The World Economy

Economy of the America's Largest Export Continues

2010-12-21T12:06:00.000+07:00

President Obama met Wednesday with corporate leaders today in an effort to control America's leading export over the past couple of decades, namely jobs. But what will be the result?

With unemployment rates stubbornly high and large businesses sitting on record piles of cash, the it is expected that the president will exhort business leaders to begin hiring again. However, structural changes to how business is done may preclude that.

While the American economy is dependent on consumer spending for growth and jobs, American businesses increasingly no longer need that same domestic spending for growth, thanks to their international sales. International sales account for about 47 percent of their revenue, according to a survey of the Standard & Poor's top 500 index.

Many of these companies have off shored and outsourced in order to seek lower wages, leading many to assume that it isn't possible to compete with low wages and regulations. However, Germany, one of the world's leading exporters, pays its manufacturing workers an average of $48 per hour (including benefits).

Reforming our economy is clearly possible without moving to a service economy or sacrificing wage rates. Manufacturing is an important part of any developed nation. If a nation is simply exporting raw materials (as the United States is the world's largest food exporter), and is importing all of its finished goods, then it is essentially a colony state for mercantilist producers, also known as a banana republic.

Manufacturing has declined from making up over 20 percent of employment a couple decades ago, to less than ten percent today, according to the Bureau of Labor Statistics. It is impossible to support a middle class without a strong manufacturing base to provide quality jobs. Our present economic trajectory is resulting in a polarization of wealth, and the top earners in America continue to own a larger percentage of total wealth.

President Obama must realize these facts as he works to turnaround the American economy. A good place to start if by choosing a replacement for the outgoing director of the National Economic Council, Larry Summers. As Wall St. and big businesses profit off of trade policies that fail the average American, these cannot be the voices whispering in the president's ear. There are many qualified economists and manufacturing CEOs who could do a much better job.

If change is to come to our economic policies, our leaders must stop listening to those who currently profit from them. Voicing your support for such policies will also help. If only lobbyists, bankers and the executives who routinely outsource jobs are the only people speaking out, then we will remain on track to becoming a ruined nation.

Afghanistan Economy

2010-12-18T13:32:00.001+07:00

Afghanistan is a landlocked country in South-Central Asia. Its location makes it a strategic point to connect East and West Asia or the Middle East. Afghanistan has a land area of 647,500 square kms and a population of 28,150,000, according to the 2009 estimates.

The country’s natural resources include gold, copper, silver and zinc in the Southeast, precious and semi-precious stones in the Northeast and significant amount of petroleum in the North. However the natural resources have not been utilized to the fullest due to frequent invasions that country has been experiencing lately.

Even after the fall of the Taliban regime in 2001, it is one of the poorest countries in the world. About 40% of the country’s population lives below the poverty line. The economic progress is extremely slow with high dependency on agriculture, trade with neighboring countries and international donation. There is still a dearth of basic facilities, such as housing, clean water, medical care and electricity. Some of the major threats to the growth of Afghanistan’s economy are weak law enforcement and governance, criminality and insecurity.

Rise of Afghanistan Economy

Since 2001, "economic growth has been strong and has generated better livelihoods" in Afghanistan, reports the World Bank. The infusion of multi-billion US dollars proved significantly beneficial to Afghanistan’s economy. Moreover, substantial agricultural production helped the country recover from the four-year draught in 1998-2001.

There was a 14% rise in the real value of the non-drug GDP in 2005 in the country. Cultivation of poppy and opium, morphine, heroin and other illicit drugs contributes about one-third of Afghanistan's GDP. About 3.3 million of population depends on opium production for its livelihood.

Development of infrastructure is in the pipeline, with two American companies, Black & Veatch and the Louis Berger Group, involved in rebuilding water supply systems, roads and power lines.

Another remarkable aspect in the recovery of Afghanistan’s economy is the homecoming of more than 5 million Afghan refugees, who had left the country in the wake of the social and political upheaval in the country. They came back completely rejuvenated and brought with them substantial funds and skills to re-establish their foothold in the country. This has led to the reestablishment of a market institution, giving a boost to employment. The setting up of a $25 million Coca Cola bottling plant by a Dubai-based Afghan family in 2006 has been a major factor behind the increase in employment in Afghanistan.

The financial sector has also experienced tremendous growth, with the opening of more than 16 banks in 2003. Some of the major banking institutions in the country are Afghanistan International Bank, Kabul Bank, Azizi Bank, Standard Chartered Bank and First Micro Finance Bank. It is now possible to transfer money in and out of the country through banking channels.

There are prospects for high economic growth in Afghanistan, according to the US Geological Survey and the Afghan Ministry of Mines and Industry. There are speculations about the natural resources reserves that are expected to generate enormous GDP for the country. These include:

* up to 36 trillion cubic feet (1,000 km3) of natural gas

* 3.6 billion barrels (570,000,000 m3) of petroleum and

* up to 1,325 million barrels (2.107E+8 m3) of natural gas liquids

England Economy

2010-12-18T13:18:00.000+07:00

England is a part of the United Kingdom and shares land borders with Scotland and Wales. Towards its North West, South East and East are the Irish Sea, Celtic Sea and North Sea. England comprises over 100 small islands.

England has a land area of 13,395 square km and a population of 51,446,000 (2008 consensus). The terrain comprises of plains and low hills. England is rich in different naturally occurring resources, such as coal, petroleum, natural gas, tin, limestone, iron ore, salt, clay, chalk, gypsum, lead and silica. This is one major reason that England has been able to adopt the industrial revolution easily and prosper.

England Economy

England’s economy is one of the biggest economies of the world. Being a mixed economy, there is active contribution from both the private as well as the government sector. However, amidst a largely capitalistic outlook, England retains the social welfare focus and leads the world in aerospace, arms and the manufacturing segment of the software industry.

Although industrialization is rampant in the nation, there has been a sudden shift towards the services sector. Tourism has therefore become an important segment and attracts over a million people annually to England.

This is how the economy has performed since 2007 (figures in US dollar trillion):

Although the recession brought down the economy significantly and England was one of the worst hit nations in the world, the Brown administration, through nationalizing, tax cuts and other financial instruments, was able to contain the losses.

The services sector helped as well, with its rich contribution to the GDP of 75%, followed by the industry sector and agriculture. The following graph shows the performance of each sector in comparison to the others (in percentage):

England’s capital, London, is the world’s largest financial center. This possibly explains why the economy struggled during the financial crisis of 2008 and 2009.

Australia Economy

2010-12-18T13:03:00.000+07:00

Over the last two decades, Australia's economy has experienced positive reforms that have boosted its economy, and raised its standard of living. Australia is today riding the commodity boom, in particular signing massive contracts with China to feed the fastest growing large economy in the world with the raw materials and energy it so badly needs.

