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September 2009 Economic Digest - Importing and Exporting

September 2009 Edition

SAHARA

 
Nigeria, Niger and Algeria have signed an agreement to build a multi-billion dollar pipeline to take Nigerian gas across the Sahara desert to the Mediterranean. The giant project will be 4,128km long, will cost an estimated US$13-billion, and aims to deliver up to 30-billion cubic metres of gas per year for the European market. Experts say this will be one of the great feats of engineering in the world and dwarf several existing pipelines, such as the one beneath the North Sea.

INSURANCE

Piracy risk and insurance costs associated with it are expected to rise in the coming years. Rates and charges will escalate if the number of successful piracy attacks increases. The cost of keeping global trade routes open could result in a growing "piracy tax" that will be felt by a wide range of businesses and consumers. For example, 20,000 ships pass through the Suez Canal each year and most cross the pirate-infested waters off the coast of Somalia.

RAINDROPS

For the first time since territorial days, rain will be free for catching in Colorado. Precipitation, every last drop or flake, was assigned ownership from the moment it fell in many Western U.S. states making criminals out of people who scooped rainfall from their own gutters. In some instances, the rights to that water were assigned over a century ago. Now, new laws in Colorado will allow people to collect rainwater legally.

BANKS

2008 was not a good year for many of the world's big commercial banks. The 12 largest losses were made by American and European banks, four of them German. The Royal Bank of Scotland, Citigroup and Wells Fargo suffered a combined loss of more than US$160-billion, a sum larger than the GDP of Egypt. Three of the biggest losses were made by banks from Switzerland and Belgium, two fairly small countries. Banks from France and Japan were conspicuous by their absence from the list of losses.

ENVIRONMENT

There are 530,000 environmental workers in Canada, three per cent of the workforce. One in ten Canadian organizations have at least one environmental employee. 42 per cent of the environment jobs are in Ontario and 15 per cent are in British Columbia.

SEWAGE

A sewage treatment facility in Nagano prefecture, north-west of Tokyo, has reported a yield of gold extracted from sludge to rival production levels at some of the best mines in the world. Tens of thousands of dollars worth of gold has been found at the Suwa treatment facility with more than 1,890 grammes of gold per tonne of ash from incinerated sludge. The unexpected presence of soaring levels of gold in sewage has been attributed to the high concentration of precision equipment manufacturers using the precious metal in the Nagano region.

OIL

China's dependence on foreign oil has surpassed that of the United States, as consumers race to the pumps to fill their new cars and the country stockpiles supplies. The country's increasing appetite has driven it to spend billions to acquire foreign oil producers and construct vast storage facilities to safeguard future needs. This year, China will import about 57 per cent of its petroleum needs, compared with 40 per cent in 2003. China sold more cars than the U.S. last year and the figure is expected to increase by over 10 per cent this year.

ACQUISITIONS

The value of global mergers and acquisitions (M&A) fell by 35 per cent in the first half of 2009 to US$1,140-billion. Finance remains the richest industry for M&A, accounting for almost a fifth of deals by value, followed by health care and mining. Australia, the most important location for M&A, after the U.S. and Britain, saw a big increase in activity in the first half, as did the Netherlands and South Africa.

ANTS

Scientists have discovered that a single mega-colony of ants has colonised much of the world. Argentine ants living in vast numbers across Europe, the U.S. and Japan belong to the same interrelated colony, and will refuse to fight one another. The colony may be the largest of its type ever known for any insect species and could rival humans in the scale of its world domination. The Argentinean ants are renowned for forming large colonies, and for becoming a significant pest, attacking native animals and crops. One European colony stretches 6,000km along the Mediterranean coast while another stretches 900km along the Californian coast.

GENOME

Britain's biotechnology research council has opened a research centre to decode the DNA of plants and animals used in agriculture. Among its aims is to help farmers boost food production. Research will focus on economically and socially important plants such as wheat and ryegrass. It's also hoped that the work will lead to breeding of livestock better able to resist emerging diseases. It will also assist in developing crops with an increased tolerance to drought and new antibodies to fight "superbugs".

PARKING

The price of parking in Canadian cities has gone up almost 10 per cent over the last year with Calgary trailing only New York City when it comes to monthly rates in North America. The median monthly parking cost in Canadian cities is now C$222.75 and the median daily cost of parking is $17.78. Calgary is the most expensive Canadian city where the median monthly rate is $460.00. Toronto is the most expensive city when it comes to median daily parking rates at $22.50 per day versus $22.00 in Calgary. The most expensive North American city in which to park is midtown New York where the rate is $630 monthly. In London the rate is $1171, Hong Kong, $861 and Amsterdam, $925.

