Global Woes Could Haunt U.S.

GKiplinger projects 2% economic growth for the United States in 2016. While not outstanding, there could be a sudden shift in the other direction if trouble occurs elsewhere. These are identified as the countries worth watching:

  • Venezuela: “Its economy is near collapse, as is its political system. If its oil flow stops, even for a short time, global prices will spike, putting pressure on major industrialized nations that need imports (including the U.S.) and likely shaking the confidence of investors.”
  • Brazil: “South America’s largest economy is in the second year of recession, its government is in disarray and its burgeoning middle class is being squeezed. A full meltdown isn’t likely but a less-than-spectacular Olympics and the spread of the Zika virus could unnerve trading partners and investors.”
  • Saudi Arabia: “Like others, the Saudis were stung by falling oil prices. But the big unknown is how the ruling family will respond if Washington decides that the kingdom can be held legally liable for the Sept. 11, 2001 terrorist attacks. One possible Saudi response: Selling off as much as $750 billion in U.S. Treasuries and other assets as a form of political retribution.”
  • China: “Slowing growth there causes ripples in everybody’s pond, threatening to slim trade in Europe, Asia and the Americas. China won’t be derailed, but its stumbles will keep global expansion muted.”

Have a Taste for Culinary Careers?

23064608Every weekend, I reach for a spoon – a big one – and dig into a pint of Ben and Jerry’s Chunky Monkey ice cream. Delectable chocolate chunks. Crunchy walnuts mixed with bananas. It’s one of my favorite indulgences. But that doesn’t mean I want to be a primal ice cream therapist.

Haven’t heard of it? Neither had I until I saw Delish’s list of the 10 coolest food jobs (no pun intended)!

Check out this description:

Ben & Jerry’s Primal ice cream therapist (yes, that’s his real title!), Peter Lind, consumes four to five pints of ice cream in an average week (roughly 15 to 25 flavors per day). The purpose of this madness? To assure Ben & Jerry’s delivers the best-tasting product possible. Peter and his team dream up, then sample and adjust flavors over and over until they are completely satisfied. “You could make a chipotle ice cream, but exactly how hot should it be?” That’s the kind of creamy conundrum the gurus must figure out.

Crave adventure? Become a chocolate explorer:

Biting into a bar of chocolate, it’s hard to comprehend the journey those cocoa beans travel to get to your taste buds. Meet Ray Major, Scharffen Berger’s resident “cacao hunter.” It’s his job to source the best possible cacao for the company’s artisan chocolates. His work has taken him around the world to Nicaragua, Belgium, Ghana, Mexico, Brazil, Bolivia, Guatemala … the list goes on. On these adventures, Major and his team visit plantations to evaluate the trees, discuss the crops, sample the pulp and study the quality of beans.

Food lovers also may enjoy careers as celeb chef assistants, restaurant publicists, gourmet food buyers or beekeepers – just to name a few. And getting paid for what you love to do? That’s icing on the cake.

Kiplinger: Heavy Load for the BRICS

The economic engines of the BRICS (that's South Africa added to Brazil, Russia, India and China) countries are slowing down a bit, according to analysts from Kiplinger. Of course, there is still growth expected in each of the countries.

(By the way, our latest BizVoice magazine features a story on international business but skips the BRIC contingent. South Africa is included in a much larger look at business prospects in all of Africa. Check it out online or in our interactive version).

Back to the BRICS, here's what Kiplinger has to say:

  • Brazil: 2% growth this year and not much more in 2014, partially due to reduced exports to China and continued union protests
  • Russia: About 2.5% this year, maybe 3.5% next. A $14 billion investment in infrastructure and small business lending will help, but hostile climate toward overseas capital is a long-term problem
  • India: 5%, a drop from the 8% annual growth for much of the past decade. High inflation (10%) and decreases in investment and savings rates are troublesome
  • China: 7% this year and slightly more in 2014. Wage increases will make it difficult to maintain massive government investment
  • South Africa: 2%, a drop from 2.5% in 2012, with a similar outlook for 2014

Guest Blog: Reset Africa; Obama Tours the Continent

The following is a guest blog by Asoka Ranaweera, managing partner of Grid2Grid LLC, a company based in Washington, D.C. that advises investors on structuring investments and developing projects in West, East and Central Africa. Ranaweera penned this back in July, and was a source in our upcoming BizVoice story, "Africa Under Construction," set for release in the new edition next week.

