Source: UK Blocks EU Drive for temps' job rights
Gordon Brown only narrowly avoided being outvoted on a draft directive that would award temporary workers full pay after six weeks. Britain was among only a few states opposing the directive, perceiving it as an imminent threat to its flexible labor markets. Although it appeared at one point that the ministers would obtain the broad consensus necessary to pass the law with a qualified majority, Portugal, chair of the meeting, said that such an agreement was not possible and opted against a vote. This failed legislation is illustrative of the underlying divisions in Europe over social laws.
British employers praised Brown’s success. Business leaders in London argued that the law would impose extra costs on employers as well as making work less flexible. The CBI employers’ body argued that this legislation would result in the loss of a quarter of million UK jobs. A majority of British employers support an award of full pay for temporary workers after a period of six months, rather than six weeks.
The unions, however, expressed “real anger” that the UK government played such a pivotal role in blocking the progress of this proposed legislation. Currently, Britain and the unions are engaged in a long-running dispute regarding the union’s maximum 48-hour work week. It is possible that protecting Britain’s exemption to the work week maximum may require an acceptance on the proposed rights of temporary workers. However, at this point, union leaders say that such a coercive agreement would be “ a terrible way to do business.”
Questions for Discussion
1. Are the ongoing negotiations with the unions likely to force Britain to agree to increase benefits for temporary workers?
Wednesday, December 05, 2007
Monday, December 03, 2007
World Bank gets lackluster marks in new report released by its own Independent Evaluation Group
SOURCE: Independent Evaluation Group—“Development Results in Middle-Income Countries, An Evaluation of the World Bank’s Support
A report on the World Bank's continuing work with Middle Income Countries (MICs) was released in September of this year. There are 86 MICs across the globe, on every continent save North America, Australia and Antarctica (the first two due to the relative wealth of the nations situated there, the last because no one lives there). For example, on the African continent fourteen countries are identified as MICs. These include all the countries along the continent’s northern coast and southern region, as well as three isolated outliers: Gabon and Equatorial Guinea in the east and Djibouti in the west. Central Africa is not represented.
In general, the report, conducted by the Bank’s Independent Evaluation Group (IEG), found that while the Bank had focused efforts on bettering tailoring its programs to meet nation-specific needs, there is still room for significant improvement. While the Bank’s efforts have promoted growth in MIC countries, the cost has been rising inequality and inadequate social programming. This is particularly problematic given that MICs are home to one third of the world’s poor. Additionally the report notes that more attention needs to paid to environmental issues associated with Bank projects in these countries and that internal cooperation between the various Bank programs to realize the best outcomes in MICs has been “underwhelming.” Another area of concern is the failure to incorporate MICs in shaping global planning—this is troubling given the number of countries in this group and that at least one rising economic powerhouse, China, is an MIC.
At the same time, the IEG implies that part of the problem for the Bank is the rapidly changing needs of the MIC client population. While the report is not a glowing one—it frankly sounds as though the Bank is struggling with this sector, which is the recipient of two thirds of its assistance—it recognizes the challenging nature of the task the Bank has set itself. On a different note, the candor with which the IEG sets forth its statement of areas where the Bank has fallen short convinces one that it is in fact independent, for it is unlikely it could have published such a report otherwise.
Click here to download the full report and view interactive maps of the MICs.
FOR DISCUSSION:
How might MICs be better incorporated into global planning?
A report on the World Bank's continuing work with Middle Income Countries (MICs) was released in September of this year. There are 86 MICs across the globe, on every continent save North America, Australia and Antarctica (the first two due to the relative wealth of the nations situated there, the last because no one lives there). For example, on the African continent fourteen countries are identified as MICs. These include all the countries along the continent’s northern coast and southern region, as well as three isolated outliers: Gabon and Equatorial Guinea in the east and Djibouti in the west. Central Africa is not represented.
In general, the report, conducted by the Bank’s Independent Evaluation Group (IEG), found that while the Bank had focused efforts on bettering tailoring its programs to meet nation-specific needs, there is still room for significant improvement. While the Bank’s efforts have promoted growth in MIC countries, the cost has been rising inequality and inadequate social programming. This is particularly problematic given that MICs are home to one third of the world’s poor. Additionally the report notes that more attention needs to paid to environmental issues associated with Bank projects in these countries and that internal cooperation between the various Bank programs to realize the best outcomes in MICs has been “underwhelming.” Another area of concern is the failure to incorporate MICs in shaping global planning—this is troubling given the number of countries in this group and that at least one rising economic powerhouse, China, is an MIC.
At the same time, the IEG implies that part of the problem for the Bank is the rapidly changing needs of the MIC client population. While the report is not a glowing one—it frankly sounds as though the Bank is struggling with this sector, which is the recipient of two thirds of its assistance—it recognizes the challenging nature of the task the Bank has set itself. On a different note, the candor with which the IEG sets forth its statement of areas where the Bank has fallen short convinces one that it is in fact independent, for it is unlikely it could have published such a report otherwise.
Click here to download the full report and view interactive maps of the MICs.
FOR DISCUSSION:
How might MICs be better incorporated into global planning?
Sunday, December 02, 2007
Fed Cuts, Again?
Sources: CNN Money, Financial Times, Chicago Tribune, San Francisco Chronicle
Will the United States cut interest rates again? The Federal Reserve suggested last month that it would likely not cut interest rates again, but it is expected that Federal Reserve will interest rates within the next two weeks. Ben Bernanke (Chair of the Federal Reserve) stated that the tight credit conditions, high energy prices, and housing crunch will lead the central bank to be “exceptionally alert and flexible.” Over the past week, stock markets in London, Hong Kong, Japan, and the US all gained on the Fed Chair’s comments. On Friday, London’s FTSE closed 2.7 percent higher. The Dow Jones rose 59.99 points, gaining three percent for the week.
Domestic US economic reports also led to speculation that an interest rate cut is coming. Spending and income slowed in October—and the actual growth in spending was not due to additional purchases but rather increased prices. These are signs of a slowing economy. Furthermore inflation is exactly on par with economists’ forecasts, giving the Fed Reserve a go-ahead for interest rate cuts. Some senior economists believe that, in light of the slowing economy an interest cut is recommended. According to one, it’ll “lower stresses on the banking system.” However, it could add pressure to the weakening dollar.
Question: Will interest rates drop to the lows from several years ago? And will this be the last time the Federal Reserve cuts interest rates in the near future?
