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Is a Seasonal Business a Timely Fit for You? 4 Ways to Make it Work.

seasonal

Is a Seasonal Business a Timely Fit for You? 4 Ways to Make it Work.

An ever-changing economy creates new opportunities for entrepreneurs, even during these rocky times that COVID-19 has caused.

Whether people are looking for a better work-life balance, a new job after having lost one, or an extra source of income, opening a seasonal business is one strategy that fits those goals, says Chris Buitron, president of Mosquito Authority® (www.mosquito-authority.com).

“Many people are taking this route as a reliable way to generate income,” Buitron says, “because although the economy is changing dramatically in some ways, seasonal businesses still fulfill annual consumer needs.”

“The benefits for a seasonal business owner are attractive: more freedom, both in running a business and having the ability to take a few months off; the satisfaction of providing a service or product to which customers stay loyal; lower overhead costs than a year-round business; a solid second income; or, if done right, a sufficient income by itself.”

Buitron offers these tips on how to run a seasonal business successfully:

Carefully construct your business model. Since you won’t be open year-round, it’s important to account for downtime in your cash flow. “If the seasonal business is your main or only source of income, you’ll need to put in extra work during the season in order to make it through your off-season,” Buitron says. “Make sure you have access to credit and plan your budget very specifically. It’s a bonus if you can find ways to diversify income streams for your seasonal business in the off-season. Determine the other needs of your customers and how you can fulfill them.”

Evaluate the past season and plan accordingly for the next season. “Analyze your successes and shortcomings from the previous season,” Buitron says. “Seek customer feedback to assist your evaluation. Overall, determine why some things worked and others didn’t. The analysis will help you build a solid plan for the next season. Look at areas such as staffing, inventory, and other expenses. Did you have enough employees and how did they perform? Which products or services weren’t successful? Should you introduce new ones? Would it be cheaper, in the long run, to buy your equipment rather than lease it?”

Connect with the public year-round to build your brand. Social media allows a seasonal business owner to build their business, their authority, and strengthen their place in the community. “Your target audience is just as accessible in the offseason,” Buitron says. “You can reach out to them and offer exclusive pricing, or create a rewards program. Publish blogs and post updates on the sites your customers follow. Give them content that can educate them beyond the reach of your business’ services. Showing you care about their lives and the community helps them remember you.”

Attend networking events and workshops. The off-season is the time for self-improvement that leads to business improvement. “Learning and networking opportunities help you and your business grow,” Buitron says. “Local business events, trade shows and conferences are great ways to gain new partnerships and skills.”

“A seasonal business comes with an array of unique demands,” Buitron says. “But with the right combination of good business practices and the passion to make it a way to enhance others’ lives, it can be a profitable and enjoyable experience for the seasonal business owner.”

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Chris Buitron is president of Mosquito Authority® (www.mosquito-authority.com), a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).

foreign

Minimize Foreign Trade Risks with These 10 Tips

Does your company follow a strategy to go global? International expansion brings endless opportunities. Statistics show that companies that export boost their productivity by 34% on average over the first year. They are also more likely to survive in the long term when compared to companies with a local focus. 

However, we must emphasize the fact that foreign trading comes with risks. Currency, credit, intellectual property, transport, logistics, ethics… you’ll be dealing with a lot throughout this journey. Being aware of these risks and taking steps to minimize them will ensure the success of your brand’s international trade management.

10 Tips on How to Minimize Foreign Trade Risks 

Make Sure Your Products Are Allowed for Distribution

This is the first thing you need to check: are you allowed to trade with your products in the respective country? For example, the EU has strict regulations that prevent many goods from China from being imported. Each country has its rules, which your business must respect. Otherwise, you would waste a lot of time and resources planning an impossible expansion project. 

You can get familiar with the rules by reading relevant laws and regulations or contacting the customs services.  

Focus on the Legal Aspects of Business Expansion

Each country has its own regulations regarding businesses from abroad. Legislators set the legal framework and conditions for FFcustomers, sales, and particularities regarding the industry. It’s important to be aware of all these details ahead of time. When designing your strategy and drafting the initial contracts, you should make sure you stay within the legal framework of the country where you expand the brand. In addition, you should be aware of potential legal disputes and their solutions. 

Most business owners hire lawyers in their respective countries. A lawyer from your own country can also make connections and give you the details you need.   

Get Shipping Insurance

Everything looks well on paper. You consider the costs of production, transport, marketing, sales, and everything else related to selling your goods abroad. But there’s a risk that business owners often forget: damage during shipping. Items may break or get lost during transport. Your shipment may become a subject of theft or even vandalism. Accidents and contamination happen during transport all the time. If you don’t get good insurance for your shipment, you risk losing a lot of money. 

Proper insurance is not cheap. You should talk to several agencies to get the best offer on international shipments. We recommend using the best finance apps to plan all costs, including insurance over a longer period of time. These apps will help you calculate a decent budget and determine a final price that won’t leave much space for losses. 

Consider All Currency-Related Things

When planning foreign trade financing, you’re guided by the official currency in your own country. You focus on evaluating the risks related to credit, but as most business owners, you might forget about one thing: currency conversions may initiate losses, too. 

The COVID-19 crisis hasn’t been kind in this aspect. In March 2020, emerging-market currencies faced losses of up to 30%. That’s something that nobody could have predicted. However, you can analyze the movement of relevant currencies and estimate potential losses. You might need to work with a financial expert to make these evaluations.  

Evaluate the Risk of Protectionism

Trade protectionism is a policy for protecting domestic industries from foreign invasion. If, for example, a particular country stimulates the domestic flour milling industry, it will impose import quotas, tariffs, and other handicaps on foreign traders. Governments do this because they don’t want foreign products to drop the market prices and get the domestic industries in trouble. 

If you plan for global exposure, you have to learn about these policies. You must take the additional expenses into consideration, so you’ll evaluate a realistic final price. Will it be acceptable for the living standard of the respective country?

Register the Corporate Names and Trademarks

When doing business abroad, you risk violating another brand’s intellectual property rights. You can avoid that by registering your brand’s names and trademarks. If that process goes undisturbed, you can feel free to offer the products on the respective market. 

Consider the Risk of a Changing Market Environment

No market situation is stable and rigid for all times. You will develop a general strategy, which will be based on solid international risk management. But no matter how well you predict potential risks and future circumstances, you cannot be 100% sure that you did it properly. 

In Deloitte’s Global Trade Management Survey, none of the Swiss chief financial officers who participated thought that the global trade environment would become less complex. Only 15% of them said they expected the conditions to remain the same. 

Your company must continuously review the strategy and make the needed adjustments as the market circumstances evolve.   

Evaluate Foreign Ethical Standard

When offering your products on a global market, you should think about the differing ethical standards that you’ll face. For example, Israel has a thriving vegan culture. It might not be a good idea to trade fur there before evaluating the risk of getting your brand dragged through discussions as an unethical one. 

Get well informed about the customs and social conditions in the country where you plan to expand. 

Invest Time and Resources on Collaboration

Business owners often neglect the need to get comprehensive advice through collaboration with foreign lawyers and governmental services. They want to save time and money, or they simply forget that getting insider information is crucial before international expansion. 

You need to talk to experts who will explain the laws and regulations. You might need finance experts from abroad as well. In addition, you have to collaborate with industry insiders who know the market and can help you build a solid network of connections.

Get Acquainted with Foreign Business Customs

You may be used to a direct, friendly approach with a bit of humor in the mix. But in a foreign country, such an approach may be considered unserious or even offensive. Intercultural differences are a major factor in foreign trading success. 

