Cote d’Ivoire faces continued insecurities as 2015 polls approach

On May 22, 2013,

Cote d’Ivoire faces continued insecurities as 2015 polls approach

By Anaïs De Meulder

Only two years after the 2010-2011 post-election crisis that resulted in some 3,000 deaths, Cote d’Ivoire is already preparing to hold presidential elections amidst persistent insecurities. On 4 May 2013, President Alassane Ouattara announced that voting would be conducted electronically at the 2015 presidential polls, in order to prevent incidents of ballot-box interference which were seen during municipal and regional elections, both held on 21 April 2013. The local elections, characterised by accusations of irregularities and violence, highlight the country’s persistent security problems and its lingering instability.

The polls were seen as a trial run for the 2015 presidential elections, which will be the first since the widespread political violence that followed the November 2010 vote. Fighting broke out when former president Laurent Gbagbo refused to concede victory to Ouattara, the internationally recognised winner. Continued political violence and infighting within Ouattara’s ruling coalition is likely to result in long-term ramifications for investor confidence in the West African nation. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Elections, Issues, Political risk, by Jason McGeown

Tagged with: Abidjan • Alassane Ouattara • Democratic Party of Côte d'Ivoire – African Democratic Rally • Henri Konan Bédié • Ivorian Popular Front • Laurent Gbagbo • PDCI • Yopougon

Transfer pricing: resource nationalism’s new battleground?

On May 9, 2013,

Shifting sands beneath the tax landscape. Photo credit Wikimedia

By James Smither
In a move that may prove a forerunner for other resource-rich economies, Zambia’s Finance Ministry on Monday 6 May announced new measures aimed at curbing tax avoidance by foreign investors. The country estimates that it loses around US$2bn each year to the problem, a sum equivalent to over 10% of its $19.2bn GDP in 2011. Under the new regulations, the government will from 16 May onwards require foreign currency earned from all exports over $10,000 in value to be deposited in a commercial bank in the country within 60 days and evidence to be provided for the reasons behind transferring the funds offshore.

Zambian officials have acknowledged that securing higher revenues from its mining sector, currently estimated to contribute between 9-10% of the country’s GDP and expected to grow to $1.35bn in size by 2015, is a prominent objective of this move. The country doubled its royalties on copper production from April 2012 but refused to introduce a windfall tax on company profits, a levy under consideration in fellow metals producer countries Ghana, Cote d’Ivoire and South Africa. Kenya and Tanzania also introduced higher royalty regimes in 2012, a move that may be echoed further afield in Poland, Romania, Quebec, Mexico and Brazil in the year ahead. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Economics, Financial services, Issues, Mining, Regions, Sectors, Sub-Saharan Africa, by Jason McGeown

Tagged with: Africa • African Development Bank • Finance minister • Gross domestic product • Ivory Coast • South Africa • World Bank • Zambia

Uganda’s Petroleum Act likely to boost investor interest, but risks remain

On May 1, 2013,

By Sarah Collier

Uganda’s Petroleum Act likely to boost investor interest, but risks remain. Photo Credit futureatlas

The unveiling of Uganda’s new Petroleum (Exploration, Development and Production) Act 2013, has paved the way for new bidding rounds and a lifting of the ban for new oil licenses, which has been in place since 2006. These developments have sparked a rush of interest from oil and gas firms that are keen to invest in the country’s huge hydrocarbons potential. This potential is illustrated by the success of drilling in the Lake Albert region so far, with oil discovered in 76 out of 87 wells.

