Chart of the week: a milestone in the developing world

We are always hearing how the developing world is struggling, says Ross Clark in The Spectator. But consider this: the number of people who don’t have electricity in their home has fallen below one billion for the first time ever. “Or at least since 1800 when the world’s population crossed the billion threshold.”
According to the International Energy Authority, electricity coverage in Bangladesh has risen from 20% to 80% since 2000. In Kenya it went from 8% to 73% and in Ethiopia from 5% to 45%. “Well-meaning western aid programmes” flogging green energy to developing states have little to do with it. In Bangladesh, 84% of electricity stems from oil and gas . In Indonesia 94% is from oil, gas and coal.
“It is a habit of domestic investors – and their advisors – to practise what is called ‘home country bias’. We feel no obligation to do so. There are plenty of foreign markets offering exceptional value today without the risk that Jeremy Corbyn or John McDonnell might be parachuted in… to destroy them. Robert Horrocks… chief investment officer at Matthews Asia, sees a silver lining in Asia amidst the global clouds: ‘Price-to-forward earnings ratios at about 12.1 times for Asia ex-Japan and 12.8x including Japan compare favourably with Europe at 13.7 times and the US at 17.1 times. These valuation discounts are already a bit excessive. It is undeniable the US has seen superior profit growth over the past seven years, but I do not expect that over the next decade, as political and wage cycles switch in the US to favour labour and switch in most of Asia to favour corporations. Our specific favourites: Japan and Vietnam.”
Tim Price, Price Value Partners

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