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.”

Ilya Strebulaev, a professor in the Venture Capital Initiative at Stanford Graduate School of Business, analysed data from 500 unicorns between 1997 and 2019. The dataset includes information on 1,078 founders, of whom 44% were identified as non-U.S.-born based on their places of birth.

“Nearly half of US unicorn founders were born outside the US. Immigrants are crucial for US innovation: our research revealed that 65 countries (apart from the US) have produced at least one founder of a US unicorn,” wrote Strebulaev on LinkedIn.

Indian-born founders form nearly one-fifth of all non-US-born unicorn founders, totalling 90 individuals from India. This is followed by Israel with 52 founders, Canada with 42, the UK with 31, and China with 27. In Asia, India leads the list of founders, followed by Israel, China, and Taiwan with 12 founders.

In Europe, the UK leads in the number of founders, followed by Germany with 18, France with 17, Russia with 14, Ukraine with 12, and Ireland with 10.

In Africa, South Africa has five non-US-born founders. In South and North America (excluding the US), Canada has the highest number of founders, followed by Brazil with 9 founders. In Australasia, no country reached double digits; Australia contributed eight founders, while New Zealand had six.

Countries with fewer than five unicorn founders include Switzerland (4), Japan (3), Sweden (2), Greece (2), and Turkey (2).

The study also concludes that relocating start-ups to the US significantly increases their chances of achieving unicorn status. Indian start-ups are 6.5 times more likely to reach unicorn status if they relocate from India to the US.

Whether this trend will continue is unclear. After all, immigration has been a significant debate issue in US politics for decades, and it remained a major concern in the 2024 election cycle. Presidential candidates Kamala Harris and Donald Trump clashed over immigration policy and disagreed on the economic benefits of immigration. Trump won the election, pledging to deport 20 million illegal immigrants and further tighten immigration rules for legal immigrants.

Starting in February, the 32-year-old heir will work alongside LVMH’s longtime CFO, Jean-Jacques Guiony, who will also join Moët Hennessy as its new CEO. With all five of Bernard Arnault’s children having operational roles within the group, the appointment has reignited speculation over who might one day take the helm of the conglomerate.

Alexandre has held various executive positions at LVMH, including a four-year stint as CEO of German luggage maker Rimowa and as vice president of product, communications, and industrial affairs at Tiffany & Co., which LVMH bought for $15.8 billion in 2021. Under his leadership, sales increased, making the New York-based jeweler the largest contributor to the group’s growth.

“Having proven himself by helping Rimowa’s expansion, one of LVMH’s newly acquired brands, as well as by strategically repositioning Tiffany’s, the only American legacy brand owned by his family’s conglomerate, the young Arnault has now been assigned his toughest task yet,” observes Thomaï Serdari, professor of marketing at NYU’s Stern School of Business. “It seems that his challenges intensify with each appointment.”

The challenges have indeed intensified. Due largely to weak demand in China and the US, the wine and spirits division’s sales fell 8% in the first nine months of 2024, with revenue down 7%, a steep drop compared to the group’s overall 3% decline.

“As the deputy CEO, Alexandre needs to reference his own playbook of how to grow individual brands under the Moët Hennessy umbrella and generate cultural relevance around wines and spirits, a category that has a diminished appeal for GenZers,” Serdari says. “Most importantly, he is asked to dust off his corporate finance skills and help the portfolio navigate a tax regulatory landscape that is veiled in uncertainty.” If he succeeds, Serdari argues, Alexandre will be well positioned for the top job in the family business.

The big news of the last few weeks is Donald Trump’s victory in the US presidential election, accompanied by a clear Republican majority in the US House of Representatives and the Senate. We know the results, but the new administration will only start working as of next month.

We also know the new administration’s announced programs, priorities, and key nominations for the new cabinet. However, other big questions remain: How quickly or slowly will the new administration implement key parts of Trump’s agenda? We are talking about tariffs, the US debt ceiling, the deportation plans for undocumented immigrants, and the future of NATO, to name a few.

It is too early to answer all these questions, as it is too early to guess if the appointments that require Senate confirmation votes will be conducted quickly and smoothly. In addition, many of the key appointees have different opinions on key policy issues: Will they get along? Is the new administration capable of working together and meeting its goals without adding to major international tensions?

We will cover the issues extensively in the new year. These questions are at the top of every boardroom and on the agenda of every executive worldwide. In some cases, they require anticipatory moves, like the ones of food importers in the US who decided to buy extra products in the last few months to avoid possible future tariffs.

The focus on supply chain and the role of artificial intelligence, the topic of this month’s cover story, is our contribution to analyze one of the key areas that could be affected in the coming months by new policies in the US. They are also an area that underwent dramatic changes due to the post-pandemic economic climate. Finally, in this issue, among other features, we present our annual private banking awards and the global winners of our Best Digital Banks Awards.

Andrea Fiano | Editor at Large
afiano@gfmag.com

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.

Hyundai’s appointment grabbed headlines as it is “the exception that proves the rule,” according to Chris Rowley, professor at the University of Oxford’s Kellogg College and at the Bayes Business School of City St George’s, University of London. 

Stark differences in national cultures can often explain a reluctance to embrace change, Rowley observes: “This can be seen across [social psychologist Geert] Hofstede’s famous 6 Dimensions Model, on a spectrum of high to low of not only Individualism-Collectivism, Masculinity-Femininity, and Power Distance, but also Uncertainty Avoidance, Long-Short term Orientation, and Indulgence-Restraint.” 

In the case of South Korea, the modest rise in female CEO representation provides further evidence, says Rowley: “Over two decades, it barely inched up, from 34% in 2000 to 37% in 2021.” Famous failures in Japan, he notes, including the former “superstar leader” Carlos Ghosn, who was partly brought down by Nissan’s corporate culture, also come to mind.

Yet, it was precisely at Nissan, where Muñoz was an executive for 15 years before joining Hyundai in 2019, that he rose through the car industry ranks, proving so adept at navigating the Japanese workplace culture that he was considered a potential CEO candidate following Ghosn’s departure. A Spanish native and a US citizen, Muñoz earned a Ph.D. in nuclear engineering from Polytechnic University of Madrid and an executive MBA from IE Business School. His appointment appears aimed at strengthening the company against geopolitical and economic uncertainties. In particular, policies proposed by US President-elect Donald Trump, such as increasing tariffs on imports and reducing subsidies for electric vehicles, could significantly impact Hyundai and Kia. Muñoz will assume his new role on January 1.

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.