Topic Category: World

The fragile three-party coalition government formed after two parliamentary elections held last year failed to produce a decisive winner. And the unwillingness of some coalition lawmakers to back various elements of a harsh austerity program dictated by the EU and the IMF has reduced the government’s majority in the 300-member Parliament from 179 seats to just 164.

Libya’s first democratically elected government officially took office in early November, with the swearing-in of 20 Cabinet ministers appointed by Prime Minister Ali Zidan. The prime minister took care to include nominees favored by the main secular and Islamist blocs, the NFA and Justice and Construction, respectively, and also included figures from eastern Libya, an area that is currently buzzing with calls for significant regional autonomy.

Political tensions have continued to simmer in Baghdad, as the blocs representing Iraq’s Shiite and Sunni Arabs in Prime Minister Nuri al-Maliki’s government maneuver for advantage within the National Assembly. At the same time, a protracted tug-of-war between Baghdad and the Kurdistan Regional Government (KRG) over control of Kurdistan’s oil wealth is heating up, as major oil investors are lining up to sign deals with the regional government, over the objections of officials at the Ministry of Oil.

An opposition motion to scrap an executive decision to allow foreign firms to own majority shares in retail enterprises was defeated by the lower house of the Parliament on December 2, 2012. Five days later the upper chamber did the same. In both cases, the opposition motion was defeated by a comfortable margin.

In July, Apple announced lower than anticipated sales numbers for the iPhone in China. Many in the U.S. media blamed high prices, wondering when Apple would make their signature device more affordable there. This assumption implies the average Chinese consumer cannot afford the iPhone and is purchasing a less expensive alternative. This is incorrect.

The slowing of the global economy is forcing China, the world's largest exporter, to confront the issue of rebalancing that primarily involves striking the right balance between the state and market. State-owned banks still dominate the financial sector and are kept profitable by a positive spread between loan and deposit rates dictated by government policy. This has resulted in financial repression that has penalized savers while rewarding banks.

Canada is one of the most accessible markets in the world. Last year, U.S.-Canadian merchandise trade amounted to almost $600 billion—nearly 100 billion more than the United States’ next largest partner.(1)  And bilateral trade in services also was tremendous, at more than $76 billion in 2010, according to the most recent data.(2)

As the U.S.-China relationship evolves, opportunities are increasing. At the same time, new risks, political tensions and misperceptions are emerging that can have a destabilizing impact. Being aware of these issues is important. Understanding how they may impact your business could be crucial.

India has experienced remarkable economic growth, averaging an annual rate of 8 percent from 2000 through 2010.(1) It declined slightly to 7.2 percent last year, and is anticipated to hover just under 7 percent this year, the International Monetary Fund reports. With rising investment, production and consumption, the Indian economy has become the world’s ninth largest, at $1.7 trillion, just after Italy and before Canada.(2)