International Trade Blog

As the global economic crisis is still roaming the world one might think that now would be the time to come together, forget private ambitions and work towards a common goal. Yeah one might think…

If this would be an ideal world with an ideal society then maybe it would be possible, but sadly this is not the fact. While these truly are hard times, these are also times of various possibilities. Of course in an ideal society everyone would do their outmost to combat the crisis in every possible way. Today more often then not everybody fights for themselves. While this might be ok for private entrepreneurs and larger companies, at least it would be justifiable, it is totally wrong when government officials start to use this crisis for their own benefit. While some politicians use the crisis as propaganda to increase their party ratings others simply gain financial benefits. Is it morally correct to proclaim that now everybody must tighten their belts and accept huge cuts in salary for the benefit of overall economy while at the same time the salary levels of government official remain ridiculously high. How can you order a family to survive with minimal income while you yourself have never experienced that? I, as a private person, might understand that it is necessary to decrease costs and thus decrease wages, but only if I see that the official who have ordered it do the same. While this may not be text book corruption I still perceive this as corruption if an official uses his post to gain unfair financial benefits in the time of crisis. If the overall situation is normal I have nothing against higher salaries for government officials, after all they represent our country and must be rewarded. Sadly in most cases government officials have now forgotten who they represent and only thinking about their personal ambitions.

I really do hope that the situation will change, but I fear that this will not happen in my lifetime. On some level I even understand these people. It is very hard to let go if you have gained something valuable, even if it is for the good of us all. This is the nature of humans.

While still a lot of people experience the wrath of the global economic crisis some governments and analysts have already proclaimed that the crisis is over and we are on a way to a recovery. One of these statements was made in UK.

Of course it sounds great and very encouraging, but there are problems with this statement and UK trade union has pointed out these problems, and warns people to be very careful. True some stock prices have shown improvement which means that really there are some positive changes happening, but it is still too soon to speak about a recovery. Well we might speak about it, but then only in theory. How can one speak about a recovery if the unemployment levels are still very high and salary levels so low? The government is sponsored by inhabitants of a country and not the other way round. If the people do not have the money and are fighting with threats of poverty how can we speak about a recovery. Only when these factors will begin to change then it is time to really speak about the end of crisis. But some governments tend to forget that.

Of course we must think positive and hope that we will recover as fast as possible. We cannot rely on some experts who say that now the crisis is over and everything will be good now. This does not happen in real life. We, the simple people, do not care about stock prices and GDP growth indexes, all we care about is quality of life and as long as we have to struggle to survive all talks about a recovery is wishful thinking. I really do hope that the crisis is almost beaten, but on the other hand I am very afraid of what will happen in the course of next few months.

Although the global economic crisis is still roaming around the world, many governments start to issue statements that the crisis is over and recovery is there. Sound nice, but what does this actually mean?

Various analysts all over the world predict total recovery by 2010 and increase of GDP. If it will be true then it is great news for everyone. Salaries will raise, unemployment levels will drastically decrease, the overall quality of life will reach unseen heights. Sounds like utopia doesn’t it? Ok let’s say that the crisis has been beaten and we are on the way to recovery. This really should mean that employers should increase wages, but I do not think that it will happen so soon. It is very easy to cut salaries, but much harder to raise them. That is the simple nature of human beings. Even if the economic situation improves employers tend to be very ‘’careful’’ with raising wages. And why shouldn’t they be? They have suffered through the crisis, had a legitimate opportunity to cut costs be decreasing salaries and now nobody can order them to reset the salaries to previous levels. This means more profit and as the economic situation still seams fragile employees will still be afraid to lose work and obey the employer. So basically we could celebrate the fact of recovery, but we will not receive any actual benefit from it, at least not as soon as we expected.

Granted the unemployment level should improve as companies who have recovered will hire new employees, but then again the salary level will not reach previous levels. None the less this is still good news as more and more people will be able to earn at least a minimum wage to survive and feed their families.

The improvement of the quality of life takes even longer as it is directly connected with salary levels and the overall employment level. Granted the crisis had one positive effect. It decreased the overall costs of food and clothes and some services which previously had reached ridiculous heights.

The general consensus is that yes we can speak about recovery, but only on paper. In real life we will probably experience it only in 2011, of course only if the prognosis does not change and we do not encounter another crisis. Let’s hope for the best scenario.

The major experts predict that by 2010 the economy of UK will recover. A bold prediction you might say, but it actually seems that they might be right. At least it is positive thinking finally.

