Tag Archives: global risk

Guest Blog: Peso Crisis by Roberto G. Newell

The Dallas Regional Chamber along with our partners TechAmerica and The University of North Texas are hosting the U.S./Mexico Technology Summit September 30th (with an inaugural dinner on September 29), a forum that will focus on a bilateral partnership that drives innovation and increases economic prosperity in on either side of the U.S./Mexico border. 

Today we would like to offer our readership a guest blog from our dinner keynote speaker and participant in the forum, Roberto G. Newell. 

Newell is the CEO of the Mexican Institute for Competitiveness, AC, a privately sponsored, independent think tank in Mexico City whose mandate is to analyze and propose policies that will enhance Mexico’s competitiveness in the global economy.  During 2003 he served as deputy secretary for agribusiness in Mexico’s federal government.  Previously he served in the same administration as CEO of the Fideicomiso de las Empresas Expropiadas del Sector Azucarero. From 1984 to 2001, Newell worked for McKinsey & Company, retiring as director. At McKinsey he served clients in Mexico, the United States, Venezuela, Colombia, Peru, Ecuador, Argentina, Spain, Jamaica, Puerto Rico, and the Dominican Republic.  He is the author of two books and has published many articles in journals and international professional publications.  He currently writes weekly for the Reforma journal.  Roberto earned a bachelor’s and master’s degree from Universidad de las Americas in Mexico and a PhD in economics from the University of Texas at Austin.

The points of view in this column are personal.  These are not to be viewed as the position of or opinions of the Dallas Regional Chamber or its staff.

Liberal conviction
Peso Crisis
May 13, 2010

The crisis has been discussed by many analysts. What has drawn most of the attention is the impact it has had on economic growth, trade flows and employment. However, it has triggered other important events. One of them, which has not been discussed enough, is the impact on the commercial terms of trade.

Most analysts use the September 17, 2008 to mark the beginning of the financial crisis. That was the day that the U.S. Treasury intervened Lehman Brothers. Since then, everything changed.

In those days, one dollar bought 0.70 Euros, 6.83 Yuan and 10.69 Pesos. Those were the days of the super-Peso. The country’s currency was revalued on a sustained basis, compounding the problems of competitiveness for exporting companies and exposing thousands of local companies to the challenge of a hyper-competitive offer from China and other countries. All this has changed.

As can be seen in the table below, the crisis transformed trade terms dramatically. Today, the exchange rate helps competitively Mexican exporters and imported goods that reach the country are more expensive, no matter where they come from. The crisis gave a huge competitive edge to all companies which produce locally.

Depreciation/appreciation  post-Crisis(Period: 17/09/08 a 10/05/10)     
  Dollar Euro Yuan Peso
Dollar 0 9.7% -0.14% 16.9%
Euro -8.8% 0 -9.0% 6.6%
Yuan 0.1% 9.8% 0 17.0%
Peso -14.4% -6.2% -14.6% 0
         

                Source: International Financial Statistics, IMF.

Mexico has gained competitiveness compared with producers around the world, including China. With respect to these, the crisis improved the country’s competitiveness more than 14%. For companies that produce locally competitive improvement was even more significant: from their perspective, the effect was to make 17% more expensive the imports from China. In one stroke, the crisis caused thousands of companies to recover part of the competitive costs they had lost.

 I highly doubt the peso will significantly rise its value in the years to come. Three of the major sources of revenue have lost its momentum: oil production is collapsing, remittances have dropped to reflect the employment situation of Mexicans living in the United States, and consumption of American families is depressed and will possibly not regain its pre-crisis level.

But come what may, the purpose of companies operating in Mexico must be to avoid losing the competitive edge afforded by the current exchange rate. To achieve this, is essential to improve the productivity of all factors used in production. Yes, it can be done: Over recent years, companies in the country have improved its energy productivity, today they consume less energy per unit produced than in 2000. Thus, despite the energy consumed in Mexico is more expensive,this has not affected the competitiveness of most businesses. In contrast, during the same period, the unit costs of labor progressed more quickly than import prices and labor productivity. The last one has been stagnant for years. Urgent actions are required on this front: Labour productivity is the Achilles heel of Mexican companies.

In any case, we are in a unique situation. Historically, the depreciation of the peso have been the result of errors in the management of fiscal and monetary aggregates in the country. This time, the depreciation of the peso is not directly attributable to the government or central bank. The peso lost value even when in general terms no mistakes were made in managing the macro-economy.

