The 15-berth port at Chancay, around 80 kilometers (about 50 miles) north of Lima on the Peruvian coast, was jointly inaugurated by Peru President Dina Boluarte and China’s President Xi Jinping as part of the Belt and Road Initiative (BRI).

The port, built by China’s state-owned Cosco and local miner Volcan, is poised to transform regional trade. Chancay is able to handle the largest “post-panamax” container ships that are too large for the Panama Canal. The port has an initial capacity of 1-1.5 million 20-foot equivalent units (TEUs), an industry standard for assessing container volumes. The port capacity is expected to rise to 3.5 million TEUs when fully operational.

With one eye on the resource-rich region, the largest container ships will now be able to sail to Shanghai in 23 days—reportedly 10 days faster than via the Panama Canal route.

Mexican and US port operators will likely see lower revenues. And US analysts worry that the port could double as an operating base for the Chinese Navy in America’s backyard, despite being located roughly 6,000 km from the US. China’s appetite for Latin American resources, and ability through the BRI to invest in developing countries, has led to accusations that the US has fallen behind in rolling out a similar initiative.

They point to the stark contrast of outgoing US Secretary of State Antony Blinken offering Peru a number of Caltrain diesel locomotives dating from the 1980s in a $6 million deal announced immediately following the Chancay port inauguration. They say the US has overlooked Latin America, allowing China to take advantage of local resources while simultaneously achieving a geopolitical advantage.

China’s investment in Chancay has not been without issues. In May, while embroiled in a dispute with Cosco, Peruvian lawmakers passed legislation granting Cosco exclusive rights to operate the port, a move previously considered unthinkable by analysts. China is Peru’s largest trade partner, with copper, iron and fishmeal making up the bulk of exports.

The objective is to put together 290 satellites and the associated ground infrastructure. The independent network should be up and running by 2030. Governments will be the first users, but commercial applications are also part of the program.

IRIS2, launched in November 2022 by former European Commissioner Thierry Breton, is expensive. It was valued initially at €6 billion, but experts nowadays estimate that it’s a €12 billion project. Robert Habeck, Germany’s Vice Chancellor, sent a letter to Brussels in March denouncing it as an “exorbitant” increase. The fact that German companies were not heavily involved in the project didn’t help. Still, the war in Ukraine convinced European leaders that they needed their own secure satellite internet network, and they found a compromise. What if their ground system suddenly failed? What would happen if there was a cyberattack? IRIS2 and its 290 satellites are much smaller than the 6,000 active Starlink satellites but the constellation is a strong communication tool. It reaffirms the old continent independence, like Galileo the global navigation satellite system which is the European answer to the American GPS.  

The European Commission carefully avoided numbers. It didn’t say what will be the final cost. SpaceRISE is a private public partnership that will be supported by EU funding and the European Space Agency. They initially budgeted more than €3 billion. The public contribution will likely exceed that amount. The rest will be covered by the private sector, including the three members of the consortium.

The data comes as the debate surrounding migrants escalates, fueling right-wing gains in elections in many countries. Experts argue that the rhetorical arguments often overlook how cross-border movements contribute to economic expansion and job creation. Immigrants also played a crucial role in helping rich nations recover more swiftly from the inflationary pressures caused by Covid-19.

Legal migration is seen as both “an engine of economic growth and as a driver of political division,” says Andrew Geddes, professor of Migration Studies and Director of the Migration Policy Centre at the European University Institute. “Down the road, the rise of anti-immigration political forces in key destination countries, including most obviously the United States, is likely to mean narrower paths for legal migration, sparking more friction both within and between nations.” The US led in 2023 with 1.2 million new legal immigrants, followed by the UK, with 750,000. Around a third of OECD nations also experienced their highest-ever immigration figures.

For decades, immigration to OECD member countries has followed a steadily upward trend, says Hein de Haas, professor of sociology at the University of Amsterdam, founding member of the International Migration Institute, and author of How Migration Really Works.

Apart from refugee influxes, surges have been mainly driven by labor shortages for low- and higher-skilled workers, de Haas argues. In the post-Covid “labor crunch,” such shortages reached new highs, and so did immigration levels. “The main dilemma governments therefore face is that it is impossible to reconcile the growing demand for labor, the need for business lobbies to open more legal migrant channels, and to turn a blind eye towards the widespread employment and exploitation of undocumented migrants, while at the same time satisfying public demands for less, or more controlled, immigration.” In other words, de Haas says, “governments can’t have their cake and eat it too.”

The BDP suffered a crushing blow, winning just four of 61 National Assembly seats. Analysts cite mounting economic frustrations, especially among the young, as key to the party’s downfall.

