U.S Courts Hold Argentinean Debt in the Balance
by Bryce Johnson
In December 2001, Argentina defaulted on $100 billion worth of debt after a series of unsuccessful attempts to reduce the debt it had accumulated through a severe recession during the late 1990’s. In the wake of this default, Argentina was essentially cut off from the global financial market, and the bonds representing the government’s debt were reduced in value to pennies on the dollar. Speculators soon took advantage, and bought up a lot of the debt at the significantly reduced price in the hope of turning a large profit in the future.
In 2005 and 2010, the Argentinean government initiated debt exchanges in which it offered holders of the bonds payments of 30 cents on the original value, representing a large return on investment for any of the speculators who bought at the low point. Approximately 93% of the bondholders accepted one of those two offers, and Argentina has been reliably making payments ever since.
Myanmar's Economic Opportunities and Risks
by Bryce Johnston
Over the past two years, Myanmar has undergone dramatic political and economic reforms. In late 2010, after more than fifty years of totalitarian rule under a military junta, former general Thein Sein was elected President in a vote that many western countries criticized as lacking credibility due to the absence of legitimate opposing parties. Nevertheless, the new civilian government has responded by releasing political prisoners and allowing pro-democracy leader Aung San Suu Kyi and her National League for Democracy to participate in the political process and win seats in Parliament.
As a result of the positive democratic steps taken by Thein Sein and the civilian government, the United States and the European Union have lifted sanctions, and many foreign corporations have prepared to conduct business in the country formerly known as Burma. Because of its longstanding economic isolation, Myanmar is perhaps the last major untapped market for consumer goods and its woefully underdeveloped infrastructure offers significant opportunities for investment. Cellular and Internet access reach a very small portion of the population, electrical grids routinely fail, and sewer systems flood. Most indicative of the isolation, ubiquitous brands such as Coca-Cola and Pepsi are just now gearing up to add Myanmar as a new front to their worldwide cola battle.
