Welcome to GPS !
We at the Raddington Group know a thing or two about strategic global insights, be it managing complex conflict dynamics or navigating emerging market regulations. Headlines and chatter create plenty of smoke, but only intelligent analysis can provide clarity. And we excel at making that analysis actionable, from the battlefield to the boardroom.
Stay tuned for the launch of The Raddington Report, which will feature the expertise of some of the world’s top thinkers and most influential government officials.
In the meantime, welcome to GPS, a lighter take on what matters big and small.
On the Up
Peru’s Budget: Peru is Latin America’s fastest-growing economy, and its recently approved 2017 budget is also increasing accordingly. Not to be outdone, newly-elected President Pablo Kuczynski has consecrated his nation “to the love and protection of Almighty God through the intercession of the Sacred Heart of Jesus and the Immaculate Heart of Mary.” He may have learned how to sugar his policies from his dealings with the Peruvian Congress, which is still controlled by the opposition. But at its current 4.8% growth rate, Lima may not require much divine help after all.
Chinese Household Debt: Policymakers in Beijing are currently in panic mode, given the amount Chinese households owe coupled with the risk of a property bubble popping. Outstanding loans are now 40% of GDP, and analysts fret that a sharp drop in property prices may lead to countless loans going bad. The only thing worse in China? Zombies. Corporate zombies.
Zimbabwean Inflation: Zimbabwe is desperate for investment, which prompted it to issue special exemptions to its controversial indigenization law for nationals of certain countries. But now it has a new problem on its hands: the central bank in Harare recently began issuing $10 million in bond notes to avoid a looming cash shortage. Sounds relatively prudent, except that the decision has reignited fears that the national currency may soon be reintroduced. Residents will never forget the hyperinflationary spiral that led the government to ditch the Zimbabwean dollar seven years ago. It came with positives, like a cheap source of toilet paper, but also negatives, like 200 trillion dollar bus fares.
Oil production: OPEC members have agreed to reduce production by 1.2 million barrels a day, the first cut in eight years. In a plot twist, the Saudis softened their tone towards the Iranians, who will now only freeze their output. High-cost producers will be grateful that Riyadh took one for the team, though it came at a price. Meanwhile, in Jakarta, government officials are trying to reassure their citizens that, yes, Indonesia is still cool.
British internet freedom: Frightening for civil liberties activists but heartening for counter-terrorism hawks, the new Investigatory Powers Act, aka the “Snoopers Charter,” is set to give the UK government unprecedented powers into monitoring the email and data of its citizens. Meanwhile, residents of Green Bank, Virginia, a town virtually devoid of communications for the sake of scientific research, wonder what all the fuss is about.
Academic debate: With the growth of trigger warnings, safe spaces, and general protection from uncomfortable ideas, university administrations across the West are gradually stifling education and debate in tertiary institutions. How can we do an even better job of shielding ourselves from ideas we don’t deserve to hear? Take a hint from this guy.
French election: Manuel Valls has resigned as France’s prime minister and announced his candidacy for next year’s presidential race. What of Francois Hollande? An almost higher percentage of French are dissatisfied with the incumbent than the country’s sprawling debt-to-GDP ratio. Still, the race looks set to pit former prime minister Francois Fillon against reactionary posterchild Marine Le Pen.
Streaming services: The Grand Tour, starring former Top Gear presenters Jeremy Clarkson, Richard Hammond, and James May is a huge hit, even though a whopping zero channels air the popular motoring series. Instead, Amazon Prime has the honor of forking over tens of millions to host the “most pirated show ever.” Does the continued growth of streaming options spell the end for traditional TV, or is there life in the old dog yet? The answer may be a bit complex.
iPhone batteries: Yes, Apple may be pulling a Samsung. Reports of iPhones exploding and catching fire have been dismissed by the California firm. Does this indicate larger issues with the rapid development of smartphones — machines which may be becoming too advanced too quickly? Electronic investors in particular will need to know sooner rather than later.
