Business and Finance – Page 8

The Politics of Oil Prices, the Price of Oil Politics

US$147/B One Year On: Political Winners and Strategic Losers

In 2009, the oil price fell sharply after a five-year honeymoon. You’d have expected it to take a number of political casualties with it. In a new analysis by the Center for Security Studies (CSS), Matthew Hulbert explains why it’s not been the case. Looking forward, he thinks that consumers will pretty likely face another price crunch as investment lags and demand rises. But he concludes with a warning to Russia, Venezuela and co:

“Some producers will no doubt see this as a ‘strategic victory’: but unless they have learned the lessons of 2008/9 to diversify their economic bases beyond narrow resource wealth, once the next bubble bursts, they will no doubt need to batten down the political hatches once more.”

Matthew is the CSS’s energy expert; he used to work in the City of London, advising on energy markets and political risk.

The paper is available for download here.

Indian women in Akbarpura / photo: lecercle, flickr

Well, it turns out microfinance institutions and microenterprises may very well be.

In an interesting reversal of fortunes, small, flexible and locally connected microfinance institutions seem to be fairing better than their larger commercial counterparts in the current economic climate. Due in large part to flexible business models, locally connected operations (microcreditors tend to know their customers much better), low exposure to the hazy world of high-flying finance, and an attractive product, microfinance institutions are flourishing all over the world.

By lending small amounts to poor people with no traditionally defined credit-worthiness, microfinance institutions are keeping the lower tiers of the world economy afloat, even thriving in parts.