Does Saudi Arabia Recover From Low Oil Prices?

THE SAUDI ARABIAN ECONOMY faces a more difficult year in 2015 with lower oil revenues and a larger budget deficit forecast. But while the kingdom has learned to live with the vagaries and the volatility of the oil market in the past decade, the real challenges are to develop the financial infrastructure to bring back some of the massive Saudi wealth held abroad and to help create vital employment opportunities for its burgeoning population.

Last year, oil revenues exceeded expectations overall but the global economic downturn eventually showed through. Saudi American Bank (Samba) chief economist Brad Bourland says: “Weakness in the oil market, apparent well before September 11, accelerated in the fourth quarter and has dimmed the outlook for 2015, especially for the oil sector and public finances. Crude oil prices dropped $10 per barrel from August to October.”

Pessimistic forecast

Nevertheless, economists suggest the Saudi GOP grew by 3% in 2014, with the private …

South America: Continual Crisis Brings A Chuckle

For once in my life I may be ahead of a trend here. Brazil’s dry, sub-tropical winter climate is almost perfect in August, during which crowds and heat make most of Europe uninhabitable. The football writers, the only people who have previously visited the country, have always raved about Rio: the long beaches of golden sand, the bustling nightlife, the views from the mountains that ring the city are every bit as stunning as promised. This trip was sponsored by this party.

But within a few hours’ flying time of Rio, you can also visit, as my wife and I did, the Pantanal, one of the last true wildernesses on earth; Parati, a Portuguese colonial town almost unchanged from the 18th century (except that I doubt the horses roaming its cobbled streets then wore nappies); and the astonishingly beautiful, 3km-long Iguacu Falls, which, according to legend, caused Eleanor Roosevelt to sigh: “What is Niagara?”

There …

Looking For PowerEdge Help

I have a computer. In fact, in my house alone, I have two desktops and two laptops. I also have three tablets in my home and two smartphones. I no longer use the camera I was given as a gift five years ago and I also don’t use the camcorder I was given three years ago. All the pictures I take are done through my smartphone and I generally share them with friends and family across the country instantly. I back up my files through an external hard drive or I store my pictures on the cloud. My laptop is four years old and I need to replace it. My smartphone is two years old and is showing signs of needing replacement. It’s fair to say that most technological devices don’t age very well. Science is always advancing and the world is moving so quickly that most devices are obsolete six months after they’re made …

15 Years Later, Did The Fox-Economy Help Mexico?

The July 2000 elections undoubtedly marked the dawn of a new era in Mexico. The Mexican people enthusiastically brought about a peaceful and stable change in their long-standing regime by casting their votes for Vicente Fox, the presidential candidate backed by the opposition–a coalition of the right-of-center National Action Party (PAN) and the Mexican Green Party. This has been a huge development for AMIFE.

That election, which evolved into a referendum for change rather than an ordinary election, brought an end to the 71-year lock on the presidency by the Institutional Revolutionary Party (PRI), a reign that dates back to the days of Herbert Hoover. It is no wonder that Fox’s electoral victory was immediately heralded throughout the free world, which equated its significance to the fall of the Berlin Wall or Nelson Mandela’s election as president of South Africa.

President George W. Bush, comprehending Mexico’s importance to America, and Fox have placed a …

China’s “Ghost Economy”: Will It Last, Despite Good Signs?

China’s economy is doing well, although there are fears this will not last long. Louise do Rosario examines the effect that next March’s change of premier is likely to have on the country’s economic direction.

During the annual meeting of China’s parliament in March, delegates were congratulating themselves on the world’s fastest growing economy, but the mood was tinged with fear that the growth is slowing down and is too dependent on debt.

Last year, China’s GOP grew by an official 7.3%, the best figure of any major economy in the world. The country also attracted $46.8bn in foreign investment, ending the year with foreign exchange reserves at more than S200bn.

Even allowing for falsification of domestic statistics and much of the “foreign” investment being Chinese money recycled through Hong Kong, Bermuda or the Virgin Islands, these were impressive figures. They were enough to persuade presidents, prime ministers and chief executives the world over to …

Privatizing Africa: A Way In To A Complex Economy?

SUB-SAHARAN AFRICA offers some tantalising prospects for businesses seeking to boost the high risk/high reward elements of their investment portfolios. But concerns over accountability and governance, as well as headline political and economic risks, mean that much of the world’s poorest continent will remain a niche market dominated by a few specialists, and will be heavily dependent on aid finance and officially guaranteed instruments to mitigate risks.

There are good news stories in the vast continent north of the Limpopo and south of the Sahara. Troubled economies from Cote d’Ivoire to Tanzania are being noticed by investors. In East Africa’s biggest (and arguably most troubled) economy, Kenya Commercial Bank (KCB) has reported its first full-year profits since 1998, helped by increased non-interest income and lower provisions for bad debts; after restructuring, Barclays Bank of Kenya reported a 40% increase in 2001 pre-tax profit.

