Download October 2014, Volume 2, Edition 3

In-The-News
October Edition
Brazil
Brazil's Rousseff, Neves race for support in election runoff
Projections are that the upcoming election in Brazil is going to be the
closest political race that Brazil has seen in a long time. It is down to
two candidates; incumbent Dilma Rousseff and challenger Aecio
Neves. Rousseff led the first round vote with 41.6% and is a slight favorite, especially among Brazil’s poor. However, Neves had a late
surge and picked up the second place vote on Sunday with 33.6% of
the vote, showing that the race is going to be closer than had been previously thought.
http://www.reuters.com/article/2014/10/06/us-brazil-election-idUSKCN0HU03C20141006
Why Brazil needs change
When Dilma Rousseff was first elected as president in 2010, the economy expanded by 7.5%. Four years late, over a million Brazilians are
protesting against poor public services and political corruption. She
has made few efforts to help Brazil’s structural problems: its poor infrastructure, high costs, and punitive tax system. She is criticized for
dishing out favors to insiders, such as tax breaks and subsidized loans
to state banks. She has damaged Petrobras, the state oil company, and
the ethanol industry by holding down the price of petrol to mitigate
Volume 2, Edition 3
Brazil Facts

Did you know?
-On October 26, Brazilian voters will be going to the polls to vote for their President:
their choice will be either the incumbent
Dilma Rousseff of the Workers' Party or Aecio Neves of the center-right Brazilian Social
Democracy Party (PSDB). In a run-off election in early October, Ms. Rousseff won 42%
of the vote to Mr. Neves’ 34%.
-Statistics are in Ms. Rousseff's favor. During
her tenure, unemployment has been lower
than under any of her predecessors, at about
5%. The minimum monthly wage (R$724;
$304) has increased despite the financial crisis and the number of undernourished Brazilians has fallen by more than 80% in the
past decade, according to the UN. However,
the past 18 months have been marred by
recession and of protests over poor public
services and the World Cup costs.
the inflationary impact of her loose fiscal policy.
http://www.economist.com/news/leaders/21625780-voters-should-ditch-dilma-rousseff-and-electcio-neves-why-brazil-needs-change
Brazil’s Presidential Candidates Announce Plans for Economy
Over the last four years Brazil’s economic growth has decreased from
7.5% to .7%. With upcoming presidential elections, the three leading
candidates have explained their plans for the economy if they are to be
-Mr. Neves, currently a senator, served as
the governor of Brazil's second most populous state, Minas Gerais, from 2003 to 2010.
He is seen as the candidate who is favored
by big business in Brazil and has in the past
condemned President Rousseff's handling of
the economy, accusing the Workers' Party of
frightening off investors.
elected. Current President Dilma Rousseff would like to continue
keeping control of inflation as a priority during her second term. Ma-
-Brazil’s current economic growth is the
rina Silva would like to set “plausible” inflation targets without con-
lowest among the BRIC countries. It is one of
the most difficult countries in which to do
business as it has some of the highest tariffs
in the world. The outcome of the election
will shape its economic policies as it heads
toward hosting the Summer Olympics in
2016.
trolling prices. Aecio Neves would like to maintain inflation at a center
target rate.
http://riotimesonline.com/brazil-news/rio-business/brazils-presidential-candidates-announceplans-for-ailing-economy/
China
Indonesia
China Just Overtook the US as the World's Largest
Economy
According to the International Monetary Fund rankings on countries GDPs in market-exchange and purchasing power terms, China has surpassed United
States as the world largest economy. Due to the different values of each country’s currency, IMF had to adjust for purchasing power. According to them, by the
end of 2014 China is estimated to make up 16.4% of the
world's purchasing power and United States will just
make up 16.28%.
Consumer Confidence Positive in Sept.
http://www.businessinsider.com/china-overtakes-us-as-worlds-largesteconomy-2014-10
Facebook CEO, Mark Zuckerberg, visited Indonesia where he
met with president-elect Joko Widodo. He was there to discuss
the spread of Internet access and connectivity to grow the
economy and jobs in Indonesia. Zuckerberg’s project, Internet.org, has the goal of growing Internet access to two-thirds
of the world’s population. Indonesia is the world’s fourth
largest Facebook user, however the majority of the nation still
does not have Internet.
Germany and China Seal Meeting With Business
Deals
Leaders of Germany and China announced that their
governments will be cooperating in a $2.5 billion investment deals, involving Volkswagen, Daimler and
other leading Germany companies. This will help increase the steady growth in bilateral trade between the
two countries. This will be especially beneficial for
Germany, whose economy is currently struggling.
Chinese financial analysts worry this relationship may
lead to an unhealthy competition.
