February 23, 2018 - WHAT HAPPENED? New Zealand State fervour over Hillary Clinton is once again evident with a clutch of governmental and therefore publicly funded institutions involved with her pending visit to Auckland in May.
Wednesday morning briefing: Dumb and dumber – Bloomberg on Brexit and Trump
Leave vote is stupidity akin to electing Trump, says mogul … blood thinners protect against dementia … and spotting borderline personalities in the office . . .by Warren Murray
Top story: ‘Hard to understand why they wanted to ruin it’
Hello – it’s Warren Murray bringing you today’s briefing.
More difficult than a moonshot, nearly as stupid as electing Trump. They could only be talking about one thing: Brexit. A German risk analyst has delivered the former assessment, saying exiting the EU is “incomparably more complex” than the Apollo programme – partly because Nasa at least understood what it was getting into. The latter, more blunt summation comes from Michael Bloomberg, the billionaire former New York mayor.
“I did say that I thought [Brexit] was the single stupidest thing any country has ever done but then we Trumped it … it is really hard to understand why a country that was doing so well wanted to ruin it.” The City of London has meanwhile warned that businesses are liable to start pulling out of the UK by the end of the year because the government keeps contradicting itself about whether a transitional deal with the EU will be agreed sooner, later or not at all.
Prime Minister Bill English has announced funding to kickstart a major upgrade of the electricity network in the Tongan capital.
New Zealand’s early commitment is expected to assist Tonga to attract other investors for the project.
“Our $5 million support will help provide safe, reliable electricity to around 8,500 households and businesses in Nuku’alofa and save around $1.1 million a year through reduced line losses,” Mr English says.
“This builds on New Zealand’s previous energy investments in Tonga, which include Tonga’s first large-scale solar farm in 2012, and other significant network upgrades.
“Access to clean, reliable energy is essential for businesses to thrive and to reduce reliance on fossil fuels used by diesel generators.
“We recognise this, and we are working with Tonga to help it achieve its energy goals.”
The Prime Minister made the announcement while in Tonga as part of the 2017 Pacific Mission.
SHANGHAI, Feb 10 (Reuters) - New Zealand Prime Minister Bill English and Chinese Foreign Minister Wang Yi agreed to work together to support free trade and globalisation when they met in New Zealand's largest city, Auckland, China's foreign ministry has said in a statement.
The pair met on Thursday and discussed launching negotiations to upgrade an existing bilateral free trade agreement and cooperate in sectors such as infrastructure, tourism and judicial enforcement, said the statement published late on Thursday on the ministry's website.
"Hand in hand, we should protect the international trade system, build the open economy, and try to start upgrading the negotiation of the free trade agreement," it quoted Wang as saying.
New Zealand was the first Western country to sign a free trade agreement with China in 2008. China is now New Zealand's largest goods export partner, with New Zealand exports to China at NZ$12.2 billion ($8.54 billion) in the year to June, 2016.
During the meeting, English also welcomed Chinese enterprises to invest in New Zealand, while Wang said he hoped New Zealand could support China's One Belt, One Road initiative with its infrastructure projects.
The Chinese foreign ministry also said that English spoke highly of Chinese President Xi Jinping's speech at the 2017 annual meeting of the World Economic Forum, which offered a vigorous defence of globalisation and signalled Beijing's desire to play a bigger role on the world stage.
It did not say whether the two had discussed the Trans-Pacific Partnership (TPP) trade pact.
New Zealand and Australia have said that they hope to salvage TPP by encouraging China and other Asian countries to join the trade pact after U.S. President Donald Trump kept a promise to abandon the accord.
China has been playing up its role as a steadying force from global trade to climate change amid a turbulent start by new U.S. President Donald Trump, whose first weeks in office have been marked by media feuds and protests. (Reporting by Brenda Goh; Editing by Michael Perry)
SINGAPORE: The Land Transport Authority (LTA) has appointed AECOM Singapore to conduct an advanced engineering study for Singapore stretch of the Singapore-Kuala Lumpur High Speed Rail (HSR) infrastructure, it announced on Wednesday (Feb 8).
The US engineering firm will provide architectural, civil, electrical, mechanical and other design services required for the Jurong East terminus, tunnels and the bridge across the Straits of Johor.
Alibaba Group has opened a new office in Melbourne, with a remit to oversee sourcing and operations in both Australia and New Zealand.
The new office is Alibaba's first expansion into the region, with personnel positioned to source and promote products, which are becoming increasing popular with consumers in China and South East Asia, from both countries. Alibaba will also use the new office to better facilitate the supply of goods to markets in Asia in which it operates, having also signed a memorandum of understanding with Australia Post to improve logistics between Australia and China. It is also understood that the relationship will be used to develop an Australian shop on the Lazada marketplace in South East Asia, of which Alibaba are the majority shareholder. Cross border ecommerce a priority for Alibaba
Alibaba's new office in Melbourne is similar to other offices they have opened around the world in order to facilitate better sourcing of products that Chinese consumers are increasingly demanding. For example, Alibaba's office in London is used for the same purpose, attracting both suppliers and retailers to use its services to sell products into Asia via its platforms.
