Frontier Markets Weekly, January 2nd 2022

Welcome back! 

I can’t lie: Leaving the Wall Street Journal was a wrench. Leaving and knowing that they would be discontinuing the Emerging and Growth Markets newsletter that I’d sent out, without fail, every week for more than seven years … well, that was an inspiration. 

An inspiration to create this—my new weekly newsletter focused on emerging and growth markets. It will look familiar to most of you, and it will hopefully serve the same purpose of keeping you abreast of key developments in countries that are often overlooked by the mainstream media. 

It will, however, be a little lighter than its late Wall Street Journal cousin as I’ll be putting it together in my spare time. It will, though, be noticeably heavier on crypto/decentralized finance/blockchain content, reflecting both the fact that my day-job now is Editor in chief at Blockworks and that much of the key action in the crypto space is taking place in frontier and emerging markets.  

While this newsletter might be less dense, I promise I’ll bring the same editorial sensibility, the same sense of curiosity and the same desire to help make the world a better place that infused every newsletter I sent out over the past seven years. 

As always, I would love to hear from you. Contact me at to share news ideas, feedback and anything else you find interesting. 

And check out It’s really interesting!

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Uganda finds China’s leverage is in the fine print. Ugandan politicians’ recent discovery that the fine print in an agreement with a Chinese bank that helped finance the refurbishment of the country’s Uganda’s Entebbe International Airport hands control of airport revenues to the lender has highlighted how Beijing can build up leverage over borrowing nations, James T. Areddy and  Nicholas Bariyo report.

In Kenya and Ethiopia, politicians, public watchdogs and media are questioning the wisdom of expensive China-built railways. A change of government in Zambia this year revealed previously undisclosed debts owed to China, and the new leadership turned to the IMF for financial support. 

Beijing rejects any suggestion it has designs on the Ugandan airport, or any infrastructure project it financed. And due to Covid-19, President Xi has suspended debt obligations in both 2020 and 2021 for China’s lowest-income borrowers.


Campaign against Myanmar opposition follows a familiar, brutal path. Myanmar’s military is stepping up attacks against civilians in an effort to suppress resistance to the junta, which ousted the elected government in February 2021. An attack this weekkilled dozens of people, according to the Wall Street Journal.

In a harrowing video, AP details some of the recent atrocities 
allegedly carried out by Myanmar’s military.

The attack appears to be part of a growing scorched-earth strategy that has seen entire villages razed by military forces in recent weeks, the AP reports.

According to the AP, the violence appears to be a response to the local resistance forces springing up across the country, but the military is wiping out civilians in the process. The massacres and burnings also signal a return to practices that the military has long used against ethnic minorities such as the Muslim Rohingya, thousands of whom were killed in 2017, AP wrote.

Pakistan braces for austerity measures as leadership seeks to revive IMF package. Pakistan prime minister Imran Khan’s government is looking to cut spending and eliminate some subsidies and tax concessions in an attempt to shore up its finances as part of a deal with the IMF aimed at strengthening the country’s troubled economy, the FT reports.

According to the FT, the measures “are designed to raise Rs600bn ($3.4bn) in the financial year ending June 2022” and are needed for the South Asian country to receive the next $1 billion installment of its $6 billion IMF support package, which was initially established in 2019.

Political dynasties amass increasing power in Southeast Asia. In the Philippines, the leading candidates for president and vice president in next year’s elections are both scions of powerful political dynasties linked to human-rights abuses, the Wall Street Journal reports. In neighboring Indonesia, the president who upended the country’s politics by winning election despite a humble family background recently saw both his son and son-in-law take office after joining his political party.

In Cambodia, the country’s authoritarian leader announced in speeches earlier this month that he hopes his son will succeed him, and that only assassination or untimely death could alter this “political direction.”

Hun Manet, a son of Hun Sen, Cambodia’s strongman ruler, is his father’s choice as a future prime minister.

In a thought-provoking article this week, Jon Emont explores the recent growth of political dynasties in a fast-growing region of the world that is nonetheless marked by high levels of income inequality and state repression.

Middle East

Abu Dhabi ramps up effort to become Middle East’s crypto hub. Abu Dhabi, the capital of the United Arab Emirates, is stepping up its efforts to attract cryptocurrency-focused businesses as it seeks to become the leading crypto center in the Middle East, Blockworks reports. The emirate’s determination to become a crypto hub is part of its effort to reduce its reliance on oil and gas.

The emirate is already among the global leaders in developing a crypto-friendly regulatory environment, having established an initial framework in 2018, and regulators are focused on anti-money-laundering, tech governance systems and controls, protecting client money, custody and exchange-operations risks.

Abu Dhabi, UAE. Source: Shutterstock

“The whole ecosystem in Abu Dhabi…is working together to make it easy for all the actors of that space, to not only attract them but bring them here, to develop the legal framework, to find what are the pain points worldwide so we can remove them, and have a very strong robust regulatory framework for those people,” Shorafa Al Hammadi, chairman of Abu Dhabi’s Department of Economic Development, said.