It is likely that the current level of the exchange rate reflects the market opinion regarding the general competitive situation in the country. The exchange rate reflects the fact that we are gradually healing of the disease in the Netherlands that kept the peso artificially strong. Today, neither the oil market, or remittances of migrants provide the financial cushion upon which rested the previous terms of trade.

In the absence of these factors, the current exchange rate seems realistic and up wind to the intrinsic conditions to generate foreign exchange in Mexico. The current exchange rate seems more sustainable than it was before the Crisis. The depreciation of the peso partly restored the competitiveness of the real sectors of the economy.

The forces of supply and demand cast their vote. Will the business and public officials know how to take advantage of the new terms of trade?

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Guest Blog: PEMEX and the Tragedy in the Gulf by Roberto G. Newell

The Dallas Regional Chamber along with our partners TechAmerica and The University of North Texas are hosting the U.S./Mexico Technology Summit September 30th (with an inaugural dinner on September 29), a forum that will focus on a bilateral partnership that drives innovation and increases economic prosperity in on either side of the U.S./Mexico border. 

Today we would like to offer our readership a guest blog from our dinner keynote speaker and participant in the forum, Roberto G. Newell. 

Newell is the CEO of the Mexican Institute for Competitiveness, AC, a privately sponsored, independent think tank in Mexico City whose mandate is to analyze and propose policies that will enhance Mexico’s competitiveness in the global economy.  During 2003 he served as deputy secretary for agribusiness in Mexico’s federal government.  Previously he served in the same administration as CEO of the Fideicomiso de las Empresas Expropiadas del Sector Azucarero. From 1984 to 2001, Newell worked for McKinsey & Company, retiring as director. At McKinsey he served clients in Mexico, the United States, Venezuela, Colombia, Peru, Ecuador, Argentina, Spain, Jamaica, Puerto Rico, and the Dominican Republic.  He is the author of two books and has published many articles in journals and international professional publications.  He currently writes weekly for the Reforma journal.  Roberto earned a bachelor’s and master’s degree from Universidad de las Americas in Mexico and a PhD in economics from the University of Texas at Austin.

The points of view in this column are personal.  These are not to be viewed as the position of or opinions of the Dallas Regional Chamber or its staff.

Liberal Conviction
PEMEX and the tragedy of the Gulf
May 20, 2010

The explosion of the Deepwater Horizon on April 20th killed 15 workers. The platform leased by BP to drill in deep waters sank 36 hours later and now lies 1,500 meters below the surface of the Gulf.

Deepwater Horizon was a highly sophisticated machine. Worth over one billion dollars, was designed to operate at extreme depths. The ship had the international record of drilling in deep water. Macondo Prospect, the well where she worked when it sank, was not an unusual challenge for this great ship which had already drilled a hole deeper than 10.680 meters.

Days after the explosion, oil continues to be shed. At least 5,000 barrels, equivalent to 800,000 liters each 24 hours. But this quantity, which is the official figure used by BP and the U.S. government, seems to underestimate the situation. Some experts believe the real leak is twenty times larger.

The largest oil spill in history is from Ixtoc well, drilled by PEMEX in the seventies. Ixtoc spilled an estimated 530 million barrels. To reach the same level, the current spill would have to last at least 33 days at the rate above mentioned, and 663 days if the official figures are correct.

In any case, Macondo Prospect will have a huge impact on the environment. At deep waters environmental damages are difficult to calculate, but become increasingly visible and expensive as long as they move towards the Gulf Coast. Many marine species live and breed in shallow waters near the coasts. This will affect several generations of these species, since the concentrations of oil will take years to be reduced to levels that can be tolerated by marine life.

It is still early to know the economic impact of the environmental tragedy that is underway. What is certain is that it will exceed the costs of any other so far accounted, due to the under size of the spill, as well as the increasing environmental awareness and ability of the Americans to estimate the economic and ecological effects. It would not surprise me if the final cost of the damage is comparable to major natural disasters like those of the Hurricane Andrew or the Chilean earthquake.

The economic magnitude of the tragedy stems from the fact that they are working in extremely inhospitable conditions. The well of BP was at 1,500 feet below the sea surface. At that depth the atmospheric pressure is 150 times higher than the standard pressure at sea level, and every square inch of surface supports a pressure equivalent to several tons. Any design flaw threatens the operation of these delicate and costly machinery operating under these conditions 24 hours a day during the operating life of the well.

