Thursday, 27 November 2014

Edita share listing ok’ed • Bisco bidding war great publicity for Egypt • debating the risk of investing in renewables • IOCs to get EGPC payout within 6 mos • 30 June report out, Sisi in France – says AXA will open in Egypt • MPC + OPEC meetings today

FX WATCH

The EGP was steady at Wednesday’s central bank auction, holding at a cut-off price of EGP 7.1401 against the USD. The pound gained a bit of strength against the dollar on the unofficial market at EGP 7.63 vs. EGP 7.65 on Monday.

WHAT WE’RE TRACKING TODAY

The CBE’s monetary policy committee is broadly expected to keep its current rates on hold when it meets today, with overnight lending rate at 10.25% and the deposit rate at 9.25% as the central bank feels the pressure from unexpectedly high growth in 3Q14. Don’t expect a rate cut before the end of 2Q15. (More below)

OPEC meets today in Vienna to set production quotas, with Reuters reporting: “A Gulf OPEC delegate told Reuters the GCC had reached a consensus not to cut oil output. Three OPEC delegates separately told Reuters they believed OPEC was unlikely to take any action,” (Read in Reuters; more below in our Oil & Gas section).

Wish your American friends, colleagues and / or family members a Happy Thanksgiving.

With the Salafi Front and the Muslim Brotherhood threatening to put their followers directly in harm’s way while many of those calling for protests are safely abroad, purge Egypt of anyone who doesn’t fit their narrow vision of Islamic identity, begin the incantations to summon Cthulhu, peacefully protest tomorrow, the question on everyone’s mind in Egypt at the moment is: Wait, there’s a Salafi Front? Who … are they?

LAST NIGHT’S TALK SHOWS

As we mentioned yesterday, our talk show section is on a planned hiatus today and will be back as usual in Sunday’s edition.

SPEED ROUND

The EGX30 closed up 1.34% on Wednesday at 9,234 points with turnover of EGP 593 mn, about 13% above the 90-day average. Real estate shares were among the market’s most-actively traded. Saudi’s Tadawul slipped 1.65%, the DFM and ADX dropped 2.51% and 0.85%, respectively. The KSE was down 0.11%, and Qatar closed up 0.70%.

The Dow and S&P 500 both set new records yesterday (we sound like broken records, we know), boosted by the performance of tech stocks including Apple, HP and chipmakers, while European shares lost energy yesterday after a solid three-day run. Asian shares were mixed yesterday with the Hang Seng up and the Nikkei down, a pattern that held at the start of trading today.

Edita gets listing approval from EGX, eyes 1Q / early 2Q15 IPO. The Egyptian Exchange’s Listing Committee has listed EDITA Food Industries’ shares on the EGX with total capital of EGP 72,536,290 split across 362,681,450 shares at a par value of EGP 0.20. The committee said that the listing will be effective starting 11 December 2014 and has restricted trading on the stock until the company meets “all the precedent disclosure conditions.” Reuters cites industry sources as claiming the follow-on IPO could value the company at around EGP 1.5 bn and says the offering should take place in 1Q15. We understand the date is more toward early 2Q15 than first-quarter. Reuters quotes EGX chief Mohamed Omran as saying “Edita is the tenth company to be listed since the beginning of the year, as promised. I would expect a number of other listings before the end of the year.” (Read in Arabic in Amwal Al-Ghad or in English on Reuters)

Polio continues to spread in Pakistan, and Islamist extremists may be bringing it to Egypt. It sounds like something cooked up for a B-grade thriller, but there may be a kernel of truth to it. Pakistan reported 260 new cases of polio this week alone, confirming the disease is making a fairly rapid comeback despite having been on its way to extinction for decades. The problem: Islamist extremists in Pakistan and Afghanistan think the vaccination campaign is part of some nefarious American / western / Christian / Jewish conspiracy. And the worst part is: The CIA appears to have stoked those fears, having allegedly used polio vaccination infrastructure as a tool in the war on terror. The murder yesterday by Islamist extremists of four polio workers in Pakistan suggests how well those polio-eradication efforts are going. Why, other than in pure human terms, should Egypt care? Says the New York Times in a one-paragraph mention buried in a wider story: “Meanwhile, officials say Pakistan has exported the polio virus to China, Egypt and Syria — in some cases, experts believe, via militant families traveling to the battlefields of the Middle East.”