The experts forecast a 1.1% growth of economy in 2010. Compared to 0.6% forecast this year the increase is clearly visible. Unemployment levels will reach 3 million as opposed to the forecasted 3.2 millions. A recovery seams very possible, but it won’t be easy to sustain it due to the large UK debts. Although not clearly visible, but most experts are sure that the economy has already started to recover. This trend can be seen not only in UK, but also other countries. So there must be some hard truth behind it all. The experts agree that this recession is somewhat worse than the one in 1990, but not as worse as the one in 1980. Now the only things that could slow down the recovery are; high unemployment, low consumer spending and fragile banking sector. The general idea behind decreasing government debt is to cut back public spending. Of course that will be quite an unpopular action, but is a necessary thing to do.

In general these are very good news. Of course the recovery will not occur in one day. I think we all understand that. It is a long term project which can be achieved only by working together towards a common goal. Let’s hope that 2010 is the year when the global economic crisis will be defeated all across the world.

The current main objective is to defeat the global economic crisis and many governments have come up with various plans on how to do that. Sometimes the actions might seem cruel, but if there is a long term benefit then it is understandable.

All is all this thesis does not sound so bad, but unfortunately some governments have decided that the only way to defeat the crisis is to raise taxes. Sometimes it really feels like the government official who make these decisions do not really understand how the economy works in real life. Of course it looks great on paper; raising taxes will provide increased income. Sadly in real life it does not work like that. Companies are struggling and unemployment levels are rising so higher tax rates will only force people to adapt shadow economy, meaning envelope salaries, evasion of taxes and other thing that will actually harm the economy. Sadly some government officials still seem not to understand the situation. In fact the government should think about lowering of taxes to promote more economic activity. As I read various news items I see that some governments have realized this fact and are actually doing the right thing.

This is the time when politicians should forget about party ratings and cease all political game to come and work together. They must understand that raising taxes means raising the dissent level of the population. A high dissent level may turn into hostility between government officials and general public. That would only decrease the stability which is a vital part of a possible recovery. I do really hope that at least someone will realize this and finally does something real instead just talking about what should be done.

We tend to accuse governments and large corporations for causing the global economic crisis and on some level it is true, but we must be able to admit that we also helped to create this economic recession. But more often than not, it is easier to point the finger to others rather than ourselves.

What did really happen? What were the main causes of the global economic crisis? We were actually living quite good and then suddenly almost like out of nothing the crisis hit us. And boy did it hit us hard! Of course at some degree governments are responsible, but I do not view them as the sole origin of the crisis. They only partially created this humongous problem. I cannot speak for the whole world, but in the context of my own native country I must admit that we, the everyday consumers, caused the crisis on some level. The inflated prices in construction and real estate sectors were significant factors. The salaries and costs were pushed to unseen heights and people believing that it can only get better started to spend and live above the real situation. Huge leasing loans became an ordinary thing. People loaned large amounts of money to invest in the booming real estate sector. When the crisis hit they were left with enormous debts without real possibility to sell the accumulated real estate as the sector was the first to crush. Banks and other financial institutions demanded the return of the assets, but that was an impossible undertaking as there simply was no more money to return. This lack of money directly influenced the construction sector and caused its collapse. A lot of people lost their jobs and income meaning even less money to spend. This only allowed the crisis to gain strength.

Now the government is forced to decrease the overall costs and raise taxes to increase income. A foolish act if you ask me as it probably will have quite the opposite effect. The main idea behind all this is that we must admit that the global economic crisis was not caused just by one country, government or person. We all are partially responsible and this should not the time of finger pointing.

The export levels of India have decreased quite drastically and now the government has decided that it is the time to perform some countermeasures. A wise choice if you ask me. They have to decide to implement some taxes brakes and waive some import duties. That surely could boost some trade levels.

The main trading partners of India have always been the USA and Western Europe. Although the global economic crisis has not had a crushing impact on India, it wreaks havoc on European and US economies. These economies on the other hand affect the economy of India, meaning that the global economic crisis has caught up with India. Now the government plans to promote trade with Eastern Europe, Australia, Latin America and Africa thus increasing trade levels. If this plan succeeds that should lift the export levels and the whole economy of India.

Actually no matter the outcome the fact that the government is really taking some measures is superb. Lowering the taxes seems like the perfect tool to battle the global economic crisis, though some governments think that it is the time to increase various taxes to increase the overall income of the country. While increasing taxes may seem like a good idea in theory, in real life it has the opposite effect. It actually decreases the income as people have less money to spend and enterprises crumble under the heavy taxes. This is a perfect breading ground for shadow economy, starting form evasion from taxes till salary in envelopes. Sometimes it really seems that the people that we have voted in our governments have absolutely no clue about how the economy actually works.

