|
|
|
|
Welcome to the latest edition of Frontier Markets News. As always, I would love to hear from you at dan@frontiermarkets.co with news ideas, feedback and anything else you find interesting.
|
|
If you'd like to receive this newsletter in your inbox every weekend, sign up at FrontierMarkets.co. Please also share this link with any friends or colleagues you think would enjoy it.
|
|
|
|
Africa
|
|
Mali’s junta announces extended transition to civilian rule. The military junta ruling Mali agreed to restore civilian rule by March 2024 with the goal of achieving the lifting of sanctions by the Economic Community of West African States, according to Reuters. The junta has been under pressure to restore democracy since ECOWAS initiated sanctions in February.
|
ECOWAS said it “regrets” Mali’s decision to adopt a 24 month transition period, RFI reports. At a meeting in Accra last weekend, West African heads of state agreed not to lift sanctions, including border closures and restrictions on financial transactions, AfricaNews reports. The bloc will convene again in early July before deciding whether to implement further sanctions.
|
|
|
Colonel Assimi Goita, leader of Malian military junta, attends an ECOWAS consultative meeting in Accra, Ghana. Photo: Francis Kokoroko, Reuters
|
|
The military seized control of Mali in a coup in August 2020. The junta has drawn ire from Western states for alleged human rights violations, including a March massacre in the village of Moura.
|
World Bank ups financing to DRC. The World Bank and the Democratic Republic of the Congo signed a $900 million financing agreement that will bolster women’s entrepreneurship and improve access to water and electricity in the country’s east, the Bank announced in a statement on Tuesday.
|
The Bank’s total commitment to the DRC will reach $7 billion in grants and credits by the end of June, the statement said. “These operations add to a portfolio of operations focused on building human capital and protecting the country’s poorest—including women—from socio-economic shocks,” DRC country director Jean-Christophe Carret said in the statement.
|
Officials signed the deal after a two day visit to the country by a World Bank delegation. The DRC is one of the world’s poorest countries, with an estimated 73% of the population living below the poverty line in 2018, according to data from the World Bank.
|
|
High fuel prices squeeze African consumers, strand truckers and snarl flights. In Cameroon, thousands of truckers spend weeks stranded at highways and border crossings due to lack of diesel. In Kenya, drivers are lining up overnight to fill their tanks. In Nigeria, airlines have threatened to ground all domestic flights as they scramble for expensive jet fuel.
|
|
|
Kenyan motorists lined up at a petrol station in Nairobi. Photo: Khalil Senosi/AP
|
Across Africa, surging fuel prices are straining businesses from bakeries to airlines and adding pressure on consumers already burdened by spiraling food costs and the economic disruptions caused by the continuing Covid-19 pandemic, Nicholas Bariyo writes in the Wall Street Journal.
|
|
While sub-Saharan Africa hosts an estimated 125 billion barrels of crude-oil reserves, almost all oil produced there is exported and then imported again as refined fuel at much higher prices. That has made African countries especially vulnerable to the sharp increase in global fuel prices triggered by Russia’s war against Ukraine. They also often find themselves at the back of the line for fuel imports, with refineries giving priority to larger markets in developed countries in times of high demand.
|
|
|
|
|
|
|
Asia
|
China begins construction of naval port in Cambodia. Chinese and Cambodian leaders commenced development Thursday on a naval port expansion project that Western officials have accused of being a clandestine Chinese military base. China and Cambodia have each denied the accusations.
|
|
The construction, which will transform the northern portion of the Ream Naval Base on the Gulf of Thailand, is expected to take two years to complete, the Associated Press reports. Chinese ties with Cambodia have strengthened over the past decade, with China granting hundreds of millions of dollars in aid and investment to the strategically located Southeast Asian nation.