Australia is the thirteenth largest economy in the world. As of 2009, Australia GDP was estimated to be $920 billion. Australia has managed an impressive 18 years of continuous growth since 1992 - see Australia GDP Growth. Even during the Financial Crisis, Australia kept growing, managing 0.732% thanks to its commodity exports. Forecasts suggest growth will continue at least for the next five years, peaking at 3.4% in 2012.

Indeed, being both a country and a continent, the only one in the world, Australia is a land of huge natural resources and beautiful coastlines. Australia geographhas a massive land area of 7,617,930 square kms (Australia geography).

Being a land with enough variation in topography and sand, huge deposits of gold, iron, bauxite, iron, manganese, opals and sapphires have been identified. Natural gas deposits are evenly spread throughout the continent.

Given these factors, it is no wonder that the Australian economy is one of the strongest economies in the world and follows a laissez-faire policy. The country features an enviable per capita GDP of $37,302 (Australia GDP per capita), slightly higher than that of the United States, UK, Germany and France, putting it in 15th position.

This is partly due to the small Australian population of 22,175,475 (2010 estimates) in a large country. A majority of the population resides in the vicinity of Sydney, Melbourne, Adelaide, Perth and Brisbane.

Australia is a western-style market economy. The services sector is the largest, accounting for 71% of GDP in 2008 (Australia Gross Domestic Product by Sector). Although the agricultural and mining sectors are small, 4.7% of GDP combined, they contribute approximately 65% of exports.

Australia Economy Rankings

Here are some rankings for the Australian economy:

    * Ranked second in the United Nations 2009 Human Development Index
    * First in Legatum's 2008 Prosperity Index
    * Sixth in The Economist worldwide Quality-of-Life Index for 2005
    * Melbourne was listed 2nd in The Economist's 2008 World's Most Livable Cities list (Perth was 4th,         Adelaide was 7th and Sydney was 9th)
    * As of 2010, the Australian Securities Exchanges ranks 9th in the world, following the 2006 merger of the Sydney Futures Exchange and the Australian Stock Exchange.

Australia Economy: What Makes it Strong?

The key contributing factors are demand for commodities, growing ties with China, low inflation, a housing market boom and strong emphasis on reforms. High export prices for agricultural products, energy and raw materials provide steady and growing foreign exchange income, leading to increasing business and consumer confidence gave a boost to the national economy. The mining states in particular notched up huge growth numbers.

During mid-2008, growth was constrained due to a tight labor market and infrastructure bottlenecks. The trade deficit went up because of strong import demand, a drought and a strong currency. However, the country managed to somewhat escape the bayonet of the Great Recession, which many other developed economies could not. The country’s strong banking sector, monetary and fiscal stimulus, investment from China and sharp buoyant export demand acted as protective factors.

In October 2009, the central bank raised its key rate, making Australia the first G20 country to constrict its monetary policy. Some of the major plans for the 2010 economic development include raising economic productivity, passing the emissions trading legislation and furthering economic relations with China. The government also plans to focus on drought, devastating bushfires and other climate-related issues.

G20

Australia is part of the G-20, Group of Twenty.

Further Resources

Find out about forex and forex courses in Australia.

Economic History of China

2010-12-18T12:34:00.000+07:00

China's economic system before the late 1990s, with state ownership of certain industries and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to investment.

Analysts estimated that investment accounted for about 25 percent of GNP in 1979, a rate surpassed by few other countries. Because of the comparatively low level of GNP, however, even this high rate of investment secured only a small amount of resources relative to the size of the country and the population. In 1978, for instance, only 16 percent of the GNP of the United States went into gross investment, but this amounted to US$345.6 billion, whereas the approximately 25 percent of China's GNP that was invested came to about the equivalent of US$111 billion and had to serve a population 4.5 times the size of that in the United States. The limited resources available for investment prevented China from rapidly producing or importing advanced equipment. Technological development proceeded gradually, and outdated equipment continued to be used as long as possible. Consequently, many different levels of technology were in use simultaneously (see Science and technology in the People's Republic of China). Most industries included some plants that were comparable to modern Western facilities, often based on imported equipment and designs. Equipment produced by Chinese factories was generally some years behind standard Western designs. Agriculture received a smaller share of state investment than industry and remained at a much lower average level of technology and productivity. Despite a significant increase in the availability of tractors, trucks, electric pumps, and mechanical threshers, most agricultural activities were still performed by people or animals.

Although the central administration coordinated the economy and redistributed resources among regions when necessary, in practice most economic activity was very decentralized, and there was relatively little flow of goods and services between areas. About 75 percent of the grain grown in China, for instance, was consumed by the families that produced it. One of the most important sources of growth in the economy was the improved ability to exploit the comparative advantages of each locality by expanding transportation capacity. The communications and transportation sectors were growing and improving but still could not carry the volume of traffic required by a modern economy because of the scarcity of investment funds and advanced technology.

Because of limited interaction among regions, the great variety of geographic zones in China, and the broad spectrum of technologies in use, areas differed widely in economic activities, organizational forms, and prosperity. Within any given city, enterprises ranged from tiny, collectively owned handicraft units, barely earning subsistence-level incomes for their members, to modern state-owned factories, whose workers received steady wages plus free medical care, bonuses, and an assortment of other benefits. The agricultural sector was diverse, accommodating well-equipped, "specialized households" that supplied scarce products and services to local markets; wealthy suburban villages specializing in the production of vegetables, pork, poultry, and eggs to sell in free markets in the nearby cities; fishing villages on the seacoast; herding groups on the grasslands of Inner Mongolia; and poor, struggling grain-producing villages in the arid mountains of Shaanxi and Gansu provinces. The economy had progressed in major ways since 1949, but after four to five decades experts in China and abroad agreed that it had a great distance yet to go.

Despite formidable constraints and disruptions, the Chinese economy was never stagnant. Production grew substantially between 1800 and 1949 and increased fairly rapidly after 1949. Before the 1980s, however, production gains were largely matched by population growth, so that productive capacity was unable to outdistance essential consumption needs significantly, particularly in agriculture. Grain output in 1979 was about twice as large as in 1952, but so was the population. As a result, little surplus was produced even in good years. Further, few resources could be spared for investment in capital goods, such as machinery, factories, mines, railroads, and other productive assets. The relatively small size of the capital stock caused productivity per worker to remain low, which in turn perpetuated the economy's inability to generate a substantial surplus.

