Many people assume either the United States or China is the world’s largest exporter of “stuff” – that was certainly my assumption until I really dug into the numbers. However – until now – that belief has been incorrect; the actual leader for quite a few years has / had been Germany.

Turning bolts, Germans were told – often by other Germans – had no future in Germany. The persistence of heavy manufacturing symbolized the country’s inability or unwillingness to transform itself into a modern, services-oriented economy like the United States or Britain, two oft-used yardsticks.

Today, the manufacturing sector in Germany is growing as a proportion of the country’s total economic output, and Germany looks set to outpace far larger economies like China and the United States as the world’s largest merchandise exporter for the fourth year running.

“The critics have one point in that the Germans are dependent on the ‘old economy,”‘ said Andreas Rees, chief Germany economist in Munich for UniCredit. “But paradoxically that is an incredible strength of Germany right now.”

While there were signs this summer that China was poised to move into a “tie” with Germany, China appears quite impatient and according to the Wall Street Journal will pass Germany this year.

• China took over the mantle of the world’s top merchandise exporter from Germany in 2009, according to the latest figures, aided by a global economic crisis that has taken a greater toll on other trading powers. China exported $957 billion of goods in the first 10 months of 2009, compared with $917 billion for Germany. No changes in November or December are expected to overturn the Chinese lead, trade experts say. China is likely to publish trade figures for the full year next week.
• China’s claiming of the title of world’s largest exporter was widely expected, with annual growth in its exports regularly exceeding 20% during the past decade. China in 2007 overtook Germany as the world’s third-largest national economy, and is on track to soon surpass Japan to become the second-largest economy after the U.S.
• China’s ascendancy has been accelerated by the international financial crisis, from which it has suffered less than other major economies. With trade in tatters around the world, Chinese exports fell 20.4% during the first 10 months of 2009, compared with 27.4% for Germany and 21.4% for the U.S. The trade figures don’t include transactions in services, which are significant in developed economies but a weak point for China.
• “Most of the products China produces for the global market are life necessities,” says Huang Huiguo, chief executive of Kingsons International, a Guangzhou-based exporter of leather bags.
• China’s currency, the yuan, is tied to the sinking dollar, helping to keep the country’s exports competitive on price. (you’re welcome) Those factors helped Chinese goods gain market share in the U.S., Europe and Japan last year.
• Many of China’s exporters earn relatively slim profits churning out goods designed and marketed by other companies.
• For Germany, the rise of China has brought opportunities as well as challenges. The country is “our biggest competitor but also our most dynamic market,” says Jens Nagel, a trade expert with the German Exporters Association.
• Many German companies say their exports to China and other emerging economies are buoyant again, but that sales to the U.S. and other European countries — which are Germany’s biggest market — are recovering more slowly, if at all.

Germany’s primary economic problem isn’t that they country exports too little, but that its own consumers don’t spend enough, which holds back its domestic service sectors, many economists say. (perhaps we can trade some Americans for Germans and help balance out both economies; we’ll export some of our spenders – especially those who enjoy buying things they have no chance of ever paying for – and import some nice German savers who we can then loot to help pay the bills for the Americans who spend with no chance of ever paying it back – problem solved.)

Lebanon is working to implement a sweeping overhaul of its health sector, aiming to upgrade the direct provision of services, put in place more cost-effective management practices and expand basic medical coverage to all members of society.

With one of the highest per-capita outlays for health services provision of any country in the region, Lebanon spends $820 per person annually. The most recent World Health Organisation figures put Lebanon’s total expenditure on health at 8.9% of GDP and 11.9% of total state outlays.

While expenditure may be high, many believe that Lebanon is not getting full value for its money, with the National Social Security Fund (NSSF) – the workplace-funded health scheme covering those in contracted employment – heavily in deficit, while state services are under pressure to meet demand.

Key to the reforms proposed by the health minister, Mohammad Jawad Khalifa, will be providing insurance to those people who do not have access to coverage through the NSSF or other insurance options.

Though people currently without coverage are given free treatment through the Health Ministry, there are concerns that this system does not provide adequate or equitable service. As proposed by Khalifa, the 58% of people not currently covered would be included in a public programme giving them the option to access both public and private health care facilities.

Payment for treatment would be through a mix of direct charges met by patients and contributions from health insurance premiums, with the state paying 40% of a beneficiary’s total health care costs.

The reforms will also see the introduction of electronic cards, national insurance numbers and a fully computerised database, which are all aimed at improving managerial services and speeding up the processing of patients.

Among the proposed improvements to direct service provision include an increase in the level of free preventative care, including scanning for cancer and mammograms.

“There is an emphasis on public health care with these reforms, though I want to encourage the private sector as well,” Khalifa said in an interview with international media in late August. “There is no reason why everyone should not have access to affordable health care and excellent hospital treatment wherever they go.”

The latest reforms are just part of a far broader process that the ministry has been working to put in place over the past few years. Earlier this year, the ministry mandated fixed rates for certain medical procedures and treatment, with more than half of all procedures having set tariffs.

Another step was taken in mid-October, with the ministry announcing it has chosen Accreditation Canada, an independent non-profit organisation that undertakes external reviews of health and social service providers, to conduct a six-month study of current Lebanese primary health care standards.

The project is seen as an important step in accomplishing the ministry’s goal of upgrading health facilities, including hospitals, primary health care centres, laboratories and other medical institutions.

According to Accreditation Canada’s president and CEO, Wendy Nicklin, one of the aims of the project is to share the organisation’s expertise in health care excellence through accreditation with Lebanon’s Ministry of Public Health.

