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With saturated markets in Europe and North America, industrial firms are turning to other parts of the world to bring their craft and technology, and to maintain their growth. And right in the middle of their scope lies Africa. The size and magnitude of industrial and infrastructural project in Africa have been on the steady rise over the past years, enough to turn the continent into a new business hunting ground.

Both because of the cliché of African poverty and because of higher-economic profile countries such as China or Brazil, uninformed readers may believe that Africa’s growth is sluggish, or even dormant. Nothing could be further from the truth, with some African countries posting growth rates neighboring 10%, far beyond the champions of Asia or Latin America. In fact, even when factoring in the sluggish or war-ridden areas of the continent, Sub-Saharan Africa is the fastest developing area in the world. Some of this growth is due to post-conflict reconstruction, some due to renewed political governance. But with the vastest natural resources in a ever-hungrier world, the road is open for Africa to maintain its steady growth and attract increasing attention from foreign investors. Economic expert Krispinana Shirima Krispinana explains (1): “Although concerns exist regarding the negative effects of foreign capital inflows, including Foreign Direct Investment (FDI) and portfolio equity and debt flows, a variety of empirical studies have demonstrated that the inflows stimulate economic growth with the transfer of new technologies and innovations, human capital formation, and integration in global markets.”

With wanting areas of development, and stabilized conditions foreign investors will be the key to unlocking projects. The Ethiopian Herald reports the effectiveness of foreign funds investment (2): “Ethiopia has continued becoming investors’ choice. It is attracting more Foreign Direct Investment (FDI) from time to time. Particularly, textile and garment manufacturing industries, as the sectors are labour intensive, they create millions of job opportunities, and help transfer technology.” Even with the period of peace and stability, little or nothing will happen without FDIs, due to lack of available native funds from the African private sector. A playground is a necessary condition to play, but not sufficient to launch the game.

Business day highlighted this dilemma (3) in its February 2017 analysis : “Between 2010-2016, Africa recorded $22.7billion in private equity transactions, reports the Financial Times (FT), representing only about 1% of global PE investments despite a contribution of roughly 3% to global GDP. Furthermore, the majority of the transaction capital came from a few big investment firms targeting a limited number of deals.” This entails that a vast majority of investments are injected by the public sector, with often reduced efficiency, exposure to graft and dependence upon international aid.

Africa has succeeded in turning its difficulties into opportunities. With less than half the continent electrified, save Northern Africa, lack of access to reliable power has plagued economic development for years. Today, numerous projects are coming out of the ground with off-grid powering solutions. Expansion of water networks or transportation networks, which suffer years of belated maintenance, is currently picking up. “A doubling of Ethiopia’s road network in two decades, has allowed more farmers to bring their produce to market”, the Overseas development Institute published in a recent report (4), stressing the impact on the general economy of the country “On average, Ethiopia’s economy is growing at 10% a year and it is expected to double within the next seven years. This means that by 2025, it will have grown to a middle-income nation. This is as reported by World Bank.” In fact, off-grid power solutions are on the rise in Europe also, where households seek to take part in environmental progress by producing their own power; so, Africa may prove to be the test lab and launching pad of the nascent technology, which Europe will then absorb with its high purchasing power.

Moreover, an increasing number of reforming and corruption-fighting leaders are at work in Africa and getting traction, according to many experts. Patrick Couzinet, director of Veolia Water Technology for Africa, gives great importance to the link between governance and economic perspectives: “In terms of development, economics and politics are one. And we are at the beginning of a new phase of stability, development and growth, with projects ready for every industry to strive on; from communications to transport, and from energy to tourism”. Throughout African 20th century, there has been many examples of development eras snapped short by revolts and instability sparked off by one political group. And when stability was assured, it has often been the silver lining of locked political interests, with a high cost to economic development. The political layer within countries often has more nuisance power than added value: it is difficult for the political establishment to develop by itself, but it can hamper development by itself. According to Patrick Couzinet, this threat is slowly drifting away from Africa, through reforms and structuration.

If anything is to confirm that the African continent is sizzling, it is the increase in foreign investments from China and from Western countries. Several post-crisis reconstruction phases are currently in progress, which yield high growth rates, just as the post-war reconstruction efforts pushed Germany and Japan to the top of the world’s economic ranking. And because the project under way are basic infrastructural equipment, it is very likely that it will bear further economic growth. There will therefore be many business opportunities for British and European businesses, due to Africa’s need for technological transfer.

