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By Ken Stibler, Noah Berman, Nojan Rostami and Mariel Ferragamo. Executive editor: Dan Keeler
Africa
Botswana inks deal to increase diamond revenues
After years of negotiations, Botswanaâsgovernment has reached a 10-year dealwith diamond firm De Beers that will help the southern African nation retain more of the value from the sector, VoA reports. Under the new deal, Gaborone will be able to sell 30% of its rough diamonds mined through a joint venture with De Beers, with that percentage rising to 50% by 2035.
De Beers IPO moves closer as Botswana eyes bigger stake (FT)
Botswanaâs diamond revenues have fallen sharply in recent years. By 2023, annual revenues through De Beers had slumped to $4.2 billion from a peak of $7 billion per year.
Botswanaâs mineral and energy minister Bogolo Kenewendo (left) with De Beers CEO Al Cook. Photo: Reuters
The World Diamond Council welcomed the partnership, which promises to ease supply constraints caused by sanctions on the worldâs largest diamond producer, Russia. The agreement also includes a framework that addresses ethical and transparency issues that have tarnished diamondsâ image among consumers.
Africaâs population growth rate starting to decline
According to an analysis by the FT fertility rates in Africa are set to decline significantly by 2050, potentially improving the economic outlook in many nations. Currently, the average fertility rate is 4.1 births per womanâenough to double the continentâs population every 17 yearsâbut the UN predicts that will fall to 2.7 by 2050.
Calculating the speed at which it drops is crucial to determining economic outlooks at both the national and household level. As well as having an impact on job prospects, falling birth rates can lead to a rise in bank savings, enabling cheaper finance for businesses and public projects, experts say.
According to FMN contributor and head of macro policy at FIM partners, Charlie Robertson, when the fertility rate drops below 3 banking systems generally have enough resources to fund development at reasonable interest levels. UN data suggest some African countries, such as Kenya, could reach that level before 2029.
Asia
Vietnam trade surplus with US hits record high
Vietnamâs trade surplus with the US widened last year by 20% to some $123 billion, a record high, according to data released on Wednesday.
Only China, the EU and Mexico have larger trade surpluses with the US, and none of those surpluses widened as much as Vietnamâs.
Containers being loaded onto a ship at Tien Sa port in Da Nang city, Vietnam. Photo: Kham/Reuters
While on the face of it this is great news for Hanoi, the Southeast Asian countryâs ascendance as a manufacturing power could be dealt a blow if it draws the attention of Donald Trump, a sworn enemy of trade deficits.
Trump has not mentioned Vietnam since taking office, but Vietnamese officials are preparing for potential tariff-related disruption to trade. On Wednesday, Prime Minister Pham Minh Chinh told cadres to prepare for a trade war, Reuters reports.
Indonesia approves second sovereign wealth fund
Indonesia approved the creation of a new sovereign wealth fund on Wednesday that will take over the management of government holdings in state-owned enterprises.
· Malaysia looks to widen sovereign wealth fund portfolio (Nikkei)
The minister of state-owned enterprises said the move is aimed at consolidating management of state companies, which hold assets worth more than $700 billion. The fund will have at least $61 billion in initial capital, Reuters reports. It will be supported primarily by seven companies, including three banks, a telecom operator and a power utility, Jakarta Globe reports.
President Prabowo Subianto (right) with state-owned enterprise minister Erick Thohir in October last year. Photo: Sigid Kurniawan/Antara Photo
Indonesian President Prabowo Subianto promised to establish the fund soon after taking office last October. The fund, modeled on Singaporeâs Temasek fund, will complement the Indonesia Investment Authority, the countryâs other sovereign wealth fund, which manages $10.5 billion in assets.
Pakistan wins Chinese pledge for infrastructure and mining investment
Pakistan secured several deals with China during a meeting between the South Asian nationâs President Asif Ali Zardari and Chinâs leader Xi Jinping this week. The two countries agreed to increase cooperation in renewable energy, infrastructure, mining and space, among other arenas.
The infrastructure deals will see China and Pakistan work together to improve Pakistanâs rail network and a port on the Gulf of Oman. The energy arrangement will cut red tape surrounding Chinese investment in Pakistani oil and gas, Reuters reports. China also agreed to bring a Pakistani rover to the moon in 2028, Arab News reports.
Chinaâs effort to expand its overseas energy investments took a blow elsewhere in Frontier Asia this week, as the president of East Timor told Reuters that he would rather work with Australian firms to develop a stalled gas project. Chinese companies had previously been in the running.
Middle East
Stage tentatively set for US-Iran Nuclear Deal
US President Donald Trump this week signed an executive order reimposing the maximum pressure sanctions strategy against Iran, aimed at âdriv[ing] Iranian oil exports to zero and diminish[ing] the regimeâs capacity to fund terror,â the New York Times reports. The order specifically calls out Iranian oil exports to China, the countryâs largest buyer, and has language authorizing modification or rescinding of sanctions exemptions for the Chabahar Port, a joint infrastructure megaproject with significant Indian investment.
