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Worker at Pearl GTL, Qatar flickr/royaldutchshell

Worker at Pearl GTL, Qatar flickr/royaldutchshell

Among the greater macro-economic shifts which we can expect for this new century, is the disappearance of major business channels as we have known them, and the appearance of new ones. The next one may well be Chinese countries establishing an industrial business stronghold in Gulf countries, namely Qatar. Unencumbered by governments, be it their own or the ones in client countries, Asian countries are reaping the spoils. This trend seems to be setting in, and will therefore investor choices heavily, for years to come.

Since the 1990s, Asian firms started slowly turning away from their initial markets, to address emerging countries, in the hope to stabilize and find new growth areas. The jackpot turned out to be Qatar. Here is a non-comprehensive list of large industrial deals performed in Qatar over the past few years, by Asian firms.

10 km away from Doha, a new high-tech desalination plant is to be built, “RAF A2” (1), to bring an additional 36 million gallons of fresh water to the capital, daily. The 500 million-dollar project is just the start. Not only will maintenance and upgrades pad the envelope for the engineering companies, but as Qatar’s population expands, the total fresh water production level is to be brought to 350 million gallons per day (from a current 328) in 2018. Of the three firms selected to build the plant, one is Spanish (Acciona), and two are Asian (Mitsubishi – Japan, and TCL – Thailand). These firms owe their success to their state-of-the-art water technology (reverse osmosis (2)), which Qatar simply doesn’t master – nor will they anytime soon, given the state of their technology.

In 2011, the Hyundai engineering corporation (3) was handed three-quarters of a billion dollars, to build the giant Hamad hospital complex (4). In view of the FIFA world cup, Doha knows it will be under international spotlights in 2022, and scrutinized both on its industrial development and on its human rights observance. It therefore chose to build a giant hospital complex, with special attention brought to women (gynecology and obstetrics) and children, so as to be able to process the increased attendance and improve its international image. Again, being utterly enable to build such a complex (or even draft requirement specifications), it called upon the Korean engineering firm which, 2 years before, had won the Gold Medal for “top civil engineering structure”, thanks to the Ma-chang great bridge.

In the lower (yet not less lucrative) B2C segment, Samsung backlashed at business analysts recently, who had predicted record losses in smartphone sales on all emerging markets, Qatar included, by posting record profits (5) unexpectedly.

Samsung is the most telling examples: in 2012, Samsung landed a deal (6) which was considered “unusual”, to say the least. The Qatari Lusai Real Estate Development company tasked Samsung with building a new city. This mega-project included the construction of power plants, highways (some buried), bridges, and utilities networks. The amounts associated to the deal were left undisclosed, but one can guess an order of magnitude, given the scale of the order and Qatar’s financial reserves. Samsung knows it can rely on this market in the long term, because Qatar may be sitting pretty for the moment, but it is at the dawn of a national challenge. Doha knows oil and gas reserve will not last forever, and needs to diversify its economy. In 2015, Qatar’s revenues still depend almost exclusively on fossil fuel. In short: Qatar needs to build a country, and it doesn’t have the first engineer to do it. Luckily for Korea, Samsung has them all.

How does Samsung do it? It reined in Qatari officials. As one of the most commercially voracious companies in the field, Samsung is one of the few businesses which remains unimpressed with Qatari money. In fact, the Samsung Corporation is worth more than all of Qatar. And Qatar needs Samsung a lot more than Samsung needs Qatar. Over the years, the Korean firm has built a solid credibility base and influence network. With these weapons at hand, Qatari decision-makers are afraid to displease Samsung, which would be well able to pull the rug under anyone’s feet, something that scares Qatari officials.

Although it may be hard for some readers to believe, these truths are supported by the fact Samsung even reined it its own government. In 2012, in an article named “South Korea, the Republic of Samsung” in the Washington Post, Woo Suk-Hoon wrote “You can even say the Samsung chairman is more powerful than the President of South Korea. [South] Korean people have come to think of Samsung as invincible and above the law”. In the following presidential debate, Lee Jung-Hee, one of the candidates, added: “Samsung has the government in its hands. Samsung manages the legal world, the press, the academics and bureaucracy”. The Korean success story has arrived to the ears of enough people for everyone to know that no one contradicts Samsung and walks away.