In the last few years, both Woolworths, Metcash and Costco, alongside numerous other retailers, have all started selling products on Alibaba's Tmall platform in China, with cross border ecommerce set to grow further in the future. Something that Alibaba CEO, Jack Ma, who was present in Melbourne, is keen to promote.
France’s Political Class Blind to PS votes going to FN
The breaking of France’s presidential glass ceiling by Marine Le Pen promises to be more shattering than any fall-out connected with the now broken presidential hopes of Hillary Clinton.
This is because the fall-out will be a compound one blended from the glass ceiling effect and the upset triumph of President Donald Trump.
The French political class which is far more pervasive than anything their English-speaking counterparts can put forward is only just realising the truth that has been hiding in plain sight.
It is that Marine Le Pen and her Front National Party have a very good chance of winning the pending presidential general election.
As with their English-speaking counterparts the French political classes only in the last few weeks have understood that she is short circuiting the sectors that customarily act as middlemen between politicians and voters.
We are talking here of once-admired categories such as academics, think tank intellectuals, and of course journalists.
Marine Le Pen channeled Donald Trump before Donald Trump started running for President.
The most recent milestone on her own presidential route is the embarrassing back tracking of academics, think tankers, and journalists on the outcome of the primary within the Republican Party for its presidential candidate.
France’s commentators, much more esteemed than their counterparts in the English-speaking zone, had stated that the winner would be the more liberal of the two conservative party front-runners, Alain Juppe.
In the event the party plumped for the more right-leaning Francois Fillon.
As a result of this France’s biggest circulation daily Le Parisien did something that its English-speaking zone counterparts have still signally failed to do.
This was to acknowledge that its employees’ wishes manifested as fact and that opinion now had to be separated from news.
It banned from its pages all tendentious reporting and, more importantly still, opinion polls.
Even so, the French intellectual class, traditionally cherished in a way that its English-zone counterpart is decidedly not now radiates a fresh formula.
This holds that, yes, Marine Le Pen may perhaps be head-to-head with Francois Fillon in the first stage of the presidential elections.
But that she will be washed out in the second stage or run-off procedure in which French voters are required to unambiguously list their preference.
As with their US and British counterparts the commentariat cannot bring itself to ask itself from which sectors Marine Le Pen will draw her votes in this head-to-head or sudden-death challenge.
These votes are increasingly being seen as being drawn from the current ruling party the Socialist Party which has become so unpopular that its chances of regaining the Elysee are not even being considered.
Marine Le Pen has promised to close the book on political correctness and all that it contains. This means globalisation (think EU) and multi-culturalism (think the religiously affiliated version.)
This is music to the ears of provincial France where local products are being swamped by lower-cost competition from the rest of the EU.
She would seek détente with Russia which since the US and EU led embargo has ceased to take France’s surplus farm output.
She will stem the tide of immigrants who are viewed by this same sector (think “deplorables”) as lowering wage rates and putting pressure on accommodation and social services.
Meanwhile Marine Le Pen while keep the emphasis on France’s imperial world-power yearnings, notably in Oceania, where she has long had a soft spot for New Caledonia.
REUTERS STR NewIn just a few decades, Vietnam has undergone a dramatic transformation, from an agrarian society to one that has embraced the modern era. Its youthful population and growing middle class have helped drive solid growth—and opportunities for many global investors. This up-and-coming market hasn’t fully embraced capitalism—it remains a Communist state—but it has managed to achieve an interesting balance. There has been a bit of buzz about Vietnam among investors in the past few years, but given the election of Donald Trump as the next US president, the Trans Pacific Partnership TPP , of which Vietnam would have been a key beneficiary, seems even less likely to move forward. However, new trade deals are in the works—including the Regional Comprehensive Economic Partnership RCEP , which Vietnam has joined along with nine other members of the Association of Southeast Asian Nations as well as Australia, China, India, Japan, Republic of Korea and New Zealand. And, there could be new, bi-lateral trade deals in the future.
Nevertheless, I believe Vietnam remains an attractive destination for both investors and tourists, and we think its future looks bright. I recently had the opportunity to visit Vietnam and see the latest wave of changes taking place.
Vietnam has seen strong economic growth, with gross domestic product GDP growth averaging just shy of 7 from 2000–2015.1 This economic boom has also boosted consumer buying power. In 1990, gross national income GNI per capita was US 910, but by 2015, it had risen to 5,690.2 During my recent trip to Vietnam, I found tremendous opportunities in the consumer sector as a result of this rise in income levels.