Despite the political upheaval, Botswana—a nation the size of France but with a population of just over 2.4 million—remains a model of stability in Africa. Known for efficient governance, a well-functioning civil service, and prudent economic management, the country achieved upper-middle-income status in 2005, showcasing its resilience and progress.

Significant challenges persist. Poverty remains high, unemployment reached a staggering 27.6% in the first quarter of this year, and inequality levels are among the world’s worst. GDP growth is forecast at just 1% for 2024, down from 2.7% in 2023 and 5.5% in 2022. Driving the downturn is the contraction of the global diamond market, precipitated by reduced production and weakened demand, since diamonds account for 90% of Botswana’s foreign exchange earnings.

Fiscal expansion through government-backed construction projects is expected to cushion the downturn. Economically, Botswana ranked as Africa’s 28th-largest economy in 2023, with a GDP of approximately $21.4 billion. While modest compared to giants like Nigeria or South Africa, it stands out for its sound fiscal policies, strong governance, and strategic reliance on diamond exports.

Botswana’s eligibility for benefits under the African Growth and Opportunity Act (AGOA) has further bolstered its competitiveness, granting duty-free access to the US market for most locally manufactured goods, including diamonds. This has spurred business reforms, improved the investment climate, and strengthened bilateral trade ties. Botswana’s ability to navigate the current economic and social storms will determine its future stability and growth trajectory as it embarks on a new chapter in its politics under Boko’s leadership.

Historically, Mauritius voters have a reputation for speaking in absolute terms. They lived up to it last month, when they chose Navin Ramgoolam, the candidate of the Alliance du Changement (ADC) coalition, to form a new government as prime minister.

Ramgoolam’s victory against incumbent Pravind Jugnauth was a rout. The ADC won 60 of 62 seats in the National Assembly, underscoring public exasperation with Jugnauth’s seven-year rule.

Although the return of Ramgoolam, 77, who had served three previous terms as prime minister, was a shocker, the rising cost of living, a pension crisis, corruption, the muzzling of freedoms, and other grievances made the island nation a fertile ground for his win. The real task will be honoring his promises for significant changes in governance and socio-economic management, observes Pritish Behuria, associate professor at the University of Manchester’s Global Development Institute.

Ramgoolam’s goals include dismantling the country’s spying system, so that “Mauritians will be free to talk.” Another priority is addressing the cost of living by stopping the rupee’s freefall and ending a value-added tax on basic commodities.

The currency’s nosedive has been a major concern, with its value dropping 30% over the past five years. The trend has continued for the better part of this year. A public debt burden of about $10 billion isn’t making the situation any easier.

An urgent need to stabilize the macroeconomic front has already prompted Ramgoolam to make an immediate change at the Bank of Mauritius. Following his recommendation, Rama Krishna Sithanen has taken over as central bank governor, replacing Harvesh Seegolam, who was serving his third tour in the post.

A former finance minister, Sithanen is credited for financial reforms that achieved economic diversification. “Sithanen faces the burden of steadying the currency to reduce the negative spillover of higher cost-of-living pressure on the economy,” notes Churchill Ogutu, an economist at Mauritius-based IC Group.

Global Finance: Tell us about Uzbekistan’s transformation over the past eight years and what else you are looking to accomplish.

Laziz Kudratov: The changes that started in 2016 continue. We have seen GDP rise by 6% in 2023 and 6.4% in the first half of 2024. Along with a more business-friendly environment, key reforms, such as reducing VAT from 20% to 12% and creating special economic zones, we have strengthened our position as an attractive destination for foreign investors.

We have unified the exchange rate and liberalized the forex market, making it easier for international partners to do business here, including through public-private partnerships and outsourcing. We have also become a hub for IT with the creation of the Tashkent IT Park; and our first unicorn, Uzum, an e-commerce platform, is now valued at over $1 billion.

On the green energy front, we are striving to become a leader in Central Asia. We have recently secured a $13.1 billion investment from ACWA Power for 9.6 GW wind and solar power projects, and we partnered with Masdar for 2 GW green projects with investments of $1.7 billion, which is a key part of our broader effort to increase the share of renewables in our energy mix. In total, 35 agreements for green energy projects with a total capacity of 18.6 GW have been signed over the past four years—an essential step toward creating a more sustainable energy future.

Moving forward, we plan further legal reforms aimed at solidifying investor rights, enhancing transparency and improving business efficiency. By integrating more closely with the global economy, particularly through WTO membership, Uzbekistan aims to become a dynamic economic force regionally and globally.

