Global Business Enivronment

8/16/2019 Global Business Enivronment

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Global Business Enivronment

1.What is the role of it in global Business?

Innovation is the great way to success in this digital age. The path of innovation in business

means doing something different, smarter or better that will make a positive difference in terms

of value, quality or productivity by using emerging or proved technologies of the world. The

technology which has already proved itself in last two decades is of course the information

technology (IT). It has dramatically changed the lives of the individuals and organisations.

Currently online shopping, digital marketing, social networking, digital communication andcloud computing etc are the best e amples of change which came through the wave of

information technology. !ow accurate business planning, effective marketing, global sales,

systematic management, real time monitoring, instant customer support and long term business

growth cannot be achieved at the optimum level without IT.

The importance of IT in Business

The success of every business depends on certain factors. "ome of which are accurate analysis,

choosing the right technology and the future vision. #esearch from the last two decade has

proved that those organisations that do invest in technology and choose the path of innovation

increase their market share, financial figures and overall competitiveness. Information

technology is the only technology which provides you the opportunity to analyse specific data

and plan your business $ourney accordingly. It also provides you many tools which can solve

comple problems and plan the scalability (future growth) of your business. In the modern age, it

is proved that digital marketing is a great tool which let you promote your products or services tothe global market while sitting in the comfort of your remote office or home. %nd thanks to the

cloud computing and modern communication which enable you to form a global organisation,

manage and monitor its virtual offices all over the world. !ow I will briefly e plain how

information technology plays a vital role in different phases of business.


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Decision Making

"peed and accuracy are at the heart of making right decision for your business. &very successful

organisation has to go through a comprehensive market research process which enables

management to make the right decision. 'arket research can be done in many ways throughonline surveys, forums, blogs, group discussions using orld ide eb and of course through

in person interviews as well. Currently *ig data, +oogle %nalytics and 'icrosoft C#'

ynamics are also great tools to e tract useful information which can impact on decision

making. These online tools not only provide real time responses from the potential audience but

also ensure the accuracy of data by minimising the risk of human errors.

Marketing an Business Gro!th

The heart of the business success lies in its marketing which enables the management to identify

its target audience first and then observe their trends and needs. The overall marketing covers

public relation, advertising, promotion and sales which subsequently impact on business growth.

'any types of marketing can help you reach your potential customers. *ut I will briefly e plain

digital marketing here which was the dream in the past without Internet technology. igital

'arketing is a modern phenomenon which let you promote your products or services all over the

world. It is a broad term which includes many concepts like search engine optimisation ("&-),

pay per click ( C), blogging, discussion forum, email shot, "'", ''", social media

marketing and "martphone app advertisement etc. Currently web market is booming at a very

fast pace because most of the entrepreneurs have understood that the long term success in

business is not possible without digital presence on the internet. 'illions of new websites are

being added on the internet every year.

"ustomer #upport an #atisfaction

/igher level of customer satisfaction is the key to success which cannot be achieved without a

real time customer support process. *usiness success depends on knowing its customers needs,

trends, behaviours and satisfaction level. &ffective communication is the best tool to understand

the customer demands, problems and their solutions. Thanks to the Internet Technology that has

enabled us to communicate with millions of potential or e isting customer in the real time. IT


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provides many channels to communicate with the customer without going out in snow or rain.

"ome of these channels are email, webinar, social media, member portals, online newsletters and

te t or multimedia messaging through the smart phone. &nterprise organisations normally use

customer relationship management systems (C#') to hold valuable data for understanding

customer behaviours and future needs.

$esource Management an Globalisation

#esource management plays a crucial role in business success. hen it comes to medium or

large organisation, it is very hard for the top management to manage all the resources manually.

These resources may include tangible, financial or human resources etc. Information technology

has played a vital role in automating such comple problems by introducing user friendly

solutions. % decade ago, most of the resource management solutions were desktop based. Thanks

to the internet and cloud technology which enables software engineers to introduce cloud based

(&nterprise #esource lanning) solutions. !ow, the managers can manage or monitor their

organisational resources virtually anywhere in the world by using their personal computer,

laptops, tablets or "martphone. This concept has introduced the idea of globalisation. 'ost of

multinational companies ('icrosoft, +oogle, %ma0on, 'c onalds etc) in the world use these

cloud based solutions to manage their virtual or physical offices and staff worldwide.