The most promising production areas of PEMEX are located at significantly deeper water than those BP was developing in the Gulf. To produce oil in the area of the spill, BP raised a world-class team: had the services of Deepwater Horizon for operation in deep water and was using Halliburton to conduct the drilling. Globally, no one could have built a team with better technical skills to carry out the process.

Now imagine PEMEX in the same circumstances, working with all the limitations arising from the regulations governing the operation of public enterprises, trying to get rid of the obstacles imposed by the interests of the union and the company’s subcontractors, making it difficult to apply the highly rated service companies for comparable tasks and perhaps more complicated. Honestly, it gives me the creeps just to think about it.

 PEMEX’s experience operating in deep waters is very limited (it has made only four wells at depths around one kilometer). Neither has much experience putting together world-class technical teams to operate in these conditions. Therefore, when taking the first steps in this direction must act with extreme caution. The risks that will be taken terrify me. We must not forget the lessons of Ixtoc, nor lose sight of what we know from experience of BP. Working in deep water is to operate in the roots of the devil.

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Guest Blog: A Lower Middle Class Life by Roberto G. Newell

The Dallas Regional Chamber along with our partners TechAmerica and The University of North Texas are hosting the U.S./Mexico Technology Summit September 30th (with an inaugural dinner on September 29), a forum that will focus on a bilateral partnership that drives innovation and increases economic prosperity in on either side of the U.S./Mexico border. 

Today we would like to offer our readership a guest blog from our dinner keynote speaker and participant in the forum, Roberto G. Newell. 

Newell is the CEO of the Mexican Institute for Competitiveness, AC, a privately sponsored, independent think tank in Mexico City whose mandate is to analyze and propose policies that will enhance Mexico’s competitiveness in the global economy.  During 2003 he served as deputy secretary for agribusiness in Mexico’s federal government.  Previously he served in the same administration as CEO of the Fideicomiso de las Empresas Expropiadas del Sector Azucarero. From 1984 to 2001, Newell worked for McKinsey & Company, retiring as director. At McKinsey he served clients in Mexico, the United States, Venezuela, Colombia, Peru, Ecuador, Argentina, Spain, Jamaica, Puerto Rico, and the Dominican Republic.  He is the author of two books and has published many articles in journals and international professional publications.  He currently writes weekly for the Reforma journal.  Roberto earned a bachelor’s and master’s degree from Universidad de las Americas in Mexico and a PhD in economics from the University of Texas at Austin.

The points of view in this column are personal.  These are not to be viewed as the position of or opinions of the Dallas Regional Chamber or its staff.

Liberal conviction
A lower middle class life
May 29, 2010

European and American families will have to get used to a more austere and modest lifestyle, as the recent crisis made noticeable the fragile economic structures on which their standard of living lay on.

In America as of the nineties, families have spent almost all of their income in consumption. At 2007 only an average of 3% had savings and even millions of these families did not even do that. To maintain their acquisition level, many were heavily indebted, gambling everything on their incomes to continue to rise faster than the cost of servicing their debts. When the crisis came, their average debt amounted more than a year of their disposable income, with a situation so vulnerable that any blow to their profits would necessarily have adverse consequences.

The U.S. financial crisis started at the lowest income segment of the mortgage market, but quickly spread in to the entire real estate market. From 2008 to date, the dwelling value in this country plunged more than 40%. Currently, over three million homes are worth less than the balance of the mortgage debt which funded the assets. All these families lost what they had invested in their houses and the market adjustment has not yet finished.

Their economic prospects are not good. Even though the U.S. economy has been growing for over a year, employment has still not recovered. Accordingly, the disposable income of these families have not returned to the pre-crisis level. To make matters worse, in order to confront and stimulate the economy, the U.S. federal government acquired a huge public debt which eventually will have to pay by reducing public spending and raising taxes, with all that this implies for economic activity, employment and disposable income levels of the families

What became clearer after the crisis is that American families can not resume their life as if nothing had happened. Millions of them lost all they had invested in their homes, a wide proportion is unemployed and may soon have to pay higher taxes. Americans will have to get used to living with a lower consumption level, aligned to a new reality.

