The list is our attempt to respond to what we see as a relatively underdeveloped marketplace of ideas when it comes to scenario planning for expropriation, unfair regulatory intervention, nationalizations, and resource nationalism events that have an impact on foreign investors in emerging markets.
Over on the FT’s Beyond Brics blog, a very interesting video interview with James Smither, associate director at risk consultancy Maplecroft, on how shifts in commodity prices can undermine a country’s resource leverage and the more nuanced ways revenue can be retained within domestic borders.
From Venezuela to South Africa to Indonesia, we have observed policies of resource nationalism that respond to ideological imperatives. In Canada and Australia similar problems arise out of suddenly aggressive tax regimes based on financial imperatives. And lastly, in challenging markets such as Central Asia as well as China, you have risks of state intervention guided by arcane clan politics and internal power dynamics.
Remember a few years ago when Russia was having fun talking about a natural-gas OPEC? It was largely derided at the time considering wildly different nature of the trade of this commodity (not the same spot market as oil), and then wholly forgotten when the shale boom crashed prices. But it would be a mistake […]
If you can’t beat ’em, join ’em. When it comes to resource nationalism in Africa, that appears to be the strategy of some mining companies such as the Australian-owned gold producer Perseus Mining, as they take their corporate social responsibility programme to a new level by recommending and endorsing their own tax increases to address […]
Here’s a very interesting article by the South African Institute of International Affairs that examines the many different types of resource nationalism. This is part of a growing discourse that looks to encourage and normalize expropriation, heightening risks for foreign investors. For instance, whereas Canada’s refusal to allow Malaysia’s Petronas to buy Progress Energy Resources […]
Yes, it’s happening there too. Today shares in gold mining company Centamin collapsed by 50% before trading was frozen following a ruling from an Egyptian court that the license for the Sukari gold mine was void. Unmistakable tones of resource nationalism when the lawyer who filed suit against Centamin boasted “Egypt’s gold is coming home […]