Africa Economy

2010-12-18T12:31:00.000+07:00

Africa is the world’s second largest continent and it has the second largest population after Asia. The African continent covers an area of 30.2 million square km which is equivalent to almost 20.4% of the total land area. Africa is surrounded by Mediterranean Sea, Suez Canal and the Red Sea, Indian Ocean, Atlantic Ocean and Sinai Peninsula. Africa has 54 states, including Madagascar and various island groups such as ‘Sahrawi’

The Africa economy is as diverse as the region. The southern parts are prosperous whereas the other parts struggle for stability. African economy is an extreme one, however, due to the presence of natural resources, has the potential to grow at a fast pace.

Africa Economy: Overview

The richest countries of Africa are South Africa and Egypt. As per 2009 statistics South Africa’s GDP (purchasing power parity) was $488.6 billion. Compared to the rest of countries, the country ranked 26th in the world. Recession decreased the volume slightly. The GDP in 2008 and 2007 was $498.1 billion and $483.1 billion respectively. Egypt GDP was almost similar at $470.4 billion in 2009, $450.1 billion in 2008 and $419.9 billion in 2007. On purchasing power parity, Egypt ranked 27th in the world. If one takes out the GDP of these two regions, the total GDP is less than a trillion when compared to Italy.

Africa’s per capita GDP is extremely low and that is why it is the poorest continent. The weakest economies in Africa are Somalia and Malawi with as low as $600 and $596 per capita GDP.

The Africa economy requires an industrial impetus to bring it out of poverty as it is the store of some of the rarest metals and precious stones. Africa has almost 90% of the world’s cobalt, 50% of gold 90% of platinum, 70% of tantalite, 98% of chromium, 64% of manganese and 33% of uranium.

The region is also the store house of almost 70% of coltan which is used in most mobile phones. Congo alone has more than 30% of the world’s diamond reserve. As the reserves are yet to be used completely, the Africa economy is highly dependant on trade and therefore exposed to the global credit situations.

Europe Economy

2010-12-18T12:26:00.000+07:00

Europe economy includes a massive population of 831.4 million, residing in 48 different countries. Like all other continents, different states have different economic strengths and weaknesses. However, the true highlight of the continent is its average economic performance, which is one of the highest, and even the least performing states of the continent have higher GDPs than countries in other continents.

The difference in economies, however, is huge. If the European economy has big players such as Germany, it also has small economies such as Kosova, which has a GDP per capita as low as $2,300. Geographically, the economies in the west perform better than economies in the east.

Europe Economy

Europe was the first continent to go through the industrial revolution and therefore all of the heavy machinery industries are located in Europe and dominate the world. Germany is a prime example, with its automobile industry having dominated the world markets for long.

The most beneficial move for the continent was the formation of the European Union, which collectively is the world’s largest economy. Europe is the richest region in the world, with over $32.7 trillion as compared to $27.1 trillion in North America.

The European industries are helped even more by the natural resources, which are abundant in the continent. The continent has huge deposits of coal, oil and natural gas reserves. Collectively, the European Union is the world’s largest exporter in the world. Internal trading is boosted by the voiding of tariffs and border controls. The standardized currency, the euro, further helps the European economy.

Europe’s economy is further fortified by its rich culture and heritage, which attracts people from around the globe and thus generates a large industry of tourism that attracts foreign exchange and contributes to the European economy.

Economic Planning of China

2010-12-18T12:20:00.000+07:00

Until the 1980s the economy was directed and coordinated by means of economic plans that were formulated at all levels of administration. The reform program significantly reduced the role of central planning by encouraging off-plan production by state-owned units and by promoting the growth of collective and individual enterprises that did not fall under the planning system. The government also endeavored to replace direct plan control with indirect guidance of the economy through economic levers, such as taxes and investment support. Despite these changes, overall direction of the economy was still carried out by the central plan, as was allocation of key goods, such as steel and energy.

When China's planning apparatus was first established in the early 1950s, it was patterned after the highly centralized Soviet system. That system basically depended on a central planning bureaucracy that calculated and balanced quantities of major goods demanded and supplied. This approach was substantially modified during the Great Leap Forward (1958–60), when economic management was extensively decentralized. During the 1960s and 1970s, the degree of centralization in the planning system fluctuated with the political currents, waxing in times of pragmatic growth and waning under the influence of the Cultural Revolution and the Gang of Four.

At the national level, planning began in the highest bodies of the central government. National economic goals and priorities were determined by the party's Central Committee, the State Council, and the National People's Congress. These decisions were then communicated to the ministries, commissions, and other agencies under the State Council to be put into effect through national economic plans.

The State Planning Commission worked with the State Economic Commission, State Statistical Bureau, the former State Capital Construction Commission, People's Bank of China, the economic ministries, and other organs subordinate to the State Council to formulate national plans of varying duration and import. Long-range plans as protracted as ten and twelve years also were announced at various times. These essentially were statements of future goals and the intended general direction of the economy, and they had little direct effect on economic activity. As of late 1987 the most recent such long-range plan was the draft plan for 1976-85, presented by Hua Guofeng in February 1978.

The primary form of medium-range plan was the five-year plan, another feature adopted from the Soviet system. The purpose of the five-year plan was to guide and integrate the annual plans to achieve balanced growth and progress toward national goals. In practice, this role was only fulfilled by the First Five-Year Plan (1953–57), which served effectively as a blueprint for industrialization. The second (1958–62), third (1966–70), fourth (1971–75), and fifth (1976–80) five-year plans were all interrupted by political upheavals and had little influence. The Sixth Five-Year Plan (1981–85) was drawn up during the planning period and was more a reflection of the results of the reform program than a guide for reform. The Seventh Five-Year Plan (1986–90) was intended to direct the course of the reforms through the second half of the 1980s, but by mid-1987 its future was already clouded by political struggle.

A second form of medium-range planning appeared in the readjustment and recovery periods of 1949-52, 1963–65, and 1979–81, each of which followed a period of chaos - the civil war, the Great Leap Forward, and the Gang of Four, respectively. In these instances, normal long- and medium-range planning was suspended while basic imbalances in the economy were targeted and corrected. In each case, objectives were more limited and clearly defined than in the five-year plans and were fairly successfully achieved.

The activities of economic units were controlled by annual plans. Formulation of the plans began in the autumn preceding the year being planned, so that agricultural output for the current year could be taken into account. The foundation of an annual plan was a "material balance table." At the national level, the first step in the preparation of a material balance table was to estimate - for each province, autonomous region, special municipality, and enterprise under direct central control - the demand and supply for each centrally controlled good. Transfers of goods between provincial-level units were planned so as to bring quantities supplied and demanded into balance. As a last resort, a serious overall deficit in a good could be made up by imports.

