A new report estimates that Africa is losing $60 billion each year from illegal outflows of capital. The Illicit Financial Flows report was released by a panel run by the United Nations and the African Union, and it delves into the sources of the fraudulent activity and offers solutions to remedy this ongoing problem. Because of these illegal outflows, Africa is missing out on valuable tax revenue as well as development opportunities.
globalEDGE Blog - By Tag: economy
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.
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.
There is no question that Nigeria will face many challenges in early 2015, which could individually or collectively have serious economic implications for the nation and the region. The constant threat of violence from the militant Islamist group Boko Haram, upcoming political elections, and the decline in oil prices all threaten the political and economic stability in Nigeria. The question is will Nigeria be able to weather the economic onslaught that these events could produce.
The coming 2015 year will prove to be a very important twelve months for the world economy. There are large issues still at play that could bring either forceful restoration or another global recession. Guardian News and Media published an article explaining the five main topics that could either make-or-break the world economy in the current year.
On December 17, President Obama announced that the United States would normalize relations with Cuba. Before relations are entirely healed, the US Treasury and other related agencies are required to complete certain business-related tasks. The Treasury Department Office of Foreign Assets Control, for example, will enact its treasury specific changes in the form of amendments to the Cuban Assets Control Regulations. The Department of Congress will additionally need to enact changes through amendments to Export Administration Regulations. However, these changes will improve the Cuban private sector as a whole and make it much less difficult for its citizens to access inexpensive goods while becoming more independent from Cuba.
In a world where overpopulation and high unemployment are serious problems for many nations, Germany faces an entirely different set of challenges. Germany currently has record low unemployment rates that are leading to a deficit of workers, especially those with high levels of education. To further magnify this issue, the current workforce is aging rapidly, and with the lowest birthrates in Europe, the size of the German workforce will decrease substantially in the coming decades. The most recent projections show that Germany’s working-age population will decrease by 6.3 million people by 2030, and that the entire population could decrease as much as 19%, to about 66 million people.
The OECD has found a link between a country's inequality and the decrease in percentage points of GDP Growth. This decline has been seen in countries including the US, who has lost almost seven points, and the UK, who has lost around 9 points of GDP Growth percentage. This is a shocking point which shows countries that if they want to promote strong and sustained growth, addressing inequality needs to be a central focus.
After nearly two decades of deflation, Japan unexpectedly has fallen into a recession in the third quarter of this year. In a preliminary economic report released by the Cabinet Office on November 17, GDP was reported as falling at an annualized pace of 1.6% in the third quarter of 2014. In combination with the previous quarter’s 7.3% decline, this GDP decline has caused Prime Minister Shinzo Abe to dissolve the parliament and call for snap elections two years before the next scheduled elections.
Michigan’s economy is reinforced by the global export market, with food and agriculture exports creating a $3.2 billion industry and supporting over 20,000 jobs. Exports of consumer food products are growing three times faster than sales in the United States due to foreign consumers’ growing purchasing power and lower trade barriers. Exporting is an essential way for Michigan companies to increase sales and profits by tapping into a far greater consumer market.
In 2008, Iceland’s entire banking structure failed causing a devastating economic recession. This caused the economy to contract by 6.6% in 2009 and an additional 4.1% in 2010. At the time, many thought this situation was incurable and criticized Iceland’s tactics for recovery. However, those critics proved to be wrong. Last year, Iceland’s recovered economy grew faster than both the United States and European economies. Now the country is ranked high in terms of economic and political stability. How exactly did Iceland complete its remarkable economic recovery?
In July, the Chinese company HK Nicaragua Canal Development Investment Co. Ltd. (HKND Group), released a finalized route for the canal they have been contracted to build across the Central American country of Nicaragua. The Hong Kong based investment group plans to break ground on this project in December, however there is still a great deal of speculation on whether or not this canal, which has been dubbed the biggest engineering project in human history, will ever come to fruition. If this ambitious project is in fact completed, it will have a major impact on both the global freight industry, and the economy in Central America, specifically in Nicaragua.
China and India have been in an economic race for many years and although China is still ahead, the gap between the two countries is shrinking. While the public fears that China’s GDP growth will continue to decrease, India seems to be making a revolutionary growth story of its own, as the new Prime Minister Narenda Modi takes control. Many find that Modi’s economic revival strategy mirrors China's economic strategy in the early 2000s and India hopes to achieve a similar level of economic success and growth.
By 2024, it is estimated that China will have the world’s largest economy – according to global information provider IHS Economics. Earlier this week in a blog post titled “China’s Impact on the Global Economy”, Nitish spoke of China’s rebalancing trend, which is signaled by an increase in consumer imports and a decrease in imports for investment purposes. Although rebalancing may limit other countries’ investment opportunities in China, it will spur growth in China’s economy, the Asia-Pacific regional economy, and possibly even the global economy. It is predicted that a drastic increase in consumer spending will propel China past the United States to become the world’s largest economy.
In 2011, Portugal was hit by a severe economic crisis and the government needed an international bailout of $103 billion for austerity measures. The effects of this crisis are still relevant to this day as the unemployment rate in Portugal just rose to 14.1%. Simply put, this has been the worst recession for the Portuguese economy in more than 40 years. Now an important question remains unanswered—as a nation and a workforce, how do you recover from this economic hardship?
A recession is typically defined as a decline in GDP in two consecutive quarters. In the first quarter of 2014, South Africa’s economy contracted by 0.6% and only grew by 0.6% in the second quarter – narrowly avoiding a recession. Many worry that South Africa, Africa’s most advanced economy, still faces a significant risk of slipping back into a recession. South Africa’s staggering 25.5% unemployment rate is a major factor that is contributing to this risk and it must be harnessed in order for the country to experience sustained economic growth.
