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Emerging Markets Daily - May 2
Suez Block Still Hits Shipping, Turkey's TAV Takes Over Almaty Hub, Inside Saudi Arabia's NEOM, New Agriculture Finance for Africa, White House Debates Vaccines for World, Cosmopolitan Baghdad + more
The Top 5 Emerging Market Stories from Global Media - May 2
Ever Given's Suez Canal Blockage Still Disrupting Global Shipping
“Global shipping is still suffering ramifications a month after the giant Ever Given container ship ran aground in Egypt's Suez Canal and blocked the key waterway for about a week.”
“Ports across the world are still clearing cargo logjams from March 23 when the ship first got stuck in the main shipping route between East and West. But even before the accident, global shipping was already facing disruptions caused by the COVID-19 pandemic.”
“Since Ever Given's problems in the Suez Canal late March, container freight rates have surged more than 10% to a new high. This has forced companies to resort to airfreight which is substantially more expensive and rail transportation which is considerably slower. As such, global supply chains are still snarled up.” Kazuto Shimada and Takeshi Kumon report
Prominent Turkish Airport Operator To Run Almaty Aviation Hub
Hurriet Daily News
“Prominent Turkish airport operator TAV Airports has taken over operations at AlmatyAirport, Kazakhstan’s main and busiest aviation hub. The airport’s capacity will be doubled with a $200 million investment to build a new international terminal, the operator said in a statement on April 30.”
“The investment is planned to be completed in less than three years. TAV is now 85 percent beneficial owner of Almaty Airport and associated fuel and catering businesses, while the Kazakhstan Infrastructure Fund, managed by VPE Capital and backed by Kazyna Capital Management, holds the remaining 15 percent stake, it noted.”
“Almaty is the first airport in TAV’s portfolio where the company owns the airport instead of a time-limited concession as well as the 15th in its global network in nine countries…”
“The southeastern province of Almaty – the country’s former capital city – is a strategic junction along China’s massive One Belt One Road project set to build trade routes with West Asia, Europe, and Africa.”
“Before the pandemic, Almaty was a major regional transportation hub for 26 passenger and 8 cargo airlines serving multiple destinations. Air Astana provided almost half of the passenger traffic while Turkish Airlines led in cargo.” Hurriet Daily News reports.
Saudi Crown Prince’s Vision for Neom, a Desert City-State, Tests His Builders
Wall Street Journal
“If Saudi Crown Prince Mohammed bin Salman realizes his dream, a $500 billion city-state dubbed Neom will one day rise from the desert, transforming Saudi Arabia by drawing billions of dollars in new investment as the kingdom attempts to reduce its dependence on oil before its crude reserves run dry.”
“So far, he has had limited success. Total investment inflows to Saudi Arabia were about $5.4 billion last year, up almost a billion dollars over 2019, despite the pandemic, but lower than the $16 billion a year a decade ago.”
“The plans for Neom are far grander. The latest vision centers around a 106-mile-long carbon-neutral project called the Line, a linear city connected by a high-speed train, with no cars.”
“Four other developments—called Neom Bay, Aqaba Region, Neom Mountain and Neom Industrial City—are intended to surround it, and include the project to build a resort in a mountainside known as the Vault. The hope is for Neom to have 14 industrial sectors, including energy, food production and media, among others.”
“To punctuate the Line’s skyscape, the project’s developers are now examining the feasibility of a massive skyscraper. According to plans seen by the Journal, the structure could soar 1,600 feet into the air, higher than the Empire State Building, and have a width of 55 miles, four times the length of Manhattan.” Rory Jones, Summer Said and Stephen Kalin report
MDB’s Pledge More than $17 Billion in Agriculture Financing for Africa
New Business (Ethiopia)
“A coalition of multilateral development banks and development partners has pledged over $17 billion in financing on Friday during a high-level forum, in a bold bid to address rising hunger on the African continent and to improve food security.”
“Funds were pledged on the final day of a two-day high-level dialogue – Feeding Africa: leadership to scale up successful innovations. The event was hosted by the Africa Development Bank and the UN International Fund for Agricultural Development (IFAD), in partnership with the Forum for Agricultural Research in Africa (FARA) and the CGIAR System Organization, on 29 and 30 April.”
“In addition, 17 African heads of state signed on to the commitment to boost agricultural production by doubling current productivity levels through the scaling up of agro-technologies, investing in access to markets, and promoting agricultural research and development.” New Business Ethiopia reports.
White House Debates How to Vaccinate the World
“A high-stakes fight over drug companies’ response to the coronavirus pandemic has split the Biden administration, with activists and progressives urging the White House to back an international petition to waive the companies’ patents — and some senior officials privately signaling they’re open to the idea.”
“The debate has reignited decades-old tensions in global health, pitting such influential figures as Pope Francis, who backs the patent-waiver proposal, against philanthropist Bill Gates, who’s opposed. It has also challenged U.S. officials who have prioritized this nation’s coronavirus response but know that the virus’s continued spread and mutation overseas will eventually pose risks to Americans.”
“The proposal was discussed last week byAnthony S. Fauci, a top coronavirus adviser to President Biden, and Katherine Tai, the U.S. trade representative, who spoke about ways to help the developing world as it reels from a worsening crisis.” Dan Diamond and Jeff Stein report.