Asian countries, namely Samsung, built their empire on peddling goods to the western world, namely North America and Europe. Now that these markets have reached maturity, Asian industrial firms have turned to new ones to consolidate and further expand. They still have the technical know-how which gave them their initial success. Except now, they have deep pockets and the authority that comes with it. In the next major industrial deal, Qatar’s public works authority, Ashghal, is due to select its engineering firm to expand and upgrade the capital’s water network (the so-called Idris project). Given the influence Asian companies have developed to coax Qatari officials (including Nasser bin Ali Al Mawlawi, Ashghal’s president) into handing over their national industry deals, it is very likely that and Asian firm will once again be selected. This is something investors about to choose their engineering vehicles should keep in mind.

References

(1) http://www.water-technology.net/projects/ras-abu-fontas-raf-a2-seawater-desalination-plant/
(2) https://www.espwaterproducts.com/about-reverse-osmosis/
(3) https://eng.hec.co.kr/
(4) https://www.hamad.qa/EN/Pages/default.aspx
(5) http://www.thepeninsulaqatar.com/business/international-business/359273/samsung-electronics-tops-q3-smartphone-sales-in-emerging-markets
(6) http://www.constructionweekonline.com/article-16336-samsung-inks-major-infra-deals-for-lusail-city/

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Economy

How People Around The World Are Investing Their Money

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One thing that everyone should aim to do with their spare cash is to invest it – as wisely as possible, but at least in a way which is going to lead to potentially high returns. If done correctly and with a bit of good fortune, it is perfectly easy to improve one’s wealth to a considerable degree this way, and it is therefore well worth people considering this.

As it happens, there are a lot of investment options that people are making use of all over the world, with some that are especially popular right now. Let’s take a look in some detail at some of the major ways in which people are investing their money – and making some considerable gains, in many cases.

Stocks & Shares

Arguably one of the most popular forms of investment is stocks and shares – which can be incredibly lucrative if it is done in the right way, and with the right set of circumstances behind an investment. Indeed, stocks and shares remain the number one investment that people are engaging in every day throughout the world, and with good reason. Not only is it potentially something that can bring considerable returns, it is also relatively straightforward to get into and learn at least the basics of, making it a very simple and easy form of investment for most people.

It also doesn’t require a huge amount of money to get going – although having that is obviously not going to hurt one’s chances of success starting out! In fact, it’s doable to get going with stocks and shares with literally a few spare pennies – so it really is something that pretty much anyone can get into and make use of. It can also be a good way to diversify and widen out a portfolio that may include other forms of investment as well.

Savings Accounts

Although many people think of investment and savings as two different things, they are really just two sides of the same coin. You can think of saving as a form of investment, especially if it is done in the right manner and with the right approach. Of course, in order to find success with this, it is important to make sure that you are choosing the best savings account there is. That means one that has a high enough interest rate for it to be worth it, as well as having other functions that might be important to an individual – such as the ability to take money out whenever you need to, for instance.

With interest rates diving all over the world, this is quickly becoming one of the less popular forms of investment – but for now it is still worth considering, as it can be a good way to at least store your spare cash as necessary. If nothing else, you’ll probably find that you are able to find yourself in a much better financial position this way soon enough, even if that doesn’t happen as quickly as it might with certain other investments.

Cryptocurrencies

Although there is some controversy around cryptocurrencies, there is no doubt that it is one of the world’s most popular forms of investment right now. There is also no doubt that it’s possible to make a lot of money this way – as some of the world’s richest people have done so already. Even in a much lesser sense, however, it is perfectly possible for an individual with a regular amount of wealth to make money investing in cryptocurrencies. And generally, this is done in a few key ways.

First of all, you can simply buy some crypto and then hold on to it, hoping for its value to improve and selling it on once it has done so. Alternatively, you might want to consider trading crypto coins by buying one kind and then trading into another as you think it might be lucrative. This takes a bit more knowledge, patience and skill, but the returns can be significant. Either of these can work very well, however, and they are worth thinking about at the very least.

A related form of investment, in that it too relies upon blockchain technology, is NFTs. These pieces of art can be bought and traded as above, and some of them are creating huge amounts of money for people right now, so it might well be worth getting into.

Spread Betting

Another form of investment that a lot of people are getting into in the past few years is something known as spread betting. This is where you place bets on a variety of outcomes on a particular event, whether it’s a sport, a political event or whatever else it might be. With the right bet and the right outcome, this can be a really effective way to make some money, and it is best done with the attitude of it being an investment rather than a bet – as this helps in keeping things a little more sensible.

