This Week on the Frontiers, September 15th 2018 - Frontier Markets News - Emerging & Growth Markets

By Anonymous

The leaders of Ethiopia and Eritrea reopened shared border crossings on Tuesday, restoring direct road transport for the first time in two decades and capping months of whirlwind diplomacy that has thawed a frozen conflict, Nicholas Bariyo reports. Ethiopia’s reformist Prime Minister Abiy Ahmed and longtime Eritrean President Isaias Afwerki gathered with soldiers and marching bands to open the frontier at Bure, a front line that saw some of the fiercest fighting during the 1998-2000 war that left tens of thousands of people dead.

This Week on the Frontiers, September 15th 2018 - Frontier Markets News - Emerging & Growth Markets
Ethiopia and Eritrea's presidents officially open the Serha-Zalambessa border crossing point.
Minister of Information Eritrea

The formal opening of the frontier paves the way for cross-border trade between the erstwhile enemies after their unexpected reconciliation since Ahmed took office in April. The leaders said troops would be withdrawn from the border—one of the world’s most heavily mined frontiers, according to the United Nations—to ease tensions.

Zambia’s ballooning external debt could hurt the investment attractiveness of Africa’s second-biggest copper and cobalt producer, Bariyo writes. Zambia has paid interest of $342 million on its $9.3 billion external debt in the first half of 2018, and according to BMI Research Zambia’s inability to reach a $1.3 billion rescue deal with the IMF could increase investors’ concerns for the Southern African nation’s macroeconomic stability. BMI warns that Zambia’s need for higher fiscal revenues in the short term might convince government “to turn to mining companies in a bid to reap additional benefits from the positive momentum in copper industry, hurting more long-term investment flows.”

Sign up here to have This Week on the Frontiers delivered to your inbox

Credit rating firm Standard & Poor’s this week upgraded Ghana’s credit rating in recognition of improvements in its monetary policy. Inflation in the West African country has been declining over the past two years and authorities’ efforts to strengthen the banking system are bearing fruit, the firm said.

Ghana has “fairly robust growth prospects, decreasing inflation, and narrower current account deficits,” S&P noted, but the firm added that the risks to Ghana’s growth story include its “still-high budget deficits and a high stock of public sector debt.”

Pakistan’s new government is pushing China to establish factories and poverty-alleviation initiatives in Pakistan instead of solely the big infrastructure programs that so far have dominated Beijing’s high-profile overseas investment program, Saeed Shah writes.

This Week on the Frontiers, September 15th 2018 - Frontier Markets News - Emerging & Growth Markets
A dredger transfers coal at the Sahiwal coal power plant, owned by China’s state-owned Huaneng Shandong Rui Group, in Punjab.
Bloomberg News

The Pakistani move to broaden that effort comes as Beijing experiences rising criticism and pushback on its program across a range of countries, from Malaysia to Montenegro. Pakistan’s government, elected in July and led by Prime Minister Imran Khan, is advocating major changes to the secretive $62 billion China Pakistan Economic Corridor, the most ambitious part of the Belt-and-Road project and centered on the building of roads, rail, power plants and a port.

The program will move toward private-sector Chinese factories in Pakistan, Pakistani officials say. More Pakistani suppliers and laborers will be included, and social-sector projects such as sanitation added, they say.

Myanmar’s leader Aung San Suu Kyi refused to criticize the military’s bloody campaign against Rohingya Muslims in her first public remarks on the issue since the publication of a United Nations report that said she bore some responsibility for the atrocities, Jon Emont writes. “I know this has been a lot of international focus, but when you say, ‘how did the military handle it?’ I think perhaps you’re thinking of the military aspect of the operations,” Suu Kyi said on Thursday at a forum in Vietnam.

That was her response to a question on how she felt about last year’s purge that killed an estimated 10,000 people and sent more than 700,000 fleeing to Bangladesh, where they remain in refugee camps.

This Week on the Frontiers, September 15th 2018 - Frontier Markets News - Emerging & Growth Markets
Myanmar State Counselor Aung San Suu Kyi.
European Pressphoto Agency

Suu Kyi was also asked about calls made by US Vice President Mike Pence—as well as other Western governments and human-rights groups—for Myanmar to release two Reuters journalists. Last week, the pair was sentenced to seven years in prison for violating an official secrets law in connection with their investigation of the anti-Rohingya campaign.

The leader of Cambodia’s now dissolved opposition party was freed on highly restrictive bail on Monday after being jailed for a year on a treason charge, the latest government opponent to be released since Prime Minister Hun Sen’s landslide election victory. The Phnom Penh Municipal Court said in a statement that Kem Sokha was granted bail due to health reasons. It stressed that the case against him would proceed. The court’s release order is so restrictive that it amounts to a form of house arrest.

This Week on the Frontiers, September 15th 2018 - Frontier Markets News - Emerging & Growth Markets
Kem Sokha seen during a Buddhist ceremony in Phnom Penh, Cambodia, in March 2017
Associated Press

The 65-year-old politician was arrested in September last year on the basis of a 2013 video clip showing him at a seminar where he spoke about receiving advice from U.S. pro-democracy groups.

Argentine inflation accelerated in August from July as the cost of imports jumped higher because of the peso’s rapid depreciation against the dollar, Jeffrey T. Lewis reports. Consumer prices rose 3.9% in the month, and increased 34.4% from a year earlier, Argentine statistics agency Indec said on Thursday. Prices rose 3.1% in July from June.

The rise was expected following the Argentine peso’s plunge to new lows against the dollar in late August after President Mauricio Macri said he would ask the IMF to speed up disbursements from a $50 billion bailout package. The announcement roiled markets, and Argentina’s central bank reacted the next day by raising its benchmark interest rate to 60% from 45% to try to support the peso.

Key Stories from the WSJ

Smartphones and Electric Cars Still Keep Miners Digging by Hand in Congo

China Poised to Win Major Victory in Sea Dispute With Help of Philippine Resources Deal

US Preparing for Second Trump Meeting With North Korea’s Leader

Egypt Court Sentences 75 to Death in Mass Trial of Protesters

Iran Develops a $5 Billion Weapon to Fight Sanctions

Iranians Can’t Leave Home as Sinking Currency Stymies Travel

US Pressure on Palestinians Raises Middle East Tension

Rising Violence in Basra Highlights US-Iran Fight for Influence in Iraq

US Warns Iran After Attacks In Iraq

Around the Web

Ethiopia Bags China Debt Deal, Others Wait

Ghana and Côte d’Ivoire Cement Cooperation Agreement on Cocoa

Nigeria’s Finance Minister Resigns Amid Scandal and Confusion

Rwanda Woos Chinese Investors and Tourists

Indonesia Targets $10b Trade With Vietnam by 2020

Vietnam Set to Gain From US-China Trade War

Myanmar Gets $300m ADB Loan to Expand Power Grid

Sri Lanka’s PM Defends Country’s Economy

China To Build $1.2b Holiday Hotspot in Cambodia

Saudi Arabia Launches New Islamic Bonds Worth $2b

Mobius Seeks £200m for Frontier-Emerging Investment Trust