Regulations and guidelines involving international business have recently changed in Thailand. The Thai Department of Employment issued new guidelines for trade and investment related activities which streamline business activities in the region. These changes will make it easier for business travel to happen within the country and potentially increase the amount of international business that takes place with companies located in Thailand.
The economy pages for each country on globalEDGE have been redesigned to provide additional economic information covering the entire spectrum of a country’s economy. The new pages have an interactive interface, where you can find the major economic indicators of a country alongside time series graphs of these selected indicators. The page showcases reliable economic information from various globally known organizations. There are six different sections on the new page including economic facts, GDP figures, economic indicators, labor & employment figures, and trade values. A radar graph is available in the last section, where the economic snapshots of countries are represented using a percentile rank system on six different dimensions. The radar graph may be utilized as a useful tool to compare the economies of countries.
Sports are big business across the world. The recent agreement to sell the Los Angeles Clippers, of the NBA, for $2 billion is the largest amount paid for a sports franchise in the history of the United States. Across the world things are no different. In 2012, for the first time, a sports franchise issued an IPO and went public. Manchester United, an English soccer club, currently holds a $2.75 billion market cap, making it one of the most valuable sports franchises.
For the first fiscal quarter of 2014, Canada will outpace the U.S. in GDP growth. Although the U.S. markets picked up after a rough winter, GDP growth is still set to decline by 0.5% according to the Globe and Mail. Meanwhile, Canada saw GDP growth of 1.7% in the first quarter, and although this is down from 2.9% in the previous quarter, GDP growth is still healthier than that of the U.S.
As the violent protests and riots in Vietnam affect the country’s social harmony, the business climate is also being seriously impacted. Anti-Chinese riots erupted in Vietnam on Tuesday after the Chinese government placed an oil rig in disputed waters between the two countries, and by Thursday the riots had claimed at least 21 lives. Following mass demonstrations, some Vietnamese protestors began to loot and destroy Chinese businesses, and as the rioting intensified, the protestors started to target all foreign owned businesses. Along with Chinese establishments, Taiwanese, South Korean, Japanese, and Malaysian companies have all reported damages from the riots, which threatens to continue as emotions are still running high throughout Vietnam.
Post graduation, previous students have to make a decision. Should they continue to educate themselves and receive a higher degree in order to make more money upon entering the workforce? Some select this option; however, in recent years the number of students immediately planning to do the opposite has increased, particularly in China. In regards to Chinese Business School grads alone, 76% plan on beginning their job search promptly after graduating.
As the western allies prepare to impose new sanctions on Russia, the complexity of Germany’s relationship with Russia is becoming increasingly apparent. German Chancellor Ms. Merkel will have to be mindful of the regional economic ties some states have with Russia, as she sides with her western allies.
Thanks to positive growth measures, the economy of the euro zone for the past month grew at its fastest rate in three years. Specifically, the release of the monthly Purchasing Managers Index (PMI) was an ample measure to earn more confidence from investors in European economy.
Japanese consumers rushed to local retailers on March 31 to purchase large numbers of goods. Even online retailers, such as “Aksul”, had their systems overloaded by the high volumes of transactions of basic goods such as toilet paper and instant rice. Why were the Japanese people in such a hurry to purchase these products? This is due to the sales tax hike from 5 to 8 percent, which was implemented the day after, April 1.
On Thursday, Greece held its first bond sale since 2010, raising $4.2 billion as investors flocked to secure bonds from the hard hit country. Greece, which stopped issuing bonds in 2010 amid their country’s economic crisis, has hailed this bond sale as a sign that the country is recovering and heading in the right direction. Investors seemed to agree with this outlook, as their high demand reduced the return rates on the bonds to 4.95%, lower than the Greek government had first anticipated. The optimism around the bond sale has encouraged some that Greece is finally beginning to emerge from the financial crisis, although it must be remembered that this is only a small step in the recovery.
On Saturday, Cuban legislators approved a new measure to help attract foreign investment into the country. The law makes initial investment in Cuba free of taxation and increases lawful protection over these finances. This new piece of legislation comes after a year of disappointing economic growth, which caused Raul Castro and Cuba's government to put forth a series of reforms to fix and modernize Cuba's economy. While many agree that increased foreign capital in Cuba would be highly beneficial to the nation, the fact remains it is still a very uneasy place to do business and the future impact of this law still remains uncertain.
For the first time in China’s history, a Chinese company defaulted on its bond payments, signaling a change in the country’s economic policy. Shanghai Chaori Solar Energy Science and Technology, a company that produces solar panels, could not make its interest payments on a one billion yuan bond, and defaulted after the Chinese government refused to bail the firm out. This is a stark change from previous actions by China, which has always bailed out onshore companies that were on the verge of defaulting. This decision to allow Chaori to default shows China’s commitment to a more open economy, in which investors cannot fall back on the government to bailout bad business decisions.
Corporate style management is set to replace the current bureaucratic system of the Holy See in the near future. On the 24th of February, the Pope announced in a public statement that he is planning to make changes to its financial system by centralizing budgetary and administrative functions. As the first economic overhaul to the Vatican in over 25 years, it was decided that the Holy See will begin to operate with a system of corporate governance.
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.
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.
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.
Russia has spent more than $45 billion hosting the most expensive Winter Olympics in history with the hope of boosting its economy. People are beginning to doubt if this larger expenditure is really worth it. Although people have already seen the Russian ruble appreciate in value, they are still unsure if the Olympics will take Russia out of the time when the economic growth slowed down to only 1.3 percent last year. This article will analyze the economic data of several countries after hosting major international sporting events so you are able to predict how Russia’s economy will perform after the Winter Olympics.
The French unemployment rate has hit a record high, currently standing at about 11.1% for 2013. In December alone, about 10,200 people listed themselves as jobless. This 0.3% is only a fraction of the 3.3 million who registered as out of work for the entire year, a figure that has never been higher. Additionally, increases in unemployment have been observed across all sectors and also take part-time workers into account. The 5.7% rise in unemployment is unfortunate news for French President Francois Hollande who had previously promised that joblessness would fall by the end of 2013.