|
|
|
|
Cambodian and Chinese officials broke ground on a naval port expansion project on the Gulf of Thailand. Photo: Cambodia’s Fresh News via AP
|
News first broke in 2019 that Beijing and Phnom Penh had signed a secret agreement to create a Chinese military base on the Gulf of Thailand, but Chinese and Cambodian officials denied the report. This weekend, a Chinese official confirmed that a portion of the base would be used by the Chinese military, the Washington Post reports.
|
|
China operates its only acknowledged offshore military base in Djibouti, but has considered pursuing additional military facilities in Myanmar, Thailand, Singapore, Indonesia, Pakistan, Sri Lanka, United Arab Emirates,Kenya, Seychelles, Tanzania, Angola, and Tajikistan, according to a defense department report.
|
Former Sri Lankan finance minister exits government. Basil Rajapaksa, the brother of President Gotabaya Rajapaksa and former finance minister of Sri Lanka, resigned from Parliament this week as the country’s political and economic crisis deepened. Rajapaksa had previously resigned from his post as finance minister amid a protest-driven purge of the country’s high-ranking officials.
|
|
Unrest in Sri Lanka has worsened in recent weeks as citizens struggle to access food, fuel, medicine and cooking gas. Newly installed Prime Minister Ranil Wickremesinghe has sought to cool the crisis, raising taxes and pledging to reduce the concentration of power around the president.
|
|
|
Sri Lankans wait for fuel. Photo via Times of India
|
|
Sri Lanka secured $48 million in assistance from the UN last week, far short of the $6 billion Wickremesinghe has said is necessary to keep the country afloat over the next six months, Business Standard reports. Sri Lanka owes $51 billion in foreign-denominated debt, including $7 billion due this year and $26 billion through 2026. The country has sought bailout financing from the IMF, China and India, but has only received money from India, according to a Wickremeseingh quote in the Times of India.
|
Philippines pushes for banana price rise. Officials in the Philippine embassy in Tokyo asked Japan to raise domestic banana prices on Wednesday, citing rising production and logistics costs for Philippine farmers. Japan is the Philippines’ largest banana export market, with exports amounting to $749 million in 2020, according to the Observatory of Economic Complexity, an MIT collection of international trade data.
|
|
The Japanese retail price of bananas has remained stagnant since 2015 at 270 yen ($2 USD) per kilogram, even as other fruits have increased in price, Nikkei Asia reports. The Philippines is the world’s second largest banana exporter, according to OEC, and supplies 80% of Japan’s bananas. Analysts anticipate that similar requests may follow to other large importers of Philippine bananas, including China and South Korea.
|
Philippine officials are flexing their muscles as countries across Asia embrace food protectionism. In the past several months, Indonesia, India, and Malaysia have restricted exports in bids to keep domestic prices low.
|
|
|
|
Europe
|
Bulgaria’s commitment to Ukraine fades amid political crisis and Russia propaganda gains. Political unrest and persistent Russian influence in Bulgaria are highlighting tension over the country’s Ukraine policy, reports Politico Europe’s Christina Oliver.
|
|
After barely six months in power, the government of Bulgaria’s Prime Minister Kiril Petkov, who came to power last December on an anti-corruption ticket and has also pushed a defiantly pro-NATO stance toward the conflict in Ukraine, has been hobbled after a populist politician removed four ministers from the coalition and deprived the government of an absolute majority. The weakening of the government increases the importance of Petkov’s other coalition partners—the pro-Kremlin Bulgarian Socialist Party and the small anti-corruption Democratic Bulgaria party. The Socialist Party has threatened to leave the coalition if the government increases military aid to Ukraine.
|
|
|
A man wrapped in a Russian flag in front of the Soviet Army monument in Sofia. Photo: Nikolay Doychinov/AFP via Getty Images
|
Responding to Kyiv’s repeated pleas for heavy weapons, Petkov reiterated that “we’ll do what we have promised to do.” However, he is facing growing dissatisfaction in a country culturally and economically ill-situated for sustained support.
