March 17th, 2010
11:50 AM GMT
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When Fernando Alonso won the weekend’s Gulf Air Bahrain Grand Prix, it started the battle for the 2010 Formula One Championship. It is a battle that will take 12 teams to 19 cities around the world.

Bahrain held the first race for the 2010 Formula One Championship.
Bahrain held the first race for the 2010 Formula One Championship.

While the British Grand Prix at Silverstone might have more history and the Monaco race in Monte Carlo is more glamorous, few of this year’s locations say as much about their destination as Bahrain.

Everything about the race and its track told me something about the country and its current transition to change, with all the controversy that goes with it.

The changes to the circuit have been introduced to make the race more versatile with some changes to the landscaping give the event a feeling of being in the desert.

Translating this to the country and you find a nation being pushed into the 21st Century by its Rulers, His Majesty King Hamad ibn Isa Al Khalifa and his son, the Crown Prince.

They have already introduced a limited form of consultative democracy and Prince Salman, the Crown Prince is pushing hard for the private sector to take more of a role in the economy.

“We have to,” the Crown Prince told me. “We are moving into a far more diversified economy that is dependant on the private sector. We have to build an economy built on productivity.”

This is a refreshingly blunt acknowledgement that while “the oil and gas won’t run out in the next ten years,” there is not much time before the country has to face this problem.

Visits here involve discussions about what the new economy should look like. There is of course a focus on tourism – currently made up of four million Saudi visitors who come to enjoy themselves in a more liberal environment. There is also the financial service sector. The country has made slow but steady headway in this area especially since Dubai’s financial crisis.

In the transition to the post-oil economy “we’re not going to just target ‘willy-nilly’ anything and everything that comes our way,” the Crown Prince noted. “We don’t have the luxury of going for the whole ‘shebang’ so to speak. We can’t be the masters of everything.”

The ultimate acceptance of this new role, means this small country will end up supporting richer nations like Saudi Arabia and Qatar. They have expertise to consult and advise neighbours on running their oil and gas industries.

Through the banks they will also take care of billions of dollars in revenues others produce. Bahrain is destined to become a service economy, more akin to a smaller European nation living off the industries of larger regional partners

For Bahrain, there is always the worry that some bigger or richer nation will steal its thunder. Gulf Air lost out to larger regional competitors. The financial industry ceded ground to Dubai in the good days.

Now, seven years since Bahrain established itself as the first Gulf nation to host a Grand Prix, Abu Dhabi has entered the fray, building the billion dollar Yas Marina Circuit. The first Grand Prix last year was triumph of organisation and spectacle, proving what money can truly buy.

So the 2010 Formula One season starts the racing in Bahrain and ends in Abu Dhabi.

While at the moment Bahrainis are relaxed about their rival’s participation, they must surely wonder, whether being first will ensure they will remain in the race. While Bahrain finds its way in the new world, they don’t need to lose what they have from the old.

Filed under: BusinessQuest Means Business

March 17th, 2010
11:33 AM GMT
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Chinese state media launched a fresh volley of articles attacking the "politicization" of Google after media reports suggest the Internet giant may soon officially pull out of China.

Should Google leave China?

A Saturday editorial in China Daily, state media's English-language newspaper, headlined "China Doesn't Need a Politicized Google," began: "Google's actions show that the world's biggest search engine company has abandoned its business principles and instead shows the world a face that is totally politicized."

Google threatened on January 13 to quit obeying China's censorship laws and possibly leave operations in China altogether after a December hacker attack that emanated from China. China has the world's largest Internet users, with nearly 400 million people online - more than the population of the United States.

The fracas has reverberated from Washington to Beijing, and was prominently mentioned in a policy statement by U.S. Secretary of State Hilary Clinton on Internet freedom.

We want to know what you think.

Should Google leave China? Why should it leave? Why should it stay?

Filed under: BusinessQuest Means Business

March 17th, 2010
09:27 AM GMT
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March 17th, 2010
08:17 AM GMT
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On World Business Today, we often turn our attention to the BRIC nations: Brazil, Russia, India, and China to monitor, explain and sometimes marvel at their emergence on the world economic stage.  Some experts  predict that these economies could be among the four most dominant over the next thirty, to forty years, and we just might have to expand that acronym to include other emerging economies.

Let's rewind a bit here to the end of 2009.  On WBT, we reported the Dow Jones list of the best performing stock markets that year.  Sri Lanka was on-top in 2009, with stocks jumping more than 150 percent in dollar terms.  Not far behind, was Indonesia.  And stocks in Brazil more than doubled.

So, what about 2010? Check this blogspot regularly for analysis on emerging markets, as well as the BRIC nations we are keeping a close eye on, so you don't have to find it yourself.

2010 has begun with concern among some analysts that emerging market stocks are due for a correction. Some analysts have predicted a 10-15 percent drop this year as global growth slows.  However, other analysts say that with the turmoil spreading from Greece to other advanced economies, one should pay less attention to past definitions of a country's creditworthiness, and look instead at which countries have strong balance sheets and which have weak ones.  The old rules, the old assumptions, have changed.  Emerging markets in the 1990s lurched from crisis to crisis under too much leverage and too much debt.  But now, it's developed countries that seem the most stretched.

So if emerging markets are on your radar in 2010, what should you watch for?   David Spegel, head of global emerging market research with ING says, "The best performers so far this year have mostly been among the dogs of 2009."  He says that includes Venezuela, up 12.2%, Belize, up 17.9%, and Jamaica, up 31%.  "These have benefited from the perception that default risks are in decline as access to credit seems less problematic.  However, for Jamaica, heavy repayment risks remain, so we could see a reversal of fortunes there," Spegel warns.  In broader terms, Spegel says, "There remain lingering concerns that while a serious double dip may be off the table, the world may stagger into an extended period of low growth," which would hamper recovery in global financial markets.

Zeina Abdel Latif who is ING Brazil's chief economist, says the economy there is still benefiting from disciplined fiscal policy.  "The economy does not appear overheated," she says, "inflation is anchored and the increase in the current account deficit does not raise concerns, especially taking into account the attractiveness of foreign direct investments."   She says the Brazilian stock market continues to outperform over the past several months, however Abdel Latif believes that the market will not surpass its performance from last year.

Also on our watch list:  Pakistan and Ukraine with markets up 10.75% and 16.92% respectively, according to ING.

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