ESADEgeo’s Daily Digest, 26/04/2017

Project Syndicate, H. Davies: Will London survive Brexit? 

  • Amidst growing uncertainty, there is an assumption that things will not remain the same in London after Brexit, and a price will have to be paid.
  • Other countries have an incentive to correct the anomaly that the principal center for trading in euro-denominated instruments lays outside the Eurozone.
  • Foreign firms tend to lean towards locations where they are treated in the same way as their domestic counterparts. They also want an independent court system that upholds property rights, as well as access to skilled staff.
  • According to the latest Global Financial Centres Index, published by Z/Yen, London and New York are still ahead worldwide. The next European city on the list is Luxembourg, at number 18, whereas Frankfurt is the 23rd and Paris is the 29th.
  • Whether London will retain its lead in Europe depends to a great extent on the availability of skilled staff, which may take a hit after Brexit.

Financial Times, L. Hornby: China’s steel battles with west set to intensify

  • China’s steel industry accounted last year for half of global production.
  • As China’s growth slows and infrastructure and property construction hit saturation point, more steel is set to flow into global markets.
  • U.S. President Donald Trump announced that he would launch a “national security” investigation, which could lead into sweeping tariffs theoretically aimed at reducing imports of Chinese steel.
  • However, “they [the U.S.] are actually more worried about competition in third countries. It’s not so much about the Chinese presence in the US market,” said Mei Xinyu, a strategist for the Chinese ministry of commerce.
  • Chinese state-owned enterprises have moved up the value chain, further diminishing foreign steelmakers’ margins.

The Guardian, C. Barr: Inequality Index: where are the world’s most unequal countries?

  • The World Bank’s Gini index has South Africa, Namibia and Haiti as the most unequal countries in the world, whereas Ukraine, Slovenia and Norway are considered the most equal.
  • According to the Palma ratio, which measures income inequality a little bit differently, the top 3 countries are the same, whereas Botswana replaces Namibia in the bottom 3.
  • The World Happiness report takes a more comprehensive look at living standards. Happiness is measured in terms of GDP per capita, social support, healthy life expectancy and people’s perception of their freedom to make life choices, generosity, and perceptions of corruption.
  • According to this latter measure, Nordic countries lead the way in terms of equality, while the Central African Republic, Burundi and Tanzania lag behind.

Al-Monitor, M. Dabrowski: Iran Polling: Will vote see a Rouhani-Ghalibaf rematch? 

  • According to a recent poll conducted by IranPoll, President Hassan Rouhani is viewed favourably by 62% of Iranians. As for the current mayor of Tehran, Mohammad Bagher Ghalibaf (who came in second in the last elections), 67% have a favourable opinion of him.
  • Rouhani’s popularity seems to have retreated a bit since the nuclear deal was reached, but it was extremely high before. Most Iranians perceive Rouhani’s economic efforts as insufficient.
  • Ghalibaf led Rouhani in most credible polls during the 2013 campaign. However, as Rouhani’s surprise win demonstrates, it’s not unusual to see big swings in the polls throughout Iran’s campaign season.
  • Elections will be held on May 19. There is a preliminary list of 6 presidential hopefuls, and some polls seem to indicate there may be another Rouhani-Ghalibaf battle, but many of them are unreliable.

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