Friday, 12 December 2008

3 further ideas to help the UK through the current economic storm

Purchasing the surplus housing stock of troubled home builders
The Government could consider purchasing surplus stock, particularly at fire-sale prices, from companies such as McCarthy & Stone and Crest Nicholson (both of which are restructuring and have roughly 5,000 unsold housing units) the government would be able to make an immediate impact on social housing, unclog the balance sheet of troubled homebuilders and allow construction activity to resume

The creation of a public fund for innovation
Also, establishing a Fund to support innovation in manufacturing and export oriented industries could incentivise R&D units and university based research to focus on creating goods and services for export. The UK economy will need to position itself for a changing economic landscape – one in which consumption and consumer spending will become less reliable engines of growth and external markets will become as much a destination for export as they were a source of goods and services imports

Long term tax breaks for export oriented and manufacturing sectors
Finally, the promotion of the UK (through tax credits and regulatory reform targeted to foreign entities) as a destination for cash-rich companies in China, India and a Middle East as a base for high-end manufacturing and export oriented industry.

Wednesday, 10 December 2008

Extraordinary solutions to extraordinary times, my ideas to help the UK economy through the financial crisis

Speaking to the CBI in November this year, Gordon Brown said “All over the world, policy makers are leaving behind the solutions of yesterday and recognising that extraordinary times require extraordinary actions”. While I expect the most effective solutions to the current crisis will be monetary and regulatory in nature, I propose a couple of ‘out the box’ ideas that I believe will help the most vulnerable in society while hopefully reducing the impact of oncoming recession.

The creation of community banks
Small businesses account for more than half of Britain’s GDP and employ more than 13 million people across the country. I believe the government should promote the formation of strategically placed community banks to help ensure a fair supply of credit to small businesses. These banks could be run by healthy banks (HSBC, Santander) in equity partnerships with government who can target them at specific geographic areas ensuring the most vulnerable groups get the help they need.

A Government sponsored asset manager
I think it would be sensible to establish a Government Sponsored Asset Manager whose sole mandate would be to bid and purchase illiquid and distressed assets from banks. Many assets on bank balance sheets are mispriced owing to the near failure of trust in the interbank lending market. An independent entity that is a ‘buyer of last resort’ – one that has a mandate to analyse and make last bids on those assets – would allow troubled banks to improve solvency. The creation of such an entity should be considered within the context of regulatory reform of financial markets.

There will be more suggestions soon....

Add to Technorati Favorites

Monday, 8 December 2008

The menace of terrorism will block South Asia’s efforts to alleviate poverty and generate economic growth

The incident in Mumbai is bad not only for India, but for the entire region. It should be condemned by all people in South Asia and they should be united in their resolve to ensure it doesn't happen again in the region. Half of the world's poor live in South Asia and such incidents will keep the region in poverty and hold back efforts to achieve economic growth and poverty alleviation.

The Commonwealth Business Council has been working with business and governments and SAARC to enhance trade and investment linkages in the region to underpin wider economic growth. After the events in Mumbai, international businesses are more committed than ever to enhance the partnership with South Asian business. I hope that the leaders and people of South Asia will be even more determined to fight the menace of terrorism for the sake of economic development in the region.

Add to Technorati Favorites

Wednesday, 3 December 2008

India must take immediate and large-scale action to prevent repeats of last week's attacks

My thoughts are with the families of those caught up in the terrible attacks in Mumbai last week.

India cannot ignore this incident; fear of repeats may drive business from India. Both World and Local business expects a clear response from the Indian Government and large scale steps to improve security and administration in order to minimise the chance of a similar attacks occur again.

I welcome the appointment of Palaniappan Chidambaram to the role of Home Minister, he has proven himself facing the challenges in the finance portfolio, and must now make tackling security and terrorism his number one priority. Retaining the confidence of the international business community is essential, more action must be taken, and more heads must role in both Mumbai and Delhi. India must now take immediate and strong action, in the manner of the US and UK following similar incidents, small steps will not inspire confidence. India must act like a world economic power to give confidence to businesses already in the country and to those on their way.

