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Economic Profiles Archives - OneDayGlobal

Category Archive: Economic Profiles

Jan 27

Developing Markets: The Fortune to Be Found in Africa

  Last week, Morgan Stanley’s New York Environment and Social Forum hosted an event focused on analyzing the investment opportunities found in Africa. The open panel discussion was led by two prominent figures in this field: Margot Brandenburg of the Rockefeller foundation and Jeffrey Leonard of the Global Environment Fund. Their discussion covered a wide …

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Dec 30

What Defines A Good Entrepreneur: How the Entrepreneurial Finance Lab is Revolutionizing Global Entrepreneurship

Last month I was speaking with an old friend, Esther, about global entrepreneurship in developing countries. Having worked previously in microfinance, I thought I knew a great deal about how entrepreneurship was being fostered by banks abroad.  It was at this point in the conversation that she asked me if I was familiar with the …

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Nov 17

The Middle East Minute: The Forces At Work Behind the Turmoil

  The past month in the Middle East has seen a flurry of conflicts that is unprecedented even for that region. In Syria, dozens of civilians are being extinguished daily by a tyrannical regime. Israel has re-engaged its tactical killing of Palestinians and thus another Gaza conflict seems under way. In Egypt, the Musri administration …

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The 2400 Square Foot Dilemma: Why Most Companies Miss the Global Bull’s-Eye

 

Last night at MIT I had the pleasure of attending the lecture of Vijay Mahajan, an accomplished marketing professor at the University of Texas Austin and the former dean of the Indian School of Business. Mr Mahajan has spent much of the last decade researching Africa and the Middle East. The result of his research provides a fascinating window into the current reality of global business and commerce.

 

How Many “Developed” Countries Exist? The GDP Per Capita Dilemma

 

Mr. Mahajan has stated that a common definition used for developed countries is a minimum GDP per capita of $10,000 dollars. This list includes the US, the UK, Japan, Germany and other global economic giants.  The more surprising element lies in the vast majority of countries that fail to qualify under this definition. Mr. Mahajan states that 86% of the world’s countries have a GDP per capita of under $10,000 dollars.  The list that includes the 86% of overall countries is actually projected to grow over the upcoming years.

 

The 14% Marketing To The World of the 86%

 

What has happened in the world of Global commerce is a stark inability of many mega corporations to successfully integrate and enter emerging and developed markets. Companies are unable to understand what and how to market their products abroad. Many look at Africa, India and the Middle East as potentially lucrative markets but with no standard formula of success.

 

Professor Mahajan’s argument is that this stems from the inability of developed nations like the US to look past their 2,400 square foot syndrome.  The 2,400 square foot syndrome refers to the size of the average house in America. What the professor is referring to is the American mentality to perceive market issues and problems from a global perspective. Products marketed and sold abroad are not addressing the general needs and wants of the greater local populations. Many Indians and Africans live in tight quarters and cannot afford the space, let alone the price of many foreign products.

 

Another problem compounding the issue of global business is the inability of companies to distribute and sell their products across a foreign country. Unlike the US that has 82% of their residents found in urban centers, India has 70% of their population located in rural areas.  No product can reach the masses in Africa and India simply by entering the main city.

 

The Argument For Inclusive Growth

 

According to his studies, Professor Mahajan feels that there are two primary indicators that lead to investing in a country: the informal economy (what percentage of the economy operates in a shadow economy), and what percentage of the economy consumer spending controls. In the US, consumer spending accounts for seventy percent of the total economy. Highly chronicled BRIC countries like India are closer to fifty percent, with China at thirty seven percent. What we do not anticipate is the large percentage of consumer spending dictating the economics in Africa. If we were to aggregate the economies of all the African nations we would find that African consumer spending accounts for over fifty percent of the total economy. With a middle class of nearly sixty million there is a real opportunity to market and create inclusive growth economies in Africa.  If investors understood and entrepreneurs focused on this, the world as a whole would profit.

 

These companies that target the middle class in Africa and the Middle East with relevant need- based products can create opportunities for many. These companies can help elevate the communities and overall economies of these nations. This is a great formula for both individual and overall economic and entrepreneurship success.

 

What It Takes To Succeed Abroad

 

According to Professor Mahajan, requirements for success include  “a deeper focus on taking the market to the people and a real understanding of what lies beneath the economic numbers.”  We must rid ourselves of our standard learned business preconceptions. A wealth of opportunities exists, but in order to capture these opportunities our global mindset must change to create relevant, meaningful and value adding products to the greater world.

