By Zubin Eimen
When the U.S annualized inflation rate hit 9.1% this June, newspaper headlines screamed “crisis.” No doubt, such inflation numbers pose a serious challenge to U.S President Joe Biden and a continuing challenge to the American consumer who has not seen such price rises in four decades.
The U.S, however, is not alone. Europe is also experiencing similar inflation numbers, as are many countries across the developing and emerging world. In fact, the general increase in the prices of goods and services – the basic definition of inflation – has become a global phenomenon, generating a great deal of uncertainty and instability.
From supply-chain issues in the wake of strong consumer demand, to worker shortages, to financial instabilities from the Russia invasion of Ukraine, a wide range of factors have been pushing prices upward.
For some countries, particularly in the developing world, inflation has hit truly crisis proportions.
Here are the current Top Ten highest inflation rates by nation, with the most up-to-date figures available (measured on an annual basis).
|Sri Lanka||55 %|
By Kian Akhavan
The advent of the internet has fundamentally reshaped society, the economy and global politics.
Its ubiquity has made the world a smaller place, democratizing knowledge and removing barriers to communication. As an inextricable part of daily life for billions of people, service providers collect and store troves of personal data, from the trivial – like information about an individual’s shopping habits – to the most intimate – like their bank details and social security numbers.
Like any major transnational phenomenon, the internet, and particularly the data stored within it, has created new threats to privacy, security and civic cohesion. As a result, it has become a key feature of the ever-intensifying geopolitical rivalry between the United States and China.
For decades, the United States and its rivals have been conducting cyber espionage and executing cyberattacks on each other. Perhaps most notably, the Chinese government has been accused of conducting (cyber-)espionage against Western countries, particularly the US. One of the most significant such attacks occurred in 2015, when Chinese intelligence agencies gained access to US government security clearance files by hacking into its Office of Personnel Management.
This revealed the personal details of nearly 22 million federal government employees and contractors, such as their foreign contacts, health histories and details about their personal relationships, including extramarital affairs.
Later that year, Chinese President Xi Jinping and US President Barack Obama announced that they had reached an understanding that their respective countries would refrain from conducting state-sponsored cyber attacks on each other while they negotiated international legal frameworks to regulate “appropriate conduct in cyberspace”. In practice, this agreement served as little more than an exercise in public relations to show superficial goodwill between the two countries.
The next major blow in this digital conflict was struck in 2017, when a cyber-intelligence wing of the Chinese military breached the servers of Equifax, one of the world’s largest consumer credit reporting agencies, and accessed the birthdates and social security numbers of over half of the American population.
This marked a distinct shift towards a new era in cyberwarfare and international relations; the Justice Department claimed that this information is valuable to the Chinese government, particularly its intelligence services, because it allows them to see if any known American government employees were struggling financially and would thus be susceptible to bribery.
In 2020, the Trump administration announced that it was considering banning TikTok, a popular video-sharing app, from the United States because of concerns that Beijing could easily access the personal information of American users through the app’s Chinese creator, ByteDance. It was recently revealed that ByteDance’s engineers in China could access US user data while their US-based counterparts could not.
Beyond its use in exploiting human vulnerabilities within a rival government, the mass collection of personal data can be used to tailor a country’s soft power and political interference campaigns; data about internet traffic is crucial to painting an accurate picture of a national zeitgeist, completely transforming the nature of intelligence-gathering.
For example, by identifying the content with which a specific group interacts, an actor can tailor its messaging to a target audience. In the past, aggregate data has been used to inflame tensions between groups and otherwise meddle in domestic politics, perhaps best exemplified by the Cambridge Analytica scandal and Russia’s interference in the 2016 American presidential election.
With nearly one billion users worldwide and ByteDance’s legal obligation to provide the Chinese government with user data, as well as its existing access to it, TikTok is a unique tool for the Chinese government to harvest the sensitive data of the app’s users. The app is banned in several countries, including India, whose government has cited privacy concerns as the reason for banning the app.
China’s stringent internet censorship makes it difficult for the United States to have an intelligence asset equivalent to TikTok but, from what can be gleaned from public information, it is still very active in its cyberespionage efforts. Chinese state media outlets have recently begun to publicise American cyberattacks in China and around the world, in an apparent effort to both position itself as a dominant figure in cyberspace and to drive a wedge between the United States and its allies, showing that no country is safe from American cyberespionage.