I am a regular visitor to India and have stayed in the Taj and Oberoi Hotels many times, last year I was in the Taj with over 100 business leaders and am determined to return with even more.

Add to Technorati Favorites

Friday, 8 August 2008

What to do in the Wake of Doha Collapse

The Collapse of the Doha talks in Geneva last week is a shame, it weakens the WTO as an international institution and gives us a worrying view of the international communities intransigence even when perusing things that would benefit all, namely Freer Trade. What will happen when the harder and more devise issue of Climate Change is up for debate?

I am sure Pascal Lamy will attempt to resurrect the Round, but when is another matter, the upcoming US elections will make this all the harder, with both candidates advocating differing positions - negotiations may well be back at square one before they even start.

In the mean time then, I believe that each Country represented at the talks should demonstrate its commitment to Free Trade, by unilaterally putting in place what they would have accepted in Geneva. If India and China, for example, were to open their agricultural industries, even with the contentious ‘safeguard trigger’ in place, trade would still increase and all would benefit.

This I believe is the best way forward; it will demonstrate the international community’s commitment to Free Trade, and make resurrecting the Round easier as everyone’s position will be readily apparent when talks eventually restart.

Tuesday, 5 February 2008

Africa as an Investment Destination

In the past six months we have fortunately seen an unprecedented interest in Africa as an investment destination. Interest in African commodities was always there and the surge in commodity prices has helped companies to take notice of other areas as well.

For the first time, banks, financial institutions and private equity firms have started looking to invest in African services and markets.

This was in part helped by the fact that countries like Sierra Leone, Congo and Rwanda have successfully moved ahead from their war torn past to promote good governance and economic liberalisation.

Interest in Africa was palpable in Kampala when we organised the Commonwealth Business Forum in November 2007. Leading multinational and private equity firms including Blackstone, CDC, Barclays showed interest in investing in the Continent.

However, unfortunately because of the Kenya crisis, the goodwill is wearing away. This unrest will affect the whole of East Africa. It will be difficult to sustain investors’ confidence under such circumstances. Kenyan and other African leaders must find a speedy solution to the crises.

Wednesday, 16 January 2008

Gordon Brown's Visit to India

British Prime Minister Gordon Brown’s India visit is imminent and the CBC is looking forward to seeing more business partnerships between the two countries. I am in India at the moment and it is heart warming to see the strides that the business community is making in India.

UK and India are engaged in one of the most profitable and significant bilateral trade and investment partnerships in the world. Increasingly, most major British companies consider it essential to have partnerships in India. And a growing number of Indian companies are getting on the LSE and the AIM listings.

I have through the CBC worked very closely with business leaders and government ministers to enhance bilateral trade and strike up partnerships in areas of finance, technology and innovation. A lot of work has gone into trade liberalisation. CBC also regularly organises business meetings in London with visiting Indian ministers.

Highlighting the growing influence of India, CBC is hosting its annual Global Business Leaders Forum on March 18-19 in Mumbai to be attended by Paul Skinner, Chairman, Rio Tinto; Gary Hoffman, Vice Chairman, Barclays; Richard Laing, Chief Executive CDC; John Studzinski, Senior Managing Director, Blackstone Group; Rahul Bajaj, Chairman Bajaj Auto, Anil Khandelwal, Chairman, Bank of Baroda; Naina Lal Kidwai, Country Head HSBC; and ICICI CEO KV Kamath. The business leaders will discuss ideas and exchange views and experiences on how to grow in a fast changing global business environment.

The Commonwealth Business Council (CBC) will also release the much-anticipated report on Indo-UK Trade in March 2008. The submission is based on the Council's ongoing work to achieve its objectives which is to promote global trade and investment.