In the months leading up to the September 11 violence in Cairo and Benghazi and later in Tunis, the International Monetary Fund, the United States, and a number of Gulf states were taking steps to shore up weak economies in all three of the Arab Spring countries.
Finance, Tax, U.S. Tax, Federal Tax Rules & Regulations, U.S. Tax Policy, Global Economy, Competitiveness, Government Policy, Money & Finance, Government Finance
The fiscal cliff is an unusually large number of contentious tax and spending laws set to expire December 31, 2012. These rules impact business as well as nearly every segment of the population. Collectively, the seven major initiatives amount to more than $600 billion, or about 4% of gross domestic product in calendar year 2013.
Global Economy, Competitiveness, Government Policy, Growth & Innovation, Research & Development, Research, Innovation
“Disruptive” by definition means to interrupt the norm. To ensure the future of manufacturing we must disrupt it. Thankfully, the President’s Council of Advisors on Science and Technology (PCAST) strongly agrees. Last month, PCAST published a Report to the President on Capturing Domestic Competitive Advantage in Advanced Manufacturing. The report presents 16 specific recommendations to “set the stage for advanced manufacturing to thrive in the United States.”
Global Economy, Competitiveness, Government Policy, Operations, Supply Chain
With its Plan Nord, the Quebec government has committed to generating CAD 80 billion in investment over 25 years in the north of the province, including several billion public dollars to build core infrastructure and improve local socioeconomic conditions. The area’s resources include 75,000 square miles of commercial forest; vast hydroelectric, wind, and solar power potential; unspoiled landscapes and wildlife to sustain tourism; and important mineral resources—including rare earth elements.
Global Economy, Economic Environment, Recession, Money & Finance, Currency
The EU summit held in late June produced two breakthroughs. First, the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), are to directly fund shaky banks. Second, requirements were relaxed for EFSF/ESM to engage in bond purchases of troubled sovereigns. These steps are significant in that they address immediate needs (a liquidity provision, support for banks) as opposed to long-term solutions (fiscal adjustment, institutional change).
Global Economy, Competitiveness, Government Policy
On July 1, 2012, Mexicans will elect a new president after two consecutive six-year terms under the ruling of the National Action Party (PAN), first with Vicente Fox and now Felipe Calderón. The latest polls show the candidate for the Institutional Revolutionary Party (PRI), Enrique Peña Nieto, leading by more than 10 points, followed by Andrés Manuel López Obrador (AMLO) from the Party of the Democratic Revolution (PRD) and Josefina Vázquez Mota from the PAN. Before the PAN took power in 2000, the PRI ruled Mexico for 71 straight years.
Global Economy, Economic Environment, Energy, Money & Finance, GDP
The impact of the load-shedding crisis of 2008 is still being felt in South Africa. The cost to the economy of the blackouts that rolled across the country for three months is estimated at R50 billion ($6.5 billion). Under the combined weight of global recession and the self-inflicted wound of massive power cuts, GDP growth slipped to 2.1% in the first quarter of 2008 and ended the year below 4% for the first time in five years.
A few years ago, many (if not most) energy analysts expected that U.S. oil production would continue its secular decline as older oil fields played out and as finding and developing new production capacity became increasingly difficult and expensive. At the same time, long-run projections showed U.S. oil consumption expanding over time as both the economy and population grew. Both projections have been stood on their head; the trends in production and consumption over the last five years dramatically illustrate how quickly the U.S. oil situation has reversed course.
Global Economy, Money & Finance, GDP, Government Finance
The Eurozone sovereign debt crisis is far from over. It will take years, not months, for excessively high government debt-to-GDP ratios to stabilize, much less begin to decline. Eurozone political leaders recently agreed upon a second multilateral assistance package that is designed to give the Greek government a respite when the first tranche is paid in. Subsequent disbursements, however, are subject to reviews by the IMF, which will check on progress in many areas; poor compliance by the Greek government on tax reform or privatization, for example, could derail the program.
The relationship between the two economic juggernauts cannot exactly be characterized as free trade nirvana, and there is a growing sentiment in the United States that China has not fully lived up to the commitments it made when joining the WTO. This is fueled in no small part by concern over the massive trade surplus China has built up with the United States, its largest trading partner. By deliberately undervaluing its currency, critics charge, China has propped up its export-dependent growth model.