Amid this new era of great power competition, and as the New Cold War quickly heats up, both the United States and China will continue to exploit vulnerabilities in the other’s digital systems to grow their respective collections of personal data. Many of the world’s leading analysts and strategists note that the US-China rivalry is the dominant feature of contemporary geopolitics. As this competition intensifies, so too will the ongoing cyber warfare escalate.
Dear New Silk Road Fellow Travelers,
I wanted to share with you a piece I wrote more than a month ago on Russia’s invasion of Ukraine and its worldwide implications.
You can find the full article over at Emerging World, my Substack newsletter.
Here is an excerpt below:
Russian President Vladimir Putin’s brutal invasion of Ukraine set off a bomb in our global order. The question on all of our minds is: Where is all of this headed?
First and foremost, there is the tragic human toll in Ukraine. Bucha. Mariupol. Kyiv. Cities little known to most of the world have now become symbols of war crimes, tragedy, and courage.
Beyond this immediate human impact, there is the feel of tectonic plates crunching, of certainties crumbling, of history spinning a new web that will entangle us all.
That old, pithy quote from Lenin is back, making its way through Twitter and chat rooms: “sometimes decades pass, and nothing happens. Then, weeks pass, and decades happen.”
I remember seeing that quote trotted out during another seemingly historic moment – the Arab Uprisings of 2010-11. But this is obviously different. This feels 19th century – land grabs and diplomats huddling and soldiers marching through the cold. But, of course, this is the 21st century, so the tools of our era — from ballistic missiles to drones to social media to sanctions — are also shaping the outcome.
What to make of these “decades” happening over the past two weeks? Of Putin’s gamble? Of Putin himself? After all, this was a leader, the pundits told us, who may be brutal, but he was ‘savvy’ and ‘clever,’ the sort who may set a fire (ask the citizens of Aleppo of Putin’s fire), but not get singed. He is certainly feeling the heat now — even as his forces continue to rain fire on Ukraine.
How long can this last? Where will this end? Will the conflict metastasize? This leads to the ultimate question: are we on the verge of World War III? These are questions almost impossible to answer, so I will not, dear reader, abuse your attention with my idle speculation. Not only is there fog in war, but there is fog in the minds of key leaders who, ultimately, will drive this war.
For the full article, go here
By Zubin Eimen
The Covid-19 pandemic dramatically transformed our lives, leading to millions of deaths and reordering societies all around the world. From the masks we wore every day, to the virtual meetings and classes we attended, to the limited capacity and social distancing guidelines we followed, to the many loved ones we could not see in-person, the pandemic will forever be remembered as a defining moment in our history.
First detected in China in early January 2020 as a novel coronavirus, COVID-19 has infected more than 209 million people worldwide and caused some 4.4 million deaths. The United States, India, and Brazil have been the hardest hit nations in the world, both in terms of total cases and total deaths. When looking at deaths per capita, however, Peru is at the top of the list along with several European countries such as Hungary and the Czech Republic.
In December 2020, a glimmer of hope was brought onto the world as the United Kingdom became the first nation to officially approve a COVID-19 vaccine for widespread use with the Pfizer-BioNtech vaccine. The United States soon followed suit, rolling out the same vaccine, along with the Moderna and Johnson & Johnson vaccines shortly after. All three of these vaccines, as well as Oxford-AstraZeneca, have been approved and distributed throughout much of the world. Russia and China have developed, approved, and distributed their own vaccines as well.
Though the world still faces tremendous challenges, from post-Covid economic recoveries to the rise of variants that challenge vaccines and re-openings, in many parts of the world we are finally beginning to witness a re-emergence to some level of normalcy. As nations all across the world steadily increase their vaccination efforts, as well as administer more effective therapeutics, it is a good time to look at the progress we have made.
There are many hurdles that can go into trying to get people vaccinated within a specific region, including limited available resources, distribution inefficiency, and vaccine hesitancy. For example, although the United Kingdom and the United States were two of the first nations to approve COVID-19 vaccines, and have had profound distribution efforts, they are both not in the top ten of percentage of population vaccinated.