The initial targets were sent to the provincial-level administrations and the centrally controlled enterprises. The provincial-level counterparts of the state economic commissions and ministries broke the targets down for allocation among their subordinate counties, districts, cities, and enterprises under direct provincial-level control. Counties further distributed their assigned quantities among their subordinate towns, townships, and county-owned enterprises, and cities divided their targets into objectives for the enterprises under their jurisdiction. Finally, towns assigned goals to the state-owned enterprises they controlled. Agricultural targets were distributed by townships among their villages and ultimately were reduced to the quantities that villages contracted for with individual farm households.

At each level, individual units received their target input allocations and output quantities. Managers, engineers, and accountants compared the targets with their own projections, and if they concluded that the planned output quotas exceeded their capabilities, they consulted with representatives of the administrative body superior to them. Each administrative level adjusted its targets on the basis of discussions with subordinate units and sent the revised figures back up the planning ladder. The commissions and ministries evaluated the revised sums, repeated the material balance table procedure, and used the results as the final plan, which the State Council then officially approved.

Annual plans formulated at the provincial level provided the quantities for centrally controlled goods and established targets for goods that were not included in the national plan but were important to the province, autonomous region, or special municipality. These figures went through the same process of disaggregation, review, discussion, and reaggregation as the centrally planned targets and eventually became part of the provincial-level unit's annual plan. Many goods that were not included at the provincial level were similarly added to county and city plans.

The final stage of the planning process occurred in the individual producing units. Having received their output quotas and the figures for their allocations of capital, labor, and other supplies, enterprises generally organized their production schedules into ten-day, one-month, three-month, and six-month plans.

The Chinese planning system has encountered the same problems of inflexibility and inadequate responsiveness that have emerged in other centrally planned economies. The basic difficulty has been that it is impossible for planners to foresee all the needs of the economy and to specify adequately the characteristics of planned inputs and products. Beginning in 1979 and 1980, the first reforms were introduced on an experimental basis. Nearly all of these policies increased the autonomy and decision-making power of the various economic units and reduced the direct role of central planning. By the mid-1980s planning still was the government's main mechanism for guiding the economy and correcting imbalances, but its ability to predict and control the behavior of the economy had been greatly reduced.

Ecomony of the People's of Indonesia

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The Republic of Indonesia is an archipelago of over 18,110 islands, of which 6,000 are inhabited. After China, India and the US, it is the fourth most populated country in the world with around 230 million people. It is also home to the largest Muslim population in the world. Jakarta is the capital city of Indonesia. Malaysia, East Timor and Papua New Guinea are its closest neighbors.

Indonesia became independent after World War II, following Dutch colonialism for three and a half centuries. Periods of swift economic change, corruption, natural disasters and a democratization process have made Indonesia a turbulent nation. Its wealth of natural resources is a pillar of its economic strength. However, poverty is the biggest challenge to the Indonesia’s economy. Around 53% of the inhabitants earn less than US$2 a day. Indonesia lacks infrastructure development, except in Jakarta and Bali. Indonesia can be easily reached by air. Its major airports are Ngurah Rai (DPS), Juanda (SUB) and Soekarno-Hatta (CGK). One can also reach Indonesia via ferry from Singapore and Malaysia.

Indonesian Economic Profile: Statistics
Indonesia is a member of the G-20 major economies. It features a developing market economy, with strong influence from the government. Over 164 state-owned enterprises are run by the government. The prices of many basic products, such as rice, electricity and fuel, are administered by the government.

Domestic consumption is one of the major driving forces behind the country’s economic growth. The economic growth slowed considerably during 2007-08. However, like India and China, Indonesia recorded higher growth during the global financial crisis, compared to the other G20 members.

GDP (purchasing power parity):

(All figures are in US dollar billion.)

GDP (official exchange rate): $514.9 billion (2009 est.)
GDP - real growth rate:

* 4.4% (2009 est.)
    * 6.1% (2008 est.)
    * 6.3% (2007 est.)

GDP - per capita (PPP):

* $4,000 (2009 est.)
    * $3,900 (2008 est.)
    * $3,700 (2007 est.)

GDP - composition by sector:

    * Agriculture: 14.4%
    * Industry: 47.1%
    * Services: 38.5% (2009 est.)
    * Literacy rate: 92.0%

G20
Indonesia is part of the G-20, Group of Twenty.

Economy Indonesian

2010-12-18T12:03:00.001+07:00

Indonesia has a market-based economy in which the government plays a significant role. There are 139 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity.

In the mid-1980s, the government began eliminating regulatory obstacles to economic activity. The steps were aimed primarily at the external and financial sectors and were designed to stimulate employment and growth in the non-oil export sector. Annual real gross domestic product (GDP) growth averaged nearly 7% from 1987-97 and most analysts recognized Indonesia as a newly industrializing economy and emerging major market. The Asian financial crisis of 1997 altered the region's economic landscape. With the depreciation of the Thai currency, the foreign investment community quickly reevaluated its investments in Asia. Foreign investors dumped assets and investments in Asia, leaving Indonesia the most affected in the region. In 1998, Indonesia experienced a negative GDP growth of 13.1% and unemployment rose to 15%-20%. In the aftermath of the 1997-98 financial crisis, the government took custody of a significant portion of private sector assets via debt restructuring, but subsequently sold most of these assets, averaging a 29% return. Indonesia has since recovered, albeit slower than some of its neighbors, by recapitalizing its banking sector, improving oversight of capital markets, and taking steps to stimulate growth and investment, particularly in infrastructure. GDP growth has steadily risen this decade, achieving real growth of 6.3% in 2007 and 6.1% growth in 2008. Although growth slowed to 4.5% in 2009 given reduced global demand, Indonesia was the third-fastest growing G-20 member, trailing only China and India. Growth has rebounded in 2010, with the consensus forecast for growth of 6.0%. Poverty and unemployment have also declined despite the global financial crisis, with the poverty rate falling to 13.3% (March 2010) from 14.2% a year earlier and the unemployment rate falling to 7.4% (February 2010) from 7.87% (August 2009).

Indonesia’s improving growth prospects and sound macroeconomic policy have many analysts suggesting that it will become the newest member of the “BRIC” grouping of leading emerging markets. Its solid track record has also resulted in credit upgrades from each of the major ratings agencies in the past year, with Fitch rating Indonesia sovereign debt one level below investment grade, while S&P and Moody’s rate it two levels below investment grade.

In reaction to global financial turmoil and economic slowdown in late 2008, the government moved quickly to improve liquidity, secure alternative financing to fund an expansionary budget and secure passage of a fiscal stimulus program worth more than $6 billion. Key actions to stabilize financial markets included increasing the deposit insurance guarantee twentyfold, to IDR 2 billion (about U.S. $222,000); reducing bank reserve requirements; and introducing new foreign exchange regulations requiring documentation for foreign exchange purchases exceeding U.S. $100,000/month. As a G-20 member, Indonesia has taken an active role in the G-20 coordinated response to the global economic crisis. In the face of surging portfolio inflows in 2010, Bank Indonesia has implemented a number of measures to encourage inflows toward less volatile, longer tenor instruments.

