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Economic Digest

Business Without Borders ®

Economic Digest – July 2016

The Scandinavian furniture giant IKEA is about to introduce its first bike. The “Sladda” which means to skid sideways in Swedish is the company’s first foray into the transportation sector. The new unisex bicycle will be available in one colour, two sizes, and have a host of custom add-ons and extras such as an optional bicycle trailer. It uses a belt drive rather than a regular chain to avoid rust (guaranteed for 15,000km) and has back-pedalling brakes to eliminate the need for cables. IKEA have also given the Sladda an automatic gear change system. The company believes it will be a hit with their environmentally-aware customers.

The Chinese government has published a lengthy Northwest Passage shipping guidebook that lays the foundation for cargo vessels to sail across the top of Canada. Spanning 365 pages of charts and detailed information on sea ice and weather, it was compiled by ocean and shipping experts as a way to help the country’s mariners plan voyages through a waterway seen as a valuable shortcut between China and North America. Once this route is commonly used, it will directly change global maritime transportation and have a significant influence on international trade, the world economy, capital flow and resource exploitation.

Climate change and globalisation are fuelling an explosion of pests and diseases that afflict south-east Asia’s cassava crops, threatening a multi-billion dollar industry and the staple food of millions of people. Cassava, which is originally from South America, is now south-east Asia’s third largest source of calories after rice and maize. An estimated 40-million people in the area depend on the plant for their livelihoods and the crop forms the basis of a US$5-billion regional market in starch, which is used to make products ranging from paper to biofuel. Researchers say the crop’s viability is now at risk as more intense dry spells and rains bring about conditions in which pests and diseases can flourish.

Delta Airlines is dumping one of the most hated airline fees. It is no longer charging customers a fee to speak with an actual human being while booking flights. In the past, the Atlanta-based airline charged travellers $25 per ticket for booking over the phone and $35 when buying at an airport. Phone reservation fees have been a top complaint from travellers.

Natural disasters around the globe have resulted in economic losses of roughly US$7-trillion since 1900, according to a new calculation by scientists. The team, from Germany, scoured the media and old records for all information it could find on floods, droughts, storms, volcanoes, earthquakes and wildfires looking at reports in 90 different languages. Over the period 1900-2115, roughly 40 per cent of economic losses are ascribed to flooding. Earthquakes accounted for about a quarter; storms for about a fifth; 12 per cent was due to
drought; 2 per cent to wildfires and under 1 per cent to volcanoes.

Scientists have successfully created a new type of electronic skin, which has been designed to monitor oxygen levels within the body and display a real-time readout. The Japanese researchers say that the goal of the e-skin is to track oxygen levels in people’s organs as they undergo surgery. In the future, the researchers hope to power the e-skin through body heat, or find a way to use flexible batteries as an alternate source.

While Bangladesh, Vietnam and India are still growth areas for garment manufacturing, clothing retailers are talking more and more about manufacturing in Africa, Ethiopia and Kenya to be precise. Sub-Saharan Africa not only has low labour costs, it is expecting more growth in its working-age population than anticipated anywhere else in the world. By 2035, there will be as many working-age people in East Africa as in China today, more than 900-million people. Ethiopian labour costs are less than US$60 a month, electricity prices are low and the country has potential as a cotton producer.

The foreign ministry in Madrid summoned France’s ambassador after French farmers seized Spanish trucks and drained their cargo of wine. The farmers, protesting against unfair competition, attacked the trucks at a border crossing where tens of thousands of litres of wine were dumped as five trucks were targeted. Protesters were protecting their products from cheap wine coming from Spain and Italy claiming the falling prices on foreign rivalry, supermarkets and distributors. Last year French farmers targeted Spanish trucks importing farm produce.
A recent US government report revealed that a significant percentage of large, profitable US corporations pay no federal taxes at all. The 50 largest US corporations currently stash about US$1.4-trillion in offshore tax havens according to Oxfam America. Another group found that that the 500 largest corporations are holding $2.4-trillion overseas, allowing them to avoid paying $695-billion in taxes.

Rising temperatures and longer summers are helping the iconic Alaskan moose to conquer new stretches of frozen tundra. Climate changes have seen a rapid increase in the size of plants that the moose depend on in winter to survive. The large lumbering creatures have moved hundreds of kilometres northwards following the spreading shrubs. Scientists believe that other species like the snow shoe hare have also benefited from the spreading shrubs to move northwards too. It is believed that the changes in the moose range into tundra regions are happening not just in Alaska, but in Canada and northern Russia also.

International crime rings targeting California’s booming agricultural industry are increasingly stealing truckloads of high-value nuts. The sophisticated organisations in many cases use high-tech tactics, hacking into trucking companies to steal their identity. Armed with false shipping papers, they pose as legitimate truckers, driving off with loads of nuts such as almonds, walnuts or pistachios. Days later when the shipment fails to arrive at its intended destination, the nuts may already be in another state or on a ship destined for Asia or Europe where they fetch top dollar on the black market. Last year’s nut losses in California exceeded US $4.6-million.

