Weekly Roundup | 01.09.2024
Top headlines and news impacting Latin America, Africa, and Southeast Asia commercial real estate.
📰 Mexico Nearshoring is Largely Chinese Rejiggering
Much of the trade data from Mexico, the Philippines, Vietnam, Singapore, and Thailand should now be viewed skeptically by investors considering investments based on trading data. China is pushing products through these markets to curtail decoupling. Whether this is sustainable comes down to your opinion on where the global order is heading and the Emerging Real Estate Digest is busy with a series aimed at answering that big question.
📰 Colombia’s Peso Unlikely to Depreciate to 5,000 Again in 2024
The political risk of Gustavo Petro taking power caused the peso to collapse in 2022 when it rose to over 5,000 pesos for every dollar. The peso strengthened only after the market saw that the reform agenda was blocked and that Petro’s abysmal approval ratings made it nearly impossible to revive.
📰 Mexico Has Doubled Gasoline Production Under AMLO
Pemex produced 300,000 barrels of gasoline a month in 2018. In 2023 it closed with an average of 655,000 per month. This puts Mexico on the path of fuel self-reliance perhaps even by 2025. For that to happen the production would need to double again and go above 1,300,000 barrels per month. AMLO has allocated at least $33 billion worth of investments into Pemex to shore up the beleaguered and most heavily indebted (17% reduction in 2023) oil producer in the world.
📰 Panama Canal’s Problems Are Design Defects Not Neverending Droughts
The restrictions imposed have been blamed on droughts and are the strictest since 1989 when the nation was closed during invasions to depose Noriega. The canal was doubled in size in 2016 and the water needs haven’t been met consistently ever since. The rain levels of last year were a big drop from 2022, but not historically significant and similar to 2015’s.
📰 DC Removes Uganda From AGOA For Failure to Promote LGBTQ+ Agenda
Most of Washington DC’s engagement with Africa is aimed at promoting historically radical gender, sexual, and social norms onto Africans and their governments. Uganda exported $71 million of goods to America in 2023, but only 12% were duty-free under AGOA. Central African Republic, Gabon, and Niger were also removed. AGOA has been a failure and has mostly facilitated the movement of petroleum products in the early-2000s.
📰 Landlocked Ethiopia Signs Deal to Secure Sea Access
Under the deal, Somaliland would lease 20 kilometers of sea access to Ethiopia’s navy under a 50-year concession. In exchange, Ethiopia recognizes it as an independent country becoming the first country to do so even though it declared independence three decades ago. It gains other financial benefits including shares in Ethiopia Airlines. Ethiopia lost sea access when Eritrea seceded in 1993. Somalia is upset and has previously called the idea of Somaliland's independence “null and void”. Ethiopia recently joined BRICS and is the second most populace country in Africa.
📰 Total Hires Former Benin PM to Secure Land for Oil Pipeline in East Africa
The pipeline will permit Uganda to develop its oilfields which are mainly operated by the French company TotalEnergies. Projected project costs have soared to $5 billion and financing remains uncertain even though the project has been in the planning stages since 2013. The move to wrap up the land rights process by hiring Lionel Zinsou is a positive development. 98% of the households to be moved for the pipeline have already signed compensation agreements.
📰 Western Cape Industrial Sector Shines in South Africa
Not much is going right in South Africa but the Western Cape is bucking the trend boasting solid residential and industrial real estate trends. Residential is buoyed by “semigration” or the exodus of Gauteng (i.e., Johannesburg) residents to coastal regions in the Western Cape. Cape Town’s industrial sector rents grew by 6% in Q4 of 2023. The region is attractive for industrial development because of its strategic location, good governance, and stable supply of industrial supplied electricity. The Red Sea tumult is a win for Cape Town.
📰 The Philippines and American Navies Jointly Patrol South China Sea
Last week the two navies patrolled the South China Seas over two days. The Americans sent an aircraft carrier, a cruiser, and two destroyers so the move was not merely symbolic. In April of last year 12,200 American, 5,400 Filipino, and 11 Australian soldiers participated in joint exercises in the region. Japan next?
📰 South Korea Invests $14 Million in Logistics Center in Vietnam
The South Korean Ministry of Ocean and Fisheries announced the investment in the logistics center which aims to help South Korean small- and medium-sized businesses wishing to operate in Vietnam. The facility features 12,000 square meters of warehouse space with a storage capacity of 4.3 million pallets of goods. South Korean companies will receive discounts to use the facility.
📰 Marcos Taps Real Estate CEO to Oversee New Economic Agency
The new agency is aimed at coordinating economic and investment policies and will be headed by Frederick Go, CEO of Robinsons Land Corp. Mr. Go stepped down from his position to fill this powerful governmental role.