You have to get acquainted with business etiquette when entering a new market. You can find this information online, but it’s best to hire a business advisor from the country in question. You’ll get proper guidance from someone who knows the target region and the communication etiquette in the particular industry. 

The country’s culture, politics, and economy are also important. Learn as much as possible, so you can start and maintain a productive conversation with potential partners. 

Foreign Trade Is a Complex Endeavor

Yes, it will be a rewarding experience for you as a business owner. With the right approach, you’ll take your brand towards substantial growth. However, you have to conduct basic research regarding the risks you’ll face during the expansion. This is a process that requires thorough planning, so don’t rush through it.

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James Dorian is a technical copywriter. He is a tech geek who knows a lot about modern apps that will make your work more productive. James reads tons of online blogs on technology, business, and ways to become a real pro in our modern world of innovations.

economy

Back to Growth: U.S. Business Leaders Have Rosy Outlook for Economy

The COVID-19 pandemic has affected every aspect of our work and life.

Business executives have had to quickly reconfigure operations, and millions have had to unexpectedly work from home or cease work entirely. Videoconferencing has become the killer app, and Zoombombing became a new privacy concern.

Despite the widespread health and business challenges brought on by the coronavirus, two-thirds of U.S. business leaders are optimistic the domestic economy will recover within a year, according to a survey TMF Group recently released.

It’s an encouraging sign that business executives in the U.S. are expressing this type of optimism, particularly based on the unprecedented challenges experienced throughout the economy over the last few months. This group was obviously very confident before the onset of the pandemic, and they now seem eager to not only restart their businesses but help reignite the economy as well.

We conducted the survey in the middle of April to gain insight into how companies plan to navigate these uncertain times. More than 40 percent of the 300 decision-makers who took part in the poll work in companies with more than 5,000 employees. Most of the respondents (85%) said their companies do business outside the United States.

Nearly a quarter of respondents (23%) expect a V-shaped economic recovery, meaning a dramatic bounce to pre-virus activity by the end of 2020 following the sharp collapse. Only a small minority (12%) anticipate the economic impact of the pandemic to the last two years or more.

Looking beyond the U.S., business executives were a little less optimistic but still positive: 56% of respondents said the global economy would recover within a year.

It may be easy for critics to judge the survey takers as stereotypical American optimists, but I believe their confidence is grounded on some key facts. The economic shock has been largely demand-driven, as travel restrictions and government stay-at-home orders shut down wide swaths of the U.S. and global economies. Many of the world’s governments acted quickly to offset the economic damage. In the U.S., the federal government and central bank organized a massive stimulus package and pumped trillions of dollars into financial markets. More than 60% of respondents said the financial support to workers and businesses in the U.S. has had a very positive or somewhat positive effect on their companies.

Now, as states allow more businesses to reopen, consumers are eagerly venturing out despite the ongoing health risks. As consumer and business demand rebound, companies will begin hiring again.

Indeed, business decision-makers are confident their businesses will rebound quickly. More than half say their companies will return to normal operations within six months.

In times of crisis, there’s a premium on bold leadership and decisive action. Resilient leaders continue to mount appropriate responses to the global pandemic while charting paths to recovery.

The survey underscored that the pandemic has forced business to rapidly evolve. Many are moving ahead to reassess, reimagine or reinvent their businesses. Thirty-six percent say they plan to accelerate plans for international expansion, and 32% plan to seize domestic growth opportunities.

It’s a positive sign that the strategic imperative to go global remains strong because COVID-19 has dealt a serious blow to the international system. The World Trade Organization predicted in April that world merchandise trade would plummet between 13% and 32% this year.

But the factors that have driven globalization for several centuries have not disappeared. People have been driven to seek profit internationally since the earliest days of the Silk Road, and this instinct will continue. Furthermore, the spirit of international cooperation has been strong in the response to the pandemic. Companies, government agencies and nongovernmental organizations are working across borders to solve problems at scale, such as developing a vaccine for the coronavirus.

A big motive for international expansion is the diversification of supply chains, cited by 35% of respondents. The coronavirus has interrupted the flow of goods across borders, from raw materials to finished products. The disruption has vividly illustrated that today’s highly interlinked, international supply chains have more potential points of failure and less margin for error for absorbing delays and disruptions.

Reducing dependence on one country or region is a priority. Diversifying your supplier base may increase costs in the short-term but will make your network more flexible and agile and potentially reduce the economic shock of future disruptions.

The outbreak of COVID-19 forced business to reassess every strategic objective and business plan. The health crisis has exposed vulnerabilities and created unforeseen challenges.

As businesses around the world consider how they can return from the economic crisis unleashed by COVID-19, the survey results provide some food for thought. Expanding internationally or domestically in uncertain times, for instance, may seem counterintuitive but could also fuel faster growth. Severe adversity provides real perspective. It is possible to find strength and confidence in the face of real hardship.

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TMG Group is an international professional services firm that provides administrative support services across multiple jurisdictions.

working conditions

Working Conditions High on the EU’s Priority List in Recent Years

In recent years, the EU has made a strong commitment towards improving working conditions which is excellent news for employees. So, what exactly is meant by working conditions, and what steps is the EU taking to improve these conditions for workers? Read on to find out more.

Working Conditions Defined

Working conditions is a broad term that covers a lot of bases. Essentially, working conditions refer to both the working environment provided to employees by the business along with terms and conditions of employment – this means that everything including the organization of work activities, health, safety, wellbeing, work-life balance, training, and skills all fall under the term working conditions.

Benefits of Good Working Conditions

Having good work conditions is important for a number of reasons. Obviously, from the European worker’s perspective, it contributes to the physical and mental wellbeing and will help to provide overall work and life satisfaction. It is also beneficial for the business because it ensures that staff are happy, engaged, and will perform to a high standard each day. Plus, from an economic standpoint, high-quality work conditions will drive economic growth in the EU so it is a win-win situation for all.

How They Have Improved

Understandably, improving work conditions is a core issue for the EU and they have been working closely with national governments to improve the workplace environment for European workers. This has been achieved by determining what the main characteristics of a favorable work environment look like and what the criteria to meet is. EU labor laws and regulations have been established to set the minimum requirement for a sustainable working environment for EU workers and these are now applied to all Member States.

Laws

These laws have strengthened worker’s rights in recent years and it is one of the main achievements of the social policy of the EU, but compensation claims are still high with workplace accidents often being inevitable. The European Framework Directive on Safety and Health at Work was established to set general principles related to minimum health and safety requirements and applies to practically all sectors.

Working with Social Partners

The EU also works with social partners such as trade unions and employer organizations via social dialogue and consultations which is key in the shaping of various different EU social and employment policies, including working hours, workers’ mobility within the EU, health, and safety, and promoting work-life balance.

Working conditions have been high on the EU’s priorities for a few years now and there have been major strides in recent times in terms of protecting EU workers. While these policies obviously help workers and provide important protection, it is also important to realize that they are beneficial for individual businesses as well as the economy as a whole so it is certainly an area that is worth focusing on.

restructuring

Republic of Ecuador Completes First-of-its-Kind International Restructuring

Global law firm Hogan Lovells represented the Republic of Ecuador in one of the first-ever tests of “collective action clauses” in capital markets transactions, helping the country complete one of the largest international restructurings. The country, a long-time client of the firm, has faced the crippling effects of the coronavirus outbreak and historically low oil prices.

The firm put together a team comprised of lawyers from its Capital Markets, IERP, BRI, LAE, and Government Relations practices from several locations including New York, Miami, Houston, London, Mexico City, and Washington, D.C. to collaborate on the landmark restructuring of its US$17.4 billion of international bonds.

