Emerging Markets Daily - February 14
Russia Sees 'Way Forward' in Ukraine Talks, UAE-Turkey Deepen Ties, Iran Nuke Deal Stalls, India CB Calls for Crypto Ban (Again), Coffeetech Startups in SE Asia
The Top 5 Stories Shaping Emerging Markets From Global Media - February 14
Russia FM Sees “Way Forward'“ in Ukraine Talks, Lowering Tensions
Financial Times
“Russia has indicated that it is prepared to keep talking to the west about its security concerns, raising hopes it wants to de-escalate a crisis over Ukraine that has raised the prospect of a new war in Europe.”
“During a one-on-one televised meeting with President Vladimir Putin, Sergei Lavrov, Russia’s foreign minister, said diplomatic engagement with the west should continue and that he could see a way to move forward with talks.”
“Asked by Putin about the likelihood of a security agreement with the west over Ukraine and Nato, Lavrov said: ‘There’s always a chance.’ John Kirby, the Pentagon press secretary, said Lavrov’s comments ‘seem to indicate that [Putin] still thinks there’s oxygen here for diplomacy, we would welcome a pursuit of that path by the Russians’.”
“But he said that Putin was continuing to ‘advance his readiness’ and ‘could move with little to no warning.’ Olaf Scholz, the German chancellor who is due to meet Putin for talks in Tuesday in Moscow, also stressed on Monday that Ukrainian membership of Nato was ‘not on the agenda’ — a message that could be seen as an attempt to address Russia’s security concerns.”
“‘Alliance membership [for Ukraine] is practically not an issue,’ Scholz said after talks with President Volodymyr Zelensky in Kyiv. ‘And that’s why it’s a bit bizarre that the Russian government is turning something that’s really not on the agenda into a big political problem.’”
“Lavrov’s comments, in a carefully managed Kremlin setting, came after a number of western capitals warned that Russia could launch a full-blown invasion of Ukraine within days and urged their citizens to leave the country. Russia has denied it has any plans to invade.” The FT reports.
UAE, Turkey Seek Deeper Trade Ties as Erdogan Visits
Bloomberg
“Turkey and the United Arab Emirates said they would work on better trade ties and explore defense industry cooperation as President Recep Tayyip Erdogan visited the Gulf state on Monday, further putting aside a longtime regional rivalry.”
“Erdogan met with UAE de facto ruler Sheikh Mohammed Bin Zayed Al Nahyan in Abu Dhabi, the second meeting in three months, after years of hostility between the Middle East nations over the role of Islamist groups in the 2011 Arab Spring uprisings.”
“The sides signed 13 cooperation deals and will explore developing defense industry cooperation, Turkey’s state-run Anadolu Agency said, without giving details. The UAE, a small but influential oil-and-business powerhouse, signed a $4.9 billion currency swap with Turkey in January, and has outlined plans for a $10 billion fund to support investments as it seeks to at least double bilateral trade.”
“Non-oil trade between the two countries reached $13.7 billion in 2021, a 54% increase on 2020 and 86% increase on 2019, according to the UAE Economy Ministry. The UAE is confident that non-oil bilateral trade will exceed $30 billion within five years, the UAE’s minister of state for foreign trade Thani Al Zeyoudi said.”
“Catalyzing the recent thaw in relations is financial tumult in Turkey that’s sent Erdogan’s popularity plunging, and the growing challenge from Saudi Arabia to the UAE’s standing as a global business and financial hub.”
“The UAE has said it wants to benefit from Turkey’s logistical ties with the rest of the world, its investments in the industrial sector and its skilled labor.” Bloomberg reports.
Iran Nuke Deal Stalls as Tehran Urges US to Accept Terms
The Guardian
“Marathon talks to revive the Iran nuclear deal have hit a new roadblock, with Iran accusing the US of refusing to make the necessary political decisions to entrench the agreement in international law or to broaden the scope of economic sanctions that would be lifted.”
