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Emerging Markets

03 December 2018 / Africa

Africa must accelerate market reforms

For Africa to grow, it needs a broad, all-inclusive financial market that facilitates investment. Policy-makers must pursue accelerated reforms to the continent's financial markets, principally because these can be used to raise capital to meet the region's significant funding needs, particularly for infrastructure projects. Africa's transformation requires significant resources. For example, to achieve universal energy access by 2025, as much as $55bn annually must be raised in domestic and international capital.

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16 November 2018 / China

Renminbi's global reserve share rising

Asset class diversification continues to be a key theme for central bank foreign exchange reserves managers. Despite a weaker renminbi/dollar rate this year, the Chinese currency has increased its share in global reserves, according to IMF data. The latest report shows a jump in renminbi holdings of around $50bn in the second quarter of 2018. Less than a decade after the launch of the renminbi internationalisation initiative, we estimate that more than 60 central banks have renminbi in their reserves. But allocations are still relatively small.

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14 November 2018 / Africa

Zambia's infrastructure habit

Infrastructure development in Zambia is a powerful tool for swaying public opinion. However, despite its importance to economic growth, it is contentious. Past projects are associated with high costs, opaque tender processes and rising public debt. The tension between development and debt dominates, and the two issues often lead back to China and its funding of Zambian infrastructure projects. In a nation that emerged out of colonialism, fears of its reoccurrence in a different form are well founded.

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30 October 2018 / Europe

Ukraine-IMF relationship not a success

The IMF's relationship with Ukraine has always been among its most high profile and difficult interactions. The US and Europe have consistently encouraged the IMF to remain engaged in Ukraine, viewing this as a means of laying a foundation for greater market orientation, integrating Ukraine with the West and diminishing Russia's regional influence. Though the Fund has spared no effort, the relationship cannot be viewed as a success, and the economic promise of the 2014 revolution is not yet close to fruition.

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04 October 2018 / Latin America

Argentina and the IMF – Take Two

Amid a plunging peso and falling confidence in Argentine economic policy, President Mauricio Macri turned to the International Monetary Fund for the second time in three months. His government is working with the Fund to implement a viable programme, owned by Argentina. With a revised framework at hand, some commentators have advanced criticisms of Argentina and the IMF, which I highlight below. They miss the bigger picture. Argentina's revised IMF programme merits the support of the international community.

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03 October 2018 / Africa

Promise and peril in Ethiopia

Ethiopia stands out among a handful of African countries that have recently rid themselves of incumbent leaders in pursuit of better governance and accountability. So far, the country has gone further and faster than others in revising its fortunes. Easing the country's foreign exchange shortage and tackling its large debt burden will be vital to ensuring reform efforts are kept on track and not disrupted by social unrest or economic volatility. The promise – and the peril – facing Ethiopia make it a key country to watch.

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27 September 2018 / Global

IMF adapts and solidifies legitimacy

The two decades since the Asia financial crisis have not been easy for the International Monetary Fund. It grappled with the rise of China and emerging markets, and the 2008 financial crisis. Then it faced Europe's crisis, including the Greek saga. During this tough period, the IMF has adapted its economic thinking, underpinned its legitimacy and repaired relations with Asia. Operationally, the Fund overhauled its work. The last two decades saw it shift from an organisation shrouded in secrecy to one basking in sunlight.

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25 September 2018 / Africa

Risks of Belt and Road in Africa

Apprehension over China's Belt and Road initiative continues to build. Some observers have accused Beijing of unduly exerting influence on other countries in the guise of infrastructure assistance. It is increasingly apparent that the risks to recipient African economies in particular are substantial, but their governments are left with little choice. It will take several years of use before one can properly measure the full economic benefits of new Chinese-built infrastructure. Meanwhile, the risks are self-evident.

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18 September 2018 / Africa

Managing economic integration in Africa

In the West, protectionism and an affinity for hard borders are on the rise. Other parts of the world, however, are adopting market-orientated initiatives appealing to the centre ground of politics, most notably Africa. In March, 44 nations signed the Kigali Declaration in Rwanda that brings the region one step closer to meaningful integration. However, one overlooked aspect is that only 30 countries adopted the Free Movement Protocol, which, it is hoped, will lead eventually to the creation of a 'borderless' Africa.

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