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Economic Digest

Economic Digest – September 2016


More than two million tourists visited Cuba in the first half of this year, putting the country on track for a record number of tourists. Visitor numbers are running 12 per cent ahead of last year bringing badly needed cash to an economy facing a sharp reduction in subsidized oil from Venezuela. The surge is credited to a wave of international interest in Cuba prompted by the announcement of the US-Cuba détente in December, 2014. Visitor numbers are expected to get another major boost after commercial flights from the US begin.


Global airlines will need to hire 30,850 pilots a year for the next two decades to keep pace with new planes on order and surging demand for air travel. Carriers will need to recruit and train about 617,000 pilots to fly the 39,620 Boeing Co. aircraft valued at US$5.9-trillion to be added to the global fleet through 2035. The Asia-Pacific region will account for about 40 per cent of total new hires as China eclipses North America as the largest travel market.


In the 12 months ended June 30th, Canadian men’s dress-shirt sales dropped 9.7 per cent to C$518-millionn after sales the previous year of $574-million. At the same time, the average price of a dress shirt dropped 2.5 per cent to $32.73 from a year earlier. The latest revenue figures are still 14.5 per cent below the $593-million sales in 2012. Fledgling online players are encroaching on traditional retailer territory and Amazon will enter the Canadian market in the fall. Innovations to dress shirts include four-way stretch materials, anti-microbial fabrics and stay-white items. A growing band of retailers are offering custom dress shirts as online players roll out personalized styles.


New figures on direct foreign investment released by Statistics Canada show that corporate Canada has been pouring billions of dollars more into offshore tax havens. Canadian corporations invested more than C$270-billion in the top 10 tax haven destinations over the past 15 years, with investment up 17 per cent over 2014. In 2015, Barbados was the top destination, attracting $80-billion in total.  Luxembourg was next with $50-billion followed by the Cayman Islands, $48-billion and the Bahamas $33-billion.


Fifteen years after joining the WTO, China is hoping a revival of its ancient trading corridor to the west will help boost its slowing economy by signing up to a United Nations trucking treaty. Becoming a member of the TIR, an international guarantee scheme that will enable Chinese freight containers to travel all the way to Ireland without being opened up for customs checks, is a first step towards putting a legal framework in place for a new “Silk Road.” China’s routes will include countries in Central Asia as well as Russia and Turkey, and potential maritime links to the Gulf and East Africa. China hopes that annual trade with the countries involved could surpass US$2.5-trillion in a decade. Last year it amounted to $1-trillion.


India’s notoriously oversized bureaucracy has found a new way to expand, the country’s first ministry of happiness, dedicated to “putting a smile on every face.” The Central State of Madhya Pradesh will be responsible for happiness and tolerance of its citizens and will employ psychologists to counsel people on how to be always happy. The new ministry will oversee up to 70 social programmes spanning yoga, spirituality, meditation and the arts, as well as offering free religious pilgrimages for senior citizens.  The new ministry emulates dedicated happiness bureaus in the UAE and Venezuela.


Canada ranks 10th among the 23 largest energy consumers in the world when it comes to using that energy efficiently. However, the country’s strict appliance and building standards are areas of strength but Canada gets weak marks for industrial energy efficiency and for poor use of public transit and investment in rail transport. The survey looked at 35 different metrics of energy efficiency in each country, including the intensity of energy use in buildings, industry and transportation. The most energy efficient country in the survey was Germany, followed by Italy and Japan tied, then France and Britain. The US was eighth. The countries in the study represent about 75 per cent of global energy used and together account for more than 80 per cent of the world’s gross domestic product.


Uncommon in France a generation ago, they number some 30,000 today, more than in Britain which invented the modern version and an estimated 500 more are built each year. The French have become roundabout enthusiasts because of road safety.  In America, which has only about 4,800 roundabouts, a quarter of all road deaths take place at intersections. Experts claim that roundabouts reduce deaths or serious injuries by around 80 per cent, compared with stop signs or traffic lights. Road deaths in Britain per 100,000 inhabitants are 2.9: in Spain, 3.7 and France, 5.1. In the US, they are 10.6 per 100,000 inhabitants. 


The usual summer buzz in cities, amplified by warm weather and backyard barbeques and busy patios has been somewhat louder this summer as  urban beekeeping has gained popularity. A Montreal company has been renting out beehives to people interested in making their own honey and learning more about beekeeping. The company has 15 beehive locations in Toronto, a couple in Quebec City and more than 250 locations in Montreal. The hives, usually made of pine, have ten frames initially accommodating 10,000 bees. The number can balloon to a colony of 80,000 bees by the end of the season as the queen bee lays 2,000 eggs a day.


UNESCO will place Venice on its list of endangered heritage sites if Italy fails to ban giant cruise ships from the city’s lagoon by 2017. The heritage committee has expressed extreme concern about the deteriorating state of the lagoon caused by development which is causing irreversible damage to the delicate ecosystem. Venice hosts more than 25-million tourists every year and there has been a bitter debate between environmentalists and the tourist industry about how to protect the city. A fact-finding mission by UNESCO last year found that the capacity of the city, the number of its inhabitants and the number of tourists is out of balance and causing significant damage.


