.........-----

translate arrow

Strike Aviation Group

Strike Aviation Group

 

Ai Logistics Network

 

WASHINGTON, DC: March 20, 2017. As Congressional hearings begin on possible connections between the Trump presidential election bid and Russia, evidence has surfaced that sacked U.S. National Security Advisor Michael Flynn received US$11,250 from Volga-Dnepr in August 2015 as a speaking engagement fee.

Volga-Dnepr has an on-going contract with Boeing to support the manufacturer's global supply chain with 20 B747-8s and the provision of AN124-100 capacity.

General Flynn was fired by Trump in February for concealing information about his communications with Russian officials. Earlier this month he revealed he had been paid US$530,000 for lobbying work last year on behalf of a foreign government while advising presidential candidate Trump.

In a letter to Trump a member of the House Committee on Oversight and Government Reform, Representative Elijah Cummings, has asked whether Flynn fully disclosed his communications with, and payments from, Russian or any other foreign agents, as well as his payments from foreign sources.

Flynn paymentsThis would have been a requirement as part of the security clearance and vetting process prior to Flynn's return to government.

In December 2015 the Russia Today (RT) television channel paid Flynn $33,750 (right) to speak at a gala in Moscow, during which he dined with Russian president Vladimir Putin, according to Cummings.

Flynn, who was a Trump campaign advisor before becoming National Security Advisor, "has dissembled regarding the source of these funds and has refused to disclose the amounts he was paid," Cummings wrote in his letter to Trump, the Department of Defense secretary James Mattis, and FBI director James Comey.

According to the Congressman, U.S. intelligence agencies have warned since 2012, when Flynn was serving as the director of the U.S. Defense Intelligence Agency, that RT is an instrument of the Russian government.

Cummings' letter also revealed a US$11,250 payment in October 2015 to Flynn from Kaspersky Government Security Solutions, founded by a former member of Russian military intelligence.

"I cannot recall any time in our nation's history when the president selected as his National Security Advisor someone who violated the Constitution by accepting tens of thousands of dollars from an agent of a global adversary that attacked our democracy," Cummings wrote to Trump.

"I also cannot recall a time when the president and his top advisers seemed so disinterested in the truth about that individual's work on behalf of foreign nations—whether due to willful ignorance or knowing indifference," he added.

RESTON, VA: March 09, 2017. The American Society of Civil Engineers (ASCE) says restoring U.S. infrastructure to its competitive position will cost the country 3.5 percent of GDP by 2025 because of a US$2.0 trillion, 10-year lack of funding by the U.S. Congress.

According to latest figures from the U.S. Department of Commerce, U.S. GDP by the fourth quarter of 2016 was US$18.56 trillion in current dollars.

Every four years the ASCE reviews and grades America's infrastructure. In its latest report it has awarded the country a 'D' overall and concluded: "The infrastructure is in poor to fair condition and mostly below standard, with many elements approaching the end of their service life. A large portion of the system exhibits significant deterioration.

"Condition and capacity are of serious concern with strong risk of failure," it added.

The 165 year-old association has graded 16 infrastructure elements from Aviation to Wastewater. Here are four that have a particular impact on trade:

Roads: The ASCE gives it a 'D' saying the country's roads are crowded, in poor condition, chronically underfunded and becoming more dangerous. Traffic delays cost America US$160 billion in wasted time and fuel in 2014. After years of decline, traffic deaths increased 7.0 percent between 2014 and 2015 to over 35,000.

DFW internationalRail: Because of regular investment, ASCE has awarded it a 'B'. The network carries one third of U.S. exports and delivers five million tons of freight each day. The private rail freight industry owns the vast majority of the nation's rail infrastructure and continues to make significant capital investment - US$27.1 billion in 2015 - to maintain it.

Ports: America's 926 ports only get a 'C+' despite being responsible for US$4.6 trillion or 26 percent of the U.S. economy. ASCE notes few ports have dredged deeper navigation channels to accommodate ever-larger box ships and landside port congestion is increasing despite investments in port expansion, modernization and repair.

Aviation: While the industry is marked by technologically advanced and economically efficient aircraft, the associated airport and air traffic control infrastructure is not keeping up says ASCE, awarding the sector a 'D'. With 24 of the top 30 major airports soon to experience "Thanksgiving traffic volume" at least one day a week, airports face a US$42 billion funding gap between 2016 and 2025.