“This initiative clearly demonstrates the ministry’s commitment to improve the health and wellbeing of the Lebanese people by providing them with the best quality health care services possible,” Nicklen said on October 19.

Of course, drafting a programme for broad-based reforms is one thing; implementing them is another. While Khalifa has held the office of health minister since 2005, long-running political uncertainty, combined with a new cabinet, will do little to help his efforts of pushing through such important reform.

Though it will probably be a challenge to advance the proposed reform package quickly, Khalifa does have a blueprint to work from for the future. Such a dramatic overhaul of the sector will surely be costly, but with some of the highest health costs in the region already, short-term spending pain may result in longer-term gain.

Though 2009 has not been easy for Kuwait, with many of the country’s leading sectors experiencing a downturn, the country appears to have weathered the worst of the global crisis and can ring in the new year on a positive note.

While Kuwait’s economy expanded by 5.9% in 2008, the situation is expected to be somewhat different come the end of 2009, with most predictions tipping a contraction of GDP to around 1.5%. However, with the price of oil having risen through 2009, Kuwait is in a far stronger position than many expected earlier in the year.

Having planned for a $16.9bn deficit for the 2009-10 budget, expecting oil prices of around $35 per barrel, Kuwait instead garnered a $17.5bn surplus for the first six months of the financial year as per barrel prices have topped $75. With some projections putting the total 12-month budgetary surplus by the end of March 2010 at around $34bn, the government should be able to sustain both its economic expansion programmes and social support schemes.

That is not to say everything has been smooth in Kuwait’s economic path this year. In March, the government announced that it was cancelling the tenders it had held for the $14.5bn Al Zour oil refinery, in part so that the costing for the massive project could be reassessed in light of falling materials prices.

Though the project had been halted, the government is still committed to building the new refinery, with the oil minister, Sheikh Ahmad Abdullah Al Sabah, saying on December 12 that the development would be part of $87bn worth of investments that would be made in the energy sector between now and 2030. The investments were part of a programme to increase output from 3m to 4m barrels per day (bpd).

The closely linked construction and real estate sectors both saw a fall off in activity in the first half of the year, though there are signs that rising liquidity and growing confidence among consumers will lead a revival into 2010. There was an increase in real estate transactions for October, up 35% on the previous month, and if this trend is maintained it will not only help kick-start the property market but draw the building sector into its tail stream.

The country’s stock market also experienced mixed results in 2009. Having opened the year at 7917 points, the main index of the Kuwait Stock Exchange (KSE) dipped below 7000 less than three weeks into the new year. By May, the index had fallen through the 8000-point barrier before sliding back to the 6900-mark in December.

Throughout the year there have been calls, both from investors and some members of parliament, for the state to compensate shareholders who lost money on the KSE, with the issue being one of the reasons there were delays in implementing a planned $5.17bn economic stimulus package that had been approved by the cabinet in early February.

The package finally came into force in mid-April, providing a series of measures to support the economy, including state guarantees of up to 50% for new credit facilities offered to local firms by banks. The package also provided a 15-year guarantee against any fall in the value of local banks’ investment and real estate portfolios and old loans to local companies.

According to Majid Al Shatti, the chairman of the Commercial Bank of Kuwait and chairman of the Union of Kuwaiti Banks, the government’s stimulus package had helped cushion the economy from the effects of the global economic crisis and saved the country’s financial sector from potential bankruptcy.

“It protected the banking sector and stabilised the market,” Al Shatti told a seminar in November. “It also leveraged productive sectors.”

Much of the year’s economic developments were played out against a backdrop of political tension, with parliamentary deputies repeatedly pressuring the cabinet over its policies and blocking items of legislation the government saw as crucial to overcoming the financial downturn.

Events came to a head in March, when His Highness Sheikh Sabah Al Ahmad Al Sabah, Kuwait’s Emir, was forced to dissolve parliament and call early elections, the third time in as many years the country had gone to the polls. However, the ballot left the distribution of seats in the 50-member assembly little changed in that there is no clear majority bloc in the house, though the election was notable for the fact that four women were elected to the parliament, a first for the nation.

As the year came to a close, political tension was again on the rise. The media suggested that the Emir might again dissolve the parliament after opposition deputies tabled a motion in the assembly that, if passed ,would halt co-operation between the elected branch of government and the prime minister and interior ministers.

With the economy looking to edge its way out of recession early in the new year, and ride high oil prices and stronger demand to post solid growth in 2010, Kuwait should be well placed to put a slow 2009 behind it and return to more positive territory.

Despite having to contend with local and international challenges, Senegal has ended 2009 on a good note, with the economy expanding and groundwork being laid for growth in the coming year.

While the global financial crisis has had an impact on the economy, the country is expected to close out the year having recorded positive growth, with GDP forecast to expand by around 1.25%. Though this is half the growth rate of 2008, any expansion at all is impressive considering the financial environment.

This is even more the case given the domestic problems that had to be overcome in 2009. There were widespread cuts to electricity supplies in August and September, while severe flooding in Dakar and surrounding districts in August temporarily displaced up to 200,000 people and disrupted businesses. These difficulties were among the reasons for the IMF tempering its prediction, made in the first half of the year, that Senegal’s GDP would increase by 1.5% in 2009. In its latest report, issued in mid-November, the IMF said Senegal’s economy should gain momentum in 2010, with GDP to expand by 3.5%, thanks to what the fund said was the satisfactory “implementation of the government’s economic and financial programme in a difficult economic environment”.

