Syria’s Searing Secondhand Stigma
Syria initially accounted for its chemical weapons stockpile to UN inspectors around the agreed deadline and an international conference was convened to explore rebel political accord with the Assad regime as the civil war continued to savage the remaining population and immediate neighbors. In Iraq fighters joined with internal Al Qaeda remnants to take cities like Fallujah, where the US suffered major troop casualties and losses before departure. The setback dented nascent interest in the Baghdad stock exchange and plans for an inaugural sovereign bond and permanent local custodian capacity to service investors. Equities in Jordan and Lebanon hosting refugees and sectarian rivalry continued weak after near 10 percent MSCI frontier drops in 2013, as the former went to the IMF and GCC for fiscal and balance of payments rescues and the latter was downgraded to B-minus with a negative outlook by S&P on “deteriorating fundamentals.” Amman tapped the Eurobond market with a bilateral guarantee from Washington and the Fund waived state electricity company support targets to enable release of $1 billion. Economic growth is under 3 percent on massive budget and current account deficits and public debt/GDP at 80 percent. Lebanon’s price for the Syrian conflict has been $7.5 billion according to a recent World Bank report, with $1 billion for the refugee influx. Growth is only 1.5 percent on 5 percent inflation and double-digit fiscal gap. Although bank deposits at triple output continue to increase with diaspora flows, public debt is at Greece’s world beating level toward 150 percent of GDP and shunned by non-Lebanese holders also afraid of the leadership standoff between Hezbollah and opposing factions as they try to agree on a new president. In the region Libya’s implosion weighs in parallel on oil markets after the prime minister was kidnapped by militias and a prominent industry official was killed. Fields were shut down half of last year causing 5 percent economic contraction, the IMF calculates. The shaky government acknowledged “liquidity difficulties” may force resort to the sovereign wealth fund with an estimated $120 billion in assets to cover costs, but managers are still trying to trace transactions from the Qaddafi era. On the 20th anniversary of the Lockerbie airline bombing, international commercial sanctions remain in effect and the banking system may be Islamic-based under outline legislation part of the controversy over future direction.
Frontier Asia is embroiled in its own Islamic disputes as Bangladesh Prime Minister Hasina tries to further marginalize political opposition from that wing and the main opposition party following boycotted elections where half the seats were uncontested and international partners refused to send observers. The stock market was flat in 2013 on 5 percent GDP growth as the garments sector suffered dual blows from factory collapses and strike-related disruptions. Real estate sales were off 50 percent and the clothing export mess further tore at the worn banking system fabric.