Acknowledging Donald Trump's campaign pledge to spend US$1 trillion on America's failing infrastructure, ASCE is recommending Trump and the current Republican Congress do the following as a matter of urgency:

  1. Put the "trust" back into "trust funds." Dedicated public funding sources on the local, state, and federal levels need to be consistently and sufficiently funded from user-generated fees, with infrastructure trust funds never used to pay for or offset other parts of a budget.
  2. Fix the Highway Trust Fund by raising the federal motor fuel tax. To ensure long-term, sustainable funding for the federal surface transportation program, the current user fee - 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel - must be raised by at least 25 cents per gallon and tied to inflation to restore its purchasing power, fill the funding deficit, and ensure reliable funding for the future.
  3. Authorize programs to improve specific categories of deficient infrastructure and support that commitment by fully funding them in an expedient, prioritized manner.
  4. Infrastructure owners and operators must charge, and Americans must be willing to pay, rates and fees that reflect the true cost of using, maintaining, and improving all infrastructure, including water, waste, transportation and energy services.

ASCE president Norma Jean Mattei concluded: "Any federal infrastructure legislation must include investment that provides substantial, long-term benefits to the public and the economy; consider the cost of an infrastructure project over its entire life span; ensure projects are built sustainably and resiliently; and not replace existing federal, state, local, or private infrastructure funding."

DETROIT, MI: March 06, 2017. Addressing executives from the U.S. auto industry, Mexico Secretary of Commerce Ildefonso Guajardo Villarreal has reiterated his government's opposition to additional tariffs or quantitative restrictions on trade with the U.S.

Villarreal said that thanks to NAFTA the automotive industry had become "a pillar of the economic relationship" between Mexico and Michigan and added that his country is quite ready to modernize and strengthen the existing treaty for the future benefit of all parties.

His visit coincided with the release of 2016 trade data from the U.S. Department of Transportation showing the value of NAFTA cross-border trade by truck, air, sea, pipeline and rail fell 3.4 percent last year to US$1.069 trillion.

NAFTA US Mexico trade 2016 by stateFrom 2015 to 2016 the value of U.S.-Canada freight flows fell 5.4 percent to US$544.0 billion with trucks carrying 60.1 percent of the value followed by rail with 16.2 percent. Air cargo accounted for 4.8 percent of the total.

In the same period the value of U.S.-Mexico freight fell 1.1 percent to US$525.1 billion as trucks carried 71 percent and rail 14.7 percent. Airfreight totaled 3.0 percent by value.

Michigan and its auto industry was the leading U.S. state for U.S.-Canada trade flows valued at $71.8 billion, an increase of 3.9 percent over 2015.

The top commodity between the U.S. and Canada last year was vehicles and related parts valued at US$106.1 billion, with US$59.8 billion moving by truck.

Texas remained the No.1 U.S. state trading with Mexico in 2016 with a value of US$173.7 billion, while Michigan had the highest percent change year-on-year with a rise of 11.0 percent (see table right).

The top commodity between the U.S. and Mexico last year was electrical machinery at US$102.6 billion, with US$94.0 billion moved by truck, followed by vehicles and parts with $43.7 billion moved by rail.

As Villarreal was visiting Michigan, recently-appointed Texas Secretary of State Rolando Pablos met with government and industry representatives in Mexico City to discuss trade prospects in the light of Donald Trump's vituperative comments about their country.

"I was highly encouraged by my meetings and discussions this week with public and private sector leaders in Mexico," Pablos said. "By continuing a robust dialogue, Texas and Mexico can forge even stronger bonds and bring greater economic prosperity on both sides of the border," he declared.

GENEVA: February 22, 2017. IATA says it welcomes the entry into force of the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA), following ratification by Chad, Jordan, Oman and Rwanda to reach the required 110 members.

Full implementation of the TFA is forecast to slash members' trade costs by an average of 14.3 per cent, with developing countries having the most to gain according to a 2015 WTO study.

The organization said it expects the TFA to reduce the time needed to import goods by over 36 hours and almost 48 hours for exports, a drop of 47 percent and 91 percent respectively over the current average.

"The Trade Facilitation Agreement will cut red tape at the border for faster, cheaper and easier trade. That's great news for airlines, which deliver about a third of the goods traded across borders by value," said IATA director general and CEO Alexandre de Juniac - adding the TFA is a timely reminder of the dangers of "current protectionist rhetoric".