The transaction involved exchanging 10 existing international bonds maturing between 2022 and 2030 for three new bonds due in 2030, 2035 and 2040. Under the terms of the new bonds, interest payments will resume at the beginning of next year, while the earliest principal comes due in January 2026, a significant reduction in Ecuador’s debt burden.

The Hogan Lovells team worked on many unique aspects of the transaction, including structuring one of the first applications of collective action clauses in sovereign bond restructurings. Collective action clauses have been primarily used in the debt markets to allow a supermajority of bondholders to agree to a debt restructuring that is legally binding on all holders of the bond, including those who vote against the restructuring. Along with the use of this mechanism, this deal was one of the largest international restructurings due to the coronavirus.

The restructuring also faced many challenges, not the least of which was an action for a temporary restraining order and preliminary injunction filed by two creditor funds in the Southern District Court of New York where the firm’s LAE team, on short notice, won a victory when the judge denied the request from the bench. Hogan Lovells also was actively involved in the restructuring of Ecuador’s bilateral debt and derivatives, including the reprofiling of its debt with China and made sure the restructuring complied with a stringent set of policies and guidelines from the International Monetary Fund.

The Hogan Lovells Capital Markets team was led by partner Evan Koster, with the assistance of counsel David Tyler, senior associates Adam Lapidus and Philip Schuster and associate Juan Moreno, all from the New York office. The IERP team was led by Houston partner Bruno Ciuffetelli with the assistance of Chief Legal Officer and Miami partner Jose Valdivia, and Miami partner Gaston Fernandez; partner Philip Robb and counsel Nick Tidnam from London; International Energy advisor Pedro Martinez from the Miami office; senior associate Dana Turjman from the Miami office; and senior associate Victor Barrientos from the Mexico City office.

The BRI team was led by U.S. BRI co-head Ron Silverman with the assistance of counsel Philip Ehrlich, both from the New York office. The LAE team was led by New York partner Dennis Tracey with the assistance of New York partners, Michael Hefter and Seth Cohen; London partner Kieron O’Callaghan and London counsels Hannah Piper and Jerome Finnis; and New York associates Austin Gassen, Julia Grabowska, and Jonathan Wieder. Lastly, the Government Relations and Public Affairs was led by partner Ivan Zapien in Washington, D.C.

agility

4 Strategies Manufacturers Can Adopt to Increase Agility

In turbulent, transformative times like these, the term “business agility” seemingly appears everywhere. And though it’s easy to imagine even the world’s largest tech companies or consulting firms making a sudden pivot, it’s harder to picture a manufacturer with a factory full of heavy equipment doing the same thing.

So what does business agility mean in the context of manufacturing or construction? It’s less about the speed and scope of changes being proposed and more about communicating effectively across large, dispersed organizations. When disruptions break the supply chain or cause demand to plummet, manufacturers must be able to encourage an information flow across all corners of the enterprise. Agility depends on the free flow of information and the ability to guide a team directly.

The good news is that manufacturers are used to disruptions. They regularly deal with supply chain issues, sudden regulatory changes, or shifting market dynamics. Adaptation is in their nature.

The bad news is that COVID-19 puts a unique strain on the industry that makes agility more important yet less accessible. Specifically, factories and construction sites that have had to either scale back or shut down in response to public health requirements can’t exactly pick their work up remotely. Teams are spread out more than ever and cut off from core assets — and that includes everything from machinery to data.

These are circumstances manufacturers don’t have contingency plans for. Meeting the moment will require extensive brainstorming, aligned leadership, and quick and decisive action — but none of those things will be easy with stakeholders scattered to the wind.

Today’s Realities

All of this means manufacturers need a new concept of business agility along with a fresh sense of commitment.

Since the start of the pandemic, we’ve seen heavy-duty industries forced to shut down suddenly and reopen as quickly as possible. While opening, they’ve had to integrate new social distancing requirements into all aspects of operations and vastly expand health and safety measures. In some cases, they’re even learning how to stop sharing pens and clipboards. And those are just the implications for operations.

Unstable economic forces mean that supply and demand could be in flux for the foreseeable future. Granted, some manufacturers are booming right now — but others have seen business crater, and the long-term fallout of this pandemic remains to be seen. Manufacturers must reexamine (and in many cases revise) their plans, strategies, and fundamental business assumptions. Everything is up in the air.

On top of everything, this pandemic is accelerating the shift away from in-person interactions toward digital ones. Relationships with customers, suppliers, employees, and all other stakeholders are evolving because of the need to socially distance. More than that, though, this health crisis has underscored the fact that digital environments are more efficient, convenient, and customizable than the alternatives. This could prove to be a tipping point for digital transformation throughout the manufacturing industry.

It’s hard to overstate the pace of change right now. The degree to which some manufacturers have already responded is impressive; we’ve seen liquor producers start making hand sanitizer and sports equipment manufacturers adapt assembly lines to create face masks. Agility is possible in the face of this crisis, but manufacturers must take the initiative.

“Business as usual” stopped being relevant with the first COVID-19 cases, and there are serious questions about whether we’ll ever return to normal. That means something different for every manufacturer while still placing the same obligation on all of them: Stay agile or get swept under.

Building the Basis of Business Agility

Manufacturers need to grow agile as quickly as possible. Unfortunately, moving fast while staying coordinated is never easy. Apply these strategies to help guide your transformative efforts:

1. Share information in real time. People need answers right now, whether that’s about health and safety measures, new workplace practices, changing strategies, and everything else that’s been uprooted by the pandemic.

The less accessible this information is, the more disorganized things become. Sharing information in real time so everyone has the answers they need on demand keeps communication issues from making a bad situation worse. Strive to be as transparent as possible and to make information highly accessible.

2. Identify information bottlenecks. The pandemic exacerbated the existing information bottlenecks in organizations and created a number of new ones. Analyzing how internal communication works — how information flows through an organization — identifies where these bottlenecks are and suggests how they can be resolved.

Better access to information (of all types and at all levels) helps accelerate and improve decision-making. Before COVID-19, 86% of companies surveyed said frontline workers need more insights at their disposal. That priority is even higher now.

3. Lead from the bottom up. In any fast-changing scenario, insights from the front lines are what matter most. If executives ignore the ideas and perspectives of workers who are actually in the thick of operations, they miss both the red flags that require attention and the innovative ideas necessary to meet this moment. Information needs to flow freely and broadly within an organization, from one-on-one and small group communication all the way up to corporate messaging. Instead of giving lip service to this priority, make sure there’s a direct pipeline.

4. Create new touchpoints. Information from outside the organization — from customers or suppliers — is also immensely valuable right now. It’s vital to business agility because it helps a manufacturer explore how it can pivot without alienating the partners it relies on. Take those outside insights seriously and solicit as many as possible. Convenient digital touchpoints make it easy for others to supply complaints, suggestions, and praise, all of which inform a manufacturer’s next move.

Remember that agility is all about alignment. Any company — manufacturer or otherwise — can evolve on the fly as long as it can move as one. Communication is what cements that connection and helps achieve unity across the board.

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Daniel Sztutwojner is chief customer officer and co-founder of Beekeeper, the single point of contact for your frontline workforce. Beekeeper’s mobile platform brings communications and tools into one place to improve agility, productivity, and safety. Daniel is passionate about helping businesses operate more efficiently. He has a background in applied mathematics and more than eight years of experience in sales and customer success.

nexus global

New report by Nexus Global Reveals State of Business Confidence in Wales Amid COVID-19

Businesses in Wales are most assured about launching new products or services, and least confident about hiring new employees.