US imposes sanctions on network that helps ship Iranian oil to China (AP)
Trump said heâs open to a ânuclear peace agreementâ with Iran, and played down earlier comments he had made about joint strikes with Israel against Iran, suggesting that strikes would be a last resort if a deal canât be reached.
Iranâs President Masoud Pezeshkian has argued for negotiating with the US. Photo: Iranian presidency
Reformist politicians in Iran, led by President Masoud Pezeshkian, have been internally pushing against regime hardliners, arguing the case for making concessions to the US in exchange for sanctions relief. Iranâs supreme leader Ayatollah Khamenei is taking a harder line, however, ruling out any direct talks with Trump and calling negotiations âneither wise, nor prudent, nor dignified.â
Oman oil production caught in the middle of tariffs and OPEC
OPEC production cuts caused a 5.4% drop in oil exports last year from Oman, costing it some $1.7 billion, according to the Oman News Agency. Total production fell 6.5%, and could drop further as the OPEC cuts have since been extended..
Oman appears to be benefitting from concerns over impending tariffs, however, as Chinese purchasers switch to Middle Eastern suppliers in favor of Russianor US oil. Omani crude is now trading at a premium of $3.50 to $4.00 over the regional benchmark, compared with $1.50 to $1.80 before tariffs were implemented.
Omanâs natural gas sector, which has invested heavily on expanding production, notched a 4.9% increase in total output last year.
Europe
Bosnia minimum wage hike prompts backlash
Companies in Bosnia and Herzegovina are warning that recently imposed increases in minimum wages could prompt a wave of layoffs and reduced competitiveness in an already fragile economy, Balkan Insight reports. The dramatic increases, pushed through with minimal consultation at the end of 2024, have triggered immediate economic ripples with reports of price increases across essential services, including a 30% jump in public transport costs and significant rises in basic commodities.
While the Federation government has attempted to mollify concerns with temporary measures, including tax relief for employers, the IMF warned the wage hikes could undermine fiscal sustainability unless they are accompanied by structural reforms.
Latin America
Tensions grow despite Panamaâs move to placate Trump
Crew members of a Chinese container ship wave Chinese and Panamanian flags as the vessel transits the canal. Photo: Luis Acosta/AFP
The diplomatic goodwill generated by Panamaâs BRI announcement was quickly dispelled by a claim from the US State Department that Panama had agreed to waive transit fees for US government vessels, an assertion Mulino described as an âintolerable falsehood.â The Panama Canal Authority categorically denied making any adjustments to its toll structure.
The dispute has exposed underlying tensions in US-Panama relations, particularly as Trump continues say he intends to âtake backâ the canal.
According to the Panama Canal Authority, US-linked vessels account for 52% of canal traffic, with American military transits costing approximately $1 million annually.
Ecuadorâs presidential elections put public finances on the ballot
Ecuador heads to a pivotal presidential election this Sunday, with incumbent Daniel Noboa holding a razor-thin lead of 0.5 percentage points over leftist challenger Luisa GonzĂĄlez. The vote, which analysts expect will lead to an April run-off, comes at a critical juncture for the nationâs public finances, with sovereign bond spreads hovering around 10 percentage points amid investor concerns over debt sustainability and the trajectory of fiscal policy.
Ecuadorâs government debt (% of GDP) Source: Capital Economics
The leading candidates present starkly different solutions to Ecuadorâs mounting challenges, particularly regarding security and public spending. Noboa has implemented a hardline security strategy and raised VAT from 12% to 15% to fund military operations. GonzĂĄlez advocates a less forceful approach focused on addressing root causes of crime through social programs.
Under Noboa the primary budget deficit has turned into a surplus of almost 2% of GDP, but consultancy Capital Economics warned this week that Ecuadorâs debt dynamics remain precarious. Unstable renewable electricity supplies are also putting pressure on the economy and threaten to add a further burden to government finances.
Global Macro
Digital âstablecoinsâ find utility in emerging markets
Stablecoinsâdigital assets whose value is pegged to a fiat currencyâare increasingly playing a role in solving inefficiencies in emerging market cross-border payments and financial services, TechCrunch reports. The dramatically lower cost of transferring money internationallyâa $200 stablecoin transfer from the US to Colombia, for example, can cost less than one cent, while a traditional transfer will cost around $12âis driving a sharp growth in attention from major payment platforms.
The trend is gaining significant traction among financial institutions and consumers alike. Brazilian fintech unicorn Nubank reported a tenfold increase in customer holdings of dollar-pegged stablecoin USDC last year, with 30% of its users now holding it in their portfolios.
New use cases are emerging beyond remittances, with startups pioneering stablecoin-based payroll solutions for remote workers and systems for handling retail payments.
While some regulators, including those in the UAE, have created supportive frameworks, others are more cautious, concerned about the risk inherent in depending on private companies such as Circle and Tether to maintain stable values.
Peruâs green tech-fueled mining boom comes at a high price (The Guardian)
Uruguayâs exports post 6% yoy increase (Mercopress)
Mileiâs aims for IMF deal to defuse Argentinaâs currency control bomb (FT)
Venezuela opposition leader vows to keep fighting after Trump envoyâs deal with Maduro (WSJ)
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