The Global Economy Growths, but...

POSITIVE PERSPECTIVES ON THE GLOBAL ECONOMY

With the fast growth of stock market indexes and the quick decrease on unemployment rates, one wonders how real this indicators are in relation to the quality of life people involved are getting. Based on the current market trends, in conjunction with political and socio-economic trends, I would not be surprised if the Dow Jones would surpass the 20000 index in the next few years, as it is projected.

My perception in the quality of life and planning for most countries is that the creation of new employment, market growths, and overall business development investment is still not balanced with demographic explosion and other relevant economic indicators, and distributions methods, in general, whether controlled or not. In the European Union, the recent election prompted leaders for further growth and economic development with job creation, quite consistent with the current US policies.

How The Hague ruling can affect Colombian Fishing Industry

The Hague (La Haya) may be wrong

Colombian President Juan Manuel Santos is right when he says that the La Haya announcement on Colombia-Nicaragua.  The fact is that Colombian waters expand historically on a path from coastal Colombian through the Caribbean Archipelago of San Andrés and Providencia, which implies treaties with various other countries in the region. 

Based on an international law Esguerra-Barcenas treaty (uti possidetis de jure), almost a hundred years old now, Colombia has the right to this channel through Colombia waters and nearby international waters.  Historically, as well, the waters that allow the practice of fishing in this logical ocean path through Colombian waters validate that Colombian waters along the path have been so, since Grand Colombia times, and chronologicaly applied in many instances through the years (uti possidetis de facto). Clearly, The Hague (La Haya) tribunal violates a historic treaty between the two countries and affects the Colombian fishery industry. Colombia should appeal this decision and extensively support the law on both de facto, ( based on status quo and fait accompli due to Colombian naval activities and social living in the region ) and de jure basis on the Esguerra-Barcenas treaty, as well due to subsequent comprehensive economic damage.

Nicaraguan interest on historic Colombian waters is probably based only in their need to expand relations with Cuba through the Caribbean ocean, which is being supported under The Hague (La Haya) questionable new international fuzzy limit model, which should not over rule a historic treaty well implemented by international law and consistently applied through the years. Nicaragua still has similar disputes with Costa Rica with alike intentions.

On Today's Global Economy

The Dark Side of Economy

The current economy has many pros and cons.  The most significant aspect of today’s global economy is the greater and increasing gap between the wealthy and the poor.  The economy of slow developing countries, such as those countries in Africa, do not allow them to earn money in many instances not for their own economic circumstances, but due to money exchange issues, and the lack of pricing control.  Thus, the economy of these countries is solely driven by cash flows without any expectations on true earnings based on their GDP. So, some economies can expand on the so called black markets to leverage their inability to attain true net earning on any domestic product, or advantage on the import-to-export balance.

Other, better developing countries, like Colombia, face some sort of economic class unbalance, as peasants, except for coffee growers, are not guaranteed a prices to provide them with earnings on their revenue.  Instead, they are usually forced to sell at a basic price where the distributors, whole sale and retailers, make the most of their earnings in comparison to smaller net revenue for the peasants.  Although this is a rather internal problem, it is comparable to the African money exchange scenario, as it could potentially lead to the development of a black market.  Colombian peasants recently complained about export reduction, but the government has reopened new export agreements with countries like Venezuela.  On the other hand, peasants’ civil rights, are comparable to those of aborigins in the United States, and could probably be supported or at least monitored by international law.

In developed countries like the USA, France, and even other members of the European Union, the economic difficulties are deeply related to the unbalance of education and the workplace environment. Thus, many recent graduates end up starting their first job (première embauche) in performing clerical tasks or at least quite underpaid in an internship, promising or not. In other scenarios, entrepreneurial activities of recent graduates involve group sales and associated residual income model, which can usually work for those who stay long in the business and sacrifice a significant amount of their time after some frustrating experience.

While there are many areas of career development such as cosmetic medicine, such as anti-aging medicine, cosmetic surgery, including hair implantation, among others; biomedical engineering graduates can also deal with great competition in what is considered the most promising inter-disciplinary technical career at the present time.

