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GLOBAL REVIEW 1
Finland
Commentators have speculated that a Greek exit could be prompted by German taxpayers and politicians exasperated at the prolonged crisis and delayed reform, or by the Greeks themselves wishing to exit the austerity measures of the IMF and the EU. Yet a possible trigger could be by a Helsinki Government. The most northerly eurozone country arguably enjoyed the strongest economy during the early phase of the single currency and debt crisis in 2010-2012. Recently however, growth has stalled and unemployment and debt levels have risen. A general election in April 2015 resulted in defeat for the pro-EU Conservative government of Alexander Stubb. While the principal winner was the Centre Party led by Juha Sipilä, he may need the support of eurosceptic party The Finns, opposed to further concessions to Greece. Although The Finns have not risen in support since their breakthrough in the 2011 election, they still won 38 seats. Finland is one of the few members of the European Union’s single currency to have come close to sticking to the Maastricht convergence criteria, aimed at keeping national debts under control. It is an exceptionally low on corruption – coming third on the international rankings. In terms of competitiveness, it is fourth, boasting highly transparent public institutions (1st), and high-quality infrastructure among other strengths. 2
Chile
Since its emergence from traumatic military dictatorship 25 years ago, the long, narrow South American country has transformed itself into a model of democratic stability with low corruption. In 2010 it voted in a centre-right government, headed by Sebastian Piñera. For years this had seemed an impossibility in the backlash against any party whose policies echoed those of the Pinochet junta of 19731990, however faintly. Michelle Bachelet, centre-left politician who had been tortured under the military regime, served as President from 2006-2010, and returned to power in the election of 2014, defeating Piñera in the run-off vote. Chile scores a respectable 21st on the international Transparency Index, a very good ranking for South America. The reliability of its official statistics led it to becoming the first South American country to be admitted to the OECD in 2010. Economically, for years the country has been heavily reliant on export of commodities, especially copper, which is extracted in vast mines in the northern deserts, but there has been some diversification. Household poverty has bedeviled the country before during and after the dictatorship. Poverty rates were slashed in the 1990s and 2000s though the improvement has leveled off in recent years. Chile is the highest-ranked Latin American country on the global Competitiveness Index, and 33rd overall. The Index cites effective institutions, low debt and efficient markets, among other assets. 12
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Kyrgyzstan (Kyrgyz Republic)
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This mountainous Asian state, whose principal borders are with Kazakhstan and China, is land-locked and, though it has some oil and gas reserves, is dependent on imports for energy. There is some gold mining. Corruption and curbs on civil liberties have marred governance for much of the quarter century since it became independent from the old Soviet Union. But since a new constitution was drafted in 2010 to curb presidential power, there have been coalition governments and more democratic stability. Its leaders have courted both US and Russian interests and, uniquely, for 12 years it hosted both American and Russian military bases. The US Air Force base was used for operations in neighbouring Afghanistan, but closed in 2014. The country scores low on the Transparency Index at 136th. It is a poor country, but there is evidence of a strong education system: literacy levels (99%) are far more impressive than health indicators (life expectancy just 69 years), indicating that, with better governance and encouragement of business, there is a foundation for economic development. Population is just 5.6 million, mostly ethnic Kyrgyz people, with minority Uzbek and Russian populations. The main religion is Islam. The Kyrgyz Republic is 108th on the Global Competitiveness Index. It scores particularly low on innovation and quality of institutions, but education is moderately well ranked. 4
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Burundi
Consistently one of the least corrupt countries in the world, New Zealand sets a high standard for governance and economic performance. It is second on the Transparency Index with a highly impressive score of 91 out of a maximum 100. It comes first in the category of Institutional Frameworks in the Global Competitiveness Index. However, it comes 17th overall for competitiveness, losing ground on market size and the quality of infrastructure. Businesses cited government bureaucracy and the need to improve infrastructure as the two main factors hampering growth. It scores moderately well for innovation. Politically, New Zealand has been extremely stable for many years. Scandals are rare and for many the country is most famous for being the location for filming the Hobbit film franchise, and it hosts a mature and successful movie industry. The traditional economic base of agriculture and tourism has been diversified in recent years. It is strongly supportive of Pacific trade. In 2008 it became the first western country to sign a free-trade deal with China. In April 2015 New Zealand trade minister Tim Groser urged Canada to follow the lead of the USA in opening up markets to trade, after the US Congress announced fast-tracked legislation to implement a 12-nation Trans-Pacific Partnership. This partnership is projected ultimately to cover 40% of the global economy, stretching from Japan to Chile. 6