Let’s hope that India’s example will influence other countries to similar actions, but I would not actually hold my breath about it.

The global economic crisis has had a terrible impact on world economy and basically our everyday life. But which is the most damaging weapon of the crisis? We all can somehow deal with salary cuts, expensive goods and inept governments, but uncertainty is something far more terrible.

What do we basically want to achieve in our lives? I am not talking about riches and fame because those can be only secondary goals in life. We strive for stability. Stability provides us with a feeling of certainty. We can make long term plans concerning our lives and professional careers. The global crisis has taken certainty out of this equation because nothing is safe anymore. Well you might have a job and even accepted a salary cut, but who is to say that two months from now your employer will come up to you and inform that there is no more work for you and that you should look for a new job. Actually in some cases this is the best scenario as it still provides some options. A more evil employer will use the global crisis to his own advantage. He can make you to take ridiculous cuts in salary; work overtime and maybe even orders you to do illegal or dangerous work. In most cases the employee has no options as to accept the demands because the salary is needed to support a family, no matter how small the salary is.

Another thing that provides unneeded uncertainty is the possible actions of governments. No one can actually tell which steps the government will take to battle the economic crisis. In some cases this could mean increase of taxes or maybe the decrease of minimal wage. Granted the government actions have a larger impact on companies and business people, but we must not forget who actually pays our salaries. Its the same companies and business people who if hindered by the government will on the other hand take it out on their employees.

We need stability. This should be the main goal for the moment. Only stability can pull us out of the global crisis. As soon as it will return the people will start to spend more money thus heating the economy. It is simple as that. But for now uncertainty rules the world.

What do you imagine when you think about Australians? A Paul Hogan look-alike cowboy type person with crocodile boots who only eats grilled food and calls everybody ‘’mate’’. I am sorry to disappoint, but you might be dead wrong.

I admit I had the same stereotype thinking when it came to Australians, but then I actually visited Australia and my preconceptions changed. The average Australian business person looks quite similar to their European and American counterparts. Men prefer conservative dark business suits, while women may wear a dress or a skirt and a blouse. Admitted Australians are somewhat more laid back and informal clothing is deemed appropriate at more informal business meetings. Despite their seemingly laid back attitude Australians value punctuality. Maintaining eye contact during business meetings is crucial. Gift giving is not appropriate in Australian business traditions as it may be confused with corruption. On the other hand if you have been invited to somebody’s home a small gift would be viewed as a token of appreciation.

As we all know Australia is an English speaking country so most business communication is done in English, but you must remember that Australia is a multi national country and a lot of people are of Asian origins. A handshake is the most commonly used method of greeting. Similar to Japan the exchange of business cards is quite widespread. In general Australians are very friendly and open people.

I do not know why, but sometimes we view Australians as simpletons and unimportant. We tend to forget that they have their own continent with a lot of natural resources and a huge industrial potential. The Australians in some ways have actually surpassed us, as they managed to out play the global economic crisis. Australia is currently one of the few countries where the impact of the crisis has been minimal. It means that they are quite efficient in business sphere and should be viewed as a major player in the global market. Use their strengths to your own advantage and maybe even become more like them.

The main experts in USA have proclaimed that the recession of US economy may have come to a halt and there are promising signs of recovery. This is not only good news for USA, but for everybody as US economy has a worldwide influence. Let’s hope that these predictions turn out to be true.

The Dow Jones index rose by 1 % and European markets also increased. US government officials said that it seems that the economy has recovered from the hardest blow, but they also warned that unemployment level will decrease only step by step. Still European officials remind that this recovery is very fragile. In fact US officials acknowledge this fact and do not promise a miraculous fast recovery. The general assumption is that the recovery will be a long and hard process and that at first the progress will be very slow. The International Monetary Fund (IMF) had earlier predicted that the economic growth of USA next year will be zero or even negative, but now they have changed the prognosis to 0.75 % growth.

The positive headlines of the different markets have had an impact on worldwide economy as most countries are starting to pull out of the economic crisis. The general fear of total financial collapse seems to have vanished or at least moved further back in our minds. I really hope that USA has defeated the global economic crisis as it only can mean good news. Let’s be real, the crisis will not stop in one certain day. It will be a long and demanding process, but we have to start somewhere. Stability and a certain financial safety is the key to overcoming the global economic crisis. An increasing consumer spending is the best news for every country in the world. Let’s hope that the good news of USA will convince their people to believe in a recovery.