I am sitting in a hotel in Dar es Salaam Tanzania. The town is buzzing with anticipation and excitement. Any day now, President Obama will touch down and thousands of Tanzanians will be out to greet him. Everywhere you go and almost everyone you speak to will have something positive to say about our President and Michelle Obama.

By some remarkable coincidence, President George W. Bush and Laura Bush are also in town. President Bush is on a regional tour, and is fondly remembered by many Africans for providing billions of dollars in funding for combating AIDS and for starting the Millennium Challenge Corporation (MCC), which has had a significant impact in countries like Tanzania.

As I ponder the countless hours of traffic jams, security roadblocks and searches to come, my attention wanders toward the hotel bar. I see a large group of Chinese businessmen and women enjoying a drink and chatting animatedly. Dar es Salaam is abuzz not just with Obama’s visit, but also by the sounds of an economy growing at an average of 7% per annum.

Wherever you might look in Tanzania, you will find Africans, Chinese, Indians, Malaysians and Arabs vying for a slice of Tanzania’s economic growth and business. Meanwhile, as I left Washington, D.C. for Dar es Salaam, President Obama was getting some flak for embarking on a weeklong tour of Africa at the expense of U.S. taxpayers.

Rather than thinking about Africa as a place where development is now taking place rapidly, many in the American press still view it from a 1980s perspective. Meanwhile, Brazil, Russia, India, China, Turkey and many other countries are increasingly seeing Africa as a land of opportunity, a place to trade, invest and to develop bilateral relations with African people.

Africa is where all the economic action is taking place these days with 15 of the 20 fastest growing economies and approximately 300 million people attaining middle-class status in the last 20 years, according to the African Development Bank (AFDB). It’s possible that in the years to come, Africa will overtake Asia to become the fastest growing region of the world.

In 2009, President Obama visited Africa for about 20 hours. His election at the time energized many Africans into believing that his Kenyan heritage would lead to greater cooperation between Americans and Africans. Unfortunately, that never panned out; President Obama and his administration had huge domestic challenges to overcome such as the global financial crisis, which we are all still recovering from.

As we entered the recession, many Americans realized that Africa — a continent long associated with starving children, conflict diamonds and corrupt dictators — was growing and that altogether a new dynamic was shaping it. And we also came to the understanding that countries such as China had come to have a profound impact on the continent and that Africa was now a destination for business, trade and investment. Thus after more than four years of being primarily absent from the scene directly, President Obama is finally back, and this time his advisors say it is with the intention to “reset relations with Africa."

Afrophiles hope that this could be the beginning of a more concerted and directed engagement with the continent, especially in light of the fact that many people both at home and in Africa believe that this belated engagement has its roots more in economic competition than anything else.

Interestingly enough, from my experience America is more welcomed and viewed in higher terms in Africa than in any other part of the world. Africans feel a strong affinity for all things American and have been yearning for our support and partnerships. Africans in this generation are more likely to ask for investment and trade projects to promote bilateral investment than that dreaded term, "aid." And so the dynamic today is so much more different than it was.

As I get ready to leave the hotel for a meeting downtown, I hear a few Tanzanians discussing what President Obama will be doing in the country. It turns out he will be visiting Symbion, a U.S. company that is playing a significant role in the power generation sector. I am relieved to hear we as American business people are doing something constructive with the Tanzanian people.

As I am being driven through the streets of downtown Dar es Salaam, we almost collide with a high speed convoy. And I am told that we just saw Sri Lankan President Mahinda Rajapakse on his way to the statehouse. It turns out this is the first official state visit to Africa by a Sri Lankan leader; times have really changed and I hope we hit that Africa relations reset button sooner rather than later.

Predictions: Focusing the Crystal Ball on 2020

The year 2020 is creeping closer. But if you’re projecting economic forecasts and demographics for eight years from now, it seems like a lifetime away.