Another step in that financial programme came late in the year, when Senegal moved to break new ground in global capital markets. In early December the government announced it was looking to raise up to $200m through the country’s first-ever international dollar bond sale. Media reports suggest that the yield guidance for the bond, which is to have a five-year term, has been set at around 8.75%. According to François Ekam-Dick, the managing director of Iroko Securities, a London-based securities firm that focuses on the African market, if the Senegal issue was well received, it could serve as a benchmark for other sub-Saharan countries, prompting a ramping up of bond activity.

“Senegal’s deal will be closely watched for how international investors respond to a deal from sub-Saharan Africa,” he told Reuters on December 10. “From a diversification strategy, Senegal’s bond looks like a good deal.”

Officials have said that the funds raised through the bond issue will be used to help finance the construction of a 31-km toll road linking Dakar and Diamniadio. The project, which has gained support from the World Bank through a $105m loan, has been budgeted at $531m and is part of the government’s efforts to improve the country’s overall infrastructure.

These efforts have extended to overcoming the chronic electricity shortages that are hampering economic growth. In July, Prime Minister Souleymane Ndene Ndiaye unveiled plans for large-scale investment in the energy sector, with more than $1.1bn to be spent by 2012. Among the projects outlined by the prime minister was a coal-fired power station, the first stage of which would come into service in 2010, with the second stage becoming operational the following year.

With its power generation capacity heavily dependant on imports, Senegal has benefitted from the fall in oil prices from their peak in mid-2008, though the steady upward movement has again eaten into the state budget as the year progressed. While not an oil producer, Senegal does have a refinery for petroleum products, which meets most of the country’s needs. However, a proposal floated by the Nigerian government could see Senegal become a net exporter of refined products, adding a significant string to its economic bow.

In early November, Nigeria’s minister of state for petroleum resources, Odein Ajumogobia, proposed that his country send crude oil to Senegal to be processed and then exported back for use in the Nigerian domestic market. The plan could dovetail with a scheme to increase the capacity of the Senegalese refinery, which currently has an optimal output of 1m tonnes annually.

In June, Senegal’s economy received another boost as the country joined the ranks of Africa’s gold producers. President Abdoulaye Wade attended a ceremony in the south-eastern Kedougou region to formally inaugurate a mine that is a joint venture between Australian-based Mineral Deposits Limited (MDL) and the government. MDL is just one of more than half a dozen international mining firms either already on the ground in Senegal or seeking licences to exploit identified fields or search for new deposits. Combined with existing phosphate mining operations, and efforts to boost output of its iron ore mines from 15m to 25m tonnes annually by 2011, the country is moving towards making better use of its mineral resources.

However, some of the gloss on the minerals sector was dulled in July, when Arcelor Mittal, the world’s largest steel company, announced it was suspending work on developing a $2.2bn iron ore project in the country’s south-east due to the global economic downturn and the fall in demand for steel. Though the decision is not final – Arcelor Mittal is talking about deferring the project rather than scrapping it – even a delay will affect the economy, with the scheme promising riches such as a major port and rail link.

Having apparently weathered the worst of the global recession and still managing to post positive growth, Senegal can look forward to a better 2010, as demand for exports is expected to rise and some of the investments made in the economy this year start to bear fruit.

Quite a remarkable performance by the Brazilian Bovespa Index. After a 83% gain in 2009, it has recaptured the 70,000 level and is only 4.5% off of its all time high of 73,517. This despite efforts to keep the flood of US pesos from over heating its markets and economy.

Much like a stock that returns to old highs, I’d expect this move to stall as the index revisits (if and when) the summer 2008 high. However, much like a strong stock, after that cursory pullback from the retest of old highs – one could expect a short term consolidation period and then a successful push through in an ensuing attempt. We shall see how it works out … as we pointed out yesterday, even Mark Mobius – who loves his international stocks – has turned cautious on emerging markets.

Amazingly, Brazil – while no longer cheap – actually trades at a massive discount to the slow growth developed market indexes.

• The Bovespa fetches 20.8 times reported earnings, near the highest level in six years. The index trades at a 40 percent discount to the MSCI World Index of 23 developed countries, according to weekly trailing price-to-earnings ratios compiled by Bloomberg.

Longer term, as the US market has gone nowhere in the past decade, the Bovespa has quadrupled. Brazil remains the most intriguing longer term opportunity in the Western hemisphere – if not the world.

Global manufacturing industry ended 2009 on what seems to be a fairly positive footing, with the JPMorgan Global Manufacturing PMI posting a comfortable 55.0 in December, up from 53.7 in November, significantly above that critical 50 growth / contraction dividing line.

December’s was the highest reading for 44 months, and the headline Global PMI has now remained in expansion territory for each of the past six months. So this is not a fluke, and growth is being sustained, even if it is not evenly distributed, and is far from being that much hoped for “V” recovery. But of course, what happens to all of this as the stimulus is gradually withdrawn?

December data also continued to reflect an ongoing expansion in international trade volumes, with growth of new export orders being the fastest in almost two years. The latest increase came from a broad-base, with only Australia, Brazil, Greece, Russia and Spain reporting declines.

The employment situation also continued to improve, and at 50.2 the Global Manufacturing Employment Index signaled the first (ever-so-slight) increase in staffing levels since March 2008. The rise in manufacturing employment was, however, largely concentrated in emerging markets (particularly China, Taiwan and South Korea) and the US. Staffing levels fell in all of the West-European nations covered by the survey, although the rates of decline were slower than in November.

Strong Growth In Asia

One thing is clear at the present time, and that is that economic growth in Asia is powering ahead at a faster pace than in other regions – and is being led by China and India. The PMI reports for China, South Korea, Taiwan and India all suggest the presence of a widespread recovery. Japan improved for the first month in four, although Japanese exports do seem very China dependent. Australia was the outlier in Asia, with conditions deteriorating from November and the PMI falling back to from 51.2 last month to the present 48.5.

