[ccebook.cn]The World in 2010

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Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved. -165-
Finance The lure of Africa Nov 13th 2009 Bond markets will discover its attractions For African governments it is clear that aid flows will go down in 2010, and dramatically so. Donor governments have slashed their aid budgets, and with most facing unfavourable demographic shifts and large deficits, to depend on their largesse is no longer sensible. The good news is that the bond markets offer a real opportunity for Africa’s governments to be serious about financial discipline and transparency—and to escape from the yoke of aid. The trend in asset allocation among the largest pools of international investment money suggests 2010 will mark a revival in African bond issuance. Although over the past 20 years investors have been overweight in equities, asset allocation is now tipping in favour of fixed-income bonds. Even at the retail level, flows into fixed-income funds have recently been in the order of five times more than into equity funds. The drop in outstanding consumer and industrial loans made by European and American banks has been more than offset by the increase in corporate-bond issuance over the past year, demonstrating the strong demand for fixed-income products. If anything, the equity rally (on low trading volumes) since the spring of 2009 has masked this important trend. Greater demand for bond products will contribute to credit spreads tightening across most bond assets. At some point soon the more traditional Western fixed-income products will look expensive, offering little upside for the investor. So it will be logical for investors to widen their search to the “frontier markets” of Africa. Moreover, if inflation picks up in 2010, so will commodity prices, improving the creditworthiness of African governments. At the same time, sovereign-wealth funds, especially China’s, will want to diversify away from Western markets. The result will be more debt issuance across Africa. The fact that relatively low-rated credits such as the government of Venezuela and the Eurasian Development Bank have been able to raise large amounts of long-duration money at competitive rates is a further signal that there is appetite for similarly rated African credits. Today, 19 sub-Saharan African governments have recognised credit ratings. Yet only a handful have accessed the international-debt capital markets over the past two decades. This is bound to change in 2010. Dambisa Moyo: author of “How the West Was Lost: Facing Up to America’s Economic Decline and the Threat of China and the Rising Rest” (to be published by Penguin in 2010) -166-
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Search Economist.com Welcome shiyi1
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From the editor Nov 13th 2009 The g
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Leaders The hard slog ahead Nov 13t
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Leaders Now for the long term Nov 1
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Leaders Europe's chance Nov 13th 20
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Leaders Not so fast Nov 13th 2009 R
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Leaders Chill, China Nov 13th 2009
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Leaders Smart states Nov 13th 2009
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Leaders Wanted: green engineers Nov
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Leaders More than a number Nov 13th
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United States Mr Obama's unpromisin
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United States Square-root reversal
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United States The Fed's next battle
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much of the asylum. Voters pass, fo
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Augustus. In America, the taxation
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Ms Rhee is reviled by many of those
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United States All the news that's f
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The Americas After Lula Nov 13th 20
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The Americas Bolívar's continent N
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The Americas Canada's northern goal
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The Americas Greenland, the new bon
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The Americas Sí, se puede Nov 13th
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Asia Bring on the new generation No
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Asia Political football Nov 13th 20
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Asia The cautious leap forward Nov
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Asia Peak labour Nov 13th 2009 Chin
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Asia The dragon still roars Nov 13t
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Asia An imperfect storm Nov 13th 20
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Asia Worryingly fragile Nov 13th 20
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Asia A grim prospect Nov 13th 2009
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Then there is the symbolic Kevin Ru
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this is accompanied by rising Islam
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To some of his critics, Mr Netanyah
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doomed sooner or later to fizzle, t
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and its surrounding Nineveh provinc
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(plastic trumpets). So Africa’s m
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Somalia would be little noticed wer
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slide backwards. Global financial i
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in June and South Korea in November
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Copyright © 2009 The Economist New
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As for rewriting nuclear rules, som
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affluent countries will have reserv
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International Delayed explosion Nov
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International Where survival is at
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Europe More than a museum? Nov 13th
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Europe Europe isn't working Nov 13t
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Europe Chameleon Bonaparte Nov 13th
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Europe Beyond the crisis Nov 13th 2
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Europe The eternal leader? Nov 13th
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Europe Coolissimo Nov 13th 2009 The
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Europe Changing the colours Nov 13t
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the centre-stage of unification, wh
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price would point to stagnation, a
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too: so long as the pipeline route
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Fearful of a public backlash, the g
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unexpected leaders of economic grow
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Page 122 and 123: interrupted recoveries, largely bec
Page 124 and 125: Britain On yer bikes Nov 13th 2009
Page 126 and 127: Britain A history lesson Nov 13th 2
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Page 144 and 145: Business The plot thickens Nov 13th
Page 146 and 147: Business Can e-readers save newspap
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Page 150 and 151: Business Big SIS is watching you No
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Page 162 and 163: Finance In the wake of a crisis Nov
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Page 166 and 167: Finance Looking for a way out Nov 1
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Page 172 and 173: Asia now accounts for five of the w
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Page 176 and 177: means that banks will take losses o
Page 178 and 179: liquefied natural gas (LNG). So int
Page 180 and 181: Policies to support supply-side ref
Page 182 and 183: Ocean Acoustic Waveguide Remote Sen
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Page 186 and 187: A company called Arcadia Bioscience
Page 188 and 189: Science The looming crisis in human
Page 190 and 191: Science The coming alternatives Nov
Page 192 and 193: Science Where have all the sunspots
Page 194 and 195: to service the space station. The p
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