On the other hand, many black market activities inspire the attention of some European men’s health care magazines: for instance, sperm trafficking out of illegal massage parlors, usually hosted in mobile domestic locations, and handled by legal professional who literally smuggle the genetic material into the legal genetic market for research or experimentation. This is probably one of the greatest invisibly untaxed business in North America. Indeed, this is quite opposite to the egg market, which is an expanding legal business with great profitability to women.

Similarly, the attack on minorities when performing business such as rental activities, job contracting, are other contracting, are in many instances set up by group inspired in conspiracy of those minority career interests, which include lack of good will in doing business from startup. Most scams can include the offer of online department stores incentives, like Walmart, which are then paid with counterfeited money orders, with the sole purpose of discrediting the individual.  

Exhibit A. I was once black mailed with Walmart counterfeited money orders.

Likewise, making payments with illegal checks with techniques such as overpayment bounced check or multi-inked checks are usually performed as attacks on minorities when doing business, which tend place minority businesses at high risk.

Exhibit B I was personally the target of fraud via a check for a potential security deposit and first month rental, which never happened.

Other similar activities deal with the intellectual property, such as literary or artistic copy rights, which clearly affects the authors, writers, or singers, whose media revenue is shrunk in the black market illegal distribution. Currently, royalty payments to writers and artists are typically delayed, and no one seems to take responsibility in the publishers side when automatic quarterly billing payment takes place.

Other black market activities are historic: auto theft and distribution of parts still remains an important networking activity; which sometimes expands into sending vehicles to developing countries.

These are only a few of many activities where today’s global economy is rather twisted and out of control and basic monitoring.

In spite of Colombia's economic growth, Colombian Coffee Growers Worried...

Cafeteros rethinking strategy

Coffee growers in Colombia are rethinking their strategic, and trying to lower production costs while keeping the quality as high or better. 

However, a quick research of the global and US markets indicates that the issue is that coffee retailers are trying to improve a variety of coffee crops from their suppliers in Central America and Vietnam, major competitors to Brazil and Colombia.  Cafeteros are advised to both diversify and blend their crops into new varieties, by enhancing and creating new specialty grains.  Besides, further research indicates that from the buyers' perspective, it would be smarter to bundle coffee exports with other agricultural products such as banana and cocoa, both of which are growing markets with great profitability.  In order to do this, coffee growers would need to invest in other crops in other Colombian regions or partner with banana and cocoa leaders as well, thus creating multi-crop enterprises possibly with the government support or NGO's interested in this venture. Each one of these products sell together in most coffee retail places and they encompass together a good proportion of larger sales markets as well. Market penetration of other markets like Europe, and France, and retaking a clear presence in the Tour de France advertisement and promotion are key.  The marketing 4 Ps are good for coffee growers in the growing Latin American economy. However, the model described here could be a transparent one, where Colombian Coffee Growers Federation can still be quite independent and the actual plan and its implementation left for the export brokers to accomplish.

Cafeteros are very worried as their revenue and net profits decreased in 2012 with respect to the previous years, with a similar trend for 2013, in spite of the economic growth, and even the perception of Colombia as a new solid emerging economy in the region.

American Stock Indexes on the Rise

American indexes continue to rise and the DJI is expected to surpass the 15000 index for the first time in history.

Successful Peace Process in Colombia Projects Economic Growth

The Regional and Global Impact of the Peace Process in Colombia

For many years there have been many attempts to bring peace to history armed conflict in Colombia.  Probably, during President Andrés Pastrana's term, the nation came close to reaching that historic milestone.  However, I believe that vision failed because there was no business continuity, in the perspective that the process needs to be handled by a supra political organization, not necessarily international.  When I say supra political, I mean gathering all political forces beyond the organized existing parties, and the opposition, either organized or not. The fact that the presidential term in Colombia is only four years is a significant factor if every president has a new vision.

