globalEDGE Blog - By Tag: government

As we continue to witness and experience various shifts in the economy, many factors come into play that lead to global problems. These include climate change, natural disasters and country debt. However, Ireland is facing a rather unusual problem; they have more money than expected this year.

New president-elect Donald Trump has proposed several new policies, including one that involves establishing tariffs on countries around the world. However, many economists are worried about the subsequent impact on the United States and the global economy.

One of the largest companies in this sector, Google currently facing its second large antitrust trial, focusing on its ad tech. Google has dominated the search engine market. It is the largest search engine in all major markets, excluding China and Russia. While Google is the only company being looked at, the outcome of this trial could have significant effects on the whole industry.

Electric vehicles (EVs) are a hot topic in today's news. As the globe continues to battle climate change, the technology of electric vehicles shows promise to help build a more sustainable future. EVs are a thriving industry in this year's depressed market. What started as an electrified wagon in the 1890s is now an industry that offers a variety of models, from sedans to luxury cars.

In an increasingly digital world, it is no surprise that war strategies are also modernizing. While cyber warfare may sound like a futuristic idea, it is a reality that must face. The unfortunate conflict between Russia and Ukraine is currently proving the severe nature of these actions.

There is a new saying in the French Canadian province of Quebec: “No vax, pay tax.” Quebec plans to impose a “significant” healthcare tax on all unvaccinated residents, due to their health system deteriorating after the most recent surge of the COVID-19.

Previously known as “Little England”, Barbados has officially severed its ties from Queen Elizabeth II, Queen of the United Kingdom, and became a republic after nearly four centuries of monarchy rule. Sandra Mason was appointed by Queen Elizabeth and was sworn in as their first president, officially declaring a republic. Apart from declaring a republic, they still remain in the Commonwealth. Many aspects of the country's British ties and British culture still remain apparent on the island. For example, their education system, systems of government, architecture, and even a hospital named after Queen Elizabeth proves the presence of the monarchy’s rule in Barbados. After centuries of monarchal presence in Barbados, the question being raised is what the future of Barbados could entail.

As globalization continues, companies around the world are diversifying their supply chains and exploring outsourcing options. Expectations for supply chains are steadily increasing. The goal is for consumers to receive goods at lower prices and higher qualities in a timely manner. However, these are all contingent upon the political atmosphere. A company's supply chain in a particular country depends heavily on the restrictions on market access, transport and logistic services infrastructure, and the business environment.

As technology advances and connectivity increases, countries are closer to each other than ever. Economically, trade blocs have increased partnership among countries and encouraged production specialization. Politically, countries are moving towards a free market and competing for additional foreign investments. Recently, however, these trends seem to be going in a slightly different direction. Governments are encouraging more domestic investments and developments. A stronger sense of nationalism is developing while the term "globalization" now has a negative connotation to some audiences.

Brazil is the largest country in South America and the fifth largest country in the world. They have endured much financial and political hardship as a nation.  Just three years ago, Brazil's economy experienced 8 consecutive quarters of contraction. GDP declined 3.6% in 2015 and 3.8% in 2016. Recovering from their worst recession in a century, Brazilian citizens had to overcome corruption from thousands of politicians and business owners alike. Even the president was arrested and prosecuted for crimes of corruption

As a result of this, new controversial president Jair Bolsanaro was elected with high hopes for Brazil's economic future. President Bolsanaro has a plan to revitalize his nation through economic reform.

Specifically, he had three goals that he wants to reach to make a positive difference in Brazil. He wants to privatize government owned businesses that dominate the economy, he wants to cut taxes, and he wants to make trade deals that more closely align with the interests of Brazil. Eletrobras, Brazil's state owned electricity company, is currently scheduled to be partly sold to public investors by June 2019. He plans to increase the minimum annual salary to pay taxes from $6,000 to $30,000, and he plans to install a single 20% tax rate for all households. Finally, he hoped to mend fences with America to promote beneficial trade relations.

Just three months into his presidency, we haven't been able to see the results of Bolsanaro’s presidency. The outcome of this legislation will have a monumental effect on Brazil's presence in world relations in the future.

China has been the world's number one importer of waste for the past 20 years. However, in an effort to address their growing pollution problem, 2018 marked the year China would begin banning imported recyclable waste from other nations. This ban applies to 24 types of materials including plastics, unsorted paper, textiles, and scrap metal and is predicted to include 32 more types by the end of 2019. As a result, countries around the world are scrambling to figure out how and where to dispose of their piling waste.

If you were born in 1900, you were expected to live a mere 50 years. Today, the average global life expectancy is 72.8 years. The good news is that people are living longer. The bad news is that many of the resources necessary to care for the aging population are dwindling. Of all the demographic trends in the world today, preparing for and managing the implications of the aging population might be the most important. 