Cosmopolitanism, Cultural Crossroads and The Jews of Baghdad
We noted earlier that the book by Jonathan Kaufman, The Last Kings of Shanghai: The Rival Jewish Dynasties That Helped Create Modern China, was on our reading list. An excerpt below that caught our eye:
“Jews had always lived at the margin of society in Europe. But for more than a thousand years, Jews had flourished in Baghdad, known in the Bible as Babylon. More than any city in Europe, more than Jerusalem, Baghdad was a crossroads of cultures from AD 70 to the 1400s. When Europe was mired in the darkness of the Middle Ages, Baghdad was one of the most cosmopolitan cities in the world. It was home to some of the world’s leading mathematicians, theologians, poets, and doctors. Raw wool, copper, and spices traveled along caravan routes across the desert. Pearls and silverware filled the bazaars. Merchants, doctors, and artists gathered in Baghdad’s coffeehouses…Within this world, Jews flourished.”
Big Tech Getting Bigger - 1Q Results Soar to New Heights
$322 Billion - The combined first quarter revenue of Alphabet, Amazon, Apple, Facebook, and Microsoft. This is roughly equivalent to the annual GDP of Egypt, Bangladesh, or Chile.
$75 Billion - After tax first quarter earnings of the five tech companies noted above. This is roughly equivalent to the GDP of Oman, Panama, or Ghana.
Notable Quotable - Myanmar Poverty Rising
“The study we’ve done projects that half the population [of Myanmar] is going to be living in poverty by early next year,” said Kanni Wignaraja, the UNDP’s Asia-Pacific regional director. “That’s a doubling of the pre-pandemic levels of poor.” Source: Financial Times
What We’re Also Reading…from Global Media
Vietnam's First Unicorn Bets on AI and Overseas Growth
“Khai is executive vice president at VNG, a gaming startup-turned-tech conglomerate that has become Vietnam's first unicorn. The Columbia-educated computer scientist also heads Zalo AI, the VNG division that developed Kiki, which he was keen to showcase.”
"‘If we don't keep up with the next wave, we could become irrelevant,’ he said.”
“Over the past decade and a half, VNG has diversified into cloud computing, ads, digital payments and media, and built up one of the biggest digital user bases in the country.” Lien Hoang reports
Live-Streamers Flock to Eastern China’s Ecommerce Hub
South China Morning Post
“The bustling, sleepless village of Beixiazhu, located in the manufacturing hub of Yiwu in Zhejiang province, has quickly transformed its traditional export-oriented industry into a live-streaming e-commerce La La Land. Since the pandemic upended the lives of exporters in the city, many have turned to live streaming in pursuit of new opportunities and wealth. Yiwu, a county-level city with a population of 1.2 million, now has about 60,000 people working in live-streaming e-commerce, according to local government data.” Tracy Qu reports
Inside India’s “Darkest Moments” in Devastating Covid Surge
“India is in the throes of one of its darkest moments since independence as a catastrophic second Covid-19 wave tears through it with dizzying speed. The country recorded an all-time high of more than 386,000 new infections on Thursday, along with more than 3,500 deaths.”
“Most experts say the actual number of fatalities is far higher. Prime minister Narendra Modi and his government have been accused of exacerbating the crisis by failing to prepare after a sharp drop in cases led to claims the country was in the ‘endgame’ of the pandemic.”
“The latest surge has surpassed anything endured since Covid-19 first struck. It has cut across the country’s many social, economic and geographic divides, affecting both rich and poor in rural and urban areas. The turmoil has been intensified by a crippling shortage of life-saving supplies such as oxygen as well as new Covid-19 variants. New lockdowns are also threatening to derail the recovery of what had been the world’s fastest-growing large economy.” Benjamin Parkin, Jyotsna Singh and Andrea Rodrigues report.
Delhi Lockdown Continues One More Week
“Amid rising COVID-19 cases in Delhi, Chief Minister Arvind Kejriwal on Saturday announced extension of the ongoing lockdown in the national capital by another week. "Lockdown in Delhi is being extended by one week," Kejriwal said in a tweet.”
”The ongoing lockdown that was scheduled to conclude at 5 am on May 3, now stands extended for another week.” Economic Times reports.
Cash-Strapped Tunisia Seeks IMF Assistance
North Africa Post
“Tunisia has officially asked the IMF for a new program to back up the economic reforms to alleviate the strain on public finances. The Tunisian government agreed an economic reform package with powerful labor union UGTT at the end of last month that tackles subsidies, taxes and state firms, and which was seen as opening the way for an agreement with the IMF for financial support, Reuters reported.”
“Reforms should also ‘tackle decisively’ the issue of public finances and debt and a restructuring of subsidies, public firms and the public wage bill, the IMF said. The IMF added that it would send its experts to conduct talks with Tunisia when it receives more information about the reform program.”
“Tunisia’s economy contracted by 8.8% last year as the pandemic hit the vital tourism sector. This year the economy is expected to grow by 3.8%. according to IMF estimates. Tunisia also struggles with a surge in its budget deficit that stood at 11.5% in 2020 when the country received $750 million emergency assistance from the IMF.” North Africa Post reports.
The Rich Find Haven in Dubai, and Luxury Home-Sale Boom Ensues
“The wealthiest home buyers fleeing virus lockdowns for Dubai are still finding bargains aplenty, turning March into the busiest month ever for the emirate’s top-end residential properties.”
“The luxury end of the market has come alive in a city that became a haven for wealthy Europeans escaping repeated lockdowns at home and for others drawn by the ease of getting vaccinated from Covid-19.”
“The United Arab Emirates, of which Dubai is a part, introduced new visas for tourists and approved a new remote work visa that enables employees from all over the world to live and operate from the UAE. Buying a property is also one of the fastest ways of getting a residency permit in Dubai.” Zainab Fattah reports