Chris Kuehl, Ph.D.
The sham election that has been forced down the throats of the Venezuelan public has been denounced by nearly every nation on the planet. In the case of the U.S., the disapproval has included sanctions. This was a step the European Union was unwilling to take, but it did issue a denunciation. Even the U.S., however, has been unwilling to sanction the oil business in the country because doing so would do damage to U.S. interests. There is fear that pushing too hard would also do far more damage to the people in Venezuela than to President Nicolás Maduro.
The “new” assembly will have no independent power at all and will serve as nothing more than a rubber stamp for Maduro. It establishes him as a dictator and eliminates the last vestige of legal opposition. That is what worries the majority of analysts.
Until this move, the opponents of Maduro had a means by which to attack the regime and had some hope that means could remove him from office. The only option for removal now is some form of a coup or overthrow. It would certainly not be the first time that power has shifted this way in the country.
Nobody is quite certain where the loyalties of the military lie. There are many committed supporters of the Hugo Chávezrevolution, but there are also many people who have asserted that Maduro has betrayed these principles. There are certainly generals who thought they would have been better successors.
If Maduro loses the support of key military leaders, he will be ousted fast and perhaps violently. The sense is that a junta will form and that Maduro will be exiled. The majority of those who have supported him will step back and wait until the dust settles as they will be relieved that opposition leaders have not come to power. The military will declare that it is “saving” the legacy of Chávez. Then the waiting game will start. Would this be a pragmatic junta with an eye to getting the country back in the good graces of the world, or would it be an ideological junta bent on promulgating the Chavez myth?
Digitization and the impact of fintech weighed heavily in the International Chamber of Commerce’s Global Survey on Trade Finance. The survey is comprised of 255 responses from banks in 98 countries.
Nearly 70% of survey respondents “identified supply chain finance and technology as areas with the highest potential for growth in the context of trade financing,” the findings state. Growth, however, is expected to “maintain some roots in the traditional trade finance space.”
About 45% of the respondents noted priorities linked to digitization and technology, including fintech and the development and use of fast-emerging platforms.
Half of the participants expect high levels of digitization to occur in less than 10 years, while the rest expect the evolution to occur in 10 to 25 years. A significant majority, however, believe “60% digitization of trade processes will take at least 10 years to achieve.”
The future is digital, said David Hennah, head of trade and supply chain finance for London-based Misys. Each new technology outpaces the adoption of its predecessor, Hennah added. In the future, adoption rates will be measured in weeks or days rather than years, he noted. “Cross-border e-commerce has already grown to represent more than 10% of trade in less than a decade.”
Hennah will join Fred Dons, director and head of trade credit finance for Deutsche Bank in Amsterdam, and Fabrice Morel, a partner with Strategy Alliance GmbH in Dusseldorf, Germany, at FCIB’s International Credit and Risk Management Summit. The trio will present Is Digital the Future of Trade? The session will consider how technology will transform risk assessment, transactions and funding of trade. Click here to learn more about this year’s summit, which takes place Sept. 10-12 in Rome.
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Concerns ranging from transaction fees and foreign exchange rates to transaction speeds and fraud risks have kept a large number of small- and medium-sized enterprises (SMEs) from expanding into new international markets, according to a Saxo Payments white paper, “Cross-Border Payments for Cross-Border Merchants–An Internationally ‘Local’ Future.”
Managing multiple banking supplier relationships also ranked among the list of concerns for businesses that participated in a survey for the paper. Sectors represented all industry sectors, including manufacturing (16%), financial and business services (15%), construction (14%), and wholesale and retail trade (13%).
Just more than 35% of the respondents use only one provider for international payments, while a little more than 10% use four or more separate providers.
“A significant number of respondents have more than one baking provider to help facilitate cross-border payments, with 7% having one account for each country in which it trades,” the paper says. Nearly 90% of the merchants still use traditional banks to complete cross-border payments. Some respondents, however, noted that they are using alternative providers: fintech, such as a payment service provider (22%) and FX specialists (14%).