At the Eurozone the families were more cautious saving about 15% of their disposable income, and in the wider European community, savings rated 10 percent. One would think that in relative terms, the Europeans were acting more responsibly, but not, for several reasons: First, because before the crisis the Europeans had lower-income than the Americans and were growing slower. Second, because their population is aging faster than the American population and therefore, the working population available to cover the cost of European social benefits package will soon be decreasing. Finally, because the public finances of many European countries (Greece, Italy, Portugal, France, Spain, Belgium, Austria, Ireland and several others) are not enough to address the pensions liabilities which these governments have acquired with their population.

European families face a similar situation as the Americans. They will also have to reduce future living standards. The European dream of working relatively light journeys for a few years, enjoy long holiday periods and retire at a relatively young age, is over.

Whoever wants to achieve this dream will have to save a far higher proportion of his income for many more years than those originally planned.

The recent economic crisis in the Eurozone countries reveals that the premises of the European dream were as false as the premises of the American dream. In both cases people will have to get used to a new reality. The economic crisis in the two continents shows that you can not live outside the parameter without obtaining, sooner or later, a reckoning.

Mexican politicians would do well to review the premises upon which the Mexican dream is built on. They continue acting and taking decisions as if the rubber band could be stretched infinitely.

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The long view on China

It’s true what they say – until you’ve been to a World Expo, there is no fathoming its size.  My first day at Shanghai EXPO 2010 it reached nearly 100 degrees Fahrenheit and set a record attendance at just under 600,000 visitors.  Droves of people waited in line to get in to see the popular pavilions for more than 4-6 hours.  This is not a typical trade show.  I didn’t see a single vendor booth.  The U.S. pavilion featured videos touting the spirit of the American people and the American companies that sponsored the pavilion.  The gift shop was packed full of Chinese people seeking out Cowboy hats and U.S.A. pins and pens.  Word to the wise – do not attempt EXPO in a business suit and heels.

The “Salute to Texas” week was kicked off on Tuesday, June 15th in the sweltering Shanghai heat I mentioned above.  Texas Governor Rick Perry was pure fun and fan-fare for the swarms of Chinese citizens gathered around the outdoor stage to hear him speak.  They also had a chance to see NASA astronauts, famed ropers, Texas musicians and high-fashion from NorthPark Center in Dallas.

The Dallas Regional Chamber joined other economic development institutions from around the State in promoting Texas’ assets to Chinese business executives at a State of Texas hosted luncheon following the opening ceremonies.

While the Chamber hosted meetings throughout the week to gain insight into the current business environment in Shanghai and throughout China (including a trip to TEDA in Tianjin, China), the highlight of the trip for the Chamber was an event held on Thursday, June 17th.  Nearly 200 Chinese business and government officials joined the Chamber for a dinner celebrating opportunities for partnership for business success.  As sponsor and attendee, Xinwei Zhang put it, “[The Chamber] not only provided the opportunity for nice food and amazing views from the balcony but also did the magic for the people to attend the event.”  She continued, “One of the entrepreneurs invited by me found a perfect partner from the U.S. to boost his family business.  Another assures me that he is going to send his son to U.S. colleges in Texas.”

The Dallas Regional Chamber is taking the long view on attracting Chinese investment to Dallas.  We know that a relationship developed in China takes time but over time it will result in very good things for the region.  The Chamber has been traveling to China for nearly ten years now.  This dinner may have been the first of its kind, but it has taken these ten years to develop the relationships with the partners that allowed for its success.

The event’s principal sponsor, Jones Day’s Peter Wang added “Jones Day is pleased to be a primary sponsor of this event in China which allows us and the Texas delegation to highlight the benefits of investing in and doing business in Texas.”  Wang’s counterpart in Dallas, George Manning continued, “Texas’s primary economic and business landscape are second-to-none for developing strategic business ties with China that will result in positive economic benefits for both regions.   Jones Day is one of a few U.S. firms with a substantial presence in both China and Texas.  We have vast experience with outbound investments out of China as well as inbound investments into the U.S. and Texas.”

The Chamber’s event could not have been successful without our fantastic sponsors and partners:

Principal sponsor:

-          Jones Day – One Firm Worldwide

Other sponsors:

-          Best Communication International Ltd., Co.