The China HSBC Manufacturing PMI rose to 56.1 in December, up from 55.7 a month earlier – the second fastest rise yet recorded by the survey, which dates back to 2004. The HSBC PMI data also signaled that prices charged by Chinese manufacturers were rising at the fastest rate since July 2008, buoyed by rising raw material costs as well as strong demand.

The India Manufacturing PMI, rose from 53 to 55.6 , its highest level since May, when it hit 55.7, the strongest performance of 2009. The positive result was helped by a big rise in the sub-index for new orders, which rose to 60.1, the highest for the year, from 54.6 in November.

The India PMI has now been above the neutral level of 50 for nine consecutive months, indicating a sustained period of expansion, following a five-month period when it suggested that output was contracting. HSBC said the detailed December survey data suggested that growth was the strongest for 15 months, driven by better economic conditions and business investment. Demand from both domestic and foreign buyers was higher than in November, although the home market remained the principal driver of new business expansion.

The South Korea manufacturing PMI edged up slightly in December to 52.8 from 52.6 in November, indicating a continued expansion of the economy, although the pace appeared to be slowing. The sub-index for total new orders fell from 54.1 to 52.9, and the index for new export orders declined from 52.4 to 50.7. However, both remain in positive territory.

In Taiwan, the manufacturing PMI moved upwards for the ninth successive month, reaching 58.7 from 58.4 in November. The index showed strong demand in both export and domestic markets, although the rate of increase in new orders edged downwards.

Diversity In The Eurozone

In Europe, the situation was more uneven, and characterised by the marked disparities between the performances of the big-4 Eurozone economies. While the French recovery remains robust, the German one continues to look lacklustre. Italy just managed to keep its head above water for the second month running, while the Spanish manufacturing sector remained firmly in recession territory. Greece and Ireland continued to struggle to gain momentum, while in the East Hungary and Russia failed to pass the critical 50 level.

The Eurozone Manufacturing PMI posted 51.6, up from 51.2 in November, the highest level since March 2008, but still well below the global level of 55.

As usual, France led the way again, with the headline PMI recording 54.7, up marginally from 54.4 in November. Output was raised in response to a further increase in incoming new orders, the sixth in successive months. The domestic market remained the principal driver of growth, although export sales rose at an accelerated pace. Anecdotal evidence suggested that improving market demand and restocking at clients had contributed to the latest increase in new work.

Higher new orders placed pressure on firms’ capacity, leading to a further rise in backlogs of work during December. The rate of growth of outstanding business was robust and the strongest in three years. If the US is no longer the global consumer of the last resort, France is certainly in the process of becoming the European one.

In Germany the final headline PMI registered 52.7 in December, up from 52.4 in November, to indicate the strongest overall improvement in operating conditions since May 2008. However, the final PMI was slightly lower than the earlier flash reading for December (53.1), while the rise in the PMI since November largely reflected slower rates of job shedding and inventory reduction.

As far as I can see, you can read four things into this December German reading: i)the situation in German manufacturing has improved since May; ii) but not very much (since 52.7 is not a very high absolute reading); iii) the final reading came in slightly v lower than the flash – that could indicate deceleration as the month went one, the good profile is having a higher final reading than the flash one; iv) the improvement came from a slowing down in job shedding (which may suggest increased optimism for the future, retaining staff etc), but not from an increase in output. Conclusion, German manufacturing continues to move forward, but the road is a lot longer and a lot harder than many were expecting. There is no sharp rebound here, nor are we likely to see one.

Italy continued to more or less move sideways. At 50.8, up from 50.1 in November, the seasonally adjusted Markit / ADACI Purchasing Managers’ Index only served to underline the fragility of the recovery in Italy, and how easily Italian manufacturing could fall back into contraction. On the other hand Italian manufacturers recorded a solid rise in new export orders during December. The increase in new business from abroad was faster than that recorded for overall new orders, suggesting that demand growth was stronger across export markets than in Italy.

Outside the Eurozone, Swedish industry continued to be the stellar performer with the PMI climbing up to 58.2 points, from 56 in November, according to data from Swedbank / Silf. This was the highest level over the last year and indeed the highest of any country included in the JPMorgan poll. A strong inflow of orders accounted for the largest positive contribution to the rise in the PMI. The order sub-index rose 5.8 points, with domestic orders rising and export orders falling.

Increased orders also lead to higher production plans for the next six months, pushing the production sub-index up close to the 60-point level, while time of delivery continued to increase, yet another sign of stronger economy. Meanwhile, fewer companies reported cutting staff and the employment sub-index rose to 49.5 points.

Eastern Europe

No Strong Performers In The East

Business conditions in Russia’s manufacturing sector deteriorated yet again in December, suggesting that domestic inflation and the rise in the ruble was continuing to take its toll on manufacturing competitiveness. Output was only marginally higher than in November, and new orders fell for the second month running. Meanwhile, manufacturers continued to shed staff and cut inventories. Input and output prices both rose on the month but, in both cases, the rates of inflation remained historically weak. The headline seasonally adjusted Russian Manufacturing PMI posted a second consecutive reading below the 50.0 no-change mark in December, indicating an overall deterioration in manufacturing business conditions.

The index declined to 48.8, from 49.1, its lowest level since July. Contributing to the downward movement in the index were slightly steeper falls in new orders and stocks of purchases, and a slower lengthening of suppliers’ delivery times.

