The Improving Highway Infrastructure of India

India’s New Highways

First Published Date : November 29, 2010 ADawnJournal.com

India is a nation that is growing quickly, but one of the main problems with it is the fact that it has some very poor highways. These highways have been made haphazardly for many years and that has led to very unsafe roads. That leads to many companies to worry about investing in India because if they do not have a proper infrastructure, then they may not be able to handle the immense traffic going in and out of the country. As a result, the country has implemented the National Highways Development Project as a way to upgrade, improve and widen the major highways in India to meet the standards of the developed world.

The project began in 1998 when the national highways of the country accounted for only two per cent of the roads but carried 40 per cent of the traffic. Currently, the project is managed by the national Highways Authority and as of 2010, the department has put $100 billion into the project.

The overall project to improve the road of India, making it easy to trade with other countries and improve its standing with investors in developed countries, has several phases.

The first phase is connecting the Golden Quadrilateral, running 5,796 km, with the four major cities of Delhi, Chennai, Kolkata and Mumbai. The total cost of the project is $6.8 billion, funded mostly by the government and their oil production tax. Currently, the phase is near completion.

The second phase is to connect the four points of the country, the east, west, north and south. This project will run 7,300 kilometers, effectively connecting the outreaches of the country. Currently, roughly 50 per cent of the project is complete, costing $10 billion so far.

The third phase is to upgrade the 12,000 kilometers of the national highways in the country, connecting all the major cities. Currently, only 2,000 kilometers have been completed.

The fourth phase is to widen roughly 20,000 kilometers of road that are not part of the first three phases. This phase has not been started yet.

The fifth phase is to upgrade four lane highways to six lane highways, comprising about 5,000 kilometers of roads. This phase has not been started yet.

The sixth phase is to connect commercial and industrial towns with expressways, This comprises several hundreds of kilometres.

The seventh phase will add ring roads to help improve connectivity of national highways to major cities in the country. There are several projects being proposed in this regard.

These projects are going to help India reach a new level of development. For the country, having a great infrastructure is important because investors will look at that and decide to invest in the country. In addition, these massive building projects will help give hundreds of thousands, if not millions of people work, raising the standard of living for them and bringing many out of poverty. It is good for the country, the people and the world, as India becomes a more developed country.

The Economy of Russia

Economy of Russia 101

First Published Date : December 3, 2010

Russia is a unique country that was a superpower for one time, and may become one again depending on how things go for it in the 21st century. Currently, the economy of Russia ranks as the 12th largest economy on the planet in terms of its nominal value. When purchasing power parity is looked at, the country ranks seventh in the world in terms of economic size.

Russia has many things going for it that other countries do not, allowing it to have immense wealth. These include its abundant natural resources such as precious metals, oil, gas and coal. In addition, Russia has a rich amount of agriculture, allowing it to supply the world with vast amounts of grain.

Russia went through several tough periods during the close of the Cold War and the early 1990s. During the early 1990s, when economic reforms were put in place and privatization occurred, the country went through vast changes, not all for the good. Currently, the private sector does not have as much freedom as in other countries and the protection of property rights is quite low.

The country has about $300 billion in exports, with its exported items including petroleum, natural gas, wood, metals, chemicals and civilian and military items. Its main exporting partners are the Netherlands, accounting for 11 per cent of exports, while Italy, Germany, Turkey and Ukraine account for eight, six and five per cent respectively. China accounts for four per cent of exports, as does Poland. Russia imports $200 billion in goods, with its biggest imports being vehicles, machinery, plastics, medicine, iron, steel, consumer goods, meat, fruits, nuts and semi-finished metal products. Its biggest trading partners in terms of importing are Germany and China at 13 per cent, Japan and Ukraine at six per cent and the United States and Italy at four percent.

Currently, the gross domestic product of Russia is $1.229 trillion, ranking it 12th in the world, as I have stated. As of right now, the GDP growth of the country is growing by 5.2 per cent per year, putting it ahead of many industrial countries. The per capita GDP (Nominal) is $8,693, ranking the country 52nd in the world. Its PPP per capita GDP is $14,919, also ranking 52nd in the world.

Following the turmoil that came about at the end of the Cold War, the country began to stabilize under the leadership of Vladimir Putin, whose administration did a great deal to increase the economic power of the country. Under Putin’s administration, the nominal GDP of the country doubled, and the country saw immense gains in GDP growth through the 2000s, averaging six to seven per cent growth every year from 2000 onwards. By 2007 the GDP of the country exceeded that of 1990, which showed the country had finally recovered from the deep recession it went through in the 1990s following the end of the Cold War.

Industry in Russia grew by 75 per cent while Putin was in power, with investments also increasing by 125 per cent. Other areas such as agriculture and construction also jumped up greatly during those eight years. The average salary increased by eight-fold, and real incomes doubled. Consumer credit between 2000 and 2006 jumped 45 times, with the middle class of the country going from eight million to 55 million, which is an increase of seven times. On the same note, the number of people living in poverty in Russia went from 30 percent in 2000 to 14 per cent in 2008.