"onclusion

I think, it is impossible to attain long term business success without leveraging the benefits of

information technology in this digital age. The companies have to bear a reasonable cost to

achieve this success because using an innovative approach in business strategy, employing

highly trained IT professionals and making right decisions at right time are the prerequisite of

business success. %s IT solutions continue to increase the productivity, efficiency and

effectiveness of business operations and communication, business will continue to rely on

Information Technology for success.

hat is the importance of IT in your organisation1 Can you think of any more area where IT is

helpful in business success1 The sole purpose of this article is awareness to those who still do not


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know much about modern IT. It is the first publication of my life, so if you see any deficiency in

the article then please let me know with your comments.

3. About the USITC

The 2nited "tates International Trade Commission is an independent, quasi$udicial 3ederal

agency with broad investigative responsibilities on matters of trade. The agency investigates the

effects of dumped and subsidi0ed imports on domestic industries and conducts global safeguard

investigations. The Commission also ad$udicates cases involving imports that allegedly infringe

intellectual property rights. Through such proceedings, the agency facilitates a rules basedinternational trading system. The Commission also serves as a 3ederal resource where trade data

and other trade policy related information are gathered and analy0ed. The information and

analysis are provided to the resident, the -ffice of the 2nited "tates Trade #epresentative

(2"T#), and Congress to facilitate the development of sound and informed 2.". trade policy.

The Commission makes most of its information and analysis available to the public to promote

understanding of international trade issues.

The mission of the Commission is to (4) administer 2.". trade remedy laws within its mandate in

a fair and ob$ective manner5 (6) provide the resident, 2"T#, and Congress with independent

analysis, information, and support on matters of tariffs, international trade, and 2.".

competitiveness5 and (7) maintain the /armoni0ed Tariff "chedule of the 2nited "tates (/T" ).

%. Describe the ma&or factor effects international tra e

Anders Borg, Sweden’s former Finance Minister, gives his perspective on what to look out for inthe economic year ahead, from reforms in China to the threat of Brexit

6849 will be a challenging and difficult year for the global economy.


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+lobal growth is picking up somewhat after a number of weak years. % global + growth rate

of 7.:;, the latest I'3 forecast, is lower than the


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This can only happen if growth is revitalised by reforms to increase labour market fle ibility and

to improve the business climate.

There is a clear risk that the fear of political populism will undermine the way leaders deal with

long term challenges and thereby creates a vicious negative spiral where disappointment further

weakens trust in governments.

T!o( global insecurit) an the refugee crisis

2" presidential elections will be a ma$or political event during 6849. 3rom a global perspective,

the key issue is whether the ne t president will be able to restore the 2" as a global force for

stability after the apparent lethargy of resident -bama s administration. %nother period of a

2nited "tates that lacks direction in its foreign policy, combined with a reluctance to engage withmilitary forces in difficult regions, will create deep security problems.

&urope needs to step up its ability to deal with emerging security issues, although that is an

unlikely outcome without leadership from the 2"%. The tragic events in aris have created a

momentum for a coalition bringing the 2", 3rance, the 2nited =ingdom and, une pectedly, also

#ussia together for a push back of the aesh ambition of establishing a Caliphate. It seems

necessary for the 2" and &urope to be ready to actively counter e tremist Islamic terrorism in

the 'iddle &ast, !orth %frica and %fghanistan in the medium term as well as in the long run. To

leave large areas and regions under the control of aesh, *oko /aram, %l "habaab or the

Taliban is a global security risk.

The refugee crises in &urope will remain a ma$or factor during 6849. 2! estimates indicate that

over one million people have entered &urope with the intention of claiming asylum during 684:.

-n a global level, 2!/C# has stated that the number of forcibly displaced people reached

almost 98 million in 684:, an increase of some


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be due to temporary harsh weather. The fact that the &uropean 2nion has made a broader

political agreement with Turkey could also be a factor.

In addition, aesh will face a stronger counter insurgency efforts during 6849. If aesh is

pushed back and insecurity reduced in "yria and Iraq that is likely to further improve the

situation. It should however be pointed out that some < million refuges from the conflict in

"yria Iraq remain in the neighbouring countries (in Turkey 6.6 million, in ?ebanon 4.4 million

and in >ordan 9:8,888 people).

The historical pattern has been that it takes a few years before the refugee numbers normalise

after a period of conflict. The intensified challenge from the Taliban in %fghanistan could also

increase the number of people claiming asylum in &urope (about 488,888 people have come

from %fghanistan to &urope during 684:). The number of refugees coming to &urope is most

likely going to be lower in 6849, but they will remain much higher than the long term average

for both 6849 and 684D.

