globalEDGE Blog Archive February 2017

When more Unites States airlines began to hold direct commercial flights to Cuba, many began to hope that increased tourism would bring more money into Cuba. However, the shortage of basic goods has not improved as tourism increased in the country, as the citizens are now competing with tourists for the scarce food available.

Are you interested in seeing how countries compare based on corruption, global connectedness, ease of doing business, and other key indicators?  Our newly updated country indices pages will allow you to do just that. Each country’s page lists a number of indices that display its score for a given index and its ranking relative to other countries. By clicking "View Heat Map", you can also see how countries compare on a visual heat map and table of scores. Check out Australia's page to see the updates made to the design and indices data!

The rapid growth in the fintech industry is revolutionizing the financial industry, forcing traditional banks and new startups to become more technologically advanced. Customer behavior is an area that has a lot of potential for financial institutions to gain insights through data analytics. Data analytics would allow banks and other institutions to have agile systems that learn through experience, where they would automatically refine the algorithms to improve results.

The Stockholm International Peace Research Institute (SIPRI) is an independent organization that conducts research on global security. More specifically SIPRI collects data on military expenditures and the international arms trade. SIPRI released their latest data for 2016, this Monday, February 21st.

The headline of their latest data release is that global arms trade volume has reached its highest point since the end of the Cold War in 1990. While the overall global uptick is intriguing in its own right, there are also several interesting trends at both the region and country level.

The United Kingdom recently announced that they could be leaping into space by 2020. Up until now, the UK has been dependent on countries such as the United States, India and Japan to help launch their satellites. However, the British have just announced a proposal, the Spaceflight Bill, which contains information on the establishment and operation of spaceports across the United Kingdom. This proposal is estimated to be worth over 30 billion dollars in the next 20 years, which will open up ample opportunities for British scientists to explore the possibilities of antibiotic and vaccine creation in a zero-gravity environment.  

Since 2006 the rate at which beehives die has jumped from 5-10% a year to about 30%. In the United States roughly 10 million beehives, worth an estimated $2 billion, died from 2006-2015. These statistics become even more alarming when you realize how important bees are to the world’s economy. Bees have been identified by a United Nations Environment Programme report as the most economically important pollinators in the majority of the world’s regions. There are 100 crop species that provide 90% of the world’s food. 71 of these crop species are pollinated by bees. Almonds, pumpkins, and cucumbers are almost entirely dependent on bees for pollination. California produces 82% of all the almonds in the world. About 70% of the almonds California produces are exported to other countries, coming out to over $2.5 billion in revenue for California. The production of almonds in California would become nearly impossible without the presence of bees.

The European Commission recently adjusted their forecast for the economic growth of the United Kingdom for 2017. Although the U.K. is expected to slow its economic growth relative to the previous year, the Commission now anticipates an annual growth of 1.5% in 2017; up from their previous prediction of 1.0%. The European Commission still expects an annual growth of 1.2% by 2018, which would still remain far below their 2% growth in 2016. This decrease in economic growth could be a response to both rising prices and the uncertainty of Britain’s future ties with the European Union.

Agriculture has been, and always will be, a crucial part of our existence. This industry is continually evolving; in the past, improvements consisted of machinery becoming more effective, or incorporating animals into the seeding and harvesting process. Today, technology is playing the biggest part in how we grow our food. In 1900, around 41% of America's labor force was employed through the agriculture industry alone. Today, due to countless technological advances, the proportion is now below 2%.

Over the past few decades, the global agriculture industry has been forced to adjust to sweeping societal changes, including booming population growth, increasing urbanization, decreasing rural populations, and a steep decline in the number of farmers. The industry has been able to shift in certain ways in order to face these challenges—technological incorporation, increased production efficiency, and a focus on mass industrial output. However, the escalating symptoms of climate change are impacting agriculture on a much more devastating scale. Crop harvesting, fertilization, irrigation, and food production are all hit by the effects of climate change, affecting the living standards of populations the world over.

There are a wide variety of successes and shortcomings currently taking place within the Latin American agriculture industry. President Michel Temer of Brazil and President Mauricio Macri of Argentina met last week to discuss the status of sugar in the Mercosur trade bloc. Mercosur includes countries such as Uruguay, Paraguay, and Venezuela, and currently, sugar is not included on the list of goods that are subject to free trade in the trade bloc. Farmers in Argentina fear that if current levies are withdrawn, there will be a downpour of cheaper Brazilian sugar into the country. Brazil is the world’s largest producer and exporter of sugar due to its favorable conditions for cane cultivation, which gives Argentina a good reason to be concerned. However, Agriculture Minister Blairo Maggi stated that Brazil would try to include sugar in the negotiations between Mercosur and the European Union. Read more about current events in Latin America’s agriculture giants below.

