CNN’s guests were Hakan Ates, president and CEO of Deniz Bank; Emilio Lozoya, CEO of PEMEX; Charles Robertson, global chief economist at Renaissance Capital; Vladimir Yakunin, president of Russian Railroads and Nikolai Zelenski, CEO of Nordgold.
Between them, the panelists represented countries from the BRICs and other countries tagged as ones to watch.
Robertson kicked off the conversation with his blunt assessment of the world’s potential to be dragged out of its mire by China.
The country, whose economy was last year flagged to become the world’s biggest by 2016, has slowed and expectations for its growth downgraded.
Robertson said the country will never again grow at a sustainable 10 percent.
“But the BRIC’s other true pillar--India--cannot yet match its potential,” he added.
Russia and Brazil are the other two nations that fall under the BRIC acronym, coined by former Goldman Sachs economist, Jim O’Neill, and they are struggling.
Economic activity in Brazil fell sharply in May versus the previous month, central bank data showed on Friday, suggesting an uneven pace of recovery in the second quarter as Latin America’s largest economy struggles to regain its footing, Reuters reported.
The Brazilian Central Bank’s IBC-Br economic activity index fell 1.40 percent in May from April in seasonally adjusted terms. The median estimate in a Reuters survey of 17 analysts was for a decrease of 0.90 percent.
Russia has been reliant on commodities but prices have been falling in recent months--and impacting the country’s growth prospects.
Yakunin’s role as the head of the country’s railroads affords him a bird’s-eye view of the country’s investment potential. And he pointed to the need for investment in the real economy, rather than just financial services, to boost growth and create jobs.
But, as Yakunin noted, the much-vaunted diversification of the economy has proved difficult for Russia to tackle.
According to Zelenski, a lack of infrastructure investment is also the key problem in Russia.
Further, he argues the country did not put away enough when the times were good, unlike China.
Turkey & Mexico
In Turkey, which is not a BRIC nation but has enjoyed a buoyant economy despite the turmoil of countries around it, faces a rockier path to EU membership after the government’s heavy-handed approach to the protestors.
During the keynote panel at the forum, Germany chancellor Angela Merkel said she was ‘shocked’ at the reaction to the protests and questioned if it was the right time for Turkey to join the European Union.
The diplomatic hiccup comes after years of strong growth by Turkey under Prime Minister Recep Tayyip Erdogan.
According to Ates, the protests were not against economic pain, given the country’s strong record of growth. But, when asked if Erdogan had been in power too long, he noted people needed to express themselves to secure democracy.
“We will see at the next election if it has been too long,” he added.
“Turkey should see cause for hope.”
Ates sees a promising and favorable landscape for investors in Turkey, with a well-educated population. “The human capital is there...but we still have to do more.”
Lozoya said Mexico was another economy with significant potential due to its natural resources and proximity to Latin America.
According to Lozoya, there is huge potential in areas such as manufacturing and petrochemicals, and the chance to feed hungry markets in Latin and North America.
However, Lozoya said Mexico mustn’t fall back on protectionist policies. “We have a good momentum,” he added.
Historic High for World Cereal Production
Global cereal production is expected to increase by 7 percent in 2013 compared to last year, the United Nations food agency said, but warned that in spite of a boost in supply, various regions, including Central Africa, West Africa and Syria, are still affected by food insecurity.
In its Crop Prospects and Food Situation report, the Food and Agriculture Organization (FAO) forecasts that cereal production this year will reach 2,479 million tons, which would mark a record, All Africa wrote.
Wheat, coarse grains and rice production are all expected to expand, which will help replenish global supplies of cereal and stabilize markets over the next year, the report said.
However, the report warns that many developing countries are still affected by food insecurity. In particular, the report focuses on various countries where conflict is preventing the population from satisfying their food needs.
In Syria, wheat production dropped significantly this year due to the escalating conflict in the country. The livestock sector has also been severely affected, and the report estimates that some 4 million people are facing severe food insecurity.
In Egypt, civil unrest and dwindling foreign exchange reserves are also raising serious food security concerns.
Conflict has also affected food security in the Central African Republic (CAR) and the Democratic Republic of the Congo (DRC).
In the Sahel, which has previously experienced famine, the overall food situation is favorable in most parts of the region, the report said, due to an above-average 2012 cereal harvest. In spite of this, a large number of people are still affected by conflict and the lingering effects of the 2011-12 food crisis.
In East Africa, serious concerns remain in conflict areas in Somalia, the Sudan and South Sudan, with 1 million, 4.3 million and 1.2 million food insecure people, respectively.
In Madagascar, damage caused by locusts and a cyclone is expected to reduce crop production in 2013, causing increased hunger, especially in the southern and western regions of the country.
In the Democratic People’s Republic of Korea (DPRK), despite an improved cereal harvest in the 2012 season, chronic food insecurity continues, with an estimated 2.8 million vulnerable people requiring food assistance until the next harvest in October.
In total, there are 34 countries requiring external food assistance, of which 27 countries are in Africa, the report stated.
IMF Raises Outlook for Philippines
The International Monetary Fund (IMF) has again raised its growth forecast for the Philippines this year to 7 percent, which is the high-end of the 6-7 percent growth forecast of the government for 2013.
In media briefing, Shanaka Peiris, IMF’s resident representative for the country, said the Philippine economy relied heavily on domestic demand rather than export revenues that fuel the economies of neighbors like Malaysia, Thailand and Singapore.