Will the United States cut interest rates again? The Federal Reserve suggested last month that it would likely not cut interest rates again, but it is expected that Federal Reserve will interest rates within the next two weeks. Ben Bernanke (Chair of the Federal Reserve) stated that the tight credit conditions, high energy prices, and housing crunch will lead the central bank to be “exceptionally alert and flexible.” Over the past week, stock markets in London, Hong Kong, Japan, and the US all gained on the Fed Chair’s comments. On Friday, London’s FTSE closed 2.7 percent higher. The Dow Jones rose 59.99 points, gaining three percent for the week.
Domestic US economic reports also led to speculation that an interest rate cut is coming. Spending and income slowed in October—and the actual growth in spending was not due to additional purchases but rather increased prices. These are signs of a slowing economy. Furthermore inflation is exactly on par with economists’ forecasts, giving the Fed Reserve a go-ahead for interest rate cuts. Some senior economists believe that, in light of the slowing economy an interest cut is recommended. According to one, it’ll “lower stresses on the banking system.” However, it could add pressure to the weakening dollar.
Question: Will interest rates drop to the lows from several years ago? And will this be the last time the Federal Reserve cuts interest rates in the near future?
World Bank reports on Thailand’s economy
Sources: Business Week: World Bank: East Asian growth robust; Bangkok Post: Thailand's economic growth lowest in region, World Bank says; China View: World Bank urges Thailand to enhance economy
The World Bank has requested the new Thai government to aggressively clarify its ambiguous state policies. The World Bank estimates Thailand’s economy is growing by 4.3% in 2007, the lowest in five years and also the lowest in the region. Thailand has suffered from waning investor confidence and a stagnant economy. The World Bank believes that private investment will greatly help Thailand’s economic recovery. The World Bank economist for Thailand stated that investors and the public are waiting to see indications of a clear direction regarding the new government’s policies which influence their confidence.
The World Bank believes that Thailand’s prospects in 2008 are better if the country can overcome its political uncertainties. Milan Bramhbhatt, author of the World Bank's East Asia Pacific Update, commented "Given that exports are going good, once the political questions are resolved, it is possible the economy could experience a sharp snapback and growth could improve quite significantly." In September 2006, Thailand experienced a military coup. Since then, it has been under an interim military-appointed government. The new government will be formed after the December general election and will likely be in place by February.
The World Bank estimated that East Asian economies are likely to remain healthy. East Asia’s economy was expected to grow 8.4% in 2007 and 8.2% in 2008. For example, the World Bank estimated that in 2007, Indonesia’s economic growth would reach 6.3%, Malaysia would reach 5.7%, the Philippines would reach 6.7%, Vietnam would reach 8.3% and China would reach 11.3%.
For discussion:
Are countries headed by military commands always subject to worldwide investment disfavor? If so, why?
Saturday, December 01, 2007
A Step Toward An Economic Zone In The Caucasus
Source: Eurasia Daily Monitor “Former Soviet Republics and Turkey Back Economic Zone In Caucasus”
Turkey is making progress towards creating an economic zone in the Caucasus. The latest evidence is the November 21 launch of the Baku-Tbilisi-Kars (BTK) railroad project that will link Azerbaijan and Georgia with Turkey. However, obstacles remain. The biggest obstacle is the dispute with Armenia and Azerbaijan. Many international financial institutions have not supported the proposed economic zone because of the aforementioned dispute. As a result, Azerbaijan, Georgia, and Turkey have financed the $420 million project.
The recently completed railway, which will eventually connect Far Asia with Europe, is also open to other countries. Turkish President Abdullah Gul said, “This project is very important for the regional peace, stability, and prosperity.” The Turkish President added, “we are in fact taking a step toward the realization of a big project that will change history.” The idea for a railroad began in 1993. However, disputes and blame between the region’s countries prevented the idea from coming to fruition.
The railroad is important to the bigger picture as it demonstrates the necessary road, air, and railroad connections the joint economic zone will require. Turkish President Gul conveys Turkey’s optimism about the project and the larger economic zone. On a related note, bilateral trade between Georgia and Turkey is planned to reach to $1 billion by the end of this year, as the two countries negotiate a free-trade deal and an agreement to prevent double taxation.
Turkey is making progress towards creating an economic zone in the Caucasus. The latest evidence is the November 21 launch of the Baku-Tbilisi-Kars (BTK) railroad project that will link Azerbaijan and Georgia with Turkey. However, obstacles remain. The biggest obstacle is the dispute with Armenia and Azerbaijan. Many international financial institutions have not supported the proposed economic zone because of the aforementioned dispute. As a result, Azerbaijan, Georgia, and Turkey have financed the $420 million project.
The recently completed railway, which will eventually connect Far Asia with Europe, is also open to other countries. Turkish President Abdullah Gul said, “This project is very important for the regional peace, stability, and prosperity.” The Turkish President added, “we are in fact taking a step toward the realization of a big project that will change history.” The idea for a railroad began in 1993. However, disputes and blame between the region’s countries prevented the idea from coming to fruition.
The railroad is important to the bigger picture as it demonstrates the necessary road, air, and railroad connections the joint economic zone will require. Turkish President Gul conveys Turkey’s optimism about the project and the larger economic zone. On a related note, bilateral trade between Georgia and Turkey is planned to reach to $1 billion by the end of this year, as the two countries negotiate a free-trade deal and an agreement to prevent double taxation.
Friday, November 30, 2007
Israel Supreme Court Approves Fuel Cutbacks
SOURCES:
BBC News—Court Approves Gaza Fuel Cutbacks
The Supreme Court in Israel has approved fuel cutbacks to the Gaza strip. Human rights groups describe the move by the Supreme Court as “illegal collective punishment.” The Israeli government responded to these human rights groups by arguing that the cutbacks are economic sanctions to defend against the attacks by Palestinian militants.
The Islamist movement Hamas has controlled the Gaza strip since June. The Supreme Court told the state they must delay electricity cuts that were supposed to be implemented on Sunday. The Court expects that this decision will prevent electricity cuts to Gaza by the military. However, human rights groups continue to believe that the Court will not intervene in the fuel cuts.
Some have suspected that the court ruling was aimed at “increasing the siege on Gaza.” Petroleum companies have begun protesting against the Israeli fuel cuts. As a result, the petroleum companies stopped accepting fuel shipments. The head of the Gaza petroleum companies said that 100 of the 150 petroleum stations closed because of the shortages.
