Competitive horizon

Citation

(2010), "Competitive horizon", Strategic Direction, Vol. 26 No. 10. https://doi.org/10.1108/sd.2010.05626jaa.001

Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 26, Issue 10

Economy in Asia poised to become global leader

The Australian (www.theaustralian.com.au) has published a report claiming that the economy in Asia could overtake G7 nations to become the world’s largest by 2030. In the last two decades, the region’s share of the global economy has trebled and the International Monetary Fund (IMF) expects Asia’s economy to expand by half its current size over the next five years. The report cites slow growth and fiscal troubles in advanced economies as reasons for predicted increases in trade and capital flows into Asia. However, the changing global economic climate demands the creation of effective policies if Asia is to capitalize and enjoy lasting benefits. A shift towards more consumption-driven economies is recommended alongside financial reform that might include the development of local bond markets. Such moves can make for more sustainable economic expansion than continued reliance on exports, presently accounting for over 40 percent of growth in Asia. The IMF forecasts sluggish performance in advanced economies will continue to slow the recovery rate for some time. Given this situation, sustaining strong growth may require a greater focus on domestic activity.

Service sector set to drive growth in Rwanda

Increased government investment will enable Rwanda’s service sector to grow by 7.6 percent in the fiscal year 2010/2011, a report published by All Africa (www.allafrica.com) claims. This marks a healthy increase on the previous year when growth fell to 4.3 percent mainly because of lower global demand and tighter credit regulations. Much of the government’s planned 9 percent increased in spending will be targeted at improving tourism, expected to generate $206 million this year and $237 million in 2011. Tourism is on course to become Rwanda’s highest earning sector, although boosting exports is also high on government agendas. A new airport is to be constructed to meet international standards and will be serviced by a leading national airline. This will help boost high-value exports and provide links for both business and leisure travelers. By the end of 2011, it is hoped that luxury hotels and a convention center will also be built and operational. Substantial investment in telecommunications in the shape of fiber optic cable to link institutions to main Rwandan cities will further enhance tourism’s resurgence, the report suggests.

Consolidation urged for Brazil plastics industry

Increased consumption has led to predictions of strong growth in 2010 for Brazil’s plastic manufacturing industry by the country’s national association of plastic industries, Abiplast. But higher domestic demand is likely to fuel a further increase in imports, a report published by www.bnamericas.com claims. Despite Brazil being an oil producing nation, it already imports double the amount of plastics products than are exported. The industry boasts around 11,200 companies but Abiplast believes that consolidation into larger operators may help to boost exports and combat foreign competition. Although the organization accepts there is a place for smaller firms, it believes that larger concerns would possess the greater negotiating power needed to secure better deals for raw materials.

New standards for EU electrical vehicles

According to a report published by EU business (www.eubusiness.com), planned proposals will improve the safety of electric cars in the European Union and ease the legislative burden on vehicle manufacturers. Electrical vehicles are regarded as a key weapon in the fight to develop and promote greener transport and reduce carbon dioxide emissions. It is hoped that the measures announced will help establish common safety standards for construction of all electric vehicles marketed throughout the EU. In particular, a key intention is to protect car users from direct contact with areas of the vehicle where high voltage is present. The European Commission (EC) also aims to revamp legislation concerning the types of car approved that is currently subject to directives and regulation from both the EC and the United Nations Economic Commission for Europe (UNECE). The conflicting approval processes currently operating in some EU member states can be replaced by a simplified system once tests for electrical safety have become harmonized.