The short term economic consequence of the high migration flows will be somewhat higher +

growth in +ermany and "weden, due to a temporary increase in public e penditure. The

consequences of a growing population is positive in the long term, reducing the demographic

pressure of an ageing population. Increased internal globalisation, to use the term coined by%ngela 'erkel, is potentially a more diversified work force and a more creative economy.

In the short term, the task of integrating such a large number of people will be a challenge. In

"weden the historical e perience has been that people from "yria have integrated well into the

labour market. /owever, to be able to integrate a large number of people coming from a much

less developed country (+ per capita in "yria was :888 2" before the conflict, which is

slightly more than 48; of the level in "weden and +ermany) will be complicated. To strengthen

integration, countries need to increase labour market fle ibility, boost spending on earlyeducation efforts and active labour market measures and streamline welfare services, but both in

+ermany and "weden this will be very difficult. ?ooking ahead it is likely that unemployment

will be somewhat higher in 684D and 684E. and this will dampen wage pressure and inflation

pressure somewhat.


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Three( the referen um on Bre*it

% key factor shaping &urope s political future in the decades to come is the referendum on the

2= s membership of the &2. #eferendums always come with uncertainty. 2ne pected events

can push the results in any direction. The best guess is that the 2nited =ingdom remains in the

&uropean 2nion. The economic and political consequences of a *ritish move towards

isolationism are devastating.

The political balance in &urope would shift from the idea of a &urope open to free trade and

dynamic markets, turning the balance towards a more bureaucratic and centralising perspective.

&urope and the 2= would both be in a much worse position in the competition with the 2nited

"tates, China, >apan and India. 3or the 2=, the long term economic consequences are likely to

be deeply concerning. ithout full participation in the &uropean 2nion, ?ondon s role as the

financial centre of &urope would sooner or later be put into question. The populists are creating

the impression that it is costless for the 2= to move away from &urope, but that is a dangerous

illusion. The anish referendum set off a wave of financial turmoil back in 4FF6 and the

implications of *re it would be more far reaching.

-ne factor to bear in mind is that voters often seems to favour the status quo when uncertainty is

high. hen almost all economic e perts, the traditional political parties and the larger parts of the business sector are arguing for a AyesB, this should be the most likely outcome, but in the age

of populism uncertainty remains high until the ballots have been counted.

+our( $ussia,s role in the !orl

%nother political factor contributing to financial uncertainty is #ussia. %t the end of 684:,

resident utin has rapidly repositioned #ussia from being the outsider rocking the boat to a

constructive force dealing with aesh in "yria and Iraq. The repositioning is obviously fragile.

utin has in no way backed down in principle from the aggressive stance in the conflict in

eastern 2kraine. "o far the #ussian intervention seems to have provided more support for

resident %l %ssad than actual damage to aesh.


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In the long run, #ussia is likely to be a declining power under the current regime. ?ow fertility

rates and premature alcohol related death among men, combined with e cessive dependence on

natural resources rather than productivity and innovations, are undermining the long term

prospects. *ut in the short run, any neighbouring country that shows signs of weakness face the

risk that #ussia will try to e ploit the situation. resident utin has been a master of navigating

the age of populism and could revert to the anti western rhetoric at any point of time.

3or the coming years investments in #ussia will be perceived as risky. % solid recovery in #ussia

will only come if foreign investors become convinced that the 2 turn in #ussian politics of late

684: is the first step towards a #ussia that is open for co operation and ready to reform its

archaic economic structures. 2ntil then most investors will hibernate and hope for a thawing in

the #ussian tundra.

+ive( !eak gro!th- chopp) markets

+lobal growth will be weak ne t year. 3urthermore, we are also likely to see substantial turmoil

in financial markets. The combination of the recovery in the 2" and, even if weaker, in &urope,

as well as a deceleration of growth in China is creating uncertainty for the financial markets. The

e traordinary monetary policy measures over the last few years have pumped short term money

into the global financial system. In combination with low liquidity in markets, partly due to thenew regulatory structures that are reshaping banking everywhere, this has set the tone for

turbulence.

The key factor deciding the degree of turbulence will be inflation in the 2" and reforms in

China. If inflation is picking up in the 2" and the 3ederal #eserve is perceived to be behind the

curve, this could push 2" rates higher and reinforce the appreciation of the dollar. The best guess

is that inflation will remain subdued in the 2". % weak consumer recovery and very low resource

utilisation is unlikely to give a demand driven inflation push. The potential for accelerated productivity growth out of the broad technology driven shift that is now taking place should also

keep cost pressure under control.