(1) http://allafrica.com/stories/201702150099.html
(2) http://allafrica.com/stories/201702180276.html
(3)https://www.businessdayonline.com/corporate-data-access-africa-sparking-private-sector-investment-greater-transparency/
(4) https://www.africanexponent.com/post/the-6-fastest-growing-economies-in-africa-36

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Economy

Joao Vale e Azevedo: pessimistic prospects could be tackled by collectivity

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As we enter the new year, the effects of 2021 are now echoing in the economy in 2022. According to the World Bank’s latest Global Economic Prospects report, global growth is expected to decelerate markedly from 5.5 in 2021 to 4.1 in 2002 and 3.2 percent in 2023. This has been proposed both in the case of developing and major economies, such as the case of the United States.

In 2021, governments around the world have suggested that it was a year of rebirth. However, current numbers are not showing that and so not everyone is trusting on this bet. This is the case of Joao Vale e Azevedo, chairman of KUNST Global – an equity firm based in London, Geneva, Zurich and Luxembourg. For him, the forecast is still negative for 2022 as inflation keeps on running critically in the US and in many European countries. But unlike in the 1970s and 1980s, the solution won’t lie in governments printing money like they did in the past.

The chairman of KUNST Global also doesn’t think that the so-called commodity crisis is temporary as the news might say. In fact, Azevedo believes that there is more to it than the effects of the pandemic. While the Covid-19 crisis has ignited the growth of e-commerce, Azevedo claims that this intensification in demand for goods would happen anyway and the problem is actually in the distribution industry: “It is unable to meet this increased demand. There is no labor, no trucks, nor ships. The offer is no longer able to meet the market demand and this is not a contingency, it is a physiological fact.”

Finally, the third and possibly the most concerning problem is the price of energy. “This is really a worrying question, and not only for our distant future, as it has been up to now, but also for our present,” explains Azevedo. “We are witnessing it on a daily basis: electricity and gas bills have skyrocketed. Families and companies, which were already suffering from the pandemic, do not know how to cope with the increases.”

Although propositions like moving from coal to gas or from oil to electricity may point the way out, Azevedo thinks we are completely deprived of the infrastructure and funds necessary to manage this change. What is more, the chairman of KUNST Global argues that present politics lacks long-term vision, which means politicians are often too focused on electoral cycles instead of considering the future – thus mining any possibility of investments for change.

In addition to that, Azevedo has been keeping a close eye on the war in Ukraine. In his opinion, if Russia persists in carrying on the war, not only this country will be doomed to bankruptcy, but the whole West could face a domino effect. “Regardless of this, the war in Ukraine means greater market instability, rising energy prices that are already out of control, and a further increase in inflation, which could reach double the current levels,” he adds.

However, not all hope is lost. Hopefully, the war in Ukraine will find a rapid resolution, which is something that could catalyze even more this sense of collectivity that Joao Vale e Azevedo sees growing after two years of pandemic. “The fact that we have had fewer opportunities for interaction has meant that we are now more aware of the value of those interactions, and probably also of human life. We are a stronger community. The challenges that await us are very difficult, but together we are much better prepared to face them,” he concludes.

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Economy

How People Around The World Are Investing Their Money

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One thing that everyone should aim to do with their spare cash is to invest it – as wisely as possible, but at least in a way which is going to lead to potentially high returns. If done correctly and with a bit of good fortune, it is perfectly easy to improve one’s wealth to a considerable degree this way, and it is therefore well worth people considering this.

As it happens, there are a lot of investment options that people are making use of all over the world, with some that are especially popular right now. Let’s take a look in some detail at some of the major ways in which people are investing their money – and making some considerable gains, in many cases.

Stocks & Shares

Arguably one of the most popular forms of investment is stocks and shares – which can be incredibly lucrative if it is done in the right way, and with the right set of circumstances behind an investment. Indeed, stocks and shares remain the number one investment that people are engaging in every day throughout the world, and with good reason. Not only is it potentially something that can bring considerable returns, it is also relatively straightforward to get into and learn at least the basics of, making it a very simple and easy form of investment for most people.