FOR DISCUSSION:
What was the true motive behind the Israeli Supreme Court decision? What other markets will be affected as a result of these shortages?
BBC News—Court Approves Gaza Fuel Cutbacks
The Supreme Court in Israel has approved fuel cutbacks to the Gaza strip. Human rights groups describe the move by the Supreme Court as “illegal collective punishment.” The Israeli government responded to these human rights groups by arguing that the cutbacks are economic sanctions to defend against the attacks by Palestinian militants.
The Islamist movement Hamas has controlled the Gaza strip since June. The Supreme Court told the state they must delay electricity cuts that were supposed to be implemented on Sunday. The Court expects that this decision will prevent electricity cuts to Gaza by the military. However, human rights groups continue to believe that the Court will not intervene in the fuel cuts.
Some have suspected that the court ruling was aimed at “increasing the siege on Gaza.” Petroleum companies have begun protesting against the Israeli fuel cuts. As a result, the petroleum companies stopped accepting fuel shipments. The head of the Gaza petroleum companies said that 100 of the 150 petroleum stations closed because of the shortages.
FOR DISCUSSION:
What was the true motive behind the Israeli Supreme Court decision? What other markets will be affected as a result of these shortages?
Iran’s Nuclear Program Continues
SOURCES:
Financial Times—EU Disappointed by Iran’s Uranium Refusal
The United Nations demanded Iran to stop its uranium enrichment program. However, Iran refused to stop. The United Nations expects that continued efforts are necessary to develop sanctions against nuclear development. Nevertheless, European Union members do not expect to see much movement from the Iranian government.
The European Union’s foreign policy chief is usually optimistic about progress. However, the Iranian enrichment program has caused much disappointment. Yet, a new resolution may still be possible. The UN Security Council and Germany will be meeting in the next week to negotiate another possible resolution on Iran.Several countries will be at the forefront in demanding these new sanctions from Iran, including the US, Germany, the UK, and France. Some countries have refused to be a part of the movement forward, such as China and Russia.Russia has been concerned about Iran’s nuclear weapons. However, China is most likely not as demanding as other countries because of their economic interests in Iran.
Iran believes that it has acquired a strong position on the issue. Most countries have become less and less interested in Iran’s position on the nuclear program. Iran’s nuclear negotiator stated that “only two or three countries” are following the United Nations sanctions method. Iran believes that the nuclear program ensures stability for the Middle East.
FOR DISCUSSION:
Should other Middle Eastern countries feel threatened by Iran’s nuclear program?
Financial Times—EU Disappointed by Iran’s Uranium Refusal
The United Nations demanded Iran to stop its uranium enrichment program. However, Iran refused to stop. The United Nations expects that continued efforts are necessary to develop sanctions against nuclear development. Nevertheless, European Union members do not expect to see much movement from the Iranian government.
The European Union’s foreign policy chief is usually optimistic about progress. However, the Iranian enrichment program has caused much disappointment. Yet, a new resolution may still be possible. The UN Security Council and Germany will be meeting in the next week to negotiate another possible resolution on Iran.Several countries will be at the forefront in demanding these new sanctions from Iran, including the US, Germany, the UK, and France. Some countries have refused to be a part of the movement forward, such as China and Russia.Russia has been concerned about Iran’s nuclear weapons. However, China is most likely not as demanding as other countries because of their economic interests in Iran.
Iran believes that it has acquired a strong position on the issue. Most countries have become less and less interested in Iran’s position on the nuclear program. Iran’s nuclear negotiator stated that “only two or three countries” are following the United Nations sanctions method. Iran believes that the nuclear program ensures stability for the Middle East.
FOR DISCUSSION:
Should other Middle Eastern countries feel threatened by Iran’s nuclear program?
Panama Emerges as Regional Economic Contender
Sources:
Latin Business Chronicle - Panama: Regional Champion
Office of Spanish Foreign Commerce - El Valor de las Inversiones en Construccion Crece 119%
Panama's economy is surging and the country is becoming a business hub of Latin America. In addition to the Panama Canal and its favorable location between North and South America, Panama is increasingly being viewed as a destination for tourists as well as multinational corporations. According to various sources, this country of 3.2 million people is Latin America's most globalized country, best country for importing and and exporting container goods, and has the region's fastest-growing tourist sector.
Panama has also been estimated by the IMF to have Latin America's fastest-growing economy and is ranked just behind Chile and Mexico in terms of competitiveness. Corporations also view Panama as a desirable location for operations. The DHL corporation uses Panama as a regional headquarters. Dell, Hewlett-Packard, and Caterpillar all have significant or announced operations in Panama. Panama has the highest number of international bank offices of any country in Latin America.
The economic growth in Panama has spurred a construction and infrastructure boom. Construction accounted for $155 million in the month of October, which is a 119% increase on the previous year. Since the beginning of 2007, nearly $1.25 billion has been invested in construction in Panama. Skyscrapers in Panama City continue to be built at a fast pace. Panama has also recently begun the widening of the Panama Canal, a controversial and costly $5 billion project.
Energy is another area where strong growth is predicted. Several multi-billion dollar refinery complexes have been announced. These are expected to serve the United States and Asian markets.
Discussion:
1. Is it in Panama's best interests to have as diverse an economy as possible, especially in light of Nicaragua's threats in recent years to build a new shipping canal to rival Panama's?
2. Has Panama escaped the natural resources 'curse' that historically has been present in some countries of South America?
Latin Business Chronicle - Panama: Regional Champion
Office of Spanish Foreign Commerce - El Valor de las Inversiones en Construccion Crece 119%
Panama's economy is surging and the country is becoming a business hub of Latin America. In addition to the Panama Canal and its favorable location between North and South America, Panama is increasingly being viewed as a destination for tourists as well as multinational corporations. According to various sources, this country of 3.2 million people is Latin America's most globalized country, best country for importing and and exporting container goods, and has the region's fastest-growing tourist sector.
Panama has also been estimated by the IMF to have Latin America's fastest-growing economy and is ranked just behind Chile and Mexico in terms of competitiveness. Corporations also view Panama as a desirable location for operations. The DHL corporation uses Panama as a regional headquarters. Dell, Hewlett-Packard, and Caterpillar all have significant or announced operations in Panama. Panama has the highest number of international bank offices of any country in Latin America.