·Sectors hit hard by COVID-19 are the least confident including leisure and sport and travel

·Law is the most confident sector in the UK

The current pandemic has thrown drastic obstacles in the way for UK businesses. With a total business confidence score of 91.89 out of 190 in Wales, these figures show just how uncertain businesses feel at present – according to a new, Business Confidence Report by Nexus Global.

Nexus Global surveyed senior managers in businesses across the UK to determine how confident they feel at present regarding the current economic climate. According to the findings, businesses are most assured about the overall health of their business, yet least confident about the health of the country’s economy.

To determine the figures, respondents were asked (on a scale of 1-10) how confident they feel at present regarding the following aspects. The results from Wales are as follows:

The South West of England ranks 8th in the UK for overall confidence

From a regional point of view, businesses in Northern Ireland are the most confident about the current climate, scoring 102.3 out of 190, nearly 10 points over the UK average. Whereas businesses in Scotland are the least confident by scoring just 83.8.

In Northern Ireland, businesses felt most confident about the happiness of employees, but least confident about the overall health of the country’s economy, this again is unsurprising given the current circumstances

Commenting on the report findings, John Westwood, Managing Director, says: “It is by no surprise to see business confidence at a low during such an unsettling and turbulent period, during which the UK economy has suffered its worst-ever decline. 

Looking forward, business confidence levels will be a key factor to influence the pace of consumer spending once lock-down measures continue to ease. This change in behavior will need to see businesses adapt if they stand a chance of seeing growth.”

For more information follow the link to click through to individual sectors to discover more in-depth information on the current climate and future predictions.

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Nexus Global IFA network was founded in 2011 to bring compliance and regulatory support to financial advisory firms.

Nexus Global is presently the only IFA network to have gained Network Membership status with The Federation of European Independent Financial Advisers (FEIFA). Nexus Global – Registration Number 10465.

The RIA firm, Blacktower Financial Management (US) LLC is registered with the Securities and Exchange Commission (SEC File # 801-111088) in the United States of America.

orange economy

THE ORANGE ECONOMY – WHERE CREATIVITY IS AN ECONOMIC ASSET

Our economic potential is limited only by our collective imaginations – the right hemisphere of our brains applied to both creative and quantitative endeavors.

Orange, the Color of Creativity

You’ve heard of the green economy and the blue economy. Now, researchers are taking a closer look at the so-called “orange economy”. With no set definition, the core of the orange economy encompasses a wide array of cultural and creative goods and services from architectural design and performing arts to film, games, fashion, music and video games.

Creative goods and services include art you can hang on your wall, print newspapers and crafts, but also works that are “experienced” such as gastronomy and live music. Beyond the physical realm, they include gaming apps on your phone, advertising on TV, and streamed movies. The infrastructure that supports our interaction with creative goods and services are also part of the orange economy, such as stadiums, fiber-optic networks and museums.

Capturing the Value of Creative Output

A 2015 analysis by Ernst & Young presented in their report, Cultural times, attempts to quantify the value generated by cultural and creative industries in the orange economy. It suggests the global industry generated $2.25 billion in revenue, supporting 29.5 million jobs in 2013. At the time, the creative economy exceeded the value of the global telecoms services industry and the entire GDP of India – and this was before the digital streaming boom.

Value of Creative Industries
The Asia-Pacific region accounts for more than one-third of global sales and 43 percent of jobs associated with cultural and creative industries. Visual arts and television broadcasts accounted for nearly 40 percent of the value generated by the industry and 35 percent of jobs. Other parts of the industry such as newspapers and book publishing employ more people but generate less revenue.

The report credits cultural and creative output as driving the online economy’s rapid growth. Sales of e-books, music, videos and games generated $66 billion in 2013. Content sales in turn drove sales of digital devices and subscriptions to online media and streaming platforms and the advertising on them. Ernst & Young estimates creative content yielded $22 billion in advertising revenues in 2013 for online media and free streaming websites such as YouTube.

These figures have probably grown exponentially in subsequent years. Consumer appetite for greater bandwidth and faster networks available on smart, portable devices appears insatiable, and the figures do not include billions in online ticket sales for performances, or all the additional revenue and jobs accruing to creative professional service providers such as digital advertising and media agencies.

Beyond the numbers, nurturing talent in the cultural and creative sector is important to economic development and growth. The industry is characterized by relatively fewer barriers to entry and digital opportunities now abound for creators to grow their business by acquiring a global reputation and audience. Cultural and creative industries tend to employ more youth and women and can offer more flexible work environments.

For example, American artists are 3.5 times more likely to be self-employed than U.S. workers overall. On the downside, many of the associated jobs are gigs – or temporary work – and remuneration might rely heavily on acquiring and asserting intellectual property rights. Without sustained work that is well compensated, creative and cultural work may fail to provide a source of reliable and adequate income.

A Culture of Trading

The beauty of trade in creative goods and services is the ability to enjoy tremendous cultural diversity, ingenuity, and have shared experiences as a global community. When K-pop and K-beauty burst on the scene, everyone could dance Gangnam-style or slather snail slime on their face. Beyond the cultural enrichment, policymakers have noticed the boost to the GDP bottom line of exporting cultural and creative offerings.

The UK is known for world-famous video games. One of its most notable exports is Grand Theft Auto 5, the fastest-selling video game of all time, which grossed $1 billion worldwide in its first three days. The UK government launched a $6.2 million Prototype Fund to help video game start-ups and pledged another $6 million to support a Skills Investment Fund for training in this and other creative sectors.

Canada has long offered tax credits to attract film and video production. An Ontario Music Fund provides grants to address investment gaps in its live and recorded music industry.

Latin telenovelas and music attract global audiences. The many World Heritage sites in Latin America built upon ancient Inca, Maya or Aztec civilizations are magnets for tourism exports (when visitors spend money in your country), supporting both local and national economic development while sharing the region’s rich cultural history.

Orange stroke of paint

Modern and traditional African art, sculpture and music hold wide appeal and are featured in global concerts and festivals. Nigeria’s government supports its film industry (“Nollywood”) which has become the country’s second-largest employer, generating export earnings and tax revenues.

Deploying a different model, Dubai in the UAE has created a cottage industry of hosting international cultural events, boasting the region’s largest indoor exhibition space. The UAE also opened the Louvre Abu Dhabi in 2016 to serve as a focal point for contemporary art in the Middle East and invested $136 million in the Museum of the Future, which showcases futuristic inventions but is also positioned as an incubator for global design innovation.

Colombian President Iván Duque even campaigned on supporting growth of creative industries and set a goal of expanding production and exports to grow Colombia’s orange economy from 3.3 percent to 10 percent of Colombia’s GDP, putting it roughly on par with the manufacturing industry. He held an auction during which more than 320 investors bid on $124 million of “orange bonds” issued by Bancóldex backed by a triple-A rating.

Getting Paid for Creativity in the Orange Economy

To enable these industries to thrive, governments must shore up their legal frameworks to protect cultural and creative intellectual property from theft. Goods and services in the creative economy usually hold a distinct intellectual property claim, so that when an author or creator exports it, they retain some form of ownership on which to compensate them for use or enjoyment of the work. A developer in the Ukraine or Colombia, for example, would be entitled to receive a royalty each time their copyright-protected and licensed software is downloaded anywhere in the world.

Simply having appropriate intellectual property laws on the books, however, will not be sufficient to protect many creative works. In a survey by the Inter-American Bank, just 34.8 percent of creative entrepreneurs in Latin America and the Caribbean had made some effort to register their rights to intellectual property or obtain a copyright. Of the total of entrepreneurs, 17.4 percent responded they had not done so because they considered it “very expensive,” and another 16.4 percent said they did not know the procedures for getting the registration.