It also doesn’t require a huge amount of money to get going – although having that is obviously not going to hurt one’s chances of success starting out! In fact, it’s doable to get going with stocks and shares with literally a few spare pennies – so it really is something that pretty much anyone can get into and make use of. It can also be a good way to diversify and widen out a portfolio that may include other forms of investment as well.

Savings Accounts

Although many people think of investment and savings as two different things, they are really just two sides of the same coin. You can think of saving as a form of investment, especially if it is done in the right manner and with the right approach. Of course, in order to find success with this, it is important to make sure that you are choosing the best savings account there is. That means one that has a high enough interest rate for it to be worth it, as well as having other functions that might be important to an individual – such as the ability to take money out whenever you need to, for instance.

With interest rates diving all over the world, this is quickly becoming one of the less popular forms of investment – but for now it is still worth considering, as it can be a good way to at least store your spare cash as necessary. If nothing else, you’ll probably find that you are able to find yourself in a much better financial position this way soon enough, even if that doesn’t happen as quickly as it might with certain other investments.

Cryptocurrencies

Although there is some controversy around cryptocurrencies, there is no doubt that it is one of the world’s most popular forms of investment right now. There is also no doubt that it’s possible to make a lot of money this way – as some of the world’s richest people have done so already. Even in a much lesser sense, however, it is perfectly possible for an individual with a regular amount of wealth to make money investing in cryptocurrencies. And generally, this is done in a few key ways.

First of all, you can simply buy some crypto and then hold on to it, hoping for its value to improve and selling it on once it has done so. Alternatively, you might want to consider trading crypto coins by buying one kind and then trading into another as you think it might be lucrative. This takes a bit more knowledge, patience and skill, but the returns can be significant. Either of these can work very well, however, and they are worth thinking about at the very least.

A related form of investment, in that it too relies upon blockchain technology, is NFTs. These pieces of art can be bought and traded as above, and some of them are creating huge amounts of money for people right now, so it might well be worth getting into.

Spread Betting

Another form of investment that a lot of people are getting into in the past few years is something known as spread betting. This is where you place bets on a variety of outcomes on a particular event, whether it’s a sport, a political event or whatever else it might be. With the right bet and the right outcome, this can be a really effective way to make some money, and it is best done with the attitude of it being an investment rather than a bet – as this helps in keeping things a little more sensible.

To make the right decisions, it is helpful to be patient and work out what kinds of results are likely to occur, and to find them at a good price. Searching for NHL picks and horse racing tips is a good place to start for that. However it might be done, with care and attention this can prove to be a decent way to invest some spare money, so it is definitely something to think about.

Bonds

If you are particularly keen for a very safe form of investment, it is well worth looking into bonds. Bonds are something like a savings account, but with an important difference that needs to be understood well in order to make good use of them. Essentially, you buy a bond and you will be paid back your initial investment, plus any interest that may have accrued along the way too. They are very low-risk and yet can bring you a lot of money over the long-term, so they are worth looking into for pretty much anyone looking to make a little money on the side.

Bear in mind that you won’t be able to access the money during the fixed rate period, so you should only invest whatever you don’t need to have immediate access to. However, they offer higher interest rates than your average savings account, so it can be worth it.

Precious Metals

Another form of investment that many people around the world are investing in right now is precious metals. In truth, these are always popular, and it’s not too hard to appreciate why. After all, precious metals will generally always retain their value even when everything else in the world is going through turmoil. That is especially true of gold, which still holds the standard that the global economy works by – with the exception of cryptocurrency.

As you can see, precious metals are almost certainly worth considering at the very least if you want to invest your money wisely. But make sure that you are only putting what you can afford to lose into this investment, like any other. Although it is not the highest-risk investment, it is not zero-risk either.

Those are just some of the most popular investments around the world that people are making good use of right now. Any of these could be lucrative and useful for you, so take a look at them in turn and see whether any of them are suitable for your needs and purposes. You might be surprised at how effective they can be.

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China

Ridiculous Tariffs on Wines – China Australia Trade War Explicated

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China Australia Trade War
Scott Morrison (right) has not yet been able to secure a bilateral meeting with Chinese President Xi Jinping (left).(ABC News)

Earlier in November 2020, Communist China slapped Ridiculously high tariffs up to 212.1% on Australian wines. These tariffs were in the response of ongoing trade war between Communist Party of China and Australia. China is the biggest importer of Australian wines making up a whopping 39% of Australia’s total wine export. Australia has already raised concerns at a WTO meeting about China taking measures against its barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton, according to a reuters report.

