Overall, the Mexican peso has had a relatively good year in 2017, set to close a shade under 20 to the US dollar at end-December (19.72 at time of writing), having opened at the year at 20.74. This would make for a gain of about 5% for the year.
At the beginning of the year, the peso was still reeling from the election of Donald J. Trump as President of the U.S. on a platform hostile to imports of goods and people from Mexico. There was concern that he may follow through on threats to unilaterally withdraw from NAFTA, tax remittances and build a big border wall, among other measures. It was in the latter stages of a rout which would see the peso climb from a shade under 18 to the dollar in mid-August 2016 to an all-time high of nearly 22 in the third week of January 2017.
A strong nine-month run would see the peso more than retrace this move as the worst fears of a Trump Presidency appeared to have been unfounded, with the Mexican currency dipping back below 18 to the dollar during the summer months.
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“May you live in interesting times” is a Chinese curse that seems apt to describe Mexico at its current political juncture. Times are certainly interesting. With the election of Donald Trump in the U.S., much focus in recent months has been outward-looking. Indeed, political risk in the diplomatic sphere is perhaps higher than at any time in living memory.
Domestically, the current administration is on the cusp of its final year in office, and the lame-duck status that goes with it. The pre-campaign to elect a new President in 2018 is well under way, with a very real possibility that Mexico will elect its first ever leftist President. At the same time, recent high-profile incarcerations of former high-level government officials and narco-traffickers has shone a spotlight on corruption and organised crime like never before.
With imminent – and important – state-level domestic elections in June 2017, seen by many as a prelude to the Presidential elections taking place in July 2018, the scope for political and policy change in Mexico over the period to late-2018 is significant. In light of the single term limit on the Mexican Presidency, the incumbent, Enrique Peña Nieto, will give way to his successor on December 1st, 2018. Opinion polls suggest a three-way fight between Peña Nieto’s PRI, the opposition PAN – which held the Presidency from 2000 to 2012 – and Andrés Manuel López Obrador (AMLO), at the head of Morena, the movement he left the PRD – traditionally Mexico’s 3rd party, and for whom AMLO twice contested the Presidency – to form.
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Powered by soaring commodity prices, Africa’s economic fortunes have been transformed since the turn of the century. This commodity boom was itself driven to a large extent by China’s resource-hungry investment-led growth model.
In 2012, China imported 17% of its fuels and 7% of its total mineral imports from Africa. Although commodity prices – from oil to precious metals and most things in between – remain elevated compared to late 20th century levels, what is often termed a decades-long ‘super cycle’ ran out of steam in the latter part of the 2000s. Commodity prices have since fallen, sometimes sharply, from their peaks.
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While the economic woes of today’s Eurozone may give pause for thought on the pursuit of regional monetary union, African leaders remain steadfast in their aspirations for shared currencies.
Around the same time as the Maastricht Treaty laid the foundations for European Monetary Union, the 1991 Treaty of Abuja set in motion the continent’s initial integration program, the African Economic Community (AEC). The AEC was soon supplanted by the African Union in 2002 and ultimately aspires to establishing a continent-wide currency – the Afro – by 2028. The project aims to include a full suite of institutions: an African Monetary Fund, African Investment Bank and African Central Bank… Click here to read full article.
Here’s a short piece on voxeu.org presenting research from a recent paper prepared by my co-authors and I.
Here is a post on the World Bank’s ‘The Trade Post’ blog written by Gonzalo Varela, Sjamsu Rahardja and myself on our recent working paper.
Today marks the 75th anniversary of the nationalization of Mexico’s oil industry, exactly one week after President Enrique Peña Nieto celebrated his first 100 days in power.
Mexican Presidents are elected for a single six year term, taking office in December. In modern times, regime change has been associated with economic and political upheaval.
Felipe Calderon’s razor thin victory in 2006 gave rise lengthy street protests and an aggressive militarization of government anti-drugs efforts driven, at least in part, by the newly-elected President’s attempt to assert his authority and establish legitimacy. Continue reading →
On foot of a recently published Policy Research Working Paper, exploring the potential for reforms to Indonesian service sector FDI policy to drive productivity in downstream manufacturing sectors, my co-authors and I have prepared a – much more digestible! – Economic Premise note for the World Bank’s Poverty Reduction and Economic Management Network. Published today, and available here.
For the past six months, I have been working with the World Bank in both Indonesia and in the US. In particular, I have been looking at the impact of changes to service sector FDI policies on productivity in downstream manufacturing sectors. Today, the fruits of these labours were published as a World Bank Policy Research Working Paper, co-authored with two of my colleagues from the Jakarta office. Continue reading →
In 2013, Côte d’Ivoire will be aiming to go one better than in 2012 across two fronts. The national football team will try to improve on last year’s runners-up spot in the African Cup of Nations, while the Ivorian authorities are targeting an increase in real GDP growth from 8.6% to 9%.
Having contracted by -4.7% in 2011 on foot of the post-electoral political crisis that saw 3,000 people killed, real GDP rebounded strongly in 2012. Whether this represents a one-time recovery of lost ground or is indicative of higher trend growth remains to be seen. The Ivoirian authorities are aiming for double-digit growth rates from 2014 in a bid to position the country as an emerging market by 2020. Although slightly less bullish, the IMF expects a still impressive average growth rate of 7.5% over the 2013-2015 period. Continue reading →