“This showed that the country was one of the few emerging markets that could better cope with current global economic conditions,” Peiris was quoted as saying by Philippine Star.
The Philippines, the IMF said, remains one of the few bright spots in the global economy, with domestic demand fueled by remittances from migrant workers and increased government spending expected to offset the slowdown in the developed world.
Remittances from overseas Filipino workers (OFWs), which the IMF expects to grow by 5 percent this year, also remain stable, fueling domestic demand.
OFW remittances are expected to reach $22.5 billion this year. Remittances from the country’s 10 million migrant workers are the Philippines’ biggest source of foreign exchange, which protects the economy from any sudden shortage of cash from overseas.
Amid this positive assessment on the Philippines by the Washington-based multilateral financing institution, officials of the government of President Benigno Aquino III cannot seem put their act together on the question of whether the country’s robust economic growth has reduced poverty or narrowed the gap between the rich and the poor.
Indonesia’s Financial Sector Remains Healthy
Indonesian Central Bank (BI) Governor Agus Martowardoyo said the country’s financial system has remained sound despite pressures from global economic slowdown, backed by solid banking performance as of the second quarter this year.
Agus said that national banks’ overall capital adequacy ratio (CAR) stood at 18.4 percent, way above the minimum limit of 8 percent, while the gross non-performing loan (NPL) ratio stood at 1.95 percent, far lower than the maximum limit of 5 percent as of May this year, Xinhua reported.
“Loan growth stood at 20.1 percent year-on-year in line with the slowdown in domestic economy, even though in a downward trend, growth of working capital and investment loans accelerated to 21.7 percent and 22.9 percent year-on-year respectively,” Agus told a press conference.
This is while consumer loans growth slowed to 18.4 percent.
The central bank learned that growth of consumer loan to finance house purchases in certain classes has entered concerning high levels. Such a condition may hinder national banks’ financial soundness and nation’s financial stability system.
To address this issue, Agus said the BI would apply regulations on house purchases in the near future.
Furthermore, the recently-appointed BI governor added that the nation’s foreign currency reserves stood at $98.1 billion in June, equating to 5.4 months imports and foreign debts financing.
Agus said core inflation in the second quarter was still at a controllable rate of 3.98 percent year-on-year.
“The BI and the government would make orchestrated efforts to control inflation, largely caused by the fuel price hike policy, within the targeted range of 4.5 plus minus 1 percent next year,” he said.
Mazandaran’s Agro Revenues Reach $50m
The northern province of Mazandaran exported 34,000 tons of agricultural products worth $50 million during March 21-June 21.
Reza Azimi, the head of Agricultural Jihad Organization of Mazandaran province, also said that the weight and value of exports marked a growth of 50 percent and 45 percent respectively compared with the corresponding figure of last year.
“Russia, Azerbaijan, Kazakhstan, Iraq, Turkmenistan, Uzbekistan, UAE and Afghanistan were among major target markets in the period,” he said, noting that apples, kiwis, dairy products as well as flowers constituted a large portion of exports.
Referring to the remarkable surge in agricultural exports during the three months, Azimi said, ”Granting banking facilities to exporters, boosting the quality of agro packaging, improving marketing methods and dispatching trade delegates for developing trade relations with target markets are some of the recent achievements in the field of exports.”
Earlier, Morteza Hashemi, the head of industries, mines and trade organization of the province, said the total value of Mazandaran’s exports amounted to $134 million in the period.
Hashemi noted that 865,000 tons of goods such as biscuits, mineral water, tomato paste, fruit juice and concentrates, cement, agricultural products and construction materials constituted a large portion of exports in the period.
Located on the southern coast of the Caspian Sea, due to its fertile lands and suitable weather conditions, Mazandaran is a major producer of farmed fish and aquaculture provides an important economic impetus to the traditional dominance of agriculture.
Another important contributor to the economy is the tourism industry, as people from across Iran enjoy visiting the scenic lansscapes.
Mazandaran is also a fast-growing center for biotechnology and civil engineering.
Qashqaie Gabbeh Earns $19m
Fars province’s tribes exported 508 tons of Gabbeh (a small traditional, handmade rug) worth $19 million in the first quarter of the current Iranian year (started March 21).
According to the Industries, Mines and Trade Organization of Fars province, 41 countries, including Persian Gulf, European and African nations and Japan were among target markets in the period.
About 1,000 weavers of Qashqaie tribes produce 800,000 square meters of Gabbeh per annum in Fars province.
Firouzabad, Qir, Karzin and Farashbod are the best handmade carpet producers in the province
The Qashqaie are a conglomeration of tribes of different ethnic origins who live in the provinces of Fars, Khuzestan and Isfahan, especially around the city of Shiraz in Fars province.
They are made up of a number of tribes and sub-tribes with more than 2 million inhabitants who are renowned for their magnificent pile carpets and other woven wool products.
Gabbeh is a hand-woven pile rug of coarse quality and medium size (90 x 150 cm or larger) characterized by an abstract design that relies upon open fields of color and a playfulness with geometry.
The Persian word means raw, natural and uncut.
Gabbeh’s patterns are of a very basic kind with only a limited number of decorative elements, mostly rectangular objects resembling animals. Usually bright colors, such as yellow and red, are used.
These rugs are made of natural, handspun wool and all the colors are created from natural plant dyes.
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