The traditional models that the 3ederal #eserve and other central banks are using to forecast

inflation are backward looking and are unlikely to capture the fast moving technological


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development that we are now seeing. -n the back of higher than e pected productivity it is also

possible for the unemployment rate to gradually go lower without pushing a traditional wage and

inflation spiral.

6849 could potentially be a year when the implications of the digital transformation become a

dominant theme. The potential is clearly there. 'any start up companies have been printing very

strong growth numbers for years, but the macro economic impact has so far been on the weaker

side because the growth has come from a low level. &very year this is gradually changing. hen

more and more people do their shopping and banking online that will also mean that the broader

implications becomes more pronounced. The pressure on e isting firms to adapt to increased

competition is likely to mean that prices and profit margins are being squee0ed.

% more problematic impact could be that employment growth is held back during the recovery.

"o far that has not been the case in the advanced economies. The labour market in the 2" has

been strong, but that has also been the trend in the 2nited =ingdom, +ermany and the !ordic

countries.

#i*( "hina,s reforms

If inflation e pectations in the 2" are a key factor shaping the financial year of 6849, reforms in

China are on another scale. If China is able to gradually move forward with rebalancing the

economy from investments to consumption, that could open a path towards more sustainable

growth and a gradual return of optimism in the Chinese business sector.

The Chinese government has many times, not least at the last meeting in avos and at the alian

summit, stated its ambition to push forward with reforms to open the economy and continue the

transformation towards a well functioning market economy. The downside risk seems to be that

these reforms are dependent on the ability to deal with resistance from special interest groups,

including state owned enterprises and more conservative centres of power. 3or the global

economy, it is key to monitor any sign that reforms are being accelerated and that resistance to

change is being pushed backwards.


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%ny sign that a credit contraction is hampering growth would imply that it is necessary for the

eople s *ank of China, *-C, to push monetary policy in an e pansionary direction. In such a

scenario, the #'* would weaken and that would imply second round depreciation in the rest of

%sia. In any such scenario we would also see continued turbulence on commodity markets as

well. Commodity prices are likely to contribute to the low inflation environment. It will take

time before we see the recovery of the super cycle.

It is important to underline how important China is for the rest of the emerging market countries.

+rowth in %sia, ?atin %merica and %frica has been bolstered by the growing demand for iron

ore, copper and oil from China. If China succeeds in dealing with domestic challenges, that

would also contribute to reviving optimism in emerging markets.

It is, however, important to underline that the renaissance in emerging markets has a more

fundamental basis than $ust being derivative of China. India, Indonesia, *angladesh, the

hilippines, *ra0il, 'e ico Colombia, !igeria, &thiopia and &ast %frica have been able to

accelerate growth out of their own power. olitical reforms have improved governance. *arriers

to trade have been reduced. The regulatory burden and the cost of doing business have been

reduced. The education level of the workforce has improved. The mobile revolution has made

information accessible almost everywhere and increased political transparency.

&merging economies will be under market pressure during 6849. If the 3ederal #eserve

accelerates rate hikes and the *-C depreciates the #!* this would create tensions for the

global economy. In this rather difficult environment, it would be a critical moment if e ternal

pressure translated into a push for economic reforms. If the governments in *ra0il, Turkey,

!igeria or #ussia would see market pressure as an argument for reinforcing structural reforms

that could be game changer. "o far the response has been far from convincing.

It is important to take on board the fundamental optimism that globalisation is bringing toemerging markets. %ccording to the I'3 forecast for 6849 there will be more than 7.< billion

people living in countries with a + growing faster than 9;. % growth rate of 9; means that

the total economy will triple in two decades. That is the fastest transformation out of poverty that

humanity has ever e perience. hether 6849 will bring a revival of the fundamental emerging


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market story or a year of disappointment is an open question, and the more market pressure is

seen as an argument for reform the better the outcome will be.

6849 is likely to be a difficult year. +rowth is increasing, lead by the recovery in the 2" and

other advanced economies, but populism, geopolitical risks and market turmoil are likely to cast

some shadows over the optimism.