As the rupiah reached a five-year low on Dec. 23, 2013, the Indonesian government began to worry about the nation’s economy. It soon announced increased levels of foreign investment in the country's power plants, advertising, and pharmaceutical industries in order to boost the slowing economy. However, some people are concerned that this move will bring many challenges to the nation .
On paper, it appears that Ireland has fared particularly well through the government’s tough austerity program, which was a condition of the 67.5 billion euro international loan it received during its severe banking crisis. For example, interest rates on 10-year bonds have fallen from 14.5% to 3.5% and newspaper headlines continue to announce the creation of new jobs. However, the austerity program has taken a large financial toll on many Irish citizens, many of whom are barely holding on.
Latin America has taken big steps in the last 15 years in terms of financial stability. Since 1998, the average frequency of crises in Latin America has fallen from 0.7 crises per year to 0.29 crises per year. Economists attribute this to better fiscal management, with gross domestic product becoming less reliant of government spending and outside help. The economies are starting to run with less assistance, generating a more stable financial situation with fewer crises. Latin American economies are on an upward trend nowadays, but there is still one major setback: Crime.
Within the next two decades, Brazil is expected to triple oil production and move from the 12th top oil producer to the 6th according to the 2013 World Energy Outlook Report generated by the International Energy Agency (IEA). The predicted success of Brazil’s energy industry can be attributed to the auctioning of the Libra oil field which holds 8 to 12 billion barrels of recoverable oil. With a supply of oil this substantial, the world’s crude oil demand could be fulfilled for up to 9 weeks alone by Libra.
Ukraine’s economic future is contingent on a key decision that will be made by government leaders in the next couple of weeks. In short, the country’s leaders must decide whether or not to accept a free-trade and political-association agreement with the European Union. If Ukraine passes on this agreement, it is likely that the country will become a part of the Russian-led Customs Union, which also includes Belarus and Kazakhstan. This decision will undoubtedly shape Ukraine’s economic environment going forward, especially related to trade.
Latin America has not had one of their best economic years. The International Monetary Fund has predicted a lower-than-average 2.7 percent growth in Latin America's total economies. This is not surprising, seeing as several factors such as poor trade, inflation, and slow economic growth are affecting many nations from this region in a rather devastating manner. Here is a closer look.
Greenland’s government embraced a major policy change last week that could greatly impact the country itself, as well as its relationship with other major countries. On Thursday, legislators narrowly voted to allow for mining of radioactive substances and iron ore on the Arctic island. In a 15-14 vote, Greenland’s parliament lifted a ban on mining uranium and rare-earth minerals, a decision that could significantly change Greenland’s economy and role in international trade. In another move, parliament gave London Mining PLC a thirty year license to mine for iron ore in hopes that the project will bring jobs and investment to Greenland.
While the European economic crisis appears to be gradually resolving, the International Monetary Fund (IMF) is insistent that the improvement being observed is not actual. Although the deficits of struggling economies such as Greece, Portugal, Ireland, and Spain are contracting, this is due to a collapse in imports as a result of the recession, not an increase of trade exports. The IMF has also taken note of lowering labor costs, but attributes the decreases to mass unemployment rather than pay cuts for workers. Consequently, even though economic indicators are showing signs of improvement, these events could be causing an even larger cyclical downtown for Europe. Since European banks have allowed large amounts of loans to be taken out, they too are unable to invest in businesses which might support infrastructural growth. As a result of this, the United Kingdom in particular is seeking help from international business partners to mitigate the issue.
When considering Africa, one does not tend of think of it as a region of the world that is doing extremely well. Poverty, disease, and violence all still run rampant throughout the continent. However, when it comes to its business opportunities and its economy, Africa is a powerhouse that is gaining more and more attention by the day from corporations and nations from all around the world. Already, it has the fastest growing economy of any continent in the world, is home to 6 of the 10 fastest-growing economies in the world, and it is expected to undergo an immense GDP growth in the next few decades. While Africa has many challenges to overcome, several sectors of the economy have huge potential for growth and change, and the continent has plenty of promising future economic prospects.
In a recent series of blog posts in the Economist, the Schumpeter columnist compared start-ups in two European cities: London and Berlin. Both are major cities in Europe that are popular to tourists, but are less well known for being leading cities for start-ups. Comparing the two, Berlin has only recently seen an increase in digital start-ups. In contrast, London has seen a large increase in tech start-ups during the internet boom in the late 1990’s. Increases in technology and international business could result in more cities beginning to experience tech start-ups.
The United Kingdom’s membership in the European Union could be coming to a crossroads within the next few years, as Deputy Prime Minister Nick Clegg admitted Tuesday he no longer is fighting to keep the referendum off the ballot. Clegg is a fierce opponent of leaving the EU, relating it to “economic suicide,” but said on Tuesday that he now plans on showing the importance and benefits membership brings to the British economy, in hopes that he can convince voters to stay in.
In the last five years, many economies around the world went through a recession or had their growth stunted significantly due to the financial crisis. Although Europe seemed to have the worst economic effects from the crisis, the new 2012-2013 Global Competitive Index produced by the World Economic Forum reported that European economies are still the strongest economies in the world. Switzerland grabbed the top spot in the rankings, and Europe was well represented towards the top of the list.
As of late, the Philippines have experienced robust economic growth coupled with low inflation. These positive economic indicators, among other factors, have led Moody’s Investor Services to give the country an investment-grade rating. An economic growth rate of 5.2% in 2006 has continued to climb and currently is at 7.6%- a rate that is consistent with the fastest growing countries in the region and high-growth emerging markets around the world.