An ancient glass factory has turned up in an archaeological dig in Israel pushing back the dates for the areas industrial development in a land now increasingly known for the tech savvy of its people. Archaeologists found kilns for glass-making that would have served the entire Roman Empire 1,600 years ago demonstrating the area’s rich history in this ancient art. This was a production centre on an international scale with its glassware widely distributed throughout the Mediterranean and Europe.

Australian bedbug scientists have found a reason why bedbugs are suddenly winning the war on humans; tougher shells. Bedbugs have become more resistant globally to sprays that once killed them. Some bedbugs have evolved a thicker layer of cuticle. This is the shell-like outer layer, or exoskeleton on the bloodsucking little bugs. That extra thick protection gives the bug new and improved armour. The thickness was found to be directly proportional to the bug’s resistance.

Backpacks are being fitted to pigeons in London to measure and better understand how smog and other air pollution are being distributed around Britain’s capital city. The data is also being made available to the public in an effort to battle pollution. Nitrogen oxide was found to be far more concentrated in the atmosphere than recommended by health professionals. This gas, which can result in diseases of the heart and lungs, was especially common around Oxford Street. The air pollution sensors with electronics are attached to a fabric vest and are worn by the wild pigeons.

Dubai has now overtaken Heathrow to become the world’s third busiest airport according to 2015 figures. The Middle-East hub looks certain to take the top spot within the next decade should current growth rates continue. It handled more than 78-million passengers last year, an increase of 10.7 per cent on 2014. The busiest airport is still the Hartsfield-Jackson Atlanta International Airport which welcomed more than 100-million fliers for the first time in 2015, an increase of 5.1 percent on the previous year. It has topped the rankings every year since 1998. Beijing Capital Airport is still number two.

A Toronto start-up that has been likened to “Instagram for doctors” now boasts more than one million health-care professionals using its platform, double the level it had just six months ago. The free online mobile tool is used by medical practitioners around the world to share images of patient ailments and seek the opinion of others. The medical images, with identifying information removed, have been viewed more than 1.5-billion times on the platform. It is estimated that two-thirds of North American medical students use the app. It now has a secure messaging system that allows users to communicate with one another rather than just commenting for all to see on a message board.

Rising levels of carbon dioxide in the atmosphere are accelerating the growth of B.C.’s forests by one to three per cent a year, enough to cancel out the impact on the climate from the mountain pine beetle outbreak by 2020. The pine beetle infestation, which killed countless trees over 18-million hectares had a double impact, dramatically reducing the ability of the western Canadian forests to store carbon, and worse, releasing massive amounts of carbon as dead stands of pine rotted or burned. Computer models estimate that B.C. forests stored 328-million tonnes less carbon dioxide and released one billion tonnes of CO2 in the atmosphere, which began in 1999.

Hundreds of dog owners from across the Western Isles recently queued in Stornoway, on Lewis, to take advantage of free micro-chipping for their pets. Compulsory micro-chipping for all dogs in Scotland is now in force in an effort to reduce the number of lost and abandoned animals. Pet owners who do not have their dog chipped face a fine of US$1,000.

The fourth World Happiness Report has found that Denmark is the world’s happiest country while Burundi is the least happy. The report found that countries where there was less inequality were happier overall. Switzerland, Iceland, Norway and Finland, which like Denmark have strong social security systems, made up the rest of the top five. Canada was sixth on the list; the US was the world’s 13th happiest country, the UK 23rd, China 83rd and India 118th.

The amount of electricity per person in sub-Saharan Africa is lower today (excluding South Africa) than it was 30 years ago. A rapidly rising population and the slow rate of connection mean the “electricity deficit” continues to grow. In Nigeria, 96 per cent of the population are connected to the electricity grid but only 18 per cent can expect the service to work most of the time. Further south in the continent, the picture is often worse. In Malawi, where population growth is 3 per cent a year, roughly 9 per cent of the population are connected to the grid, and in rural areas this falls to about one per cent meaning that each year, the country is falling further and further behind.

Legislation that would have set minimum standards for passenger space aboard commercial aircraft has failed to pass in the US Senate. In recent years, airlines looking for cost savings have reduced the sizes of seats and cut the amount of passenger legroom, among other changes. Many airlines now charge passengers if they want more legroom. Airline companies opposed the bill saying the measure was attempting to “re-regulate” the industry. Under the legislation, airlines would have been barred from further reducing the “size, width, padding and pitch” of seats.

Hundreds of hardened gangsters in Japan slice off their pinkie fingers in a ritual to show their contrition. When they leave their life of crime they turn to Mrs. Fukushima who makes them superior prosthetics. Without the false little fingers the ex-criminals would have a hard time finding jobs and marriage partners, and returning to a semblance of normal life.

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