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Weekly Roundup | 01.09.2024

Top headlines and news impacting Latin America, Africa, and Southeast Asia commercial real estate.

 
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Much of the trade data from Mexico, the Philippines, Vietnam, Singapore, and Thailand should be viewed skeptically by investors considering investments based on trading data. China is pushing products through these markets to curtail decoupling. Whether this is sustainable comes down to your opinion on where the global order is heading and the Emerging Real Estate Digest is busy with a series aimed at answering that big question.


trade surplus with china and mexico vietnam philppines singapore and thailand


The political risk of Gustavo Petro taking power caused the peso to collapse in 2022 when it rose to over 5,000 pesos for every dollar. The peso strengthened only after the market saw that the reform agenda was blocked and that Petro’s abysmal approval ratings made it nearly impossible to revive.


colombian peso with petro winning showing depreciation


Pemex produced 300,000 barrels of gasoline a month in 2018. In 2023 it closed with an average of 655,000 per month. This puts Mexico on the path of fuel self-reliance perhaps even by 2025. For that to happen the production would need to double again and go above 1,300,000 barrels per month. AMLO has allocated at least $33 billion worth of investments into Pemex to shore up the beleaguered and most heavily indebted (17% reduction in 2023) oil producer in the world.


mexico energy production under 3 presidents ending with amlo


The restrictions imposed have been blamed on droughts and are the strictest since 1989 when the nation was closed during invasions to depose Noriega. The canal was doubled in size in 2016 and the water needs haven’t been met consistently ever since. The rain levels of last year were a big drop from 2022, but not historically significant and similar to 2015’s.


panama canal rainfall
 
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Most of Washington DC’s engagement with Africa is aimed at promoting historically radical gender, sexual, and social norms onto Africans and their governments. Uganda exported $71 million of goods to America in 2023, but only 12% were duty-free under AGOA. Central African Republic, Gabon, and Niger were also removed. AGOA has been a failure and has mostly facilitated the movement of petroleum products in the early-2000s.


africa exports under agoa over years


Under the deal, Somaliland would lease 20 kilometers of sea access to Ethiopia’s navy under a 50-year concession. In exchange, Ethiopia recognizes it as an independent country becoming the first country to do so even though it declared independence three decades ago. It gains other financial benefits including shares in Ethiopia Airlines. Ethiopia lost sea access when Eritrea seceded in 1993. Somalia is upset and has previously called the idea of Somaliland's independence “null and void”. Ethiopia recently joined BRICS and is the second most populace country in Africa.


disputed area of somaliland where ehtiopia wants port


The pipeline will permit Uganda to develop its oilfields which are mainly operated by the French company TotalEnergies. Projected project costs have soared to $5 billion and financing remains uncertain even though the project has been in the planning stages since 2013. The move to wrap up the land rights process by hiring Lionel Zinsou is a positive development. 98% of the households to be moved for the pipeline have already signed compensation agreements.


large oilpipline through tanzania for uganda oilfields


Not much is going right in South Africa but the Western Cape is bucking the trend boasting solid residential and industrial real estate trends. Residential is buoyed by “semigration” or the exodus of Gauteng (i.e., Johannesburg) residents to coastal regions in the Western Cape. Cape Town’s industrial sector rents grew by 6% in Q4 of 2023. The region is attractive for industrial development because of its strategic location, good governance, and stable supply of industrial supplied electricity. The Red Sea tumult is a win for Cape Town.

 
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Last week the two navies patrolled the South China Seas over two days. The Americans sent an aircraft carrier, a cruiser, and two destroyers so the move was not merely symbolic. In April of last year 12,200 American, 5,400 Filipino, and 11 Australian soldiers participated in joint exercises in the region. Japan next?


2024 military footpring in philippines


The South Korean Ministry of Ocean and Fisheries announced the investment in the logistics center which aims to help South Korean small- and medium-sized businesses wishing to operate in Vietnam. The facility features 12,000 square meters of warehouse space with a storage capacity of 4.3 million pallets of goods. South Korean companies will receive discounts to use the facility.



The new agency is aimed at coordinating economic and investment policies and will be headed by Frederick Go, CEO of Robinsons Land Corp. Mr. Go stepped down from his position to fill this powerful governmental role.



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