Last Tuesday, September 17 European finance officials agreed on a change to the region’s budget policies that would ease the austerity measures currently in place. Austerity can be defined as measures taken by a government to reduce its expenditures and budget deficits. Unprecedented austerity policies were put in place beginning in 2009 to ease the overwhelming budget deficits that came as a result of governments spending huge sums of money to stimulate their struggling economies. This change comes in response to criticism that the required budget cuts are making matters even worse in countries whose economies and labor markets are already crippled.
Japan has had a very successful year so far. It had one of its biggest periods of economic growth in the first half of the year, much bigger than what was originally projected for the country. In addition to this, it was announced on Saturday that Tokyo will host the 2020 Olympic Games. It all presents a positive outlook for Japan as it climbs steadily but surely out of its previous economic slump. According to several central financial officers, this also presents good news for the world economy. Despite this good fortune, there are still many problems that the country must overcome, and it is not certain that the Olympics will be the economic boon to Japan that it appears to be.
Understanding the short-term and long-term economic fluctuations is important for businesses all around the world. The global economy influences all businesses regardless of their location. To better understand these trends within the global economy, there are numerous ways to expand your knowledge base. One of these ways is the 2013 Coface Country Risk Meeting taking place on Thursday, May 2nd in New York City. This conference includes a panel of economists and business leaders that will discuss the short-term economic outlook for 2013. During the conference, there was also be an in-depth analysis on today’s rapidly growing regions and the world’s economic power bases. To register for this year’s event or to obtain more details, please visit the 2013 Coface Country Risk Meeting registration site!
One of the major events taking place right now in the Western Hemisphere is the death of Venezuelan President Hugo Chávez and the subsequent transition to a new leader. The leader died March 5th due to complications from cancer that he had been battling the past few years. His death left behind a bitterly divided nation on the brink of a political crisis, with doubts of the economic future of his socialist revolution.
Germany’s economy holds a critical significance in the European Union, especially in regards to the ongoing debt crisis. Its industrialized economy has held steady despite a slump in the global economy. It might be surprising to hear that Germany, one of the most industrialized countries in the world, is undertaking an energy revolution that will dramatically transform its economy’s energy sector. The newly re-engineered economy will no longer receive its energy from nuclear powered stations as all nuclear power plants in Germany are being closed down. Renewable energy sources, including wind and solar power, will instead fill Germany’s energy gap. Will this move jeopardize Germany’s economy and how does this energy revolution affect Germany’s relationship with other countries?
Despite already being a large investor in Southeast Asia, Japan is looking to increase its economic ties with countries in this region. To address economic as well as security issues, Japan’s recently elected Prime Minister Shinzo Abe is currently visiting countries in this region. China, as of late, has increased its presence in Southeast Asia both commercially and militarily and Japan is intent on remaining competitive in this region.
The flash of Dubai has captivated the world for the past decade. But thoughts of skyscrapers built on sand with borrowed cash rather than a concrete future has been incepted into the minds of the world. The opulent structures have created a city within a city – an oasis surrounded by relative poverty. Consequences of such lifestyles and myopic philosophies are not latent in nature; they may be apparent tomorrow, next year, and even for the next generation. While the world outlook for 2013 is positive in many ways, it would be arrogant to assume all liabilities will be paid by the end of this year.
With the 2014 deadline set for the withdrawal of U.S. troops from Afghanistan, franchising consultants are starting to turn their attention toward the prospective market. Besides fast-food chains, there are not many American franchises in Afghanistan, but that may soon change as RadioShack begins to establish ties in the region. Other franchises are following suit, despite depressing property values, capital flight, and other economic woes. The promise among tech-savvy Afghan businessmen may facilitate economic growth, stability, and employment in the suffering region.
Mexico has reached a tipping point; it is no longer the poor nation it once was a generation ago. But, it also has a long way to becoming rich. The nation’s economy is the 13th largest in the world, but many experts claim that Mexico has been running under the radar in respect to a strong business investment for many international business investors.
As globalization has emerged and evolved into one of the leading factors driving business decisions today, certain countries and economies have been profiled for their seemingly important role in this new age. India is seen as one of those stars in the age of globalization but recent setbacks may warrant a second look. With anemic growth in the United States economy and the European Union with its whole host of problems some economic consequences for India seem legitimate. However, with the missteps that India businesses have taken, both at home and abroad, the business practices of the country must be questioned.
Many analysts anticipated the growing possibility of the 3rd largest economy falling into recession in the short future and the time has now come. The analysts expect that Japan will stay in recession in the final quarter of the year due to sluggish trade to China, a strong yen, and the effects of the tsunami that ravished the country over a year ago.
Official data on Monday morning showed Japans economy contracted during the second quarter this year by .03% and then by another .09% between July and September. The increasing contraction trend of the economy is putting more pressure on the government and Bank of Japan to take more steps to boost the economy.
In today’s interconnected and globalized world, receiving investments from abroad is a major factor contributing to economic growth for countries all across the world. Spain has recognized the importance of international business and foreign investment by implementing strategies to change the flow of investment. In the late 1990s, many Spanish companies began investing in Latin America and also started a vast amount of business operations there. Now, Spain is looking for investments to flow in the complete opposite direction.
While tourism to the culturally prominent cities of Casablanca and Rabat is increasing, Morocco’s aggregate economy is slowing. Recently, the King Mohammed VI of Morocco staged a week-long tour of the Arabian Gulf to rally support as the European-dependent economy falters in the wake of the global crisis. Morocco has strong relations with the Arabian Gulf nations stemming from centuries old historical, religious, even and linguistic ties, while Rabat and Casablanca (and other major cities) have been largely influenced by Europe, particularly Spain and France.
Without government involvement, Indonesia is experiencing good times with one of the highest economic growth rates in the world. Needless to say, things could have been even better if the government provided assistance to help the economy and take Southeast Asia’s largest economy to a whole new level. It has been estimated that if Indonesia made certain changes to its economy, each citizen would be more than forty percent wealthier by 2030. Also by this time, if it has the right reforms and remains on this path, it would be the world’s sixth largest economy. The main areas of renovation would be the outdated infrastructure along with the increase in bureaucrats.
