On Wednesday, the European Union Commission approved plans to combine the energy markets of its twenty-eight member countries into a unified energy market. The Commission stated that the EU Energy Union would provide many benefits to the countries of the EU, lessening their dependence on energy supplies from foreign countries and boosting their economic power significantly. The ambitious plan is facing some criticism, and has yet to be approved by the European Parliament as well as the EU's member countries, but it certainly has the potential for major influence on European economics.
As people in developed countries live longer lives, companies with pension plans are facing growing pension shortfalls. The Society of Actuaries estimates that the average 65 year old man today will live two years longer than it estimated 15 years ago. This has led to large differences in the amount budgeted for pension plans and the amount actually being spent. The increased longevity of these employees’ lives has caused many major companies’ balance sheets to be changed dramatically. Most United States companies use defined-contribution plans such as 401(K)s, and these leave workers on their own after retirement. These companies will not have to worry about increased life longevity when it comes to these payments.
On February 19, the German government rejected Greece’s request for a 6 month extension to its Eurozone program. Germany had hoped that Greece would renew its existing deal that contains harsh austerity conditions, and a German Finance Ministry spokesman claimed that the proposed assistance package was “not a substantial proposal for a solution”. The Finance Minister himself, Wolfgang Schaeuble, stressed that no new payment of funds would be given to Greece until a new deal was made. Despite the Greek economy growing in all four quarters last year, it has been in recession for almost 6 years and must take measures to improve the condition of its economy.
This past week, the Obama Administration cleared a plan to override federal regulations on oil drilling off of Alaska's coast in the Arctic Ocean. The proposal is intended to establish drilling standards for the Chuckchi and Beaufort Seas, both of which are believed to be abundant in fossil fuels, and follows a growing emphasis in the international system on the Arctic's natural resources. Last January, 1,400 participants from several countries gathered in Tromsø, Norway to stake their claims at the Arctic Frontiers conference. Russia's increasing interest in the region, coupled with its growing military presence throughout international waters, gave the conference unprecedented significance.
Are you curious about what the population growth rate is in Nigeria? How about the oil exports from Saudi Arabia or the renewable energy generation in Germany? These questions are all answered in the redesigned country statistics pages on globalEDGE. These pages contain statistics that are broken down into four categories: people, energy, technology and infrastructure, and geography and environment. Learn more about a country you are interested in by checking out the new country statistics pages today!
In part 4 of our international tourism blog series, we discussed the importance of cultural sensitivity as tourism increases in developing countries. In this blog, we will focus on how hosting international conferences can stimulate a country’s hospitality and tourism sector. Organizing global conventions requires an extensive amount of planning, data gathering, and business acumen. One of the most important decisions made is location. Attendees, reporters, and small enterprises will flock to the chosen venue. This presents a prime opportunity for significant amounts of resources and capital to be exchanged. But is it possible for a singular event to revitalize an entire economy?
Globalization is occurring and the world is growing more interconnected and accessible, and as a result it is now easier to travel to other countries. Cultural awareness is increasing, and as a result, tourism is too as people want to experience the culture of other countries. The tourism industry accounted for 9.5% of the world’s GDP in 2013 (U.S. $7 trillion) and currently employs 266 million people worldwide. In perspective, the global tourism industry employs 1 in 11 people on this planet. One aspect related to tourism, that is often not considered, is that with benefits and new opportunities, come new challenges.
In part 2 of our international tourism blog series, we looked at currency exchange rates and their effect on tourism. In today’s post, we turn to the tourism industry in Sub-Saharan Africa, and its future outlook. For many countries in Sub-Saharan Africa, tourism presents a great opportunity for economic growth. Since 1990, the number of tourists arriving in Sub-Saharan Africa has increased by over 300%, and the tourism industry now accounts for almost 3% of the region’s GDP. As more governments realize the industry’s growth potential, the competition for foreign visitors continues to increase, making the next decade an interesting one for the entire region.
Exchange rates for currencies across the world are akin to a seesaw - they need a balance. As a result, the simplest differences in the exchange rates can have drastic ripple effects on economies due to the economic purchasing power principle. If your domestic currency is trading strongly (weakly) against a foreign currency, you have increased (decreased) your purchasing power and can purchase more (less) just from currency swapping. The effects of currency exchange on purchasing power can be in the form of government policy, such as Japan, or based on the nature of current positive market conditions within the economy like the United States. As you will see, exchange rates can have a drastic impact on tourism globally.