Topic Category: World

Political risk has increased significantly since the eruption of a corruption scandal in mid-December 2013. Triggered by the detention of more than two dozen suspects, including the sons of two Cabinet ministers on charges of graft related to questionable real estate deals, the scandal has breathed new life into a popular anti-government movement that had lost momentum following a bout of mass protests last summer.

In November 2013, the top leaders of the ruling Chinese Communist Party (CCP) unveiled an ambitious roadmap for economic and social reforms to be implemented by 2020. The policy strategy hammered out by the CCP’s Central Committee is the strongest signal yet of President Xi Jinping’s commitment to replacing the existing export- and investment-focused economic model.

The turmoil that erupted in Juba last month threatens to ignite a full scale ethnic civil war. If peace talks fail, a potential genocide may even result. Certainly, political risks for foreign investors and neighboring governments would increase under such circumstances. Given South Sudan’s position as a regional oil producing country, a civil war would also close transnational energy corridors throughout Central/East Africa and fuel regional instability.

Park Geun-hye’s first year in office was a bumpy one, marked by disruptive political scandals, worrisome tensions in relations with North Korea, and back-tracking on key components of her signature “economic democratization” agenda that have weakened her popularity and undermined her credibility. This new year is unlikely to be any easier, even assuming the continued recovery of the economy.

An article recently in the Argentine journal La Politica confirmed the collapse of talks between the Argentine government and Chinese financiers to help fund $21.6 billion in hydroelectric facilities to be built on the Santa Cruz river. This failure in negotiations is significant since it is one of the first times a Chinese denial of a major loan request by a “strategic partner” has been made public.

North Korea’s “Dear Leader” Kim Jong-il has been dead for two years, but his son, Kim Jong-un, appears to have taken firm control—and in a much bloodier fashion than many predicted, with the execution of his uncle and one-time mentor Jang Song-taek. However, no one knows whether the regime is stabilizing or destabilizing. The ascension of Kim fils never seemed certain. Not yet 30 when his father passed, Kim had had little time to secure the levers of power.

Professional sports players are usually paid based on performance. The better they play, the more money they make. In the business world, CEOs are typically compensated based on the performance of their company. The better the company performs, the more they are paid in salary and stock options.

In a recent speech, Secretary of State John Kerry highlighted “new energy” as an area in which the United States could work together with Latin America for the benefit of the region. As the administration pursues such collaboration, however, it will confront an important but little noticed trend: the transformation of the Latin American energy sector is already well underway, led by Chinese companies and backed by Chinese banks.

Saudi Arabia is angry with Washington. In Riyadh’s view, the U.S. government isn’t doing enough to support tyranny and war in the Middle East. The Obama administration should tell America’s foreign “friends” that Washington acts in the interests of the American people, not corrupt dictators. Repressive Riyadh long has been an embarrassment for the U.S.