After a long period of droughts in Zimbabwe, persistent rains in the region renewed hope for farmers across South Africa that food shortages might finally let up. A lengthy drought seemed to be the worst of the agricultural industry's problem, but a new pest has taken over those fears and multiplied them. An outbreak of armyworms in countries like Zimbabwe, Zambia, and Malawi threaten the crop yield for the coming year.

This week, the globalEDGE blog will be taking a look at the global agriculture industry and its relevance to the international business world. In the following four days, we will look at current stories pertaining to the industry, including a look at Latin America and South Africa, along with how climate change is impacting farmers. On Friday, we will look toward the future, at how new techniques and technologies might improve the economic environment of the industry.

Dr. Tomas Hult, professor of marketing and Byington Endowed Chair at Michigan State University’s Broad College of Business, as well as Director of MSU’s International Business Center, was recently recognized for his outstanding research. Dr. Hult co-authored four articles for the Journal of Marketing last year, the biggest single-year contribution by any expert in the journal’s history. Read more by clicking the link below.

http://broad.msu.edu/2017/02/10/faculty-spotlight-international-innovator/

Indonesia is a country where over 50% of the population is under the age of 30. It is a country where the GDP has maintained an annual growth rate of 5% - despite “regulatory slowdowns” that many on the ground here believe could add 2-3% to that figure. And it is a country where hiring an immigration services facilitator to obtain an entry visa and clear customs is advisable, lest the traveler incur their own “regulatory slowdown.”

The word refugees has been thrown around quite often recently due to the several ongoing situations across the world. There is no doubt that the impact of the inflow of refugees into a country is very controversial. They have been welcomed by some and rejected by some. Some look toward the benefits and some look at the disadvantages of allowing in refugees.

In recent years, the demand of expatriates has shifted from Westerners to expats from Asia. Many corporations in the West would send their employees to different countries for a short period of time to gain experience and transfer knowledge to their companies. However, companies in Asia are drawing attention due to their global economic success, resulting in an Eastern shift for expats.

The 2015 Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal, was a global agreement that curtailed multinational sanctions on Iran with the promise that Iran would cut back on its uranium enrichment. Several nations have doubted Iran's full commitment to the deal, especially with news of the recent missile test; nonetheless, the JCPOA has held firm thus far. Helped by the sanctions relief, Iran has now taken a large step in revitalizing its position within the global marketplace. The country has started building 12 new oil refineries, hoping to increase its overall output to at least 4 billion barrels a day by the end of March. Unaffected by the OPEC supply cuts negotiated last November, Iran hopes to massively expand its lagging energy industry, a sector that was particularly hit hard by pre-deal sanctions.

On Thursday, United Kingdom consumer goods company Reckitt Benckiser placed a bid on Asian firm Mead Johnson for $16.7 billion. Mead Johnson is well known for producing various consumer products, including baby formula, a product with sales of $41 billion in 2014. Asia is currently the fastest-growing market for this product due to the repeal of China’s one-child policy in 2015. Couples can now have two children, after only one was permitted throughout the 36 year long rule. As a result, the birth rate last year was China’s highest in the past century, with the number of newborns rising by 7.9%, or 17.86 million.  

A year ago, the mood in Singapore, if not quite jubilant, was highly optimistic. There was palpable energy around both the Trans Pacific Partnership (TPP) and the ASEAN Economic Community (AEC). The mood today is marked by uncertainty.

In the United States this weekend, the country’s biggest event on television, the National Football League’s Super Bowl, will take place. The Super Bowl has become known not only for the play on the field, but also for the advertisements that accompany the television broadcast. For just 30 seconds of air time, a company must pay $5 million for their advertisement, an incredible price that is justified by the huge television audience and the Super Bowl’s unique focus on commercials. In today’s blog post, we will take a look at how and through what channels companies try to engage the general population.

On Monday, January 30th, Morocco was readmitted as a member state of the African Union (AU) following a summit at the AU’s headquarters in Addis Ababa, Ethiopia. Morocco had previously withdrew from the AU’s predecessor, the Organization for African Unity, in 1984 in protest of the organization's decision to allow the Sahrawi Arab Democratic Republic (SADR) membership. Morocco and the SADR, which is not officially recognized by the UN, have been in conflict over the Western Sahara region since 1975 when Spain withdrew its colonial power. Morocco’s readmittance will likely have significant geopolitical ramifications in the coming years. However, placing the politics to the side, Morocco joining the AU will also have significant economic effects.

Greece has been in a state of economic uncertainty and crippling levels of debt since the 2008 financial crisis. Recently though, it’s been estimated that the debt levels will skyrocket and result in Greece owing nearly triple its annual output. Save for any substantial debt relief, the IMF estimates an EU-headed aid program of 86 billion euros will be needed to temporarily keep Greece afloat.