Output in Poland continued to rise, while the Czech Republic just managed to keep its head above the 50 mark. Unsurprisingly, Hungarian manufacturing continued to contract, though at a slightly slower rate than in November.

The rate of expansion also slowed in Turkey, and the headline index posted a measly 50.6 in December, indicating only a marginal improvement of business conditions in the Turkish manufacturing sector. The rate of expansion fell back from November and reached the lowest recorded in the current eight-month period of growth. Incoming new business received by Turkish manufacturers only increased marginally in December.

Labour market conditions remain difficult, and employment only increased slightly in December. Staffing levels have now risen for seven successive months, but the latest increase was the weakest since July. On the other hand input prices rose substantially in December, and faster than they did in November.

Dynamic Growth In Both The US And Brazil

In the Americas, both Brazil and the United States showed strong growth – in the US case the reading was a four year high. The Brazilian manufacturing sector continued to expand at a robust pace, and the seasonally adjusted Brazil Manufacturing PMI hit 55.8 in December, up from 55.5 in November – its highest level since November 2007. Output rose for the sixth time in seven months, and at the fastest rate since October 2007. Unfinished business and employment both increased during the latest survey period, pointing to the existence of capacity pressures in Brazil’s manufacturing industry. Staffing numbers expanded at a robust rate that was the fastest for seventeen months.

The U.S. manufacturing sector expanded in December for the fifth straight month, according to the Institute for Supply Management report. The ISM manufacturing index rose to 55.9% from 53.6% in November. It was the highest since April 2006. In December, nine of 18 industrial sectors were growing, led by apparel, petroleum, electronics and machinery. Manufacturing is benefiting from the need to restock inventories, according to Norbert Ore, chairman of the ISM’s survey committee.

“Overall, the recovery in manufacturing is continuing, but there are still some industries mired in the downturn as evidenced by the seven industries still in decline,” Ore said. Construction materials, chemicals and plastics are declining. The new orders index rose to 65.5% in December from 60.3% in November. It was the highest since December 2004. The employment index rose to 52% from 50.8% in November. The production index rose to 61.8% from 59.9% in November. The supplier delivery index rose to 56.6% from 55.7%.

Telkomsel and Nokia today announced their collaboration to offer the Nokia Messaging service, which will be commercially available to Telkomsel subscribers from 26 December 2009 onwards.

Telkomsel is the first operator in Indonesia to commercially launch this service which will allow users to enjoy easy access to mobile email on their Nokia (NOK) devices. Telkomsel is also the first operator worldwide to offer Nokia Messaging for Instant Messaging to prepaid consumers.

“As the best and leading mobile lifestyle and solutions provider in the region, we always aim to deliver the best service to all of our customers. We have demonstrated our strong commitment to offering innovative mobile email solutions and are proud to be the first to deliver Nokia Messaging to the Indonesia market and the first to provide prepaid charging for Nokia Messaging’s IM service to meet our consumers’ needs” said Rachel Goh, Telkomsel’s Vice President of Product Lifecycle Management.

“Offering easy set-up and access to several email accounts as well as Instant Messaging all on one device, Nokia Messaging has the potential to become as popular as SMS” said Bob McDougall, General Manager, Nokia Indonesia. “Today, we are pleased to announce Nokia Messaging together with Telkomsel, who will be joining other leading operators in Southeast Asia Pacific to offer this innovative service to their customers”

Nokia Messaging is an easy to set-up and easy to use push email service which allows user to mobilize up to ten personal email accounts on one device. Nokia Messaging supports all leading consumer email solutions, such as Gmail, Windows Live Hotmail and Yahoo! Mail as well as local email service providers. The user can read, send, smart forward, reply to emails, download, read and attach files directly on their mobile phone. Push email technology ensures fast delivery of email to the mobile phone as soon as the email arrives on the email server.Nokia Messaging also allows you to mobilize your IM accounts to enable users to chat with your friends conveniently.

Nokia Messaging service is supported on a wide range of Nokia devices, including the Nokia E71, Nokia E63 and Nokia E52. The service also comes on board in the new Nokia E72 and Nokia E75.

The Latvian government is getting nervous about the level of lending coming from Swedish banks. According to the Financial Times, “Latvia’s prime minister has warned Swedish banks they risk choking off recovery in the Baltic state’s crisis-hit economy unless they resume lending.”

The Latvian authorities are complaining, it seems, that banks such as Swedbank and SEB, which dominate the Latvian market, have reined in credit as they struggle to contain rising bad loans amid the deepest recession in the European Union.

So basically, in this climate, with unemployment rising, and wages falling, and an economy contracting at nearly 20% a year, it isn’t hard to understand why not that much new bank lending is going on. Those who are creditworthy are trying hard to save, while those who need to borrow normally aren’t that creditworthy, so Dombrovskis’ plea is rather like asking the bank to subsidize new bad debts, and that is really not something you can do, and especially not when you are going along the course you are following because you wanted to, and against one hell of a lot of external advice. What kicked the whole process off was a short sharp credit crunch, but now it is the contraction in the real economy which is following its own dynamic, till someone finds a way to put a stop to it. It is the drop in output that is preventing banks from lending, and not banks being unwilling to lend that is causing the contraction to continue.

But there is another point in the FT article which should give food for thought:

Mr Dombrovskis…ruled out devaluation of the lat. While breaking the currency’s fixed exchange rate with the euro would help Latvia’s exporters, it would increase the burden of euro-denominated loans, which account for 85 per cent of lending, he said.

“We would not see much benefit from devaluation because we are a very small and open economy which means that any competitiveness gains we may get would be very short-lived,” he said. “We would redistribute wealth from pretty much all the population to a few exporters.”