-          Frisco Economic Development Corporation

-          McKinney Economic Development Corporation

Partners:

-          U.S. Commercial Service at the U.S. Consulate in Shanghai

-          CCPIT of Shanghai and Hunan

-          Shanghai Overseas Investment Development Board

-          State of Texas

-          U.S.- China Federation of Industry and Commerce

-          Nautilus Asia Pacific Management

-          Shandong Department of Commerce

-          University of Texas at Arlington EMBA program

The Chamber will continue to build on the foundation established nearly ten years ago.  We set up a more formal presence through the partnership with Jones Day.  The law firm hosts a virtual office for the Chamber at Jones Day’s Shanghai office in Kerry Center, established several years ago.  With this event, we were able to begin settling into our new “home away from home” in Shanghai.  We look forward to hosting new and old friends alike both in Shanghai and someday soon in Dallas.

Related readings:

Dallas could benefit from China’s currency move | Dallas Morning News | Jim Landers
Source:  dallasnews.com

Texas Delegation Visits Expo
Source: en.expo2010.cn

Texas Week Begins at USA Pavilion
Source: en.expo2010.cn

Texas sending officials, local flavor to Shanghai world expo | American Statesman | Laylan Copelin Source: statesman.com

Gov. Rick Perry says China trip promotes Texas in Asia |Dallas Morning News
Source: dallasnews.com

Videos:

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Brazil is on the corporate radar, but can U.S. biz successfully navigate the tax system, bureaucracy?

Brazil tops list of growing economies

As the fifth largest country in the world, with the fifth largest population in the world, Brazilian officials have estimated the country will have the fifth largest economy in the world by 2026, just 16 years in the future. Although recent reports have indicated Brazil’s economy slowing slightly in the wake of the global financial crisis, Brazil is a country that seems to be on the radar of many companies. Ford recently announced plans to invest over $200 million in Brazil, on top of the $2.2 billion announced last year.

Other entities are taking notice as well, as evidenced by Brazil’s win as host to the 2016 Summer Olympics in Rio de Janeiro and being the lead representative in the popular BRIC study, naming the four potentially largest emerging markets, joined by trade powerhouses Russia, India and China.

The size and growth of the $1 trillion annual Brazilian economy is demonstrated through important economic indicators: a relatively low inflation rate of 3.23% a year; a trade surplus of $42 billion; and an exchange rate of 2.14 Brazilian Reales to the dollar. Brazil has an enormous and well-developed agricultural, mining, manufacturing, and service sectors, large labor pool, and historically low interest rates. Brazil’s GDP far outweighs that of any other Latin American country, competing with some of the most productive economies in the world.

Bureaucratic Nightmare for U.S. Companies?

Despite these apparent economic boom times, the current business climate in Brazil presents some significant challenges for U.S. companies.

First on this list would be the Brazilian tax system, which is among the most complex and burdensome in the world. The tax system’s administrative complexity and high rates are a recognized burden to foreign investment in Brazil. There are three types of taxes that American businesses people should be concerned with when considering investment in Brazil: corporate income, “consumption” and property.

Another obstacle to doing business in Brazil is the bureaucratic red tape involved in forming a business. Incorporating in Brazil requires an average of 152 days using government agencies. As such, some resources recommend that a “shell” corporation be purchased by buying out shareholders of an existing Brazilian company.

U.S.-Brazilian Trade Relations a Nightmare for U.S. investment?

In 2002 the Government of Brazil alleged in a World Trade Organization (WTO) arbitration panel that the subsidies provided to the cotton industry by the U.S. government was what made them one of the most successful producers of this commodity. The panel ruled in favor of Brazil which allowed the country to retaliate with tariffs on U.S. products.

The list of products for increased tariffs was substantial. Cotton products would see the highest increase of 100% tariff. Brazil, and other emerging markets, may feel that they are unable to see these issues resolved due to the economic strength in countries like the U.S. Brazil found a way to dramatically impact the negotiations by threatening to break patent agreements on U.S. products. For example, pharmaceutical patents and other licensing agreements would no longer be protected in Brazil.

In early April, both countries announced that they would start working on negotiations that would benefit both countries. In a statement, U.S. Trade Representative Ron Kirk and U.S. Agriculture Secretary Tom Vilsack said negotiators are aiming to agree by June on a process for settling the cotton dispute.

In 2002 the Government of Brazil alleged in a World Trade Organization (WTO) arbitration panel that the subsidies provided to the cotton industry by the U.S. government was what made them one of the most successful producers of this commodity. The panel ruled in favor of Brazil which allowed the country to retaliate with tariffs on U.S. products.