Although the survey was limited to one region, this is likely a familiar refrain globally, including in the United States where creators are familiar with rights available to pursue but find it too costly to obtain representation and navigate complex intellectual property laws. In some industries, creator organizations such as collective management organizations (CMOs) in the music industry, help overcome such challenges by manage licensing and distribution of royalties and remuneration to its member artists. More could be done by governments to help their creators avail themselves of intellectual property protections.

IP in LA for Creatives

An Infinite Economic Asset

Protecting author and creator rights is critical to fuel industry growth and provide returns to authors and creators, particularly as digital platforms expand. Although such platforms enable them to reach global audiences, creators must adopt new business models and strategies to monetize amidst a sea of free content on internet intermediary platforms. Another challenge is that such platforms remain immune from liability despite hosting entities that traffic in products that violate copyright and other intellectual property rights protecting their creative goods and services.

It should also be mentioned that when it comes to cultural and creative experiences, digital and virtual are not forcing the extinction of an analog experience. Before COVID-19, New York City’s Broadway was achieving record sales. World class museums like the Guggenheim and cultural zones like West Kowloon Cultural District in Hong Kong attracted their share of visitors. The Comic Market in Tokyo still drew global fans of Japanese manga and anime.

my visual

Put On Your Thinking Cap

Creativity is rapidly becoming a condition for competing in the globalized economy. It has become among the top ten skills sought by employers. The application of creativity is not limited to cultural goods and services. Scientific creativity drives the pursuit of new ways to study, experiment and resolve societal problems. Creative thinking is applied to design new products, new production processes and commercial practices.

Ernst & Young analysts point out that the world is young – and that young population is increasingly literate, has more means and a global outlook. If policymakers view creativity as a significant economic asset, and nurture and protect it as such, countries can leverage creative output to support jobs and growth.

And – if we can manage to protect freedom of expression and the ability to trade in cultural and creative works – we can simultaneously promote cross-cultural experiences, preserve traditions and heritage, and celebrate diverse aesthetics, which might just make our world more civilized.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

essential business

4 Factors to Consider Before Buying an Essential Business in COVID Times

The shutdowns and rollbacks of businesses due to the COVID-19 pandemic continue to play havoc with the U.S. economy. But the least-affected businesses during the crisis, for the most part, have been those deemed “essential” by state and local governments, allowing those companies to remain fully operational or close to it.

Meanwhile, with the idea that essential businesses can be recession-proof and even boom during a public crisis, buying one is becoming a more attractive prospect for some people, says Chris Buitron, president of Mosquito Authority® (www.mosquito-authority.com).

“Our current economic challenges as a nation are showing that owning an essential business can be a solid financial strategy for an individual,” Buitron says. “They are practical purchases. They are not often glamorous businesses, but they make sense largely because they offer services that are currently in demand, and as such they can weather economic downturns.

“Some essential businesses, such as ours, are busier than ever as people are trying to maintain social distance by staying home and not taking many vacations. People consider protection from mosquito bites and the diseases they carry as a high priority for their family’s health and outdoor enjoyment. Like other essential businesses, our franchisees provide measures of security and comfort, allowing people to enjoy being in their yards at a time so many are cooped up inside due to the pandemic.

“And at the same time, all kinds of essential businesses provide ownership opportunities while millions of unemployed people are looking for new opportunities or new career tracks. Perhaps they’re looking to be their own boss and to have more control over their financial future.”

Buitron suggests considering the following when weighing whether to buy an essential business:

Focus on successful types of essential businesses. Among the essential businesses  that have the potential to succeed even during difficult economic times are: delivery services, grocery stores, convenience stores, e-commerce, gas stations, cleaning services, liquor stores, auto repair, lawn care, pest control, mailing/shipping services, and contracting. “The pandemic may be with us for a while,” Buitron says. “People will be home more often, and businesses that can service their needs while home will gain customers.”

Consider franchises as ownership opportunities. While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs, and franchises annually employ 9 million people in the U.S. One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you. Reach out to other franchise owners to get a sense of the company’s commitment and support.”

Know a bargain vs. a bad investment. A relatively low sale price tempts some people into making a poor buying decision on a business. Buitron says it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.

Be sure you’re up to owning a business. “There are no guarantees with owning an essential business,” Buitron says. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”

“Owning an essential business brings with it the satisfaction of providing necessary services for people,” Buitron says. “In these times especially, that’s a noble pursuit.”

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Chris Buitron is president of Mosquito Authority® (www.mosquito-authority.com), a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).

ASEAN

Global Trade Talk: Navigating Geopolitical Currents in a Changing Southeast Asia

Global Trade Talk is part of an ongoing series highlighting international business, trade, investment, and site location issues and opportunities. This article focuses on the conversation between Simon Tay, Chairman of the Singapore Institute of International Affairs and Keith Rabin, President, KWR International, Inc.

Hello Simon. How have you been? Before we begin can you tell our readers about your background and current activities?

I am Chairman of the Singapore Institute of International Affairs (SIIA). We focus on the Association of Southeast Asian Nations (ASEAN), a regional organization comprised of ten countries in Southeast Asia, as well as the wider Asia Pacific and Singapore’s role as a hub for trade and investment and greater integration in the region. This includes a range of geopolitical issues including the rise of China, the role of the US, and most recently the coronavirus pandemic, which is serving as an accelerator for changes that have been occurring over the last decade.

Professionally, I am an attorney and was a member of Parliament from 1997-2001, serving during the Asian financial crisis. Then during the 2008 global financial crisis, I was stationed in New York at the Asia Society where we first met. These experiences have given me a unique perspective on the impact of globalization and other trends we have experienced over the past two decades.

While ASEAN currently possesses the third-largest economy in the Indo-Pacific and fifth largest in the world, many foreigners have never even heard of the regional group nor do they recognize its potential. Can you talk about how ASEAN evolved, what it represents as a commercial market and investment destination, and in terms of security and its global importance? What opportunities and obstacles and investment themes are of particular importance to foreign companies and investors in the coming years?

I don’t blame people for not knowing ASEAN. When one looks to Asia, one’s eyes are first drawn to the giants. China in particular has done very well over the past twenty years and no country has grown faster during that time. As it developed and labor costs and standards of living rose, Southeast Asia began to capture the attention of businesses, and deservedly so. ASEAN now has growing appeal, because of greater integration as we create an ASEAN Community with increased consumption and growth. That is why many people refer to us as the fifth largest economy in the world.

The reality, however, is a bit short of that – as we are not really one country or one system. We are, however, working to realize the “ASEAN 2025 Vision.” This is a roadmap adopted in 2015 to articulate regional goals to create a more cohesive ASEAN Community. SIIA is currently working on the ASEAN mid-term review, which is examining our progress, and how crises such as the pandemic can strengthen our will to more fully integrate. While an unfinished project, given the diversity in the region, it is — in some ways — every bit as ambitious as the establishment of the European Union (EU). The trend is toward closer integration.

Before the Asian financial crisis, which began in the summer of 1997, the region was mostly viewed, at least in the US, through the lens of the Vietnam War. Over the last twenty+ years we have advanced, however, and growth in ASEAN has been reinforced. This is true both in developed countries such as Singapore and Thailand, developing nations such as Vietnam and Myanmar, and those in between. Before the pandemic, ASEAN as a whole was growing at a faster rate than China. While the pandemic is hitting our people and economies hard, the region should still outperform the world.

