MarketLine Blog

Posts about Politics

Boeing vs. Bombardier: Tariffs justified as Bombardier receives state aid

MarketLine

In September 2017, the US Department of Commerce announced the preliminary decision to implement import tariffs of approximately 220% on any imports of Bombardier’s C-Series jets into the US. Following a complaint by major competitor Boeing that Bombardier was dumping its jets into the US market as below cost-price, the tariff plan has met with widespread criticism across Canada – where Bombardier is based – and in the UK, where wings are built in a plant in Belfast, currently providing 4,200 jobs. In reality the tariff – which would more… Read more

KPMG South Africa involved in “Zuptagate” scandal: Senior staff fired as audits fall “short of the quality expected”

MarketLine

In May 2017, a series of emails were leaked which showed a very close relationship between the Gupta family and the incumbent South African President Jacob Zuma. Opposition parties and civil rights groups claimed that this close relationship had resulted in a whole host of government contracts being given to the Gupta family without the proper procedures being followed. In the midst of this scandal were caught major multinationals like KPMG, McKinsey, Bell Pottinger and SAP. All of them have been associated with the Gupta family’s activities in South Africa… Read more

No longer too big to jail: Imprisoning heir to Samsung can create change in chaebol culture

MarketLine

Efforts to solve problems emanating from corporate governance and culture within massive chaebols have gained fresh impetus from the conviction of Lee Jae-yong for bribery in a corruption scandal which was responsible for the impeachment of President Park earlier this year. For significant change in culture to occur and for forces seeking change to stand a reasonable chance of success, Mr. Lee must remain in prison rather than be subject to the pardons previous prison sentences handed to powerful businessmen have ended in. Pushed by a sizeable chunk of public… Read more

The Independent: Independent No More

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On March 25, 2010 the failing Independent newspaper was bought for £1 ($1.30) by the Russian Lebedev family. Since then, father-and-son team Alexander and Evgeny have invested over $140m and the newspaper – now an online-only publication – has been revitalized while maintaining its traditional pro-free speech, left-wing approach to reporting. The recent politicization of young people in the UK – driven by their defeat in the EU membership referendum when young people voted overwhelmingly in favor of remaining a member – is one of the driving forces behind the… Read more

Poland: Kaczynski close to demolishing all remaining democratic oversight in Poland

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Kaczynski’s ruling PiS (Law & Justice) party has, since its election, been rapidly demolishing the process of democracy in Poland. The PiS party has crushed the power of the opposing parties and state institutions that had the ability to stand in its way. In July 2017, the party introduced a bill attacking the independence of the judiciary and despite street protests and chaotic and angry scenes in the house, and this bill has now passed. This bill will mean that judges will be in direct control of the justice minister,… Read more

UK General Election: Night of upsets points to an enormously difficult period to come for the UK

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A fairly staggering set of results in June 2017 showed that in the UK, the political climate is changing. Almost every poll done in the run up to the election suggested a landslide victory for the incumbent government and the result was that the Conservative Party dropped its majority and only a deal with the DUP would provide them with a minority government. The implications of this result are wide ranging. It looks increasingly likely that there will be a second general election within six months as confidence in Theresa… Read more

Minority Conservative government: Hung parliament will provide a better deal for business

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The declaration of a hung parliament but with a Conservative party government is good news for the economy and businesses because the likelihood of a ‘hard Brexit’ has suddenly been reduced because in order to survive, the government will require support from opposition groups. Given the opposition parties are all but wholly united on a ‘soft Brexit’, the policy of the previous government could be about to change radically. The change makes the possibility of the UK buying access to the single market and passporting much greater than has been… Read more

Donald Trump: The Anti-Globalism Billionaire

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Since revealing plans to run for President, billionaire businessman Donald Trump has expressed surprising anti-globalist sentiments. For a man who’s made his fortune running luxury resorts across the globe, it is initially surprising that he would claim to oppose trade blocs, a major driver of globalization and free trade. But perhaps Donald Trump is taking his new job seriously. The ex-businessman is now the most powerful person on the planet and that comes with certain responsibilities. The US people voted for a populist, radical alternative to the established political system… Read more

Greater Manchester mayoral elections: Manchester shows little interest in the predicted Conservative landslide

MarketLine

  The Greater Manchester Mayoral Election during the local election period of May 2017, was a particularly interesting one. Despite strong Conservative gains nationally, this was not reflected in the Greater Manchester vote. The Labour Party win was a white wash and even areas that traditionally had leanings towards the Conservative party did not show a strong Conservative turnout. What was also seen was that, particularly in the case of the Manchester Central district, deprivation or affluence is a very poor indicator of voting intention as both poor and wealthy… Read more

Namibia: NEEEF is not the solution. New policy would be bad for the economy

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NEEEF is not the policy the Namibian economy requires at present. Businesses, however big or small, would be required to be at least 25% owned by people described as ‘disadvantaged persons’ and occupy half of board and management positions. The suggested legislation appears to be an effort towards what amounts to forced redistribution of wealth and has similarities with the land redistribution attempted in Zimbabwe. Ownership is not the only target: spending and investment would be subject to new controls too. Problems regarding implementation are legion. Given approximately 40% of… Read more

UK General Election: Theresa May’s Call for Election on June 8 an Opportunistic Masterstroke

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On June 23, 2016, the United Kingdom voted to leave the European Union, a historic result the likes of which has never been seen. On June 5, 1975 the UK voted overwhelmingly in favor of remaining in the EU (then called the European Community) and the thought of any member state actually leaving is a very recent phenomenon. Many point to the Great Recession of 2008-09 as the catalyst for the most recent wave of anti-EU sentiment but opposition to the EU has existed in the UK since it joined… Read more