I believe that President Juan Manuel Santos is doing a great job and Colombians, and internationl observers, expect the best from the peace process.  While there is a need for overall will to make and keep peace, it is important to preserve life, and end violence.  The will to attain a peaceful and civilized society that generates culture rather than violence, where the youth raises their educational level and carries books instead of weapons is a milestone that not only Colombia but the entire Latin America needs to focus on.  I believe that a general change of attitude is and has been a good starting point, but also the feeling of oppression is the counterpart for many of those who have little hope for a career, and the opportunity to life a peaceful life.  This is why I see that what missed in President Pastrana's model was the need for further vision.  So, I think that the armed conflict should not only include demilitarized zones but a perspective and a plan for economic growth, and obviously the integration of rebels to the civil nation voluntarily and peacefully.  Since the conflict involves a great deal of political ideology and other relevant factors, the perspective of the demilitarized zone is that of officially opening a new community.  In several countries worldwide, there are sub nations such as aborigines and reserve nations in the United States.  During my MBA days, I started my first attempt to the International Business class with Prof. Rodríguez at Montclair State University, but after a few weeks I as disappointed about the fact that the class is based on the Indian communities in the USA only as an entire nation, which to me did not seem to be "international business".  So I actually took the class at a later time with another professor, but the weeks I was in that class inspire me to believe that a similar process could bring peace to Colombia, and that guerrillas like FARC, ELN, and others can be converted into political parties and actually found cities and formal political divisions in those territories.  Similarly, the economy of that new nation can create their own world with their own political representation once they are ready to deliver the weapons and live in the civilized world.

The positive impact to the region would be enormous.  The economic diversification of Colombia could allow the full exploration, and research and development of agriculture, cattle, and mine industries, among others; and a variety of underdeveloped transportation models could be created.  I believe in the full reappearance of the national railroad company, and its integration my dream for the Americas, that some day one can travel by developed highways or a railroad system to joins South America from Patagonia to Alaska, and that no one has to bother about the guerrillas in South America, or the gangs in Central America, or other disturbing communities in its path, just the way it happens Western and Eastern Europe.  Also, the transportation through Colombian rivers, and the on-going development of channels to join the Atlantic and Pacific Oceans will have an accelerated development.

This peace process will greatly united the South Americans and secure the tourism of the nation with the many unexplored regions full of wealth and beauty, as well as those historically given for granted.  It can also enhance the oil and coal industries for both domestic consumption and exportation, when appropriate.

Finally, Colombia would become another economic leader in the region, with further integration with Brasil, and the original Great Colombia nations. Then, Colombia could be a much better role player with North America, as well as other emerging economies in the world, with well calculated protectionist laws in place.

Factors for a Crisis

Money Exchange and Other Factors
Related Link

Economists have carefully analyzed the recovery from global economic crisis, and have made very few recommendations and listed very few factors, if any.  I have mentioned in an earlier blog that excessive regulation could be listed as a factor.  In that sense, those controls, that try to make business more ethical, inhibited the ability to do business for some. Likewise, the mechanisms use to enhance security -not only in the USA- can be perceived as intimidating or even discriminatory for many individuals, affecting their ability to partake in economic activities or even being productively employed.  

However, there are other factors.  For instance, the instability of money exchange rates affects the economic balance resulting from the Euro crisis, caused systematically by the slow regional economic growth and the deficit due to the Greek default and other countries in need of a bail out. Similarly, Monetary regulations in China have not looked at the global impact and subsequent retro-impact not to maintain a stable money exchange with other countries. 

Significantly so, since aggregate economics have acquired a more complex dimension doing business on the web, I have observed that there are a few main streams, and that they should converge as martingales that can be equated in an equilibrium point. Such it is possible to list the coins that are aligned with or pegged to the dollar and Euro, and those that are neither aligned nor pegged and are in constant adjustment in a protectionist fashion, which while normal, on excess could have critical consequences as the difficult financial times the world is living today.

I am enclosing my presentation on Money Exchange during my MBA years at Montclair State University. The presentation was part of my International Business class.