Five years later, the devastation of the Haiti earthquake can still be felt throughout the country. Cities are densely packed and the construction of new buildings is progressing slowly after approximately $8 billion in damages were done to the city, leaving about 1.5 million people homeless. Although $9 billion was pledged in relief money, about 3 times Haiti’s annual budget, unemployment and corruption are still extremely common throughout the country. In order to continue the process of recovery, Haiti will need more than just philanthropic efforts. Improvements in the education system, business environment, and infrastructure through increased foreign direct investment and aid will play a key role in Haiti’s eventual economic revival.
Since the Eurozone has been at a very low inflation level for quite some time and people have become more conservative in their spending, the issue of pushing the economy up has been raised by the European Central Bank. The ECB President, Mr. Draghi said, “for growth to pick up, you need investment. For investment, you need confidence. And for confidence, you need structural reforms.” Then, a 60-billion-euro-a-month bond purchase program became such a structural reform last week. This blog will examine both the regional and international impacts of this quantitative easing policy.
This past Monday, Standard & Poor’s Ratings Services downgraded Russia’s credit rating to BB+, also known as “junk”, for the first time in more than 10 years. This means that it is below investment grade, reflecting the country’s struggling financial position. The Russian economy has been thrown in a downward spiral because of intensifying pressure from sanctions from the United States and the European Union over the Ukraine crisis, and the steep decline in oil prices, an industry from which Russia derives much of its revenue from.
Shortly following the coronation of the new King Salman of Saudi Arabia, the recently minted monarch quickly assured the global energy community that the kingdom would continue its policy of encouraging top oil exporters to raise their production levels. The king's message directly contradicts with global expectations that the death of King Abdullah might lead to fundamental changes in Saudi Arabia's oil policy, but most analysts now agree that the royal family will resist any sharp changes in policy, especially as it tries to navigate multiple foreign policy challenges in the region.
The 2014 Annual Report for the International Business Center (IBC) at Michigan State University’s Broad College of Business is now available! In 2014, the International Business Center was reaffirmed as a Center for International Business Education and Research (CIBER), which is a competitive, four-year grant funded by the U.S. Department of Education. The report highlights the International Business Center’s accomplishments in 2014 and provides an overview of the services and resources the IBC has to offer.
Recent investments by U.S. companies into Indian-based startups are proof that there are innovative tech companies in places some companies may have never thought to look. Startups in emerging markets are increasingly catching the eyes of foreign investors. As of 2013, only 15% of India’s population had internet access. However, this is a number that has more than doubled since 2010. As India and other emerging economies become better connected from a digital perspective, more and more tech companies will emerge.
Is it possible that the newest form of renewable energy could come from volcanoes? If Iceland becomes more than just an example, but a leader in the energy industry, this new form of geothermal energy will no longer just be conversation. Currently, Iceland’s volcanic geography is contributing geothermal resources that account for nearly a quarter of the country’s electricity. While the world is currently dominated by hydrocarbon economies, taking a lesson from Iceland and tapping into volcanic geothermal sources could open access to a powerful renewable resource for the world.
In part 3 of our global energy blog series, we discussed which countries could capitalize on the falling oil prices. For the fourth installment of the series, we turn our eyes to some of the environmental issues surrounding the energy industry, specifically the issue of carbon emissions. As climate change fears increase and become more urgent on a global scale, world leaders have been looking for solutions to reduce harmful emissions while avoiding the economic pitfalls that can be associated with taxes or regulation. One solution gaining popularity is carbon markets, which create carbon emission allowances that are given to businesses. These credits can be used or sold depending on the amount of emissions the business produces, giving companies an incentive to reduce their emissions.
In yesterday’s blog post, we spoke of the how falling oil prices could lead to increased mergers and acquisitions in the private sector. This blog will focus on the public sector and which countries benefit the most from these low energy prices. Commodity pricing is as much an art as it is a science; the fundamentals of supply and demand clarify most of these fluctuations, however they do not properly explain the exaggerated influence prices. The saturated, oversupplied market is now creating volatility for producers, but opportunities exist for speculative nations looking to stabilize or expand their global economic footprint.
The extremely low oil prices that have characterized the energy industry for the past few months are making waves all around the world. In some countries, low prices have been seen as a benefit; in others, not so much. A major consequence has arisen that will affect all nations regardless of economic status: oil corporation mergers and takeovers. Historically, it has generally been the case that when there are low prices in the energy industry, mergers and acquisitions occur between bigger and smaller firms. Several plants and companies that originally profited immensely off of high oil prices, will now either have to severely change business strategies or be forced to relinquish control to more powerful firms in the industry.