The fundamentals are real. ASEAN is ascending from a lower base, leaving substantial room for further growth. There are many opportunities as countries raise consumption and leapfrog using software, digital innovation, and a greater online presence. Diverse sectors can do well, including labor-intensive manufacturing, infrastructure, services, consumer markets, and others that are part of the new economy.

As you note many people view ASEAN as being similar to the EU, a vehicle grouping together a group of countries into a more integrated market, though without a common currency. Is that fair and can you talk about both the diversity of ASEAN as well as the steps being taken to link these ten nations into a more cohesive entity? Is it possible for companies to have an “ASEAN strategy” or should they be looking at individual markets?

Given what I said about ASEAN, and how it is not yet a cohesive union, that is a very good question. The answer is yes and yes. Movement toward greater integration is very clear but we are not like China or the EU where you can put up one office and that’s it for the region. In a way, this is an economic strength as well as a political challenge.

In ASEAN you have an opportunity to link supply chains from a hub like Singapore, which offers first-class amenities, to less developed markets with eager and driven populations rising out of poverty and looking for jobs in factories and a more modern lifestyle. Myanmar for example is a sizable country with a pool of young people looking for jobs and a government seeking to develop. Myanmar also has a sizable expatriate population that has lived and worked in countries such as Singapore and Thailand, as well as Australia, Europe and the US, where they received education and training. Now their economies are opening – and they are returning with capacity, experience and ideas to implement change. So these countries are not starting from zero.

In between, you have countries such as Vietnam, Thailand, Malaysia and Indonesia. Labor there remains hungry for work, the land is relatively cheap and demand is growing. Today, a lot of attention is focused on Vietnam in particular. This is a country of almost 100 million young, dynamic, and hard-working people, which is well on its way to becoming a competitive supply base for many products.

ASEAN also benefits from not being China. Our diversity offers a decentralized model that adds diversification to global supply chains. It can be more complex to work across ASEAN — there is no one President or government to go to – but it is also less risky for those who can manage across borders – as it is not a case where if one government or economy fails, then the investor also fails. Moreover, ASEAN is not a threat to anyone politically. Vietnam for example has a trade surplus with the US whereas Singapore has a deficit.

Those who invest in ASEAN benefit from having an alternative to China, though are still located in this growing region. This allows synergies with production clusters based there. Being in ASEAN allows companies and investors to benefit and participate in this growing regional economy without putting more eggs into the China basket.

You mentioned the US has enjoyed strong ties with ASEAN since its birth in 1967. This was a time when the US sought to develop regional allies in the face of the Vietnam and Cold Wars. Today, however, despite a move to initiate an “Asian Pivot” under the Obama administration and talk of the “Indo-Pacific” under President Trump, some question US commitment to the region. How do you view the US presence and role within ASEAN? What should US companies and leaders know about ASEAN and how does their presence compare to other nations including Japan, Korea, Australia, and the EU?

The US remains an important partner and market for ASEAN and when looking at its involvement in the region, there are three strands we can talk about. The first is like an underlying current in the ocean, the second is the waves on top, and third like a bright object on the surface. If you look at the current, the destiny of the US remains very much an outward one. It is the country that created the modern world and global trading system you and I have grown up in. It was built to America’s advantage and I think this strong current of the US having shaped and benefitted from this world is ever-present despite current tensions. So we have not seen, whichever President, a lack of interest from US business, its military or security establishment. So whether you call it an Asian Pivot, Indo-Pacific region or before that the War on Terrorism, we believe this current can and should have reasons to continue.

At the same time, there are waves on the surface. These are more noticeable, as it is hard to see the underlying current unless you put your hand deep below. The waves do matter and I would say right now they are choppy and we are now going through a period where Americans are questioning globalization and retreating from multilateralism and international engagement. I was in Seattle during the 1999 WTO protests. At the time President Clinton had the political savvy to suggest we let these voices in to assuage concerns – even as he was the president who signed and implemented the NAFTA agreement. As a result, after a time, things calmed down and the situation became less tense for the moment.

Since then, however, the waves have gotten more turbulent, and it is important to recognize the tensions that brought Trump into office are not singular to him. Remember that Hillary Clinton responded to those choppy waves in her election bid. She supported the Trans-Pacific Partnership (TPP) agreement while Secretary of State, and yet as a candidate against Trump, she too expressed doubts about the TPP. So it is not just the Trump administration and we can see a wave of US constituencies questioning and expressing concerns.

The concern is rising to the point where now even the underlying current of outward movement that I mentioned is less visible. Companies are now being judged by how many jobs they are reshoring and their loyalty to America and American jobs. This is now seen as more important than an overall win-win growing the global economic pie paradigm, which has guided the thinking of policymakers and companies for decades.

And then there is the ball or float which can be seen in tweets and incendiary rhetoric. These attract a lot of attention and concern but they are not necessarily consistent. You mentioned the Indo-Pacific strategy and frankly, I haven’t really seen one. I have seen Indo-Pacific statements and senior US officials talking about issues, but I haven’t seen an overall strategy tying things together. I have to say I view this from an ASEAN perspective and generally, ASEAN is the final stop after a comprehensive strategy dealing with other parts of Asia is finalized.

There is also much less US involvement in multilateral institutions. This is important given the nature of the problems the world faces today. I also think the State Department itself has less access and the whole US establishment which has guided foreign policy and economic engagement, has been weakened.

At the same time other countries – and China in particular – have upped their game. They engage us, not only at the top level – but very thoroughly on an ongoing basis.  Ambassadors of these countries, whether you agree with them or not, are out all the time engaging people, and are much more present. The US is still here but less than in the past. Take something as simple as Ambassadors. How many ASEAN countries have sitting US Ambassadors? And if you talk with the ones that are here, how much access do they have into Washington and White House decision-making at a high level? Stove-piping is always a problem in big countries, but it is now becoming a more serious issue.

Since the early days of ASEAN, China has developed rapidly and has now become the world’s second-largest economy. It is also a major driver of economic growth and seeks greater regional and global influence through vehicles such as the Belt and Road Initiative (BRI) and Asian Infrastructure Investment Bank (AIIB), at a time when the US is backing away from multilateral institutions and its traditional role as a global leader on a range of important issues. As tensions rise between China and the US, both in terms of trade as well as influence and security, how is the region affected, and what are the challenges ASEAN countries face in navigating this changing environment?

The pandemic makes a vast difference. We are trying to figure out in a post-pandemic world whether China or the US will recover faster and at the moment the answer seems to be China. It is still early, however, and of course, there is now an outbreak in Beijing so we will have to see. At the same time within China, there seems to be a growing understanding they need to remain engaged with the outside world. They also did not have this pre-pandemic spirit of isolationism and questioning of whether it is good for China to export and invest abroad. So unlike the US, they did not come into this with a globalization backlash, strengthened further by the pandemic.

Singapore recently entered into a “green lane” agreement with China for business travel and Singapore-based businesses of all nationalities can now travel to six cities and regions of China with minimal testing as a first step toward reopening our borders. This is not political but an effort to restore supply chain links and our ability to operate as a hub while maintaining decent safety levels. We are also trying to open Australia and New Zealand, and other countries in ASEAN, but those discussions are not yet concluded.

Also, if you look back to the global financial crisis of 2008, it is notable that Asia and China kept growing. While the US did not shrink, in relative terms its global market share declined. That caused an adjustment similar to when an elevator goes up and suddenly stops. I feel if the US does not respond correctly to the current situation, we may experience another of those adjustments; it doesn’t mean the US will fade and fall down the elevator shaft, but there will be another jerky moment and perceptions in this part of the world will shift further as they did after the onset of the global financial crisis.