The National Fact Finding Committee on 30 June 2013 spoke about its final report yesterday, saying 693 civilians and 10 Interior Ministry police members were killed during the breakup of Islamist protest camps that summer. The committee, headed by Mr. Justice Fouad Abdel-Moneim Riad, a former member of the bench at the International Criminal Tribunal for the Former Yugoslavia, also “blamed pro-Morsi protesters for the wave of violence that swept the country before, during and after the dispersal of the sit-ins, especially attacks on Coptic Christians.” Critically, the report found that at Rabaa, the scene of the highest civilian death toll, police initially offered safe passage, but responded with violence when fired upon. Ahram online has a solid roundup of the report’s findings here and of its key (non-binding) recommendations to President Abdelfattah El-Sisi here. Among those recommendations:

  • The government should compensate all victims killed in clashes with Islamists had not been involved themselves in acts of violence or incitement;
  • The state must distinguish between Islamist extremism and legitimate activism in politics, labor, etc — and carry through with its ban on religious political parties per the constitution.
  • The Interior Ministry must work on negotiation skills and its procedures for handling protests and civil assemblies. The Police Academy curriculum should be overhauled to enshrine respect for human rights.
  • The Interior Ministry should reconsider its use of birdshot and begin using CCTV cameras in police stations and when deployed; footage recorded by the CCTV cameras should be kept for a set period of time.
  • The report also carries recommendations for the Prosecutor General’s Office; the next Parliament; cultural, educational and religious institutions; and, of course, that bastion of intelligence and professional responsibility: the media.

Ultra-conservative preacher Mahmoud Shaaban detained for 15 days over incitement charges: Ahram Online reports that Mahmoud Shaaban was arrested on Tuesday for “allegedly inciting violent and terrorist acts, threatening social peace and calling for nationwide Islamist protests on Friday,” citing a judicial source. Here he is in a video where Shaaban appeared on a talk show earlier this week, bringing along his duffle bag of personal belongings, just in case of his arrest during the program. (Watch)

In “A blacklist that places a new player centre stage,” the FT’s Roula Khalaf uses the UAE’s new terror list as evidence in favor of her conclusion that “…it’s the latest example of the transformation of the UAE from a shy state that favours quiet diplomacy to a hawkish regional player. Abu Dhabi has bolstered the military coup in Egypt with financial support, carried out air strikes against Islamist militants in Libya and led the charge against Qatar to force it to abandon its support for the Brotherhood.” (Read)

Shares of UK travel operator Thomas Cook, a fixture of the Egyptian market, tumbled 18% yesterday the previously very-well regarded CEO Harriet Green stepped down with “immediate effect” at a board meeting. Green herself said she opted to leave because “my work is complete,” but company watchers appear to believe Green was dumped by the board because having turned the company around, it was time to bring back a “travel industry person” to the top job. Read more in the FT, Telegraph or BBC.

ICYMI

The Economist briefly outlines the experiences of the current Indonesian president Joko Widodo with cutting fuel subsidies.“Jokowi’s announcement also sparked anger—protests, largely peaceful, broke out in cities across Indonesia, and public-bus and minivan drivers threatened to strike—but was not a surprise. Trimming the subsidies was a campaign promise.” Read more in Energy prices in Indonesia | Fuel’s errand

The World Bank has a brief paper explaining why reforming Indonesia’s fuel subsidy system is a prudent and fair policy (pdf here), but The Economist nails it by noting that the crux of the matter is that “Fuel subsidies are popular (seemingly free money usually is),” despite the consensus of economists with regard to their counter-productivity. The IMF estimates only 3% of gasoline subsidies reach the poorest 20% of the population (pdf here). Need a quick primer on why fuel subsidies are so difficult to phase out? We’ll have more on our website today: EnterpriseMEA.com.

EGYPT IN THE NEWS

The IMF’s Article IV statement on Egypt, on which we reported yesterday,got fairly wide press. “Egypt needs further subsidy reform to reduce its budget deficit even as recent efforts at an economic overhaul are starting to bear fruit” was the WSJ’s take, noting that “the IMF also called on Egypt to consider a more flexible currency rate policy to help spur investment, create jobs and attract more tourists.” The FT’s Heba Saleh, writing under the banner “Egypt’s hopes of attracting investment given timely boost by IMF,” quotes Capital Economics’ Jason Tuvey as saying: “We have long argued that the pound is overvaluedand that fears that a devaluation might be on the horizon have been holding back foreign investors.” Reuters’ coverage has also been widely picked up.