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Wag the Dog: Why The Latest Anti-Islam Movie is a Vehicle of Distraction

A couple of weeks ago I had the distinct privilege of going to see Murhaf Jouejati, at Harvard. During his talk, Mr. Jouejati informed the general public of the dire straits and consequences of the war in Syria. What became very clear during this discussion was the lack of concrete international intervention and the bloody future months of innocent killing that lie ahead. Innocent civilians and refugees are being murdered ruthlessly and the world silently watches.

 

Why Syria is Different From the Rest of The Middle East

 

Syria has become the focal point of attention and dissension for the global super powers and an unfortunate victim of poor timing and placement. Russia, still seething from foreign military intervention in Libya has run a full court press supporting and backing the current Syrian regime.  For Russia, Syria represents a last stronghold in the Middle East and an important trading partner.  Over the last year the Syrian government has placed a considerable amount of money in buying Russian-made arms and defense weapons. China and Iran hold similar trade and political agendas for their alliance with the current regime.

 

The European Union is in flux and unable to handle any more crisis’s and America is in the midst of a pivotal presidential election. All this leaves the Syrian people with no hope for positive foreign intervention and a speedy resolution. The crises will continue and become more secular as thousands lose their life trying to gain freedom.

 

The Role of The Inflammatory Movie In All This

 

Recently a movie purportedly produced by a former criminal portraying the profit Mohammed as a womanizer, bastard and power monger was produced and translated into Arabic. This movie is a low-brow production and mix of different scenes meant to outrage and incite hatred on both ends of the spectrum. While this has caused a wave of protests, violence and unfortunate deaths across the Arab world recently, the movie was actually launched in June and only translated to Arabic around the time of September 11th.

 

The timing of the translation and the protests seem to be a well-timed plan of a greater organization that has nothing to do with the common Arab. This seems to aid certain organizations and countries while deflecting the attention from a greater issue at hand.

 

Wag the Dog Forget The Syrian

 

The Syrian people have been lost in the noise of what is commonly referred to as a wag the dog strategy. The biggest beneficiaries of this movement are precisely the enemies of the Syrian revolution. Arabs are portrayed as highly unstable individuals unable to manage with free civil liberties. Their backlash reaction shows them to be a blood-thirsty culture that hates the West and needs to be tightly controlled. Russia and Iran can point to Libya and Tunisia as examples of what happens when Western intervention helps oust a West friendly Dictator.  Even Israeli Prime Minister Benjamin Netanyahu is using the movie to push his own platforms. Mr. Netanyahu sees the protests as a case study for what can occur when Middle Eastern countries are given too much leeway.

incendiary movie. Countries like Russia, China, Iran and Israel continue to push their own platforms. This movie has helped and aided their cause, serving as a vehicle for frustration and diversion while successfully diverting the world’s awareness and attention from the continuing Syrian genocide.

 

Aug 19

Its All Greek To Me: Why Greece Could Be A Microcosm Of The Entire World

  As the world economy continues to try to move forward, many countries across the Eurozone seem to be sinking or stuck in neutral. Countries like Greece, Spain and Portugal are responsible for their situation due to the fiscal irresponsibility they have shown over the past decade. In the last year we are increasingly seeing …

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Why the Super PAC is the PAC-Man of True Democracy

In a world teetering on an economic collapse, one can never truly breathe easy. The November US presidential elections hold a glimmer of hope for many across the world. By knowing what president will reside over the next four years, investors and companies alike can better predict what kind of market legislation lies ahead.  A domino effect will occur as finally many of the financial strategies that are currently being held up in fear of an unknown future are executed.

 

Usually one can take solace in knowing the future of the markets will be dictated by the will of the collective spirit of the people. Part of this belief is the understanding that the elected officials represent the will of the people. While, legal lobbying has always been present from the inception of the US, this presidential election will mark the first time the super PAC will be present. The super PAC allows an uncapped level of private wealth to enter into campaign funds.

 

Carte Blanche for the President

 

With a super PAC in place the private interests will become the center of each candidate’s decision-making process. As long as the candidates cater to their collective campaign cronies, there can be no harm in any of their decisions. This leads to a dangerous precedent where democracy and liberal free flowing capitalism is greatly hindered.

 

Campaign stuffers like the Koch brothers and others will continue to get their platforms across at any cost. These platforms come at a cost of the social welfare as many of the so-called benefactors are not moderates and are out on their own personal mission. This mission does not correlate with the social good of the country.

 

Wheels in Motion: Why the 99% should be afraid

 

The President and his cabinet are already seeing the effects of this super PAC.  Mitt Romney has raised more campaign funds than many thought was possible during this time period.  While current President Obama has not necessarily lived up to peoples’ expectations, a future with Mitt could turn the US’s international standing and economy into an irreversible tailspin. The same Mitt who was once an underdog now is seen more and more as a potential primetime candidate.