To make the right decisions, it is helpful to be patient and work out what kinds of results are likely to occur, and to find them at a good price. Searching for NHL picks and horse racing tips is a good place to start for that. However it might be done, with care and attention this can prove to be a decent way to invest some spare money, so it is definitely something to think about.

Bonds

If you are particularly keen for a very safe form of investment, it is well worth looking into bonds. Bonds are something like a savings account, but with an important difference that needs to be understood well in order to make good use of them. Essentially, you buy a bond and you will be paid back your initial investment, plus any interest that may have accrued along the way too. They are very low-risk and yet can bring you a lot of money over the long-term, so they are worth looking into for pretty much anyone looking to make a little money on the side.

Bear in mind that you won’t be able to access the money during the fixed rate period, so you should only invest whatever you don’t need to have immediate access to. However, they offer higher interest rates than your average savings account, so it can be worth it.

Precious Metals

Another form of investment that many people around the world are investing in right now is precious metals. In truth, these are always popular, and it’s not too hard to appreciate why. After all, precious metals will generally always retain their value even when everything else in the world is going through turmoil. That is especially true of gold, which still holds the standard that the global economy works by – with the exception of cryptocurrency.

As you can see, precious metals are almost certainly worth considering at the very least if you want to invest your money wisely. But make sure that you are only putting what you can afford to lose into this investment, like any other. Although it is not the highest-risk investment, it is not zero-risk either.

Those are just some of the most popular investments around the world that people are making good use of right now. Any of these could be lucrative and useful for you, so take a look at them in turn and see whether any of them are suitable for your needs and purposes. You might be surprised at how effective they can be.

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China

Ridiculous Tariffs on Wines – China Australia Trade War Explicated

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China Australia Trade War
Scott Morrison (right) has not yet been able to secure a bilateral meeting with Chinese President Xi Jinping (left).(ABC News)

Earlier in November 2020, Communist China slapped Ridiculously high tariffs up to 212.1% on Australian wines. These tariffs were in the response of ongoing trade war between Communist Party of China and Australia. China is the biggest importer of Australian wines making up a whopping 39% of Australia’s total wine export. Australia has already raised concerns at a WTO meeting about China taking measures against its barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton, according to a reuters report.

How did China – Australia trade war begin?

China and Australia shared one of the best times in their relationship after Kevin Rudd from the centre-left Labour party came to the power in Dec 2007. During his leadership Australia decided to pursue appease China policy which included steps such as:

  1. Chastising Taiwan for its renewed push for independence and reiterating support for a one-China policy in favor of People’s Republic of China. (Source: The Age)
  2. Signing a A$50 billion deal with PetroChina in 2009 (largest contract ever signed between the two countries) that ensures China a steady supply of LPG fuel until 2029.
  3. Unilaterally announcing departure from Quadrilateral Security Dialogue to appease China.

Nosediving of China – Australia Relationship

The course of this partnership changed when Julia Gillard from the centre-left Labour Party took over the leadership and initiated closer partnership with United States. This included revival of interest in Joining Quadrilateral Security Dialogue and stationing of US troops near Darwin, Australia.

In 2013, Tony Abbott from centre-right Liberal Party took over the leadership. During his term Australia saw some confusion in its China Policy. His Defence Minister Senator David Johnston told in a statement that Australia is seeking to balance their relationship between China and the United States. It was during his term when Australia and China established a Free Trade Agreement.

However, the relationship between Australia and China took a downturn in 2015 when Malcolm Bligh Turnbull from the centre-right Liberal Party came into power. This is the point in history which has led to current trade war situation between Australia and China.

  1. Australia became the strongest opponent of China’s territorial claim in South China Sea.
  2. Banned foreign donations to Australian political parties and activist groups in a move to target Chinese interference in Australian democracy.
  3. Revived Quadrilateral Security Dialogue with United States (Donald Trump), India (Narendra Modi) and Japan (Shinzo Abe). This was the time when Quadrilateral Security Dialogue saw hope of becoming something bigger as all four countries had centre-right governments who had a clear China Policy.