|
|
|
|
Latin America
|
Nicaragua approves Russian military deployment. In a decree published this week, Nicaragua authorized the deployment of Russian troops, aircraft, and ships in the country for “training, law enforcement or emergency response,” Al Jazeera reports. The agreement also allows the permanent presence of Russian troops for training exchanges.
|
|
Nicaragua will also allow port visits from Venezuela, Honduras, Guatemala, the Dominican Republic, Cuba, Mexico, El Salvador and the US. While it is unlikely that many of these countries will exercise this right, it marks a potential step toward direct military interaction between Russia’s clients in the region.
|
|
|
Daniel Ortega has been a staunch ally of Russia since his days in the leadership of the 1979 revolution. Photo: AP Photo via Al Jazeera
|
|
Nicaragua’s move highlights how the US is losing influence in Latin America, and any further integration of Nicaragua with Cuba and Venezuela will likely increase Washington’s perception of a security threat. The agreement also represents the first significant appearance of Russian forces in Central America and an expansion of Russia’s influence in the region.
|
Venezuela notches international gains in wake of US rapprochement. On the heels of Venezuela’s partial rapprochement with the US last month, President Nicolás Maduro began a “Eurasian tour” in Ankara, Turkey, MercoPress reports. Maduro billed Venezuela as Turkey’s port of entry into Latin America. He also promoted tighter tourism, mining, industry, logistics, banking, gold and energy ties, offering “all legal guarantees” to Turkish businesses operating in the country.
|
|
Maduro’s remarks followed a bilateral meeting with Turkey’s President Recep Tayyip Erdoğan that saw new agreements on agriculture, tourism, and financial relations signed, which aim to grow trade between the two countries from $850 million in 2021 to $1 billion by 2023.
|
|
|
|
Venezuela’s President Nicolás Maduro with Turkey’s President Recep Tayyip Erdoğan. Photo via MercoPress
|
The following day, Maduro was welcomed at the airport by Algeria’s prime minister and participated in a ceremonial review of the Republican Guard by the president.
|
|
|
|
|
|
What we’re reading
|
Inflation rate at 18-year high as food costs surge in Ghana. (Bloomberg)
|
Somalia braces for worst drought in 40 years while food prices soar. (The Africa Report)
|
Algeria suspends Spain co-operation treaty over Western Sahara dispute. (France24)
|
Hun Sen tightens grip on power in Cambodia local poll landslide. (Nikkei)
|
Pakistan unveils budget aimed to woo IMF and fend off Imran Khan. (FT)
|
Bangladesh investigates fire that killed at least 41. (WSJ)
|
Kazakhs vote for constitutional changes ending Nazarbaev’s grip on country. (Radio Free Europe)
|
Demonstrators picket Chinese embassy in Kazakh capital as Chinese minister visits. (Radio Free Europe)
|
US urged to step up in Pacific after China visit. (WSJ)
|
US defense secretary warns that China’s military is increasingly aggressive. (WSJ)
|
Pensioners protest across Iran as inflation, sanctions ravage economy. (Radio Free Europe)
|
Iraq’s post-election impasse deepens. (AP)
|
Syria halts flights to and from Damascus, hours after Israeli attack. (Reuters)
|
Saudi Arabia moves toward eventual ties with Israel. (WSJ)
|
EC set to back Ukraine’s EU candidate status despite objections from Denmark, Netherlands. (Radio Free Europe)
|
Russia announces retaliatory sanctions against US officials, business leaders. (Radio Free Europe)
|
Russia’s Lavrov slams Balkan states for blocking his Serbia visit. (BalkanInsight)
|
Hungary’s Viktor Orbán loses friends in Poland over stance on Russia sanctions. (FT)
|
Czech Republic eyes exit from China’s 16+1 investment club. (Al Jazeera)
|
Food insecurity hits nearly 60% of Brazilians, study shows. (MercoPress)
|
Thousands protest Argentina’s debt deal with IMF. (France24)
|
|
Biden pushes back against waning US influence in Latin America. (WSJ)
|
|
|
|
|
|
|
|
|
|
|
|
|