The new legislation governing Uganda’s petroleum sector will provide greater regulatory clarity for investors, but the operating environment remains complex and companies need to be aware of the range of risks that they may encounter. In particular, there are challenges related to the lack of transparency, weak institutional capacity, poor oil and gas infrastructure, entrenched corruption, and the personal involvement of President Yoweri Museveni in the industry. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Economics, Issues, Middle East and North Africa, Oil and gas, Regions, Sectors, by Jason McGeown

Tagged with: Business • Lake Albert • Museveni • National Oil Company • Petroleum • Petroleum Act • Uganda • Yoweri Museveni

China baby milk crisis highlights low consumer confidence to domestic brands

On May 1, 2013,

By Guo Yu

China baby milk crisis highlights low consumer confidence to domestic brands

Purchase limits in overseas markets coupled with toughened custom controls between Hong Kong and the mainland has led to an infant milk formula supply crisis for Chinese consumers. From early April 2013, major retailers in the UK including Sainsbury’s, Tesco and Boots have all imposed purchase limits on sale of baby milk powder to two tins per person per day. This followed similar measures applied in other countries such as Germany, the Netherlands, the US, Australia and New Zealand.

The ongoing crisis reflects the very low trust and confidence in domestic products following on from the highly publicised 2008 infant milk scandal. The illegal practice of adding melamine to milk to boost the protein level led to the deaths of six infants and damage to health to more than 300,000 babies in China. The scandal together with China’s appalling food safety records have led to aspirational middle class parents paying inflated prices to online brokers for foreign-made milk powder.

As Western dairy companies seek ways to balance global supply, as well as meet rapidly growing demand from the Chinese market, some have established direct selling channels online. For instance, Danone (which produces Karicare, Cow & Gate and Aptamil) and Nestle (which owns NAN H.A & Wyeth) set up partnership with China’s Tmall (a popular business-to-consumer online retail platform owned by Alibaba Group) in March 2013 to sell baby milk powder directly to Chinese consumers. Considering the potential demand for foreign-made milk powder, China offers great business opportunities for setting up official direct selling operations, cutting off private brokers and unregulated imports. Approximately 16m babies are born every year in China and only 28% of them are breastfed. By comparison, the breastfed rate in the UK stood at 81% in 2012. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Asia Pacific, Chemicals, manufacturing and retail, Healthcare, Regions, Uncategorized, by Jason McGeown

Tagged with: Alibaba Group • China • Cow & Gate • Groupe Danone • Hong Kong • Infant formula • Netherlands • Tmall

Pressure mounts after Dhaka factory collapse, but change remains unlikely

On April 29, 2013,

Pressure mounts after Dhaka factory collapse, but change remains unlikely. Photo credit Wikimedia

By Ryan Aherin

The 25 April 2013 collapse of the Rana Plaza, which resulted in the deaths of at least 300 workers, has brought further scrutiny over poor working conditions in Bangladesh. International and domestic pressure is mounting on the Bangladeshi government to take action towards improving labour standards in the country. However, the garment industry has significant political influence, and factory owners face great pressure from their clients to maintain competitive pricing amidst tense regional competition. These factors, combined with general political instability, will make it difficult for significant improvements in labour standards to be achieved in the short term.

Political influence of garment industry inhibits change

Bangladesh’s economy relies heavily on the export of ready made garments (RMG). In 2012, RMG exports accounted for 78.6% of the country’s total of US$24.2bn (according to the country’s Export Promotion Bureau). In 2012, Bangladesh’s total value of exports to the US and EU combined was US$15.4bn, second only to China. However, regional competition in the industry is fierce – Vietnam’s own RMG sector is growing rapidly, and is threatening Bangladesh’s position, with total export value of US$12.6bn in garment exports to the US and EU in 2012. Furthermore, Vietnam’s participation in the Trans Pacific Partnership and a relatively more stable (albeit authoritarian) government will only increase its competitiveness in years to come. This will place increasing pressure on Bangladesh’s manufacturers to keep costs down. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Economics, Issues, South Asia, Supply chain risk, by Jason McGeown

Tagged with: Asia • Bangladesh • China • Dhaka • Generalized System of Preferences • Rana Plaza • United States • Vietnam

Dramatic abduction of foreigners demonstrates risks in Afghanistan’s restive eastern provinces

On April 22, 2013,

Dramatic abduction of foreigners demonstrates risks in Afghanistan’s restive eastern provinces

By Dr Karl Sandstrom

The Taliban’s capture of a group of development workers in Afghanistan this morning is not the propaganda success they are trying to make it into by claiming that the group were all NATO soldiers. In fact, once the workers’ identities have been established, a release is the most likely scenario – unless a rescue attempt is made.

