International Trade Blog

The first step towards recovery from the economic crisis is spending money, more precisely spending money in the domestic market. UK seems to be moving in the right direction as retail sales keep increasing. This means that people in UK are again willing to spend money.

As British Retail Consortium officials have stated the main reason for this trend might be the rather bad weather in the second half of July. Apparently people are deciding not to go on a foreign vacation, but rather spend their money on home improvement. The extensive discounts have also had a positive effect on sales. The increase could be bigger, but it is somewhat hindered by the rising unemployment. The same trends apply to food and clothing sales. This is nothing strange as I have stated before that in times when people are not able to afford expensive and exclusive items, they rather spend their money on cheaper everyday stuff and with that somewhat improve the quality of life. So this is why sectors like food and clothing are less affected by the overwhelming global economic crisis.

So due to these facts some retailers seem to think that this may be the beginning of the end of recession. But as long as there will be the fear of sudden unemployment and salary cuts the improvement tempo will be fairly slow. None the less this means good news for everyone. It is possible that we have passed the deepest point of the economic crisis. As the stability returns the crisis diminishes. Let’s hope that UK is not the only place where positive things are beginning to show on the horizon.

Although Africa has virtually unlimited potential it is still a place of severe poverty, famine and in some cases a war zone. Humanity strives for total democracy and so should the countries of Africa. But this will not be an easy and quick undertaking.

US Secretary of State Hillary Clinton has just began her tour through Africa. Her main aim is to convince the local governments that democracy is a vital part of country development. She is completely right because as long as there will be no stability foreign investors will be afraid invest their money, develop industry and generate trade. Yeah sure foreign companies buy African natural resources, but that is no trade it is more like exploitation. With this visit the US shows that Africa is still a key element of their foreign policies. As the family of the president of USA Obama, is originally from Kenya, now it is even more important. Of course USA understands that the trade between USA and countries of Africa can be very profitable. If achieving democracy is one thing then maintaining it is another.

In general newly turned democracies are very prone to corruption which is a global problem. There is not much difference between a dictatorship and democracy if both governments exploit the country and its nation. Though I have nothing against corruption in small scale, which actually can sometimes be an effective tool, on large scale it prevents successful trade operations.

Will things change in Africa? They probably should, but it will not happen in months, probably not even years. We must realize that democracy is not a magic wand that changes all wrongs and cures every disease. Democracy is important, but it will reach its full potential only when the thinking of people in general will change. If Africa is ready to begin this journey then it is good news for international trade.

The crisis is currently ruling the world and everyone is just trying to survive. So what does China do? Amidst the global recession China’s economy is still growing. And growing good!

The experts predict that the growth will reach the 8 % mark in 2009. That is hell of a lot higher if we compare this, for example, with the prognosis of USA (1-1.5 %). Still experts warn that China is not completely out of the woods yet and there are a lot of problem that have to be solved. Largely this economic growth is contributed thanks to the huge government economy stimulus plan which was launched in the autumn of 2008 (585bn dollars). Hell a lot of money, but apparently it worked. Most of China’s experts warn that the growth is not stable and it would be much too soon to speak about a full recovery of China. Although the firmaments of recovery are still considered unstable and weak the average income has increased by approximately 10 %. And in general that is a good sign for the population. While that may be a good thing people are still afraid to spend more money and consumer level of China is still decreasing. Not by much, but still it is decreasing.

Export has suffered a significant decrease compared to the previous year. China is exporting approximately one fifth less than last year. Many workers in the export sector have lost their jobs, but thanks to the plan launched by the government did not fell into unemployment. Various government infrastructure projects provided numerous jobs for the laid off workers. This is an admirable achievement for the government. The export levels still remain low due to the overall economic situation in the world. Sadly China’s economic recovery is not enough to pull the whole world out of recession due to the fact that China is not a major importer.

So good news for China! Yeah, but how does it benefit me, my country is still tumbling down the rabbit hole? The deliberation is very simple – if China can do it then we also can. Just don’t give up.

Global economic crisis has hit the world hard, there is no denying that, but not everything is as bad as it seems. Apparently the crisis has a somewhat positive side effect – the price for crude oil is falling, and what a fall it is!
Approximately a year ago the price of crude oil peaked at 147 dollars per barrel. Now, a year latter, a barrel of crude oil costs about 60 dollars. I would classify the difference as substantial. What has caused such a change? Well the obvious answer is – the worldwide economic crisis and more precisely the overall decrease in demand. Simply put; people have less money to spend on petrol and as using a car can be classified as an elite activity people try to save money by driving less. So now the big oil producers are starting to worry about their profits. For ordinary enterprises on the other had this is good news as transportation costs are lowered meaning the import and export business becomes more lucrative.
Most experts predict that oil prices will stay low until 2010 or even further on. Basically it all depends on how the developing countries will cope with the crisis. As soon as the recession diminishes the oil prices will start to climb. Will they reach previous heights? Eventually yes. So if possible take any advantage of the current situation.
Lastly why this is a consolation price? Yeah the oil prices are low and gas stations drop their prices, but the actual benefit to the general public is kind of small. What is the point of low oil prices if we still only can afford just to by food and somehow scrape by. So this is only good news for those with secure jobs and some extra money. But after all anything is better than nothing

Well of course crisis and recession are not the nicest sounding words in our vocabulary, but what can we do? There will always be some sort of crisis and good times are always followed by recession. We of course can whine and cry about it, but it does not actually get us anywhere. So what should we do?

What is the worst case that can happen to you in a crisis? In my opinion it is unemployment. That is brutal especially if you have a family to take care of. But if you are a smart and active person you can always find a job even in the worst recession because you have to remember one thing – recession can also be a very good thing as many enterprises use it to expand into new markets and they always need good employees. And while you search for the new job you have a lot of free time which you can spend to further improve your skills or learn something new. Continue reading »

By Brandon Francis

Imports and exports in the midst of Global Financial Crisis

With the world in the grip of a deep recession and no clear way out, how have imports and exports been affected? How have those who rely on shipping trade been getting along?

Short term credit

The first point to note is that this crisis has affected credit, but more importantly for the shipping industry, short term credit used for shipping transport has dried up, with some port agents refusing to even accept credit notes from certain banks. Short term credit use in the shipping industry is wide spread, so this is a major issue. This has had a big impact for the shipping industry as a whole, as businesses struggle to hold on to cash and try and live on a credit-free diet. Continue reading »