“The issue has dogged the talks in Vienna between the west, Russia, Iran and China – which have been under way since February – from the outset. There is no sign that the eighth round of negotiations, once intended to be the final round, has reached the breakthrough some had been expecting.”
“Ali Shamkhani, the hardline secretary of Iran’s national security council, in a tweet issued in multiple languages, declared after speaking to his government’s negotiators that progress was becoming ‘more and more difficult’.”
“The foreign ministry spokesperson, Saeed Khatibzadeh, at his weekly press conference tried to calm the atmosphere by saying he had spoken to Iran’s chief negotiator in Vienna, Ali Bagheri, and that he had been assured the position was ‘neither one of flowers and nightingales, nor one of rocks and thorns’. But, he added, the onus lay on the US to accept Iran’s terms.”
“…He added that all sanctions should be lifted at the UN security council…He stressed that any agreement on the release of political prisoners, including US dual-nationals held in Iranian jails, was discussed only in parallel with the nuclear talks.”
“Prof Mohammad Marandi, an Iranian analyst in Vienna thought to be close to the government, also claimed the tensions centred on the range of sanctions that would be lifted as part of the deal. Iran is pushing for all sanctions to be lifted, but the US says some sanctions are linked to human rights and terrorists abuses, and are not linked to the nuclear deal.” The Guardian reports.
India Central Bank Sharply Attacks Crypto (Again), Calling for Bans
The Times of India
“Making a strong case for banning cryptocurrencies, Reserve Bank deputy governor T Rabi Sankar on Monday said they are even worse than Ponzi schemes and threaten the financial sovereignty of a country.”
“Observing that crypto-technology is underpinned by a philosophy to evade government controls, he said they have been specifically developed to bypass the regulated financial system.”
“More substantially, he added, cryptocurrencies can wreck the currency system, monetary authority, banking system, and in general the government's ability to control the economy.”
"‘All these factors lead to the conclusion that banning is perhaps the most advisable choice open to India,’ Sankar said while delivering a keynote address at the Indian Banks Association 17th Annual Banking Technology Conference and Awards.” The Times of India reports.
Coffeetech Investments Giving Startups a Jolt
Rest of World
“On the side of a dusty Jakarta road, nestled in the corner of a gas station, might be the future of coffee.”
“Driving home, you might preorder a cup as you plan to refill the car, even before pulling up to the gas station. Open the Kopi Kenangan app, click on ‘preorder,’ and choose one — perhaps a mellow coffee with just a hint of acidity, creamy with milk. By the time you arrive at the station, the iced coffee, made by a human, will be sitting on the countertop, sweating in a plastic cup in the Jakarta humidity.”
‘Indonesian coffee chain Kopi Kenangan — ‘coffee memories’ in Bahasa Indonesia — did not set out to be a tech-powered coffee chain. It began to rely on technology to grow, banking that there were Indonesians who wanted accessibly priced coffee that was also high-quality.”
“‘We understood that, going into this space, we cannot follow the incumbents and that we have to do something different,’ said Kopi Kenangan co-founder and Chief Operating Officer James Prananto….”
“Southeast Asia is seeing the rise of companies like Kopi Kenangan: tech-powered coffee companies, colloquially known as ‘coffeetech,’ which span digital and physical experiences.”
“Across the region are about a dozen of these companies, which operate through apps that feature delivery, preorder service, discounts, and loyalty memberships and use internal technologies, such as cloud-powered heat maps, to help them build new physical locations.”
“The coffeetech wave mirrors the growth of local e-commerce, and a global return to the advantages of brick-and-mortar stores, even by giants such as Amazon. Kopi Kenangan and others are attempting to merge the customer-pleasing speed of online transactions with the immediacy of physical pickups.” Antonia Timmerman reports.
For more on coffee, see our column - Globalization in a Mug
Happy Valentines Day to all!
“Your task is not to seek for love, but merely to seek and find all the barriers within yourself that you have built against it.” — Rumi