Oil isn't the only product being affected by tensions between Iran and the US. The pistachio industry has been caught in the middle of trade difficulties. In general, Iranian farmers have faced hardships with distributing their products due to strict restrictions, tariffs and sanctions. The Joint Comprehensive Plan of Action, under former President Obama, was put into place in 2016 which removed sanctions to improve trading agreements within the US and their allies. This aided the pistachio growers in Iran because as the product gained popularity in the US and around the world, they were able to increase production and sell more. However, Trump decertified this agreement in October. Iran and the US dominate the pistachio industry and together have produced "between 70% and 80% of yearly output for the last decade." If President Trump decides to completely end this agreement, the reinstating of previous trade sanctions will leave Iran in a noncompetitive state and prices will continue to increasingly fluctuate.
Link: The US and Iran battle over the pistachio nut trade
Monday, October 30, 2017
Tuesday, October 17, 2017
Syria Reopening International Job Fair
Syria will be holding its first international trade fair
since the civil took hold of the country in 2011. The event being hailed as a “victory”
by Syrian officials and a symbol of confidence from the war-ravaged nation. The
fair is being held a few kilometers away from the rebel held suburb of Damascus
and is a showing of Assad’s military might as much as it is about employment
opportunities.
The state-run media claims that 43 countries are taking part
in the 10 day fair and will be seeing major investors from China, Russia, and
Iran. Egypt, South Africa, and Belarus will also be taking part, as well a few European
countries, but who will be doing so in a “private” capacity. For those that don’t
know, the west has been supporting the rebels, so any company seen doing
business with the Syrian government will likely face intense backlash.
The fair is made possible by a combination of assistance
from Russian and Iranian forces that have assisted the Syrian governments
military in taking back major territories in the past two years. The Syrian government
is partly holding the fair as a show of strength against rebel forces and to
celebrate their victories in the past few years. Syrian prime minister Imad
Khamis claims that the fair is “an indication of Syria's recovery and insisted
the war waged against Syria could not kill the Syrian people's love for life.”
Which is slightly ironic considering the various war crimes and violations of
the Geneva Convention that the Syrian government has committed in the past six
years, including the use of chemical weapons against rebels and firing weapons
upon protesters. Additionally, Roman Khudyakov, a Russian politician, speaks of
wanting to invest further in Syria and to bring more Russian tourism there.
Source: “Syria claims business comeback with international trade fair.” Fox
Business, Fox Business, 17 Aug. 2017,
www.foxbusiness.com/markets/2017/08/17/syria-holds-first-international-trade-fair-since-war-erupted.html
Thursday, October 5, 2017
Brave New Saudi Arabia
King Salman of Saudi Arabia has many new plans for Saudi Arabia. He has created the Saudi Vision 2030 plan which is divided into pillars.
- "vision is our status as the heart of the Arab and Islamic worlds." He says that "Allah the Almighty has bestowed on our lands a gift more precious than oil." (Saudi Vision 2030 Foreword)
- Non-renewable energy sources are on the decline and Saudi's economy is heavily based on oil. They have 267 billion barrels of proven reserves with a 10.2 percent share of world production.
- "determination to become a global investment powerhouse" in order to "diversify our revenues" (Saudi Vision 2030 Foreword) King Salman says that Saudi has very strong investment capabilities. They will invest in many projects.
- Transform their "strategic location into a global hub connecting three continents: Asia, Europe, and Africa."
For reference they are in a great spot:
They are taking FDI very seriously for the future. They will turn "Aramco from an oil producing company into a global industrial conglomerate," "transform the Public Investment Fund into the world's largest sovereign wealth fund," "encourage major corporations to expand across borders and take their rightful place in global markets," they plan to "manufacture half of our military needs within the Kingdom to create more job[s]," and "expand the variety of digital services to reduce delays and cut tedious bureaucracy." (Saudi Vision 2030 Foreword)
Saudi really plans to become a big global player in the coming decade and they have already set in motion big changes.
Firstly, women are now allowed to drive (Guardian). According to my Saudi friend, many households had chauffeurs to reduce the impact of not being allowed to drive. Many men also taught women how to drive there. Many, many Saudis everywhere and on UW Stout campus are excited for this change and are hopeful for the future. Auto manufacturers may change their marketing to reflect this new change.
Secondly, a huge resort project across 50 natural red sea islands for tourism has been announced. This will hopefully bring in many different tourists to the country. Tourist women will be allowed to wear bikinis despite of the clothing laws for citizens. This will bring large amounts of revenue to Saudi and reduce their dependence on oil (Telegraph). With more tourism in Saudi and more external influence, this may cause Saudi to change more laws and modernize even more. This is fascinating: normally we think that culture influences business but if Saudi were to change more based on this we may see business influencing the culture. This really brings to light how globalism will affect the world as a whole.
Pay attention for any more changes in Saudi within the next few years. I'm sure many will come! It may be a prime time to put some FDI in Saudi right now.
Sources
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