Iraq’s top court endorses election results in setback for pro-Iran faction. Iraq’s top court on Monday endorsed the results of the country’s October parliamentary election, in a setback for a powerful pro-Iran faction that paves the way for the formation of a new government, Ghassan Adnan and Stephen Kalin report in the WSJ.

Iraqi riot police stood guard ahead of the decision by the court Monday.
Photo: Ahmed Saad/Reuters

Shiite cleric Moqtada al-Sadr, an independent-minded nationalist, won the largest share of seats in the poll. The Fatah Alliance, aligned with Iran-backed militias, lost significant ground in the vote and alleged voter fraud despite the election being validated by international observers and Iraq’s electoral commission.

According to Al Monitor, the certification means the constitutional clock starts ticking and deadlines have to be met: Within 15 days of the certification, the new parliament has to convene and elect its speaker. The biggest bloc has to be registered at the same session. Within 30 days of this parliamentary session, the parliament should elect a new president who will task the biggest bloc with forming the government.


US and Russia set schedule for Ukraine talks. The US and Russia have agreed to hold security talks on Jan. 10amid tensions over Russian forces deployed near Ukraine, and Moscow’s demands that NATO renounce any expansion eastward into the former Soviet bloc, the WSJ’s Michael R. Gordon writes.

Biden and Putin warn of danger to relations if crisis over Ukraine escalates

Deputy Russian Foreign Minister Sergey Ryabkov said he expected the talks to focus on security proposals the Kremlin provided the US in December that would preclude NATO’s expansion eastward and Western military activities near Russia’s periphery.

No sign has emerged that the two sides have been able to narrow their differences concerning Moscow’s core demand that NATO sever its military ties to Ukraine and Georgia, and rescind past statements that they eventually would join the alliance.

Latin America

Argentine bonds rally on IMF deal hopes. Optimism that Argentina will strike a new agreement with the IMF lifted prices of the country’s government debt by about 10% in December, the WSJ’s Matt Wirz writes. The strong performance coincides with an unusual admission by the IMF in recent days that the previous lending package it provided to Argentina in 2018 failed to deliver on its aims.

The country’s bonds held up well late in the month despite weakness in other emerging markets triggered by a hawkish turn by the US Federal Reserve and continued devaluation of the Turkish lira, according to research by CreditSights.

Argentina’s administration has been in halting talks for months with the IMF over repayment of money Argentina owes from the 2018 lending program. Pressure is mounting on the government to clinch a deal, which would allow it to borrow again from the fund, because it is running out of foreign-exchange reserves and inflation is ravaging the economy.


Asia-Pacific frontier markets ‘outperform rivals in diversification benefits.’ A new study published in the International Review of Economics & Finance that analyzed the impact of various portfolio constructions using a blend of frontier, emerging and developed markets has found that frontier markets can add significant diversification benefits—although they might not provide the performance enhancement investors would hope for. 

The study focused on frontier markets in two regions: Asia Pacific and Europe—and showed that Asia-Pacific frontier equities were more effective in enhancing portfolio diversification. However, “although Asia-Pacific frontier markets offer higher potential for diversification than the Asia-Pacific emerging markets…they do not enhance risk-adjusted returns of the portfolio,” the report said.

“Only bold investors with good risk appetite should invest in European frontier markets”

The report also found that European frontier markets had until 2018 provided stronger returns with lower risk than other regions but that since then—and particularly since the onslaught of the coronavirus pandemic—their performance has faltered. “Only bold investors with good risk appetite should invest in European frontier markets,” the study concluded.

What We’re Reading

Ethiopia to create national dialogue commission. (DW

Buhari vows to make Nigeria a leading sugar producer. (Vanguard

Vietnam’s GDP growth slows to 2.58% in 2021 as pandemic drags. (Nikkei

PM: Despite Omicron, Cambodia to continue socio-economic reopening. (Khmer Times

Video: Rising sea levels in Pakistan force thousands inland. (Al Jazeera

Sri Lanka shuts three foreign missions as dollar crisis worsens. (Al Jazeera

Afghanistan’s former female troops fear for their lives. (WSJ

Cryptocurrencies stable as Turkey eyes digital-asset regulation. (Blockworks

With rappers, race cars and raves, Saudi Arabia learns how to party. (WSJ

Syria accuses Israel of striking its main commercial port. (WSJ

Iran sends rocket into space amid faltering nuclear talks. (WSJ)

Low-vaccinated Eastern Europe braces for omicron surge. (ABC News

Latin America is now a world leader in vaccinations. (WSJ

Venezuelan migrants fall prey to sex traffickers after fleeing their collapsing country. (WSJ

Ecuador applies to join CPTPP trade pact. (NHK Japan

Argentina braces for new Covid wave as cases rise to highest in almost 6 months. (Reuters)

More Covid-19 vaccines are reaching poorer nations, but slowly. (WSJ

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