Author! Anders Borg, Chair, "lo#al Financial System $nitiative, %orld &conomic Forum

$mage! A sign showing distances to cities all over the world is seen outside City 'all in San

Bernardino, California (anuary )*, )+ - .&/0&.S12ucy 3icholson

.$ole of !orl bank an imf in evelopment of business

his article e plains the role of the three important international organi0ations, namely, orld

*ank, the International 'onetary 3und, and the orld Trade -rgani0ation in facilitating trade.

The e cerpts of the functions and ob$ectives are taken from their respective websites.

International Monetar) +un /IM+0

The purposes of the I'3 are clearly e pressed in %rticle I of its constitution, the %rticles of

%greementG

• To promote international monetary cooperation

• To facilitate the e pansion and balanced growth of international trade

• To promote e change stability

• To assist in the establishment of a multilateral system of payments

• To give confidence to members by making the general resources of the 3und temporarily

available to them under adequate safeguards


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• To shorten the duration and lessen the degree of disequilibrium in the international

balances of payments of members

Worl Bank

The orld *ank is a vital source of financial and technical assistance to developing countries

around the world.

e are not a bank in the ordinary sense but a unique partnership to reduce poverty and support

development. e comprise two institutions managed by 4EE member countriesG the International

*ank for #econstruction and evelopment (I*# ) and the International evelopment

%ssociation (I %). The I*# aims to reduce poverty in middle income and creditworthy poorer

countries, while I % focuses e clusively on the world s poorest countries. These institutions are

part of a larger body known as the orld *ank +roup.

Together these two institutions provide low interest loans, interest free credits and grants to

developing countries for a wide array of purposes that include investments in education, health,

public administration, infrastructure, financial and private sector development, agriculture, and

environmental and natural resource management.

Worl Tra e 'rgani ation /WT'0

The orld Trade -rgani0ation ( T-) is the only international organi0ation dealing with the

global rules of trade between nations. Its main function is to ensure that trade flows as smoothly,

predictably and freely as possible.

here countries have faced trade barriers and wanted them lowered, the negotiations have

helped to open markets for trade. *ut the T- is not $ust about opening markets, and in some

circumstances its rules support maintaining trade barriers H for e ample, to protect consumers

or prevent the spread of disease.

%t its heart are the T- agreements, negotiated and signed by the bulk of the world s trading

nations. These documents provide the legal ground rules for international commerce. They are

essentially contracts, binding governments to keep their trade policies within agreed limits.

%lthough negotiated and signed by governments, the goal is to help producers of goods and


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services, e porters, and importers conduct their business, while allowing governments to meet

social and environmental ob$ectives. The system s overriding purpose is to help trade flow as

freely as possible.

2.Ma&or pro uct effect the global business

Global oil prices have fallen sharpl) over the past seven months- lea ing to significant

revenue shortfalls in man) energ) e*porting nations- !hile consumers in man) importing

countries are likel) to have to pa) less to heat their homes or rive their cars.

3rom 6848 until mid 684une prices have more than halved. Brent cru e oil has now dipped belo! 3 4 a

barrel for the first time since 'ay 688F and 5# cru e is down to below


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3ormer finance minister, %le ei =udrin, said the currencyJs fall was not $ust a reaction to lower

oil prices and western sanctions, Kbut also La show ofM distrust to the economic policies of the

governmentK.

+iven the pressures facing 'oscow now, some economists e pect further measures to shore upthe currency.

K e think capital controls as a policy measure cannot be off the table now,K said ?uis Costa, a

senior analyst at Citi.

Image caption #ussiaJs economy is forecast to fall into recession in 684: if oil prices do not

regain ground

hile resident utin is not using the word KcrisisK, rime 'inister mitry 'edvedev has been

more forthright on #ussiaJs economic problems.

K3rankly, we, strictly speaking, have not fully recovered from the crisis of 688E,K he said in a

recent interview.

*ecause of the twin impact of falling oil prices and sanctions, he said the government had had to

cut spending. K e had to abandon a number of programmes and make certain sacrifices.K


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#ussiaJs interest rate rise may also bring its own problems, as high rates can choke economic

growth by making it harder for businesses to borrow and spend.

9ene uela( :o subsi ) cuts

Image caption Nene0uela saw mass anti government protests earlier this year

Nene0uela is one of the worldJs largest oil e porters, but thanks to economic mismanagement it

was already finding it difficult to pay its way even before the oil price started falling.

Inflation is running at about 98; and the economy is teetering on the brink of recession. The

need for spending cuts is clear, but the government faces difficult choices.