 

Mitt could be the first lab rat of the new super PAC and its effects. Mr. Romney is a candidate willing to be a pawn of the super PAC benefactors. All believers in social democracy as a check and balance should be wary this November. What may start as a great market recovery, could be the start of a new and dangerous brand of politics.

Nov 10

Why the Arabic Spring Couldn’t Change the Iron Grip Dictatorship Everywhere in the Middle East: Syria The Country The World Ignored

The past six months have brought a flood of excitement that the Arab world has not seen since the 1950’s. What was once thought impossibility became a reality as many of the staunchest dictators in the area saw their unexpected final days. What stated as a mere protest movement in North Africa caught wildfire and …

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The One Thing America’s Founding Fathers Forgot: Lobbying A Missed Check With No Balance


After the article I published on Occupy I got many interesting comments and a good deal of feedback from readers. While, I am still not in support of the movement in its present undirected and ill aimed form it has brought to light many discussions that all citizens regardless of country should partake in. These discussions centered upon the rules, which govern local, national and international economies are always needed.

 

The Birth Of A National Identity & Ideal 

When the US was founded the Founding Fathers of the nation went through a great deal of deliberation to set the rules and platforms of the new country. The result is seen by many to be a masterpiece and perhaps the real crown jewel of America. The Constitution and Declaration of Independence are seen as great achievements and the real cornerstones upon which America has been able to build a flourishing economy.

The Constitution was built in such a way as to create a series of checks and balances in the system to ensure that no party became too powerful and ran the country like an aristocracy instead of a democracy. The one point they hotly contested was the need to curb, ban or outlaw lobbying. At the time the founding fathers saw lobbying as a needed part of the freedom to push through what you saw was needed in the country. These checks and balances have generally served America well and allowed democracy to grow and dictate the needs of the country.  The one black mark can be clearly seen however in the lack of control of corporate lobbying.

 

The Building Corporate Lobby That Ate Democracy 

As of 2007 according to Wikipedia there was over 17,000 corporate lobbyists based in Washington DC. Each lobbyist representing a cause and company and trying in their own way to influence, dictate and manage the actions of US politics. The results have been largely disastrous for the common US citizen who is largely unaware of what occurs in the shadows.

Politicians are so addicted to the kick-backs, the campaign contributions, & the guarantees afforded to them legally by corporations that they forget their common constituencies. As a result the US is currently involved in wars in Iraq and Afghanistan that have tragically killed thousands of Americans, ballooned the national debt, and mortgaged the financial prosperity of future Americans.

The only individuals to have profited from the war’s are a select group of wealthy people running corporations who need government funding to finance their operations, or get valuable land and oil rights in these foreign countries. The common American is left wondering why his government put him in this situation.  Lobbying obviously has affected more than just wars, but also can be attributed to corporate tax breaks, and laws passed that favor certain companies and people.

This is not the first time the US or a foreign country has found themselves in this situation.  This has been done countlessly in many historic empires. A great example of this in US history is the Vietnam Occupation or War, which lasted thirty years. A forgotten generation of soldiers fighting a war for their country without understanding that this war had more to do with economic supremacy than ideals or freedom. In that particular war millions lost their lives and no solution was ever found.

 

ObamaNation an Abomination 

When President Obama came to power he spoke of so many truths, ideals and connected with the common American. In doing so he raised the spirits and hopes of the common American. Unfortunately when he came in power he was unable to make any significant change in economic and US policy. The lobbying machines have handcuffed him to make the “right” decisions for the country. As a result what we see was a continuing four years of Bush politics and its effects.

President Obama like all other people is bound to human desires and want.  His need or desire to get re-elected kept him toeing the line of neutrality when a strong push was needed to change the system.  No majority will rise against the current policy in congress or the senate simply because they are in fear of losing their ultimate backing. As a result the checks and balances made to distribute power have been lost.

 

Don’t Blame the Lobby Blame the Malaise 

The corporate lobby is not solely to blame for this issue. It lies within each and every American and citizen of the world to understand what the real issue is. The corporate lobby laws can be amended if enough people see the truth behind the curtain. Mainstream politics has become minimally different between parties and politicians. As a result a growing number of Americans are joining the extreme on either side with the Tea Party, and Occupy movements growing by the day. The answer does not lie in the extremes but rather in the common American asking for a true democracy with a curbed lobby. Until this happens, US politics will be a game of chess controlled by the affluent interest of a few, with the common man and politicians as pawns in an intricate game.

Oct 14

Misplaced Civil Disobedience: The Top Five Adverse results of the Occupy Movement

Contradiction at its finest (Source Facebook NewsFeed pictures)

In the past three weeks I have had the great pleasure and luck to be in three of my favorite American cities: San Francisco, New York, and Boston. While all three cities are important economic hubs of the US each has different cultures and highlighted strengths. The one thing these cities have in common in …

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