Economic Policy: After he took office on October 20, 2004, President Yudhoyono moved quickly to implement a "pro-growth, pro-poor, pro-employment" economic program, which he has continued in his second term. The State Ministry of National Development Planning (BAPPENAS) released a Medium-Term Development Plan for 2010-2014 focused on development of a “prosperous, democratic and just” Indonesia. The Medium-Term Development Plan targets average economic growth of 6.3%-6.8% for the period, reaching 7% or above by 2014, unemployment of 5%-6% by the end of 2014, and a poverty rate of 8%-10% by the end of 2014. President Yudhoyono’s economic team in his second administration is led by Coordinating Minister for Economic Affairs Hatta Rajasa. Sri Mulyani Indrawati continued as Finance Minister until May 2010, when she resigned to take a senior position at the World Bank. She was succeeded by Agus Martowardojo, a well-respected banker who had led Indonesia’s largest state-owned bank. In July 2010, Indonesia’s DPR Commission XI approved the appointment of Darmin Nasution as Governor of Bank Indonesia, following a 14-month vacancy of the position after former Governor Boediono stepped down to become Yudhoyono’s running mate. In May 2010, President Yudhoyono established a National Economic Committee to provide strategic recommendations to accelerate national economic development and a National Innovation Committee to provide input and recommendations to increase national productivity, create a culture of innovation, and speed up economic growth.

Indonesia's overall macroeconomic picture is stable. By 2004, real GDP per capita returned to pre-financial crisis levels and income levels are rising. In 2009, domestic consumption continued to account for the largest portion of GDP, at 58.6%, followed by investment at 31.0%, government consumption at 9.6%, and net exports at 2.8%%. Investment realization had climbed in each of the past several years, until the global slowdown in 2009. It is again rebounding in 2010.

Following a significant run-up in global energy prices in 2007-2008, the Indonesian Government raised fuel prices by an average of 29% on May 24, 2008 in an effort to reduce its fuel subsidy burden. Fuel subsidies had been projected to reach Rp 265 trillion ($29.4 billion) in 2008, or 5.9% of GDP. The fuel price hikes, along with rising food prices, led consumer price inflation to a peak of 12.1% in September 2008. To help its citizens cope with higher fuel and food prices, the Indonesian Government implemented a direct cash compensation package for low-income families through February 2009 and an extra range of benefits including an expanded subsidized rice program and additional subsidies aimed at increasing food production. Subsequent declines in oil and gas prices allowed the government to reduce the prices for subsidized diesel and gasoline, but with oil and gas prices recovering, the energy subsidy bill has again swelled in 2010.

Banking Sector: Indonesia has 122 commercial banks (May 2010), of which 10 are majority foreign-owned and 28 are foreign joint venture banks. The top 10 banks control about 64% of assets in the sector. Four state-owned banks (Bank Mandiri, BNI, BRI, BTN) control about 36.3% of assets (May 2010). The Indonesian central bank, Bank Indonesia (BI), announced plans in January 2005 to strengthen the banking sector by encouraging consolidation and improving prudential banking and supervision. BI hopes to encourage small banks with less than Rp 100 billion (about U.S. $11 million) in capital to either raise more capital or merge with healthier "anchor banks" before end-2010, announcing the criteria for anchor banks in July 2005. In October 2006, BI announced a single presence policy to further prompt consolidation. The policy stipulates that a single party can own a controlling interest in only one banking organization. Controlling interest is defined as 25% or more of total outstanding shares or having direct or indirect control of the institution. BI planned to adopt Basel II standards beginning in 2009 and to improve operations of its credit bureau to centralize data on borrowers. Another important banking sector reform was the decision to eliminate the blanket guarantee on bank third-party liabilities. BI and the Indonesian Government completed the process of replacing the blanket guarantee with a deposit insurance scheme run by the independent Indonesian Deposit Insurance Agency (also known by its Indonesian acronym, LPS) in March 2007. The removal of the blanket guarantee did not produce significant deposit outflows from or among Indonesian banks. Sharia banking has grown in Indonesia in recent years, but represented only 2.66% of the banking sector, about $7.9 billion in assets as of May 2010.

Exports and Trade: Indonesia's exports were $116.5 billion in 2009, down 14.8% from a record $136.8 billion in 2008. The largest export commodities for 2009 were oil and gas (16.3%), minerals (14.3%), crude palm oil (12.5%), electrical appliances (8.2%), and rubber products (5.0%). The top four destinations for exports for 2009 were Japan (12.3%), the U.S. (10.7%), China (9.1%), and Singapore (8.2%). Meanwhile, total imports in 2009 were $96.86, down from $128.8 billion in 2008. Indonesia is currently our 28th-largest goods trading partner with $18.0 billion in total (two-way) goods trade during 2009. The U.S. trade deficit with Indonesia totaled $8 billion in 2009 ($5.1 billion in exports versus $12.9 billion in imports).

Oil and Minerals Sector: Indonesia left the Organization of Petroleum Exporting Countries (OPEC) in 2008, as it had been a net petroleum importer since 2004. Crude and condensate output averaged 948,000 barrels per day (bpd) in 2009, down slightly from 2008. In 2009, the oil and gas sector is estimated to have contributed $19.8 billion of government revenues, or 19.5% of the total. U.S. companies have invested heavily in the petroleum sector. Indonesia ranked tenth in world gas production in 2009. Despite the declining oil production, Indonesia's oil, oil products, and gas trade balance was negative in 2008 with a $1.4 billion deficit, but became positive again in 2009 with a $29.4 million surplus, according to official statistics.

Indonesia has a wide range of mineral deposits and production, including bauxite, silver, and tin, copper, nickel, gold, and coal. Although the coal sector was open to foreign investment in the 1990s through coal contracts of work, new investment was closed again after 2000. A new mining law, passed in December 2008, opened coal to foreign investment again, although it eliminated the difference between foreign and domestic ownership structures. Total coal production reached 208.0 million metric tons in 2009, including exports of 161.3 million tons. Two U.S. firms operate two copper/gold mines in Indonesia, with a Canadian and a U.K. firm holding significant investments in nickel and gold, respectively. In 2007 Indonesia ranked fifth among the world's top gold concentrate producers. Although coal production has increased dramatically over the past 10 years, the number of new metals mines has declined. This decline does not reflect Indonesia's mineral prospects, which are high; rather, the decline reflects earlier uncertainty over mining laws and regulations, low competitiveness in the tax and royalty system, and investor concerns over divestment policies and the sanctity of contracts.