IMF appeases US trade policy

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The first conference held by the IMF since the economic policy of the United States underwent dramatic changes following the election victory of Donald Trump already shows strong signs of moving towards a position designed to appease the new president. Differences between previous statements and policies from the IMF and what is now being espoused point towards the dropping of the pledge occurring for political purposes. Indeed the language used by the German Finance Minister and that of the IMF shows a stark contrast between views on the matter. Whilst… Read more

French elections: Economic considerations and policies will shape the final outcome

MarketLine

First of all, the preference of French voters is clarified from the polls as three quarters of voting preferences tend to be gathered among center to right wing politicians. This indicates certain prevailing trends of voters such as the need for sense of security and the adjustment of France’’ foreign relations with Europe and the rest of the world. Nevertheless, even immigration and foreign relations are associated with economic policies over unemployment, welfare state, national security and certain industries of the French economy. Especially, unemployment and social protection are fundamental… Read more

South Korea and China: WTO complaint must be resolved swiftly and amicably

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In July 2016, American and South Korean military officials agreed to deploy the Terminal High Altitude Area Defense (THAAD) missile defense system in South Korea. China was unimpressed, seeing the move as an act of aggression and intimidation by the US close to its borders, as well as citing concerns that it could interfere with the efficacy of its own military capabilities. On March 20, 2017, South Korea complained to the WTO that China’s unease with the THAAD situation has caused it to retaliate economically, although it was keen to… Read more

President Park Impeached: Relations with chaebols could change forever

MarketLine

Legislation designed to curtail the strength of chaebols has traditionally failed to discover parliamentary approval; now amendments to several acts have found new impetus following the impeachment of the president. Whilst voters await the coming election, prospective candidates are seeking to assert their case for a change in how chaebols operate in the South Korean economy. However, despite the rise in support, problems will need to be overcome for lasting change to occur. Previous efforts have fallen flat; this time there is a far greater chance of success. Moon Jae-in,… Read more

Trump’s win is good news for US economy

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Donald Trump’s whole mantra during his campaign (as evidenced by his rather natty headwear) has been to ‘Make America Great Again.’ In order to do this, he knows he must make the US competitive on the global stage. He has pledged to reduce taxes heavily for low and middle income Americans and also to make sure that the wealthy (including corporations) do not pay too much as that undermines jobs. This should help boost the currently questionable level of job creation and to increase spending power, which should in turn… Read more

An inconvenient truth about the euro area

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The creation of the euro area was a mistake. Top ranks of business and political classes in Europe were expecting an explosion in trade and economic activity following the creation of the single currency area in 2002. The euro would lubricate the integration of the newly formed euro area. It would be possible to achieve higher levels of growth and long-term prosperity. Unfortunately, the real GDP of the euro area increased only by 1.8% per year between 2001 and 2006 and by merely 0.2% per year within the 2007 -2015… Read more

Uncertainty over political events trumps fundamentals as markets fall

MarketLine

On Thursday June 23, 2016 the UK went to the polls to decide on its future as a member of the European Union (EU). By a small margin, the country opted to leave and despite the fact that no steps to enact Article 50 have yet been taken by Theresa May and her government, speculation about an imminent implosion of the British economy has been rife, damaging the value of the Pound and serving as a rather convenient scapegoat for everything from companies’ poor performance to increased prices, to political… Read more

Fracking approval: In spite of public opinion

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The decision to approve Third Energy’s application to begin exploratory drilling for shale gas outside of Kirby Misperton in North Yorkshire has been hailed as a landmark decision for the UK fracking industry. Many believe that it will open the door to a swathe of further approvals, while setting a precedent which could help rival firm Cuadrilla in their appeal against the decision not to allow them to frack up on the Fylde coast. However, industry chiefs would do well to keep their champagne on ice, as public opposition is… Read more

Better the devil EU know?

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Thursday 23rd June is set to be one of the most hotly-anticipated and controversial days in British political history, as UK citizens vote in a referendum to decide whether or not they wish to remain a member of the European Union. The referendum – promised by Prime Minister David Cameron in his 2015 election manifesto – has now entered the final stages of campaigning. As both the ‘in’ camp, led by Britain Stronger in Europe, and their opponents Vote Leave ramp up the pressure it is still almost impossible to… Read more

Prosperity based on debt

MarketLine

A large number of European governments were keen to embark on the deregulation of the financial sector in the 1980s. The deregulation in Europe was initially proposed in the United Kingdom by the Prime Minister Margaret Thatcher and, subsequently, adopted by a large number of European governments. It opened up the doors to the addiction of European consumers to credit. Waves of bank loans and mortgages became available to consumers and it quickly turned into a necessity. Later on, it became clear that banking in Europe turned into a highly… Read more

Hit hard by austerity measures

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The rate of unemployment is closely watched by the government as an important measure of success or failure of economic policies. According to the Office of National Statistics (ONS), unemployment in the United Kingdom declined from a peak of 2.65m in December 2011 to 1.84m in February 2015. Close to 800,000 workers found a job between December 2011 and February 2015. Additionally, according to BBC news, ONS also claims that “the employment rate now stands at 73.3%, the highest rate of people in work since the ONS began keeping records… Read more

The UK General Election 2015: The Result that nobody expected

MarketLine

On Thursday the 7th of May the UK went to the polls to choose their next government. The previous government had been a compromise between two parties, sharing their seats in order to form a workable coalition. For months and years before last week’s election, the pollsters had been predicting a similar result,  a hung parliament, where no one party would have overall control  and all the signs were suggesting that there would have to be another coalition and no one knew for sure which parties that might contain and… Read more