Economic growth is a desire held by many nations around the world. But before a country achieves this goal, it must have the proper infrastructure in place to foster economic growth. The country of Bangladesh is a great example of this thought. Can you imagine having to wait three or more hours to cross a river? This is exactly what people in Bangladesh must do each day in order to enter the under-developed southern region of the country. The river separating the country is called the Ganges, known locally as the river Padma. Having a bridge over the Padma river has been a dream of Bangladeshis for decades and that dream may finally become reality.
China is currently in an economic slowdown, the causes of which are a great debate in Asia’s largest economy. China, the world’s second largest economy behind the United States, expanded 7.6 % in the second quarter from a year earlier, the slowest pace since 2009. While a growth rate above 7% might seem thriving at first glance, you must first consider that China has had an average annual growth rate of nearly 15% since 2000. Many economists believe that their growth will slow further to a rate of around 7.0% for 2012. Is the economy of the most populous nation in the world in trouble?
The changing global climate has become increasingly more difficult to ignore due to climbing air and water temperatures, rising sea levels, and melting of polar snow and ice. Recent reports have stated that the area of ice in the arctic has never been smaller, which has recently caught the attention of Asian economists. The opening of the Arctic north promises new trade routes, untapped reserves of oil, and an abundance of minerals to discover.
While most news headlines involving Mexico revolve around drug cartels, illegal immigration, and law enforcement, economists are noticing a new story south of the border. Trade between the United States and Mexico has been surging recently, including a 17 percent increase to a record level of $461 billion (USD) in 2011. Mexico is currently competing with China for the title of America's second-largest trading partner following Canada, and the Mexican economy became the top investment destination for the aerospace industry this year. Mexico's middle class, which is quickly growing to be the country's majority, has been responsible for much of the trade with the U.S. since they are buying record levels of American goods.
While the rest of the world scrambles to overcome the current global recession, the Philippines has been experiencing record levels of economic growth. The island country has benefited greatly from increases in government efficiency, as well as a crack down on political corruption. The gross domestic product of the Philippines has grown 6.4 percent in the first quarter, which surpasses the performances of all other neighboring economies except China, and its currency, the peso, has reached record heights in the past four years when compared to the dollar. As a sign of the country's unprecedented economic progression, the Philippines has pledged $1 billion (USD) of its $70 billion in reserves to the International Monetary Fund to aid the European Union, which is the same fund that rescued the country in the 1980s.
Over a year after the Fukushima nuclear disaster, the future of nuclear energy in Japan is in jeopardy. On March 11, 2011 an earthquake off the Eastern coast of Japan triggered a tsunami that killed nearly 20,000 people, devastated many towns along the Eastern coast, and severely damaged the Fukushima Daiichi nuclear reactors. The damage to the reactors led to a significant release of radioactive chemicals, and a mass evacuation of the surrounding area was conducted. Now, Japan is intent on cutting back and possibly even eliminating nuclear power productions, and the economic repercussions of such a transition are coming to fruition.
For a country that has a deep and prosperous mining heritage, Australia was shocked by the latest report from its Resources Minister Martin Ferguson: the resource boom, one of the largest engines in Australia's economy, was over. The statement came following BHP Billiton's announcement that there has been a 35% dip in profits and postponed plans to expand the nation's Olympic Dam mine. There have also been considerable concerns in the country that the weak global economy might also decrease the demand for coal, metal ores, and other commodities. For foreign investors and Australian economists alike, a slowdown in the prosperous mining sector will surely leave a noticeable dent in Australia's economic growth.
For the first time in 25 years, the World Bank is considering sending financial aid to Burma. Following Burma's recent political and financial reforms, sanctions have been repealed against the nation in an effort to bring Burma back into the international community. Following this trend, the World Bank is preparing up to $85 million in grants to give to Burma for community-driven development programs. According to World Bank group president Jim Yong Kim, these grants are intended to build confidence in Burma's reform process, help in the World Bank's mission of eradicating poverty, and help to restructure Burma's current debt $397 million.
With bountiful natural resource and an extremely small population to support, Mongolia is becoming an independently powerful economic powerhouse. With $5 billion pumped into the economy in 2011 fueling a stunning 17% increase in the country’s GDP, Mongolia has become the world’s fastest growing economy.
Landlocked between Russia and China can be both a blessing and a curse in international trade. The former has supplied all of Mongolia’s oil needs and the latter receives 90% of Mongolia’s exports. Both are wooing the country so they may become the dominant force in developing the country’s natural resource. However, with other nations pouring in, they might not be as successful in having too much leverage.
Dubai was always seen as the future and had unimaginable developments throughout the emirate. After tough economic times Dubai had temporarily stopped many of its large glamorous projects. Why is it then that Nigeria has invested US$52.2 million into the emirate’s property market in the first six months of this year? Without ever stepping out of Dubai airport Central Bank of Nigeria official, Osita Nwanisobi, was convinced to buy a flat in Dubai. He believes Dubai is a guaranteed return on investment and sees it as a world center.
Leaders from Somalia and Somaliland, the unrecognized sovereign region of Somalia, had their first formal conference in London to discuss the future of an internationally recognized sovereign state of Somaliland. Since declaring independence in 1991, the northern region has been relatively peaceful with orderly civilian and political movement whereas the rest of Somalia has been overflowing with conflict. The government of Somaliland, having sought internationally assistance for gaining a stronger legal, economic, and security base, have agreed to continue cooperations with Somalia for squashing the terrorism, violence, famine that plagues much of the region while the negotiations take place.