In early 2010, the Government of Indonesia also formally decided to become a candidate country of the Extractive Industries Transparency Initiative (EITI), which will increase accountability and transparency in energy revenue transactions between the government and oil, gas, and mining firms.

Investment: President Yudhoyono and his economic ministers have stated repeatedly their intention to improve the climate for private sector investment to raise the level of GDP growth and reduce unemployment. In addition to general corruption and legal uncertainty, businesses have cited a number of specific factors that have reduced the competitiveness of Indonesia's investment climate, including: corrupt and inefficient customs services; non-transparent and arbitrary tax administration; inflexible labor markets that have reduced Indonesia's advantage in labor-intensive manufacturing; increasing infrastructure bottlenecks; and uncompetitive investment laws and regulations. In each of the past 3 years, the Government of Indonesia has announced a series of economic policy packages aimed at stimulating investment and infrastructure improvements and implementing regulatory reform. A new investment law was enacted in 2007, which contains provisions to restrict the share of foreign ownership in a range of industries. The new negative investment list was signed by President Yudhoyono on May 25, 2010 and announced by the Chairman of Indonesia's Investment Coordinating Board (BKPM), Gita Wirjawan, on June 10. The changes included long-awaited legal clarifications alongside limited liberalization. The clarifications include a continuous review of closed sectors for increased market access. The new decree replaces the previous list (Presidential Regulation 111/2007). The decree confirms that investment restrictions do not apply retroactively unless the new provisions are more beneficial to the investor. The changes also clarify that capital investments in publicly listed companies through the stock exchange are not subject to Indonesia's negative list unless an investor is buying a controlling interest.

In 2010, the Overseas Private Investment Corporation (OPIC) updated its 1967 investment support agreement between the United States and Indonesia by adding OPIC products such as direct loans, coinsurance, and reinsurance to the means of OPIC support which U.S. companies may use to invest in Indonesia. Over its 39-year history OPIC had committed more than $2.1 billion in financing and political risk insurance to 110 projects in Indonesia. Currently, OPIC is providing more than $94 million in support to six projects in Indonesia in the energy, manufacturing, and services sectors.

On September 2, 2008, the DPR passed long-awaited tax reform legislation. The legislation reduced corporate and personal income tax rates as of January 1, 2009. Corporate income tax rates fell from 30% to 28% in 2009 and to 25% in 2010, with additional reductions for small and medium enterprises and publicly listed companies. The legislation raises the taxable income threshold for individuals, cuts the maximum personal income tax from 35% to 30%, and provides lower marginal personal income tax rates across four income categories. Taxes on dividends also fell from a maximum of 20% to a maximum of 10%. Long-planned labor reforms have been delayed.

The passage of a new copyright law in July 2002 and accompanying optical disc regulations in 2004 greatly strengthened Indonesia's intellectual property rights (IPR) regime. Despite the government's significantly expanded efforts to improve enforcement, IPR piracy remains a major concern to U.S. intellectual property holders and foreign investors, particularly in the high-technology sector. In March 2006, President Yudhoyono issued a decree establishing a National Task Force for IPR Violation Prevention. The IPR Task Force was intended to formulate national policy to prevent IPR violations and determine additional resources needed for prevention, as well as to help educate the public through various activities and improve bilateral, regional, and multilateral cooperation to prevent IPR violations. It has yet to fully realize these aims. In 2007, Indonesia was removed from the U.S. Trade Representative's "Priority Watch" list and placed on the "Watch" list. However, Indonesia was raised back to the Priority Watch List in 2009 due to an overall deterioration of the climate for IPR protection and enforcement and some concerns over market access barriers for IP products. There have not been signs of improvement in the past year.

Environment: President Yudhoyono's administration has significantly increased Indonesia's global profile on environmental issues, and U.S.-Indonesia cooperation on the environment has grown substantially. Indonesia is particularly vulnerable to the effects of climate change, which include rising sea levels and erosion of coastal areas, increased frequency and intensity of extreme weather events, species extinction, and the spread of vector-borne diseases. At the same time, Indonesia faces challenges in addressing the causes of climate change. Indonesia has the world's second-largest tropical forest and the fastest deforestation rate, making it the third-largest contributor of greenhouse gas emissions, behind China and the U.S. President Yudhoyono pledged at the 2009 G-20 in Pittsburgh to reduce Indonesia’s greenhouse gas emissions by up to 41% below business as usual by 2020, in addition to eliminating fossil fuel subsidies. In June 2010, President Barack Obama pledged to support U.S.-Indonesia shared goals on climate change through a Science, Oceans, Land Use, Society and Innovation (SOLUSI) partnership and through the establishment of a climate change center. Indonesia continues expanding its constructive engagement in Southeast Asia, within the G-20 and Major Economies Forum, and in other international bodies to encourage other developing countries to adopt and implement ambitious steps to reduce the impacts of global climate change.

In 2004, President Yudhoyono initiated a multi-agency drive against illegal logging that has significantly decreased illegal logging through stronger enforcement activities. The Department of Justice-sponsored Environmental Crimes Task Force supports this enforcement effort. The State Department and the U.S. Trade Representative negotiated with the Indonesian Ministries of Trade and Forestry the U.S. Government's first Memorandum of Understanding on Combating Illegal Logging and Associated Trade. Presidents George W. Bush and Yudhoyono announced the MOU during President Bush's November 2006 visit to Indonesia. Implementation of the MOU includes collaboration on sustainable forest management, improved law enforcement, and improved markets for legally harvested timber products. This effort will strengthen the enabling conditions for avoiding deforestation, specifically addressing the trade issues that are involved.

The U.S. Government contributed to the start of the Heart of Borneo conservation initiative to conserve a high-biodiversity, transboundary area that includes parts of Indonesia, Malaysia, and Brunei. The three countries launched the Heart of Borneo initiative in February 2007. In 2009, the Governments of Indonesia and the U.S. concluded a Tropical Forest Conservation Act (TFCA) agreement. The agreement reduces Indonesia's debt payments to the U.S. over the next 8 years; these funds will be redirected toward tropical forest conservation in Indonesia.

Indonesia is also home to the greatest marine biodiversity on the planet. President Yudhoyono called for a Coral Triangle Initiative (CTI) in August 2007. The Coral Triangle Initiative is a regional plan of action to enhance coral conservation, promote sustainable fisheries, and ensure food security in the face of climate change. In December 2007, the U.S. Government announced its support for the six CTI nations (Indonesia, Malaysia, Philippines, Timor-Leste, Papua New Guinea, and Solomon Islands). Since then, the United States has provided $8.4 million to this initiative. With projected funding of $32 million over 5 years, the U.S. is the largest bilateral donor to CTI, and President Bush endorsed the CTI proposal formally at the 2007 Asia-Pacific Economic Cooperation (APEC) Summit.

