What We're Reading:
What We're Reading:
Bank of England expects UK to fall into longest ever recession. The Bank of England has warned the U.K. is facing its longest recession since records began, as it raised interest rates by the most in 33 years. (BBC)
Pakistan: Imran Khan's party calls for protests. Former Pakistani Prime Minister Imran Khan's party called nationwide protests after the politician was shot and injured at an anti-government rally. (DW)
US employers keep hiring briskly even in face of rate hikes. America’s employers kept hiring vigorously in October, adding 261,000 positions, a sign that as Election Day nears, the economy remains a picture of solid job growth and painful inflation (AP)
Germany's Scholz urges China to use 'influence' on Russia. Chinese President Xi Jinping on Friday received German Chancellor Olaf Scholz in Beijing in the first visit by a leader of a G7 nation to China in three years. (DW)
Iran celebrates 1979 US embassy seizure amid anti-government protests. Iran held state-sponsored annual rallies on Friday marking the 1979 seizure of the U.S. embassy in Tehran, as the clerical establishment that has ruled since then struggles to suppress nationwide protests calling for its downfall. (US News & World Report)
China’s Covid outbreak worst since May as lockdowns persist. There were 3,800 new cases reported for Thursday, a 22% jump from the day before and the highest since the country emerged from its biggest outbreak in the spring, according to the National Health Commission. (Business Mirror)
Big food companies commit to 'regenerative agriculture' but skepticism remains. A consortium of 12 food companies, including Mars, PepsiCo and McDonald's, announced a plan to scale up the amount of regenerative farmland. The plan was released just days before the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) in Egypt. (NPR)
Tankers: Full effect of ban on Russian oil to be felt from 2023 onwards. The tanker market’s structural shift is still not complete. In its latest weekly report, shipbroker Allied said with the recently announced crude oil production output cuts from OPEC+ now ready to take effect. (HSN)
US, Taiwan plan in-person trade talks as China tensions simmer. The U.S. and Taiwan will hold in-person trade talks in New York next week as they deepen ties despite opposition from China, which claims the island. (Business Mirror)
Saudi Arabia cuts oil prices for Asia as economies slow. Saudi Arabia lowered most of its oil prices for its main market of Asia in a sign of weakening with the global economic slowdown. (Business Mirror)
Analysis: Banks face trickier fights against shipowners to recover commodities losses. Singapore’s High Court has this year scuppered the plans of both Standard Chartered and the Overseas Chinese Banking Corporation (OCBC) to quickly recoup trade finance losses arising from the Hin Leong fraud scandal. (Global Trade Review)
Russian retaliatory strike on civilian targets in Ukraine paints bleak picture for approaching winter. Missile strikes that knocked out water for 80% of Kyiv’s residents combined with renewed threats to block grain shipments portend new willingness to leverage civilian suffering in his failing war. (US News & World Report)
Is North Korea building to another nuke test? North Korea has fired 26 missiles in two days as the regime demands the attention of neighbors. International observers fear that a seventh nuclear test at the Punggye-ri proving grounds could follow. (DW)
Trade Growth to Slow Sharply in 2023 as Global Economy Faces Strong Headwinds
World trade is expected to lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks weigh on the global economy. WTO economists now predict global merchandise trade volumes will grow by 3.5% in 2022—slightly better than the 3.0% forecast in April. For 2023, however, they foresee a 1.0% increase—down sharply from the previous estimate of 3.4%.
Import demand is expected to soften as growth slows in major economies for different reasons. In Europe, high energy prices stemming from the Russia-Ukraine war will squeeze household spending and raise manufacturing costs. In the United States, monetary policy tightening will hit interest-sensitive spending in areas such as housing, motor vehicles and fixed investment. China continues to grapple with COVID-19 outbreaks and production disruptions paired with weak external demand. Finally, growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress in developing countries.
“Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation, maintaining full employment, and advancing important policy goals such as transitioning to clean energy. Trade is a vital tool for enhancing the global supply of goods and services, as well as for lowering the cost of getting to net-zero carbon emissions,” Director-General Ngozi Okonjo-Iweala said.
“While trade restrictions may be a tempting response to the supply vulnerabilities that have been exposed by the shocks of the past two years, a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and reduced living standards over time. What we need is a deeper, more diversified and less concentrated base for producing goods and services. In addition to boosting economic growth, this would contribute to supply resilience and long-term price stability by mitigating exposure to extreme weather events and other localized disruptions. The success of the WTO's 12th Ministerial Conference (MC12) in June is proof that with sufficient political will, members can cooperate and move forward together.”
The new WTO forecast estimates world GDP at market exchange rates will grow by 2.8% in 2022 and 2.3% in 2023—the latter is 1.0 percentage point lower than what was previously projected.
In their April forecast, released only weeks after the start of the war in Ukraine, WTO economists had to rely on simulations to generate reasonable growth assumptions, in the absence of hard data about the war's impact. As events have unfolded, the WTO's GDP projections for 2022 turned out to be broadly correct. The estimates for 2023, however, now appear overly optimistic, as energy prices have skyrocketed, inflation has become more broad-based, and the war shows no sign of letting up.