First Korean Air B787-9The TFA promotes trade by establishing harmonized rules for expediting the movement, release and clearance of goods based on a commitment to accepting e-payments and electronic documentation.

Commenting on the ratification, WTO director general Roberto Azevêdo said it was "fantastic news" because the TFA will help cut trade costs and "kick-start technical assistance work to help poorer countries with implementation" that could lead to an annual US$1 trillion boost to global trade.

"This is the biggest reform of global trade in a generation. It can make a big difference for growth and development around the world. Now, working together, we have the responsibility to implement the Agreement to make those benefits a reality," he added.

Coincident with TFA ratification by the government of South Korea, Korean Air has taken delivery of its first B787-9 (right) with five more due in 2017 and another five by 2019. The first aircraft will be used to launch long-haul passenger and cargo services to Toronto, Madrid, and Zurich this year.

As of February 22, 2017, the following WTO members have accepted the TFA: Hong Kong China, Singapore, the U.S., Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d'Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the UAE, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, Canada, Ghana, Mozambique, Saint Vincent & the Grenadines, Nigeria, Nepal, Rwanda, Oman, Chad and Jordan.

BERLIN: November 21, 2016. Following the election of Donald Trump as America's next president, watchdog Transparency International (TI) has released a report saying a third of the population of Europe and Central Asia think corruption is one of the biggest problems facing their respective countries.

TI corruption TI said it spoke to nearly 60,000 people in 42 countries from Portugal to Kazakhstan between November last year and July 2016 and concluded that nearly a third of the region's citizens believe government officials and lawmakers are "highly corrupt".

According to the survey, an average of one in six households paid a bribe to use a public service during the period, with the highest rates in Tajikistan (50 percent), Moldova (42 percent), Azerbaijan, the Kyrgyz Republic and Ukraine (38 percent), and Russia (34 percent).

Romania had the highest rate for an EU Member State with 29 percent, followed by Lithuania with 24 per cent, said TI.

The report notes that in the region's richest countries, 65 percent of people think the wealthy have too much influence on public policy compared to 44 percent in EU accession countries, and 46 percent in CIS countries.

In Spain, 88 percent of people consider wealthy individuals to have excessive influence over government decisions; in Portugal it is 85 percent, France 79 percent, Germany and the UK, 77 percent. Overall, TI said 26 percent of citizens in Europe and Central Asia believe business executives are "highly corrupt".

TI corruption businessThe watchdog cites the recent example of former European Commission president Jose Manuel Barroso accepting a position with Goldman Sachs. The news generated a petition of over 100,000 signatures calling for greater integrity in politics and business.

"Corruption is a significant problem all across the Europe and Central Asia region. In EU countries many citizens see how the wealthy and those in government distort the system to their advantage," said José Ugaz, TI chair.

"Governments are simply not doing enough to tackle corruption because individuals at the top are benefiting. To end this deeply troubling relationship between wealth, power and corruption, governments must require higher levels of transparency, including around who owns and controls companies through public beneficial ownership registries," he added.

Based in Berlin, TI is represented by more than 100 chapters worldwide with the goal to ensure government, business and civil society is free from corruption.

TALAHASSEE, FL: February 14, 2017. Enterprise Florida (EFI), a public-private partnership between business leaders and state government to promote economic development and foreign direct investment (FDI) in the state, is threatened with extinction.

Following the introduction of a bill by Florida House of Representatives' Speaker Republican Richard Corcoran to eliminate the state's main economic development agencies, the House Careers and Competition Subcommittee has passed the bill 10 votes to 5 to cut all funding.

Florida governor Rick Scott, also a Republican, said he opposed the bill noting the agency's goal is to bring more jobs to Florida and diversify the state's industries.

In 2015 Florida's total merchandise trade (exports plus imports) reached US$147.4 billion as the state continued to have the highest trade surplus nationwide.

International trade and FDI accounted for about one-sixth of Florida's economic output in 2016 and supported an estimated one million jobs. The state ranked 6th in the nation in FDI and first in the Southeast.

Qatar Cargo MIA launchAccording to a representative of World Trade Center Miami, Enterprise Florida has been successful in developing trade programs that help thousands of small and medium-sized Florida companies each year, including one-on-one export counseling; education and training programs; overseas trade shows and trade missions; and export diversification and expansion trade grants.

