Country Risk Hotspots and Global Economic Updates

COUNTRY RISK HOTSPOTS October 26, 2017 Group 2 Anthony SIMON Francesco MAURO Rishabh SANGWAN Svend OPPEGAARD Yasmina TANZI

Tillerson seeks Arab help in US effort to isolate Iran Washington (CNN)US Secretary of State Rex Tillerson, anticipating an end to the fight against ISIS, said Sunday it was time for Iranian-backed militias to exit the war-torn nation of Iraq. "Those militias need to go home," Tillerson said. "Any foreign fighters in Iraq need to go home and allow the Iraqi people to regain control of areas that had been overtaken by ISIS and Daesh that have now been liberated. Allow the Iraqi people to rebuild their lives with the help of their neighbors. "Both of our countries believe that those who conduct business with the Iranian Revolutionary Guard, any of their entities -- European companies or other companies around the globe -- really do so at great risk," Tillerson said. The US under President Donald Trump has assumed a more aggressive posture towards Tehran, with Trump recently threatening to exit a multilateral agreement with Iran over its nuclear program.(uranium)

Reasons and Possible Outcomes Qatar and Bahrain are home to the largest US military bases in the Middle East. GULF Coultries OIL Sectarian reasons Possible European Investments in Iran

PIPELINE

Iran vs Saudi Arabia

Ethiopia devalued the birr by 15% (Oct.10) First initiative of the National Bank of Ethiopia since 2010 to boost lagging exports The birr was quoted by the NBE at a weighted average of 23.42 against the dollar on Oct.9, compared to an expected 26.92 post-devaluation. The IMF and the World Bank have been consistently urging the NBE to consider the benefits of a devaluation. They stated that Ethiopian exports mostly consist of unprocessed products and would undoubtedly benefit from the move so that they remain competitive on price. Ethiopia s economy is one of the fastest growing in Africa, with the IMF expecting a growth rate of 9 percent for the 2016/17 fiscal year. Ethiopia has operated a managed floating exchange rate regime since 1992.

Ethiopia devalued the birr by 15% (Oct.10) The Horn of Africa country is the continent s biggest coffee exporter. However, its exports proceeds were lately sluggish, falling short of expectation by around 27.5% mainly due to falling commodity prices. ($2.9 billion in the 2017-2018 fiscal year vs. exp. of $4 billion.) The central bank also announced that it has raised the key rate by 2% (from 5% to 7%) to stimulate savings and decrease inflationary pressures that could arise from the devaluation (10.8% yoy in September from 10.4% a month earlier) IHS Markit stated that the devaluation move is in line with the Ethiopian Growth and Transformation Plan II (GTP II). Tree map of Ethiopian Exports (2012)

Ethiopia devalued the birr by 15% (Oct.10) The expansion, however, has mainly been fueled by huge public expenditure. The government has invested heavily in dams for hydroelectric power, new highways and an electrified railway linking the landlocked nation to a port in neighboring Djibouti. The IMF has said Ethiopia needs to attract more private sector investment to maintain growth. But Addis Ababa has in the past tended to brush off such advice and said it would keep charge of key sectors. Sources: 1) https://www.reuters.com/article/ethiopia- rates/update-1-ethiopia-devalues-currency-by-15- percent-to-boost-exports-idUSL8N1ML40J 2) https://www.byblosbank.com/Library/Assets//Galler y/Publications/CountryRiskWeeklyBulletin/Country% 20Risk%20Weekly%20Bulletin%20510.pdf

Belarus The Inbetweener Strengthen ties with EU diversify Possible due to the lift of sanctions Need FDI to reform the economy Antagonize Russia Failed deal with IMF China s investment technology park Provided $7bn in credit line and a renminbi denominated line which is unlimited. You can t go to bed in the totalitarian Soviet Union and wake up in a democratic state. Vladimir Makei