TPT January 2012

G lobal M arketplace

hydrate, a crystalline compound consisting of gas molecules surrounded by a cage of water molecules. Hydrate commonly forms during offshore gas drilling when water is condensed in the presence of methane at high pressure and low temperature. The Herald ’s Shin Hyon-hee noted that the ministry has pledged $9.2mn over the next five years to the Korea Institute of Industrial Technology, a state-run think tank, to pursue the desalination project. The nascent technology reportedly costs up to 50 per cent less than existing methods that involve evaporation or reverse osmosis. Seoul also hopes to recruit corporate participants to a plan to set up a desalination plant with a daily capacity of 20 tons by 2015. Business Bucking the tide, Canada does very nearly everything right Kurt Badenhausen, who covers “data-driven stories” for Forbes , observed that, during the run-up to every US presidential election, countless Americans threaten to move to Canada if their candidate is beaten. While few of them follow through, the 2011 instalment of Forbes ’s annual “Best Countries for Business” suggests that a move north may exert a stronger attraction than ever to disaffected Americans. Canada ranks No 1 in the Forbes rankings, up from No 4 in 2010, for reasons summarised by Mr Badenhausen. While the US is fearful of a double-dip recession and Europe struggles with sovereign debt issues, Canada’s economy has held up better than most. The $1.6tn Canadian economy is the ninth-biggest in the world and grew 3.1 per cent in 2010. It is expected to expand 2.4 per cent in 2011. (“The Best Countries for Business,” 3 October) Canada skirted the banking meltdown that scourged the US and Europe. The Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal and other banks avoided bailouts and were profitable during the financial crises that started in 2007. As noted by Mr Badenhausen, “Canadian banks emerged from the tumult among the strongest in the world thanks to their conservative lending practices.” Canada is the only country that ranks in the top 20 in ten of the 11 metrics that Forbes considered. It is in the top five for both investor protection and the absence of red tape, which measures how easy it is to start a business. Credit goes as well to a reformed tax structure; a Harmonised Sales Tax was introduced in Ontario and British Columbia in 2010, with the goal of making Canadian businesses more competitive. Reduced corporate and employee tax rates also contributed to the country’s improved tax status. “Three-quarters of [Canadian] exports end up in the US each year,” wrote Mr Badenhausen. Thus, he said, Canada leans “heavily” on the US economy. But, while unemployment in the US stays stubbornly above 9 per cent, it is 7.3 per cent in Canada. The 25-year Canadian average is 8.5 per cent. Currently the eurozone unemployment rate is 10 per cent.

› The US ranked No 10 in Forbes’s reckoning, down from No 9 in 2010. The world’s largest economy at $14.7tn continues to be one of the most innovative, ranking sixth in patents per capita among all countries. Sweden, No 7 overall, comes in tops for innovation. Here is the full list of the Forbes top ten for business in 2011: Canada, New Zealand, Hong Kong, Ireland, Denmark, Singapore, Sweden, Norway, Britain, the United States. The US economy Watchers of the world’s largest economy can breathe easier: growth speeds up as consumers and businesses spend more With Americans returning to consumer mode, at least tentatively, and companies stepping up their investment in equipment and software, figures released 27 October by the Commerce Department showed that the US economy grew in the third quarter of 2011 at the fastest pace in a year. Surpassing its pre-recession peak for the first time, gross domestic product – the value of all goods and services produced – rose at a 2.5 per cent annual rate, up from 1.3 per cent in the prior three months. “It ain’t brilliant, but at least it’s heading in the right direction,” Ian Shepherdson, the chief US economist for High Frequency Economics, a data analysis firm, told the New York Times (27 October). “I want to see 4 per cent. But, given that people were talking about a new recession, I’ll take 2.5 or 3, thanks very much.” Household purchases, accounting for fully 70 per cent of the economy, increased at a 2.4 per cent pace in the quarter, more than forecast by economists. Corporate spending, which has been strong throughout the recovery, continued to grow as well, with a 13.3 per cent increase in non-residential building and a 17.4 per cent increase in equipment and software purchases. The increase in US business investment is at least partially explained by a rush to qualify for a larger government credit. In a compromise fashioned in the highly polarised political climate of Washington, the Obama administration offered to extend for two years the so-called “Bush tax cuts” for all tax brackets. The controversial accommodation to the wealthy – the price of a jobless-benefits extension wanted by Mr Obama – allows companies to depreciate 100 per cent of investment in capital outlays in 2011 and 50 per cent in 2012. › A contributor to the late-October uplift was the agreement by European leaders on steps that included recapitalising the continent’s banks. At least in theory, this moved Europe closer to a resolution of the sovereign-debt crisis that Federal Reserve policy makers had identified as a risk to the American economy. Certainly the news was enough to cause US stocks to surge. The Standard & Poor’s 500 Index climbed 3.4 per cent to 1,284.59 at the close of trading in New York, extending its biggest monthly rally since 1974. Dorothy Fabian , Features Editor (USA)

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