Scott responded to the subcommittee move on Twitter saying: "Politicians turned their back on jobs today by supporting job killing legislation." He went on to accuse Speaker Corcoran of putting a bid to become Florida's next governor ahead of the state's economic growth.

The Florida Chamber of Commerce has added its voice to the controversy saying it believes the state must continue to fund initiatives that support diversifying the economy and attracting visitors and businesses.

"The approved committee bill sends a signal that Florida's state legislature is no longer an active partner in‎ job creation, diversifying our economy, ‎or supporting our important tourism sector," it declared.

EFI said if the state was a country it would be the world's 18th largest with a GDP of US$839 billion – compared to Switzerland with US$693 billion and the UAE at US$348 billion.

And in an acknowledgement of Donald Trump's desire to spend US$1 trillion on upgrading America's infrastructure, EFI said Florida is already No.2 in the nation with 20 commercial airports, 15 deepwater seaports including a super Post-Panamax, 3,000 miles of freight rail tracks and 122,000 miles of highway – plus two spaceports.

With Miami reflecting the state's goal to become a global business hub, Qatar Airways has become the latest foreign carrier to begin a freighter service via the airport (above) as it links Doha and Luxembourg twice a week with Sao Paulo, Buenos Aires, Quito and Liege, Belgium.

"We appreciate Qatar Airways Cargo for choosing MIA as a strategic hub for its Latin American cargo operations," said Miami-Dade Aviation director Emilio González. "As the busiest U.S. airport for international freight and for cargo traffic within the Americas, we expect them to see continued success on their new Miami cargo routes."

Pictured left to right: Emir Pineda, Miami-Dade Aviation Department (MDAD) manager, Aviation Trade & Logistics; Joe Napoli, MDAD chief of staff; Ken Pyatt, MDAD deputy director; Ian Morgan, Qatar Airways vice president Cargo for the Americas; and Emilio González, MDAD director.

LONDON: October 11, 2016. The UK and China have agreed to more than double the number of flights to 100 a week between their two countries and allow for an unlimited number of air cargo services.

A restriction on the number of destinations has also been increased from six, allowing services between any point in the UK and any point in China.

UK signs ChinaIn June this year Manchester became the first airport outside London to begin direct UK-China air links with the launch of a four times a week A330 service by Hainan Airlines to Beijing.

Current operators from capacity-restricted London Heathrow to Beijing and Shanghai include British Airways, Virgin Atlantic, China Eastern, Air China and China Southern – which also began a twice-weekly B777 freighter service between London Stansted and Guangzhou last year.

By comparison, the Netherlands currently links six cities in China from a five-runway Schiphol: Beijing, Shanghai, Hangzhou, Xiamen, Guangzhou and Chengdu. And in Germany last month, Frankfurt airport signed an MoU with Beijing Capital International Airport and Air China to increase flights to and from Beijing – adding to a list of other Mainland China destinations including Changsha, Guangzhou and Shanghai.

Commenting on the agreement signed by UK Aviation minister Lord Ahmad and Wang Zhiqing, deputy Administrator of China's Civil Aviation Administration (right), Lord Ahmad said: "Post Brexit, improving trade links with key markets such as China will boost exports and tourism, as well as helping create jobs and strengthening our local economies. This deal demonstrates that the UK is very much open for business."

UK Transport secretary and leading 'Brexit means Brexit' supporter Chris Grayling added: "This deal is a big moment for the UK. Strong connections with emerging markets like China are vital for us if we are to continue competing on the global economic stage." He said it would be up to the airlines as to whether they take advantage of the new aviation regime.

LONDON: January 17, 2017. British prime minister Theresa May's declaration that the U.K. will make a "hard Brexit" with the European Union will cost UK exporters £44 billion according to parcel broker Fastlane International.

Fastlane said May's decision to abandon the EU Common External Tariff would also lead to excessive delays and more bureaucracy at EU borders.

Europe tradeIn her speech the prime minister said: "I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff. These are the elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries."

Fastlane head of Consumer Research David Jinks said this would mean Britain would have to set duties on 19,000 individual tariff codes: "Moving outside the EU's Common External Tariff is a frightening scenario that could result in an increase in the cost of imports of around 20 percent [or] £44 billion on current UK business exports to the EU of around £220 billion," he declared.