If the current forecast is realized, trade growth will slow sharply but remain positive in 2023. It should be noted that there is a high degree of uncertainty associated with the forecast due to shifting monetary policy in advanced economies and the unpredictable nature of the Russia-Ukraine war. Chart 1 shows quarterly world merchandise trade volume through 2023 with error bands around the forecast period. If current assumptions hold, trade growth in 2022 could end up between 2.0% and 4.9%. If the downside risks materialize, trade growth in 2023 could then be as low as -2.8%. If the surprises are on the upside, however, trade growth next year could be high as 4.6%. Trade could also finish outside of these bounds if any of the underlying assumptions change.
The Ukraine crisis has pushed up prices for primary commodities, particularly fuels, food, and fertilizers. These are illustrated by Chart 2, which shows global commodity price indices on the left and natural gas prices by region on the right. In August, energy prices were up 78% year-on-year, led by natural gas, which was up 250%. The 36% increase in the price of crude oil over the same period was small by comparison but still significant for consumers.
Read the entire press release here.
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3 Ways to Measure Your Leadership Effectiveness
Rashan Dixon, senior business systems analyst, Microsoft
Leadership isn’t a formula. It’s an art. The ability of flawed and inherently limited humans to lead others like them toward a common goal takes a special skill set. Even if a leader has the talents required to lead a business, that doesn’t mean they’ll immediately see positive results. Good leaders know that they need to find ways to step out of their egos and truly see themselves from a rational, unbiased perspective.
If you’re a leader that is struggling to remove the blinders, here are some ways to help you accurately measure your leadership effectiveness—as well as a few tips to address any shortcomings you might discover along the way.
1. Measure the right metrics
Sometimes the simplest reason a leader can’t assess themselves is that they aren’t aware of the tools required to gain an accurate measurement. Here are several metrics that can help you take that step back and assess how well you’re leading:
- Company profitability: The ability of your company to turn a profit is ground zero for leadership effectiveness.
- Objectives and KPIs: Strategic benchmarks aren’t just set for productivity or team unity. They can also provide feedback on how well you lead your team over time.
- Communication: Assess if your team is intimately familiar with your company’s vision, goals and core values. Their degree of alignment indicates how well you’re guiding everyone.
Look for measurable components like these that require your input as a leader. Then, use them to measure your leadership effectiveness.
2. Seek direct feedback
The metrics outlined above tend to be measurable statistics. They can provide a certain sense of understanding, but if you want to dig deeper into your leadership track record, you may need to seek more direct feedback. There are two ways that you can go about this.
First, go straight to your customers. In many cases, customer feedback can speak directly to leadership. For instance, you might ask about a sales experience that a CSO spearheaded. Customer experience can also be helpful in an indirect manner. If a customer has complaints, it can reflect on the quality of leadership that a company’s employees were receiving.
Speaking of employees, that is the second (and in many cases more valuable) form of direct feedback. If you’re wondering how your leadership efforts are going, no one will have a more intimately informed answer for you than the very people you’re leading.
In either of these cases, take the answers with a grain of salt. Feedback may be an opinion outside of yourself, but there’s no guarantee that it will be rational or unbiased. Instead, use it to balance out your own internal thoughts and self-assessments.
3. Try a third-party audit
If you feel you can’t gain an accurate depiction of your leadership effectiveness, you may need to go outside of your business entirely. Hiring an external consulting firm is a good way to get a professional, experienced and truly unbiased idea of your leadership.
In the end, an external audit will consist of many of the same things listed above. A consultant will gather key metrics and talk to customers and employees. However, their ability to remain disconnected from the situation can provide a unique degree of clarity.
A consultant will be able to go further than a basic diagnosis. They can also help guide you toward solutions if and when you discover a shortcoming.
4. Ways to make adjustments as a leader
As you find areas that need improvement as a leader (and you will) here are a few tips for ways to make adjustments:
- Own mistakes: The ability to admit that you’ve failed is the first step in improving your future behaviors and decisions.
- Set goals: As with all business-related activities, setting a clear objective always helps guide efforts.
- Find role models: This gives you a clear inspiration and possibly even a mentor.
- Maintain perspective: Work on weaknesses while understanding your strengths and what already gives you value as a leader.
The most important thing to remember as you hone your leadership is to remain open-minded. Resist the urge to become defensive or emotional as you review your effectiveness.
If you can stay focused and maintain a growth mindset, you can use your discoveries to perpetually refine yourself into an elite and experienced member of the C-suite.
Reprinted with permission; SmartBrief
Latin America Is Becoming China’s Backyard
Juan Cortiñas, founder, Opportunitas Advisors & Peter Schechter, host, Altamar Global Issues Podcast
Growing economic needs, Chinese ambition and hard cash are giving China a stronger and stronger foothold in Latin America. The underlying reasons for China’s success include China’s domestic demand for Latin American agriculture and mining and raw materials, and the U.S.’s inability to take a concerted interest in the region, along with the political turmoil in Washington. The old idea, enshrined in the Monroe Doctrine, that Latin America is “America’s backyard,” over which it could dominate, has been relegated to the dustbin of history.
