FocusEconomics Insights - Latest Posts
April 4, 2018
By Guest Author: Professor Arthur S. Guarino, MBA, MSSc, JD, Rutgers University
Key parts of America’s infrastructure must be rebuilt immediately. But the problem becomes complicated when attempting to prioritize the projects, finding the best solution, and then paying for them.
March 23, 2018
Steel is the fourth-most commonly used metal in the world. It is highly important to the global economy and trends in production can even be thought of as an indicator of the health of a country's economy. Although many do not realize it, the metal is therefore extremely important to our everyday lives. Recently, however, it seems like the entire world has started to pay attention to the metal due to U.S. President Donald Trump's recent decision to impose high tariffs on China, sparking fears of a trade war on the horizon. In this post we go through the situation between the U.S. and China in more detail before discussing the history of the steel industry and how steel enhances our daily lives.
March 22, 2018
eCommerce in Latin America is booming, and with the number of people using the internet and social media growing by the day, there is plenty of opportunity for companies selling online, also known as “eRetailers”. In fact, online sales are expected to grow 19% in the next five years – well above the global average of 11% – and are foreseen doubling in value to $118 billion in 2021. Two of the three fastest-growing eCommerce markets in the world are in Latin America: Colombia and Argentina.
Despite these impressive statistics, eRetailers face many challenges in Latin America, including online payment security, low banking services usage among citizens, and serious logistics issues, according to Patricia Galina of IEBS. The World Bank highlights some key areas where Latin America lags behind other regions as “lack of adequate roads and railways and port and airport efficiency”. It also cites corruption and cumbersome customs as major concerns. Lower purchasing power and tricky government regulations present yet another major roadblock. In addition, there are challenges related to trade and financial structures, such as the aforementioned banking penetration rates, along with low levels of confidence in electronic payment systems and lack of free flow of data. Analysts believe that companies must find a way to overcome these barriers to realize their full potential in this very promising market.
March 19, 2018
These are turbulent times for international trade. The massive economic crisis that unfolded in 2008 has not only intensified political tensions within several countries but has also had an impact on an international scale, which is being reflected in, among other things, a shifting global trade map. The resurgence of nationalism has prompted various countries to dust off the flags of trade protectionism, led mainly by the government of Donald Trump in the United States and Teresa May in the United Kingdom.
Just as trade protectionism is being highly debated, globalization is not dying down and new business opportunities are arising, which is quite intersting for countries in Latin America. In early March, 11 countries signed the Trans-Pacific Partnership Agreement (TTP 11) in Santiago, Chile. This agreement, in which Canada, Mexico, Chile, Peru, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand are participating, will eliminate between 65% to 100% of tariffs among member countries over time.
March 16, 2018
With elections in Russia just around the corner, we interviewed Consensus Forecsat panelist Dmitry Polevoy, Chief Economist for Russia and the CIS region at ING, on the potential outcome and implications.
March 14, 2018
Between 2002 and 2015, the proportion of Latin Americans over 65 with access to some type of pension increased from 53.6% to 70.8%. This increase was mainly due to the expansion of non-contributory pension systems. That said, despite the considerable progress of recent years, inequality in access to benefits within pension systems is huge, and almost a third of the Latin American population does not have access to any type of pension.
March 14, 2018
“Want is only one of five giants on the road of reconstruction, and in some ways the easiest to attack. The others are disease, ignorance, squalor and idleness.” So wrote economist William Beveridge in 1942, in his renowned UK government-commissioned report into citizens’ welfare.
Published in the dark depths of World War Two, at a time of morphing social attitudes, Beveridge’s work became a lodestar for those advocating a much more active role for the public sector in improving people’s lives. The Beveridge Report laid the foundations for the modern British welfare state and provided the ethos behind the establishment of the National Health Service (NHS), among the world’s first tax-funded healthcare systems to be completely free at the point of use.
More than 75 years later, the idea that governments should shoulder far greater responsibility for their citizens’ wellbeing has taken root the world over. Most countries now devote far more public resources to health than at any other time in history. Among OECD members, government spending on health accounted for 7.7% of GDP in 2014 (the most recent year for which data is available), up from a negligible amount in the middle of the last century. OECD health spending per head has on average risen over 70% since the early 1990s.
Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
March 1, 2018
Chile’s economy is gradually picking up after a prolonged period of subdued growth brought on by lower copper prices and stagnant investment. Business and consumer confidence have risen sharply in recent months, there are incipient signs of a turnaround in the construction sector and prices for copper are now back near multi-year highs. Against this macroeconomic backdrop, center-right candidate Sebastian Piñera is set to be sworn in as Chile’s new president on 11 March, having previously governed the country from 2010 to 2014. He has pledged to boost the country’s competitiveness, stoke growth and alter some of Michelle Bachelet’s key reforms—notably the reform of the tax system.
The challenges facing the incoming government are, however, considerable. Fiscal room for maneuver will be constrained by the not-insignificant structural budget deficit. Furthermore, the parliament is fractured, and lingering weaknesses in education, health and infrastructure must be tackled if Chile is to truly become a developed country—an often-stated aim of Piñera.
To discuss the country’s economic situation in more detail, we spoke to Alejandro Fernández Beros, Chief Economist at Gemines.
March 1, 2018
By Guest Author: Professor Arthur S. Guarino, MBA, MSSc, JD, Rutgers University
“When goods do not cross borders, soldiers will.” – Frederic Bastiat, French economist (1801-1850)
Trade protectionism is re-emerging as a controversial tactic among policymakers and economists in enhancing a nation’s economic well-being. Trade protectionism has been used with the intent of helping a nation recover from an economic downturn. However, in many instances the opposite effect occurred in which not just one but many nations suffered economic setbacks such as a recession or even a depression. In order to understand trade protectionism, it is necessary to know why it is done and what the effects are on an economy.
February 26, 2018
While it may be widely known that Latin America is the most unequal region in the world, what’s not so well known is that an enormous economic disparity exists between the different regions within Latin America. For example, it would take the Chocó region, the poorest area in Colombia, 200 years to reach Bogotá’s per capita income levels, according to an OECD study on Colombia published in 2015. In Latin America, individuals’ incomes in the various intermediate administrative divisions—department, province, state or region—are nine times higher in the richest than they are in the poorest.
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