Russian rockets: A Soyuz rocket and its International Space Station-bound payload burned up in the atmosphere, the fifteenth Russian rocket failure since 2011. Granted, Russia is quickly becoming the beast of burden for space agencies across the world, and these setbacks occur on only a tiny portion of launches. Who may benefit overall? Possibly United Launch Alliance. The Boeing-Lockheed joint venture is increasingly being seen as one of the most reliable players in the industry, and has escaped some of the negative publicity that has befallen its close rival, SpaceX.
Tunisia’s unions: The powerful UGTT union cancelled a planned public sector strike after striking a deal with the government over salary increases. While the government is still facing opposition to next year’s austerity measures, the deal shows how moderation and compromise is still possible in the home (and arguably only positive development) of the Arab Spring.
New Zealand’s Prime Minister: The surprise resignation of James Key has left Kiwis scratching their heads. The fact that Key has kept his own head for this long and went out on his own terms is remarkable. Especially since only twelve years ago the head of his own party gave a widely-condemned speech on race relations. Still, New Zealand was able to escape the type of xenophobia that has occasionally plagued western neighbors. Politicians like James Key are part of the reason.
US airlines: American carriers are sticking to their plans of opening new routes to Cuba despite the uncertainty of Washington-Havana relations in the aftermath of Trump’s election. The president-elect has vowed to reverse Obama’s efforts to normalize relations with Havana if he didn’t obtain a better deal from President Raúl Castro. However, the reluctance of airlines to revise their plans signals a belief that Trump won’t backtrack after all.
To Little Confidence…
Italy: The ECB prepared to buffer the ailing Italian economy in the case of a “No” vote in last week’s constitutional referendum, which came at a time when investors were already pulling capital out of Lo Stivale. Now, with Prime Minister Matteo Renzi’s political career finished and a new government sworn in, the financiers in Frankfurt are sending mixed messages by failing to assist Monte dei Paschi di Siena, the oldest bank in the world. Et tu, Brute?
To No Confidence…
Jacob Zuma: Well, almost. Despite his involvement in corruption scandals, the South African president survived a no-confidence vote within his ruling ANC party. With the victory for the “Teflon President”, a cabinet reshuffle will now be in order, since many of the ministers who supported Zuma’s departure may now be offering their resignation.
South Africa’s credit rating: The Rainbow Nation is 2/2 in this edition of GPS. It has been thrown a lifeline by S&P, as the credit rating agency maintained South Africa’s foreign currency-denominated bonds at one level above junk. Alas, the same can’t be said for the rugby exploits of the Springboks.
J Jayalalitha: The passing of the former film star and leader of the Indian state of Tamil Nadu was so momentous that her party reported that 470 residents had died of shock. “Amma,” or “mother,” as she was known, was the queen of iron-fisted patronage politics, but also left a legacy of often drastic social improvements. Her death is causing a worrisome power vacuum in the second-largest economy among Indian states, and one of the world’s top IT hubs. But in a country where regional parties have almost always flexed their political muscles at will, it might also signal new hope for the Congress Party and the BJP.
Colombian VAT: Aiming to reassert the country’s credibility, the Colombian parliament is on its way to approving a tax reform bill that would raise VAT from 16% to 19%, widen the base for income tax, and slash corporate taxes. Always a difficult sell in the region, politicians in Bogota are looking to capitalize on the recently-approved peace deal with FARC and institute pro-growth policies at the same time. Colombia may not be too far away from becoming a darling of foreign capital.
Finally, If You Watch One Video…
Make it Mehdi Hasan’s recent UpFront interview with Gerard Araud, the French Ambassador to the US. Could this be occurring in America too? Well, if you go by President-Elect Trump’s first phone call with a Muslim world leader, not at all. Everything is terrific, amazing, tremendous, and, oh yes, fantastic.