GF: Uzbekistan is Central Asia’s most diversified economy. Has this been an advantage in driving growth?

Kudratov: Diversification sits at the heart of all our modernization efforts, allowing us to remain resilient in the face of an increasingly volatile global economy. By ensuring growth across multiple sectors with the support of international investors, we are positioning for long-term, sustainable development. This balance between established industries and emerging sectors is driving our progress.

We have built upon our traditional industries, such as textiles, mining, and agriculture. In the textile sector, we created Specialized Textile Industrial Zones, designed to attract investments by offering favorable operating conditions. Since the reforms began in 2017, the sector has welcomed investments totaling $9.8 billion. Today, as in the past, Uzbekistan is Central Asia’s textile hub.

We also have a highly developed mining industry. The Navoi Mining and Metallurgical Company (NMMC) ranks among the top four gold producers globally, while the Almalyk Mining and Metallurgical Complex (AMMC) is a leading global copper producer. The agricultural sector has been transformed, with several programs implemented to boost trade and provide farmers with access to essential technology, supplies and funding.

Manufacturing has seen a significant boost, contributing over $55 billion to the economy in 2023. Today, automotive firms such as BYD, KIA, and GM are producing cars in Uzbekistan, making us the leading car producer in Central Asia. In the electronics sector, in partnership with Samsung, an enterprise was established for production of electrical appliances, with investments of half a billion dollars. The chemical industry, built on abundant mineral resources, is benefiting from modernization efforts and government initiatives. From 2017 to 2023, we attracted $9.7 billion in FDI, with companies such as AIR Products and Casale building facilities here.

Meanwhile, Uzbekistan’s building materials industry is booming in response to growing demand. Over $8.7 billion has been invested by international companies in cement plants, glass factories, and rolling mills between 2017 and 2023.

We have also made a conscious effort to develop new sectors such as pharmaceuticals, IT, and renewable energy. IT sector expanded rapidly, with the IT Park exporting $344 million in IT products and services in 2023. These sectors are quickly becoming key pillars of our economy.

Total FDI in electricity over the last six years has amounted to an impressive $10 billion, and we are aiming to increase generating capacity coming from renewable sources to 20 GW by 2030, ensuring that green energy is about 40% of the total.

GF: The recent Central Asia summit saw the countries of the region commit to regional integration. How realistic is this given Uzbekistan’s historic close relations with Russia—and have we started to see evidence of it yet? 

Kudratov: Uzbekistan has prioritized strengthening ties with its neighbors and fostering regional collaboration, with particular focus on diplomatic initiatives like Consultative Meetings of Central Asian Leaders, border demarcation, visa liberalization, initiatives stimulating regional trade and certainly economic cooperation.

Integration priorities include regional connectivity, water resource management, energy and security cooperation, as well as cultural and educational exchange.

The recent Summit marked an important step toward deeper regional integration. Uzbekistan is actively focusing on improving trade routes. One key example is the China-Kyrgyzstan-Uzbekistan railway, which will be crucial in facilitating trade within the region and beyond.

GF: In terms of attracting FDI and other investments, what are Uzbekistan’s main advantages? 

Kudratov: Uzbekistan offers three key attributes that make it a highly attractive destination for FDI.

Third is our reforms. Our more business-friendly environment includes customs duty exemptions on over 7,000 raw materials, a three-year tax exemption on dividends for foreign investors, and a lowered profit tax rate of 12%. We have also strengthened legal protections for foreign investors, ensuring their businesses are both secure and welcomed in Uzbekistan. Our inclusion in the OECD’s Regulatory Restrictiveness Index highlights our growing competitiveness.

Between 2017 and 2023, Uzbekistan utilized $60.9 billion in FDI and non-guaranteed loans, which funded large-scale projects across both sectoral and regional programs. We are continually striving to create a business ecosystem that is dynamic, inclusive, and future-ready.

GF: The plan is to attract some $250 billion in investment by 2030. How realistic is this?

Kudratov: Our goal is ambitious, and it is not something we can achieve alone. Uzbekistan is moving forward, and we are making it one of the best places to do business. But we need partners who share our ambition. The opportunities are here, the workforce is ready, and the incentives are in place. This is a chance to be part of something big, something transformative. Together, we can build an economy that benefits everyone.

Is globalization reversing? Will US tariffs derail global trade? Is the world splintering into geopolitical trade blocs? Answers to these questions will now come faster—if not in real time, then at least quarterly—due to the new DHL Global Connectedness Tracker.