The economic growth in Panama has spurred a construction and infrastructure boom. Construction accounted for $155 million in the month of October, which is a 119% increase on the previous year. Since the beginning of 2007, nearly $1.25 billion has been invested in construction in Panama. Skyscrapers in Panama City continue to be built at a fast pace. Panama has also recently begun the widening of the Panama Canal, a controversial and costly $5 billion project.
Energy is another area where strong growth is predicted. Several multi-billion dollar refinery complexes have been announced. These are expected to serve the United States and Asian markets.
Discussion:
1. Is it in Panama's best interests to have as diverse an economy as possible, especially in light of Nicaragua's threats in recent years to build a new shipping canal to rival Panama's?
2. Has Panama escaped the natural resources 'curse' that historically has been present in some countries of South America?
Monday, November 26, 2007
Uganda and Kenya ready to finalize intellectual property protection statutes as East Africa struggles with counterfeiting crisis.
SOURCES:
AllAfrica.com—“East Africa: Counterfeits Upset Regional Markets”
AllAfrica.com—“East Africa: Region's Manufacturers Threatened By Counterfeit”
Counterfeit versions of both foreign and domestic products are appearing en masse in the marketplaces of East Africa. The counterfeits are given names similar to well-known or local brand names and often designed to resemble the same. Products affected cover a host of goods—from car tires to pharmaceuticals.
State officials claim that the counterfeit trade is costing national governments hundreds of millions of dollars in revenue year; they assert that these lost funds could be used for social programs to assist the poor.
Both Uganda and Kenya are in the final stages of drafting statutes to provide greater protections for intellectual property interests. Also, the East African Community (EAC) and Investment Climate for Africa (ICA) signed a memorandum of understanding (MOU) to step up efforts to control counterfeiting and piracy in the East Africa region earlier this month.
In addition to the loss of revenue, concern over the counterfeiting problem in East Africa has been voiced by the World Health Organization (WHO) because of counterfeit pharmaceuticals that threaten the safety of African consumers.
State officials in East Africa blame domestic businesses for the majority of the problem. They contend that the willingness of domestic business interests to import counterfeits has made the problem worse. They further fault domestic businesses for having failed thus far to cooperate with the government to stop counterfeiting.
FOR DISCUSSION:
Is the private sector responsible for cooperating with the government to stop counterfeiting?
AllAfrica.com—“East Africa: Counterfeits Upset Regional Markets”
AllAfrica.com—“East Africa: Region's Manufacturers Threatened By Counterfeit”
Counterfeit versions of both foreign and domestic products are appearing en masse in the marketplaces of East Africa. The counterfeits are given names similar to well-known or local brand names and often designed to resemble the same. Products affected cover a host of goods—from car tires to pharmaceuticals.
State officials claim that the counterfeit trade is costing national governments hundreds of millions of dollars in revenue year; they assert that these lost funds could be used for social programs to assist the poor.
Both Uganda and Kenya are in the final stages of drafting statutes to provide greater protections for intellectual property interests. Also, the East African Community (EAC) and Investment Climate for Africa (ICA) signed a memorandum of understanding (MOU) to step up efforts to control counterfeiting and piracy in the East Africa region earlier this month.
In addition to the loss of revenue, concern over the counterfeiting problem in East Africa has been voiced by the World Health Organization (WHO) because of counterfeit pharmaceuticals that threaten the safety of African consumers.
State officials in East Africa blame domestic businesses for the majority of the problem. They contend that the willingness of domestic business interests to import counterfeits has made the problem worse. They further fault domestic businesses for having failed thus far to cooperate with the government to stop counterfeiting.
FOR DISCUSSION:
Is the private sector responsible for cooperating with the government to stop counterfeiting?
Sunday, November 25, 2007
A Potential Oil Crisis In Russia?
Sources: Russia's Gas Crunch (Washington Post); Russian Gas Shortfall Is `Urgent' Concern, U.K. Lawmakers Say (Bloomberg.com)
Last week Gazprom, a large Russian energy company, announced it was tripling gas prices in Belarus. Other countries have also been forced to accept an increase in gas prices. While many saw these as political increases, some analysts feel the increase are a result of inefficient management and a decline in Russian gas production. Further, analysts feel that Russian gas production may not be able to keep up with the demands of the export and domestic markets. One individual from the European Union stated “the prospective shortfall in Russian gas production represents an urgent energy security concern for the European Union.”
Western Europe imports around 25% of their gas from Russia who has a history of cutting of gas exports for political reasons. Further, Russia controls over a quarter of the world's gas reserves. Unfortunately for the rest of the world, discovery of new fields and output from current oil fields is, and has been, falling.
However, the expensive and needed investments are not likely given the harsh environments where new investments hold the most promise. Further, Gazprom does not have the money or technological ability to make needed investments. A stagnant Russian economy helped to delay the effects of falling oil output, but the expanding Russian economy is increasing the chances of an oil crisis in Russia
Russia will not likely be able to increase gas supplies from Turkmenistan or other central Asian suppliers. In addition, analysts give two barriers to non-Gazprom producers fixing the situation. First, such producers do not have access to Gazprom’s pipeline network. Second, gas production is only economically feasible if the producers sell the gas outside Russia given the low domestic prices.
A future gas shortage is likely and could make for interesting decisions within Russia. As one write points out, “Gazprom [may] face a politically unpleasant choice: whether to cut off internal customers (voters) or the Western customers who are the firm's main source of hard cash.” Hopefully, it will not come to that decision, but proactive measures need to be taken to ward off this potential crisis.
Discussion questions: (1) Do you believe the possibility of an oil crisis is overstated? (2) How do you think a potential crisis can be averted?
Last week Gazprom, a large Russian energy company, announced it was tripling gas prices in Belarus. Other countries have also been forced to accept an increase in gas prices. While many saw these as political increases, some analysts feel the increase are a result of inefficient management and a decline in Russian gas production. Further, analysts feel that Russian gas production may not be able to keep up with the demands of the export and domestic markets. One individual from the European Union stated “the prospective shortfall in Russian gas production represents an urgent energy security concern for the European Union.”
Western Europe imports around 25% of their gas from Russia who has a history of cutting of gas exports for political reasons. Further, Russia controls over a quarter of the world's gas reserves. Unfortunately for the rest of the world, discovery of new fields and output from current oil fields is, and has been, falling.
