Export Finance and Insurance Corporation (EFIC) examines the MENA turmoil, eurozone’s financial crisis as well as Japan’s natural disasters in the April issue of their newsletter, World Risk Developments.
EFIC is the Australian Government’s export credit agency that provides finance and insurance solutions for Australian exporters to grow their business overseas.
EFIC’s latest newsletter covers the continuing impact of three recent dislocations: the turmoil in the Middle East and North Africa (MENA), the eurozone sovereign debt-cum-banking crisis, and the earthquake and tsunami in Japan.
The MENA coverage includes the crackdowns mounted by regimes, Libya’s civil war and Yemen’s shaky situation.
Recent developments in Egypt and Tunisia look promising with proposed constitutional changes and elections.
EFIC’s Chief Economist, Roger Donnelly comments that trading and investment in the region has a lot of upside potential, but also much downside risk.
Basing his outlook on historical experience, he says that governance and economic performance don’t always improve following the overthrow of an autocrat.
In Europe, highly indebted peripheral eurozone governments continue to struggle with their public finances.
Portugal’s caretaker government became the third country after Greece and Ireland to seek a bailout from the European Union.
However Donnelly predicts a positive impact of the earthquake in Japan from an economic standpoint. Purchasing manager indices for March indicated that aggregate world manufacturing production has not suffered a severe blow.
However, Japanese imports have certainly been heavily impacted, with imports going down correspondingly, including from Australia.