Neverthless, the fearless prognosticators at Kiplinger (the authors of weekly management decision-making letters and various other publications and products) consistently weigh in on future conditions. These are a few of their recent insights, in separate reports:

  • Don’t be shocked if inflation doubles, from 2% this year to 4% or a bit more by 2020. Higher interest rates will mean pricier mortages, about 8% compared to 4% now for a 30-year fixed rate loan. The homeownership rate will settle around 66%, higher than now but shy of the peak of 69% in 2006.
  • By 2020, health care will account for nearly one in nine U.S. jobs, adding more than 4 million jobs in the decade. Home health aides will be the fastest growth segment, but there will also be rising demand for registered nurses, physicians and surgeons.
  • Consumer spending in Africa will double by 2020 with the overall economy growing by 5% a year. Joining South Africa as growth hot spots will be Algeria, Egypt, Morocco, Nigeria and Kenya. Others to watch: Ghana, Tunisia and Botswana (with plenty of minerals and a stable government).
  • Staying global and extending the time out five more years (to 2025) will result in more megacities. Projected to have 20 million people within its borders by that time (no city today has reached that level) are Mexico City; Tokyo; Shanghai; Dhaka, Bangladesh; Sao Paulo, Brazil; and three Indian cities … Delhi, Mumbai and Kolkata. New York is listed as a possible ninth. Seven more Chinese cities will top 10 million each, according to the forecasters.

We might not remember to pull this or other predictions out eight years from now, but if we do I imagine the experts will be on target more than a few times.

Ranking the Best to Invest for 2011 Around the Globe

Site Selection magazine is well known for its tracking of business projects and rankings of economic activity. One of its newest projects (in its fourth year) is Best to Invest ratings. Half of the evaluation is based on its comprehensive database of new and expanded facilities, with the other 50% an analysis of business environment, business risks, foreign direct investment and infrastructure.

Here are top countries in five global regions. The metro rankings in these regions are based on similar factors as above, but with a slightly different weighting formula.

Western Europe

  • Top five countries: Ireland, United Kingdom, Germany, Austria and (tie) Switzerland and Italy. Top five metros: Dublin, Ireland; Frankfurt, Germany; Edinburgh, Scotland; Birmingham, England; and (tie) Belfast, Northern Ireland and Paris, France.

Eastern Europe

  • Countries: Hungary, Poland, Slovak Republic and (tie) Estonia and Czech Republic. Metros: Budapest, Hungary; Moscow, Russia; Bucharest, Romania; Prague, Czech Republic; and Warsaw, Poland.

Asia-Pacific

  • Countries: Singapore, Australia, (tie) Malaysia and South Korea, Vietnam. Metros (first three in China and last two in India): (tie) Beijing and Shanghai; (tie) Chongqing and Chennai; and Bangalore.

Africa and the Middle East

  • Countries: South Africa, Bahrain, United Arab Emirates, Saudi Arabia and Qatar. Metros: Port Elizabeth, South Africa; (tie) Nairobi, Kenya; Cairo, Egypt; and Kinsasha, Congo; and Casablanca, Morocco.

Latin America

  • Countries: Mexico, Brazil, Costa Rica, Chile and Argentina. Metros: Sao Paulo, Brazil; Rio de Janeiro, Brazil; Mexico City, Mexico; (tie) Guadalajara, Mexico and Monterrey, Mexico.

 

Business Potpourri: Did You Know …?

A weekend-plus of reading left me with a few business-related nuggets to share:

  • According to one respected analysis, 38 state economies are growing. Seven (Wyoming, New Mexico, Minnesota, Illinois, Maryland, West Virginia and Rhode Island) are expected to turn around soon; two (Maine and Mississippi) should reach that point early next year; and three (Nevada, Michigan and Georgia) are still in the waiting game.
  • Twenty years ago, employee performance pay (bonuses, incentives, stock options, etc.) accounted for less than 4% of total payrollls; today, that number is at 12% and growing.
  • Cell phone applications are all the rage, with a new one intended to help avoid rage on the road. It will assist with finding the nearest E85, biodiesel, hydrogen or other fuel station, along with where you can charge up your electric vehicle.
  • Within 20 years or so, four countries (China, India, South Africa and Brazil) will account for 40% of the world’s water use.
  • California is not expected to gain any additional seats in the House of Representatives — marking the first time that will have happened since the state joined the union in 1850.
  • A simple retail sales greeting chance may make a big difference. Instead of “Can I help you?” and getting, “No, thanks, I’m just looking,” as a response, try  “Hello. What brings you into the store today?”
  • Pointing out problems within an organization is OK unless it develops into a culture of complaints. One way to keep the whining under control is to require that all complaints be accompanied by at least one proposed solution. This will force people to take a closer look at the problem, and often they’ll realize it’s not that big of an issue after all. Or they may have a legitimate complaint and now they are focused on solutions instead of just problems.
  • The once-required white page phone directories are becoming a thing of the past. In three states (Florida, Oklahoma and Ohio) where distribution is by request only, just 2% of phone users ask for a copy. Savings in paper and energy costs could be substantial.

Indiana Fire Hydrants Now Extra Crispy

Two Hoosier cities seeking creative ways to supplement their budgets have gotten a bit of assistance from the Colonel — yes, THE Colonel.

Fast-food chain KFC is giving two Indiana cities $7,500 so it can emblazon founder Colonel Sanders’ face on hydrants and fire extinguishers to promote new "fiery" chicken wings.

Experts say to expect more ads on public property as companies look to cut through the clutter of traditional advertising. Cash-strapped governments have long sold space on mass-transit vehicles, benches, trash cans and other public property to help stretch budgets.

KFC told Indianapolis and nearby Brazil that it wanted to improve their fire safety by helping pay for new hydrants and extinguishers in public buildings in exchange for ads on them.

Alternative marketing efforts like this have been growing as people become immune to conventional advertising, said Allen Adamson, managing director of branding firm Landor Associates.

"I think it’s the tip of an iceberg … as marketers struggle to find places to reach consumers and as cities look for ways to squeeze more dollars," Adamson said.

So do you think this is a useful way to enhance public budgets — or capitalism run amok and an unhealthy merging of the public and private sectors?

Decade a Good One for Global Growth

Not a lot of Americans are going to look back fondly on 2009 in an economic sense. But if you expand the viewpoint to a longer time frame and make it more global in nature, a George Mason University economics professor says it was a pretty good decade.

According to Tyler Cowen, national leaders around the world are embracing the commercialization of their economies. He writes:

Putting aside the United States, which ranks third, the four most populous countries are China, India, Indonesia and Brazil, accounting for more than 40 percent of the world’s people, and all four have made great strides.

  • Indonesia had solid economic growth during the entire decade, mostly in the 5 percent to 6 percent annual range.

  • Brazil also had a consistently good decade, with growth at times exceeding 5 percent a year.

  • Elsewhere in South America, Colombia and Peru have made enormous progress and Chile is on the verge of becoming a "developed" country.

  • To be sure, in Africa, there is still enormous misery; nonetheless, overall standards of living rose in a wide variety of countries there, with economic growth for the continent as a whole at more than 5 percent in most years.

In a given year, an extra percentage point of economic growth may not seem to matter much. But, over time, the difference between annual growth of 1 percent and 2 percent determines whether you can double your standard of living every 35 years or every 70 years. At 5 percent annual economic growth, living standards double about every 14 years.

Energy, According to Gingrich

High gasoline prices have generated the greatest public anger since California’s Proposition 13 in 1978. So says Newt Gingrich (as offered in his May 30 speech to the Council of State Governments in Lexington, Kentucky). Many likely disagree with that statement, but Gingrich backs up his claim that "Washington does not have a clue" what to do.

He points out that:

  • The U.S. has three times the Saudi oil reserves in the Rocky Mountains
  • Kentucky has 27% of the world’s coal
  • Brazil is utiliziing two oil fields in the Atlantic, allowing it to be independent of the Middle East
  • The U.S. can’t explore anywhere — the Atlantic, Pacific or Gulf of Mexico
  • "What did we do? We passed a bill in Congress to sue OPEC"

Gingrich’s focus on November 6 at the Indiana Chamber’s 19th Annual Awards Dinner will undoubtedly be on Washington’s new leaders and solutions that hopefully are better than those currently offered.