Iranium Enrichment

Background

Since the election of Mahmoud Ahmadinejad in 2005, Iran has heavily pursued nuclear development in open defiance of international protests. Even after United Nations sanctions, Iran continued to enrich uranium and build centrifuges. In fact, on the 30 year anniversary of Iran’s revolution, the country launched a satellite into space and at the same time launched fears of possible ballistic missile development. With the a new Obama administration that is more willing to deal with Iran, the door opens for a potential turning point of US-Iranian relations. Recently, President Obama made a video address to Iran calling for cooperation. Although the message was received with mixed reviews, there is no doubt that a new relationship could soon emerge.

The following is a BBC news article with Obama's video message near the bottom of the page:

http://news.bbc.co.uk/2/hi/middle_east/7956504.stm

Enriching Relationships?

Since 2006, the United States investigated Iranian banks suspected of funding Mr. Ahmadinejad’s nuclear plans and discovered quite a few. Two of the most prominent are Bank Sepah, which is heavily involved in nuclear weapons development, and Bank Saderat, which is known for supporting terrorism. Long term actions were taken on these banks to block them out of the US and world financial system. But, Iran continues to squeal past the problem by requesting the identity of its banks to be hidden in transactions. Businesses must be careful in dealing with clients that purposefully hide information to ensure that banks such as Sepah and Saderat are financially cut off. Stable relations with Iran would be much easier if nuclear weapons are not in the picture.

Former Satellites Causing Concern

Background

The financial crisis seems to be hitting former Soviet Union Satellites such as Latvia and Hungary the hardest. In 2004, Latvia and Hungary both joined the European Union. Since then, their developing economies have experienced astounding growth due to foreign investment. The Latvian and Hungarian economies are heavily export driven. Unfortunately, because of declining global demand and lack of credit, exports have dropped sharply, leading to near economic collapse. Rising unemployment compounded with decreasing wages have lead to widespread public upheaval.

Big Shocks from Small Countries

Latvian farmers recently protested over worsening economic situations which led to the resignation of Prime Minister Ivars Godmanis. Hungarian Prime Minister Ferenc Gyurcsany resigned a few days ago for similar reasons. Furthermore, Western European banks that invested in these countries fear that either country might go bankrupt. Defaulted loans could mean disaster for larger Swiss and Finnish bank that have lent vigorously to Eastern Europe. Europe is becoming more concerned, and the EU finds itself paying extra attention to unlikely countries in the East. Investors and businesses that bought heavily from Eastern Europe should not stop, but instead must continue to support these countries. For although they are small, another economic collapse will send strong ripples all across Europe and perhaps the world.

Leftist friend in Latin America

Background

After 20 years of conservative rule, El Salvador has finally elected a leftist president on March 15th. Mauricio Funes is a former talk show host and represents the more left-leaning FMLN party. The opposing ARENA party has made many connections between Funes and President Hugo Chavez of Venezuela. In fact, there are widespread fears that electing Funes would turn El Salvador towards socialism and against the United States.


Ideology That Leans Towards Money

Although in general, another leftist government in Latin America does not bode well for the United States, El Salvador’s business interests allow the continuation of friendly ties. Over 18% of El Salvador’s economy relies on remittances from the US. That is money sent back from Salvadorian workers here to their families in El Salvador. Despite the fact that many of the FMLN guerrillas are trained in Cuba, El Salvador also enjoys free trade agreements with the United States. Because of these benefits, El Salvador contributed troops to fight the war in Iraq. Although Mr. Funes leans left, business interest will ensure that his policies lean towards the United States. Companies that are afraid a leftist government could be unfriendly towards business have nothing to fear and can continue to invest in El Salvador.

Mauricio Funes

A Second Korean War?