Jinks said the Common External Tariff ensures the same rates of taxes on the same item in different (EU) countries and abandoning it is "throwing the baby out with the bathwater". He added this would make UK exporters less competitive as couriers and forwarders applied Customs clearance surcharges to cover border delays.

The British International Freight Association (BIFA) responded to May's speech saying it was "short on the details that will assist its members as they go about their business of managing much of the UK's visible international trade".

BIFA director general Robert Keen said his members "would have welcomed clarity on the mechanics that will underpin Mrs. May's desire for 'tariff-free and frictionless trade'. As the old saying goes, the devil is in the details. And after today's much anticipated speech, much of the real detail is missing," he noted.

May is due to trigger Article 50 "at the end of March" that will begin Britain's formal withdrawal from the EU.

WASHINGTON, DC: October 06, 2016. The 191 members of the International Civil Aviation (ICAO) have agreed a scheme to reduce and offset carbon emissions beginning in 2021. The announcement coincided with U.N. confirmation that the Paris Agreement on Climate Change will come into force on November 04 this year following ratification by the U.S. and China.

The agreement has been endorsed by 175 countries and calls for the adoption of a sustainable low-carbon future by limiting the rise in global temperature to "well below" two degrees Celsius.

In anticipation of this global action, the Global Commission on the Economy and Climate (GCEC) has called on government leaders to increase investment in sustainable transport and infrastructure to spur growth. In a new report it said the cost of new investments required by 2030 would be US$90 trillion.

Qatar new order"Investing in sustainable infrastructure is essential to solve all the world's most pressing problems," said Felipe Calderón, former president of Mexico and chair of the GCEC. "It's key to reigniting global growth. It's key to reducing poverty. And it's key to meeting the Paris Agreement. Infrastructure can be the pillar on which we build a sustainable economy, or it can crumble beneath us. It all depends on whether we get financing right, only then will capital fully shift in the low-carbon direction."

The Commission's report says a major obstacle to sustainable infrastructure investment has been the price distortion from continued use of fossil fuel subsidies that totaled US$550 billion in 2014.

"Green finance and climate risk are two sides of the same coin. The finance sector is increasingly grasping the opportunity side of the low-carbon transition. But any prudent investor looks not only at the opportunities in the portfolio, but also the risks, especially of legacy investments," said Commissioner Caio Koch-Weser, former vice-chairman of Deutsche Bank.

The report notes that a single infrastructure project can require dozens of financial institutions, all with their own demands, and take more than a decade to build. The cost of project preparation is substantial says the GCEC, typically 2.5–5.0 percent of total investment.

As Qatar Airways announced an order for 30 B787-9 Dreamliners and 10 more B777-300ERs, IATA director general and CEO Alexandre de Juniac commented on the ICAO agreement: "The aviation industry understands that sustainability is critical. Airlines will continue to invest in new technology—particularly new aircraft and sustainable alternative fuels —to improve their environmental performance. And we will continue to ask governments to do their part with investments to modernize air traffic management and with supportive polices to help commercialize sustainable alternative fuels for aviation."

MUSCAT: November 29, 2016. Oman has begun the process of devising a national economic plan to be less dependent on oil and gas revenue. While the current price of oil may be good news for the consumer, it's less so for the producer. Oman is no exception.

Called 'Tanfeedh', the country's program for economic diversification is designed to increase investment in manufacturing, tourism, transport and logistics, mining, and fisheries.

By 2020, the goal is to create more jobs for Omani youth and raise the contribution these sectors make to the country's GDP by US$12.7 billion.

In the logistics sector, the aim is contribute approximately US$5.2 billion to GDP and create 50,000 jobs in the next four years by building and extending rail and road capacity to improve regional connectivity; and enabling private/public partnerships.

According to Massimo Roccasecca, Cargo development director for the Oman Airports Management Company (OAMC), there's never been a better time or opportunity to do his job:

"Oman is actually in the favorable historical moment where the UAE was 15-20 years ago. There are important logistics development plans deeply supported by the government. One of them is to make Oman's airports among the top 20 in the world – so it's quite a challenge, but one I definitely welcome."