That said, people in ASEAN want more US involvement and encourage US investment and more participation by US firms. We think of the market and technology as rational and neutral, but it is beginning to get colored. Meaning if people think the winner will be China there is a tendency to go more in that direction – even though we are still fighting to keep things as neutral, rational, and as inclusive as possible. You can see that in the struggle over the decision this week to award Singapore’s 5G network to Ericsson and Nokia, though it still maintained a smaller role for Huawei.

In the past, there was a belief in the west that China’s development would lead it toward a more democratic form of government and integration within the global trading system that arose following the Second World War. In recent years it has become apparent this is not the case and China is embarking on its own path. This has led to growing concerns about China’s aspirations and efforts to exert global leadership and establish standards in new technologies as seen its “Made in China 2025 initiative”, its policy toward Hong Kong and Taiwan, cybersecurity and privacy, social credit scoring and other policies, practices, and beliefs. Do you share these concerns? How does China’s model translate to ASEAN and do you see a new “Cold War” developing in which countries will be asked to choose sides?

I have studied, lived in, and like the US, but never assumed China would become more democratic. I believe the Party will have to evolve and change in response to China’s development but never assumed this would necessarily be in a democratic direction. When I look at the region beyond China, I would also say most in Asia are not a democracy in the US-style. Even look at Japan, which you Keith know well. It is not a one-party system like China but it is not a US-style democracy. Neither is Singapore. We will have an election here in less than two weeks, yet there is almost no doubt which party will win. So I am not sure you as an American would describe such systems as democracy.

So I do not look at China through an ideological lens of democracy and have always thought China would do what made sense for China. As neighbors, we do have to figure out whether what is good for China will be a threat to us, rather than win-win. This applies when we look at Chinese investment; we tend to look at it through pragmatic calculations. I do not begin with the assumption that it is an attempt to politically suborn every place where they invest. There are of course risks that remain but they can be managed. For example, with BRI we have talked to Myanmar and others about the risks of unproven projects that burden them with high debt. That is Singapore’s style. We initiate projects incrementally. We start with one terminal and gradually expand to five, or one chemical factory into a large complex as demand is proven. We have an idea of where we want to go – but build incrementally rather than start with grand projects.

That is why you now see a number of Singapore industrial parks in Vietnam. These parks are not just physical spaces. Some provide training, education, and skills development for local workers so they can better serve companies based there. This helps our neighbors while developing our role as a hub. Singapore companies are also involved in BRI. For example, Surbana Jurong provides consultancy services to some Chinese investors in ASEAN countries, as well as acting for the hosts on other occasions. The Port of Singapore Authority (PSA) is also pushing out into the region and beyond; recently opening a joint port in Greece with Cosco, a Chinese shipping line. So Singaporean efforts are to seek cooperation and commercial deals that look non-ideologically to support globalization and free trade around the world.

The bigger question is the “new Cold War” between the USA and China. We do feel it. We try to make rational decisions based on market principles but increasingly everything is reduced to whether “you are for or against China or the US.” For the AIIB, Singapore participated from the start because infrastructure is a big issue in the region. We are in the Asian Development Bank (ADB) too and the World Bank. We think there is no reason we can’t be in more than one, and I do not see why the US objected to the AIIB or what was the alternative they were offering. On the other hand, when American’s spoke about the Indo-Pacific we were happy to work with our ASEAN colleagues to develop an ASEAN understanding and response.

The view of the Indo-Pacific that ASEAN has developed is slightly different than the US, as our goal was to make it more inclusive and not just for democracies. But we do agree a larger framework for the region is necessary. For Singapore, as close friends with India, we have no problems working with them as well and continue to hope they will become more and more integrated with the region.

Even before the coronavirus and heightened US-China trade tensions, corporations were beginning to reevaluate global supply chains to lessen their reliance on Chinese production. Many view ASEAN as a natural beneficiary, offering cost and diversification benefits. As a result, we see many clients giving the region more consideration given its strategic location, strong infrastructure and its ability to bridge operations that had been based in China and still rely on inputs from there. How do you view ASEAN’s potential as the region rises in importance as a hub within the global supply chain? What are the prospects for developing and more developed countries in ASEAN– as well as integration between the two, for example, the relationship between Singapore and Batam/Bintan and the Riau Islands, where we have been active for many years, located in Indonesia only 12 miles away?

Our greatest fear is not a splintering of global supply chains but rather the idea of bringing everything back home in response to growing nationalism. Big countries sometimes think they can do that – whether it is the US, China, India, or even Indonesia. They believe they can produce everything for themselves and capture their own market. We used to see this in the “import substitution” and “beggar thy neighbor” days. That is something we need to work together to avoid. Post-pandemic there will be exceptions and a degree of self-supply is important, for example with masks and ventilators, to prevent a cut-off of supply. Similarly, markets such as Singapore which imports almost 100% of its food supply, need to rethink being completely reliant on offshore sourcing. But we need to make sure that tilt does not go too far.

But I would emphasize we are not going to exclude China either. The interesting question is whether we still believe in global supply chains. I think the answer is that we do, provided that security and other key concerns can still be addressed. If that is the case, countries that can provide that, who can reliably manage increasing supply chain complexity with good governance and rule of law, with an ability to deliver will be rewarded. ASEAN and Singapore are well-positioned in that regard.

The larger danger is that countries retreat back completely to a reliance on national production and protectionism. It is a lesser danger for supply chains to split into two, one being the US and the other a Chinese supply chain. Sometimes it is important for other countries to have guts and stand up against that and bullying from either side. This is especially important during the pandemic when some powerful countries were trying to grab masks and other medical supplies for themselves when these had been contracted to others. For Singapore, and for me as an attorney and international lawyer, I emphasize the importance of fulfilling contracts. This does not always work to our advantage in Singapore. Sometimes in the pandemic, neighbors cut off supply but we still try our best to observe our commitments. The rule of law is important. The bottom line is – trust is something you can’t ditch in a crisis.

You ask about Batam and Bintan as part of our strategy to expand across the region. These islands are part of Indonesia but stand just a small distance from Singapore. Back in the early 1990s, there was a lot of excitement in Singapore about their development as an early step in regionalization and cross border cooperation. They are still significant; proximity still matters, but not quite as much as before. Other opportunities arise, and regionalization has deepened. One newer aspect is whether that proximity is connected to another market.

For example, a major Singaporean company now has an industrial park operating in central Java that caters to Indonesia, rather than offshore markets like Batam and Bintan. Singapore also has more than seven industrial parks in Vietnam – and we do more there than in these Indonesian islands nearest us. Why? It is not because we do not like Batam and Bintan; they also have a role to play. But they do not enjoy any special preferences or contiguous market, have no natural workforce so workers there are imported from other parts of Indonesia. In the end, they remain useful, allow easy commuting, but do not provide a definitive advantage in an environment characterized by deeper and more complex regional integration.

ASEAN has been severely affected by the coronavirus – and by most measures handled the pandemic relatively well. Can you talk about how the virus has been handled in Singapore and other countries in ASEAN, the nature of regional cooperation, and how the pandemic is likely to affect economic and other aspects of integration moving forward? What lessons should the US take from the ASEAN experience dealing with the virus?

There are differences in how ASEAN countries have handled this and from what we can see, Vietnam has come out on top in terms of controlling the pandemic. In Singapore, the overall national numbers may look scary, but it is under control for most of the community though the problem is acute within the foreign work dormitories which account for the bulk of numbers.

Singapore has a strong health system and has ramped up testing and treatment facilities; our medical system has coped and there has been a very low mortality rate. Malaysia and Thailand are also doing relatively well. For Laos, Cambodia, and Myanmar the numbers seem ok but it is really hard to know for sure, given low levels of testing. In Southeast Asia, I think the biggest worry is Indonesia where numbers are beginning to rise while the country faces strong economic pressure to reopen.