78 teenagers — all of them legally minor children — have been handed jail terms of three to five years for protesting in favor of ousted president Mohamed Morsi in violation of the nation’s protest laws. Ahram Online has the basics, and Al-Jazeera already has the story. This story will have legs in the international press.

Yes, it’s Arab News, but sometimes it’s the message, not the medium:Saudi Arabia’s urging of reconciliation between Egypt and Qatar continues, with the latest example coming in the form of comments from Prince Miteb bin Abdullah, the Saudi Minister for the National Guard, who broke from script during a discussion with Al-Sharq Al-Awsat about his recent US trip to once more urge Cairo and Doha to kiss and make up. Arab News editors brought the comments over into English. (Read)

The New York Times carries brief pieces today noting that Cabinet signed-off yesterday on a comprehensive anti-terror law and that the Rafah border crossing was temporarily opened yesterday to permit at least some of the 2,500 Gazans marooned in Egypt travel back home. The anti-terror law essentially enshrines what is already common practice and bits and pieces of presidential decrees; Reuters has the details in a piece that will be widely picked up by business media.

In a platitudinous piece on Al Arabiya’s English-language website, Manuel Almeida, a Middle East scholar, reaches a eureka moment with his conclusion that the largest obstacles economic reform in Egypt are (1) unrest in the Sinai and (2) the government’s ability to gain the political capital it needs to impose meaningful fiscal reforms. Almeida seems to believe the insurgency in Arish is preventing a recovery in South Sinai tourism, which is debateable. He also still seems to think that Arabtec’s housing project is catering to low-income residents. (Read)

LONG READS FOR THE WEEKEND

Could it be that international development aid doesn’t work? As states roll independent development agencies into larger ministers of trade and foreign affairs (cf: Canada, Australia) and so-called “major donors” including governments and corporations turn to DFIs, “impact investing” and “social entrepreneurship,” the human rights consultant Michael Hobbes writes: “I am conflicted about this moment. I have worked at international development NGOs almost my entire career. Over the last year, I read every book, essay, and roman à clef about my field I could find. I came out convinced that the problems with international development are real, they are fundamental, and I might, in fact, be one of them. But I also found that it’s too easy to blame the PlayPumps of the world. Donors, governments, the public, the media, aid recipients themselves—they all contribute to the dysfunction. Maybe the problem isn’t that international development doesn’t work. It’s that it can’t.” Read in The New Republic: Stop Trying to Save the World: Big ideas are destroying international development.

What do our passwords say about us? The New York Times Magazine takes a long look at how our choice of passwords carries with it our hopes, dreams and memories: “Howard Lutnick, the chief executive of Cantor Fitzgerald, one of the world’s largest financial-services firms, still cries when he talks about it. Not long after the planes struck the twin towers, killing 658 of his co-workers and friends, including his brother, one of the first things on Lutnick’s mind was passwords. This may seem callous, but it was not…” Read The Secret Life of Passwords

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

MEED summit participants debate risk of investing in Egypt’s renewable energy infrastructure
Daily News Egypt | 26 Nov 2014
DNE reports on a debate on Egypt’s renewable energy sector at this year’s ‘Invest in Egypt’ conference, which began in Abu Dhabi yesterday. “I see two risks for investors: there is the risk of government insolvency; and then the exchange rate risk,” said John Shehata, an energy and infrastructure specialist for Orrick, an international law firm. “In fact, there is a third risk as well and that is conversion,” said Mohamed Hazzaa, senior associate of Sharkawy & Sarhan Law Firm. Still, according to Hazzaa, the level of risk is “not unreasonable”. “The institutions are lacking, there is too much uncertainty,” said one businessman, who requested to remain anonymous because his company is currently bidding for a tender. (Read)

MegaCell, Misr Asset Management sign MOU for 120MW cell production plant
MegaCell press release | 25 Nov 2014
Italian solar cell manufacturer MegaCell and Misr Asset Management signed on Tuesday in Rome an MOU for the construction of a 120MW/year production plant of bi-facial high efficiency solar cells and modules in Egypt within 2015. The agreement comes on the back of the Egyptian government setting a target of 2300MW of PV projects over the next two years. (Read the release)