The Danareska Research Institute reported that the consumer
confidence index in September rose 2.4% and passed the 100
level for the first time since March 2005. This most recent consumer confidence index shows that Indonesians are optimistic
about their economic prospects in the coming months. These
indexes were developed from a survey of 1,700 Indonesian
households from 6 different regions of the country.
http://www.thejakartapost.com/news/2014/10/07/consumer-confidence-positivesept.html
Zuckerberg in Indonesia for Internet access push
http://www.sfgate.com/business/article/Zuckerberg-in-Indonesia-for-Internet-accesspush-5820354.php
http://www.nytimes.com/2014/10/11/business/international/germany-andchina-to-seal-meeting-with-business-deals.html?_r=0
Chile
"Financial Educations" Seen as Solution to Growing
Retail Debt
The Chilean government has declared October "financial education month." This comes after a report from
the country's central bank was released that stated that
approximately 75% of Chilean households have annual debt that is higher than what their annual salaries
can sustain. Throughout October, the government is
hosting about 40 major educational events, and they
are also partnering with universities, banks, and other
organizations.
http://santiagotimes.cl/financial-education-seen-solution-growing-retail-debt-2/
Indonesian President-elect Joko Widodo (left) and Face book CEO
Mark Zuckerberg.
Argentina
Argentina's economy: Puff Daddy, economic guru
Santiago unemployment soars in latest quarter
In the quarter from May to July of this year, the unemployment rate in Chile rose to 6.7%; .1% higher
than the analyst projection. The problem is actually
quite substantial, Chile's unemployment rate this time
last year was 5.7%. The cause of this increase seems to
be a rising labor force and stagnant job growth that is
unable to absorb the increased number of employees
available to work.
Faced with struggling to tap into international markets for hard
currency, the government appears to have returned to its old
trick of data fudging. On September 24th the national statistics
agency announced that the economy had grown by 0.9% in the
second quarter, thereby exiting the recession it entered in June.
Private estimates tell a different story. EconViews, another economics consultancy, reported a 0.4% contraction in the second
quarter, writing in a report: “INDEC’s indicators have grown
apart from ours again, in spite of new official methodologies.”
http://santiagotimes.cl/santiago-unemployment-soars-latest-quarter/
http://www.economist.com/blogs/americasview/2014/10/argentinas-economy
Japan
Japan Aims to Turn Robotics into Profit
Panasonic has struggled with his robotic pursuits over the past
two decades, but hopes to finally make it into the spotlight with
its latest invention of a robotic bed. Breaking robots into the commercial market has been a struggle for all companies but Panasonic thinks that this could be the big break. Japanese Prime Minister
Shinzo Abe is pushing robotics and aims for the robot market to
reach $22 billion by 2020. Abe has even expressed plans to organize a robot Olympics when Japan hosts the summer Olympics. He
hopes that robots become one of the main pillars of Japan’s strategy for growth.
http://www.cnbc.com/id/102072329#
Turkey
Turkey Is Now the Latest Country to Deal With
Serious Violent Spillover From Syria
Syria's civil war has begun to spill over into Turkey as
ISIS militants and Kurdish freedom fighters cause more
and more issues for Turkey's government. This has also
begun to spill over into Turkey's economy which is
causing issues for businesses. Uncertainty in the stability of Turkey has led to investor fear which may stall
business growth in the short term. Businesses should be
wary of the increasing political and economic instability
before they make decisions about doing business with
Turkey.
http://www.businessinsider.com/syrias-ominous-impact-on-turkey-2014-10
Turkish Airlines carried 41.4 million passengers
up to September
Models demonstrate a robot assistant to support people walking and
standing up from a bed and moving to the toilet, during a press preview
hosted by Japan's Panasonic in Tokyo.
Coming Soon: Japan’s First Airliner in 50 Years
Mitsubishi Aircraft Corporation has invited top Japanese government officials to the official rollout of Japan’s first commercial airliner in half a century. The president of Mitsubishi Aircraft plans
to obtain 50% of the total global market for regional jets over the
next 20 years. Mitsubishi’s marketing strategy is promoting its jet
as cleaner, quieter, and more comfortable than existing regional
jets.
Turkish Airlines has experienced a 14.3% increase in
number of passengers on their airline in 2014. The increase of pasengers is due to the increase in the of destinations now offered by the Turkish Airlines. The reason
for the increased traffic is that the Turkish Airline has
been chosen as the best airline in Europe for four years
in a row. Turkey hopes the exponential growth will be
translated to different sectors within the country. In the
meantime, Turkey is capitalizing on their superior air
service.
http://www.hurriyetdailynews.com/turkish-airlines-carried-414-millionpassengers-up-toseptember.aspx?pageID=238&nID=72913&NewsCatID=345
http://online.wsj.com/articles/coming-soon-japans-first-airliner-in-half-a-century1413401634?KEYWORDS=japan&cb=logged0.5287117369007319
South Korea
South Korea Continues to Lower Interest Rates
For the second time this year Bank of Korea cut interest rates in
order to boost growth. The overall lending rate is now a record
low 2%, down from the previous 2.25%. Bank of Korea was responding to downgraded growth estimates and is hoping to
increase capital expenditure and consumer spending. This will
allow for greater growth momentum due to more activity from
consumers and businesses.