Well, we haven’t advanced too far in all these months, now have we, if we are still wheeling out the argument that “external” devaluation will hit holders of euro denominated loans, since it should be generally recognized that the (very painful) internal devaluation which is now taking place is hitting Euro loan and Lati loan holders alike. And the argument is a strange one to use just shortly after the statistics office announced that due to the rapid reduction in the number of those employed and to the fact that many of them changed their working conditions from full-time to part-time, the number of hours worked in the 3rd quarter of 2009 fell by an annual 27.3%, while labour costs fell during the same time period by 30.1%. This fall in disposable income, and the continuing prolongation thereof, poses a far greater threat to the continuity of Latvian loan payments than the 15% reduction in the value of the Lat as compared to the Euro which the IMF proposed in the autumn of last year would have done. Indeed, it is, in and of itself, one of the pernicious consequences of having resigned yourself to an “L” shape non-recovery. Stress on the banking system only goes up and up, as incomes and employment fall, and the government has less and less ammunition left to counteract the contractionary pressure.

It is like sitting it out in freezing weather at the North Pole, in the vain hope that help will arrive. But help will not arrive, and the cruel truth about the post-crisis shock world we live in, is that nobody is coming to help you if you will not help yourself. In this sense, what Latvia doesn’t need is more international borrowing (hasn’t there been enough of that already) but some kind of meaningful strategy to start paying back the debt. But this means putting people back to work, and selling abroad, and financing Latvian lending from Latvian savings, and not pleading for yet more capital inflows to finance non-productive activities (attracting investment would be another matter, but as things stand right now the environment is far from “appetizing”, and according to the latest data from the Statistics Office, non-financial investment in Latvia was only 402.8 mln lats in the third quarter, a fall of 39% on the 3rd quarter of 2008).

And just to be clear, what we have seen to date is not a 30% drop in unit labour costs (which would, of course, mean a great boost to competitiveness), rather it is a drop in earnings due to the fact that the output people could have produced just isn’t needed, since no one is willing and able to buy it. In fact according to the data of the Statistics Office to hourly labour costs fell by only 3.9% in the 3rd quarter when compared with the same period a year earlier. Hardly a massive drop, and especially not when the large annual increases of earlier quarters are taken into account (see chart below). The internal devaluation has a long course still to run!

But Latvia is back in the news today for more reasons, since the constitutional court has just ruled against the government pension cuts, drawing a question mark over Latvia’s ability to meet the terms of its international lending commitments.

“The decision to cut pensions violated the individual’s right to social security and the principle of the rule of law,” the court said in its judgement, which cannot be appealed. The pension cuts – in place since July – formed a vital part of the Latvian government’s list of austerity measures, as it struggles comply with terms of the IMF-lead bailout, and the constitutional inability to implement them is another hammer blow against the credibility of the current Latvian administration.

According to the Baltic Course, Valdis Dombrovskis told Latvian State Radio that the Constitutional Court’s ruling on pensions must be carried out, and not debated. I am sure this will really come as music to the ears of people in Brussels and Washington. Basically pension reform forms a key part of the mid term strategy for sustainability of Latvian finances, and without the ability of the Latvian government to carry these out, then frankly the coherence of the whole strategy falls apart. If the Latvian constitution does not permit pension changes, then the Latvian constitution has to be changed, and the only surprising thing is that all this wasn’t foreseen when the initial loan negotiations took place in late 2008. Basically, it is impossible for the EU Commission and the IMF to accept any other view, since if any state could ring fence a whole part of social provision before entering debt negotiations, then non of the structural reform programs could possibly work. This may seem harsh, but it is the price you have to pay for becoming insolvent as a society. Latvia’s problems are not short term liquidity ones, but problems of the sustainability of an entire economic and demographic model, and, as in the case of Greece, these problems will not be solved by two or three years of (rather painful) fiscal deficit cosmetics. Real changes need to be made, and especially in raising the long term growth potential of the country, and frankly it is these changes which we have yet to see evidence for.

The issue is not simply one of limping into the Euro in 2012, even if as Mark Griffiths, the IMF’s mission head in Latvia, said in Riga last week the Latvian government does face a lot of “hard work” in trimming the budget deficit enough to qualify for euro adoption, and how much more so if they cannot constitutionally implement the cuts they agree to.

“The key is meeting the deficit targets, and meeting the Maastricht criteria and euro adoption, that’s the path,” Griffiths said. “The government needs to work hard over the next year to find the measures which will deliver that adjustment to meet those targets. It’s going to be a challenging task.”

Oh yes, and Latvia was also in the news yesterday for another reason, since Latvian stocks dropped the most among equity markets worldwide as small investors sold stocks before the government starts to tax investment gains. The OMX Riga Index fell as much as 4.3 percent to 271.55, its lowest intraday level since August 21. In dollar terms, the drop was the biggest among 90 benchmark indexes tracked by Bloomberg. The reason for the sell off was that Latvia’s 2010 budget includes measures which will impose taxes on dividends, gains from trading stocks and bonds and interest income. These measures were agreed to in order to ensure the continued transfer of the 7.5 billion-euro bailout from the European Commission and the International Monetary Fund.

Latvian investors have increasingly sold their holdings ahead of the Dec. 31 deadline. Dividends and interest income will be taxed at 10 percent, while tax on gains from trading stocks and bonds will be 15 percent.

Finally one that wasn’t in the news, but should have been, since while everyone knows that at 20.3% Latvia’s unemployment is the highest in the European Union (see chart below), what they don’t know is that more Latvian’s than even are now being forced to leave their country in search of work.