Traditional payment methods prevailed among business: credit, debit and prepaid card payments (74%) and bank transfers (64%). Checks (42%) and invoices (41%), however, still ranked high in business-to-business payments.
“A major priority for merchants looking at cross-border payments is the ability to transact quickly across borders as they do locally, with little or no impact on the bottom line,” said Anders La Cour, CEO of Saxo Payments. “They require speed of settlement, speed with which banks are able to provide financing, speed of response from a bank or payment provider. … A delay in any of these can cause a merchant to falter.”
Aug. 23 - Angola, General
Sep. 11 – Norway, Norwegian Parliament
Sep. 23 – New Zealand, New Zealand House of Representatives
Sep. 24 – Germany, German Federal Diet
Oct. 10 – Liberia, President
Brazil's President Temer survives corruption vote. Opposition lawmakers in the lower house of Congress failed to obtain the two-thirds majority needed to send the case to the Supreme Court. (BBC)
Venezuela prosecutors open probe into vote manipulation. The Venezuelan state prosecutor's office said late on Aug. 2 it has opened an investigation into accusations that the country's elections council manipulated turnout figures in the July 30 controversial election for a legislative superbody. (Reuters)
Qatar makes legal complaint to WTO over Gulf trade boycott. Qatar has filed a wide-ranging legal complaint at the World Trade Organization to challenge a trade boycott by Saudi Arabia, Bahrain and United Arab Emirates, Qatar’s WTO representative Ali Alwaleed al-Thani has told Reuters. (The Guardian)
Trump signs Russian sanctions into law, with caveats. President Donald Trump signed legislation on Aug. 2 imposing sanctions on Russia and limiting his own authority to lift them, but asserted that the measure included “clearly unconstitutional provisions” and left open the possibility that he might choose not to enforce them as lawmakers intended. (Business Mirror)
European Commission requires Belgium and France to end tax exemptions for ports. The European Commission has required Belgium and France to abolish the corporate tax exemptions granted to their ports, so as to align their tax regime with EU state aid rules. (Global Trade Magazine)
Latin America counts losses as NAFTA talks loom. Mexico will be the biggest loser from North American Free Trade Agreement (NAFTA) renegotiations, with a host of other Latin American countries set to suffer negatively from U.S. President Donald Trump’s trade and economic nationalism. (GTR)
Bitcoin splits, but clone off to slow start. Bitcoin's underlying software code was split on Aug. 1, generating a new clone called "Bitcoin Cash," but the new virtual currency got off to a slow start due to lackluster support for its network. (Reuters)
China’s new Silk Road risks unravelling in Hungary. China’s planned railway link between Greece and Central Europe has hit difficulties after the project was accused of flouting EU rules on public procurement in Hungary. (EurActiv)
Global geo-political series: Russian Prime Minister hits at new U.S. sanctions calling it full-scale economic war. After the news came out that despite his reservations about the new sanctions bill on Russia, Iran and North Korea, President Trump has signed the bill into law. The Russian Prime Minister Dmitry Medvedev said that the move shows that the U.S. establishment, which is known as the ‘Deep State’ outwitted President Donald Trump and it shows that the bilateral ties between Russia and the U.S. would never improve. (EconoTimes)
Rwanda votes, with only one likely winner. Rwandans went to the polls on Aug. 4 in an election that was widely expected to extend the long rule of President Paul Kagame, who has guided the country with a steady and at times repressive hand following a genocide two decades ago. (New York Times)
China's fear of Japan-style economic bust drives crackdown on deals, says source. President Xi Jinping’s top economic adviser commissioned a study earlier this year to see how China could avoid the fate of Japan’s epic bust in the 1990s and decades of stagnation that followed. (Bloomberg)
Week in Review Editorial Team:
Diana Mota, Associate Editor and David Anderson, Member Relations