Foreign direct investment in Vietnam hit a record in 2015 and has surged again this year.  Deals reached US$11.3-billion in the first half of 2016 up by 105 per cent from the same period last year. Vietnam has a strong, often underappreciated record. Since 1990 its growth has averaged nearly 6 per cent a year per person, second only to China.  That has lifted it from among the world’s poorest countries to middle-income status. One of the biggest factors in Vietnam’s favour is geography. Its border with China, a military flashpoint in the past, is now a competitive advantage. No other country is closer to the manufacturing heartland of southern China with connections by land and sea. As Chinese wages rise, that makes Vietnam the obvious substitute for firms moving to lower-cost production hubs.


Nike will stop selling golf clubs, balls and bags after years of falling sales in its golf division, but the company says it will accelerate innovation in golf footwear and clothes. Despite heavy spending on marketing, Nike has been struggling in the golf business. Last year sales at Nike’s golf unit fell by 8 per cent to US$706-million, the third year of declining sales. Earlier this year, Nike’s rival Adidas announced its intention to sell off most of its golf business.


Several B.C. ranches have started using Unmanned Ariel Vehicles (UAVs) to track cattle, helping to find the approximately 15 per cent of cattle that don’t return home when the weather begins to turn cold. The B.C ranching industry is unique, compared to Alberta for instance, in its almost exclusive use of Crown land for grazing. Cattle meander through grasslands and over mountains during the summer months. Drones allow a farmer to peek over the next ridge or grove of trees from a stationery position. Drones have limitations, 20 to 30 minute battery life, but are much cheaper than fitting cows with GPS collars which can cost up to C$3,000 each. They also show much more detail than satellite pictures.


The use of plastic bags has plummeted in England since the government introduced a 10 cents charge last year. In the six months after the levy was brought in last October, 640-million plastic bags were used in seven major supermarkets in England. In 2014, a waste-reduction charity estimates that the same supermarkets used 7.64-billion bags. Since the charge was introduced, one major manufacturer of plastic bags has gone out of business.


The horrific wildfires that ripped through the Fort McMurray region in May will cost insurance companies an estimated C$3.58-billion, making it by far the costliest natural disaster for Canadian insurers. The total loss estimate, based on a survey of insurers, is more than twice the figure of southern Alberta floods three years ago. Seven of the ten costliest insured natural disasters in Canadian history have taken place in Alberta which has volatile weather. 62 per cent of the costs are related to personal property damage and 32 per cent to commercial property. 


When it comes to height, Dutch men and Latvian women tower over all nationalities. The average Dutchman is now 183cm (6ft) tall while the average Latvian woman reaches 170cm (5ft 7 in). The research has tracked growth trends in 187 countries since 1914. It finds that Iranian men and South Korean women have had the biggest spurts, increasing their heights by an average of more than 16cm (6in) and 20cm (8in). East Asia has seen some of the biggest increases. People in Japan, China and South Korea are much taller than they were 100 years ago. Increases were driven by better standards of health care, sanitation, and nutrition. Also important is the mother’s health and nutrition during pregnancy. In parts of sub-Saharan Africa, average heights have actually fallen.


Americans throw away almost as much food as they eat because of a “cult of perfection” it is claimed in a new study. Vast quantities of fresh produce grown in the US are left in the field to rot, fed to livestock or hauled directly from the field to the landfill, all because of unrealistic and unyielding cosmetic standards, according to official data and interviews with dozens of farmers, packers, truckers, researchers, campaigners and government officials. From the fields and orchards of California to the population centres of the east coast, farmers and others on the food distribution chain say high-value and nutritious food is being sacrificed to retailers’ demand for unattainable perfection as people seek blemish-free produce. By one government estimate, about 60-million tonnes of produce, worth about US$160-billion is wasted by retailers and consumers every year, one third of all foodstuffs.


Despite years of public messaging about the dangers of drinking and driving, Canada ranks No. 1 among 19 wealthy countries for percentage of roadway deaths linked to alcohol impairment. A US Centers for Disease Control study found that while fewer people were dying from motor vehicle crashes in Canada (the crash death rate in 2013 was 5.5 per 100,000 people, a drop of 43 per cent), the proportion of deaths linked to alcohol impairment was 34 per cent higher than any other country in the survey. The US was next at 31 per cent followed by Australia, 30 per cent and France at 29 per cent. . The lowest countries were Israel, 3.2 per cent, Japan, 6.2 per cent and Austria, 6.8 per cent.


A court in Padua, Italy has ruled in favour of a divorced father who paid his child support in the form of pizza. The pizza baker was acquitted on criminal charges of failing to pay child support after a judge ruled that he had done his best during hard times to provide 400 Euros worth of pizza, calzone and other goods from the take-out pizza place he was managing.