On 22 April 2013, a helicopter reportedly belonging to Afghan civilian charter airline Khorasan Cargo Airlines made an emergency landing in insurgent-dominated Azra district of Logar province in eastern Afghanistan. All crew and passengers were detained by the Taliban, who subsequently destroyed the helicopter. While precise information about the passengers appears unavailable, the group most likely consisted of one Russian, one Afghan pilot/interpreter and nine Turkish civilians working on a Turkish development project in Khost (located in ISAF regional command East (RC-E)).

It is noteworthy that the Taliban claim that the entire group consisted of American soldiers and that they were dressed in US military uniforms. US forces, on occasion, have been reported to ask journalists to wear uniforms in order to blend in with the troops they are accompanied by. It is however unclear why civilian development project personnel would wear military uniforms when in transit from their own project site. Turkey, a member of NATO, does have troops in Afghanistan but they are not deployed in RC-E. Further, Turkey would most likely transport troops using its own air assets. The Russian embassy has also confirmed that one of the hostages is Russian, thus suggesting a civilian helicopter with a contract pilot. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Conflict, Issues, by Jason McGeown

Tagged with: Afghanistan • Azra District • International Security Assistance Force • Logar Province • NATO • Pakistan • Taliban • Turkey

Child labour, the vulnerability of girls and the role of business

On April 17, 2013,

Child labour, the vulnerability of girls and the role of business

By Amber Larsen

The ILO estimates that there are 215 million children labouring in the world. The underlying reasons for child labour are diverse, and include discernible issues such as extreme poverty and lack of access to education. However, what might not be as apparent are the gender dimensions of child labour exploitation and how these perpetuate poverty cycles.

Due to a myriad of factors, such as boy child preference, early marriage and traditional gender roles, girls suffer from greater disadvantages than boys in accessing quality education, restricting their socio-economic progress. For example, poverty can cause families to remove their children from school, and girls are at an increased risk of being removed from education to support their families. Data retrieved from Girls Discovered reveals how female youth literacy rates are lower than those for males in the same age group, in for example India (girls 74%, boys 88%), Pakistan (girls 59%, boys 79%), Nigeria (girls 65%, boys 78%), and Guatemala (girls 84%, boys 89%).[i] (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Human rights, Issues, Labour standards, by Jason McGeown

Tagged with: Child labour • Democratic Republic of Congo • Education • Girl • ILO • India • Nike Foundation • United Nations Foundation

EU disclosure rules target increased transparency in resource management, expanding compliance challenges for extractives companies

On April 11, 2013,

EU disclosure rules target increased transparency in resource management, expanding compliance challenges for extractives companies

By Chris Dixon

On 9 April 2013, European Union (EU) ministers reached agreement on new transparency rules for the extractives sector aimed at countering mismanagement of resources in developing economies. The EU is following in the footsteps of the US, which introduced transparency requirements under the Dodd-Frank Act in 2010. The rules are expected to be finalised by June 2013. Industry efforts to win concessions in the implementation of the law can be anticipated, however, and may delay implementation. Key business concerns include the costs of compliance and implications for data privacy.

