Frontier and Emerging Markets Weekly, January 14th 2023

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TL:DR on?this week’s newsletter:?

Africa

Benin’s?President Patrice Talon coasted to reelection this week but?Benin’s main opposition party had its best performance in recent memory.?‘Les Democrats’ won 28 seats, Al Jazeera?reports, a sizable enough figure to encourage the two leading parties to form a parliamentary alliance.

The World Health Organization (WHO)?declared an end?to?Uganda’s?Ebola outbreak on Wednesday, a victory against a variant of the disease that threatened to be the deadliest to date.

The?Egyptian?government is pursuing broad measures to stabilize the economy as the Arab state?grapples with a foreign currency crisis, a weakening pound, and rising inflation, which 19% in November and is expected to rise to 25% by March.?

Asia

Leaders of?Indonesia?and?Malaysia?are escalating their resistance to?EU?efforts?to reduce deforestation that could affect palm oil imports. Officials in Malaysia are considering a complete halt on palm oil exports to the EU, the world’s third largest palm oil importer.

Some large hedge funds are allegedly?hindering?Sri Lanka’s?efforts?to resolve its debt issues, slowing progress on a much-needed IMF bailout.?

Go deeper on Sri Lanka?with our podcast featuring Ruchir Desai of Asia Frontier Capital and Abhijit Kukreja of Auerbach Grayson.?

Pakistan?received over $10 billion in commitments from wealthy nations and international institutions to rebuild after the country was devastated by record floods. The pledges exceeded Prime Minister Shehbaz Sharif’s request for $8 billion over three years.

Middle East

Saudi Arabian?officials are wooing top mining companies to help?exploit untapped mineral deposits?in the kingdom that could be worth hundreds of billions of dollars. The move is part of the country’s effort to build new industries unrelated to oil, in large part by improving the country’s business climate.?

Europe

Strained by the rising costs of its war on?Ukraine, the?Russian?government posted?a $47 billion budget deficit?for 2022, the second-highest since the Soviet Union’s dissolution. To try to support its economy Moscow is?partnering with Tehran?to complete 3,300 kilometers of railways throughout Iran to provide an export channel to South Asia that can help it bypass sanctions.?

Latin America

Haiti?was left this week?without a single democratically elected official?after the country’s remaining 10 senators’ terms expired. This marks the end of the last semblance of democratic order in the beleaguered Caribbean nation; with no functioning parliament and a breakdown of democratic institutions, it has become impossible to confront warring gangs that now control an estimated two-thirds of Port-au-Prince.

Brazil’s?bonds and stock market fell after a January 8th insurrection that saw thousands of ex-President Jair Bolsonaro’s supporters?storm the country’s top government institutions. Rioters ransacked congress, the presidential palace and the supreme court in a well-organized effort that appeared to be designed to trigger military intervention.?

Global

China’s?Belt and Road Initiative (BRI) has been slowing as megaprojects have proven economically tenuous and Beijing faces its first overseas debt crises as a lender, but it’s still?expanding its footprint?in other areas, particularly in?Latin America. Despite the slowdown in funding, experts believe it is unlikely Beijing will abandon its BRI projects entirely—particularly if Beijing has long-term plans to translate some of the projects into military assets.

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Read more, including our list of must-read stories, at?FrontierMarkets.co.