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1. Don’t Count Out U.S. Oil Production as a Market-Shaper

Author:
Patrick Clawson
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Total U.S. production from all sources will remain the world’s largest no matter how low prices go, leaving Washington (and Texas) with considerable room to help domestic companies and press Riyadh and Moscow on stabilizing prices. Five years ago, U.S. shale production costs were so high that whenever oil prices dropped, the impact was felt first and foremost by American producers. Many commentators and media sources assume that is still the case, but the situation has changed dramatically. A recent IMF report with the dry title “The Future of Oil and Fiscal Sustainability in the GCC Region” listed the “breakeven price” for various sources of crude. Naturally, Gulf oil had the lowest cost at $18 per barrel, but the shocker was that U.S. shale came in second place at $22—50 percent below the average deepwater project, 80 percent below Canadian oil sands, and 90 percent below Russian onshore projects. Since costs vary widely, some projects presumably have a much lower breakeven price and some much higher, but the general findings are nonetheless striking. If the IMF is correct, then U.S. production should not be counted out, since the cost fundamentals are on its side. To be sure, the current market structure is not on U.S. shale’s side. Small U.S. producers have to raise money on financial markets and cannot rely on the deep government pockets available to producers in Russia and OPEC states. As a result, many are staring at a very dire situation.
Topic:
Oil, Natural Resources, Global Markets, Business, and Domestic politics
Political Geography:
North America and United States of America

2. Digitalisation and its Impact on SME Finance in Sub-Saharan Africa: Reviewing the Hype and Actual Developments

Author:
Sabrina Disse and Christoph Sommer
Publication Date:
01-2020
Content Type:
Special Report
Institution:
German Development Institute (DIE)
Abstract:
The vast majority of enterprises worldwide can be categorized as small and medium-sized enterprises (SMEs). They play a crucial role in providing a livelihood and income for diverse segments of the labour force, in creating new jobs, fostering valued added and economic growth. In addition, SMEs are associated with innovation, productivity enhancement as well as economic diversification and inclusiveness. However, almost half of the formal enterprises in low and middle-income countries (LMICs) are financially constrained, meaning that SMEs’ financing needs are unserved or underserved. Digitalisation is often seen as game changer that overcomes the challenges of SME finance by capitalising on the reduced transaction costs, the broader access to more and alternative data and the new customer experience shaped by convenience and simplicity. This paper aims to answer the question what the role of digital financial instruments in SME finance in Sub-Saharan Africa is. It reviews and discusses the opportunities and challenges of digital advances for SME finance in general and of three specific financing instruments, namely mobile money (including digital credits), crowdfunding (including peer-to-peer lending) and public equity. It contrasts the hype around digital finance with actual market developments and trends in Africa. Main findings indicate that even though digital advances have led to impressive growth of certain digital finance instruments, it has not triggered a remake of the financial system. Digitalisation of the financial system is less disruptive than many expected, but does gradually change the financing landscapes. Some markets have added innovative and dynamic niches shaped by digital financial services, but new digital players have in general not replaced the incumbents. Furthermore, the contributions of digital instruments to finance in general and SME finance in particular are still very limited on the African continent compared to either the portfolio of outstanding SME finance by banks or the capital raised by similar innovative instruments elsewhere in the world. Many uncertainties remain, most importantly the response of regulators and responsible authorities. They need to provide a suitable legal framework to strike a balance between the innovation and growth aspiration of the digital finance industry and the integrity and stability of markets and the financial system at large. Also regulators have to safeguard data privacy and cybersecurity and prevent illicit financial flows, bad practices around excessive data collection, intransparency and poor reporting as well as exploitation of vulnerable groups with limited financial literacy. Governments also have to address the increasing gap towards those left behind by digital finance due to issues with ownership of a digital device, mobile network coverage and the internet connection or issues of basic digital and financial literacy.
Topic:
Development, Science and Technology, Digital Economy, Business, Economic growth, and Diversification
Political Geography:
Africa

3. Strategies to Strengthen Socially Responsible Public Procurement Practices in German Municipalities: A Mapping Exercise

Author:
Maximilian Müngersdorff and Tim Stoffel
Publication Date:
01-2020
Content Type:
Special Report
Institution:
German Development Institute (DIE)
Abstract:
Socially Responsible Public Procurement (SRPP) is a tool to use the market power of the public sector to trigger private companies to provide socially responsible products and services. In this sense, SRPP contributes to achieving SDG 12 of the Agenda 2030 (“Ensure sustainable consumption and production patterns”). However, while regulations at EU level and within the member states encourage SRPP, German municipalities lack effective implementation of social criteria in their tenders. This gap seriously decreases the triggering effect of the country’s procurement expenditures of which municipalities account for more than 50 per cent. By triangulating interview data with secondary literature, this paper identifies success factors and triggers for the introduction and consolidation of SRPP practices in German municipalities. Our research shows that there is not one gold standard of implementing SRPP in a municipality (as suggested by most existing toolboxes and handbooks on the topic). Rather, our paper presents a compilation of various different entry points from which practitioners may embark on fitting pathways. Beyond this, we have translated the most crucial success factors and triggers into nine recommendations for political action, for example, with regard to clear and ambitious regulations; measures to ensure broad support for SRPP within the municipal administration; and approaches for a more strategic procurement management. Our research also highlights the role played by individuals, that is, the importance of personal commitment for successful implementation of SRPP. This finding, however, is problematic when it comes to transferring and upscaling good practices. To reach a high level of broad and ambitious SRPP action, the balance between individual, regulatory and institutional measures has to change for the benefit of the latter two.
Topic:
Governance, Regulation, Business, and Private Sector
Political Geography:
Europe and Germany