Muscat airportRoccasecca is a 20+-year veteran of the logistics industry having started with UPS as an area sales manager in Milan and over the next two decades held a number of management positions at TNT, Alitalia, SkyTeam, Cargolitalia, DAMCO, Maximus Air Cargo and Poste Italiane.

His job at OAMC is to get more international airlines using Muscat and Salalah for point-to-point imports and exports as well as transshipments – both air and sea/air.

The geographic advantage of Oman over its Upper Gulf neighbors in the GCC area is based on a trading history that is now being repeated, or at least echoed, suggests Roccasecca.

"In general terms I know that having mega airports and mega airlines just outside the porch may affect how you look at the country strategy and plan, And to some extent I may also say that I understand the doubt.

"However do we really have to take Dubai, Abu Dhabi or Doha as a reference point? Or compete with them? I'd say that Oman, having started quite some years later, has a particular advantage both in terms of geography and government commitment."

His current focus is to attract airlines to Muscat that are interested in cargo development, and not necessarily cargo-only airlines. This is reflected in ideas being considered under the Tanfeedh umbrella – how to make Oman's airports more attractive so customers can "recognize the difference," he explains.

One idea under discussion is to create a new cargo village at Muscat incorporating an international import, export, re-export, transshipment and express courier center. News that DHL Express signed an MOU with OAMC in November suggests this is more than an idea.

Also under consideration by Oman Air is a separate joint-venture business to dry lease three A330 freighters in a bid to develop an air cargo hub for imports, exports and transshipments supported by, and linked to, Free Trade Zones at the ports of Salalah, Sohar and Muscat.

At the same time OAMC plans to reduce Customs clearance at Muscat airport to an international standard of eight hours; increase cargo throughput by 20 percent year-on-year to 2020; and attain a Logistics Performance Index (LPI) ranking in the top 30 airports worldwide in four years.

Asked about his company's mission Roccasecca replies: "There is, generally, limited knowledge of the beauty of Oman, so promoting the 'Omani experience' is definitely a primary role. There are a lot of potential investment possibilities in this country. Air transport is the enabler that will help make them happen."

PARIS: September 21, 2016. The OECD expects global GDP growth to be 2.9 percent in 2016 with weaker conditions in advanced economies, including the effects of Brexit, offset by a gradual improvement in major emerging market commodity producers.

The organization says the world economy remains in a "low-growth trap with persistent growth disappointments weighing on growth expectations and feeding back into weak trade, investment, productivity and wages".

The volume of world trade fell in the first quarter of 2016 and, despite some recovery in the second quarter, growth is expected to be less that global GDP - suggesting globalization as measured by trade intensity may have stalled.

OECD outlook 2016The OECD says structural factors, such as a slowdown and reversal of trade liberalization and the weakening of global value chains (particularly in China and East Asia), have played a significant role in the deceleration in trade growth between 2011 and 2015.

"The marked slowdown in world trade underlines concerns about the robustness of the economy and the difficulties in exiting the low-growth trap," said OECD chief economist Catherine Mann. "While weak demand is surely playing a role in the trade slowdown, a lack of political support for trade policies whose benefits could be widely shared is of deep concern."

Noting the high volatility in financial markets in a post-Brexit Britain has caused a 10 percent devaluation in Sterling, the OECD expects UK growth to be 1.8 percent by year-end, down from 2.2 percent in 2015, and only 1.0 percent next year - "well below the pace in recent years and forecasts prior to the referendum".

The organization acknowledges that continued uncertainty about future UK government policy and consequent risks to the economy remain very high.

Growth in major emerging markets is expected to pick up slowly in 2017, with China's GDP growing at 6.2 percent and 7.5 percent in India. However Brazil's continuing recession will shrink its economy by 3.3 percent in 2016 and a further 0.3 percent in 2017.

For the OECD as a whole, potential GDP-per-capita growth is estimated at just 1.0 percent in 2016, half the average in the two decades preceding the [2008] crisis. Since 2011, potential per capita output growth in China has fallen by 1.75 percentage points while in the remaining BRIICS economies (now including Indonesia) it has been 1.0 percentage point.

To exit the low-growth trap, the OECD suggests governments need more ambitious policies, particularly those that boost trade, including commitments to stand still on new protectionist measures, roll back existing ones and urgently tackle other obstacles to trade and investment.

CSAFE Global

 

Rss Module (Zai)

RSS

- powered by Quickchilli.com -