However, the expensive and needed investments are not likely given the harsh environments where new investments hold the most promise. Further, Gazprom does not have the money or technological ability to make needed investments. A stagnant Russian economy helped to delay the effects of falling oil output, but the expanding Russian economy is increasing the chances of an oil crisis in Russia
Russia will not likely be able to increase gas supplies from Turkmenistan or other central Asian suppliers. In addition, analysts give two barriers to non-Gazprom producers fixing the situation. First, such producers do not have access to Gazprom’s pipeline network. Second, gas production is only economically feasible if the producers sell the gas outside Russia given the low domestic prices.
A future gas shortage is likely and could make for interesting decisions within Russia. As one write points out, “Gazprom [may] face a politically unpleasant choice: whether to cut off internal customers (voters) or the Western customers who are the firm's main source of hard cash.” Hopefully, it will not come to that decision, but proactive measures need to be taken to ward off this potential crisis.
Discussion questions: (1) Do you believe the possibility of an oil crisis is overstated? (2) How do you think a potential crisis can be averted?
Survey says disparity of wages widens in Tanzania
Source:
AllAfrica: Tanzania: Disparity of Wages Widens
According to Harvard University and the University of California’s Global Gender Gap Index (GGI), Tanzania has fallen due to increases in perceived wage inequality. The GGI ranks a total of 128 countries, with Tanzania positioned at number 34 this year, falling 10 places from last year. Tanzania remains the leader in East Africa on the GGI index, ahead of Uganda and Kenya. However, it has slipped from second to fourth in Africa, and is now behind South Africa, Lesotho, and Namibia. Tanzania’s scored a 0.697 on the GGI index, where a one represents equality and a zero stands for inequality.
The GGI assesses how countries divide their resources and opportunities among males and females and is based on four critical areas of gender inequality. The first sub-index is economic participation and opportunity, which examines outcome on salaries, participation levels, and access to high-skilled employment. The second sub-index measures educational attainment, and focuses on access to basic and higher level education. The third sub-index is political empowerment, and examines representation in decision-making structures. The final sub-index is health and survival, with an emphasis on life expectancy and sex ratio.
The GGI is important, because it “provides a comprehensible framework for assessing and comparing global gender gaps” and reveals countries that are doing a better job at dividing resources equitably between men and women. It is hoped that the results will then serve as a “catalyst for greater awareness as well as greater exchange between policymakers.”
Discussion questions:
Is the GGI an appropriate measure of gender disparities? What factors contributed to Tanzania’s ranking this year?
AllAfrica: Tanzania: Disparity of Wages Widens
According to Harvard University and the University of California’s Global Gender Gap Index (GGI), Tanzania has fallen due to increases in perceived wage inequality. The GGI ranks a total of 128 countries, with Tanzania positioned at number 34 this year, falling 10 places from last year. Tanzania remains the leader in East Africa on the GGI index, ahead of Uganda and Kenya. However, it has slipped from second to fourth in Africa, and is now behind South Africa, Lesotho, and Namibia. Tanzania’s scored a 0.697 on the GGI index, where a one represents equality and a zero stands for inequality.
The GGI assesses how countries divide their resources and opportunities among males and females and is based on four critical areas of gender inequality. The first sub-index is economic participation and opportunity, which examines outcome on salaries, participation levels, and access to high-skilled employment. The second sub-index measures educational attainment, and focuses on access to basic and higher level education. The third sub-index is political empowerment, and examines representation in decision-making structures. The final sub-index is health and survival, with an emphasis on life expectancy and sex ratio.
The GGI is important, because it “provides a comprehensible framework for assessing and comparing global gender gaps” and reveals countries that are doing a better job at dividing resources equitably between men and women. It is hoped that the results will then serve as a “catalyst for greater awareness as well as greater exchange between policymakers.”
Discussion questions:
Is the GGI an appropriate measure of gender disparities? What factors contributed to Tanzania’s ranking this year?
Saturday, November 24, 2007
Argentina's Creditors not in Favor of Debt Swap
Financial Times - Bondholders Snub Debt-for-Equity Proposals
Bloomberg - Lousteau Proposes Deal on Defaulted Argentine Debt, Nacion Says
A group of creditors holding more than $20 billion of bonds that Argentina defaulted on in 2001 reacted negatively to ideas of exchanging the bonds for equity to invest in Argentine industry or infrastructure. The group of creditors, The American Task Force Argentina, dissented from the Argentina debt restructuring in 2005 and therefore still hold the defaulted Argentine bonds.
The potential swap was floated by an Argentine economist through channels at the Inter-American Development Bank and the incoming Argentine economic minister was reported to be considering such a plan. In 2005, when Argentina restructured its debt, many holders of over $62 billion in defaulted bonds received less than 25 cents on the dollar. In addition to the group of creditors holding the $20 billion in bonds, Argentina is also seeking to come to an agreement with the Paris group of creditor nations, holding around $6 billion in defaulted debt.
The incoming economy minister under new President Cristina Fernandez, Martin Lousteau, is also reportedly considering proposals to tie the Argentina peso to a greater number of currencies. Such a move might cause the peso to depreciate against the dollar, going against the economic policies of outgoing President Nestor Kirchner. Kirchner favored a weak peso to make exports more attractive, and sought to maintain a 3-1 peso to dollar exchange rate.
Discussion:
1. What are realistic options for the group of hold-out creditors still holding defaulted Argentine bonds, and how much of a loss of face value should they be prepared to sustain?
Bloomberg - Lousteau Proposes Deal on Defaulted Argentine Debt, Nacion Says
A group of creditors holding more than $20 billion of bonds that Argentina defaulted on in 2001 reacted negatively to ideas of exchanging the bonds for equity to invest in Argentine industry or infrastructure. The group of creditors, The American Task Force Argentina, dissented from the Argentina debt restructuring in 2005 and therefore still hold the defaulted Argentine bonds.
The potential swap was floated by an Argentine economist through channels at the Inter-American Development Bank and the incoming Argentine economic minister was reported to be considering such a plan. In 2005, when Argentina restructured its debt, many holders of over $62 billion in defaulted bonds received less than 25 cents on the dollar. In addition to the group of creditors holding the $20 billion in bonds, Argentina is also seeking to come to an agreement with the Paris group of creditor nations, holding around $6 billion in defaulted debt.
The incoming economy minister under new President Cristina Fernandez, Martin Lousteau, is also reportedly considering proposals to tie the Argentina peso to a greater number of currencies. Such a move might cause the peso to depreciate against the dollar, going against the economic policies of outgoing President Nestor Kirchner. Kirchner favored a weak peso to make exports more attractive, and sought to maintain a 3-1 peso to dollar exchange rate.