Indonesia hosted the first-ever World Oceans Conference in Manado, North Sulawesi, May 11-15, 2009. The World Oceans Conference was also the venue for the Coral Triangle Initiative Summit, at which leaders from the six CTI nations launched the CTI Regional Plan of Action. From June to August 2010, the National Oceanic and Atmospheric Administration (NOAA) research vessel Okeanos Explorer and the Indonesian research vessel Baruna Jaya made a pioneering joint mission to the "Coral Triangle" in the Indo-Pacific region. The "Coral Triangle" region is the global heart of shallow-water marine biodiversity.

GDP (2007): $433 billion; (2008): $511 billion; (2009): $542 billion.
Annual growth rate (2007): 6.3%; (2008): 6.1%; (2009): 4.5%; (2010 est.): 6.0%.
Inflation, end-period (2007): 6.6%; (2008): 11.1%; (2009): 2.8%; (2010 est.): 6.0%.
Per capita income (2009 est., PPP): $4,149.
Natural resources (10.5% of GDP, 2009): Oil and gas, bauxite, silver, tin, copper, gold, coal.
Agriculture (15.3% of GDP, 2009): Products--timber, rubber, rice, palm oil, coffee. Land--17% cultivated.
Manufacturing (26.4% of GDP, 2009): Garments, footwear, electronic goods, furniture, paper products.
Trade: Exports (2009)--$116.5 billion including oil, natural gas, crude palm oil, coal, appliances, textiles, and rubber. Major export partners--Japan, U.S., China, Singapore, Malaysia, and Republic of Korea. Imports (2009)--$96.86 billion including oil and fuel, food, chemicals, capital goods, consumer goods, iron and steel. Major import partners--Singapore, China, Japan, U.S., Malaysia, Thailand, South Korea.

Recovery from war of China

2010-12-18T11:54:00.000+07:00

In 1949 China's economy was suffering from the debilitating effects of decades of warfare. Many mines and factories had been damaged or destroyed. At the end of the war with Japan in 1945, Soviet troops had dismantled about half the machinery in the major industrial areas of the northeast and shipped it to the Soviet Union. Transportation, communication, and power systems had been destroyed or had deteriorated because of lack of maintenance. Agriculture was disrupted, and food production was some 30 percent below its pre-war peak level. Further, economic ills were compounded by one of the most virulent inflations in world history.[1]

The chief goal of the government for the 1949-1952 period was simply to restore the economy to normal working order. The administration moved quickly to repair transportation and communication links and revive the flow of economic activity. The banking system was nationalized and centralized under the People's Bank of China. To bring inflation under control by 1951, the government unified the monetary system, tightened credit, restricted government budgets at all levels and put them under central control, and guaranteed the value of the currency. Commerce was stimulated and partially regulated by the establishment of state trading companies (commercial departments), which competed with private traders in purchasing goods from producers and selling them to consumers or enterprises. Transformation of ownership in industry proceeded slowly. About a third of the country's enterprises had been under state control while the Guomindang government was in power (1927-1949), as was much of the modernized transportation sector. The Communist Party of China immediately made these units state-owned enterprises upon taking power in 1949. The remaining privately owned enterprises were gradually brought under government control, but 17 percent of industrial units were still completely outside the state system in 1952.

In agriculture a major change in landownership was carried out. Under a nationwide land reform program, titles to about 45 percent of the arable land were redistributed from landlords and more prosperous farmers to the 60 to 70 percent of farm families that previously owned little or no land. Once land reform was completed in an area, farmers were encouraged to cooperate in some phases of production through the formation of small "mutual aid teams" of six or seven households each. Thirty-nine percent of all farm households belonged to mutual aid teams in 1952. By 1952 price stability had been established, commerce had been restored, and industry and agriculture had regained their previous peak levels of production. The period of recovery had achieved its goals.

Economic policies

2010-12-18T11:44:00.000+07:00

When the Communist Party of China came to power in 1949, its leaders' fundamental long-range goals were to transform China into a modern, powerful, socialist nation. In economic terms these objectives meant industrialization, improvement of living standards, narrowing of income differences, and production of modern military equipment. As the years passed, the leadership continued to subscribe to these goals. But the economic policies formulated to achieve them were dramatically altered on several occasions in response to major changes in the economy, internal politics, and international political and economic developments.

An important distinction emerged between leaders who felt that the socialist goals of income equalization and heightened political consciousness should take priority over material progress and those who believed that industrialization and general economic modernization were prerequisites for the attainment of a successful socialist order. Among the prominent leaders who considered politics the prime consideration were Mao Zedong, Lin Biao, and the members of the Gang of Four. Leaders who more often stressed practical economic considerations included Liu Shaoqi, Zhou Enlai, and Deng Xiaoping. For the most part, important policy shifts reflected the alternating emphasis on political and economic goals and were accompanied by major changes in the positions of individuals in the political power structure. An important characteristic in the development of economic policies and the underlying economic model was that each new policy period, while differing significantly from its predecessor, nonetheless retained most of the existing economic organization. Thus the form of the economic model and the policies that expressed it at any given point in Chinese history reflected both the current policy emphasis and a structural foundation built up during the earlier periods.

Economy of the People's Republic of China

2010-12-18T11:29:00.000+07:00

In the modern era, China's influence in the world economy was minimal until the late 1980s. At that time, economic reforms initiated after 1978 began to generate significant and steady growth in investment, consumption and standards of living. China now participates extensively in the world market and private sector companies play a major role in the economy. Since 1978 hundreds of millions have been lifted out of poverty: According to China's official statistics, the poverty rate fell from 53% in 1981[6] to 2.5% in 2005. However, in 2006, 10.8% of people still lived on less than $1 a day (purchasing power parity-adjusted). The infant mortality rate fell by 39.5% between 1990 and 2005, and maternal mortality by 41.1%. Access to telephones during the period rose more than 94-fold, to 57.1%.

In the 1949 revolution, China's economic system was officially made into a communist system. Since the wide-ranging reforms of the 1980s and afterwards, many scholars assert that China can be defined as one of the leading examples of state capitalism today.

China has generally implemented reforms in a gradualist fashion. As its role in world trade has steadily grown, its importance to the international economy has also increased apace. China's foreign trade has grown faster than its GDP for the past 25 years. China's growth comes both from huge state investment in infrastructure and heavy industry and from private sector expansion in light industry instead of just exports, whose role in the economy appears to have been significantly overestimated. The smaller but highly concentrated public sector, dominated by 159 large SOEs, provided key inputs from utilities, heavy industries, and energy resources that facilitated private sector growth and drove investment, the foundation of national growth. In 2008 thousands of private companies closed down and the government announced plans to expand the public sector to take up the slack caused by the global financial crisis. In 2010, there were approximately 10 million small businesses in China.