For example, we visited a dairy company and learned that while per-capita milk consumption in the United States has been above 100 liters per person per year, and in China it was 30 liters, in Vietnam it was only 16 liters. However, that number has been growing very quickly, and it’s no wonder the milk company we visited in Vietnam has seen profit growth every year for the last five years. The company produces fresh raw milk from local cows as well as reconstituted milk from powder, condensed milk, baby formula and yogurt. The company exports its products not only to its neighbors in Asia but also to some markets in the Middle East.
Many companies in Vietnam are government-majority owned, but privatization is expanding with plans to publicly list shares of a number of companies in the future. Some will initially be listed on the Ho Chi Minh Stock Exchange’s secondary exchange, the UPCoM, which has less stringent disclosure requirements, but we think eventually many companies will likely be required to list on the main board and institute broader disclosure. We believe the sale of some state-owned enterprises should help lower Vietnam’s rising national debt, but foreign direct investments are strong, and industry and exports are doing well. As services including tourism represent more than 40 of Vietnam’s GDP, it is the area we are most interested in.3
Phu Quoc Island
To study Vietnam’s tourist industry, my colleagues and I flew down to Phu Quoc Island off the coast of southern Vietnam. We landed at a new, modern airport capable of handling a growing influx of both local and foreign tourists. Local tourists can fly from Ho Chi Minh City for the equivalent of only US 30 to US 50 one way on Vietnam’s low-cost airline. While travel regulations can be tricky and ever-changing, today, foreign tourists can stay between 15 to 30 days without a visa in Phu Quoc, which is a unique concession not available for visitors to other parts of Vietnam.
During our stay, we drove and cycled from one end of the island to the other and found a construction boom under way with new hotels, apartments, villas and a spectacular cableway under construction linking the island with other smaller islands. Phu Quoc itself is a large island 574 square kilometers compared with Singapore’s 719 , and Vietnam’s government has designated it for tourist development.
REUTERS STR NewWe drove to our hotel on a new four-lane highway, and as we toured the island we saw construction of a new north-south four-lane highway under way as well. The government has spent over US 1 billion thus far for infrastructure on the island, including more than US 700 million on the airport where we arrived. According to regional news reports, through summer of 2016, the government had approved and licensed more than 160 projects involving a total investment of more than US 6 billion.
As a microcosm of the country as a whole, Phu Quoc has seen quite a transformation when we consider its history as a place of refuge. The island was also once a prison camp used during various regimes, from the French colonial period through the Vietnam War. One of the tourist attractions is a prison camp museum, complete with barbed wire, guard towers, and models of guard soldiers and prisoners. The island is also famous for its fish sauce and for peppercorns; which we saw growing on vines around the island.
Tourism is transforming the island’s economy, which had previously subsisted on fishing and the aforementioned peppers and fish sauce. A major Vietnamese developer constructed a huge complex at the northern part of the island, including 1,000 hotel rooms, 1,000 villas, a safari park apparently one of the world’s largest , a water park and an amusement park featuring many types of roller coasters and other stomach-churning rides. There is also a 27-hole golf course, an international hospital and facilities for what could become a major casino.
Another developer is building a complex on the southern part of the island, which includes a spectacular cable car that crosses the sea to neighboring islands. We also saw other new hotels being built along the beach.
A pearl farm has also been introduced, so we saw a number of shops promoting the local pearls. Touring the villages around the island we noticed there was still a dire need for better roads and facilities. The influx of tourists and construction of high-end facilities to accommodate them have brought good-paying, steady jobs to many locals who had been suffering a low standard of living before.
For example, one of the Vietnamese cooks at our hotel told us that he had been a fisherman, but now he was doing better financially. As a fisherman, he said life was dangerous and uncertain because he never knew if he could catch enough fish to earn a living. Now, with his wife also working, they are living a better life.
While some may criticize development in naturally beautiful places like Phu Quoc, it’s important to look at the issue from many angles. For the 100,000 natives on the island, prospects are now brighter. Hopefully, development in Vietnam and elsewhere can come with the right intentions and the right balance of interests. With their kind, hospitable nature and happy dispositions, the residents of Phu Quoc, in my view, will make their island a tourism success. We are excited about the potential for further growth and transformation in Vietnam.
Mark Mobius’s comments, opinions and analyses are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, comments, opinions and analyses are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy.
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1. Source: IMF World Economic Outlook database, October 2016.
2. Source: World Bank, data as of 2015. GNI per capita is expressed in purchasing power parity dollars to adjust for price level differences across countries.
3. Source: CIA World Factbook, data as of 2015.NOW WATCH: Here's what happens to your body when you stop eating sugar