Archive for October, 2009
Top Destination for Foreign Direct Investment: Asia-Pacific Region
The FDI Magazine keeps track of FDI investments worldwide.”In the first six months of 2009, fDi Markets tracked 6644 FDI projects, representing a combined capital investment of $474.6bn and the creation of 1.3 million jobs.”
Compared to the same period last year, this was a decline of 14% .Despite the economic crisis, many large global firms continue to invest in foreign markets in order to gain a foothold and expand market share.
Foreign Direct Investment Tracking
Source: FDI magazine
The Asia-Pacific region remained as the top destination for FDI in 2009, attracting 32% of investments. In Asia, China remains the top country for FDI for the seventh consecutive year.
In terms of foreign direct investment, US companies are still the number one. For eg – US companies like Pepsi, GE are investing heavily in China to capitalize on its domestic growth.
Dutch Public Debt Exceeds EU Limit of 60 Percent
The Dutch Public Debt has exceeded the 60 Percent EU Limit for the first six months of this year. The last time this occurred was in 1999. The public debt totalled 365B Euros. This represents a 10% increase from the end of 2008. The Government-Debt-GDP was 61.1%.
Dutch Public Debt
Source: Statistics Netherlands
Why did the public debt grow so fast?
In January, the Dutch government took 80% of all the soured loans and profit of the American mortgage portfolio of the large ING bank. This caused the public debt to increase by about 20B Euros.
It is not just the US where tax revenues are down and government expenditures going up. The Netherlands also has the same problem as noted below.
From Statistics Netherlands:
“Public revenue more than 6 bn euro down
Public revenue over the first half of 2009 was more than 6 bn down on the first six months of last year. Revenue from social contributions, wage and income taxes was about the same as in the first half of 2008. Other tax revenues have fallen dramatically. Revenue from VAT shrank by 1 bn euro. Due to the poor situation on the housing market, revenue from property transfer tax declined by nearly 1 bn euro. Revenue from dividend tax was reduced by 1.5 bn euro. Corporate tax revenue was reduced by 2 bn.
Revenue from capital dropped considerably by more than 1 bn euro. Lower natural gas revenues were partly offset by extra government revenues from capital invested in the financial sector by the end of 2008.
Public expenditure nearly 6 bn euro up
Government expenditure was nearly 6 bn higher than in the first half of 2008. In particular benefits under the Exceptional Medical Expenses Act (AWBZ) and basic health care benefits rose substantially by nearly 3 bn euro. Wage payments, acquisitions, investments and subsidies increased by 1 bn each. The reduction on Dutch payments to the European Union had a positive effect on the government balance sheet, which was brought down by nearly 2 bn euro due to discounts stipulated on EU contributions.”
Latest Unemployment Rates in OECD Countries
The unemployment rate for the OECD countries was 8.6% in August 2009, as per data released by the OECD on Monday.
The unemployment rates were:
Euro Area = 9.6% in August, 2009
Japan = 5.5% in August, 2009
France= 9.9% in August, 2009
Germany= 7.7% in August, 2009
UK= 7.8% in June, 2009
USA = 9.8% in September, 2009
Canada= 8.4% in September, 2009
France has the highest unemployment rate in the OECD area with US coming second. Japan has the lowest rate at 5.5%. Despite the global financial crisis, Japan keeps most people employed. Germany and UK are also lower than the US rate.
Top 10 Export Destinations for Iranian Crude-Oil
The Top 10 export destinations for Iranian-crude oil in 2007 is shown in the chart below:
Source: WSJ
Japan is the largest importer of Iranian crude followed by China and India.
Cost of Living Comparison: USA vs. Asian Countries
The research firm CLSA Asia-Pacific Markets has recently released an interesting study on the cost of living among various countries in Asia and the USA, the UK.
The chart below shows the Purchasing Power Parity of various currencies against the US dollar:
Click to enlarge
It costs 40% less to buy a basket of the same goods in Indonesia than in the US. However in Australia, Japan, Singapore and the UK it would cost more than a dollar for the same goods. The basket of goods used in this study are listed in the chart below.
The US $ price comparison of a basket of goods in different markets:
In the chart above, we can see that electronics goods and food items are cheaper in the USA than any other country. FOr example, an Apple i-pod costs $149 in the US compared to $170 in UK, $208 in India and $200 in Japan.
However monthly broadband internet costs $40 in the US, the second costliest in the chart.Asian countries generally have cheaper internet services with just $17 in Singapore and $18 in Thailand for the broadband connection.
The Toyota Camry costs the cheapest in USA. In Singapore, the same car costs more than 3 times the US price at $66,000+.
For more details checkout: Finally, A Sensible Cost Of Living Study – An Important Posting
USA is The Largest Investor in Norway
The US ranked number one in terms of the largest foreign-controlled enterprises by value added in Norway. Sweden and France occupied the second and third positions. In 2007, USA accounted for 35% of foreign-owned enterprises.
In terms of number of enterprises and number of employees Sweden was the largest. Oil and Gas sector held the largest foreign-owned enterprises. Since US has some of the top oil-related companies the world naturally the US is the top investor in this sector in Norway.
Norway’s Net Foreign Assets
Norway’s foreign assets continued to increase in 2008 despite the worldwide turmoil in financial markets. Assets grew by 35% to NOK 1,654 billion in 2008. In 2008, net foreignassets totalled 65% of GDP where as in 2007 it amounted to only 54% of GDP.
Source: Statistics Norway
The current unemployment rate in Norway is just 3% compared to nearly 10% in the US.
