Emerging Markets Daily - May 13
Informal Sector Vital to Emerging World, S. Korea Goes Big on Semiconductors, Vietnamese Covid Vaccine, Ant Group in $3.4 B Quarterly Profit, Argentina's Debt, Pakistan Joins Amazon Seller List, More
The Top 5 Emerging Markets Stories from Global Media - May 13
Informal Sector Accounts for a Third of GDP and 70% of Employment in Emerging Countries
El Pais
“That the mantle of informality over the developing world is huge has been known for decades, but quantifying it is a daunting task that is only addressed from time to time. The World Bank…concludes that the informal sector accounts for about a third of GDP and more than 70% of total employment in emerging and developing countries, a heading which includes all of Africa and most of Asia and Latin America , as well as some nations of Eastern Europe.”
“The Washington-based organization itself describes the data as ‘surprising’ because of how high it is. And remember that the fact of having such an important fraction of the economy in a shadow area, outside the range of action of the States themselves - which cannot collect or regulate everything that is beyond their control - is highly correlated with lower development, as well as with high levels of poverty and inequality and with a - logically - worse governance.” Ignacio Fariza reports (In Spanish).
South Korea to Create World's Largest Chip Manufacturing Complex
Korea Times
“The government announced Thursday that it will help establish the world's largest semiconductor supply chain in Korea by 2030 in cooperation with firms in the private sector, including Samsung Electronics and SK hynix, to make the country a global leader in both memory and system chips.”
“To achieve this auspicious goal, the administration said it will provide huge tax incentives to companies constructing semiconductor facilities, after chip manufacturers vowed to invest more than 510 trillion won ($450 billion) for this and research and development (R&D) by the target year.” Baek Byung-yeul reports
Vietnamese COVID Vaccine Goes to Final Trial, as Hanoi Lags on Shots
Nikkei Asia
“Vietnam's first coronavirus vaccine candidate is headed for a final-stage trial, giving a country that has accepted no Chinese-made shots a chance to gain ground on Southeast Asian peers in inoculating its people.”
“Nanocovax, a recombinant protein vaccine made using animal cells, was developed by a startup called Nanogen Pharmaceutical Biotechnology in collaboration with Vietnam Military Medical University. The first-phase trial began in December, followed by the start of the second phase in late February.”
“…Vietnam could be the first member of the Association of Southeast Asian Nations to produce a vaccine domestically.” Tomoya Onishi reports
Jack Ma’s Ant Group Posts $3.4 Billion Quarterly Profit
Bloomberg
“Ant Group Co.’s profit rose to $3.4 billion in the December quarter after Chinese regulators thwarted its record initial public offering and told it to scale back its sprawling business.”
“Billionaire Jack Ma’s fintech giant contributed nearly 7.2 billion yuan to Alibaba Group Holding Ltd.’s earnings, a company filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to 21.8 billion yuan ($3.4 billion) in profit, up 50% from 14.5 billion yuan in the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.”
“The tally underscores the earnings powers Ant boasted before authorities demanded China’s largest fintech company fold its financial business into a holding company, curtailing its growth prospects. Regulators have issued a battery of proposals that threaten to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.” Lulu Yilun Chen reports.
Argentina Hopes to Buy Time on Looming Debt Payments
Financial Times
”As Argentina’s economy minister tries to convince wealthy countries to postpone a $2.4bn debt payment due on May 30, some investors worry his attempts to avoid yet another default are being undermined by a faction at home led by vice-president Cristina Fernández de Kirchner.”“Martin Guzmán, the 38-year-old finance minister, is touring several European capitals this week with President Alberto Fernández to appeal to members of the ‘Paris Club’ of 22 countries, which include the US, Japan, France and Germany, to delay its debt payment.”
“Investors fear that if an agreement with the Paris Club is not reached amicably, it could upset negotiations over a larger, more critical deal with the IMF to keep its notoriously loose finances in check.”
“Argentina had been expected to negotiate new repayment terms for the $44bn the IMF had lent it since 2018 shortly after it agreed a restructuring of $65bn in private debt in August.But now, IMF officials do not expect to reach an agreement with Argentina until after midterm elections in October, as the Peronist government’s populist instincts to increase spending ahead of the vote kicks in.” Benedict Mander reports.
What We’re Also Reading…
Mongolia’s Apocalyptic Sandstorms
bne IntelliNews
“In Mongolia, one trigger for the government to declare a disaster is a wind speed that exceeds 24 metres per second. This occurred in mid-March, when the country’s largest sandstorm in a decade struck. In Uvurkhangai, Bulgan and Umnugovi provinces the wind speed reached from 18 to 34 metres per second. The wind speed in Dundgovi province, was even higher, at 22 to 40 metres per second.”
“Other provinces, such as Govi-Altai, Bayankhongor, Arkhangai, Tuv, Khentii, Dornod, Sukhbaatar and Dornogovi experienced less severe, although still dangerous, storms with wind speeds of 16 to 28 metres per second. The storms left hundreds of people missing and claimed 10 confirmed casualties, including one child and nine adults. They also caused the loss of 1.6mn livestock.” Antonio Graceffo reports
Amazon Adds Pakistan to Its Approved Seller List
The News International (Pakistan)
“The US e-commerce giant Amazon decided to add Pakistan to its approved Seller’ List, Adviser to Prime Minister of Pakistan for Commerce and Investment Abdul Razak Dawood announced on Thursday.”
“Razak Dawood said it is a great opportunity for Pakistani youth, SMEs and women entrepreneurs. The adviser said that they have been engaged with Amazon since last year and now it’s happening.”
“Earlier, Special Assistant to Prime Minister on Political Affairs (SAPM) Shahbaz Gill said Amazon has added Pakistan to its approved seller list. Crediting the PTI government for the development, Prime Minister Imran Khan’s aide tweeted: ‘What could not be achieved during the last 10 years in the history of Pakistan, has finally been done by the present government.’”
“Gill said Pakistan has now joined the global market which will result in billions for the country in the form of investment and employment opportunities.” The News International reports.
For a daily round-up of top emerging markets stories, occasional thought leader interviews and the weekly Emerging World column…