The country already has some of the worldJs cheapest petrol prices fuel subsidies cost Caracas

about 46.:bn a year but resident 'aduro has ruled out subsidy cuts and higher petrol prices.

KIJve considered as head of state, that the moment has not arrived,K he said. KThereJs no rush,

weJre not going to throw more gasoline on the fire that already e ists with speculation and

induced inflation.K


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The governmentJs caution is understandable. % petrol price rise in 4FEF saw widespread riots that

left hundreds dead.

#au i ;rabia( 6rice versus market share

Image caption "audi %rabia is not e pected to cut production to prop up oil prices in the shortterm

"audi %rabia, the worldJs largest oil e porter and -pecJs most influential member, could support

global oil prices by cutting back its own production, but there is little sign it wants to do this.

There could be two reasons to try to instil some discipline among fellow -pec oil producers,

and perhaps to put the 2"Js burgeoning shale oil and gas industry under pressure.

%lthough "audi %rabia needs oil prices to be around E: in the longer term, it has deep pockets

with a reserve fund of some D88bn so can withstand lower prices for some time.


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KIn terms of production and pricing of oil by 'iddle &ast producers, they are beginning to

recognise the challenge of 2" production,K says #obin 'ills, 'anaar &nergyJs head of

consulting.

If a period of lower prices were to force some higher cost producers to shut down, then #iyadhmight hope to pick up market share in the longer run.

/owever, there is also recent history behind #iyadhJs unwillingness to cut production. In the

4FE8s the country did cut production significantly in a bid to boost prices, but it had little effect

and it also badly affected the "audi economy.

'pec( :ot all are e


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-ther -pec members such as Iran, Iraq and !igeria, with greater domestic budgetary demands

because of their large population si0es in relation to their oil revenues, have less room for

manoeuvre.

They have combined foreign currency reserves of less than 688bn, and are already under

pressure from increased 2" competition.

!igeria, which is %fricaJs biggest oil producer, has seen growth in the rest of its economy but

despite this it remains heavily oil dependent. &nergy sales account for up to E8; of all

government revenue and more than F8; of the countryJs e ports.

The war in "yria and Iraq has also seen Isis, or Islamic "tate, capturing oil wells. It is estimated it

is making about 7m a day through black market sales and undercutting market prices by

selling at a significant discount around 78 98 a barrel.


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5nite #tates( +racking boom

Image caption 2" domestic oil production has boomed due to fracking

KThe growth of oil production in !orth %merica, particularly in the 2", has been staggering,K

says Columbia 2niversityJs >ason *ordoff.

"peaking to **C orld "erviceJs orld *usiness #eport, he said that 5# oil pro uction levels

!ere at their highest in almost =4 )ears.

It has been this growth in 2" energy production, where gas and oil is e tracted from shale

formations using hydraulic fracturing or fracking, that has been one of the main drivers of lower

oil prices.

K"hale has essentially severed the linkage between geopolitical turmoil in the 'iddle &ast, and

oil price and equities,K says "eth =leinman, head of energy strategy at Citi.

&ven though many 2" shale oil producers have far higher costs than conventional rivals, many

need to carry on pumping to generate at least some revenue stream to pay off debts and other

costs.

http://www.bbc.co.uk/programmes/p0281yl8http://www.bbc.co.uk/programmes/p0281yl8http://www.bbc.co.uk/programmes/p0281yl8http://www.bbc.co.uk/programmes/p0281yl8


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Europe an ;sia( Mi*e blessings

Image caption +rowth in the &uropean 2nion remains weak

ith &uropeJs flagging economies characterised by low inflation and weak growth, any benefits

of lower prices would be welcomed by beleaguered governments.

% 48; fall in oil prices should lead to a 8.4; increase in economic output, say some. In generalconsumers benefit through lower energy prices, but eventually low oil prices do erode the

conditions that brought them about.

China, which is set to become the largest net importer of oil, should gain from falling prices.

/owever, lower oil prices wonJt fully offset the far wider effects of a slowing economy.

>apan imports nearly all of the oil it uses. *ut lower prices are a mi ed blessing because high

energy prices had helped to push inflation higher, which has been a key part of >apanese rime'inister "hin0o %beJs growth strategy to combat deflation.

India imports D:; of its oil, and analysts say falling oil prices will ease its current account

deficit. %t the same time, the cost of IndiaJs fuel subsidies could fall by 6.:bn this year but

only if oil prices stay low.


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Global Business Enivronment