Global Talent Update - September 2018

GlobeEurope, Middle East and Africa

Given the long period of recession and low employment following the collapse of the "Celtic Tiger" period in the early 2000s, Irish business leaders and everyday workers may express understandable suspicion of economic development that looks like it's moving too fast. Between 2013 and 2017, the economy of Ireland grew at a rapid speed far ahead of most projections, and it currently doesn't look to be slowing down, according to The Irish Times. However, analysis remains divided on whether Ireland's growth is potentially problematic.

In its August 2018 analysis of global home prices, The Economist stated that costs in Dublin are overvalued by 25 per cent compared to residents' incomes. Prices rose significantly not long before that, spiking 12 per cent in June. By contrast, credit rating firm DBRS believes that even with the double-digit price growth, falling unemployment alongside slow but steady wage growth is helping to ensure that growth doesn't occur too quickly. However, DBRS also stated that the possibility for overheating is there, if bank lending activity or household debt begin to dramatically increase.

While not a genuinely problematic economy, Morocco has laboured under considerable debt for years. Data from Bank Al-Maghrib, the kingdom's central financial institution, cited Morocco's debt to gross domestic product ratio as 82 per cent, according to Boursenews. To address this issue, the nation plans to partner with the World Bank - as it has for a number of solar power, sanitation, job creation and infrastructure projects - in the hope of reducing the debt to GDP ratio 22 per cent by 2021.

Morocco World News reported that healthcare and employment initiatives will be a part of the kingdom's World Bank collaboration, with a goal of insuring 90 per cent of the population by 2020. Low-income Moroccans, in particular, are a focus of the project. The country is also adopting greater sustainability and environmental consciousness, as Secretary of State for Sustainable Development Nezha El-Ouafi confirmed at the UN's African Ministerial Conference on the Environment in Nairobi, Kenya, during a Sept. 19 session of the five-day seminar.


The recovery of Japan's economy after a brief contraction earlier this year continued through the second quarter, per Reuters' reporting on Cabinet Office data released in early September. Significant capital expenditures helped fuel 3 per cent annualized growth in Q2 of 2018. Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, explained some particulars of this positive development to the news provider.

"The environment surrounding capex is favorable thanks to labor-saving investment because of labor shortages, construction demand related to the 2020 Tokyo Olympics and inbound tourism, and research and development, on top of hefty company profits," Shinke said.

At the same time, the Bank of Japan held firm to its policy of quantitative easing, according to a separate Reuters piece. BOJ Governor Haruhiko Kuroda stressed that the national bank would end this initiative as soon as it hit 2 per cent inflation, but said abandoning the stimulus too early could be devastating to Japan's economy.

Much of Thailand's economic well-being depends on exports, and according to The Nation, these remain strong, in part due to jumps in the values of several crops: corn, sugarcane and rice. A broader uptick in export and tourism revenues encouraged the University of Thai Chamber of Commerce to adjust its prediction for nationwide economic growth in 2018 to 4.6 per cent from 4.5 per cent.

In keeping with its desire to make up for lost time in tech development, Thailand is also embracing cryptocurrencies and blockchain more than many nations. Blocknomi reported that the military government legalized cryptocurrency use in the country and plans to have a centralized digital currency backed by the state sometime in the near future.


America saw another month of considerable job growth in August, based on the results of the latest Employment Situation Summary from the Bureau of Labor Statistics. Nonfarm employers in the U.S. added 201,000 positions to their payrolls during the month. This stood ahead of various economists' projections, such as those polled by Reuters, who expected an average of 191,000 new jobs, and beat July's revised jobs-added figure (147,000 new roles).

The unemployment rate, meanwhile, held steady at 3.9 per cent, and even when adjusted to include those not actively looking for work and Americans who only work part-time jobs, it came in at 7.4 per cent - the lowest such percentage seen since April 2001. U.S. wages grew during August as well. Average earnings' year-over-year growth, in fact, hasn't been higher since 2009 - by that metric, wages increased 2.9 per cent from August 2017 to August of this year. Between July and August 2018, they rose 0.4 per cent.

Trade remains a contentious issue due to the numerous tariff-related disputes between the U.S., China, the European Union and other major economies, though according to Reuters, there hasn't yet been major adverse impact on the American economy because of them. This could change if China and America both follow through on threats of additional tariffs that could affect $467 billion worth of goods on the U.S. side alone.

Once a major economic highlight of South America, Brazil's numerous political corruption scandals and the recession of 2014-2016 have many citizens disillusioned about their government. According to The Economist, Brazilians surveyed in recent polls say the words most emblematic of their country are "corruption" and "disappointment." There is a clear hope for new leadership, which former soldier Jair Bolsonaro believes he can fulfill.

The current front-runner for the nation's presidential election in October, Bolsonaro is projected to win by a small majority. He commands about 20 per cent of the likely vote, due to the wide field of different candidates. Bolsonaro is a staunch conservative, but espouses a non-elitist, "economic populist" message very similar to that which helped U.S. President Donald Trump win the 2016 election.

Bolsonaro's emphasis on robust economic development could potentially benefit the nation in the long run, if not immediately. Reuters noted that many Brazilians appear to be in favor of specific reforms to the nation's pension systems and general readjustment of its complicated tax structure. If Bolsonaro commits steadfast to these measures in his platforms, it could help him win the trust of more Brazilians and eventually serve the country's greater good.


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