According to EFIC most challenging global risks for the October 2014 are Chinese economic slowdown, political uncertainty in Thailand, ore export ban in the Philippines, minimum wage demands in Cambodia and Ebola spread in Africa.
China — Economic slowdown continues to deepen
Industrial production growth slowed to a five-year low of 6.9% (y/y) in August from 9% in July. Growth in fixed asset investment also slowed, though retail sales held up better.
The housing correction continues to be a serious drag, even as local governments continue to ease their housing restrictions and banks increase mortgage availability to home-buyers.
Thailand — When putsch comes to shove
Interim Prime Minister General Prayuth Cha-Ocha said on September 4 that he expects it will take at least a year to draft a new constitution – Thailand’s ‘own version of democracy’.
He also said he might not hold to the original timetable of elections in October 2015.
Philippines — Shock at ore export ban
A proposed ban on Philippine exports of unprocessed metal ores has caught the market unawares. The nickel price rose 7% in the four days after the announcement, and is up 22% since the start of the year, when Indonesia announced its own ban on nickel ore exports.
Cambodia — Pay demands not only economic challenge
Thousands of clothing industry workers from around 300 factories staged a Global Day of Action on September 18 to campaign for an increase in the minimum wage from US$100 to US$177 a month.
All parties – workers, foreign fashion buyers and the government – appear to be taking a more conciliatory approach to the current campaign than to a previous one in 2013, in which police shot dead four striking workers.
West Africa — Ebola economic cost could go either way
A World Bank analysis of the Ebola epidemic released last month finds that the economic costs could be limited if containment is swift.
Then again, if the virus continues to surge in the three worst-affected countries – Guinea, Liberia, and Sierra Leone – its economic impact could grow eight-fold, dealing a ‘potentially catastrophic blow’ to the already fragile states.
In Liberia, the hardest hit country, the GDP hit could be almost 12 percentage points in 2015. The analysis finds that the direct costs of the crisis – death, sickness,
nursing, and associated lost working days – aren’t the largest ones.
The largest cost is rather fear.
This leads people to shun one another and withhold their labour, which closes businesses and disrupts transport, including through sea and airports.
80-90% of the total economic impact of epidemics comes from fear, the Bank concludes after studying previous epidemics such as SARS in 2002-2004 and H1N1 flu in 2009.
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