The list of products for increased tariffs was substantial. Cotton products would see the highest increase of 100% tariff. Brazil, and other emerging markets, may feel that they are unable to see these issues resolved due to the economic strength in countries like the U.S. Brazil found a way to dramatically impact the negotiations by threatening to break patent agreements on U.S. products. For example, pharmaceutical patents and other licensing agreements would no longer be protected in Brazil.

In early April, both countries announced that they would start working on negotiations that would benefit both countries. In a statement, U.S. Trade Representative Ron Kirk and U.S. Agriculture Secretary Tom Vilsack said negotiators are aiming to agree by June on a process for settling the cotton dispute.

 Your business needs to get in front of the fifth largest population in the world, so what can you do to protect your interests in this complex country?

The Dallas Regional Chamber’s International Business Council presents the next installment of “Navigating Global Risk” Series, with a look at Brazil, and its business risk and opportunities.  The series, launched in 2009, offers educational programming for companies seeking to conduct business overseas that would like to analyze and mitigate the potential risks.  This practical program, led by local experts in legal, financial and corporate experience, will give participants the background and tools needed to spot the issues early, develop workable risk management processes and implement effective trade programs with Brazil.

Expert speakers will walk the audience through some of the key legal, tax, financial, cultural and other obstacles that may step into the path for success in Brazil; and offer suggestions for overcoming these obstacles. The program will be held Thursday, May 6, 2010 at the Cityplace Conference Center from 7:30 – 10:00 AM.

Speakers will include:

          John Cohn, Partner, Thompson & Knight, LLP

          Scott Schwind, Partner, Thompson & Knight, LLP

          Anne Crews, Executive Vice President, Government Affairs, Mary Kay, Inc.

          Dr. Sherry Dean, Executive Dean of the College of Humanities, Richland College

          Jeffrey Hill, Vice President, Beck do Brasil (The Beck Group)

          Brian Dill, Principal, Grant Thornton

To learn more about the “Navigating Global Risk” series or to register for the Brazil seminar, please visit www.dallaschamber.org/global or contact Kelle Marsalis at (214) 712-1901 or kmarsalis@dallaschamber.org.

The Dallas Regional Chamber’s International Business Council (IBC) is committed to developing trade and investment opportunities for North Texas businesses.  The IBC’s Trade Development Committee provides information and education to Dallas area businesses on trade issues.  For more information on upcoming events, please visit www.dallaschamber.org/global.

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Trade horror movie of 2010?

“Here’s a start for your horror movie,” Roger Cunningham, president and owner of United Risk Consultants tells me as we begin to talk about political risks for exporters in North Texas. He tells me that we are seeing “unprecedented” worldwide insolvencies in 2009 that are continuing into 2010. This means that companies are in a lot of financial trouble. 

Some may ask, ‘how does this impact me?  I have great relationships with my buyers.”   Contracts signed three years ago under the best of intentions are now facing extraordinary uncertainties.  Buyers are unable to follow through. 

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Foreign Currency Fluctuation and Risk Management – How Does THAT Impact MY Business?

Every time I listen to KERA, I hear something about how China or OPEC or other countries are considering investing more in the Euro and purchasing fewer U.S. Dollars.  As we all have heard, China now holds about $800 billion of our $1.58 trillion deficit.  It can be quite confusing to navigate all of these related issues and may lead some North Texas business executives asking themselves “how does this affect my company?”.

The answer is a lot, especially if you are competing in the global marketplace (even if you aren’t doing international business, you are likely going to be impacted).

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Dallas Regional Chamber launches new Navigating Global Risk Series

As I am wrapping up my participation in this week’s CoreNet Global Summit in Brussels, I would like to take a moment to share some thoughts discussed and announce a related initiative my team is preparing to launch.

European economists discussed the economy and its recovery at length this week. The “V” curve recovery model was dismissed (think curves on a graph) as well as the “L” and even the “W” models. A new model was proposed by Deutsche Bank chief economist, Norbert Walker. The “triple- U” recovery with multiple ups and downs over the next several years. While he suggested that western economies would be recovering for a while, he thought that several Asian economies were (or are already) tremendously important to the economic recovery and in fact would be able to begin their departures from policies of monetary stimulation as early as this year or early 2010.

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