Background

After the 1953 armistice that ended the Korean War, relations between North and South Korea have been rugged and fragile. The two countries have actually managed a series of nonaggression agreements and compromises in the past. Recently, hostility has again emerged along the Korean border. South Korea’s President Lee announced that they would discontinue giving aid to North Korea until they can prove they are disarming their nuclear program. Kim Jong Ill, being the character he is, reacted by… escalating North Korea’s nuclear program!


Banking on Another War

The United States has investigated Banco Delta Asia, a bank based in Macao, and found that they were accepting large deposits of counterfeit cash from North Korean officials. The bank was also participating in other illicit activities that help fund the North Korean nuclear program. In fact in Kim Jong Ill announced that they would be testing the missileTaepodong-2 in April. Any intervention from other countries will be considered an act of war. Inadvertently, Banco Delta Asia, could be funding a second Korean War. Companies or banks that do business in Asia must block out Banco Delta Asia from the world financial system and stop having transactions with them so that they cannot continue to fund hostility.

A New Perspective

Initially, this blog targeted businesses as the ultimate root of many international conflicts. As I continue to research and analyze different events, this globalized world continues to prove that we are all interconnected. Many companies are doing business overseas in countries whose culture and political atmosphere is quite foreign. In fact, a seemingly austere business climate could be cloaked by complex issues involve various international players. I believe businesses would benefit from learning about world affairs that could potentially affect their company and investments. From now on, this blog will take on another purpose, which is to inform businesses of possible foreign conflicts that could change the way business is done. This information will hopefully be helpful in guiding companies operating in other countries.

Dancing in the Face of Death

Background

Since 2003, the Darfur region of Sudan suffered the loss of 300,000 lives in the war between the government backed Janjaweed and African rebel groups. Recently the International Criminal Court issued a warrant for the arrest of the President of Sudan, Omar Al Bashir, for crimes against humanity. Unfortunately, the Sudanese government reacted by expelling numerous humanitarian aid groups in response to the warrant and has also called for a million man march in protest.

The following link is a video of Omar Al Bashir dancing at a rally in defiance of the ICC's warrant:

http://www.youtube.com/watch?v=oG_qD4A9o7U

Bashir's Reason for Defiance

Many countries along with the African Union have called upon the United Nations to suspend the warrant for a year in order to focus on peace within the region. The five members of the UN Security Council tried to agree on a statement asking Sudan to reverse the decision to expel aid groups. Their efforts were blocked by China’s disapproval. Historically China and Sudan have enjoyed friendly relations mainly because China imports oil from Sudan and exports weapons. As a permanent member of the UN Security Council, China's business interests compromise humanitarian interests giving Mr. Bashir all the more reason to dance. Businesses and Non-government aid groups must petition members of the ICC to bring Mr. Al Bashir to justice.

Zimbabwe Sprialing Out of Control

Background

Zimbabwe, former economic power house of Africa, has hit an all time low with problems such as hyperinflation, disease, and starvation. The country recently suffered a cholera epidemic that killed over 3000 people and infecting 20 times more. The problem resides in the so called President Robert Mugabe whose greed for power and money override the pressing concerns of the country. Just last month a power sharing deal was signed between Mugabe and opposition leader Morgan Tsvangirai, although there remains little hope for true change.

Vicious Cycle of Greed

The problem begins with local businessmen in Zimbabwe who are seizing farm land and reaping the profits while average civilians are suffering from malnutrition. Mugabe’s party backs these seizures and enjoys abundant support from the businesses in return. A $250,000 party was thrown in honor of Mugabe’s 85th birthday. Ironically, this happened a few days after the government asked for $2 billion in foreign aid. The US and the EU historically are the main contributors of aid. Money cannot cure greed, and countries must not continue to offer Zimbabwe aid until Mugabe is out of power. Investors and businesses should not funnel foreign money into Mugabe's hands. The opposition party needs to remove the businessmen from the equation and return farmlands to their rightful owners. Only then can this ailing country hope to take steps towards recovering its glory days.

Mugabe chomping on his birthday cake.