Norris McLaughlin & Marcus, P.A.

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REWIND: International Business News #53

Posted on January 17th, 2013 | Author: admin

  • In my December 13 BWOB REWIND post, I discussed the International Telecoms Union (ITU) conference taking place in Dubai in December.  This little known, but evidently very powerful, UN quasi governmental entity hoped to pass a treaty that would effectively give national governments control of the internet.  This treaty was a purported attempt to level the paying field between developed nations who are arguably disproportionately benefiting from a relatively free, unregulated internet, and those developing nations that are being left out.  After two weeks of negotiations, it appears this attempt has failed (at least for now).  In the end, the measure was blocked by the U.S. and key western and African nations.  This development preserves the internet’s role in the world economy as an unregulated, international service that runs on top of telecoms systems free of direct interference by national governments.
  • Brazil’s government is sending signals that updating its infrastructure is a main priority, as the county struggles to maintain its recent growth.  Previously, the government has embarked on an aggressive program of renegotiating its road, railway, and airport concessions with private companies. Recently, it added ports to the list of infrastructure being overhauled.  Congestion, bottlenecks, and long lines continue to be a major problem.  One of the reasons can be found in the lack of development of new port capacity over the years, as well as infrastructural neglect.  The Brazilian government indicated that it will spend 54 billion reais to expand and dredge public ports and to improve landside access over the next five years.  Operating contracts for port terminals that have expired are now being renegotiated and put out for bids.  Contracts will go to whomever can ship the largest volume at the lowest price.  The new government programs will enable private ports to directly compete with public ones, whereas currently only companies with enough cargo to merit a dedicated port can take advantage of private ports.  Experts believe this move is an effort to curtail the power of Brazil’s pilots and dockworkers, who are often blamed for making shipping in and out of Brazil far more expensive than average.
  • No one ever said that reinventing the economy of one of the most populous nations on earth would be easy.  Many experts agree that infrastructure gaps are a key impediment to India’s growth.  Further, the public/private partnerships that have been the much-lauded spur for infrastructure improvements and other economic advances in India are coming under attack.  While there is no denying that these partnerships are a big part of India’s success, some recent projects are failing to make money, raising claims of crony capitalism and ineptitude.  India will have to sift through the various failed and failing projects and figure out a way forward.  Most in the Indian business community are fearful that reforms will mean more counterproductive governmental interference.
  • Some are questioning the World Trade Organizations ability to come through on its promise of trade equality for developing nations.  After picking up speed when China became a member in 2001, the WTO began an ambitious attempt to get the developed nations and the developing nations to agree on a package of trade reforms.  Nearly twelve years later, the impasse continues.  To a large extent, the next WTO head will determine whether brokering such a deal will be a major part of the WTO’s agenda going forward.  Nine candidates will meet to vie for the position later this month.