Discussion:
1. What are realistic options for the group of hold-out creditors still holding defaulted Argentine bonds, and how much of a loss of face value should they be prepared to sustain?
IMF disburses aid to Mauritania under the PRGF
Source: IMF grants Mauritania 3.1 mln usd - Forbes.com
The IMF this week disbursed some 3.1 million USD to the Republic of Mauritania through its Poverty Reduction and Growth Facility arrangement, bringing the total amount of relief to the Islamic nation under the arrangement to some 13.3 million USD. The disbursement is reflective of the Republic’s economic performance under the PGRF program. The IMF said that, despite sharp declines in oil production, the Republic has been able to maintain performance by containing inflation and implementing sound macroeconomic policies.
Additionally, the IMF reported that the Republic has made significant strides towards improvement of governance and structural reforms, including the beginnings of a new oil revenue management law to ensure best practices. The Republic will continue its work under the program, with financial sector reforms to improve the situation of money markets and commercial banks, and an attempt to stimulate private-sector growth.
Question: Is the influx of money from the IMF sufficient to help countries like Mauritania for the long-term?
The IMF this week disbursed some 3.1 million USD to the Republic of Mauritania through its Poverty Reduction and Growth Facility arrangement, bringing the total amount of relief to the Islamic nation under the arrangement to some 13.3 million USD. The disbursement is reflective of the Republic’s economic performance under the PGRF program. The IMF said that, despite sharp declines in oil production, the Republic has been able to maintain performance by containing inflation and implementing sound macroeconomic policies.
Additionally, the IMF reported that the Republic has made significant strides towards improvement of governance and structural reforms, including the beginnings of a new oil revenue management law to ensure best practices. The Republic will continue its work under the program, with financial sector reforms to improve the situation of money markets and commercial banks, and an attempt to stimulate private-sector growth.
Question: Is the influx of money from the IMF sufficient to help countries like Mauritania for the long-term?
Too many graduates, not enough jobs
Source: Rise in graduates over-qualified for jobs
Recent reports suggest that one in three university graduates in Britain are currently in a job that does not require a degree. Critics suggest that this number suggests that mass education goals are producing a sector of young people who might not have the opportunity to realize their career ambitions because there is insufficient demand for these educated youth. The number of young people attending university is already above 40%, and Britain’s goal is 50%. The government contends that Britain needs as many skilled workers as possible to keep up with competition. The labor market, however, cannot keep pace with the rapid increase of graduates.
Some subject areas are more vulnerable than others. Researchers at the London School of Economics (LSE) found that the number of English and other humanities subjects and social sciences are three times as likely to take work that does not require a degree; art and design students are six times as likely.
These numbers also mean that fewer graduates are earning the salaries they might have expected. The difference in earnings between vocational students and students in English and the humanities continues to grow as well. Researchers suggest that whereas money is not everything, problems arise if young people are led to believe that choosing a particular career will result in a higher salary than is actually possible, given the relatively constant demand and quickly expanding supply of university graduates.
Recent reports suggest that one in three university graduates in Britain are currently in a job that does not require a degree. Critics suggest that this number suggests that mass education goals are producing a sector of young people who might not have the opportunity to realize their career ambitions because there is insufficient demand for these educated youth. The number of young people attending university is already above 40%, and Britain’s goal is 50%. The government contends that Britain needs as many skilled workers as possible to keep up with competition. The labor market, however, cannot keep pace with the rapid increase of graduates.
Some subject areas are more vulnerable than others. Researchers at the London School of Economics (LSE) found that the number of English and other humanities subjects and social sciences are three times as likely to take work that does not require a degree; art and design students are six times as likely.
These numbers also mean that fewer graduates are earning the salaries they might have expected. The difference in earnings between vocational students and students in English and the humanities continues to grow as well. Researchers suggest that whereas money is not everything, problems arise if young people are led to believe that choosing a particular career will result in a higher salary than is actually possible, given the relatively constant demand and quickly expanding supply of university graduates.
Thursday, November 22, 2007
IMF’s debt cancellation a huge relief for Liberia
Sources:
Financial Times: IMF agrees to cancel Liberia debt
Afrol News: Liberia’s debt cancellation approved
This week, the IMF agreed to begin eliminating Liberia’s outstanding debts after a bureaucratic hold-up of more than a year. The announcement follows $842 million in pledges from donor member nations, which will help put the West African country back on track. Liberia accrued huge debts totaling $4.5 billion during the 14 years of brutal civil war. The debt includes approximately $2 billion in arrears to financial institutions such as the World Bank, IMF, and the African Development Bank, $1 billion in debts to commercial banks, and $1 billion to the Paris Club of creditor nations.
It is a huge vote of confidence for Liberian President Ellen Johnson-Sirleaf. In order to qualify for debt relief, Liberia had to meet certain political and economic requirements. Therefore, the IMF’s cancellation of Liberia’s debt marks a promising step forward for Liberia’s comprehensive debt relief.
Additionally, the IMF’s new managing director, Dominique Strauss-Kahn, noted that “IMF staff are currently finalizing discussions with the Liberian authorities on a three-year, IMF-supported program, so that Liberia can build upon the initial economic recovery, maintain the strong growth needed to reduce poverty, and restore debt sustainability.”
Discussion questions:
Does the debt relief confirm that Liberia has achieved the necessary political turnaround under President Johnson-Sirleaf? What other steps will Liberia and the international community need to take to help Liberia sustain its economic reconstruction?
Financial Times: IMF agrees to cancel Liberia debt
Afrol News: Liberia’s debt cancellation approved
This week, the IMF agreed to begin eliminating Liberia’s outstanding debts after a bureaucratic hold-up of more than a year. The announcement follows $842 million in pledges from donor member nations, which will help put the West African country back on track. Liberia accrued huge debts totaling $4.5 billion during the 14 years of brutal civil war. The debt includes approximately $2 billion in arrears to financial institutions such as the World Bank, IMF, and the African Development Bank, $1 billion in debts to commercial banks, and $1 billion to the Paris Club of creditor nations.
It is a huge vote of confidence for Liberian President Ellen Johnson-Sirleaf. In order to qualify for debt relief, Liberia had to meet certain political and economic requirements. Therefore, the IMF’s cancellation of Liberia’s debt marks a promising step forward for Liberia’s comprehensive debt relief.
