Trade & Growth Data-the Club Business

Trade & Growth Data-the Club Business​

By: Amit Bhushan Date: 23rd June 2016

1. World trade continues to rise howsoever slowly, but some earlier trade growth champions like China, India, Brazil or other major emerging economies register fall in external trade.

2. Currency value of many primary commodity exporters has declined against their respective basket of trade currencies.

3. GDP growth trend in most of the developed world is lacklustre at its best though employment numbers may have risen from the lows from where they reached once indicating rise in economic activity.

4. While some developing countries notably China, India, Indonesia, Malaysia, Vietnam, Philippines etc. depict a healthy GDP growth trend but some other like Russia, Brazil, Middle-Eastern countries, Venezuela and some of the biggest economies of Africa show sluggishness/decline and ditto in much of Southern America.

5. Exchange value of Euro/European currencies vis-a-vis USD seem to have stabilized while Asians/Africans & others show a decline vis-a-vis USD.

6. Commodity Exports/Trade by volume seem to be limping back to normal for most countries while trade by-value in USD may still not be around mark.

7. The governments in the countries who could afford to scale up public investments are focussed to keep them up.

This is true from emerging economies as well as in Europe/Japan where government have resorted to quantitative easingThe above seem to imply a rise in services trade (since commodities and manufactures are yet to beat the past highs) primarily within developed world and a rise in capital flows as well on the back of investments in Europe.

The stability around their currency values vis-a-vis trade basket indicate this. The trade within developed world seem to be more about services with IT, Intellectual property, Financial, Logistics and telecom playing a major role. And the other seem to be a rise in capital flows as well, probably on the back of M&As which seem to be growing even on the back of a sluggish growth. There is a rise in M&As which seem to dramatically impact the business capabilities of the firms and create value for the investors. Much of the speculative capital seem to be pre-occupied around this activity while the green-field value development like new ventures seem to be given a miss due to perceived high risk or lack of innovation or both.

The rising concerns around intellectual property especially around pharma/bio-technology/environ-technology seems to suggest the focus areas of wealth creation.Presently, the M&As seem to be getting played in the context of nations whereby some nations seem to be seeking passage into some trade clubs while some others weigh if they would be better off exiting such a club. It depends upon leaderships ability to view a clear path to business growth coming from either exit a club that frees them from some of the reservations seen hindering business & resultant movement of investments & jobs.

When such clubs are created they result in unprecedented expansions of corporate activity generally via mergers and acquisitions. Similarly exit from such clubs will force ring-fencing of business into separate entities often scraping out a set of activities as well as possibly those where the business units is most competitive in. This is because the new entities (two or more) need to be most profitable for their investors who are most likely to be owning both such ventures and need to ensure that both are healthy.

A hype around both ways leads to heightened excitement and seems to attract the buzz as well as possibly an increase in activity. This while some other view that joining such a club might result in access to new resources, investment & jobs. Much of the supra-region such as "EU" business seem to be a result of such calculation whereby many nations from the European Club which rose to its prominence with over 22 countries signing up to share markets while some shared even currencies. Of course there were certain issues which could not be taken care at the time of each country signing up. The resultant mess now seems would require cleaning of a magnitude that was not envisaged by many of the members.

The overall cleaning cost is increasingly becoming a thorn and resulting in some of the other members weighing options around exit and how it would play out in terms of maintaining overall level of investments and jobs in respective countries. This seems to have given rise to the "exit the club" business and demands around this. The emerging economies afflicted by internal chaos as well as mutual mistrust seem not yet ready to have similar club games.

A lack of well-established institutional mechanisms and rigour required to implement discipline to play by the rules seem to be a reason. To exacerbate the problems, there is a lack of clear leadership to could articulate an acceptable framework to resolve issues as well. Pre-occupation with creation of a halo around leaders rather than against institutions or frameworks, which could resolve issues hyped by the media, actually helps to undermine the possibilities for some workable solutions, though keeps up the competition amongst players. With the other pre-occupation of global media and player around large capital movements in a specific part of the world in any case leaves little time and incentive to fix these issues in some other parts.

While emerging economies have grown to be able to solve some of their challenges around telecom on the back of technology and are gearing to look for agri-related or IT related solutions again basis south-south trade in respective technologies, however challenges would remain regards healthcare/medicines which require substantial investment in new molecular research as well as in establishment of suitable healthcare systems.

Much of these opportunities are new product development opportunities say either to come up with new variety of seeds, or new IT products or new healthcare service product/procedure etc. Besides development around new ideas so that these products can be within affordability levels in emerging markets, what is needed is right supporting conditions for easy access to markets and right level of infra development.

The supporting conditions is part of creation of new clubs defining rules that provide for easier market access for product evolved in one country to reach another, while infra to support development at affordable prices as well as distribution requires investments and better rules around same. Let's see if the play around emerging markets heats up as well.

 

[Dhruv Bindhani]

Trade & Growth Data-the Club Business​

By: Amit Bhushan Date: 23rd June 2016

1. World trade continues to rise howsoever slowly, but some earlier trade growth champions like China, India, Brazil or other major emerging economies register fall in external trade.