Companies often seek growth opportunities by acquiring a company or merging with one either within its borders or internationally. Successful M&As (mergers and acquisitions) have proven to be one of the most effective ways to increase a company’s sales and/or profitability. It is also a method to push competitors outside the picture and take a larger part of the pie. M&A’s face a long list of challenges when it comes to M&A, but one of the most significant obstacles companies face in the pre-deal stage is government intervention.

The United Kingdom's High Court has ruled that in order for the British government to trigger Article 50, it must receive approval from Parliament. In late June, the U.K. voted in a referendum 52% to 48% to leave the European Union, but does this ruling have the potential to discredit more than 30 million voters?

The International Monetary Fund recently released a report detailing how much corruption impacts governments worldwide. This report, titled “Corruption: Costs and Mitigating Strategies”, follows Managing Director Christine Lagarde’s warning to Ukraine in February that the IMF would halt its bailout unless stronger action to fight against corruption occurred. According to the report, corruption in the public services sector takes out an estimated $1.5 to 2 trillion each year from the global economy due to stunted bribes and costs, lost tax revenue, and sustained poverty.

After a tedious war that took a toll on its people, Chechnya remained under the control of Russia following its annexation. After a very close outcome on the 2012 referendum, Scotland remained a loyal entity of the Queen’s monarchy. While both attempts of secession were predictably unsuccessful, it seems Spain’s biggest problem isn’t going to be a gruesome war or rioting masses in the streets. If Cataluña is successful in efforts of secession from Spain, it’ll be out of the frying pan and into the fire for the Iberian democracy.

In India, electricity is not a commodity that is taken for granted by consumers. Power is so valuable to Indian citizens that inspectors from electricity companies have been brutally attacked so that they would not have to pay power bills. In addition to these attacks, some have even tampered with meters to lower readings just to dodge payments. The problem is so prevalent in India that Bloomberg estimates an annual loss of $17 billion in revenue due to electricity theft alone.

No one enjoys paying taxes. For many, the most grueling exercise when budgeting is seeing the amount deducted from one's paycheck by the government. For this reason, tax avoidance has been a business that is almost as old as taxes themselves. From personal to professional, tax avoidance has become a common practice across many cultures and seems to be here to stay.

Globalization has been the result of many different developments. From the increasing ability to ship goods across the world at low rates to moving manufacturing to achieve lower labor expenses, globalization is an entrenched part of the new economy. Another element factoring into globalization, that is not mentioned quite as much but has played an increasingly large role, is that of taxes.

According to the first ever corruption report by the European Commission, the European Union (EU) is losing over 120 billion euros a year because of widespread corruption in many member nations. The report stated that the corruption regulations and controls in many countries are not adequate enough to effectively fight the fraud occurring across the EU. The loose regulations and inspection has allowed for much of the corruption to occur in local governments and communities in all member countries, showing that the Commission believes that corruption is a problem across the EU.

Major changes could be coming to China, after officials released plans to reform economic and social policies. China’s president, Xi Jinping, unveiled reform plans after a four-day conclave of Communist Party leaders in hopes that the economic changes will increase economic growth, which has slowed since the world-wide recession. Along with the economic reforms, plans were made to relax the one child policy and close labor camps, both infamous in the international community. The reforms, if implemented, could have wide-ranging impacts on society and business in China, improving human rights and opening new sectors of the economy to private companies.

Venezuela experienced an extreme 12-month inflation rate of 54% last month and shortages of basic goods. Venezuelan President Nicolas Madura has responded to extreme inflation by forcing managers of local businesses to lower their prices with arrests and armed forces. The socialist leader stated that the seizure of these stores was just the tip of the iceberg and that he will take over more businesses. These events could have a major effect on Venezuela’s economy, including an outflow of foreign investment and firms.

Pensions have become an increasingly talked about topic of late. With bankruptcies of cities, and most notably of Detroit, it is unsure whether people who worked their entire lives with the promise of a retirement will actually receive such. The trick with pensions is how does a company or city adequately plan for retirement costs decades into the future?

People around the world are questioning the objectives of China and Saudi Arabia, who are vying for seats this week on the United Nations’ Human Rights Council. The members of the General Assembly elect the members to the council’s forty-seven seats. The inquiry of these countries to the council comes on the grounds that the General Assembly is supposed to take into account the contribution to the promotion and protection of human rights, while China and Saudi Arabia may be considered to some, two of the most infamous violators of human rights.

The effect of time zones has been a little-known but important issue for international business. Country time zones have been historically influenced by trading patterns and partners. Setting the same time zone to a partner makes it easier to conduct trading since business hours match. Different time zones force businesses to factor in time zone conversion when dealing with international business and can negatively impact worker productivity.