The proposed rules put forward by the EU go beyond those introduced by the US. Notably, the rules apply to both private and publicly listed companies and extend to the forestry industry, in addition to oil, gas and mining. The EU will require companies in these sectors to disclose any payment to government over €100,000, as well as earnings by country. The rules will apply to any company with more than €40m in profits, €20m in assets or 250 employees. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Economics, Issues, Political risk, Regions, Western Europe, by Jason McGeown

Tagged with: BRIC • Dodd–Frank Wall Street Reform and Consumer Protection Act • Equatorial Guinea • European Union • London Stock Exchange • SEC • United States • US Securities and Exchange Commission

Security risks persist in Cote d’Ivoire, despite gradual progress in reconciliation

On April 9, 2013,

Security risks persist in Cote d’Ivoire, despite gradual progress in reconciliation. Photo Wikimedia

By Anais De Meulder

The exhuming of mass graves in the Yopougon district of Abidjan is a crucial step in the reconciliation process for President Alassane Ouattara’s government. However, if badly managed, these efforts could lead to renewed violence in the country. On 4 April 2013, Ivorian authorities began works to exhume dozens of mass graves dating from the post-election conflict in 2011. Violence, which broke out in December 2010 after November elections, gradually escalated as former president Laurent Gbagbo refused to concede victory to the internationally recognised winner, Ouattara. The ensuing five-month crisis resulted in an estimated 3,000 deaths. Fighting ended in April 2011, after a French-led military intervention supported by the UN peacekeeping mission, ONUCI, led to the arrest of Gbagbo by pro-Ouattara forces.

Reconciliation progress could destabilise fragile peace

While the exhumations started in Abidjan – where 57 graves have been identified – the process is targeted to gradually expand across the country over a one-year period. This small, but concrete step in the reconciliation process will be welcomed by the majority of citizens and the international community as an apparent attempt to identify and bring to justice perpetrators of the 2011 post-election violence. However, while these investigations are vital for justice in this post-conflict nation, rekindled tensions could lead to further civil unrest. Although Ouattara created a national commission of inquiry in July 2011, investigations only started six months later, in January 2012. This lapse of time, along with concerns voiced about the commission by human rights groups and UN officials, highlights the shortcomings of Ouattara’s reconciliation efforts. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Conflict, Issues, Middle East and North Africa, Regions, by Jason McGeown

Tagged with: Abidjan • Alassane Ouattara • Gbagbo • International Criminal Court • Laurent Gbagbo • Liberia • Ouattara • Yopougon

Tunisia’s sectarian divide simmers, despite the formation of a new governing coalition

On March 29, 2013,

Tunisia’s sectarian divide simmers, despite the formation of a new governing coalition

By Christian Beaumont

The composition of Tunisia’s new governing coalition reflects the authorities’ willingness to accommodate different interest groups, helping to promote stability. However, February’s short but protracted period of sectarian violence, is likely to dominate elections scheduled for December.

On 13 March 2013, the recently appointed leader of the dominant moderate Islamist Ennahda party, Ali Larayedh, won a vote of confidence in Tunisia’s National Constituent Assembly (NCA), confirming him as prime minister. Constructive negotiations in the weeks leading up to the vote helped to secure an orderly transition. However, this was only made possible by the subsidence of violence provoked by the assassination of secular political leader Chokri Belaid on 6 February. As is common across many of the post Arab-Spring states, political progress in Tunisia is often determined by the mood on the streets. (more…)

If you would like to comment on this article, request further in-depth analysis, or contact the analyst for media comment please contact: blog@maplecroft.com

in Economics, Issues, Middle East and North Africa, Regions, by Jason McGeown

« Previous Entries

Cote d’Ivoire faces continued insecurities as 2015 polls approach

Transfer pricing: resource nationalism’s new battleground?

Uganda’s Petroleum Act likely to boost investor interest, but risks remain

China baby milk crisis highlights low consumer confidence to domestic brands

Pressure mounts after Dhaka factory collapse, but change remains unlikely

Dramatic abduction of foreigners demonstrates risks in Afghanistan’s restive eastern provinces

Child labour, the vulnerability of girls and the role of business

EU disclosure rules target increased transparency in resource management, expanding compliance challenges for extractives companies

Security risks persist in Cote d’Ivoire, despite gradual progress in reconciliation

Tunisia’s sectarian divide simmers, despite the formation of a new governing coalition

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