The Monroe Doctrine Has Been Replaced
It is hard not to be impressed by the extent of China’s growing economic footprint in the region. Last year, China’s trade with Latin America reached $450 billion compared to $180 billion in 2010. According to the World Economic Forum, “on the current trajectory, LAC-China trade is expected to exceed $700 billion by 2035, more than twice as much as in 2020.”
As a result, China is now the largest trading partner for many South American countries, including Peru, Chile and Argentina. This is a particularly impressive feat, considering that at the beginning of the century in 2000, Chinese trade with the region was only 2%.
Chinese trade with the region is boosted by commerce in the natural resources and raw materials that the Asian giant needs for its growing economic footprint and agricultural goods—such as soybeans needed to assure sustenance for its massive population.
It’s Not Just Trade
Diplomatic, cultural, military, financial and investment ties are everywhere. Twenty of 33 nations in Latin America and the Caribbean have joined China’s Belt and Road Initiative. Some of the signing ceremonies were accompanied by pomp and circumstance, such as Argentine President Alberto Fernández’s visit to China earlier this year, when he attended the Beijing Winter Olympics and held a grand signing ceremony with President Xi Jinping.
The BRI partnership opens the door not only to greater trade but also investment, as among other things, the agreement makes it easier for “Chinese banks and companies … to fund and build roads, power plants, ports, railways, 5G networks and fiber-optic cables around the world.” Chinese investments in the region have also grown rapidly, especially in strategic sectors such as mining and power generation. In 2020, direct foreign investments from China in the region amounted to $17 billion, with most of it focused on a few countries such as Brazil, Argentina and Mexico.
China has also become a leading lender to the major oil-producing countries of the region, such as Venezuela and Ecuador. Chinese investment has focused on extractive industries, but according to the IMF, is “increasingly tilted towards manufacturing and services industries such as transport, electricity, financial services and information and communication technology (ICT).”
Beyond trade and investment, China has engaged in aggressive diplomacy in the region at a time when U.S. leaders have been looking elsewhere. During the COVID pandemic, China rushed to provide many countries in the region with Chinese-made vaccines against the coronavirus as well as PPE equipment. President Xi has also been a frequent visitor to the region, making 11 trips to Latin America since 2012, compared to one trip from former President Donald Trump and none for President Biden.
While China has stepped in to bring needed investment and trade to the region, its presence comes at a price. The Chinese regime doesn’t prioritize democracy or civil rights, and investment is often at the expense of poor environmental, labor and human rights standards. A report from The Collective on Chinese Financing and Investments, Human Rights and the Environment found that “many of the projects backed by China are also some of the most egregious violators of human rights and environmental law. They neglect the needs of local and Indigenous communities and contribute to deforestation and pollution.”
While China has the economic muscle and strategic desire to maintain a presence in the long run, it also has challenges in the region. A major one is the pandemic-created awareness that new supply chains need to be diversified, and geographic proximity of suppliers is not as insignificant as believed.
US Nearshoring Is a Counter to Chinese Dominance
There is a new bipartisan desire in the U.S. Congress and the White House to expand U.S. investments in the region to potentially grow manufacturing supply chains closer to the U.S. mainland. And, Latin governments are picking up on it: Just listen to Caribbean governments explain to U.S. manufacturers the attractiveness of locating their next factory just a four-day ship’s travel away from Miami. Such a decision would help to boost U.S. investments in the region and create a new economic interdependence.
U.S. regulators are increasingly focused on slowing China’s technological expansion, with new laws now both restricting exports and imports. This places new pressure on Latin governments to exercise caution as to which technologies they buy from China.
The U.S. could do more to enhance and use the advantages of its close cultural ties with the region, developed over decades of closeness and the large number of Latin American immigrants in the U.S. Leveraging the economic, cultural and language power of Latinos from Los Angeles to Miami is a win-win situation, a phrase popular with Chinese government officials.
The US Needs to Look Beyond Immigration
There is a growing chorus of voices in the United States warning about the need to have a more robust response to China’s presence in the region, but a thoughtful U.S. agenda for the region is sorely lacking. Ask any Latin American government official, and you’ll find a tired exasperation with languid responses from U.S. government counterparts to both threats and opportunities in the region.
The U.S. focus on Latin America needs to move beyond a preoccupation with immigration to look at creating new forms of trade and investment that take the current relationship up to a new level. Chief among these is how to position the U.S. trade relationship in areas such as renewable energies, strategic minerals, such as Lithium and information technologies. Focusing on these growing and innovative sectors will open new doors.
Reprinted with permission; Brink News.
Week in Review Editorial Team:
Annacaroline Caruso, editor in chief
Jamilex Gotay, editorial associate
Kendall Payton, editorial associate