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EFIC states that emerging markets experience mixed fortunes as world trade recovers

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This month's issue of Export Finance and Insurance Corporation newsletter, World Risk Developments, looks at a series of both positive and negative developments for investors in emerging markets. Among the good news for companies doing business in emerging markets are:

  • Investors can witness a breakthrough agreement in Mongolia for the giant Oyu Tolgoi mine
  • A new cabinet in Indonesia that promises to keep up the reform drive
  • Investors also see a relaxation of controls on investment in Malaysia's car industry as part of a broader deregulation push.
‘True, so-called trade remedy investigations are up 50% in the September quarter over a year before, as countries move to protect their hard-pressed industries from import competition through safeguard and anti-dumping measures and the like’, says EFIC's chief economist, Roger Donnelly. ‘But by and large countries have been relying on multilateral trade rules and the measures they are introducing will arguably have only a marginal impact on trade flows.’

The more ambiguous news for investors this month comes from India, the Gulf, Fiji, Guinea and the Ukraine, and includes issues such as:

  • In the Gulf, plans for monetary union have been put on the backburner and could be abandoned completely
  • In Guinea, a country with vast bauxite, iron ore and other mineral reserves, the military junta is facing sanctions after bloody suppression of an opposition protest
  • In India, a growing anti-land acquisition movement and threat from ‘Naxalite’ communist revolutionaries are stalling billions of dollars of investment
  • From the Ukraine, markets are demanding
  • In Fiji, relations between the government and Australia and New Zealand are going from bad to worse

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