When looking at the percentage of the population vaccinated within continents, Europe and North America dominate this list. Many of the low-income countries in Asia, Africa, and South America have yet to make significant strides with the limited supplies currently available to them. The international community has pledged equitable access to COVID-19 vaccines will eventually be achieved, however, through the worldwide initiative called COVAX.
Here are the current Top Ten nations and Top Six continents by percentage of population fully vaccinated:
|Country||% Population Fully Vaccinated|
|2. United Arab Emirates||73.0|
*Excludes small islands, nations, and territories; U.S. #27 (50.4%)
|Continent||% Population Fully Vaccinated|
|2. North America||39.95|
|4. South America||24.58|
By Martin Vatanka
Like many countries, Russia faced economic contraction in 2020 as the Covid-19 pandemic wreaked havoc on the global economy. Russia’s economy contracted by 3% in 2020, though the country had been accustomed to slowing or negative growth long before the pandemic. Ever since its GDP hit an all-time high of $2.292 trillion in 2013, the economy has been on the decline or slowing, owing to volatile oil prices and mounting Western sanctions due to its annexation of Crimea.
For Russia’s economy to fulfill its potential, it will need to grow and diversify its export base. Here are the top ten export destinations for Russian goods
Russia’s Top Ten Export Destinations – 2020
- China $49.58 Billion
- The Netherlands $25.34 Billion
- United Kingdom $23.06 Billion
- Germany $18.63 Billion
- Belarus $16.02 Billion
- Turkey $15.75 Billon
- Kazakhstan $14.05 Billion
- South Korea $12.52 Billion
- United States of America $10.82 Billion
- Italy $9.87 Billion
- China became the top 1 biggest customer of Russian exports in 2017, overtaking the Netherlands.
- Russia’s top exports to the international community are Crude Petroleum, Refined Petroleum, Gold, and Coal.
- Russia’s GDP hit an all time high of 2.292 trillion USD in 2013, shortly before the Russian annexation of the Crimea in March 2014, which led to many sanctions by the European Union and the United States being put on Russia and severely hurting its economic growth.
By Zubin Eimen
As the world increasingly focuses on climate change as a vital global issue, fossil fuels have come under fire. These fuels – coal, natural gas, and petroleum – account for about 74% of greenhouse gas emissions in the world.
While fossil fuels are major greenhouse gas contributors, they have also been vital to our modern global economy. From the fuels that transport us, to the life-saving medicines that heal us, to the plastics used in everyday products, to the electricity that powers us, fossil fuels have become critical to our modern life. In fact, they account for 84% of the world’s energy.
The most widely used fossil fuel in the world today is petroleum (oil). Although initially discovered in ancient times, the oil industry did not take off until the start of The Machine Age in the early 20th century. Today, there are several global economic sectors that highly rely on oil, especially the transportation and electricity sectors, and it is the largest traded commodity in the world.
The oil industry has historically been dominated by three nations: The United States, Russia, and Saudi Arabia, which currently account for about 42 percent of the oil production in the world. Saudi Arabia is a member of The Organization of the Petroleum Exporting Countries (OPEC), which consists of 13 nations from the Middle East, Africa, and South America, with the rest of its members being significant oil contributors as well. Saudi Arabia and Russia have increasingly worked together over the past year to try to balance oil markets and forestall lower prices.
Over the past decade, the United States has risen to become the world’s largest producer of oil, thanks mostly to advances in exploration and production on shale oil and gas.
Here are the current Top Ten oil producing nations in the world:
Top Ten Largest Oil Producers in the World (2020)
|Country/Region||Production||Share of World Total|
|1. United States||19.51 million bpd||~19%|
|2. Saudi Arabia||11.81 million bpd||~12%|
|3. Russia||11.49 million bpd||~11%|
|4. Canada||5.50 million bpd||~5%|
|5. China||4.89 million bpd||~5%|
|6. Iraq||4.74 million bpd||~5%|
|7. United Arab Emirates||4.01 million bpd||~4%|
|8. Brazil||3.67 million bpd||~4%|
|9. Iran||3.19 million bpd||~3%|
|10. Kuwait||2.94 million bpd||~3%|
The Top 5 Stories Shaping the New Silk Road – March 3
Hyundai Heavy Industries Joins with Saudi Aramco on Hydrogen Project – “Hyundai Heavy Industries Holdings said Wednesday that it has signed a deal with Saudi Arabia’s state-run oil firm Saudi Aramco to cooperate on a hydrogen project. Under the deal, Hyundai Oilbank, HHIH’s refining unit, will import liquefied petroleum gas from Saudi Aramco to produce blue hydrogen, which is derived from fossil fuel resources such as natural gas, the holding company said.”