According to a report by Oļegs Krasnopjorovs, economist with the Bank of Latvia, during the first half of 2009 8,300 Latvian residents left for Great Britain, a twofold increase over the year earlier period. 3,600 people emigrated to crisis-ridden Ireland in the first 11 months of 2009 – 3% more year-on-year. Among the new EU member states, Latvia has seen the sharpest increase in emigration to these two countries.

According to Krasnopjorovs, the data (which comes from the UK and Irish social security systems) confirm the trend identified by the Latvian Statistics Office, who examined data on long-term migration. In the first ten months of 2009, the number of long-term emigrants was 6,300, up 18% more year-on-year; moreover the steepest rise took place in the last few months, reaching a ten-year peak. For several years now the number of emigrants has exceeded that of immigrants in Latvia, with the exception of the second half of 2007 when a sharp rise in salaries and a steep drop in unemployment were fueled by the credit and construction boom, leading to labour force shortages and the expectation that incomes would rise even further.

The real problem here, of course, is that the Latvian economy remains mired in deep recession, and shows few signs of real recovery, something which is not surprising given that domestic consumption is in limbo land (where it is likely to stay), while the Prime Minister seems to attach little priority to boosting exports, and regaining competitiveness. Indeed, the contraction has rather gathered than lost momentum in recent months, and on a seasonally adjusted basis Latvian GDP fell another 4% between the second and third quarters of 2009. This was much faster than the 0.2% contraction between Q1 and Q2.

Year on year Latvian GDP fell by 19.0% in the third quarter.The decrease was largely due to a 28.7% drop in external trade (share in GDP 15.6%), a 18.2% one in transport and communications (12.5% GDP share), an 17.4% fall in manufacturing (10.2% GDP share, incredible) and by a 36% drop in construction (7.5% GDP share, not far below manufacturing).

Private final consumption fell by 28.1%. Government final consumption decreased by 12.4%, while expenditure on gross capital formation fell 39.4%. Goods exports (68.2% of total exports) fell by 11.7% and services exports by 20.5%. Goods imports (82.1 % of total imports) were down much more sharply – by 36.6% -and services imports by 29.1%. Which meant net trade was positive, otherwise the fall in GDP would have been greater, and nearer to the levels seen in domestic demand.

And entering the fourth quarter there were few signs of any real improvement. Retail sales fell in October by 1.3% from September (on a seasonally adjusted, constant price basis).

Industrial output, however, seems to be holding up a little better, and output has stabilized since the spring. The problem is that manufacturing industry is now such a small share in GDP that it will be hard to pull the entire economy on the basis of anything other than very strong rates of increase. Industrial production was up in October by 0.1% over September, marginal, but at least it wasn’t a fall. Unfortunately most of the increase was in the energy sector, with electricity and gas up by 10.3%, mining and quarrying contracted, by 2.1% as did manufacturing, by 1.9%.

The largest third quarter capital inflows registered under the capital and financial account were the result of government borrowing from the IMF-lead support program. There was some new foreign direct investment in Latvian companies to the amount of LVL 370.2 million, which to some extent offset direct investment outflows. Net external debt shrank by LVL 0.5 billion in nominal terms, but due to the fall in GDP (as I explained earlier) the ratio of net external debt to GDP posted only a tiny drop, reaching 56.4%, and gross external debt to GDP (excluding foreign assets) was up, reaching 145.8%.

So, as I say, a start has been made, even if there is still a long, long road to travel. Internal devaluation is the chosen path of the Latvian people, and the best thing I can suggest at this point is to get it moving in earnest (in fact there is some evidence from November producer prices that the rate of price fall is now accelerating), and that Latvia’s leaders start to value what they have (that is, export potential) instead of dreaming of what they can no longer have (dynamic domestic consumption driving growth). Living in the past is never a good idea, not even in the sentimental moments of Yuletide. A Merry Xmas to you all!

Like much of the economy, Jordan’s media sector has been affected by the global recession, with revenue down and a round of belt tightening the order of the day, though even in difficult times the industry has been looking to improve both its quality and its bottom line.

The global economic crisis is having an impact on the Jordanian media sector, with advertising revenue for the first nine months of the year down by 20% compared to the same period in 2008, according to industry figures. This is a sharp turnaround from the past few years, which have seen double-digit earnings growth. If the current trend carries through to the end of the year, advertising revenue could fall to around $240m, down from the $303m of 2008.

In mid-November, the Jordan chapter of the International Advertising Association (IAA Jordan) announced it was launching a media awareness campaign to promote optimism in the economy and, just as importantly for the sector, the importance of maintaining advertising during the downturn.

According to Karim Abu Khadra, the president of IAA Jordan, the campaign will put the spotlight on firms that achieved growth thanks to continued advertising. Rather than reduce spending on advertising, as was so often the case in times of recession, studies showed that increasing promotional outlays could help a company weather hard economic times, he said in an interview with local press on November 15.

“We were able to take advantage of this global crisis to stop, think and carefully plan for future and the changes that we, as an industry, will face in the coming years,” said Abu Khadra. “We were also able to co-operate, exchange ideas and expertise to come up with this campaign – which we believe – is crucial for creating the behavioural change needed to face economic challenges.”

While the crisis has focused attention on the need to strengthen advertising income and revenue streams in the media sector, another initiative has been launched to improve the quality of Jordan’s media offerings, through the inauguration of a new training complex for media professionals in the Arab world.

