(CNN) - During their heyday at the start of this century, emerging markets were often referred to as the "engines of global growth." I can almost hear them revving back up again, but let's not refer to what we are witnessing as a high speed recovery.
It's more like a recovery at a reasonable speed limit.
The latest World Bank global outlook suggests they will climb back above 5% - hitting 5.3% - which is up 0.5% over last year, but more than 2% below their pre-financial crisis run rate of 7.5%.
Once one digs through the numbers you will find that not all emerging markets are created equal. This rings true in the BRICS economies themselves. China, under the relatively new leadership of President Xi and Premier Li, will hum along at a projected 7.7% in 2014. India is recovering from a near decade long low to hit nearly 6%. In fact, we should give a collective cheer to Asia, with regional growth pegged at 7.2%. FULL POST
(CNN) - Ukraine's energy dependence on Russia's natural gas is a key factor in Ukrainian politics. CNN's John Defterios explains why.
(CNN) - We are aware of the saying “keep all your options open.” Europe is doing just that with a landmark $28 billion natural gas pipeline agreement signed in Baku Tuesday which will open up what is called the Southern Gas Corridor in 2018.
The nearly 20 heads of state, ministers and commissioners did not go out of their way to make the Russian connection with Ukraine as a reason to forge ahead, but one cannot overlook the motivation.
The deal was signed in Baku on the very day Vladimir Putin met with Ukrainian President Viktor Yanukovich to potentially define how Russia may step up assistance to Kiev.
After being frozen out in the winters of 2006 and 2009 with interruptions to gas supplies from Russia through Ukraine, the European Union has stepped up efforts to complete the agreement which was first drawn up in 1996.
Azerbaijan came onto the energy scene when it launched the Baku–Tbilisi–Ceyhan or BTC oil pipeline from Baku to the southern Turkish port of Ceyan with political backing from the United States.
This pipeline network will cover more than 3500 kilometers and stretch from Baku to Italy. BP and Norway’s Statoil are the lead investors taking 25.5% each in the partnership with a handful of others including the Azeri state energy company SOCAR.
Unlike a number of pipeline agreements that have been drawn up, this one will launch with at least nine customers from the heart of Europe guaranteeing revenue when the taps are officially opened up in 2018.
Azerbaijan sits on roughly 1% of the world’s proven gas reserves, so it is not a major player yet. But this production from the Shah Deniz 2 field will double its output by the end of the decade according to Azeri officials.
Russia may not be thrilled about this effort by the European Union to diversify gas supplies, but with 17% of proven gas reserves it will not be unseated as the major supplier to Eastern and Western Europe.
Iran's six month agreement with P5 + 1, Egypt's transition after the ouster of Mohammed Morsy and Syria's long and catastrophic civil war have nudged a plan to revitalize the Palestinian Territories right off the global agenda.
I was in the room when U.S. Secretary of State John Kerry unveiled, on the evening of May 26, what he saw as an ambitious plan to deliver hope to Palestinians by jump-starting investment. His speech closing out the World Economic Forum regional meeting at the Dead Sea in Jordan was met with a heavy dose of skepticism because it lacked specifics.
Kerry presented an economic road-map, calling for $4 billion of private investment covering eight sectors from agriculture to tourism. If you build the right framework, according to the top U.S. diplomat, investors will come. The goal is to boost the economies of the West Bank and Gaza by up to 50% in just three years.
While no one can really argue with the spirit of the economic initiative, the reality on the factory floor, whether it is light manufacturing or in telecommunications, is very different. Palestinian businessmen suggest it is time to be more holistic in the approach. One cannot divorce the peace process from business. FULL POST
(CNN) - The historic six-month agreement over Tehran's nuclear program may begin a new era of relations with Iran, but it will be a long road back for the country's most vital sector, oil.
Iran produces about two and half million barrels a day - far off its 4-million-barrel-per-day peak a decade ago. Output is hovering at a level last seen at the end of Iran's war with Iraq. With North Sea Brent crude averaging over $100 a barrel for a record three years running, the sanctions on energy alone are costing Tehran about $50 billion in lost annual revenue.
"During the six month phase, the oil sanctions that will remain in place will continue to cause over $25 billion in lost revenues to Iran or over $4 billion a month," he said.
With every year that has passed, the screws have been tightened by Washington and the countries of the European Union. It was not only sanctions against oil, but also blocking Iran's ability to secure shipping insurance and to trade in U.S. dollars and euros. That economic isolation, many Middle East strategists I have spoken with suggest, is what brought Iran's new government to the negotiating table.
Despite the deal breakthrough, U.S. Secretary of State John Kerry said most of the sanctions will stick as the world gauges the intentions of this relatively new administration in Tehran.
The message is clear: the pressure remains, but if all goes well, in a half year's time Iran can expect more in return for transparency.
It is still early days, but this country of nearly 80 million people has been described as potentially being the Germany of the Middle East with plenty of natural resources - that is, if it can emerge from years of economic isolation.
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