OIL & GAS

EGPC to pay off debts owed to foreign partners in full within six months – source
Daily News Egypt | 25 Nov 2014
A senior source at the Ministry of Petroleum said Egypt will repay the USD 5.5 bn owed to foreign partners within the next six months. The loan represents a step within the government’s commitment to pay 60% of total debt by the end of this year, according to the official. EGPC was offered USD 4 bn in loans from Egyptian banks to repay part of the debts owed, Tarek El Molla said. The repayment process remains complicated, however, the government will borrow from EGPC to repay foreign partners as a finance ministry rule does not allow for debts to be paid out of the state treasury. In return, EGPC is expected to borrow from local banks and pay monthly instalments to banks by mortgaging a portion of Ras Gharib crude and naphtha export revenues. (Read)

Cyprus and Egypt to accelerate talks on export of Cypriot gas to Egypt after energy ministers’ meeting
Reuters and Cyprus Mail | 25 Nov 2014
In a joint statement, Egypt and Cyprus’ energy ministers said they had agreed to expedite discussions regarding natural gas exports to Egypt. Cyprus will have a technical study on the options for exporting gas ready in two months but so far Nicosia believes that the best option for exporting would be via pipeline. Egypt can receive as much gas quantities as Cyprus can export, Egypt’s petroleum minister Sherif Ismail told reporters in Nicosia. Noble Energy with Israeli partners Delek and Avner hold an exploration concession to one Cypriot offshore field with proven reserves, while Italy’s ENI and France’s Total have concessions in other areas south of Cyprus. Following separate but parallel talks between the Cypriot and Greek delegations, Greek energy minister said they discussed the prospect of the East Med pipeline, connecting Israeli and Cypriot gas reserves to continental Europe via Crete and mainland Greece. (Reuters and Cyprus Mail)

Dana Gas to pump USD 270 mn in investments to Egypt, will be repaid in full by 2018
Daily News Egypt | 25 Nov 2014
Dana Gas’ CEO, Patrick Allman-Ward, said that an agreement has been finalised to increase gas production and allow the company to export condensates in exchange for repaying debts. The programme will stretch over a seven-year period, and work will commence during the coming months with the capital investment coming from cash flow from Dana Gas operations in Egypt as well as funds allocated to project financing. The project entails drilling 37 new wells and renewing a similar number of existing ones and total production for the period is expected to reach around 270 bcf of gas and 8-9 mn bbl of condensates in addition to around 450,000 tonnes of LPG. Dana Gas will cooperate with BP on operation rights for block 3, where each has a 50% share under the terms of the agreement. (Read)

Israel’s finance ministry approves model for taxation of gas exports
Platts | 26 Nov 2014
Israel’s finance ministry has approved a proposed model for gas export tax, Finance Minister Yair Lapid said on Tuesday. The draft was prepared by a finance ministry team of experts headed by Finance Ministry director general Yael Andorn. Lapid said in a statement that the draft proposal was approved by the ministerial committee on legislation. The proposal will now be presented to the Knesset for final approval in the coming weeks. The proposal calls for a netback model for determining the transfer price for taxation purposes on exports. The state would determine the expected profit for each export deal and then subtract the accepted return on investment on this kind of transaction. In addition, a mechanism would be established to guarantee that the gas price in export deals is not lower than the average price in the domestic market. (Read)

Saudi Arabia says OPEC shouldn’t cut production, just monitor prices
Bloomberg | 26 Nov 2014
After a meeting between officials from Venezuela, Saudi Arabia, Mexico, and Russia failed to produce an agreement on reducing output yesterday, they said they’ll only monitor prices. This is despite prices being below what nine of OPEC’s 12 members need to balance their national budgets, according to Bloomberg. The meeting yesterday in Vienna comes after weeks of diplomatic efforts from Venezuela to coordinate actions with producers outside OPEC to halt the collapse in oil prices. (Read)

BASIC MATERIALS & COMMODITIES

Amreyah Cement earmarks EGP 500 mn for coal
Al Borsa | 25 Nov 2014
Al Amreyah Cement commercial manager Mohamed El Naqly was quoted in Al Borsa saying his company has earmarked EGP 500 mn to convert two out of its three production lines to run on coal instead of natural gas. The conversion is expected to take some 18 months and is pending the Ministry of Environment’s finalization of the standards and regulations for the use of coal in the cement industry.  El Naqly added further that the plant’s total capacity stands at 4.5 mn tons per annum albeit decreased capacity utilization on the back of natural gas shortages has seen production drop to 2.5 mn tons per annum in 2013. However, he gave no indication on the targeted fuel mix for the company. (Read in Arabic)