On Sunday, China opened a new, 28 square kilometer free trade zone in northern Shanghai. The zone will feature loosened restrictions compared to greater China, such as more freedom for banks and the opening of several industries. Foreign investors and companies hope the new zone will allow for easier access to the Chinese market, but the Chinese government has released few specifics on the regulations and rules of the zone. This has brought along skepticism on whether the zone will have any meaningful impact.

Australia foreign policy debate has begun to take focus on two of the largest economies: The United States, a century long ally, and China a major trading partner. As China’s economy continues to grow and its need for natural resources increases, Australia will need to find a way to manage and balance its relationship between the two rival countries.

Economic bubbles have been a reoccurring economic cycle in the world throughout the history of capitalism. Recent economic bubbles that the world has experienced include dot-com/telecom, real estate, stocks, and biotech bubbles. They date back to the 1880’s when the first railroad tracks were laid down in the United States. The goal was to connect the United States through economic integration and development, which created a boom in the development of canals, turnpikes, railroads, and telephone lines. Many of these projects were funded by the government, and now green technology projects are funded by them as well. Globally, governments are beginning to promote green technologies through loans and subsidies. The rapid growth the world has seen in green technology could be the start of the next big economic bubble.

For the first time since last October, the Japanese economy has reported figures that do not include deflationary prices. Japan's core consumer price index, which includes energy but not volatile fresh food prices, rose 0.2 percent in May from April's recording of a 0.6 percent annual decline in prices. The Bank of Japan's fight against deflation, which has persisted for 15 years and caused the Japanese economy to fall behind China as the world's third largest economy, has set their sights on reaching a 2% inflation rate within the next two years. Prime Minister Shinzo Abe has also made fighting deflation one of his top priorities since taking office 6 months ago, which he claims has been the source of waning profits, wages, and consumption.

The past five years has seen an increased importance placed on a country's level of debt. Trying to deal with this problem can differ greatly by country. From the gradual debt reduction approach seem to be preferred by the United States to the austerity measures that became a popular tool by Eurozone governments, countries are waking up to the realization that too much debt is a bad thing. What is too much debt? The groundbreaking academic paper released by Carmen Reinhart and Kenneth Rogoff in 2010 seemed to have solved the problem when the models they ran indicated that when a country exceeds a 90% debt to GDP ratio it greatly diminishes growth rates.

One of the most significant trends of the past several years has been austerity measures taken by governments all over the world in order to try to keep their budgets in control. Much of the support for these actions came from a 2010 paper by Ken Rogoff and Carmen Reinhart of Harvard entitled Growth in a Time of Debt. 

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 5^th 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.

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.

Government leaders around the world are hoping that business start-ups will fuel economies still struggling since the global financial crisis.  To stimulate such growth, policymakers are shaping programs to promote the development of new business ventures.  What incentives are most effective for stimulating entrepreneurship?  What countries are leading the way for new business growth? 

The world is changing rapidly.  People are becoming more interconnected than ever.  Information is increasingly easier and cheaper to come by.  Whether it's texting, social media, emailing, faster logistics, or finding information on the internet, it all leads to one thing, making a faster paced and more competitive business environment.  Here are some top trends in business that are already happening but will play a significant role in the future.

As we are wrapping up this globalEDGE blog series of “top trends,” we thought there’d be no better way to finish then with a custom-made list talking about top global business trends as seen by us here at globalEDGE. The list is in no particular order (i.e. trend number 1 is no more prevalent then trend number 5), but we feel that all of these trends are making themselves known in the international marketplace now. Here’s the list!

Is it possible that corporate social responsibility, one of the most popular trends in modern business, is an irresponsible goal for any profit-driven organization to pursue? Is the pursuit of the triple-bottom-line (people, planet, profit) contrary to the value that corporations provide for society? Ann Bernstein, the leader of the Centre for Development and Enterprise in South Africa argued in her new book that it is more valuable for companies to focus solely on profit while leaving people and planet to fend for themselves, especially in developing nations.

Following the recent financial crisis, many people are blaming the large banks almost solely for the collapse. Many feel that the banks must split their commercial banking divisions from their investment banking ones. People think that the banks should not be allowed to use the money they hold for customers in speculative investments for the bank's potential profit. Do these concerns sound familiar?

Kerala is known all over the world for its lush landscapes, sunny beaches, and peaceful and pleasing backwaters. It also defies the stereotypical Indian state. This state has a lot going for it, and the following just touches the surface:

• The highest human development index in India
• The highest literacy rate (more than 90%) and life expectancy, lowest infant mortality and the lowest school drop-out rate in all of India