Spain’s Labor Ministry recently reported that the number of people filing for unemployment benefits fell by 0.63% since May. While this might seem like good news, it is not. An estimated 30,113 people have simply stopped trying to find a job. The country’s unemployment rate of 24.3% is the highest in Europe. A new conservative government is trying to battle the rough economic times by employing a variety of labor market reforms. Some of the legislature has included a reduction in severance pay and the banning of increases in salary to match inflation. Spain's new measures for reducing the unemployment rate and debt levels are highly unpopular with unions.
The economy in Thailand has rebounded following the destructive floods of 2011. One of the worst monsoon seasons in decades killed hundreds of people, caused billions of dollars in property damage, and shut down much of the nation’s manufacturing capabilities. The floods were very harmful to the economy, however, the nation has recovered dramatically and is in a very good position for continued growth.
The rolling tides of economic woes have slammed the shores of Jamaica. The island nation’s unemployment rate has risen above 12% while its debt-to-GDP ratio is at a staggering 130% - not far behind Greece. Discussion has started with the International Monetary Fund for a significant amount of debt relief.
This will not be the first time the international financial institution has come to Jamaica’s aid for in 2010, the country received $1.27 billion. Prime Minister Portia Simpson-Miller of the People’s National Party, who stepped into office early January 2012, has yet to implement many of her social and economic policies (one of which includes finalizing negotiations for financial aid with the IMF). Other hot topics of Jamaica’s political discussion are tax and pension reform and reducing wages for government workers.
Despite stories of economic struggles scattered around Europe, there is some bright news from the United Kingdom. According to financial data, the United Kingdom maintained its 16-month recovery in the construction sector. Strong orders for new building projects and a rise in employment in April have helped sustain construction recovery as well as economic growth. The main demand for this boost of construction output has come from commercial building and civil engineering during the spring months and is expected to be carried forward into the summer. Another major cause of this growth is probably not a surprise to anyone—the 2012 Summer Olympics.
U.S. billionaire investor Sheldon Adelson has plans to open a £17 billion hotel and casino resort in Spain. The resort, being called “EuroVegas", would contain 12 hotels, six casinos, a concert hall, several theaters, and golf courses. It would be about half the size of the Las Vegas Strip in the United States. If plans for the resort follow through, it would be a huge stimulus to the Spanish economy.
Ten years have passed since the end of Angola’s civil war and the country has made enormous strides in rebuilding its once struggling economy. This year Angola’s economy is expected grow by eight percent as it becomes the second biggest producer of oil in Africa. One of the main effects of this rapid economic growth is the boom in infrastructure development. In the capital city of Luanda, the skyline is now filled with newly-built skyscrapers and each month more businesses are beginning to populate the area. Economic growth is beginning to transform Angola into a country filled with business opportunities, but how does Angola expect to sustain this economic growth in the years to come?
As discussed in yesterday’s introduction post, different cultures have very unique ways of doing business; from business dress, to conducting meetings, to even the customs surrounding deal-making. Each nation takes a unique approach to how many holidays they observe; this is a reflection of their distinctive culture and can affect their economy and business environment. In today’s fast-paced, ever-changing work environment, each day off means less output which in turn reflects potentially lost money. Days off are important for worker’s mental and physical health, but there needs to be a balance between productivity and a conducive work environment. The amount of bank holidays that a nation celebrates could be impacting the economy more than you think.
As Cambodia furthers itself from the tumultuous ‘70s, ‘80s, and ‘90s, topics such as economic development and tourism are receiving more and more attention. Developers in Cambodia believe that building casino resorts will be highly beneficial for tourism and the economy alike. Currently, there are 25 casinos in Cambodia, but many of these are small and cater primarily to hard-core gamblers in the surrounding area. Gambling in Southeast Asia is growing rapidly and Cambodia is seeking to capitalize on this, in hopes of increasing tourism and foreign investment.
Following a summit in New Delhi on March 29, 2012, the BRICS countries (Brazil, Russia, India, China, and South Africa) announced the proposal for a shared development bank. The idea is that this BRICS bank would provide an alternative to the U.S.-dominated World Bank and even have the ability to protect the developing world from financial problems originating in wealthier nations. Only a day after the summit in New Delhi, president of the World Bank Robert Zoellick said that the World Bank is interested in partnering with the BRICS bank and would be willing to share knowledge regarding global operations with the new bank.
Indonesia’s economy grew by 6.5% in 2011, marking the highest percentage in over a decade. This GDP growth, however, is not unprecedented because in seven of the last eight years Indonesia’s GDP has grown by more than 5%. In the last couple of years, corporations and investors have begun to compare Indonesia’s economic growth potential with the likes of India and China. Strong growth and political stability are two of the main reasons why corporations and investors share this confidence.
Last month, Hong Kong was reported to be the world’s most developed financial market by the World Economic Forum, an independent international organization. The responsive business environment and financial stability most industries found in this special administrative region of China, along with its efficiency, size of banking, and other financial services catapulted Hong Kong to the top, surpassing the United States, the United Kingdom, and Singapore. The rise of Hong Kong has been attributed to non-banking services, like IPOs and insurance, which offer long-term yields rather than the shortsighted investments that Western financial markets tend to favor.
The German Federal Statistical Office has recently released estimates stating that the nation’s economy grew by approximately 3 percent last year. While this is a very impressive figure in today’s uncertain global economy, official data shows that the growth came mostly in the first half of 2011. Alarmingly, the office estimates that the German economy actually contracted by approximately .25% in the fourth quarter of 2011. Stress from the European Sovereign Debt Crisis and a slowdown in the global economy are weighing heavily on the nation.
With large amounts of minerals and natural resources, the South American country of Brazil has received large amounts of attention as it economy continues to expand at a rather rapid pace. In 2010, the Brazil economy grew by a large 7.5 percent and has been named one of the key “BRIC” economies of the world along with Russia, India, and China. Brazil’s economic growth has far outpaced the United States and has also positioned Brazil as the world’s sixth-largest economy, just passing the United Kingdom’s economy this last year.