Protests erupted in the small central African nation of Burundi in late April 2015 over the decision of the President Pierre Nkurunziza to run for a third term, which many argue is unconstitutional. The government responded in a draconian way, taking the main independent radio station off the air, banning protests and deploying the army. There is a fear that civil war could return to the country some 20 years after the horror of genocide in neighbouring Rwanda spilled over, causing widespread violence and political instability. There is long-running tension between the two main ethnic groups, the Hutus and Tutsis. In the 2015 crisis President Nkurunziza claims that the first of his two terms was by parliamentary appointment, not election, so he is clear to run again. Needless to say, his opponents do not agree. Poverty is a serious problem in Burundi. Health and education statistics are poor: life expectancy is 66 and the literacy level is below 50%. It is near the bottom of the Transparency Index, at 159th, indicating wide-scale corruption. It is 139th out of 144 nations on the Global Competitiveness Index, scoring low on nearly all indicators, though with some indications of improvement on primary education and the macro economic environment. Corruption and access to finance are the two principal barriers to trade cited by business managers. www.heditionmagazine.com
New Zealand
USA
Protests, sometimes resulting in sporadic violence, have erupted in different US cities over the treatment of black suspects by police. This illustrates that, despite having a black head of state for the past seven years, racial and social divisions persist. A country with a strong libertarian tradition can feature anti-establishment sentiments from both the left and the right of politics. Onshore fracking for oil has cut energy costs and led to a resurgence in manufacturing. The federal debt remains considerable, however. Economic growth has returned, but slowed in early 2015. Politically, the race for the Presidency has already begun for next year’s election. The Constitution prevents Barack Obama from running for a third term. His former Secretary of State Hilary Clinton is the front-runner for the Democrats. Of the Republican candidates, the best-known is Jeb Bush, two-time Governor of Florida and brother of former President George W Bush. The USA, home to some of the most successful technology companies in the world, ranks well for competitiveness, coming third overall, with particularly strong rankings for innovation and market size. On anti-corruption, it scores only moderately well, at 17th in the global rankings. There have been scandals of political corruption at state level, but the legal system is often effective. www.heditionmagazine.com
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Libya
The overthrow of violent and corrupt dictatorships in the ‘Arab Spring’ of 2011 by no means guaranteed orderly transition to democracy, and one example has been Libya, which has been plagued by political violence and instability. Last year the capital Tripoli was overtaken by an Islamist-led group, while the parliament and new government are based in Tobruk. Western governments have admitted that they helped too little with nation-building after helping rebels overthrow the former dictator Muammar Gaddafi. Many of the migrants trying to reach Europe in small boats have been Libyans. An indication of instability hampering potential growth came in April 2015 when the El Feel oilfield had to be temporarily owing to delays in paying salaries to security staff. Corruption is high, with Libya placed 166th in the most recent Transparency Index. Yet some indicators are better than expected: Literacy is 89% and life expectancy is 75 years, both high for Africa. If political stability can return the oil-rich economy can be diversified to ensure growth. Health and education score moderately well on the Global Competitiveness Index, but other factors do not, dragging the nation down to 126th on the international rankings. Unsurprisingly, government instability is the top factor cited by business as hampering development, while access to finance is the second. 8
Bangladesh
Success on the cricket field for the national side has given Bangladesh a timely lift in morale for a country bedevilled by poverty, political violence and natural disasters. A 3-0 series win against Pakistan in April 2015 followed the achievement of knocking England out of the World Cup. The international profile of sporting success builds on some modest progress in social and economic issues. Life expectancy is only just under 70. Literacy is low, at just 55%, with a particular problem being low participation of girls and young women in education. This reflects social and cultural prejudices; the constitution in theory insists on equal rights for women in many areas. The current Prime Minister is a woman, Sheikh Hasina, head of the Awami League. In the economy, agriculture and the textile industry have been significant. There has been huge pressure, with some success, on international companies to improve wages and working conditions in supplier factories in the country. Politically, there is still much corruption and instability. In April 2015, for example, the opposition party Bangladesh Nationalist Party boycotted three mayoral elections owing to accusations of vote rigging. The country ranks a lowly 145th on the Transparency Index. It is 109th on the Competitiveness Index, with low scores for infrastructure and quality of institutions. Education scores moderately well. 13