“Carbon dioxide captured and stored during the production process will also be provided to Saudi Aramco for the extraction of crude oil from exhausted oil fields. Hyundai Oilbank plans to sell blue hydrogen as fuel for vehicles and thermal power plants or to use it for desulfurization equipment, HHIH said. The refining unit also plans to set up 300 hydrogen charging stations by 2040 across South Korea.” The Korea Herald reports.
Chinese Firms Still Actively Hacking Indian Port, Report Says – “At least one connection opened by Chinese state-sponsored hackers into the network system of an Indian port is still active, even as authorities block attempts to penetrate the South Asian nation’s electrical sector, according to the U.S. firm that alerted officials.”
“As of Tuesday, Recorded Future could see a ‘handshake’ — indicating an exchange of traffic — between a China-linked group and an Indian maritime port, said Stuart Solomon, the firm’s chief operating officer. Recorded Future calls the group RedEcho and says it had targeted as many as 10 entities under India’s power grid as well as two maritime ports when the company first notified India’s Computer Emergency Response Team on Feb. 10. Most of these connections were still operational as recently as Feb. 28, Solomon said. ‘There’s still an active connection between the attacker and the attack,’ Solomon said, referring to the port. ‘It’s still happening.'”
“A spokesman for India’s Ministry of Electronics and Information Technology wasn’t immediately available for comment. “Without any proof, slandering a specific side is irresponsible behavior and an ill-intentioned one,” Chinese Foreign Ministry spokesman Wang Wenbin said in Beijing on Wednesday.” Bloomberg reports.
Iraq Receives First Vaccines as Gift from China – “Iraq on Tuesday received 50,000 Sinopharm vaccines donated by China, the health ministry announced, launching a long-awaited vaccination campaign.”
“Health ministry spokesman Seif Al-Badr told reporters that the first delivery in the early hours meant inoculations could begin.
‘The doses will be delivered to Baghdad’s three main hospitals, and maybe to some provinces,’ said Badr, who confirmed the jabs were donations. ‘We will start vaccinations today, Tuesday,’ he said.”
“The health ministry simultaneously announced it had agreed with the Chinese ambassador in Baghdad to purchase another two million doses, with no details on payment or timing.Sinopharm affiliate Wuhan Institute Of Biological Products says its vaccine has an efficacy rate of 72.51 percent, behind rival jabs by Pfizer-BioNTech and Moderna, which have 95 percent and 94.5 percent rates respectively,” Arab News reports.
Pakistan Urges Sri Lanka to Join China-Pakistan Economic Corridor, Sparking Concern in Delhi – “Pakistan’s offer to Sri Lanka to join its multibillion-dollar trade and infrastructure scheme with China under Beijing’s Belt and Road Initiative has raised concerns in Indian policy circles, as New Delhi seeks to secure its influence in a region where China’s presence is growing.”
“On a two-day visit to Colombo last week, Pakistani Prime Minister Imran Khan urged Colombo to participate in the China-Pakistan Economic Corridor, which comprises railways, power plants and the deepwater Indian Ocean port of Gwadar. The CPEC is aimed at offering China a major overland route from its western frontiers to the world but critics have accused it of being a debt trap for Islamabad. India has kept a close watch on the visit but has not commented on it.” South China Morning Post reports.
Morocco Top Arab Exporter to Brazil in January – “In January 2021, Morocco exported $100 million of goods to Brazil, making the country the top Arab exporter to the country. According to data from the Arab Brazilian Chamber of Commerce (ABCC), Morocco had the most sales, claimed Brazil.”