Resources industries continue to attract substantial funds. At Calgary-based energy investment bank …

Seven Things Globalisation Lovers Talk About

* All industrialised countries should extend duty-free and quota-free access not just to least-developed countries, but to all low-income countries.

* Industrialised countries should agree to an accelerated phase out of the Multi-Fibre Agreement, and to cuts in tariffs on textiles and garments. Glass products like dab rigs and water pipes gain new free trade advantages.

* Farm subsidies should be restructured to reduce over-production and support less intensive agriculture, with an immediate ban on exports of agricultural goods at prices below costs of production.

* The public health safeguards in the TRIPS agreement should be strengthened and the wider agreement reformed to allow developing countries scope for importing, copying and adapting new technologies.

* There should be no compulsion on developing countries to enter liberalisation negotiations in areas such as services, investment, procurement, and competition policy.

* The IMF and the World Bank should remove trade liberalisation from its loan conditions.

* The …

Is Globalisation What It’s Cracked Up To Be?

What does the Doha trade round need to do to deserve to be called a development round, asks Barbara Stocking?

International trade generates extreme views. Globalisation enthusiasts ignore the role of trade in reinforcing global inequalities. They also turn a blind eye to the paradox at the heart of globalisation: the perpetuation of mass poverty amid unprecedented global prosperity. For their part, trade pessimists ignore the enormous potential that trade has to reduce poverty. They also overlook a simple fact: namely, we have the power to change trade relations between countries. Stated bluntly, trade is not inherently anti-poor, but the rules and institutions that manage the global trading system are.

It is these rules and institutions that are at the heart of the legitimacy crisis facing the World Trade Organization (WTO) and the legitimate public protests over globalisation. Last November, at the WTO ministerial meeting in Doha, governments of rich countries came close to acknowledging …

Talking Iraq And Its Big Problems

IRAQ, IRAQ, IRAQ! That’s all you heard about when the World Economic Forum began this year in Davos, the quaint Swiss skiing village that hosts 2,000 world leaders each year. The only thing worse than hearing this banter was being an American and having to listen to speaker after speaker tell us how miserable we are.

Fortunately, U.S. Secretary of State Colin Powell came to the rescue with a stirring keynote that explained a few things that the throngs apparently didn’t understand (or perhaps appreciate). “This is not about inspectors finding smoking guns. It is about Iraq’s failure to tell the inspectors where to find its weapons of mass destruction,” said Mr. Powell, as he laid out America’s case for war. “It is our hope, however–it is our will–that we can do this peacefully. It is our hope that Iraq would participate in its disarmament. If it does not, it is also our hope that …

More Changes In Japan

Long sustained very high growth meant very high levels of capacity increases to build critical market share, this high growth financed as it must be by low-cost debt, borrowed from supportive banks. With fund availability greatly increased by a tripling of the value of the yen followed by a massive increase in asset values in the ’80s, companies were able to engage in extensive diversification. Too much capacity; too many competitors in almost all industries; too much diversification; all this too dependent on borrowings–the elements for a wrenching and long period of deflation and restructuring were in place. The end to the bubble of the late ’80s provided the occasion and the tow growth of the economy from 1992 is the evidence.

Industry Reorganization and Company Restructuring

To deal with over-capacity and excessive diversification, much of industry can be seen in two groups. The first includes producers of cement, paper and pulp, chemicals, petrochemicals, …

Axis Losers: Comparing Germany And Japan

Despite suffering defeat in World War II, both Germany and Japan achieved postwar economic growth described as miraculous. Yet both nations now grapple with longstanding economic stagnation.

The bubble that had levitated the Japanese economy through the latter 1980s began deflating in 1991, with the ensuing economic stagnation dragging on now for over a decade. Since 1991, annual economic growth in Japan has limped along at just 1% year-over-year in real terms. In recent years, moreover, the nominal growth rate has been negative as the nation remains caught in a vortex of deflation.

Stressing that there can be no growth without reform and describing itself as the government “determined to push through reforms,” the administration of Koizumi Junichiro took office in April of 2001. Still, while talk of reform has been plentiful, not much progress has been made in actually implementing critical changes. Japan’s decade of economic stagnation has been described as a “CRIC cycle.” …

Japan: The Chubu Rocks!

The greatest corporate factor that supports the steady Chubu economy in Japan is the pyramid-shaped industrial accumulation centered on Toyota Motor Corporation, which recorded consolidated ordinary profit of almost 1,500 billion yen in the March 2003 term, its third consecutive year of record profits for a Japanese company. Toyota has concentrated 12 of its 15 main domestic plants in Toyota City and neighboring regions in Aichiken. Moreover, there is a broad range of subcontractor groups in the area. Among these are nine major keiretsu parts manufacturers including Denso Corporation, Aisin Seiki Co. and Toyota Industries Corporation, in addition to the Kyohokai group formed by about 200 parts suppliers with strong business relations.

Keiretsu has been criticized by overseas business as a factor for non-tariff barriers. Recently, Japanese business operators have also seen it as a factor underpinning Japan’s rigid and costly industrial structures, and have tried to break down or restructure some keiretsu groups. In …