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Monday, 1 August 2016

Hey, at least we’re not Mongolia

FDI cratering, growth forecast in the dumps, strategic position in a difficult neighborhood, IMF bailout rumors… sound familiar? FDI is in the dumpster, falling from USD 4.45 bn in 2012 to USD 121.5 mn today. There’s the prospect of a sovereign default (or an IMF bailout) as the state struggles with ballooning interest payments. Disputes with foreign investors. Politicians at loggerheads. GDP growth plunging from 17.5% to 0.8%. It’s not Egypt, it’s Mongolia. Read “Mongolia gropes for path out of economic hangover” in the Financial Times’ BeyondBrics blog.

While you’re on the FT, check out this piece on what happens when a country talks about slashing incentives for foreign direct investors. We’re cheerleaders for (sensible) investment incentives every bit as much as we’re hoping for an IMF facility, but Japan’s reaction to the Philippines’ proposal to cut tax incentives for foreign investors is kind of sobering.

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