The economy of Russia is heavily dependent on commodities. Roughly half of all the budget revenues of the government came from custom duties and taxes put in place in the fuel and energy sector. While the level of poverty has fallen, the gap between rich and poor has increased greatly between 2000 and 2007. The income of the rich grew 14 to 17 times larger than the incomes of the poor during that period. One of the biggest revenue makers for Russia is arm sales, which have gone up to the point where Russia is now the second largest seller of weapons on the planet, with the United States ranking first.

Another area where there has been increased growth includes the IT industry, with the country ranking third behind India and China in terms of outsourcing software destinations. The space industry is also ahead of the United States, ranking second behind the European space industry.

The economy of Russia has taken a major hit during the major economic crisis felt around the world. The country has seen its revenues fall sharply during 2008 to 2010 as a result. Oil prices dropped from $140 to $40 per barrel, which the budget reserves of the country falling greatly as a result. In 2009, industrial production fell by 16 per cent, while fixed capital investment was down by 15.5 per cent. The GDP shrunk by nine per cent, but that is beginning to recover as of 2010.

Russia, which is the largest country on the planet at 17 million square kilometres, covering one-ninth of the world’s surface, also has 142 million people in it. This gives the country an immense amount of power and ability to help influence the world in an economic sense. While the country suffered during the collapse of the Soviet Union, it has risen out of that turmoil to become a world power once again.

As time goes on in the 21st century, there is a good chance we may see Russia once again become a super power, as it was in the 20th century. The country has a lot going for it with hard working people, immense natural wealth and a bevy of trading partners all along its borders. How it manages that wealth and the economic troubles it may face in the future are not certain, but that does not mean Russia will not be an economic force to be reckoned with as China and India below it all rise up as super powers, shifting the balance of power in the world from the East to the West.

China Launches New Residential Real Estate Tax start

China’s New Property Tax

First Published Date : January 16, 2011

China is finalizing plans to launch a trial property tax to tame its overheated real estate market. China’s financial hub, Shanghai and Chongqing in Southwest China are among the firsts to taste this new tax. The new tax is expected to be 0.5 to 1.5 percent.

China has long debated having a residential property tax. However, this has never been applied out of fears that it may harm market. Currently, China has real estate tax only on commercial properties. Some tightening measures such as higher down payments, purchase restrictions, hiking lending rates failed to cool down inflated asset prices. This new property tax may be China’s last weapon to curb inflated prices.

Analysts widely believe this new measure should curb speculative demand and should help driving down prices lower in the long run. However, disagreements remain strong as well. Despite some measures taken, housing prices in major cities rose by more than a fifth in 2010. The State Information Center predicts property investment will grow about 20 percent (jumped nearly 40 percent in 2010 from a year ago) in 2011 due to tight property policies.

China recently started to allow its citizens to invest in foreign countries. For example, Wenzhou, which is located in the east, now allows its citizens to make up to 200 million U.S. dollars foreign investments annually. It is expected, but not with certainty, that the newly proposed property tax implementation will be able to curb excessive real estate growth along with many other measures (some mentioned above). Only time will tell.

Is Canada Going To Be A Future Global Business Centre?

Canada – The Global Business Centre

First Published Date : February 9, 2011 ADawnJournal.com

Canada has one of the largest economies on the planet and is a world leader in terms of investment, resources and more. Go anywhere in the world and people will speak highly of Canada and the people there. It should come as no surprise then that the country is well known for being a great place for companies to do business and this is why Canada has the strong possibility of becoming a future global business centre for the world. While many people tend to think more of the United States than Canada, Canada has many things going for it. For one, it typically has better relations with other countries than their southern neighbour and while 75 per cent of the country’s trade is with the United States, that is rapidly changing as emerging markets in India, China, Brazil and Russia begin trading with Canada.

Currently, the Foreign Direct Investment into Canada, over the course of the first decade of the 21st century, has amounted to nearly $400 billion, which happens to be higher than Brazil, India, Mexico and Russia, all emerging superpowers. Foreign direct investment is how much a country trades, long-term, with another country and can include goods, experience, technology and more.

Currently, the total exports and imports of merchandise for Canada make up 58.9 per cent of the Canadian economy, making it one of the most open economies on the planet.

Canada also has one of the highest levels of economic freedom in the world, a very low level of employment and it was one of the few countries to get through the global financial crisis with not too much difficulty.

Another important fact showing how much foreign investment is coming into Canada and why it is a global business centre is based on the fact that according to Forbes magazine in 2008, Canada has 69 of the worlds largest companies working in the country, putting it fifth next to France. In addition, the government debt of the country is one of the lowest on the planet and the lowest of all the top eight (G8) economies on the planet.

International trade is an immense part of the Canadian economy because of its high amount of natural resources. The largest exports in Canada are found in the agricultural, energy, mining and forestry sectors, accounting for 58 per cent of the country’s exports. Canada also exports machinery, equipment, automotive products and other manufactured goods make up 38 per cent of the exports in the country. With the combined exports and imports of the country, Canada ranks eighth on the planet.