Cement prices stable: Supply minister
Daily News Egypt | 26 Nov 2014
Companies have fixed their cement prices and are subject to regular ministry investigations and inspections, said Minister of Supply Khaled Hanafy in a Wednesday statement by the Ministry of Supply. The statement added that cement companies announce their prices by the third week of every month. According to the statement, the Suez Cement Italcementi Group, which operates Tourah, Helwan and Suez cement production facilities, fixed their price at EGP 850 per ton. Amreyah Cement Company set a price of EG 831 per ton, while National Cement put a price of EGP 750 in Cairo and a price of EGP 770 in all other governorates. (Read)

HEALTHCARE

EIPICO invests USD 10 mn to produce Sovaldi in Egypt
Al Mal | 26 Nov 2014
The Egyptian International Pharmaceutical Industry Company (EIPICO) is planning to produce some 90 thousand treatment courses of Hepatitis C drug Sovaldi at an investment cost of USD 10 mn during the first year of production, the company’s commercial director, Osama Rostom, was quoted in Al Mal. Rostom also noted that the Ministry of Health currently has some 220 thousand Sovaldi courses sufficient to treat between 60-70 thousand patients, adding that local pharmaceutical companies are expected to start supplying similar medications by the first quarter of 2015. (Read in Arabic)

REAL ESTATE

Orascom Development records 9M 2014 CHF 36.4 mn net profit
Orascom Development consolidated statement | 26 Nov 2014
Orascom Hotels and Development’s reported its nine-month net profit at CHF 36.4 mn Swiss francs versus a CHF 75.8 mn net loss in the same period yoy. (Download the statement as a pdf)

Amer secures ok for capital decrease
EGX | 26 Nov 2014
Following Amer Group’s announcement on Sunday to split into two companies, the EGX approved yesterday a request from Amer Group Holding to proceed with the decrease of issued capital from EGP 1.36 bn to EGP 911 mn as a result of splitting the group into two companies: Amer Group (demerging company) and Porto Group Holding (demerged company). (Download the release as a pdf in Arabic)

BANKING & FINANCE

IMF: Egypt should tap diaspora to finance megaprojects
IMF People Move Blog | 25 November 2015
In a compelling little post to an IMF blog on remittances, the authors argue that the Egyptian diaspora’s low participation rate in the epic EGP 64 bn, eight-day fundraising for the New Suez Canal had everything to do with the challenge of getting money back to Egypt in a very short period of time and nothing to do with an unwillingness to participate. The authors figure that 3.5 mn Egyptians living abroad have together more than USD 6.7 bn in savings, a healthy chunk of which they would invest in their homeland. Bottom line: How to better tap the diaspora for low-cost financing should be a major topic at the Sharm investment summit, they say. (Read)

MERGERS & ACQUISITIONS

Abraaj, Kellogg bidding war for Bisco Misr continues; delivers strong message to international business community
EGX Disclosure and Reuters | 26 Nov 2014
UAE-based Abraaj Capital has submitted a new bid for Bisco Misr for EGP 80.58/share setting their valuation of Bisco Misr at EGP 929.7 mn, beating Kellogg’s offer of EGP 79/share by the mandated 2%, according to a statement by the EFSA submitted to the EGX. (Download the disclosure in Arabic as a pdf)

Our take: Widespread pickup in the international press of Ehab Farouk’s piece on the bidding war for Reuters yesterday is sending exactly the right message about Egypt’s business climate: “The competing bids from Kellogg and Abraaj are the latest sign foreign investors could be returning to the market,” he writes. “The bidding war is part of flurry of mergers and rights issues boosting activity on the Cairo bourse … Egypt’s government this year launched a raft of long-delayed reforms aimed at luring back foreign investors and shoring up growth while cutting a ballooning deficit.” It’s the type of very real, very positive press the nation cannot buy at any price. (Read on Reuters)

EFSA approves Pioneers Holding’s mandatory purchase offer to acquire Arab Dairy
EGX | 25 Nov 2014
The Egyptian Financial Supervisory Authority accepted and approved the publication of pioneers Holding’s mandatory purchase offer to buy 3,611,301 shares representing 60.188% of Arab Dairy’s total shares at EGP 56/share. (Download the disclosure in Arabic as a pdf)