2. Currency value of many primary commodity exporters has declined against their respective basket of trade currencies.

3. GDP growth trend in most of the developed world is lacklustre at its best though employment numbers may have risen from the lows from where they reached once indicating rise in economic activity.

4. While some developing countries notably China, India, Indonesia, Malaysia, Vietnam, Philippines etc. depict a healthy GDP growth trend but some other like Russia, Brazil, Middle-Eastern countries, Venezuela and some of the biggest economies of Africa show sluggishness/decline and ditto in much of Southern America.

5. Exchange value of Euro/European currencies vis-a-vis USD seem to have stabilized while Asians/Africans & others show a decline vis-a-vis USD.

6. Commodity Exports/Trade by volume seem to be limping back to normal for most countries while trade by-value in USD may still not be around mark.

7. The governments in the countries who could afford to scale up public investments are focussed to keep them up.

This is true from emerging economies as well as in Europe/Japan where government have resorted to quantitative easingThe above seem to imply a rise in services trade (since commodities and manufactures are yet to beat the past highs) primarily within developed world and a rise in capital flows as well on the back of investments in Europe.

The stability around their currency values vis-a-vis trade basket indicate this. The trade within developed world seem to be more about services with IT, Intellectual property, Financial, Logistics and telecom playing a major role. And the other seem to be a rise in capital flows as well, probably on the back of M&As which seem to be growing even on the back of a sluggish growth. There is a rise in M&As which seem to dramatically impact the business capabilities of the firms and create value for the investors. Much of the speculative capital seem to be pre-occupied around this activity while the green-field value development like new ventures seem to be given a miss due to perceived high risk or lack of innovation or both.

The rising concerns around intellectual property especially around pharma/bio-technology/environ-technology seems to suggest the focus areas of wealth creation.Presently, the M&As seem to be getting played in the context of nations whereby some nations seem to be seeking passage into some trade clubs while some others weigh if they would be better off exiting such a club. It depends upon leaderships ability to view a clear path to business growth coming from either exit a club that frees them from some of the reservations seen hindering business & resultant movement of investments & jobs.

When such clubs are created they result in unprecedented expansions of corporate activity generally via mergers and acquisitions. Similarly exit from such clubs will force ring-fencing of business into separate entities often scraping out a set of activities as well as possibly those where the business units is most competitive in. This is because the new entities (two or more) need to be most profitable for their investors who are most likely to be owning both such ventures and need to ensure that both are healthy.

A hype around both ways leads to heightened excitement and seems to attract the buzz as well as possibly an increase in activity. This while some other view that joining such a club might result in access to new resources, investment & jobs. Much of the supra-region such as "EU" business seem to be a result of such calculation whereby many nations from the European Club which rose to its prominence with over 22 countries signing up to share markets while some shared even currencies. Of course there were certain issues which could not be taken care at the time of each country signing up. The resultant mess now seems would require cleaning of a magnitude that was not envisaged by many of the members.

The overall cleaning cost is increasingly becoming a thorn and resulting in some of the other members weighing options around exit and how it would play out in terms of maintaining overall level of investments and jobs in respective countries. This seems to have given rise to the "exit the club" business and demands around this. The emerging economies afflicted by internal chaos as well as mutual mistrust seem not yet ready to have similar club games.

A lack of well-established institutional mechanisms and rigour required to implement discipline to play by the rules seem to be a reason. To exacerbate the problems, there is a lack of clear leadership to could articulate an acceptable framework to resolve issues as well. Pre-occupation with creation of a halo around leaders rather than against institutions or frameworks, which could resolve issues hyped by the media, actually helps to undermine the possibilities for some workable solutions, though keeps up the competition amongst players. With the other pre-occupation of global media and player around large capital movements in a specific part of the world in any case leaves little time and incentive to fix these issues in some other parts.

While emerging economies have grown to be able to solve some of their challenges around telecom on the back of technology and are gearing to look for agri-related or IT related solutions again basis south-south trade in respective technologies, however challenges would remain regards healthcare/medicines which require substantial investment in new molecular research as well as in establishment of suitable healthcare systems.

Much of these opportunities are new product development opportunities say either to come up with new variety of seeds, or new IT products or new healthcare service product/procedure etc. Besides development around new ideas so that these products can be within affordability levels in emerging markets, what is needed is right supporting conditions for easy access to markets and right level of infra development.

The supporting conditions is part of creation of new clubs defining rules that provide for easier market access for product evolved in one country to reach another, while infra to support development at affordable prices as well as distribution requires investments and better rules around same. Let's see if the play around emerging markets heats up as well.

In the often-murky waters of political commentary, this article shines as a beacon of clarity. The writer's writing style is refreshingly direct and remarkably insightful, capable of distilling even the most convoluted political machinations into understandable terms. It's a voice that not only informs but empowers, cutting through partisan rhetoric to focus on tangible realities. The structure is intuitively logical, carefully organizing arguments and evidence in a way that progressively deepens the reader's understanding of the political issue at hand. This thoughtful arrangement allows for a comprehensive grasp of the intricate relationships between policy, power, and people. Furthermore, the exceptional clarity with which the political arguments are articulated is truly commendable. There's no room for misinterpretation; the issues are presented with such transparent precision that the article serves as an essential guide for navigating and understanding today's political environment.

 

[Priyani Gupta]

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