Additionally, the IMF’s new managing director, Dominique Strauss-Kahn, noted that “IMF staff are currently finalizing discussions with the Liberian authorities on a three-year, IMF-supported program, so that Liberia can build upon the initial economic recovery, maintain the strong growth needed to reduce poverty, and restore debt sustainability.”
Discussion questions:
Does the debt relief confirm that Liberia has achieved the necessary political turnaround under President Johnson-Sirleaf? What other steps will Liberia and the international community need to take to help Liberia sustain its economic reconstruction?
Tuesday, November 20, 2007
G20 Pushes for Reform of the Bretton Woods Institutions
Sources: G20 MEETING: Mbeki urges substantial reforms of IMF, World Bank; G20 MEETING: At-a-glance guide to the main points; World Bank Group President Announces More Aid for Trade
During the G20 meeting held at Cape Town this past weekend, Thabo Mbeki called on the member-state representatives to push for reform of the International Monetary Fund (“IMF”) and the World Bank. The President of South Africa expressed his concern that these two institutions appear to be maintaining an international economic system which favors few powerful countries at the expense of the rest. More specifically, Mbeki noted the growing inequality (1) between developed and developing countries, as well as (2) that between the rich and poor within any given country. Mbeki suggested that the Bretton Woods Institutions could remedy these problems by taking into account (1) the continuation of economic integration amongst countries; (2) the need for greater transparency in trade and investment; and (3) the rapid growth of emerging economies, such as South Africa.
To work towards a more equitable international economic system, the G20 demonstrated support for the continuation and successful completion of the Doha trade round. Robert Zoellick, current President of the World Bank, demonstrated his agreement with the G20 on this matter today at the Aid for Trade Meeting of the World Trade Organization.
Discussion:
The new heads of both the World Bank and the IMF won their offices based in part on their strong commitments to reform their respective institutions. Given that Robert Zoellick and Dominique Strauss-Kahn have pledged to address precisely the issues highlighted by the G20 members this week, what is the significance or weight of the criticisms brought by the G20?
During the G20 meeting held at Cape Town this past weekend, Thabo Mbeki called on the member-state representatives to push for reform of the International Monetary Fund (“IMF”) and the World Bank. The President of South Africa expressed his concern that these two institutions appear to be maintaining an international economic system which favors few powerful countries at the expense of the rest. More specifically, Mbeki noted the growing inequality (1) between developed and developing countries, as well as (2) that between the rich and poor within any given country. Mbeki suggested that the Bretton Woods Institutions could remedy these problems by taking into account (1) the continuation of economic integration amongst countries; (2) the need for greater transparency in trade and investment; and (3) the rapid growth of emerging economies, such as South Africa.
To work towards a more equitable international economic system, the G20 demonstrated support for the continuation and successful completion of the Doha trade round. Robert Zoellick, current President of the World Bank, demonstrated his agreement with the G20 on this matter today at the Aid for Trade Meeting of the World Trade Organization.
Discussion:
The new heads of both the World Bank and the IMF won their offices based in part on their strong commitments to reform their respective institutions. Given that Robert Zoellick and Dominique Strauss-Kahn have pledged to address precisely the issues highlighted by the G20 members this week, what is the significance or weight of the criticisms brought by the G20?
Federal Reserve approves China Merchants Bank New York Branch
Source: Financial Times: CMB’s New York branch licence approved; Telegraph: China threatens 'nuclear option' of dollar sales
The US Federal Reserve authorized China Merchants Bank, China’s sixth-largest lender, to establish a branch in New York. The New York branch is authorized to engage in wholesale deposit taking, lending, trade finance and other banking services. Chinese officials believe this approval could lead to US stock market listings by Chinese banks. Chinese regulators support New York Stock Exchange listings. They want to boost the international standing and corporate governance standards of China’s lenders. US listings would greatly improve the reputations of Chinese banks and would enable them to establish their brands worldwide.
China Merchants Bank is the first Chinese bank in 15 years to gain approval for a US branch. Bank of Communications and Bank of China are the other two Chinese banks which have licenses to operate in the US. In addition, the New York State Banking Department approved the Industrial and Commercial Bank of China, China’s largest lender, to open a New York branch but it is waiting for final approval from the Federal Reserve.
The approval of a license for China Merchants Bank may demonstrate goodwill that might influence the Chinese to permit US financial services firms better access to China.
For Discussion:
China is one of the top three trading partners with the US and the US is China's second largest trading partner. It is estimated China holds over 900 billion dollars in US bonds. Is the license approval for the China Merchants Bank merely an indication of the growing US-China economic partnership or is it a sign that the US depends upon China to continue financing US debt?
Monday, November 19, 2007
World Bank Engages China as a Donor
Sources: World Bank encouraging ‘responsible’ Chinese lending in Africa: Zoellick; China builds African empire: The giant’s rush to secure resources
On November 19, Robert Zoellick urged the European Union to engage China as a fellow donor in Africa. Zoellick’s comment was in response to doubts raised by European donors about China’s aid to Africa. More specifically, Europe worries that China is worsening African economies with its assistance by increasing their debt.
Indeed, China has continually expanded its economic influence on the African continent; not only has it engaged the continent as a donor, but it has also enhanced its role as a trading partner. China is the second-largest trading partner in Africa (the first being the United States), and its trade on the continent has increased about 20% since last year. Its economic policies towards Africa include (1) debt cancellation, and (2) lower tariffs on goods entering the Chinese market from designated least-developed countries.
Developed countries and other concerned parties have been quick to criticize China for its refusal to condition its aid and trade on the recipient country’s political system or policy positions on human rights and other socio-political freedoms. For example, China is the largest investor in Sudan.
While these concerns require serious review, Zoellick has nevertheless advocated the position that these are not pretext for ostracizing China from playing a greater role in Africa. He cautioned Europe about hastily drawing conclusions about China’s economic activities in Africa, especially given its members’ history as colonizers on the same continent.
Discussion:
How should standards for trade and aid be established? Do you think the identity of the actor (e.g. China, the World Bank, members of the European Union, African recipient countries) matters in defining these standards?
On November 19, Robert Zoellick urged the European Union to engage China as a fellow donor in Africa. Zoellick’s comment was in response to doubts raised by European donors about China’s aid to Africa. More specifically, Europe worries that China is worsening African economies with its assistance by increasing their debt.
