Emerging Markets Monitor - December 21
Peru Unrest Prompts Early Election Calls, Ramaphosa Rolls in S. Africa, Toyota Launches EVs for EMs, ADNOC Buys Stake in OMV, Imran Khan Remains Defiant
The Top 5 Stories Shaping Emerging Markets from Global Media - December 21
Amid Deadly Unrest, Peru Congress Opens Door to Early Elections
Associated Press
“Peru’s Congress tentatively endorsed a plan on Tuesday to hold early elections in an attempt to defuse a national political crisis marked by deadly unrest after lawmakers ousted President Pedro Castillo.”
“The proposal, approved by 91 of the legislature’s 130 members, would push up to April 2024 elections for president and congress originally scheduled for 2026. The plan — which seeks to add one article to Peru’s constitution — must be ratified by another two-thirds majority in the next annual legislative session for it to be adopted.”
“The measure has the backing of caretaker President Dina Boluarte, who took over from Castillo after the former schoolteacher tried to dissolve Congress on Dec. 7 — a move widely condemned by even his leftist supporters though it touched off deadly nationwide protests that continue. After the failed move, Castillo was swiftly arrested.” AP reports.
Ramaphosa Strengthens Hold on ANC As Allies Win More Top Posts
Bloomberg
“South African President Cyril Ramaphosa notched up another win in the leadership contest for the ruling African National Congress, after his allies secured a resounding majority of posts on the party’s top decision-making structure.”
“At least 65% of 80 additional members of the ANC’s National Executive Committee, who were elected at its Dec. 16-20 national conference, appeared on a list of preferred candidates that was drafted by the president’s camp and seen by Bloomberg News. They include Finance Minister Enoch Godongwana, Minister in the Presidency Mondli Gungubele, Justice Minister Ronald Lamola and Minister of Public Service and Administration Senzo Mchunu.”
“…That’s a marked turnaround from 2017, when the party leadership was more-or-less evenly split between his supporters and adversaries, some of whom were loosely aligned to his predecessor Jacob Zuma.”
“The shift could make it easier for Ramaphosa to pursue reforms needed to bolster economic growth and give him more freedom to make changes to his cabinet. He’s also likely to get more political cover against attacks over his handling of the theft of foreign currency that had been stuffed into a sofa at his game farm — a scandal that almost led to impeachment proceedings.” Bloomberg reports.
Toyota to Launch EV Targeting EM This Year
Nikkei Asia
“Toyota Motor will add an electric vehicle for the first time to its lineup of strategic models geared toward emerging economies as early as next year in Thailand, where the automaker is defending its traditional stronghold from Chinese and South Korean rivals.”
“The step is part of the Japanese company's multipronged approach to decarbonization. Toyota unveiled Dec. 14 an electric pickup truck prototype under its Innovative International Multi-purpose Vehicle (IMV) project, a strategy to produce and sell affordable vehicles tailored to the local needs of emerging economies.”
“The truck will initially be produced and sold in Thailand. Toyota will consider eventually releasing it elsewhere in Southeast Asia and beyond.”
“The vehicles have found major success in emerging economies, thanks to their ability to handle rough roads and to haul various types of cargo. In the Philippines, they can be seen everywhere in and around cities like Manila.”
“One of Toyota's biggest IMV plants is in central Thailand's Ban Pho. It focuses on pickup trucks, as well as SUVs based on them. The finished vehicles are exported to 124 countries throughout the world.” Nikkei Asia reports.
ADNOC Buys 24.9% Stake in Austrian Oil and Gas Producer From Mubadala
Reuters
“Abu Dhabi National Oil Company (ADNOC) will acquire 24.9% of Austrian oil and gas group OMV it said on Wednesday, stepping up its international expansion since Russia's invasion of Ukraine prompted energy market turmoil.”
“ADNOC has been flexing its muscles, taking on international oil companies and Gulf rivals in its pursuit of energy assets outside the United Arab Emirates.”
“The company is acquiring Abu Dhabi state fund Mubadala's entire OMV stake in a transaction that….ADNOC and Mubadala said in a joint statement. Mubadala's stake in OMV is valued at about $4.1 billion, Refinitiv data shows.”
“The deal, which is subject to regulatory approvals, will also increase ADNOC's holding in both European petrochemicals maker Borealis and Abu Dhabi-listed petrochemicals company Borouge.”
“A separate statement from state-owned Austrian holding company Osterreichische Beteiligungs AG (OBAG), which owns a 31.5% stake in OMV, said that ADNOC would become a long-term strategic partner in all areas of OMV's business.” Reuters reports.
Imran Khan Pushes for Early Elections as Pakistan Economy Stumbles
Financial Times
”Imran Khan has vowed to dissolve two of Pakistan’s four provincial legislatures in a move expected to inflame political tensions as the country grapples with a worsening balance of payments crisis.”
“The cricketer-turned-populist politician has said that his Pakistan Tehreek-e Insaf (PTI) party will on Friday move to dissolve assemblies in Punjab and Khyber Pakhtunkhwa provinces, where it controls the government. The two regions between them account for about 70 per cent of Pakistan’s 220mn population and Khan believes that his PTI party will increase its hold on power if new elections are held.”
“Prime Minister Shehbaz Sharif is next set to face voters in a national election in October 2023 but Khan has been pushing for an early poll. ‘We are scared that by that time [October], Pakistan could go to a point of no return,’ Khan told foreign journalists this week at his home in Lahore, where he is recovering from an apparent attempt on his life last month.”
“‘In other words, it’s facing default and the government has no road map to get out of this. The worry is that our economy is tanking, it’s going into a tailspin,’ he added. If the legislatures were to be dissolved, new polls would need to be held within 90 days.”
“Khan, 70, was ousted from power in April in a parliamentary vote. But his popularity has surged since then in a year in which Pakistan has suffered from rising inflation and catastrophic floods and sought IMF bailout funds. He led thousands of supporters on a march through Punjab last month, during which he was shot in the leg.” The FT reports.
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