Unveiled on Tuesday by global logistics and shipping company DHL and New York University’s Stern School of Business, this web-based platform features interactive charts that track globalization levels and trends worldwide.

Some recent findings may come as a surprise: Global “connectedness,” measured across trade, capital, information, and people flows, remains robust as of mid-2024, despite geopolitical turbulence. The Tracker shows resilience in international flows even amid wars in the Middle East and Ukraine, immigration pressures, bottlenecks in the Panama and Suez Canals, and an ongoing US-China trade war.

This attests to “the resilience of international flows in the face of geopolitical tensions and uncertainty,” Global Connectedness Tracker reports.

“Currently available data indicate a stable level of globalization in 2024, with the balance of international relative to domestic activity,” Steven Altman, a Senior Research Scholar and Research Assistant Professor at the NYU Stern School of Business, and lead author of the Tracker and its affiliated DHL Global Connectedness Report, tells Global Finance. That is, it is holding roughly steady around the record high level set in 2022.

The Tracker scales globalization from 0% (no cross-border flows) to 100% (frictionless trade, with no border or distance effects). Projections for 2024 suggest little change across its four main categories, Altman adds.

How does one square this with all the turmoil in the world? “We might be focusing too much on the largest countries and economies. Many see the US and China interacting less, Europe and Russia decoupling, and the UK leaving the EU as signs of ‘the end’ of globalization,” says Tobias Meyer, CEO at the DHL Group, in the report’s introduction.

Still, maybe the election of Donald Trump in the US will change things? Trump has proposed tariff increases across all trade partners and especially large tariff increases on China.

If these tariffs are implemented, “they would put negative pressure on all US imports and exports, because trade partners are sure to retaliate,” answers Altman. “This implies especially great pressure on the 2.6% of world goods trade that takes place directly between the US and China, and some pressure more broadly on the 22% of all goods trade that is to or from the US,” i.e., 13% of world imports and 9% of exports.

Elsewhere, countries that are neither close allies of the US nor of China grew their share of world trade from 42% in 2016 to 47% in 2024, according to the Tracker, with the United Arab Emirates, India, Vietnam, Brazil, and Mexico seeing especially large trade share gains over this period.

Put another way, the vast majority of trade does not directly touch the US. “So what matters most for the global level of trade integration is whether a potential US-led escalation of trade barriers spreads further and begins to constrain trade between other countries,” Altman says.

He doesn’t foresee most countries retreating from cross-border trading. For one thing, most international trade is already between countries that are friends. Also, smaller countries, as a rule, are more dependent on trade than larger countries. “The US is actually the major advanced economy that relies the least on imports,” i.e., has the lowest imports-to-GDP ratio, says Altman. 

Nor is there much evidence yet that cross-border trade is becoming regionalized. Countries continue to trade with other countries far, far away. During the first seven months of 2024, “goods trade traversed the longest average distance on record (4,970 km),” according to the Tracker.

There is some evidence that trade between rival geopolitical blocs (e.g., US allies v. China allies) may be diminishing, however, mainly because of Russia’s international flows. According to the Tracker:

“The share of world trade crossing between close allies of the US and China and the opposing bloc fell from 13% in 2016 to 10% in 2024, but excluding Russia only from 11% to 10%.”

What about the longer-term prognosis—beyond the next decade or two: Should one expect globalization to grow, retract, or remain about where it is today?

“I think the most likely scenario is that we will see modest increases in globalization,” says Altman. Globalization often advances by fits and starts, with temporary reversals, but the long-range trend is positive.

That said, “we’re still far from a ‘flat’ world and I don’t think we’ll come anywhere close to complete or unfettered globalization in the coming decades,” he adds.

The current “depth,” or connectedness on the Tracker’s scale (i.e., 0% to 100%) is 25%, where 0% would mean that no flows cross borders at all, while 100% means that borders, distance, and cross-country differences have ceased to matter, and interactions are just as likely to happen between countries as they are within them.

This means that most of the overall business conducted around the world is still overwhelmingly domestic.

“And it’s going to stay that way because people and companies naturally tend to have stronger roots at home, and very few manage to achieve equal levels of success all around the world,” he comments.

While the Tracker is highly unlikely to reach 100%, “I wouldn’t be surprised if we eventually get from 25% up to 30% or maybe even, perhaps several decades into the future, up to 35%,” Altman says. 

Global Finance: Against a backdrop of rising debt, geopolitical and economic instability, how is the role of Islamic finance evolving to address emerging global challenges?

Yousef Khalawi: Despite its centuries-old heritage, Islamic finance is still a comparatively young industry. In its modern iteration, it is really just a half century old. Sukuk, for example, is less than 20 years old, making it relatively new compared with Western bonds.