http://www.iol.co.za/business/news/south-korea-cuts-interest-rate1.1765365#.VD7fF8lCjGU
Financial Regulator to Ease Regulation of e-commerce
South Korea’s chief financial regulator is to give more autonomy to financial companies, allowing them to choose their own
security programs in online payment systems in order to ease
up internet purchasing. Currently, everyone involved in an
online transaction is required to install ActiveX software which
has been reported as an inconvenience. It doesn’t work on all
browsers. New mobile payment systems that are comparable to
Pay Pal are starting up as well.
http://www.koreaherald.com/view.php?ud=20141006001121
Philippines
PH seen to spawn wealthy consumer class
Cushman & Wakefield, a global consultancy agency,
claims that the VIP countries -Vietnam, Indonesia, and
the Philippines- are on the rise due to the rapid advancement of their economies. In these countries, debt is
low, sound fiscal and monetary policies are in place, and
they have made strides in global competitiveness. For
these reasons, they are expected to draw in a greater
number of foreign investments, especially from the United States and the European Union. The advancements
from these countries are fostering an increasingly
wealthier middle class and the Philippines will rise as a
stronger economic power, globally.
http://business.inquirer.net/180337/ph-seen-to-spawn-wealthy-consumer-class
Saudi Arabia
Russia
Here's Who's Getting Hammered By Russia's Falling
Ruble
President Vladimir Putin is currently unable to control the
declining value of the ruble, Russia’s national currency. The
currency is down approximately twenty percent against the
dollar since January and is now at its lowest level since Russia’s debt default in 1998. The ruble’s performance this year
is the worst of any major currency except Argentina’s peso. It could potentially fall further despite interventions by
Russia’s central bank, which has spent over $1.75 billion to
increase its value.
http://www.businessweek.com/articles/2014-10-07/the-havoc-wreaked-by-thefalling-ruble
Currency exchange board shows rates in central Moscow on Sept.
15
India
Farmers Fight Coca-Cola as India’s Groundwater Dries Up
Indian Prime Minister, Narendra Modi, faces difficult
decisions as Indian farmers and international corporations fight over the country’s limited groundwater supply. WWF says that India faces one of the world’s worst
water shortages. Drilling deeper is not an indefinite solution. Thus, it is up to Mr. Modi to step in and regulate the
use of this precious resource.
Saudi Arabia's Oil Price 'Manipulation' Could Sink
the Russian Economy
Since the vice-president of Russia’s state owned oil,
Mikhail Leontyev, announced that Russia needs the
price of oil to be at least $100 a barrel to buoy its
economy, Saudi Arabia has been accused of lowering
oil prices, for political reasons. So far, OPEC has been
willing to accept Saudi Arabia oil prices lead of as
low as $80 a barrel, which poses large problems for
Russia.
http://www.businessinsider.com/russia-saudi-arabia-and-oil-prices-201410#ixzz3GFuR6P4I
South Africa
Three New African currencies to trade on SA exchange
The Johannesburg Stock Exchange will now track the exchange rate between 4 African currencies that had not
been done before. These currencies are: South African
rand, the Zambian kwacha, the Kenyan shilling and the
Nigerian naira. In doing so, investors through the Johannesburg Stock Exchange will now be able to investment
via the Euro, U.S. Dollar, South African rand, Zambian
kwacha, the Kenyan shilling, and the Nigerian naira.
http://www.southafrica.info/news/jse-african-stocks-071014.htm#.VEAW4_ldVWU
Nene rules out recession
South African Finance Minister, Nhlanhla Nene, spoke to
address the world's uncertainty about South Africa's
economic future. He does not believe the country will
enter into a recession as a result of this change in forecast.
http://www.fin24.com/Economy/Nene-rules-out-recession-20141015
http://www.bloomberg.com/news/2014-10-08/farmers-fight-coca-cola-as-indias-groundwater-dries-up.html
India Inflation Eases to Near Three-Year Low in
September
India’s inflation has reached a three year low. Economists
say that food and fuel prices should continue to decline
and the economy should be boosted form this. A lowering of oil prices and a stable rupee has helped to keep
inflation down and the economy growing. And for the
first time in a while, the central bank of India did not increase interest rates.
http://online.wsj.com/articles/india-inflation-eases-to-near-three-year-low-inseptember-1413204792
Geneseo International Business Club
Editors: Brigid Lonergan & Leah Swarthout
Contact: [email protected]
Nhlanhla Nene (Picture: AFP)