In the business world, sports may be best recognized for the many benefits they offer to individual businesses such as sponsorships, brand building, venues for advertisement, and marketing opportunities. However, sports also have major impacts on economies all around the world. It’s no surprise that international sporting events like the World Cup and the Olympics greatly affect the economies of host countries. These economic effects can be positive or negative and can have implications not only on a regional level but a global level as well.
While many countries look to drive their economies by increasing trade and consumer spending, South Korea is looking in another direction. Renewable energy sources and projects are being used to boost business and promote economic growth in South Korea. The term “Green Growth” has been coined by the country and has become a major national strategy. This strategy has given rise to a vast range of policies regarding waste-management and air-quality control. However, South Korea’s main focus lies within renewable energy technologies with the mission not only to lower greenhouse gas emissions but to also boost the economy.
Lately, global news has been dominated by the European debt crisis. This news has been predominately negative and I personally have been looking forward to hearing something positive for a change. Ireland has recently been experiencing moderate economic growth and the budget deficit has since been declining. Germany and France have commended Ireland for making economic strides, and believe that this nation is not far from being out of the crisis.
The United States-Colombia free trade agreement approved just a few months ago has helped business growth in Colombia and is expected to continue to help boost Colombia’s economy. The main benefit from the free trade agreement is often seen as attractive conditions for increased exports and imports. However, some companies in Colombia see the main benefit coming from the growth of demand that the free trade agreement will likely generate. Besides these major benefits, there are also many other positives for business in Colombia derived from the newly passed free trade agreement.
The Association of South East Asian Nations (ASEAN) recently endorsed Burma to become the leader of the regional trade bloc beginning in 2014. This is a major milestone for the country, revitalized by a new civilian government that assumed power from a militaristic rule early in 2011. Economic growth in the nation has suffered in the past, due to inefficient government policies, corruption, and wide-spread poverty. However, since the new government came into power, there have been numerous reforms in order to promote economic growth within Burma.
With Turkey’s location serving as a natural bridge between Asia and Europe, it’s no surprise that Turkey plays an important role in international trade. In fact, this is one of the key reasons why Turkey’s emerging economy is having major impacts on the region and international business. However, this is not the only reason why Turkey is becoming a regional power in today’s business world. The emergence of Turkey has been a positive development for a number of reasons and Turkey is looking to capitalize on this success by striving for continued economic growth.
The Dominican Republic is usually known as the country leading the tourism industry of Latin America. However, that’s not necessarily the entire picture as the Dominican Republic is increasingly boosting its other sectors such as mining, finance, telecommunications, and infrastructure. Foreign direct investment flowing into the country allows this growth to be sustainable and continue into the future. There are many business factors that provided the foundation for the Dominican Republic’s growth in these various sectors.
Germany and Vietnam recently expanded their economic ties by signing financial cooperation and partnership pacts. Last year bilateral trade exceeded 5 billion dollars between these two countries and Germany was Vietnam’s largest trade partner in the European Union. These countries are not only looking to increase trade, but also to create welcoming working conditions for businesses in each other's country. This partnership aims to benefit both parties in ways far beyond just trade.
While most economies in the European Union are slowing down, Estonia is going in the complete opposite direction. Estonia currently has the fastest economic growth rate in the European Union with a solid eight percent growth rate in the first quarter of 2011. Joining the European Union in 2004, Estonia has come a long way to establish itself as a prominent economic force in Europe. The country experienced some hindrances along the way but has overcome these obstacles while continuing to grow economically. There are many reasons and key business factors that account for this positive growth rate in Estonia.
The past several years, the economy in Morocco has been characterized by macroeconomic stability and low inflation. However, the country has been faced with high unemployment and its task in recent years has been to accelerate growth in order to create more jobs.
Morocco's initiatives for developing entrepreneurship put stress on improving the literacy rate and encouraging women to enter the business field. In the past decade there have been numerous literacy programs, targeting mostly women, the largest one being "Massirat Nour". The government sees education as the tool to decrease poverty. The larger goal is to diversify the economy so that it is not as agriculture focused and make the country more attractive to foreign investors.
Products by large companies such as Samsung and Hyundai are crucial to keeping South Korea’s economy afloat however the country’s small and medium-sized businesses may be even more important. These smaller businesses provide more than 80 percent of the country’s jobs but are beginning to feel the pressure from Korea’s big conglomerates. The number of smaller firms competing in various sectors has been reduced to just a handful because of the difficulties of earning a profit in the face of big company demands. This is not the only concern for small-businesses in South Korea.
When looking at economic indicators in Uruguay, government officials and businessmen have much to cheer about. In 2010, the economy grew by 8.5 percent giving Uruguay the fourth-highest increase in Latin America. This growth is predicted to continue as officials estimate a growth rate of 5 to 6 percent this year. Some predict the GDP growth rate to be even higher as both domestic and external demand continues to climb at a very healthy pace. There are many reasons that account for the positive growth rate of Uruguay.
Most people think of China or Japan as the most prominent auto manufactures in Asia. That has certainly been the case for the past years but now the country of India is becoming a major manufacturing hub for the continent. Nissan’s Indian factory is less than a year old and covers 600 acres making it one of the company’s largest plants worldwide. Nissan is just one of the many major Asian auto companies that have set up manufacturing hubs in India.
A new report by KPMG is claiming that the clean technology sector is a strong force in the economy of several Canadian provinces, including British Columbia. The report says that clean tech firms will directly generate over $2.5 billion for the economy in 2011, not including other economic benefits created by these companies. This is a 57% increase from 2008. The growth is not expected to slow either; KPMG has stated that the sector will grow 16.5% to 8,400 employees in 2011.
After a strong recovery last year, local and foreign investors are optimistic about growth and investment opportunities in Mexico. The strong recovery in 2010 was fueled by the increase of exports and tourism as well as growth in the mining industry. These factors helped produce an economic growth of 5.5 percent. This was the best result Mexico has experienced over the past decade. Mexico looks to continue this economic growth trend and the good news is 2011 seems to be shaping up just as well.
