SEBA's Annual Global Economic Forum Explores the New Economic Reality
On Wednesday November 9th, Saint Mary’s College of California School of Economics and Business Administration hosted the 2nd Annual Global Economic Forum at the Commonwealth Club of California in partnership with the Center for Regional Economy and the Graduate Business Alumni Council. This year’s distinguished panel explored the “New Economic Reality: Competitiveness in a Multi-Polar, Interconnected and Interdependent World Economy.”
Dr. Shyam Kamath, Associate Dean of Graduate Business and Global Programs for the School of Economic and Business Administration introduced our three experts on economics, business and finance from China, Latin America and Europe; Dr. Hui Wang, Andrew Cummins and Raffaele Savi, respectively. Dr. Kamath asked them to respond to specific questions regarding each represented continent.
Dr. Hui Wang, CEO of First China Capital Inc., responded to Dr. Kamath’s question about a potential “China bubble” by pointing out that real estate prices in China had stopped rising and general inflation is down with export growth above 20% and domestic national sales up over 10% reducing the possibility of a “hard” economic landing.
Dr. Wang also spoke about three main initiatives he believes will positively impact China’s economic growth: innovation, continuous market reform and the development of democracy. China’s economy delivers about 10% of the GDP per capita that the US does. Currently, China is projected to equal or surpass the Total US GDP between 2020 and 2030. While China’s economy is strong it faces a significant competitor country in India which has a better education infrastructure than China currently does. Without successful implementation of the aforementioned initiatives, India will potentially compete with China and its growth will slow due to three primary factors – economic, business, and cultural.
Andrew Cummins, Founder and CIO of Explorador Capital, spoke about five key areas and structural reforms required in order to continue and/or increase Latin American growth which are dependent on investors’ willingness to make long-term investments on that continent.
- Rule of Law: regarding contracts, security of doing business, and fighting corruption.
- Controlling Inflation
- Fiscal Balance
- Free Trade: Optimizing Free Trade can add 1% to 2% to the GDP growth rates and improves the confidence of foreign investors with investment expertise to help countries grow.
He pointed out that the “Big 5” (Mexico, Brazil, Peru, Chile, and Colombia) show good metrics on all five criteria.
Raffaele Savi, Managing Director for North American, European and Developed Market Equity Strategies at Blackrock spoke about the current European financial crisis and the varying reasons countries like Greece, Italy, Ireland, Spain and Portugal are having economic and financial problems.
When the European Monetary Union was initially formed, the contagion risk was relatively low. However, given the current economic crisis EU countries’ contagion risk is noticeably higher. Mr. Savi, believes there are four potential solutions to the current crisis which may all be present in the final solution that emerges:
- The troubled countries default and leave the Euro Zone.
- The troubled countries are bailed out, with stronger countries like Germany supporting the troubled countries and their debt.
- The troubled countries are scared into taking action by not immediately being offered support, incenting them to fix their own problems.
- The European Central Bank and the IMF step in to save the troubled countries and the world.
These solutions bring up a lot of implementation questions. Difficulties include the fact that there are so many different players involved making it hard to come to a single agreement on what to do, when to implement it, and how. It is possible that the European Monetary Union will not survive in its current state and there is a possibility that it comes out of the crisis with fewer member countries.
The presentations were followed by a dynamic question and answer period with 140+ participants. Commonwealth Club Members, Saint Mary’s alumni, and current Graduate Business students asked questions about the cultural, financial and governmental factors as they relate to our Global Economy and capped off a well-rounded event. View photos from the evening, tag your colleagues, and share your takeaways from the event. The session was also recorded on video and will be posted on the Saint Mary’s Business YouTube page soon.
About Saint Mary's College Graduate Business Alumni
Founded in 1863, Saint Mary's College of California is a cornerstone institution of the San Francisco bay area. After nearly 150 years, with a network of more than 40,000 alumni worldwide, Saint Mary's tradition of educational excellence is stronger than ever. Saint Mary's College of California Graduate Business Alumni Chapter's mission is three-fold: network, learn and serve. Our goal is to connect graduates with new people and opportunities, provide continued professional development, and use our knowledge, experience, and skills to help those in our community. For information about how to get involved visit, www.smcbusinessalumni.com
About Saint Mary’s College Center for Regional Economy
The Center for the Regional Economy (CRE) brings together faculty, students and alumni at Saint Mary’s College with business, governmental and non-profit groups in the San Francisco East Bay, the Greater San Francisco Bay Area and the Asia-Pacific Region in support of an economy that is economically, socially and environmentally sustainable. For more information visit, www.stmarys-ca.edu/CRE