A key question is transparency. The more you test the more you find cases. So we look at testing rates as an indicator. In Singapore, we have good testing for a small population. As testing increased in dorms for migrant workers, this caused our numbers to really jump. It was just last week that Indonesia overtook us as having the most cases – and we have to ask why did it take that long? Basically, many countries are not testing enough. When they do test, it is for confirmed cases and not more generally – and the number of tests per million is very low. So from the reported numbers, the situation may look acceptable, but no one can be quite sure.

The current question is how to ease up the restrictions to restart the economy and allow travel across borders. There are worries about importing cases and all countries have at least temporarily closed off tourism, which are important parts of their economies. In the pipeline, I think green lanes for business are possible. But there will continue to be concerns about large numbers of tourists unless easy and reliable testing and (ideally) vaccines are ready. So we will have to figure out how to manage borders – allowing transport of workers as well as goods and services – to restart our economies and manage our integration and supply chains in an increasingly interdependent region.

One of the things we have learned is we have to be open to help from outside and cooperation is critical. In early February we first had a China-ASEAN meeting on how to deal with the virus and it was just China, but then we had an ASEAN Summit and this was notable in bringing in Japan and Korea – two countries that have the industry and technology needed to help. Now some of us are advocating Australia and New Zealand also need to be added as well. If we address the pandemic together – we have a much better chance of containing and dealing with it. Harmonizing our approaches to treatment and travel is important. Multilateral dialogue and cooperation are essential and world leaders should encourage talk rather than just closing borders.

India also represents a major economy that borders ASEAN and has traditionally had a major impact though often gets overlooked given the attention paid to China. What is your view on India as a regional and global player and how important is its economy to the development of ASEAN and how should companies be approaching this important market? Additionally, any thoughts on current tensions between India and China?

Last year before the pandemic we had the Regional Comprehensive Economic Partnership (RCEP) discussions which could potentially not only open up India but bring India more into the region as a major global manufacturer and supplier – much as China embarked on that path decades ago. RCEP’s importance rose after the US withdrew from TPP negotiations, and aimed to bring together all ASEAN members and our key trading partners — including India, Australia, China, Japan, New Zealand, and South Korea. But it seems the Indians didn’t like that vision or thought the costs of opening up their market were too high and walked away.

They thought they could scupper the whole initiative, but ASEAN has decided to go ahead without them. That was not our hope and it would have been much better to include them, but we were not going to let India veto RCEP, and it will now proceed, aiming to conclude by the end of 2020. I always tell my Indian friends we have to move – particularly now with the pandemic – and they would be advised to jump on board.

India has tremendous potential and their size and promise will always be there – but it is a bit like a giant universe operating by itself – cut off from the outside. That is sad as there are some really top-class Indian companies that can more than compete in the region. But India as a whole has not really been fully engaged. The politics are complicated – and while Singapore remains great friends of India – it remains to be seen if a path forward can be found. If Prime Minister Modi with all the support he enjoys is not willing to open up, how and when will it happen? Compound that with the pandemic and a lack of desire to integrate, and my fear is India will miss the boat.

For Indonesia, the largest country in ASEAN, it’s different. They know investors are questioning reliance on China because of costs and Sino-American conflict and are working to catch the attention to join global chains and attract more investment to create more and better paying industrial jobs. They are trying but it won’t be easy. China has retained many supply chains, and many that moved decided to go to Vietnam.  One Indonesian minister I know quite well is working hard to attract jobs and promote innovation and some companies are moving to base there. The minister told me his scorecard is based on an ability to attract foreign investors and industry. It will be difficult, but it is good they are trying. India, however, has mostly been sitting on the sidelines and it may only get harder over time.

Singapore is one of the world’s great success stories and has become a preferred destination to establish businesses and operate for companies in a wide range of sectors, including as a world financial center. For many years we operated our own company there as a base for activities in Myanmar, Indonesia and other ASEAN markets which lacked the same level of infrastructure, governance and services. Does the Singapore model hold, and what changes need to be made, as neighboring countries develop? Can you tell us about current Singapore initiatives, the upcoming election and the “bubbles” that are being created for business, travel and trade?

Singapore understands we serve as a hub for the region and if we cut ourselves off due to the pandemic and health reasons, we will find ourselves in a bubble that does not have enough air for all of us. You can live your life that way if you need to, but resources become scarce and it will not be much of a life. So we have to reopen, and all small economies face similar issues. New Zealand for example is further away but faces similar decisions.

That is why we talk about green lanes and bubbles. We need to start but in a controlled way with trusted partners. In the past, we were wide open. When you entered Changi Airport, even before you got to the doors, they opened wide. There was seldom a line and often no one even checked your luggage. Now, while I have not been there in five months, I imagine the scanners are working overtime. You need to show a health certificate and the process is much more cautious and guarded.

My analogy is that we have gone from an automatic door and seamless travel to a situation that requires a special pass and perhaps a key before you will be able to pass. Safety concerns are a priority. But for Singapore, the important thing is the doors need to remain open even if there are more checks and verifications to ensure adequate safety and easy passage. Singapore is committed to that. The government just formed a new public-private partnership called the “Emerging Stronger Task Force”. This will gather ideas on how to develop new processes and procedures to get better ideas on Singapore’s economic strengths, and how to move forward into the “new normal” in the wake of the pandemic.

It won’t be easy. But when I look back, there is reason to believe we can rise to the challenges. Singapore came out stronger from the Asian financial crisis and we are determined to do that again. That was true after the global financial crisis as well. If we get it right, Singapore can come out stronger this time as well. Of course, we could get it wrong and have made mistakes along the way;  two recoveries do not automatically translate into a third so we have to be careful not to have hubris and to work hard and innovate to succeed.

As you know we have been active and involved with Myanmar’s development for many decades, and one of the more interesting developments – at least in terms of Singapore – are long term plans to develop deep seaports in Kyauphyu, which would provide a land route into China. This initiative would allow shippers to bypass the Straits of Malacca and the Port of Singapore which has long dominated trade in the region. How do you view Myanmar’s prospects and the potential of these projects?

Do we see other ports in the region as a direct threat to Singapore? The answer is no. We think win-win. Our ports are busy and before the pandemic operated almost at full capacity. If Asia continues to grow, the volume of traffic will grow even more. The PSA has been expanding internationally to places in the region and beyond. Moreover, within Singapore land is very valuable and there is a plan to create a new mega port named Tuas in the north of the island. The current site of one port is very close to the city and is such valuable land that, rather than stacking containers, far more value can be realized if it is used for real estate and infrastructure development. So while we do want Singapore to continue as a major port, this means that we welcome and want to participate in growth across the region.

As for Myanmar more generally, we are very encouraged and remain positive. We would love to see them come up like Vietnam. As mentioned, there are several Singaporean industrial parks there and while there are none are as yet in Myanmar – we have very good relationships there and see lots of potential. Many people from Myanmar received their education and training in Singapore and many Myanmar companies rely on Singapore for banking, legal and financial services. So there are extensive people-people relationships and we want to help and be part of their development. Also, two of the most active banks in Myanmar, UOB and OCBC are from Singapore and as Myanmar opens up and liberalizes they are seeking to increase their presence.

Thank you Simon for your time and attention. Look forward to speaking again soon!

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Keith Rabin serves as President at KWR International, Inc., a global consulting firm specializing in international market entry; trade, business, investment and economic development; site location, as well as research and public relations/ public affairs services for a wide range of corporate and government clients.