The challenges you refer to are not merely domestic or regional—they are truly global in nature, and we see huge potential for the creativity of Islamic finance to address many of these. Take climate change, for example. Last year’s floods in Pakistan were not a result of local, or even regional actions; this is a global problem that can affect any part of the world.

Islamic finance has enormous capacity to develop new solutions to these sorts of challenges, and this is precisely the focus of the AlBaraka Forum, as it seeks to extend Sharia principles beyond the Muslim community.

GF: Where are the greatest growth opportunities?

Khalawi: Beyond the major global centers for Islamic finance of Malaysia and the GCC, Egypt, Pakistan, Indonesia, and Nigeria in particular represent huge growth opportunities for Islamic finance.

Financial inclusion is one way of unlocking that potential. In the case of Nigeria, Pakistan and Indonesia, these Muslim-majority countries each has a population far exceeding 200 million. If you consider the rate of financial inclusion in these countries, the potential for Islamic finance becomes evident.

Turkey also has great promise. Islamic finance penetration there is less than 10%, so raising that to just 20% is doubling the current penetration rates – underscoring the considerable potential for Islamic banking there.

GF: What role can Islamic finance play in advancing a more sustainable global economy?

Khalawi: The non-profit area of Islamic finance represents a huge range of opportunities for sustainability and ESG. If we were to transform the practice of zakat from an individual practice to an institutional practice, for instance, the sky is the limit. This would help institutions to focus on issues of inequality – just one of many of the 2030 Sustainable Development Goals that we are still some way off achieving, with just six years to go. Adapting the concepts of waqf and zakat at an institutional level could effect a great deal of change, especially in the world’s least developed countries.

The wider concepts and standards of Sharia-compliant investment by their nature lend themselves well to the sustainability agenda. Investments in alcohol, tobacco or military activities are prohibited anyway because these activities go against the well-being of individuals.

The fundamentals of Islamic finance have a lot to offer the whole investment industry. Even one of the largest funds in the world, Norway’s $1.6 trillion sovereign wealth fund, is moving closer to Islamic fundamentals. There is huge potential to explore this much more at a global level. So many CEOs in Islamic finance are focused only on the needs of Muslims seeking Sharia principles, but the potential is so much greater.

We need to consider these factors when communicating with Gen Z. We need to understand that they are looking for a digital economy, that ethical issues are important to them, and that they are guided more by values than by brands. A lot of research has been carried out on this topic, and it’s a great development that we need to take into account.

One of the Forum’s upcoming initiatives, scheduled for launch in 2025, is the first dedicated hub for communication strategy frameworks for Islamic finance. The new microsite will offer downloadable assets for anyone interested in exploring opportunities in Islamic finance.

Bonds with earlier maturity dates are more popular for resale by bondholders. The platform, provided by JPMorgan Chase, is a debt-for-nature swap of significant proportions.

“This debt conversion represents the most ambitious and impactful environmental action in El Salvador’s history,” President Nayib Bukele said. “With support from international parties, we are executing the largest debt conversion transaction of its kind to date.”

This is the fourth debt buyback offer El Salvador has made since 2022, which began with a liquidity crisis. S&P rated the nation’s outlook at B- with a stable outlook and called the debt swap “opportunisticaction.”

In September, corporations looked to secure finance ahead of possible market turbulence, and over 1,225 issuances saw $600 billion of bonds traded during the month. The move took many market analysts by surprise, with many blaming the November US election and recession fears that surfaced in August.

According to the El Salvadoran government, the refinancing will provide savings of $352 million in debt service costs. The US International Development Finance Corporation provided $1billion in political risk insurance and the Development Bank of Latin America and Caribbean added $200 million as a standby letter of credit.

Robert Cozzari, co-head of Latin American markets at JPMorgan, told Bloomberg that El Salvador brought “all parties together” for a capital market initiative that will achieve execution certainty and cost savings.

The costs saved by the buyback will go toward the conservation and restoration of the Lempa River basin, which is the largest in the country and provides water security for El Salvador, Guatemala, and Honduras. Under the agreement, the El Salvadoran government will establish an entity to oversee the conservation, create a water resources data monitoring service and declare 75,000 hectares of protected aquifer recharge zones by 2044.  

QIA invests across nine sectors: retail and consumer; technology, media and telecoms (TMT); liquid securities; infrastructure; financials; funds; healthcare; industrials; and real estate.

Key investments aiding the energy transition:        

Key Europeans investment examples:

Key US investment examples:

Key APAC investment examples:

Further key investments: