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Emerging Markets Daily - November 8
Peronists Face Voter Anger in Argentina, Abu Dhabi Unveils New Fund, Rebels Advance on Addis Ababa, China 6th Plenary Cements Xi Power, Kuwait Gov't Resigns
The Top 5 Stories Shaping Emerging Markets from Global Media - November 8
‘There’s no future in Argentina’: Peronists Face Voter Anger in Upcoming Polls
“Silvia Ramírez, a 62-year-old pensioner in Buenos Aires, has started working again because her pension has been ‘crushed’ by inflation, but she still struggles to cover even basic costs as prices keep spiralling higher. ‘There’s no future in Argentina,’ she said. ‘No future for those like me who want to fully retire, and no future for youngsters.’”
“Ramírez plans to vote against the ruling Peronist party in midterm congressional elections on Sunday, part of a wave of popular anger over the leftwing government’s handling of the economy and the coronavirus pandemic.”
“Polls show the centre-right opposition alliance is about 10 percentage points ahead, a result that could cost Alberto Fernández, the country’s Peronist president, his majority in the Senate. Half the seats in the lower house of Congress are up for election, along with a third of the Senate.”
“A serious defeat at the midterms could turn Fernández into a lame-duck leader for the rest of his mandate and position the opposition to win back the presidency in 2023. Fernández imposed one of Latin America’s longest Covid-19 lockdowns, which crushed the economy but failed to prevent a death toll almost as bad as neighbouring Brazil’s, when adjusted for population size.”
“Photographs showing him flouting regulations by hosting a birthday party for his partner at the presidential residence at the height of the lockdown infuriated Argentines. Delays in procuring vaccines and a scandal over well-connected Peronists jumping the queue for jabs made matters worse.”
“Juan Germano of the polling consultancy Isonomía said his latest survey showed Fernández’s approval rating had sunk to 33 per cent, with his more radical vice-president Cristina Fernández de Kirchner even lower on 31 per cent...”
“Inflation was 52.5 per cent in the year to September, one of the highest rates in the world, and economists fear it could go higher still next year.” Lucinda Elliott and Michael Stott report.
Abu Dhabi Lifts Veil On New Fund With Lime, Indonesia Deals
“Rapid-fire deals spanning the globe are putting a months-old Abu Dhabi sovereign fund on the map. A convertible debt deal on Friday by U.S. electric scooter and bike startup Lime marked the first known investment by Abu Dhabi Growth Fund, and an agreement with Indonesia followed the day after.”
“Based in a city that’s among the few globally to manage over $1 trillion in sovereign wealth capital, the emirate’s new fund was set up in July with a ‘unique risk profile that complements the existing Abu Dhabi sovereign wealth funds,’ according to its website.”
“Besides ADG, Abu Dhabi is also the home of the Abu Dhabi Investment Authority, with an estimated $829 billion in assets, and $243 billion Mubadala Investment Co. In addition to the two biggest funds, the government in 2018 set up ADQ, which took custody of some of the emirate’s biggest assets…”
“ADG says it will invest primarily in private equity, venture capital, hedge funds and public equities. Its mandate is to pursue ‘a differentiated investment strategy to generate high financial returns for its shareholder,’ the government, according to its website…”
“Lime on Friday described ADG as being among the ‘leading global funds’ that committed $418 million in convertible debt funding to the San Francisco-based startup. Fidelity Management & Research Company, Uber Technologies Inc. and funds managed by Highbridge Capital Management also joined the financing.”
“The following day, Indonesia’s state wealth fund signed an agreement with ADG to enable investments in a variety of high-yielding financial instruments as part of a broader commitment by the UAE to channel $10 billion into the Southeast Asian country. The Indonesia Investment Authority said Abu Dhabi Growth Fund was established by ADQ.” Nicolas Parasie and Ben Bartenstein report.
Rebels Advance Toward Ethiopia Capital As Civil War Widens
Wall Street Journal
“Ethiopian rebel forces advanced toward the country’s capital, threatening to widen a civil war raging in Africa’s second-most populous nation marked by allegations of ethnically motivated atrocities and man-made famine.”
“Fighters from the Tigray People’s Liberation Front and allied militias in recent days have captured two strategic towns about 230 miles from Addis Ababa, expanding a conflict that for the past year had largely been confined to Ethiopia’s north.”
“Ethiopian Prime Minister Abiy Ahmed ordered citizens to sign up for military training and gave security forces authority to detain without a warrant anyone they suspect of cooperating with rebel forces, which the government describes as terrorist groups.”
“In a speech on Wednesday marking the first anniversary of the start of the conflict, Mr. Ahmed, who won the 2019 Nobel Peace Prize, promised to reverse the rebels’ progress and said he would bury his government’s enemies “with our blood and bones.”” Gabriele Steinhauser and Nicholas Bariyo report.
China 6th Plenary Session Opens as Xi Widens Grip on Power
“The Chinese Communist Party's Central Committee has begun its sixth plenary session on Monday in Beijing, a high-level meeting to define the country's near-term goals and enhance President Xi Jinping's power base.”
“Over 300 members of the Central Committee -- the CCP's largest decision-making body -- are meeting through Thursday to deliberate two key issues, state media CCTV reported. These include revising the party's achievements and history over the last 100 years and will form the basis of the country's third ‘historical resolution.’”
“The CCP, which marked its centennial on July 1, has passed two such resolutions in the past: one in 1945 under Mao Zedong and another in 1981 under Deng Xiaoping. Both resolutions solidified the leaders' grip on power until their deaths and fixed their respective styles of governance.”
“Under Xi, who came to power in 2012, the belief that the CCP has led China out of extreme poverty and toward modernization has become a focal point of local media. Xi's ideology about ‘socialism with Chinese characteristics for a new era’ has further united the country and firmly planted the Chinese flag on the geopolitical map, state news agency Xinhua wrote in a series of reports on Monday.”
“But China's overseas and domestic assertiveness under Xi has alarmed the international community. Recent examples include Beijing's unilateral claim over much of the South China Sea, its human rights record involving the ethnic Uyghur minority, the heavy-handed crackdown against Hong Kong's pro-democracy movement, and growing hostility toward Taiwan.” CK Tan reports.
Kuwait Government Resigns Amid Stand-Off With Parliament
“Kuwait’s government has submitted its resignation to the emir, local media reported, in a move that could help end a standoff with opposition lawmakers that has hindered fiscal reform.”
“The resignation on Monday, reported by Al-Qabas and Al-Rai newspapers, was the second time a government headed by Prime Minister Sheikh Sabah Al Khalid Al Sabah has resigned this year in the feud with the elected parliament.”
“It was not immediately clear if Emir Sheikh Nawaf Al Ahmad Al Sabah, who has the final say in state matters, would accept the resignation of the cabinet, which was formed in March after the previous government resigned in January. Several opposition MPs have insisted on questioning the premier on various issues, including the handling of the COVID-19 pandemic and corruption.”
“The feud has paralysed legislative work, hindered efforts to boost the OPEC member’s state finances – hit hard last year by low oil prices and the pandemic – and enact measures including a debt law needed to tap global markets.”
“Deadlocks between the cabinet and assembly have for decades led to government reshuffles and dissolutions of parliament, hampering investment and reform…”
“Kuwait does not permit political parties, but it has given its legislature more influence than similar bodies in other Gulf monarchies, including the power to pass and block laws, question ministers and submit no-confidence votes against senior government officials.” Al Jazeera reports.
“Not everything that is faced can be changed, but nothing can be changed until it is faced.” - James Baldwin