It’s hard to believe two and a half years after a global financial crisis that economies around the world can recover to pre-crisis levels. However, that is exactly where the economies of Central European countries find themselves. Countries in Central Europe have shown remarkable resilience to recover at a rather quick pace. Estonia and Slovakia are swiftly moving ahead with estimated growth rates of nearly 4 percent this year. But perhaps the most important piece in Central Europe’s recovery lies in the country of Poland.
Since the Euro was introduced by the European Central Bank in 1999, Germany has gained competitiveness against not only other developed countries around the globe, but also against all other members of the Eurozone. In this time, they have also managed to transform a slight budget deficit into a strong surplus. A lot of people are starting to wonder what caused this rapid transformation?
With the recent concerns in Japan over nuclear power hazards, many around the world are questioning the use of nuclear energy. Some ask if the benefits outweigh the costs while others just question the precautions necessary when using nuclear energy. Of the questions asked, Germany has an answer. Don't use nuclear energy at all.
Across the world there are many emerging economies that provide excellent opportunities for businesses looking to invest in these countries. In the Middle East, there is one emerging economy that is of particular importance. The country of Turkey has the largest economy in the region and is in the process of accomplishing a major milestone. Soon, Turkey will enter the group of $1 trillion economies and with this major economic growth, Turkey is certainly considered a significant emerging economy.
Oil is quite possibly the single most important commodity in the modern world economy. Those countries with abundant sources of the valuable substance are in a strong position to trade with producers around the world who cannot do business without it. CNBC has put together a list of the top fifteen countries in terms of confirmed oil reserves. The ramifications of this list are much greater than they may initially seem.
Valuable copper, gold, and coal deposits enticed international investors to put $1.4 billion into the Mongolian economy in 2010. As production in China expands, Mongolia is well positioned geographically to capitalize on demand for raw materials. Although small in terms of population, Mongolia saw its national currency (the tugrik) outperform any other global monetary unit over the last year. Will this upward trend continue, or will Mongolia fail to capitalize on a promising opportunity for economic growth?
As the benefits of international trade increase, many countries search around the globe for reliable markets that provide vast opportunities for exports and foreign investments. Over the past years, Latin America has proven to be a very important and dependable market for U.S. exporters.
After 42 years as the world’s second biggest economy, Japan officially fell behind neighboring China in 2010. Many projections indicate that China will go on to surpass the United States as the world’s largest economy by the year 2025.
It is hardly surprising that the world’s most populated country would pass its tenth largest. Japan maintains a significant lead on China when population is accounted for in per-capita measures of wealth. Regardless, this does draw attention to recent economic struggles in Japan. Several indicators of the nation’s economic well-being have recently fallen and Standard & Poor’s went as far as to downgrade the Japanese credit rating from AA to AA-.
In 2001, global economist Jim O’Neill labeled Brazil, Russia, India, and China as the premier emerging markets of the world with enormous economic potential. The mainstream BRIC acronym was applied to these countries and the hype surrounding these countries was well deserved. Over the past decade, the countries have contributed to over a third of world GDP growth. Recently, Jim O’Neill named the next tier of large emerging economies using the term MIST – or Mexico, Indonesia, South Korea, and Turkey.
Today, immigration is often regarded as an economic threat because jobs are believed to be stolen by immigrants. However, a recent study published by the National Bureau of Economic Research contradicts this popular bias. The results of the study indicate that immigration encourages business activity and produces more jobs for a country’s economy. You may be asking yourself: “How can immigrants competing with domestic labor for jobs, actually create more jobs?” There are several reasons which help answer this question.
So how exactly to you advance from a frontier market to an emerging market? Some people classify frontier markets as a subset of emerging markets, but there is a clear distinction. We’ve talked in previous posts about systematic risk and political instability as huge factors to impeding growth. Once a country can overcome many of these risks, and grow a more stable infrastructure, it is well on its way to becoming a developed economy.
Japan has received good news. There are now more optimists among Japanese manufacturers for the first time since 2008. Japan has the world’s second largest economy, and things are starting to look up as the country has struggled in past years to overcome its financial slump. One of Japan’s key banks released a report which showed that business manufacturers are improving for the fifth straight quarter, as exports such as gadgets, cars, and other goods are on the rise. The number of businesses reporting that conditions are good is higher than those reporting unfavorable situations, allowing Japan to look forward to future growth.
When a natural disaster hits a country, the negative affects are quite obvious. The number of deaths is always devastating, along with the destruction of the land. Luckily, the number of casualties associated with natural disasters has dropped significantly in the past few decades. On the other hand, the cost of natural disasters is continuing to rise. They can have an enormous effect on the country’s GDP and economic growth. Natural disasters have been proven to drop a country’s GDP significantly.
A recent story by BusinessWeek describes the value of a country focusing on the education of its female populace.
Some interesting statistics:
- When a girl in the developing world receives seven or more years of education, she marries four years later, on average, and has 2.2 fewer children.
- An extra year in primary school statistically boosts girls' future wages by 10% to 20%, and every additional year a girl spends in secondary school lifts her income by 15% to 25%. The size of a country's economy is in no small part determined by the educational attainment and skill sets of its girls.
- Young women have a 90% probability of investing their earned income back into their families, while the likelihood of men doing the same is only 30% to 40%.
- A girl's school attainment is linked to her own health and well-being, as well as reduced death rates: For every additional year of schooling, a mother's mortality is significantly reduced, and the infant mortality rate of her children declines by 5% to 10%.
As the economy continues to recede, many people are starting to think about their futures more seriously. The unemployment rate in the U.S. is at 6.7% and we are facing the worst job market in the past 15 years. Fortunately, there are still some industries with hiring potential.