TRENDS

TiVo Inc, the digital video recording company is teaming up with Domino's Pizza Inc. to allow subscribers to order pizza for delivery or pickup from their TV sets using their remotes. They can specify crust type, sauces and delivery address. In about 30 minutes, the pizza is delivered to the door.

BUY AMERICAN

Executives from the US$165-billion global rail industry have been flocking to the Middle East lured by the prospect of an investment boom. Every country in the region has drawn up plans for ambitious rail projects. Qatar and Kuwait are spending about $10-billion each and the United Arab Emirates is shelling out twice that. Their shopping lists include: monorails, bullet-trains and local metros. Saudi Arabia plans to spend $15-billion to increase the size of its rail network to include 360kph trains for pilgrims to Mecca.

GROWTH

Canada's income per person grew twice as fast as that in the U.S. over the past few years according to a CIBC report. Canada's real disposable income, what you spend once you subtract price increases, rose C$2,660 since 2005, double the $1,300 gain in the U.S. This is almost enough to wipe out the disparity between U.S. and Canadian earnings levels that had built up over the past 15 years.

COUNTERFEIT

Just as Chinese companies are trying to move up the value chain of manufacturing from producing toys and garments to making computers and electric cars, so to are counterfeiters. Technological advances have allowed hundreds of small Chinese companies, some with as few as 10 employees, to churn out what are known as shanzhai, or blackmarket brand-name cellphones, often for as little as US$20.00 each. Shanzhai phones already account for more than 20 per cent of sales in China. They are being exported illegally to Russia, India, the Middle East, Europe and even the U.S.

ASYLUM

The number of people claiming political asylum rose by 12 per cent in 2008. Much of the increase was because of rising numbers fleeing conflict in Afghanistan and Somalia. The U.S. was the biggest recipient of asylum pleas for the third consecutive year. Just five countries (America, Canada, France, Italy and Britain) accounted for more than half of all claims.

WAISTLINES

Sixty-three per cent of American employees responding to a survey said that they struggle to maintain a healthy diet at work. Almost half of respondents (47 per cent) attributed the dieting challenge to the abundance of less-than-wholesome snack options available at the office. Companies should offer a variety of choices like fresh and dried fruit, yoghurt, whole grain crackers, nuts, raw veggies with low fat dip, hummus and baked pita chips and oatmeal raisin cookies. Only 36 per cent of respondents said their companies offer produce, though staff rated this as their top snack choice.

OFFICES

The most commonly stolen office supplies are: Pens/pencils, 77 per cent and "Sticky" notes and paper clips, 44 per cent.

GAS

The corner gas station is in decline. Once, they populated urban street corners all across Canada. A recent study counted 1,400 gas stations in British Columbia at the end of 2008, down from about 1,510 at the end of 2006. Across Canada, it is calculated that 37 per cent of the estimated 20,000 gas stations that pumped fuel in 1989 have since closed.

AID

Saudi Arabia is spending about US$100-million on agricultural investment to grow wheat, barley and rice for domestic consumption in Ethiopia on land leased to them by the government. Meanwhile, the United Nations World Food Program is spending almost the same amount, $116-million providing 230,000 tonnes of food aid between 2007 and 2011 to the 4.6-million Ethiopians it thinks are threatened by hunger and malnutrition.

LOYALTY

Retailers in the U.S. are finding a silver lining to the recession's dark cloud: loyalty program participation is growing. Participation in rewards and loyalty programmes has risen by 19 per cent across the board since 2007. Consumers clearly see value in program participation and continue to leverage their activity as an antidote to hard times, seeking added value and using rewards to stretch dollars.

TAX HAVENS

The OECD has published its blacklist of non-cooperative tax havens. Costa Rica, Malaysia and the Philippines are listed as countries that have not agreed to tax standards. There is also a list of 38 places that have agreed to improve standards but have not yet done so, such as Gibraltar, Liechtenstein, Andorra and San Marino.

TOURISM

Spanish taxidrivers, hotel receptionists and shopkeepers are being asked to attend "friendliness" sessions and to smile more in a bid to boost tourism.

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