Indeed, China has continually expanded its economic influence on the African continent; not only has it engaged the continent as a donor, but it has also enhanced its role as a trading partner. China is the second-largest trading partner in Africa (the first being the United States), and its trade on the continent has increased about 20% since last year. Its economic policies towards Africa include (1) debt cancellation, and (2) lower tariffs on goods entering the Chinese market from designated least-developed countries.
Developed countries and other concerned parties have been quick to criticize China for its refusal to condition its aid and trade on the recipient country’s political system or policy positions on human rights and other socio-political freedoms. For example, China is the largest investor in Sudan.
While these concerns require serious review, Zoellick has nevertheless advocated the position that these are not pretext for ostracizing China from playing a greater role in Africa. He cautioned Europe about hastily drawing conclusions about China’s economic activities in Africa, especially given its members’ history as colonizers on the same continent.
Discussion:
How should standards for trade and aid be established? Do you think the identity of the actor (e.g. China, the World Bank, members of the European Union, African recipient countries) matters in defining these standards?
Labor Unrest in Abu Dhabi
Source: Arab Business—Jaber Eyes Labour Unrest from Weak Dirham
The dollar-pegged dirham has been continuing to decline compared to other major currencies. The declining dirham may cause labor unrest in Abu Dhabi. The dirham is becoming more and more weak.
Al Jaber employs more than 30,000 construction workers. Many of these workers come from neighboring countries. Workers are suffering because the declining dollar makes it much more costly for workers to purchase different currencies. Pressure is placed on the Abu Dhabi government to provide more land worker homes. The government owns most of the land in certain regions. The declining dirham has had a huge effect on other Middle Eastern countries as well.
Expatriate workers are being affected in other nations like the United Arab Emirates (UAE). Foreigners make up 80 percent of the population in the UAE. In Dubai, migrant workers rioted demanding an increase in pay for lost savings due to the declining dirham. Some employers agreed to a pay increase for only a small number of strikers.
For Discussion:
Will the dirham continue to decrease and cause continuous worker conflict in the Middle East? Will the decreasing dirham give other Middle Eastern countries an opportunity to succeed at a faster rate?
The dollar-pegged dirham has been continuing to decline compared to other major currencies. The declining dirham may cause labor unrest in Abu Dhabi. The dirham is becoming more and more weak.
Al Jaber employs more than 30,000 construction workers. Many of these workers come from neighboring countries. Workers are suffering because the declining dollar makes it much more costly for workers to purchase different currencies. Pressure is placed on the Abu Dhabi government to provide more land worker homes. The government owns most of the land in certain regions. The declining dirham has had a huge effect on other Middle Eastern countries as well.
Expatriate workers are being affected in other nations like the United Arab Emirates (UAE). Foreigners make up 80 percent of the population in the UAE. In Dubai, migrant workers rioted demanding an increase in pay for lost savings due to the declining dirham. Some employers agreed to a pay increase for only a small number of strikers.
For Discussion:
Will the dirham continue to decrease and cause continuous worker conflict in the Middle East? Will the decreasing dirham give other Middle Eastern countries an opportunity to succeed at a faster rate?
Sunday, November 18, 2007
Auto Sales Slip
Sources: Reuters, Wall Street Journal, Bloomberg
American automotive sales are predicted to suffer its biggest drop in nearly fifteen years. The weakest forecast is for a possible 9.4% drop in sales. The prediction was made by the top three investors in the automotive industry: Jerry York, an adviser to billionaire investor Kirk Kerkorian; financier Wilbur Ross; and Thomas Stallkamp, a former Chrysler president. Light auto sales could slip to 15.5 million or less next year, marking the second consecutive year sales dropped. 15.5 million would be the lowest level of sales since 1998. Others predict that auto sales could slump to 14.5 million units—the lowest level since 1993.
This drop would be sector-wide. This grim picture can be attributed to the housing credit disaster. The credit crunch, drop in home values—all paint a picture of some panicked consumers who are unwilling to make big-ticket expenditures. Stallkamp states, “I think the mortgage issue is going to freak people out and that will hit pretty hard in '08." Ross calls it a “sort of poverty effect from house prices going down.”
All of the major automakers agree that a drop is imminent, and are better prepared for a sales drop. Most automakers have cut production in their factories, and thus are better equipped for the lower demand. Analysts predict that there will not be the massive discounting seen in the post 9-11 era of car sales. Furthermore, carmakers will be adjusting production to meet the existing demands. With fuel prices the way they are, Toyota is likely to produce more Camrys, Corollas, and Yaris, instead of the fuel-thirsty 4-Runner. Chrysler is, for example, is preparing a restructuring plan that would cut its work force, streamline its product offerings, and eliminate dealers.
Question: The Big Three automakers have fallen behind some of the top foreign automakers in sales and profitably. What can they do, in the wake of this drop in sales, to regain some of the dominance they once enjoyed when the “slippage” is over?
American automotive sales are predicted to suffer its biggest drop in nearly fifteen years. The weakest forecast is for a possible 9.4% drop in sales. The prediction was made by the top three investors in the automotive industry: Jerry York, an adviser to billionaire investor Kirk Kerkorian; financier Wilbur Ross; and Thomas Stallkamp, a former Chrysler president. Light auto sales could slip to 15.5 million or less next year, marking the second consecutive year sales dropped. 15.5 million would be the lowest level of sales since 1998. Others predict that auto sales could slump to 14.5 million units—the lowest level since 1993.
This drop would be sector-wide. This grim picture can be attributed to the housing credit disaster. The credit crunch, drop in home values—all paint a picture of some panicked consumers who are unwilling to make big-ticket expenditures. Stallkamp states, “I think the mortgage issue is going to freak people out and that will hit pretty hard in '08." Ross calls it a “sort of poverty effect from house prices going down.”
All of the major automakers agree that a drop is imminent, and are better prepared for a sales drop. Most automakers have cut production in their factories, and thus are better equipped for the lower demand. Analysts predict that there will not be the massive discounting seen in the post 9-11 era of car sales. Furthermore, carmakers will be adjusting production to meet the existing demands. With fuel prices the way they are, Toyota is likely to produce more Camrys, Corollas, and Yaris, instead of the fuel-thirsty 4-Runner. Chrysler is, for example, is preparing a restructuring plan that would cut its work force, streamline its product offerings, and eliminate dealers.
Question: The Big Three automakers have fallen behind some of the top foreign automakers in sales and profitably. What can they do, in the wake of this drop in sales, to regain some of the dominance they once enjoyed when the “slippage” is over?
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