Mexican manufacturing puts China, Brazil in shade

Southsourcing

Business Standard

Nigeria's oil mess hides solid African growth bet

Oil isn't everything

Myanmar has cleared another hurdle to being investible. The Southeast Asian nation has obtained a Paris Club debt relief agreement, which means aid agencies and global banks will now flock to lend. Myanmar should avoid taking too much easy money; private sector growth through domestic savings and property rights matters more than government-led infrastructure, even if the latter provides greater graft opportunities for corrupt officials.

Danger of flooding

The Federal Reserve may have to hike interest rates sooner than it thinks. The Federal Open Market Committee announced on Wednesday, as expected, that it is sticking with its near-zero target until 2015. But next month&rsquo;s presidential election may change that.

Weather change

There&rsquo;s something rotten with the American jobs picture - even if it&rsquo;s not immediately apparent from the latest report released by the Bureau of Labor Statistics. In October the economy created 171,000 new jobs, and 84,000 more were added to previous months&rsquo; tallies. That&rsquo;s good for President Barack Obama&rsquo;s re-election chances.

Structural rot

The latest US GDP report sharpens the knife-edge of the US election. The economy grew at a two per cent rate in the third quarter, just above expectations, perhaps giving President Barack Obama a wafer-thin advantage. But beneath the headline number, private sector growth has slowed further. That&rsquo;s a hint of the problems facing whoever next occupies the White House.

Muddling on

The International Monetary Fund has a new long-term worry: decades of higher interest rates. Don&rsquo;t get too comfortable with low borrowing costs, is the downbeat message from the normally overoptimistic fund&rsquo;s flagship World Economic Outlook. Slightly feebler growth of 3.3 per cent for 2012 is the short-term concern. But past fiscal excesses and an ageing population could push up interest rates for a generation.

Rate clouds ahead

A surprisingly sharp drop in US unemployment helped President Barack Obama&rsquo;s odds of re-election regain half the ground lost in his debate with challenger Mitt Romney on Wednesday. They now stand at about 70 per cent, according to Intrade. But behind the statistical noise, the reality is more of the same &mdash; a steady but uninspiring recovery.

Cheerful noise

Venezuela and Iran are looking desperate. Barely three weeks after the most recent OPEC meeting, the two countries are clamouring for an emergency gathering. They&rsquo;re claiming that overproduction is depressing prices and want to institute a price band to halt the drop. But crude is hovering just below $100 a barrel, near its highest level in decades.

Oil sharks

The United States added an unexpectedly strong 163,000 jobs in July, though the jobless rate ticked up to 8.3 per cent. Job creation of late is matching population growth but reducing unemployment only slowly. It&rsquo;s more evidence that recovery is stuck on the slow train in a sluggish new normal.

Slow train

The Federal Reserve is looking helpless until at least 2013. The US central bank&rsquo;s rate-setting committee on Wednesday bewailed slowing US growth but made no policy changes. Absent crises, more quantitative easing this year is unlikely. A new third round of QE may anyway be more effective in theory than in practice. After the US election, though, the Fed may face much tougher choices.

Twisting in the wind

US GDP expanded at an uninspiring 1.5 per cent annual pace in the quarter to June, though the report accompanying the first initial estimate of growth contained positive details. Meanwhile, adjustments to prior years suggest America&rsquo;s emergence from the 2009 recession has been sluggish, yet steady. Policymakers might wish otherwise, but they need to adjust to the new normal.

Uninspiring new normal

Enjoy the rosier US jobs figures while they last. The 146,000 new positions added in November were more than expected while the 7.7 per cent unemployment rate is the lowest level since December 2008. But the labour force participation rate also sank to a 30-year low and fiscal austerity, cliff-driven or otherwise, looms. That portends a workforce reversal of fortune.

Unhappy new year

The whole of sub-Saharan Africa is the real quasi-BRIC. South Africa alone can&rsquo;t match the others in the emerging club. But add non-Arab continental neighbours, and the combined GDP is $1.3 trillion by the World Bank&rsquo;s tally, and growing fast. Single countries are too small for most investors. But if the region can combine markets and trade, it could take off.

Brightening continent

Park Geun-hye, the first woman to be elected president of South Korea, may turn out to resemble Angela Merkel more than Margaret Thatcher. Though conservative, her policies, which include social spending, curbs on conglomerates and engagement with North Korea, run left of those of the incumbent Lee Myung-bak. Korea can afford it: German pragmatism is needed, not Maggie&rsquo;s radicalism.

Central Park

British Prime Minister David Cameron has a worthy goal for the United Kingdom&rsquo;s 12-month presidency of the G8 group of wealthy nations. He wants the group to start work on an EU-US free-trade agreement (FTA). Global trade deals are nearly impossible and bilateral ones tangle world commerce. But a pact between the two Western blocs could set new standards while also boosting the world economy.

Lands of the free

A rich country trade deal on services looks worth the effort. With the Doha Round of global trade negotiations stymied and bilateral agreements proliferating, a multilateral services deal among an initial group of 20 mostly rich countries could cover a lot of trade - and address numerous knotty problems. Even without the BRICs, it would fight creeping protectionism and should bring big returns.

New trade machete

Thirty months after the US jobs nadir, employment has risen by 3.1 per cent, according to Friday&rsquo;s report for August. That&rsquo;s roughly in line with the post-recession record of the last 2-1/2 presidents, but far short of Ronald Reagan&rsquo;s 9.8 per cent jobs increase. The picture for August alone was also mixed: President Barack Obama, his Republican presidential rival Mitt Romney, and the Federal Reserve can all take something from it.

Jobs blues - and reds

Occupy Wall Street, a year old on Monday, has lost momentum. Yet new data underline how real incomes for the US middle class are going down. More than inequality itself, that is a good reason to want change. Oddly, though, neither Occupy nor the Tea Party &mdash; both protest movements that despite differences represent ordinary Americans &mdash; has grabbed what could be a defining issue.

Preoccupied

Offering asylum to WikiLeaks founder Julian Assange is a fun political freebie for Ecuador&rsquo;s leftist president Rafael Correa. The move is bound to irritate the United States, not to mention the UK and Sweden. But Ecuador&rsquo;s oil exports, mineral exploration and loan funding are increasingly dominated by China, where the capital&rsquo;s official newspaper Beijing Daily in 2010 suggested Assange for the Nobel Peace Prize. With resource prices still robust, Ecuador must think it has nothing to lose.

Fun while it lasts

South Africa&rsquo;s mining-related unrest has a kind of pre-revolutionary feel. The poor have gained little in 18 years of democracy. The gulf with the rich is huge, growth isn&rsquo;t what it could be, and the African National Congress leadership is complacent. It&rsquo;s no surprise that as, say, in pre-1917 Russia, militant opposition is rising.

Martin Hutchinson