4. Seeds of Gulf-Africa Agribusiness

Author:
Sarah Townsend
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
When Gulf nations face food, security, and water scarcity issues, one response is to seek lucrative agricultural investments in fertile African lands. Yet, while such deals can bring benefits to the countries involved, there are also sizeable risks.
Topic:
Agriculture, Water, Food, Food Security, and Business
Political Geography:
Middle East and North Africa

5. Doing Business in Bolivia: a case study in the Andean regulatory framework

Author:
Jorge Ignacio Del Castillo Machicado
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This article researches on the evolution of the business regulatory framework of Bolivia from 2006 to 2017 and its relationship with the country’s Labor productivity, Total Factor Productivity, and its Informal Economy size. To do this, it analyzes the Doing Business annual reports and standardizes each year overall score to the most recent methodology developed by the World Bank Group. Furthermore, it complements its finding with qualitative data through semi-structured interviews to key actors in the Bolivian economy. Overall, this paper finds that few steps have been taken to improve Bolivia’s Business regulatory framework from the period of 2006-2017, result in a lower rank in the Doing Business report and keeping its score constant. The lack of initiative in working towards more efficient policies, complex nature and poor adaptability of new technological practices have stagnated the improvements of business regulations along their lifecycles. As a consequence, Bolivia Total Factor Productivity, Informal Economy size and Labor productivity have shown no improvement over the last 10 years.
Topic:
Economics, Science and Technology, Labor Issues, World Bank, Regulation, and Business
Political Geography:
Latin America and Bolivia

6. The Causes, Effects, and Manifestations of the Money Laundering Problem in the Former Soviet Union

Author:
Yehuda Shaffer and Stefan D. Cassella
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Georgetown Journal of International Affairs
Abstract:
In the past few years, a number of European banks have been implicated in money laundering scandals in countries such as Cyprus, Malta, Latvia, and, most recently, Scandinavia. Although European and international voices are putting pressure to take further action by all including the banks against this, the issue continues to emerge in the continent. In this short article, we attempt to explain this trend and how might it be resolved.
Topic:
Crime, Economics, Finance, Business, Financial Crimes, Banks, and Currency
Political Geography:
Russia, Soviet Union, Latvia, Scandinavia, Cyprus, and Malta

7. Iraq’s Power Sector: Problems and Prospects

Author:
Sujata Ashwarya
Publication Date:
01-2020
Content Type:
Special Report
Institution:
Georgetown University Press
Abstract:
Despite substantial efforts and investments in rebuilding Iraq’s infrastructure since the overthrow of Saddam Hussein in 2003, the country is still struggling to deliver on public services. Years of destruction in conflict, as well as alleged mismanagement and neglect, have taken a heavy toll on the country’s power infrastructure. Severe power cuts and rolling blackouts are endemic in Iraq today. Between 2014 and 2018, Islamic State terrorism inflicted billions of dollars in damage on the already dilapidated electricity infrastructure, causing a cumulative potential and actual loss of a whopping 7GW in generation and transmission capacities.
Topic:
Economics, Energy Policy, Infrastructure, Business, Conflict, Services, and Electricity
Political Geography:
Iraq, Iran, and Middle East

8. Big Tech, Antitrust, and Breakup

Author:
Michael A. Carrier
Publication Date:
01-2020
Content Type:
Special Report
Institution:
Georgetown Journal of International Affairs
Abstract:
Big Tech is in the news. At the center of our political and economic dialogue is the effect that Amazon, Apple, Facebook, and Google have on our lives and what, if anything, governments should do about it. In this article, I explain how Big Tech has come under scrutiny, the antitrust implications of the industry’s behavior, and the potential remedy of breaking up the companies.
Topic:
Economics, Government, Science and Technology, Regulation, Internet, Social Media, and Business
Political Geography:
Global Focus and United States of America

9. The Recycling of Lithium-Ion Batteries: A Strategic Pillar for the European Battery Alliance

Author:
Raphaël Danino-Perraud
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Although it is still marginal, the market for electric vehicles (EVs) is growing. According to the French Institute of Petroleum and Renewable Energies (IFPEN, Institut Français du Pétrole et des Énergies Renouvelables), EVs accounted for a little more than 2% of the light vehicle market in 2019. This was up by 54% compared to 2018, but EVs still only represent 0.8% of the global car fleet. That said, the International Energy Agency (IEA) estimates EVs could make up between 15% and 30% of vehicle sales in 2030. However, while European manufacturers have so far developed EVs such as the Renault Zoé or the BMW i3, they are highly dependent on Asian companies for the supply and manufacture of materials for cells and electric batteries, such as nickel, cobalt, lithium used to build precursors, or cathodes and their components. Asia provides more than 90% of world car battery output, half of which comes from China alone. European dependence is not only related to the manufacture of batteries, but occurs throughout much of their value chain, from extraction and processing of raw materials to the preparation of necessary treatment processes for recycling. The recycling market for batteries from small electronic objects (smartphones, computers, tablets, etc.) has also been led by Asian countries.
Topic:
Energy Policy, Environment, Regional Cooperation, Science and Technology, Business, and Recycling
Political Geography:
Europe and European Union

10. The impact economy: balancing profit and impact

Author:
Dirk Schoenmaker
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Governments and companies can reinforce each other in their pursuit of sustainable development, which is based on three pillars: economic, social and environmental. An impact economy, in which governments and companies balance profit and impact, is best placed to achieve the United Nations sustainable development goals.
Topic:
Economics, Environment, United Nations, Governance, Sustainable Development Goals, Business, and Private Sector
Political Geography:
Global Focus