globalEDGE Blog - Page 114

Global economic growth has been held back in recent times and many factors play into this; however, political uncertainty has been at the forefront. Unpredictable political outcomes, such as the general election season in the world, instability in the Middle East, the Brexit, and China’s leadership reshuffle, have created considerable doubt and uncertainty in global markets.

With the economic struggles of many emerging markets, Indonesia has been one of the few bright spots. The economy is expected to meet expectations and grow 5% this year, the fourth highest rate among emerging markets. The fact that Indonesia has been able to keep its economy growing is impressive, especially with the many outside factors that have significantly impacted other emerging markets.

The economic impact of natural disasters can be witnessed on a global scale. These disasters often set in motion a variety of chain reactions, negatively impacting and in some cases decimating sectors of the global economy. "In 2014, 72 percent of global losses classified as "disasters" were caused by extreme weather events: hailstorms in Europe, drought and severe winter weather in the U.S., hurricane damage in Mexico to typhoon damage in the Philippines, and disastrous flooding in the U.K., India, Pakistan, and Afghanistan." 

These are some of the most infamous natural disasters with respect to their economic repercussions:

Earlier this month on October 5th, Brazil’s congress approved the key points of a polarizing bill, which would allow foreign investment in the nation's offshore oil fields. The bill overturns parts of a 2010 bill which was aimed at increasing government control over the lucrative oil fields. This law mandated that the state-run oil company, Petrobras, be the lead operator and hold a minimum of a 30% stake in any offshore drilling operations in so-called “pre-salt” fields.

The Paris Agreement focusing on the reduction of emissions and overall achievement of climate neutrality has initiated efforts to reduce carbon emissions throughout the aviation industry. Airlines are one of the major emitters of carbon dioxide, and air travel is forecast to double by 2030. However, aviation had not been included in the agreement until now. 

Second Shift captures the dynamic, collaborative management model that essentially saved a U.S. manufacturing city - Lansing, Michigan. The "Second Shift Model" has now been codified in a book and a documentary.

When car-making giant General Motors decided to close its plant in Lansing, Michigan, in 1996, one person – the city’s newly elected mayor, David Hollister – stood up and said “no.” Hollister’s “no” began a five-year competitive, collaborative, strategically intricate process to keep GM in town.

In efforts to dominating the global mining industry, Canada has made tremendous attempts to promote mining overseas. With increased international mining initiatives, many Canadian corporations have been fueling their resources to expand globally. According to the Huffington Post, “Ontario-based Carube Copper said it acquired ‘over 500 square kilometers of the most prospective ground in Jamaica based on historic showings.’” 

Nigeria is currently in a recession after unpegging from the U.S. dollar, and the decreased dollar supply has reduced output and created obstacles for companies to pay their debts. A challenge that Nigeria is trying to overcome is the lack of investment in infrastructure during the oil boom years which would have allowed for more sustainable growth.

A stated goal of Singapore’s Ministry of Trade and Industry is to increase trade relations with the countries in Africa, which currently make up only 1.5% of the country’s total international trade. The continent’s economic potential and recent investments by other Asian nations has led Singapore to explore an expansion of trade, with an initial focus on free trade agreements. Singapore currently has very few agreements with any African nations, but in August, the country was able to work out small agreements with Nigeria, Ethiopia, and Mozambique.

After the Brexit, the pound fell immensely, by 8.4% in one day, to its lowest since 1985, which was the biggest one day fall on record.  Since the morning of the referendum result, the pound has deprecated by around 11% against the dollar without any large fluctuations in the last two months. The depreciation of the pound could be seen as a double-edged sword. It caused a significant boost in exports in several industries in the United Kingdom due to British prices becoming relatively lower for the world, but prices of imported goods, such as raw materials, have and will continue to rise.