“Morocco’s exports to Brazil were up by 95.5%. Moroccan exports to Brazil with the most growth were fertilizers (118.3%), inorganic chemicals (137.9%), and seafood (44.2%). Morocco and Brazil share good trade cooperation. In 2020, Moroccan exports to Brazil reached $1.2 billion, making Brazil the third largest customer after France and Spain. Brazil’s trade with all Arab countries climbed by 17.3% in January compared to the previous year.” Morocco World News reports.
The Top 5 Emerging Markets Stories – January 29
- GameStop Frenzy Spreads to Asia – Singapore Straits Times/Reuters
“Asia’s retail investors, emboldened by the meteoric rise of US videogame retailer GameStop, are taking on short sellers and making their brokers nervous enough to cut off margin lending.”
“In South Korea, small investors known as ‘ants’ have borrowed so much money to dabble in stocks that at least half a dozen brokerages have stopped offering them leverage.”
“GameStop’s global impact is the latest manifestation of a day-trading mania driven by amateur investors that is boosting the price of assets ranging from cryptocurrencies to new stock market listings,” Reuters/Singapore Straits Times report.
- Retail Investors Storm Kuaishou Technology IPO – Reuters
“China’s Kuaishou Technology raised $5.4 billion from its IPO, the top of the range, with offers from retail investors reaching a mammoth $162 billion, nearly half of it backed by margin loans, three people with knowledge of the matter said.”
“Combining retail and institutional demand, the offering saw total bids worth over $370 billion, more than the gross domestic product of Hong Kong, for the 8.9% of the online video site on offer. The shares were priced at HK$115 ($14.83), two of the sources said, making the company worth $60.9 billion.”
“The huge demand comes amid growing fears about an asset bubble, with amateur investors boosting the price of assets ranging from cryptocurrencies to new stock market listings.”
“Those concerns, triggered by a sharp surge in U.S. videogame retailer GameStop and a few other stocks, have led some brokerages globally to raise margin requirements or stop offering leverage for buying securities.”
“Retail investors bid for more than 1,200 times the amount of Kuaishou shares on offer for them as the book closed on Friday, said the sources, who declined to be named as the information had not yet been made public,” Reuters reports.
- EM Record Borrowing Sparks Debt Concerns – Wall Street Journal
“Developing economies borrowed at a blistering pace at the start of the year after a record 2020, prompting questions among investors about whether they are building up debt problems for the future.”
“Governments and companies in developing countries have sold close to $100 billion of bonds so far in January, using the cash to plug budget deficits and shield themselves from the economic impact of the coronavirus pandemic, according to data from Dealogic. In all of 2020, they borrowed $847 billion.”
“‘We’ve never seen a busier start, in terms of issuance year to date—by a large margin,’ said Stefan Weiler, a regional head of emerging-debt capital markets at JPMorgan. ‘From an issuer perspective, it’s hard to see market conditions improving.’” The Wall Street Journal reports.
- China Earnings Set for Strong Showing – Bloomberg
“Hundreds of Chinese companies are set to report an improvement in annual earnings, offering investors a stronger fundamental backdrop after stocks sank this week.”
“Among the 1,200-odd firms listed in mainland China that issued preliminary results in January, 75% have said earnings rose last year, according to data compiled by Bloomberg as of Thursday. Firms in the communication services and health care sectors are set to report the biggest growth, followed by consumer staples and technology. Listed companies have until Sunday to announce significant changes in earnings.”
“Evidence of China Inc.’s resilience to the slowest economic growth in four decades due to the coronavirus, capped by a stronger-than-expected fourth quarter, may offer relief to investors. The CSI 300 Index, which tracks some of the biggest firms in China, rose 0.5% Friday after a three-day, 4.4% decline which raised worries that a near-term peak has been reached. That lost momentum came as the central bank withdraws liquidity and a central bank adviser warned of asset bubbles,” Bloomberg reports.
- Saudi Stock Exchange Expects Record IPO Year – Bloomberg
“The Saudi stock exchange expects to host more initial public offerings than ever in 2021, seizing on strong demand from local investors that supported several deals last year.”
“After 22 issuances across different platforms in 2020, ‘I think we will break that record this year,’ Khalid Abdullah Al-Hussan, the chief executive officer of the Tadawul exchange, said in an interview on the sidelines of the Future Investment Initiative conference in Riyadh.”