OTHER BUSINESS NEWS OF NOTE

Minister of Transport: Plans to increase dependence on river transport for cargo
Al Mal | 26 Nov 2014
Egypt’s Minister of Transport, Hany Dahy, was quoted in Al Mal saying that his ministry is aiming to increase the use of river barges in the transport of cargo. Dahy said that he expects a resurgence of river transport in the coming period especially as Egypt’s roads infrastructure has severely deteriorated owing to the fact that the great bulk of cargo movement utilize road transport. He further noted that once the Damietta logistical center for grains is complete,  river barges will play a vital role in transporting grain to the far reaches of the country. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

President El Sisi wraps up Italy meetings, begins French leg of Europe visit
Office of the Presidency and France 24 | 26 Nov 2014
President El Sisi held further meetings on his second day in Italy before departing to France according to a statement released by the Office of the Presidency. President Sisi met with the Chairman of Foreign Affairs of the Italian Chamber of Deputies before meeting with the Director General of the Food and Agriculture Organization (FAO) and the Executive Director of the World Food Programme. The WFP pledged to expand their ‘Food for Education’ program in Egypt that provides support to low-income households with an eye on keeping school-age children in school and out of the workplace, especially out of hazardous occupations. The representatives from the WFP and FAO also discussed how the proposed grain logistics hub in Damietta could be used to help rapidly distribute food aid to those in crisis in the Middle East, with a special concern for refugees in general and Syrians in particular.

Following the additional day of meetings in Rome, President El-Sisi travelled to France where he first met with Henri de Castries, CEO of French investment bank AXA. The presidential spokesperson Alaa Youssef says that de Castries expressed an interest in the growing insurance sector. The statement also reads that de Castries will send a representative to Cairo to open an office here. President Sisi also met with French President François Hollande, with France 24 noting that their meeting is largely focused on securing military hardware, namely deals that are already in progress, including a EUR 1 bn deal to provide four Gowind battleships to the Egyptian Navy. Discussions are also under way on the renewal of Egypt’s stock of French-built Mirage 2000 fighter jets, unnamed sources told AFP this week and as reported by France 24.

Later in the day, the President met with the French Minister for Foreign Affairs, with who he discussed the security situation in the Middle East and the need to use all tools available to combat extremism and terror. The former French Secretary of State for Foreign Trade Anne Marie Idrac was also present, promising to visit Egypt ahead of the March investment summit to review the projects under consideration for presentation at the conference to help ensure the summit’s success. Representatives from the two countries also affirmed their support for the elected government in Libya. (Read in France 24)

OUR TAKE

CBE’s monetary policy committee meets today; don’t expect a cut to policy rates before 2Q15
The CBE’s Monetary Policy Committee will meet today to set the central bank’s main interest rates. The MPC is expected to keep the current rates on hold with overnight lending rate at 10.25% and the deposit rate at 9.25% as the CBE will be feeling pressure from the unexpectedly high quarterly growth rate in 3Q14 (6.8% y-o-y). That pace adds to the upside risk to inflation, especially given that Egyptian CPI is still recovering from the price shock of increasing fuel prices in July. Also, there is a general consensus that the market is looking for policy stability heading into the Sharm investment summit in March 2015.

With core inflation dropping to 8.47% in October (dipping below 9% for the first time since July 2014), it is edging closer to the CBE’s comfort range of 6-8%; with the risk of accelerated dollarization easing as international reserves become more stable (especially if relations with Qatar improve palpably), the CBE will be expected to move to cut rates by at least 50 bps before the end of 2Q15. This will partly accommodate the wave of investments expected in 2015 and the subsequent increase in demand for financing. It should also help the Egyptian treasury edge closer to its budget deficit figures before the end of the fiscal year by driving a decrease in the state’s borrowing costs.

ON YOUR WAY OUT

The diaspora are a crucial part of our economic equation, and we’re largely ignoring them. Read our take on the IMF’s blog post on why tapping the diaspora for financing should be on the agenda at the Sharm summit, then go watch (or listen to) Dilith Ratha’s awesome TED Talk on the power of remittances and what should be done to stop price gouging by money transfer services and national post offices — and, in the process, catalyze new flows of inward investment. The size of the market alone should have us interested: “In 2013, international migrants sent $413 billion home to families and friends — three times more than the total of global foreign aid (about $135 billion).” (Read and Watch)

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