2019 Onwards: China – Australia Trade War

In 2019, relationship between the two countries further took a dip with Scott Morison from centre-right Liberal party becoming the Prime Minister. During his leadership:

  1. Australia signed a letter condemning China’s mistreatment of Uyghurs and other minorities.
  2. Suggested investigating the cause of Covid 19 in April 2020, which resulted into an angry response from China threatening to reduce Tourism and Trade.
  3. Opposed the Hong Kong National Security Law in June 2020.
  4. Reiterated its support for ethnic minorities in China and freedom in Hong Kong in October 2020
  5. Demanded a formal apology from China for posting a fake image of an Australian soldier holding a bloodied knife against the throat of an Afghan child

In conclusion, these continuous attack on China made China so angry that they deliberately leaked a list of 14 points suggesting why China is angry at Australia

China’s attempt at “buying” left wing politicians around the world

Recent trend is suggesting China’s attempt at “buying” influential left-wing politician around the world. In November, 2017 Australia’s Labour Party’s MP Sam Dastyari went against his own party on South China Sea. He later quit his party after he was found of taking financial favours from China.

In 2008, India’s Centre-left party – Indian National Congress signed a Memorandum of Understanding with Communist Party of China. Its contents are still hidden from the Government of India and the people of India.

Recent US Report has shown concern on President Elect Joe Biden not clearing doubts on his China policy.

How Can we Help Australia Post Ridiculous Tariffs on Australian Wines?

In 2020 China has directly or indirectly impacted many of our lives. Some of us have lost our jobs, some of us are taking a reduced salary. In fact, some of us are sitting at home instead of travelling; while some of us have lost our loved ones only because of communist party was incapable of controlling a virus outbreak.

As the entire world is struggling with this virus, Chinese economy continues to be on path of surpassing the US. Therefore, we should pledge to minimize buying Chinese products. It might be impossible to completely boycott Chinese products, but we can at least minimize it.

Install Cultivate Chrome Extension (non sponsored/affiliate link – We are not getting paid to post this). This plugin works on both Google Chrome and the new Microsoft Edge. It helps you understand the origin and seller location of a product on Amazon. It is a great tool to minimize your dependence on Chinese products. If you are lucky, this extension will also suggest some Made in USA alternatives

Buy Australian Wines – Australia desperately needs a new market for its wine and other products. This New Year and Christmas season, we should pledge to celebrate with at least one Australian wine!

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Economy

Seasif’s Franco Favilla discusses the post-Covid economy and the price of gold

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Although the Covid-19 pandemic isn’t over yet, there has been much discussion on the idea of a “post-Covid” economy, especially with the beginning of vaccination efforts in some countries. With markets throughout the world suffering the economic effects of the virus, experts have been looking towards the future –– and one of the topics that often comes up is the price of gold.

In August, the price of gold exceeded US$ 2,000 an ounce for the first time, driven by multiple factors. However, in November, advancements in Covid-19 vaccines led to a decrease in this trend, a result of the turbulent period we are going through.

“Regardless of the market volatility and the price changes that could occur over a given period of time, the fundamental fact is that the price of gold over the course of 2020 has reached an all-time high, and this, in my opinion, is very good news for the world economy,” explains Franco Favilla, founder and CEO of Seasif, a multinational company active in the extraction and trading of gold and oil.

According to Mr. Favilla, the main problem of the pre-Covid economy was the completely arbitrary nature of international finance. At one time, a ton of gold corresponded to a ton of currency, but since the 1980s, and at an impressive rate since 2000, the gap has widened enormously, so much so that today the relationship between the world’s currencies and gold is enormously unbalanced.

Total gold reserves around the world cover only 30% of currencies. This means there is nothing to cover and guarantee the value of money. In short, money has turned into a pure convention, a pure agreement between parties acting outside the market. Gold, on the contrary, guarantees democracy, because it protects savers and the market, offering an objective value for parameterizing every transaction. 

“My hope, therefore, is that the crisis caused by Covid-19 will help to change finance, making it less ‘phantom’ and more linked to an objective dimension, based on gold, with obvious advantages for the real economy. Gold protects consumers, the most important component in any economic system: if you don’t have a market made up of consumers with a certain level of wealth, how can you sell? To whom? Consumer protection must come first, and gold is one of the main ways of protecting them,” states the CEO of Seasif.

Sustainability has also been at the forefront in discussions about the post-Covid world, as countries look towards establishing a more resilient global economy, one able to better withstand such events in the future –– and “green gold” may well be a part of that future. Green gold, in a sense, can be considered the “gold of the future” due to its ethical and sustainable extraction process. Seasif produces green gold, with a department entirely dedicated to green, and has allocated economic incentives to its continued production.

Even as 2020 draws to a close, the future may still look uncertain. But for those searching for greater security, gold may be one of the few certainties left.

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