When naming the most innovative place in the world, Silicon Valley of the United States is usually everyone’s first response. However, that might not hold true in Europe. The tech-savvy country of Estonia is proving to be an important focal point for entrepreneurship and innovation. Right on the edge of Europe, Estonia has a total population of just 1.3 million. Estonia may be considered an extremely small country, but in terms of technology and innovation, it’s a giant.
The evolution of technology has opened the Internet for cross-border collaboration and has enabled a whole new range of economic activity that includes online trades, big data, and online advertising. According to the McKinsey Global Institute, from 2004-2009, the Internet contributed up to 21 percent in GDP growth in the developed world and 11 percent in the BRIC countries (Brazil, Russia, India, China). This blog will discuss the international trade benefits created by the Internet and the risks associated with online cross-border trade.
The Trans-Pacific Partnership, or TPP, is a trade agreement between twelve countries, including China, Japan, the United States, Canada, Mexico, Chile, and Peru. This agreement, if ratified, would eliminate almost all trade barriers between these twelve countries, uniting them in the largest free-trade zone in world history. The problem is, it doesn't seem to be getting approved anytime soon; talks that occurred just last week in Singapore ended with the countries reaching no finalized agreement that would put the TPP into effect. As the partnership has been undergoing negotiation talks for years, it is wondered how much longer it will take for the countries to cooperate on certain final issues and establish the partnership.
In the midst of what appeared to be a comeback for the European automotive market, which includes western Russia in international marketing figures, the current political crisis in Ukraine has spurred on fears that Russia's days as a growing reliable source of car sales may be coming to a quick halt. Seeing as Russian forces in the Crimea region has resurrected Cold War tensions between Russian and Western supported factions, American and European investors in the Russian automotive market have reportedly lost confidence in Russia as a continued source of fuel for the sector's global recovery. These tensions come alongside economic turmoil that the international automotive industry has been handling in other emerging markets, which includes the currency market problems that are worsening prospects in the emerging-market countries of Turkey and South Africa.
Brazil’s economy posted surprisingly good numbers for the fourth quarter of 2013, renewing hope that the country’s economic fortunes can turnaround. Brazil had seen its GDP contract by .5% in the third quarter, leading some analysts to speculate that the country was headed for a recession. The new numbers for the fourth quarter show that the economy grew .7% from the previous quarter and 2.3% over the entire year, numbers that no one expected to see. This news brings some relief and encouragement to Brazilian officials, who currently have their hands full with issues surrounding the economy, protests, and major upcoming sporting events.
Ever since the financial crisis hit the world in 2008 discussion has ensued on who is at fault and how can we make sure something like this never happens again. At the heart of this debate are banks - especially global ones. Legislative bodies across the globe have acted in an attempt to stabilize the banking system and stop financial panics that dry up credit. From Basel III to Dodd-Frank many attempts have been undertaken.
This September, the ballot to vote on Scottish Independence will be held. Scotland’s North Sea possesses a great amount of oil revenue for the United Kingdom, which poses a threat to the United Kingdom if Scotland were to become independent. What does this mean economically and politically for the country of Scotland, the United Kingdom, and the European Union? A lot of uncertainty. The rarity of the creation of a new state in Western Europe poses a lot of questions that economists do not know the answer to.
The political and economic future of Ukraine remains uncertain despite a rapidly changing political situation. This uncertainty will undoubtedly affect economic conditions for those in Ukraine but also other countries supporting Ukraine. Officials from both the United States and the European Union have stated that they are willing to provide financial assistance to Ukraine. How will the future of Ukraine be shaped by this financial assistance and growing international relationship?
India has a caste system which is a social structure that separates people according to different socio-economic conditions. In recent years the system has been relaxed and it is easier to move from caste-to-caste, but it is still significant to the Indian culture. Having a caste system can increase the amount of poverty and economic activity, leading to a decrease of international trade. In May, India’s general election will take place and the front-runner to be the next prime minister is Narendra Modi. Modi was a former tea seller, which is not considered an elite occupation and is quite different from the former occupations of leaders from the ruling Congress party.
Since abandoning the Zimbabwean dollar in 2009, Zimbabwe’s central bank has allowed the use of the U.S. dollar, the South African rand, the British pound, and the Botswanan pula. Recently, the central bank announced that four additional currencies will become legal tender in Zimbabwe: Australian dollars, Chinese yuan, Indian rupees, and Japanese yen. The hope is that the move to more currencies will bring in more cash and quell the ongoing liquidity crisis, which has forced some banks to stop lending altogether.