“Four companies went public last year on the main market of the Saudi exchange, raising a combined $1.5 billion, according to data compiled by Bloomberg. That was more than the $1.3 billion worth of IPOs in Germany, though far behind the listing of oil giant Saudi Aramco in 2019.”
“‘We have a very very healthy pipeline in all our platforms, and there is a good focus on Nomu and the main market,’ Al-Hussan said, referring to the parallel market for smaller listings in Riyadh. ‘So we see a good pipeline — even better than 2020,’” Bloomberg reports.
The EM 5 – The 5 Stories You Need to Read Today on Emerging Markets
1. Alibaba’s “Existential Crisis” (BABA)
“This year could be the most consequential for Alibaba since it was founded two decades ago. China’s most famous tech company faces a host of challenges at home and abroad that risk fundamentally changing it forever. Chinese authorities are investigating the company on antitrust grounds as part of a growing crackdown on the tech industry, while also pushing its sprawling financial affiliate, Ant Group, to overhaul its business,” CNN reports.
2. Is it Time to Buy Beleaguered Luckin Coffee? (LKNCY)
“When it peaked at the start of 2020, Luckin Coffee (LKNCY) traded as high as $50.02. Today Luckin stock trades around $10. A lot has changed in the last year, but a comeback could be on the horizon,” writes Chris Lau via Yahoo Finance.
3. Taiwan Semiconductor Spending Blitz Spurs Chip Rally (TSMC)
“Taiwan Semiconductor Manufacturing Co. triggered a global chip stock rally after outlining plans to pour as much as $28 billion into capital spending this year, a staggering sum aimed at expanding its technological lead and constructing a plant in Arizona to serve key American customers. The envisioned spending spree sent chipmaking gear manufacturers surging from New York to Tokyo. Capital spending for 2021 is targeted at $25 billion to $28 billion, compared with $17.2 billion the previous year. About 80% of the outlay will be devoted to advanced processor technologies, suggesting TSMC anticipates a surge in business for cutting-edge chipmaking. Analysts expect Intel Corp., the world’s best-known chipmaker, to outsource manufacture to the likes of TSMC after a series of inhouse technology slip-ups,” Bloomberg reports,
4. The Next Wave of Korean FinTech IPOs
“Last year was a historic year for initial public offerings (IPOs). While 2021 is shaping up to be no less exciting especially for fintechs, Kakao Bank and Toss are considered as some of the top IPO candidates that deserve a closer look. The COVID-19 pandemic was the primary reason for the stellar IPOs of some fintech companies last year. The pandemic triggered a major shift in consumers’ financial services preferences to digital applications, which ended up boosting the appeal of fintechs to big investors. These developments have paved the way for more IPOs on the horizon,” Korea Times reports.
5. Reliance Industries Stores Hit by Farmer Protests
“Dozens of Reliance Industries’ retail stores and a giant Walmart outlet face revenue losses of millions of dollars after being forced to shut for more than three months over protests against India’s new farm laws, sources said. Thousands of farmers from states including northern Punjab have camped for weeks on the outskirts of the capital, in a bid to force Prime Minister Narendra Modi to repeal the laws they contend will benefit corporates, rather than cultivators,” Business Standard of India reports.
From Shenzhen Daily
“ZHONG SHANSHAN is a private billionaire who’s rarely quoted in the press.
Now, after an improbable career spanning journalism, mushroom farming and health care, he’s become Asia’s richest person, eclipsing India’s Mukesh Ambani and a group of Chinese tech titans.
Zhong’s net worth surged US$70.9 billion last year to US$77.8 billion, making him the 11th-richest person on the planet, according to the Bloomberg Billionaires Index.
Zhong’s business interests aren’t entwined with other rich families such as the property tycoons, which is why he’s known locally as the “Lone Wolf.”
He owes his success to two unrelated fields. He took vaccine maker Beijing Wantai Biological Pharmacy Enterprise Co. public in April, then months later Nongfu Spring Co., a maker of bottled water, became one of Hong Kong’s hottest listings. Nongfu shares have jumped 155 percent since their debut, and Wantai’s are up more than 2000 percent. (SD-Agencies)”