The PRC government's decision to permit China to be used by multinational corporations as an export platform has made the country a major competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia. China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government has also focused on foreign trade as a major vehicle for economic growth. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated. Nevertheless, key bottlenecks continue to constrain growth. Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP. The two sectors have differed in many respects. Technology, labor productivity, and incomes have advanced much more rapidly in industry than in agriculture. Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government. The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society. China is the world's largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton. The country is one of the world's largest producers of a number of industrial and mineral products, including cotton cloth, tungsten, and antimony, and is an important producer of cotton yarn, coal, crude oil, and a number of other products. Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories. The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment. A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

China's increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem. Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s. By the early 1990s these subsidies began to be eliminated, in large part due to China's admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation. China's ongoing economic transformation has had a profound impact not only on China but on the world. The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

Wayne M. Morrison of the Congressional Research Service wrote in 2009 that "Despite the relatively positive outlook for its economy, China faces a number of difficult challenges that, if not addressed, could undermine its future economic growth and stability. These include pervasive government corruption, an inefficient banking system, over-dependence on exports and fixed investment for growth, the lack of rule of law, severe pollution, and widening income disparities." Economic consultant David Smick adds that the recent actions by the Chinese government to stimulate their economy have only added to a huge industrial overcapacity and commercial real estate vacancy problems.

A Revival in Global Economic Activity

2010-12-16T19:16:00.000+07:00

Exports during the month hit their highest level since August 2008, the month before the financial crisis.

"More and more of our exports have started going to the faster-growing regions in Asia, Latin America and Canada," said Morgan Stanley economist Ted Wieseman. "It highlights that the emerging markets never really had much of a slowdown at all. They've continued to outperform throughout the crisis."

Exports of industrial supplies were particularly strong, rising 8%, driven by chemicals and plastics. Food exports also surged. Among the big gains: Soybean exports jumped to almost $2.4 billion, an all-time high, from $1.8 billion in September.

Read the entire article here.

What is the Smartest Decision You Made in Starting Your Business?

2010-12-15T19:00:00.000+07:00

Mine was going global at the outset. What was yours?

What's Nato's New Role?

2010-12-14T18:54:00.000+07:00

A little late on this but still worth a look:

Nato's new strategic concept unveiled in Lisbon underlines the global role of the alliance's new non-continental or non-geographic preoccupations such as cyber and space.

Watch a video and learn more here.

Illustration clip here.

10 Things to Consider Before You Start a Business in the United States

2010-12-13T19:06:00.000+07:00

The following article covers ten areas that anyone wishing to start a small business had better think about before moving forward. Here's a glimpse at No. 7:

Foreign Competition

Especially if you are creating a small business that does manufacturing, you are going to have to deal with foreign competition.

So are you going to be able to compete with the companies in your industry that pay their workers on the other side of the world less than a tenth of what you are paying to your American workers?

On the other side of the world, companies often don’t have to worry about unions, worker’s comp, health benefits, retirement benefits, nightmarish environmental regulations, crushing taxes or miles of paperwork and red tape.

Are you certain that you can compete against that?

Read the entire article here.

How to Become a Micro-Multinational Small Business

2010-12-11T21:04:00.000+07:00

Here are 5 steps that a startup or a small business can take to become a micro-multinational.

Read the entire article here.

Illustration credit here.

How to Leverage Your Existing Customers To Go Global

2010-12-10T20:44:00.000+07:00

For small businesses doing a great job for big-name clients close to home can leverage those relationships to expand abroad. This is a savvy way to grow global for a small business. That is what economist Jayson Myers, head of Canadian Manufacturers & Exporters, one of the country’s biggest industry groups, said in an interview.

“Often the best sales strategy is not going directly into new markets, but it’s leveraging up your existing customers. We are seeing this in a lot of manufacturing sectors, in a lot of technology companies. We [Canadians] have very, very good products, but often these products have to be packaged or integrated into a bigger service for customers.”

Read the entire article here.

Posted by: The Global Small Business Blog

Turn To Other Parts of the World to Grow Your Business

2010-12-09T19:05:00.000+07:00

Here are ten fabulous things you need to know about doing business in China.

It’s a global economy. We know that. But what does that really mean? It means that even if you decide to start a business tomorrow in your hometown, more likely than not, you’re going to have to turn to other parts of the world to make your business efficient and profitable. For many business owners, that other part of the world will most likely be China.

Read: The Top 10 Things You Need to Know About Doing Business in China

Posted by: The Global Small Business Blog

Growing Small Business Exporting

2010-12-08T19:42:00.000+07:00

A very interesting perspective on small-business exporters:

Thinking Small
The Obama administration's efforts to grow small-business exporting, and how Congress could derail them.

Pictured: United States President Obama

Going Down the Export Road

2010-12-07T20:19:00.000+07:00

Find out how you can boost sales by looking for customers across borders.

Tapping into exports

Illustration: Ricky's Lucky Nuts as featured in the above article.

Posted by: The Global Small Business Blog

Toolkit Kiosk Helps SMEs Go Global

2010-12-06T19:03:00.000+07:00

SMEs got a boost recently when the Small and Medium Enterprise Corp Malaysia (SME Corp) unveiled the first of its kind SME Toolkit kiosk in the country aimed at helping SMEs go global.

The kiosk, which is located at SME Corp's office in Menara Matrade, also helps them leverage on the toolkit to enhance their business by reducing their operational cost. SMEs can gain access to the relevant information in the toolkit via the Internet and need not go to the kiosk personally to access it.

The SME Toolkit is an online program that enables entrepreneurs and small businesses to learn how to implement sustainable business management practices needed for growth in areas such as finance, accounting, international business, marketing, human resources or legal, at no cost.

Learn more here.

Illustration credit here.

Posted by: The Global Small Business Blog

Gum and Greetings Around the World

2010-12-04T20:07:00.000+07:00

Chicago-based Wrigley offers a nice season's greetings around the world ... check it out and enjoy your weekend.

Photo credit: Laurel Delaney, GlobeTrade.com -- captured in my car near a stop light at Wacker Drive and Michigan Avenue in Chicago.

Global Gaga

2010-12-03T19:02:00.000+07:00

My latest contribution for Small Business Trends at the American Express OPEN Forum:

How to Market Your Business Lady Gaga Style

Pictured: Lady Gaga

Posted by: Laurel Delaney, for The Global Small Business Blog