Emerging Markets Daily - March 28
Brazil Covid Variant Poses New Global Risk, Progress in Suez Ship Crisis, US Fears China Plans Taiwan Seizure, WB Sees Indonesia Growth at 4.4%, Kenya Airways Posts Historic Loss
The Top 5 Emerging Markets Stories from Global Media - March 28
Brazil Covid-19 Variant Poses Global Public Health Risk
“Brazil is in the throes of a battle against the new Covid-19 variant from the Amazon that threatens to send shock waves across the globe.”
“Home to less than 3% of the world’s population, Brazil currently accounts for almost a third of the daily global deaths from Covid-19, driven by the new variant More than 300,000 have died, and daily deaths now top 3,000, a toll suffered only by the far more populous U.S…”
“The spread of the virus in Brazil threatens to turn this country of 213 million into a global public-health hazard. The so-called P.1 strain, present in more than 20 countries and identified in New York last week, is up to 2.2 times more contagious and as much as 61% more able to reinfect people than previous versions of the coronavirus, according to a recent study.”
“The P.1 is now responsible for the majority of new infections in Brazil, with many doctors here saying they are seeing more young and otherwise healthy patients falling ill. About 30% of people dying from Covid-19 are now under 60, compared with an average of about 26% during Brazil’s previous peak between June and August, according to official figures analyzed by The Wall Street Journal.”
“Public health researchers warn this isn’t just Brazil’s crisis, pointing to what they say is widespread complacency in the U.S. and elsewhere over the risks stemming from Latin America and other unvaccinated swaths of the globe. Brazil has fully vaccinated only 1.8% of its population.”
“‘There is a rush to declare this pandemic is over, and it’s not,’ said William Hanage, a Harvard University epidemiologist. ‘I dread to think what will happen when P.1 manages to get to [places] that are not likely to get vaccinated for quite some time.’” The Wall Street Journal reports.
Signs of Progress In Dislodging Stuck Ship From Suez Canal
“Officials reported steady progress in dislodging the giant cargo ship blocking the crucial maritime route. The rudder is now clear of mud and dirt, and a full moon will raise the tides. But many challenges remain.”
“With the costs of the closure of one of the world’s most vital maritime arteries growing by the day, salvage teams hoped on Sunday to take advantage of the full moon and swelling tides to dislodge the giant cargo ship stuck in the Suez Canal.”
“Late Saturday, tugboat drivers sounded their horns in celebration of the most visible sign of progress since the ship ran aground late Tuesday. The 220,000-ton ship moved. It did not go far — just two degrees, or about 100 feet, according to shipping officials. That came on top of progress from Friday, when canal officials said dredgers had managed to dig out the rear of the ship, freeing its rudder…”
“Lt. Gen. Osama Rabie, the chairman of the Suez Canal Authority, said that water had started running underneath the vessel. ‘We expect that at any time the ship could slide and move from the spot it is in,’ he told a news conference on Saturday.” The New York Times reports.
Meanwhile, Twitter’s most famous Suez chronicler, “Guy With the Digger at Suez Canal,” reports this below:
Geopolitics: US Fears China Flirting With Taiwan Seizure
“The US is concerned that China is flirting with the idea of seizing control of Taiwan as President Xi Jinping becomes more willing to take risks to boost his legacy.”
“‘China appears to be moving from a period of being content with the status quo over Taiwan to a period in which they are more impatient and more prepared to test the limits and flirt with the idea of unification,’ a senior US official told the Financial Times. The official said the Biden administration had reached the conclusion after assessing Chinese behaviour during the past two months. “
“‘As we prepare for a period in which Xi Jinping will likely be entering his third term, there’s concern that he sees capstone progress on Taiwan as important to his legitimacy and legacy,’ the official added. ‘It seems that he is prepared to take more risks.’”
“Twenty Chinese warplanes flew into Taiwan’s air defence zone on Friday, marking its biggest incursion. It came one day after the US and Taiwan agreed to boost co-operation between their coast guards. The rising alarm in the Biden administration matches a warning from Admiral Philip Davidson, head of US Indo-Pacific command, who told senators China could take military action ‘in the next six years.’”
“Admiral John Aquilino, who is scheduled to succeed Davidson, this week told Congress that there was a wide range of forecasts but ‘my opinion is this problem is much closer to us than most think.’ Aquilino said China had taken other ‘aggressive actions,’ including clashes with India on their border that suggested it was emboldened.” The Financial Times reports.
World Bank Sees 2021 Indonesia GDP Growth At 4.4%
“The World Bank has maintained its forecast for Indonesia’s gross domestic product (GDP) growth for this year as the country lags behind some Asian economies in containing COVID-19 and in trading manufactured goods.”
“In its March outlook, the Washington-based lender projects Indonesia’s GDP to grow 4.4 percent this year, an unchanged figure from its December outlook. The forecast stands at the same level as the average growth expected for the East Asia and the Pacific (EAP) region, excluding China and Vietnam.”
“‘Indonesia chose not to fight hard the disease by hurting livelihoods,’ World Bank EAP chief economist Aaditya Mattoo told The Jakarta Post in a video interview on Thursday. ‘In a way, it had a more accommodative approach to the disease, which made the economic distress in the short run less a shock than in the Philippines, but the long-term prospects were correspondingly less promising than those in Vietnam.”
“The bank noted that Indonesia had also failed to capture the revival of global trade in manufactured goods, such as electronics, when compared to its neighbors. Instead, the country’s recovery is poised to ride on recovering commodity prices such as coal and palm oil.”
“The World Bank adds to a list of multilateral organizations that forecast Indonesia to achieve a near-economic recovery in 2021 as its GDP grows above 4 percent, reversing the 2.07 percent contraction last year, but short of the 5 percent growth it enjoyed in the decade before COVID-19 struck the global economy.” The Jakarta Post reports.
Kenya Airways Reports Worst Ever Net Loss, Down $330 Million
“Kenya Airways (KQ) net loss has nearly tripled to Ksh36.2 billion (about $330 million), the worst ever in the history of the airline, on account of Covid-19 disruptions that led to a sharp decline in passenger numbers.”
“The loss, for the financial year ended December 2020, is 2.8 times more than the Ksh12.98 billion ($118 million) net loss it had posted a year earlier, and now deals a major blow to the recovery efforts of the national carrier.”
“KQ chairman Michael Joseph says the outlook still looks bleak and the airline will be seeking a right-sized network to match the prevailing demand. ‘The Covid-19 global outbreak in 2020 was beyond anyone’s prediction and its impact on the industry is expected to continue affecting air travel demand for the next two to three years,’ said Mr Joseph. KQ’s loss, also the worst ever results in corporate Kenya, came on the back of strict Covid-19 control measures across the globe that crushed demand for air travel.” The East African reports.
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Suez Canal By the Numbers
1869 - The Year the Canal Was Completed
1956 - The Year that Egypt Nationalized It, Prompting Invasion By UK, France and Israel
$9.6B - Value of goods per day held up by the blockage
220,000 - The total tonnage of the lodged ship, the Ever Given
10% - percentage of seaborne trade that passes through the Canal
10% - percentage of seaborne oil that passes through the Canal
1.6 million - the number of seafarers engaged in global shipping trade
Source: FT, Lloyd’s List
