods during the Covid-19 pandemic.”
“Transportation and logistics providers are seeking big boosts in prices for contracts for the coming year, signaling that the inflationary pressure driven by strong demand and tight capacity in freight markets is likely to persist.”
“With high shipping demand still far outweighing tight capacity across the freight sector, industry experts say transport operators have leverage to raise prices when negotiating new contracts. Ocean-shipping executives say they expect the rates set in many annual contracts will double compared with agreements struck earlier this year, before supply-chain bottlenecks squeezed capacity. Some trucking companies project double-digit growth in contract rates for 2022.”
“Prices have been rising across the freight sector, including in parcel delivery, trucking, ocean shipping and warehousing. Most freight-transportation contracts are negotiated annually, although many large shippers may have multiyear agreements with a variety of carriers. ‘I think folks are a little shell-shocked at the moment,’ said Todd Bulmash, a logistics executive and board member at the Council of Supply Chain Management Professionals. ‘They’re preparing for the worst.’” Wall Street Journal reports.
Feature: Giant Rave in Saudi Desert Pushes Boundaries
“The party in the Saudi desert looked like any other rave until the music stopped for the Islamic call to prayer, leaving attendees in ripped skinny jeans and combat boots to stand in silence.”
“Fifteen minutes later -- religious duties completed -- thousands of party-goers got back to business. Men and women danced with abandon in a country where that would have been unthinkable five years ago.”
“The electronic music festival in Saudi Arabia this weekend highlighted the changes catapulting through the conservative kingdom under its controversial crown prince, Mohammed bin Salman. In just a few years, the prince has lifted a ban on women driving, loosened gender segregation and defanged the religious police, who used to roam the streets punishing restaurants that played music.”
“In contrast, the four-day festival called MDL Beast Soundstorm was endorsed by the government and included performances by global DJs like Tiësto and Armin van Buuren. Organizers say more than 180,000 people attended the opening night, pushing boundaries as the kingdom transforms.”
“…the festival was part of a dizzying month in which Saudi Arabia hosted a Formula One race, two separate art biennials and a visit by French President Emmanuel Macron…At a recent international film festival in Jeddah, women strutted the red carpet in sleeveless gowns and an openly queer man, Adam Ali, won best actor. British supermodel Naomi Campbell was photographed sitting on the floor in front of a traditional Saudi meal, eating with her hands.”
“The scenes at the music festival were the most extreme of any yet. Women flaunted their style, wearing everything from skintight pants to full-length robes and face veils. Inebriated men stumbled through crowds perfumed with the distinct scent of marijuana, alongside a limited but notable display of local queer culture. Alcohol and homosexuality are still illegal in Saudi Arabia, but the event created a carnival-like atmosphere, opening the space to test limits.” Vivian Nereim reports.
Feature: Turkey’s Scramble for Africa Reinforced by Soft Power
Turkish soap operas growing in popularity across the continent
“Turkish President Recep Tayyip Erdogan was all smiles as he attended a town hall meeting with African youth in the capital Ankara this week. One after another, the students took to the microphone and showed off their fluent Turkish…”
“Erdogan has visited 30 African countries bearing gifts and infrastructure. Turkish Airlines is the largest non-African carrier on the continent, connecting many countries to Istanbul. Turkey's military drones are gaining popularity across the land as a means to boost hard power at low risk and low cost.”
“But there is also a soft power element to Ankara's growing influence in Africa. ‘Magnificent Century,’ a Turkish drama about the 10th Ottoman sultan Suleiman the Magnificent and his wife Hurrem, a former Ruthenian slave, has been airing five times a week in Uganda. ‘The Ottoman’ and ‘Brave and Beautiful’ are also hits among the Ugandan Turkish-drama fan base.”
“The encounter with the Turkish-speaking African students may have allowed Erdogan a respite from criticism over Turkey's surging inflation and crashing currency, triggered by his insistence on lowering interest rates.”
“He did not mince words with the students. Pointing to past colonialists, the president said: ‘They come from European countries and take away all your natural resources like gold, precious stones and take them to their country and leave nothing to you.’”
“The meeting took place on the sidelines of the three-day Turkey-Africa Partnership Summit, which wrapped up Saturday. Sixteen heads of state and more than 100 ministers came to Istanbul to attend, traveling amid the rise of the omicron coronavirus variant spreading across the world.”
“Trade between Turkey and Africa has increased nearly fivefold to $25 billion since 2003 and Turkish contractors have completed $78 billion worth of construction projects on the continent. Turkish floating power plants provide a substantial portion of the total electricity output of countries like Guinea Bissau, Sierra Leone, Gambia, Senegal and Sudan.”
“Erdogan has been attempting to elbow out former colonial powers like France and Portugal, frequently raising their colonial past in his speeches while suggesting Turkey is a benevolent actor. The Turkish president's strategy has put French President Emmanuel Macron on the defensive.” Nikkei Asia reports.
Chile Heads to Polls Under Shadow of Unrest
“Chile, hailed for decades as a model of economic success but reeling from two years of social unrest, will elect its next president later today in a bitterly fought race between extremes of the political spectrum.”
“Sunday’s run-off election, which most polls say is too close to call, pits ultra-conservative candidate José Antonio Kast against the former student union leader, Gabriel Boric. The winner takes office in March next year.”
“Ahead of polling day Chileans have been talking of little else. ‘It’s a transcendental election,’ Héctor Durán, a 38-year-old civil engineer from Santiago, the capital, told the Financial Times, with the two contenders offering diametrically opposed visions for the country’s future.”
“Kast, who secured a two point victory in the first round of voting on November 21, has campaigned on a platform of cracking down on crime while safeguarding free markets and traditional values. He has promised to dig a 3-metre-deep ditch across northern Chile to keep out migrants and defends the legacy of General Augusto Pinochet, whose dictatorship ended in 1990.”
“His opponent, Boric, is a bearded and tattooed 35-year-old who shot to fame a decade ago during street protests against inequality in education. Part of a coalition that includes the Chilean Communist party, Boric has vowed to scrap the private pension system and pledged a long list of reforms intended to empower women, indigenous groups and minorities…”
“December’s decisive leadership race comes as the Latin American country is still feeling the after-effects from an explosion of anti-government protests in October 2019, when troops were ordered back on to the streets to control crowds in one of the only times since the dictatorship.”
“The unrest, which alarmed Chileans used to decades of order and stability, was triggered by fare increases on the Santiago metro and quickly escalated into violent demonstrations over income inequality and high living costs.” The FT reports.
Indian CEOs Bullish on Growth in 2021/2 Fiscal Year
“The Confederation of Indian Industry (CII) in a release on Sunday said the Indian economy is likely to set for a strong rebound in the current fiscal posting a growth rate of 9-10%.”
“The trade association recently conducted a poll of around 100 CEOs among the members of the CII National Council. The survey found that despite a large number of CEOs polled appeared to be worried about the impact of the new covid variant Omnicron on services and the manufacturing sector, but they were confident that the Indian economy is all set for a strong rebound in the current fiscal.”
“The survey found that about 10% of the CEOs polled believe that the economic growth could even exceed 10% during 2021-22…The survey said, 55% of CEOs polled expect that the services sector would get adversely impacted due to the spread of the new Omicron variant, while another 34% indicated that it could adversely impact manufacturing activities.” LiveMint reports.
“Even if you are on the right track, you’ll get run over if you just sit there.”
― Will Rogers