In the following pages, Technology Business Review keeps the tabs on the breaking news, developments and highlights in international business to bring you an executive summary of the world's headlines.
Russia in Latin America
According to The Economist, China has been flexing its economic muscles and deepening its diplomatic influence in South America, while India, Russia and Iran are also making inroads into South American economies. This "encroachment" seems to undermine Yanqui (U.S.) interest and renders the Monroe Doctrine irrelevant, which states that any interference by outsiders in America's hemisphere is dangerous to its people's peace and safety as declared by President James Monroe in 1823. China especially, has been making its presence felt by pushing its industrial agenda in Peru, Brazil, Argentina and Venezuela. Deals of note in recent months include Chinese metals giant Chinalco's US$2.2b investment in the Toromocho copper mine in the Peruvian Andes, oil giants China National Petroleum and CNOOC's US$17b bid for an 84% stake in YPF, Argentina's biggest oil company currently held by Spain's Repsol and Venezuela having secured a US$8b loan from China Development Bank to finance a US$12b joint venture with Chinese firms to develop Venezuela. However, China's influence in Brazil is possibly the most pervasive one, with China becoming Brazil's biggest export market from January to June this year. This led to talks between Brazil and China in Beijing in May, which culminated in an agreement where Petrobras will supply China with 200,000 barrels of oil a day for the next 10 years in exchange for a US$10b loan from China Development Bank. A Yuan currency-swap deal worth US$10b has also been agreed by both Brazil and China. Just as it has done in Africa, China intends to exert its economic dominance in Latin America, though its geopolitical influence may not be similar to its influence in Africa due to the superior democratic ideologies and economies of Latin America. As for Russia and Iran's interest in Latin America, analysts noted that their deals are mainly military. Venezuela has bought US$4.4b of military equipment and weapons from Russia while Iran has pledged a US$1b loan to Nicaragua and has opened embassies in Chile, Colombia, Ecuador, Nicaragua and Uruguay. Iranian firms have also been widely involved in the manufacturing of cars and tractors as well building homes for the poor in Venezuela.
Source: The Economist
Taiwan eyes improved ties with China
Swiss lets go of UBS332.2 million UBS shares worth about US$5.6b are up for sale after the Swiss government decided to sell its interest in UBS AG, the country's biggest bank. According to Bloomberg, the move was made after the Swiss government agreed to disclose data on clients suspected of tax evasion to the United States. It also reported that the Swiss government has mandated its agents to sell its stake in the financial institution at a price of Chf16 (US$15) to Chf16.50 (US$15.50) per share. Due to the current global financial crisis, the Swiss government provided financial assistance to the bank by buying its shares and boosting the bank's capital thus increasing consumer confidence. Furthermore, a U.S. lawsuit seeking information about 52,000 UBS clients has also been settled to further improve the situation resulting in UBS agreeing to disclose information on clients suspected of tax evasion by providing the data on 4,450 clients to the Swiss government, which will then filter the information that eventually gets through to the American authorities. As a result of the Swiss government's withdrawal, UBS shares may seem an attractive investment as analysts noted that the exit is a positive signal indicating the confidence of the Swiss government regarding the situation of UBS. With the sale of the shares, the Swiss government stands to procure a substantial profit and the Swiss Confederation will opt for a cash payment of about Chf1.8b (US$1.7b) instead of using its right to receive future coupons on the mandatory convertible notes.
Source: Bloomberg
India looks eastward
Indian software and outsourcing companies such as Wipro Technologies Ltd and Infosys Technologies Ltd are expanding into the Japanese market in efforts to reduce their reliance on the United States. The Japanese market was a tough environment to penetrate in the past but is now slowly easing up due to factors such as its aging population which is unable to produce the human capital required to sustain its market demand, according to The Wall Street Journal. Due to over-reliance on the U.S. economy, Indian businesses have suffered as a result of the financial crisis, hence, they are starting to look at alternative markets such as Japan to improve their prospects. Even the Japanese are opening up to the potential of welcoming foreign expertise. For example, Wipro is co-operating with Hitachi Ltd and Olympia Corp to design car navigation systems and medical scanners respectively. Similarly, Japanese investment bank Daiwa Securities SMBC Co and India's Tata are in an agreement where the Indian firm was chosen to build Daiwa's international automated trading system. As observed by several Japanese analysts, in order for Japanese companies to survive, they must become more international.
Source: The Wall Street Journal
Britons have no faith in their institutions
In a survey by WIN Network, a leading global market research organisation, which involved companies from 22 countries in June and July, it was found that Britons and the Japanese have the least faith in their governments to come good in the face of a global slump, reported The Guardian. It also concluded that Britons have the least confidence in their banks. However, in contrast, a survey conducted by ICM in Britain revealed an increased level of confidence towards the British economy in light of a troubled future, suggesting that the reason for this is because Britons have become accustomed to the crisis. Japan's neighbour, China received the highest rating of 7.2 from its citizens while governments such as India, Brazil, the Netherlands, Switzerland and Russia each scored an average of five to six points. This shows that since March, the pessimistic perceptions of the public towards their government and banks have diminished except in Britain and Japan.
Source: The Guardian |