How did China – Australia trade war begin?

China and Australia shared one of the best times in their relationship after Kevin Rudd from the centre-left Labour party came to the power in Dec 2007. During his leadership Australia decided to pursue appease China policy which included steps such as:

  1. Chastising Taiwan for its renewed push for independence and reiterating support for a one-China policy in favor of People’s Republic of China. (Source: The Age)
  2. Signing a A$50 billion deal with PetroChina in 2009 (largest contract ever signed between the two countries) that ensures China a steady supply of LPG fuel until 2029.
  3. Unilaterally announcing departure from Quadrilateral Security Dialogue to appease China.

Nosediving of China – Australia Relationship

The course of this partnership changed when Julia Gillard from the centre-left Labour Party took over the leadership and initiated closer partnership with United States. This included revival of interest in Joining Quadrilateral Security Dialogue and stationing of US troops near Darwin, Australia.

In 2013, Tony Abbott from centre-right Liberal Party took over the leadership. During his term Australia saw some confusion in its China Policy. His Defence Minister Senator David Johnston told in a statement that Australia is seeking to balance their relationship between China and the United States. It was during his term when Australia and China established a Free Trade Agreement.

However, the relationship between Australia and China took a downturn in 2015 when Malcolm Bligh Turnbull from the centre-right Liberal Party came into power. This is the point in history which has led to current trade war situation between Australia and China.

  1. Australia became the strongest opponent of China’s territorial claim in South China Sea.
  2. Banned foreign donations to Australian political parties and activist groups in a move to target Chinese interference in Australian democracy.
  3. Revived Quadrilateral Security Dialogue with United States (Donald Trump), India (Narendra Modi) and Japan (Shinzo Abe). This was the time when Quadrilateral Security Dialogue saw hope of becoming something bigger as all four countries had centre-right governments who had a clear China Policy.

2019 Onwards: China – Australia Trade War

In 2019, relationship between the two countries further took a dip with Scott Morison from centre-right Liberal party becoming the Prime Minister. During his leadership:

  1. Australia signed a letter condemning China’s mistreatment of Uyghurs and other minorities.
  2. Suggested investigating the cause of Covid 19 in April 2020, which resulted into an angry response from China threatening to reduce Tourism and Trade.
  3. Opposed the Hong Kong National Security Law in June 2020.
  4. Reiterated its support for ethnic minorities in China and freedom in Hong Kong in October 2020
  5. Demanded a formal apology from China for posting a fake image of an Australian soldier holding a bloodied knife against the throat of an Afghan child

In conclusion, these continuous attack on China made China so angry that they deliberately leaked a list of 14 points suggesting why China is angry at Australia

China’s attempt at “buying” left wing politicians around the world

Recent trend is suggesting China’s attempt at “buying” influential left-wing politician around the world. In November, 2017 Australia’s Labour Party’s MP Sam Dastyari went against his own party on South China Sea. He later quit his party after he was found of taking financial favours from China.

In 2008, India’s Centre-left party – Indian National Congress signed a Memorandum of Understanding with Communist Party of China. Its contents are still hidden from the Government of India and the people of India.

Recent US Report has shown concern on President Elect Joe Biden not clearing doubts on his China policy.

How Can we Help Australia Post Ridiculous Tariffs on Australian Wines?

In 2020 China has directly or indirectly impacted many of our lives. Some of us have lost our jobs, some of us are taking a reduced salary. In fact, some of us are sitting at home instead of travelling; while some of us have lost our loved ones only because of communist party was incapable of controlling a virus outbreak.

As the entire world is struggling with this virus, Chinese economy continues to be on path of surpassing the US. Therefore, we should pledge to minimize buying Chinese products. It might be impossible to completely boycott Chinese products, but we can at least minimize it.

Install Cultivate Chrome Extension (non sponsored/affiliate link – We are not getting paid to post this). This plugin works on both Google Chrome and the new Microsoft Edge. It helps you understand the origin and seller location of a product on Amazon. It is a great tool to minimize your dependence on Chinese products. If you are lucky, this extension will also suggest some Made in USA alternatives

Buy Australian Wines – Australia desperately needs a new market for its wine and other products. This New Year and Christmas season, we should pledge to celebrate with at least one Australian wine!

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