Foreign Direct Investment
China’s careful new focus on Latin America
Just a few years ago, China was going all-in in Latin America, making huge investments and cozying up to governments that did not get along with Washington. Yet instability in Venezuela and a new government in Ecuador have exposed Beijing to greater risk. While China is still deepening ties with the region, it has slowed down and changed tack, focusing only on investments that are a crucial strategic interest.
Modi looks inward on trade
The Indian government has taken a protectionist posture on trade, taking measures to boost domestic manufacturing, hike tariffs and stall trade negotiations. Yet exports have failed to increase, in part because of red tape and poor logistics. The administration’s present attitude could see India struggle with the current account deficit and increasingly get shut out from overseas markets, unless a growing corporate sector can lobby for change.
Modi’s economy faces the voters
The Modi government in India enters the last year of its term with mixed economic results. The prime minister has moderated inflation and carried out important reforms, but growth remains slow and many Indians are pessimistic about their financial situation. With elections coming next April and several external threats on the horizon, a second term for Narendra Modi is in doubt.
Spain and Morocco: trouble or potential?
The burden of controlling irregular immigration, terrorism and drug smuggling has fallen disproportionately on the European Union’s southern members, including Spain. Ensuring stability on both sides of the Strait of Gibraltar, one of the world’s key waterways, is particularly tricky. If the new government in Madrid can’t find ways to work more closely with Morocco, the problems both countries are facing could get worse.
ASEAN: A nexus of conflict and prosperity
For the first time since the Vietnam War, Southeast Asia has become a cockpit for great-power rivalries. China’s inexorable rise has split the Association of Southeast Asian Nations (ASEAN), which had become a regional broker for peace and prosperity. The ASEAN countries have the demographics and infrastructure to leapfrog into the ranks of the advanced economies, but everything depends on whether China’s growing dominance can be accommodated peacefully.
Uzbekistan’s reforms: Opening a new era in Central Asia?
Uzbekistan’s new president, Shavkat Mirziyoyev, has embarked on a series of far-reaching reforms. While some domestic initiatives – such as strengthening the rule of law and liberalizing the market – will take more time to show results, a new, proactive foreign policy is already having positive effects. How far Tashkent will take these reforms is still in question, but a stronger Uzbekistan will mean a less influential Russia in the region.
China’s soft landing in the Balkans
In the next few years China will be opening an investment bridgehead in the Balkans. As other powers such as Russia and Turkey have increased their geopolitical presence in the region, China’s expansion will be even stronger – but different in kind because it will be a “soft,” mostly economic penetration. The push will be all the more powerful if the European Union neglects the region, as seems probable with its decision to delay the next round of accession until 2025.
Global trends: terror and transition in sub-Saharan Africa
Sub-Saharan Africa is poised for another year of fast economic growth in 2016. But countries of the region must contend with falling commodity prices, an upsurge in terrorism and a widening gulf between aging leaders and newly assertive urban voters. <i>This report is part of GIS’s “Global Trends” series, which aims...