Another main reason that Canada is a global business centre of the future is because it has several free trade pacts in place, as well as in the works. Current free trade pacts include the Canada-U.S. Free Trade Agreement, the North American Free Trade Agreement, the Canada-Israel Free Trade Agreement, the Canada Chili Free Trade Agreement, the Canada-Costa Rica Free Trade Agreement, the Canada-European Free Trade Association Free Trade Agreement, the Canada-Peru Free Trade Agreement, the Canada-Colombia Free Trade Agreement, the Canada-Jordan Free Trade Agreement and the Canada-Panama Free Trade Agreement.

Currently, Canada is negotiating having a free trade agreement with the following countries and political entities: Ukraine, Morocco, India, South Korea, Dominican Republic, Singapore, Andean Community, Caricom (Caribbean community), European Union and a possible Canada Central American Free Trade Agreement.

Canada is working hard to become a global business centre and that is evident through several programs running within the country, including ConsiderCanada.com, which is helping to get countries investing within Canada to help themselves and the Canadian economy.

The government of Canada has also created the Invest in Canada organization, which promotes and attracts foreign direct investment in Canada. The organization operates as a bureau of the Department of Foreign Affairs and International Trade. The goal of Invest in Canada is to get companies planning on investing in Canada more information to do so, and to get those already invested in Canada to expand their operations within the country.

Invest in Canada, as does ConsiderCanada.com, helps guide companies through the investment process from giving information to helping them choose a site for their business.

With organizations devoted to helping Canada become the global business centre of the future, and an economy already suited to foreign investment, what more evidence is there that Canada is the global business centre of the 21st century? Well, these facts are what companies are looking at when they are thinking of putting their operations in a country.

1.   Canada has the soundest banking system on the entire planet, which is incredibly important right now in tough economic times. While the United States had several banks fail during the global recession, Canada had none. This is why the World Economic Forum chose Canada as the best banking system country on Earth.

2.   Canada has the highest proportion of post-secondary graduates in the Organization for Economic and Cooperative Development.

3.   Canada has the fastest economic growth in 2011 for all the G7 countries, which include the largest economies on the planet. In addition, it also has the lowest debt-to-GDP ratio in the G7 and the lowest taxes on new business investment in the G7. Canada also has the lowest research and development costs in the G7.

4.   Canada has a very high quality of life and is often chosen as the best country to live in on Earth.

One major factor to Canada becoming a global business centre in the coming years was put in place by the Government of Canada in 2010 when they announced the initiative to reduce tariffs on all manufacturing inputs down to zero per cent by 2015.

So, is Canada the global business centre of the future? According to these statistics, yes it is and many companies are now investing heavily in the great white north because it is the right country to be in at this time.

Japan Economy and Debt Crisis

Japan’s Debt Crisis

First Published Date : February 13, 2011 ADawnJournal.com

Japan has always been seen as an economic powerhouse ever since the miracle growth of its economy occurred from the 1960s to the 1990s. Japan went from a war ravaged country to one of the leading economies on Earth. However, even one of the most powerful economies on Earth is not immune to the debt crisis.

One of the main reasons for Japan possibly moving into financial crisis is debt and the fact that the average Japanese individual holds part of the government-debt. In fact, domestic holdings of debt in Japan is 94 per cent, compared with just 50 per cent in the largest economy on the planet; the United States of America.

What’s more, Japan has the second largest debt compared to its gross domestic product on Earth with the country running its debt to 196 per cent of the GDP. You know what other country has more debt that Japan? Zimbabwe. Yes, that is right one of the most poorly run countries in Africa is the only country beating Japan in terms of debt load to GDP. Japan borrows 50 cents on every single dollar, which is a huge debt load.

Inflation is also increasing in Japan with meat and fruit prices reaching 10.3 per cent inflation in Japan. Compare that with other countries that are industrialized and in most cases it is 10 times as high.

Japan’s credit rating, once one of the best in the world has also been falling. According to Standard & Poor, which does the ratings for countries, the country fell from AA to AA- because of the aging population in the country (it has the highest life expectancy on Earth) and the high debt ratio of the government.

Many economists are looking at Japan right now since it weathered through much of the Great Recession without much trouble to its economy. However, with growing debt ratios, inflation and more in the country, there is cause for some to worry. Japan has the third largest economy on Earth behind the United States and China, and with the United States already dealing with financial crisis, having Japan fall into the same situation would be disastrous. Japan is also a huge importer of goods, and without its buying power, many other countries would then suffer with a loss of trade.

The domino effect is something that is worrying many investors and economists but if one thing Japan has proven to be it is resilient. There is a good chance that the country will manage through this crisis and possibly stave off financial meltdown.

Japan is a stable country and there is little risk of government protests but again it is not right to say it won’t happen. With more and more people taking on debt from the government, inflation and more, people could rise up and the stability of one of the most important nations on Earth could be threatened to the level not seen in over 50 years since World War II.