For years, Dubai's Jebel Ali Port and industrial zone operated as the shipping hub for the Gulf region. But now, neighboring Arab cities are investing huge sums of money to develop competing mega shipping ports, as the Gulf region views logistics as a means of diversifying traditional oil economies. There is concern however about infrastructure overlap and oversupply as global shipping traffic and trade show signs of slower growth.
Published: April 16, 2013 Amidst High Praise for Gulf Oil Economies, Caution that Serious Challenges Lie Ahead
Flush with revenues, engaged in aggressive social spending and enjoying relative calm, some of the Arab World's oil-producing countries are in a phase of super-abundance, according to regional economic and financial observers. Gathered at a recent Abu Dhabi conference co-sponsored by the Higher Colleges of Technology, they noted that the Gulf's wealth of opportunities are, however, tempered by certain concerns, including potential budget deficits and questions regarding the economic and political impact of a United States that is not dependent on Middle Eastern oil.
Published: April 02, 2013 Global Currency Battles: A Waiting Disaster or a Win for All?
To many, Japan's recent moves to devalue the yen looked like the spark that could ignite a global currency war -- a series of competitive devaluations that, last century, helped plunge the world into the Great Depression. Until now, central bankers have been resisting the urge to politicize exchange rates. However, while currency skirmishes can be dangerous and require monitoring, they are also necessary for establishing equilibrium in markets and will help in the global economic recovery, some experts say.
Published: March 19, 2013 Reverse Mergers: A Looming U.S.-China Showdown over Securities Regulation?
As the U.S. and China tussle over high-profile trade disputes and geopolitical tensions, a scuffle in yet another arena -- the securities market -- has been brewing and threatens to boil over soon. U.S. securities regulators are frustrated in their efforts to go after Chinese companies that listed on U.S. stock exchanges through transactions known as "reverse mergers," attracting investors often with allegedly fraudulent financial disclosures. Meanwhile, U.S. investors in Chinese reverse merger companies face limited prospects recuperating their losses, experts say.
Published: March 05, 2013 How the Middle East Is Protecting Itself from Europe's Ongoing Woes
In spite of the austerity efforts by European governments and increased financial collaboration in the Eurozone, the region remains saddled with a number of economic and fiscal difficulties. Sony Kapoor, the head of European think tank ReDefine, tells Arabic Knowledge@Wharton that Middle Eastern investors have moved interests out of Europe and into Asia or closer to home as a result. "We have also seen some opportunistic buying-up of distressed assets by the Middle East, so there are also other opportunities that will arise," he adds.
Published: February 05, 2013 Consumer Credit in China
Since being introduced in 1985, credit cards issued in China have grown at an astonishing rate, reaching 285 million in 2011, five times the number in 2006. Growth is expected to continue at 31% per year over the next five years. Yet credit cards are still used mostly for large-ticket items, while cash remains the predominant payment method for smaller purchases. In addition, China's traditional beliefs about personal finance have slowed the adoption of electronic payment methods. Recent studies, however, have also shown that these traditional value systems are changing, and that Western consumption-driven lifestyles are finding their way into China, especially among the youth.
Published: January 08, 2013 Shrugging Off a Debt Default, Gulf Islamic Financial Markets Show Maturity
A major United Arab Emirates energy company defaults on nearly US$1billion in debt, but the market takes the announcement in stride rather than panicking. It is a stark contrast to investor reaction in 2009, when Dubai World requested a six-month delay on payments on US$26 billion in debt. A matured, deeper Islamic finance market, the Arab Spring and Dubai's economic resurgence are all reasons why observers say the default caused little concern, despite almost US$50 billion of maturing debt in the Emirate in the next four years.
Published: November 13, 2012 Private Equity in India Finds Opportunity in Adversity
Private equity (PE) in India is facing problems because of unclear and changing regulations, and the lack of exit routes. At the same time, many are turning to PE funds because other sources of finance have dried up. This year is expected to be one of consolidation for the industry, according to the "India Private Equity Report 2012," released by global management consulting firm Bain & Company.
Published: November 13, 2012 Google's Osama Bedier: Why the Digital Wallet Is Key to the Marketplace
Many of today's digital payment systems leave both consumers and merchants more frustrated than satisfied. But Osama Bedier, Google's vice president of payments, says building a better digital wallet could be the key to more targeted and profitable consumer-merchant relationships. "We're moving into a world where consumers take much more control of their relationships with merchants than in the past," he tells Knowledge@Wharton. "They are deciding which ones they care about more and which ones they don't. The wallet will be the tool they will use to manage those relationships."
Published: November 13, 2012 The Potential Consequences of Rescuing Spain
When it comes to the global economy, all eyes are focused on Spain. Analysts and other observers assume that the Spanish government will eventually ask the European Union for help in dealing with its debt, although no one is certain when that might happen. What economic consequences will such an aid request bring for the country -- and for the European Union?
Published: October 31, 2012 With Increased Financial Clout, Middle East Women Seek Greater Investment Options
Shedding traditional limitations, women in the Middle East are becoming better educated and finding themselves in greater control of financial matters than ever before. Seeking to guide women in the region in financial education is Azeemeh Zaheer, vice president of Gatehouse Bank, a Shariah-compliant bank in London. She tells Arabic Knowledge@Wharton that Middle Eastern women are both empowered and gaining financial savvy, moving even into international real estate holdings. "Most of the ladies feel a sense of comfort investing in tangible assets that are in transparent regulatory environments and cities they have visited," she notes.
Published: October 16, 2012 Transactional Banking and Mobile Payments in China: An Emerging Opportunity
In China's biggest cities, smartphone penetration is approaching 50% -- higher than in many developed markets. But that's not the whole story. At the same time, the country's rapidly growing smartphone market is fuelling even bigger, more fundamental changes in how consumers interact and engage online - with each other, with service providers, with retailers and more. One of the biggest beneficiaries of this trend, experts say, is mobile commerce. This story, produced in collaboration with Chinatrust, looks at the skyrocketing number of mobile payments in China and what lies ahead.
Published: October 02, 2012 China Is Buying U.S. Companies at a Record Pace
Chinese companies are buying up U.S. companies and other assets at a record pace in a scramble to spend down China's large dollar holdings while acquiring assets, market share, technological know-how, talent and training. What does it all mean for the U.S.? To shed some light on the latest run at U.S. companies by Chinese firms, China Knowledge@Wharton asked two Wharton management professors to offer their thoughts on Chinese acquisitions and the potential for a U.S. backlash.
Published: September 18, 2012 Confidence is High, but Brazil's Success Is Showing Signs of Tarnish
While the economies of Europe and the U.S. slumped during the 2008 global financial crisis, Brazil's surged, enjoying a time of unprecedented growth and development. But now signs are pointing to a potential slowdown, as the Brazilian economy feels the effects of the evolving financial crisis in Europe, the leveling off of growth in China, bottlenecks created by decades of underinvestment in infrastructure and other critical areas, and the absence of much-needed reforms.
Published: August 21, 2012 Argentina Faces an Unknown: How to Regain Its Energy Independence
In recent years, Argentina has reduced its production of oil and gas while importing an increasing amount of fuel. As a result, the country has become more and more dependent on foreign sources of energy. When the government of President Cristina Fernandez de Kirchner expropriated 51% of oil producer YPF in April, it set off major disruptions in the energy sector. Will Fernandez de Kirchner's administration be able to reverse the energy crisis and guide the country toward self-sufficiency?
Published: June 26, 2012