The vehicle for this endeavour is the Jordan Media Institute (JMI), the brainchild of Princess Rym Ali, wife of Prince Ali Bin Al Hussein, but better known to many as Rym Brahimi, a producer and reporter with CNN following stints with the BBC and the Bloomberg news agency.

Located in central Amman, the JMI will focus on training and refining the next generation of media professionals in the Middle East, with plans to have two main streams, a masters programme and journalism training programmes, both of which will predominantly be taught in Arabic.

The year-long master’s programme, which will have its first intake in early 2010, will offer cross-media platform training in print, online, television and radio journalism, equipping students with the skills to meet the changing needs of the industry. Along with mandatory courses in reporting, writing, media law and press ethics, there will also be specialised training in investigative journalism, together with business, scientific and social affairs journalism.

The lower-level training courses, being developed in cooperation with local media and other academic institutions, are intended to offer those already working in the industry supplementary courses, while newcomers will receive introductory lessons.

Founded in 2007, the idea for the JMI grew from industry demands for quality media personnel, according to Princess Rym, with the shortage of qualified staff having been driven, in part at least, by the rapid growth of media across the Middle East.

“A lot of people complained of not being able to hire people at the highest levels – good journalists, critical thinkers who were able to write properly in Arabic,” she said in an interview with regional media in mid-October.

Jordan is by no means alone in putting in place media training facilities, with a number of universities offering courses in journalism and production across the Middle East. However, with the planned initial intake for its masters course being just 20 students, the emphasis of the institute’s programmes will be quality, Princess Rym added.

Despite the difficult economic times, the JMI has been successful in gaining support from a range of sources, both local and international. In May last year, the European Commission and the Ministry of Planning and International Co-operation inked an agreement under which the commission would provide $1.4m to support the JMI.

In mid-October, Zain Jordan – part of the Kuwait-based mobile telephone corporation Zain – announced it would fund a postgraduate scholarship for a Jordanian journalist studying at the JMI, while the institute has also been given support by advertising and international media consultancy agency Saatchi & Saatchi.

Both the positive press and a focus on knowledge within the industry will likely provide a much-needed boost to the Jordanian media sector, considering the challenges the country, and indeed the region, has faced over the past year. On a more practical note, by establishing Jordan as a centre for journalistic educational excellence, the JMI could well attract more investments in the local media sector, serving to improve quantity and quality.

As demand continues to rise, Ras Al Khaimah (RAK) is looking to bolster its power infrastructure. With plans for several new power plants under way, the emirate is following a strategy that utilises both traditional and sustainable energy sources, falling in line with global trends to maintain efficiency and respecting environmental concerns.

The need for greater power capacity was highlighted this summer, with power cuts regularly affecting areas in the northern emirates. Sharjah was most affected by the cuts, but regular power and water outages were also reported in RAK by local media. Peak energy demand coincides with the hot summer months and people turning to their air conditioning units. Electricity infrastructure throughout the region is straining to keep up with the demands of growing populations and industrial activity in recent years.

While RAK has a relatively small population – at an estimated 231,000 – its industrial sector is coming into its own. The RAK Free Trade Zone (RAK FTZ), for example, enjoyed steady growth through both 2008 and 2009, defying global recessionary trends. It hosted close to 5500 companies at the end of last year and has sought to add another 2000 by the end of this year. It had recruited 900 new companies by the end of the first half.

In an indication of the health of the industrial sector, RAK Ceramics – one of the largest industrial players in the emirate – expanded production by 10% this year, despite rocky global conditions. It now exports to 126 countries, with strong demand from regional emerging markets like Iraq and Algeria, according to media reports.

The RAK Investment Authority (RAKIA) has been at the forefront of promoting industry as a means of growth for the emirate over the past several years. It has registered 450 industries to date and invested billions of dollars in development. So, with so much focus on industrial growth and actual production increasing continually, significant strain is being placed on utility infrastructure.

As is the case elsewhere in the region, water supply remains a challenge. With limited freshwater resources, the UAE depends heavily on energy-intensive desalination processes. RAK is chipping away at the issue through both public and private solutions. The Al Ghurair Group, a UAE-based retail, manufacturing and industry investment company, recently broke ground on the first membrane sewage treatment plant in the emirate, located in the village of Masafi, which will increase efficiency and produce water suitable for irrigation. Currently, Masafi must bring in all its water via tankers.

Greater capacity is on the way. In April the Federal Electricity and Water Authority (FEWA) announced plans for a 10m-gallon-per-day desalination plant in RAK scheduled for completion in 2011.

Meanwhile, RAK has been steadily moving towards increased power capacity throughout the year despite challenges stemming from the recession. In March RAKIA announced plans to build a 400-500-MW coal-fired plant over the next two years, with a scope to eventually expand capacity to 1000 MW, making it by far the biggest power plant in the emirate. RAK already uses coal to power its cement factories. RAKIA officials said it would utilise the latest technology available to minimise the environmental impact of coal. The feedstock will come from a joint-venture coal mine in Indonesia that is expected to yield 15m tonnes a year by 2014, 8m-9m of which will be exported to the emirate.

RAKIA is also pursuing large-scale green energy solutions, including the construction of a solar “island” that would eventually be anchored in the sea and used to create a thermal energy reservoir for steam turbine electricity plants. The plan is currently undergoing feasibility studies and RAKIA recently announced that it may expand the proposed dimensions of the solar island based on promising initial results.

Until new plans come on-line, the supply-demand imbalance is set to remain. In November RAK secured 400 MW from the federal power grid in order to ease the power gap in the short term. While this new supply will help to ease the shortfall now, more expansive long-term solutions are needed – and the emirate seems to be well on its way to finding both traditional and green answers.