Saturday, September 8, 2007

Philippines Looks to Medical Tourism

Dubbed as “The Economics of Compassion,” Lyf Center Ultimate Solutions chief executive officer Julio Cabanero cited the highly expensive medical treatment among industrialized countries which should stimulate investments in medical tourism here in the country.

Cabanero said: “The Philippines has proven to the world that it has the competence and can assure the safety of potential foreign patients availing of our healthcare facilities and medical personnel.”

“While we are talking of a US$40 billion medical tourism global industry in the future, it is forecasted that the figure will grow by US$188 billion in 2013,” Cabanero said.

“With our competence and related tourism development, the Philippines or the Visayas in particular has no reason not to capture a good portion of this multi-billion dollar market,” he added.

Other than competence, Cabanero cited world economic development that is very favorable to the growth of medical tourism in the Philippines.

He also cited ease and affordability of travel as among the plus factors for the country.

Cabanero said “Japan now has 22 million elderly population costing them US$36.5 billion in elderly care. My estimate is that the Philippines can offer at least 50 percent less if we develop fully the medical tourism industry.”

Cabanero also explained linkages if medical tourism is to be developed, among them, wellness centers (both hi-tech and traditional), schools, and medical research institutions (much cheaper to study here), medical insurance companies, tourism enterprises, local government units (LGUs), and other associations.

Source article

Friday, September 7, 2007

Business and Industry Intelligence: Forestry and Wood Products

Overview

The global forest products market grew in value by 4% in 2006 to reach a value of $296 billion. The US accounts for 14% of this, or $41 billion. The US is also a major exporter of wood and forest products.

The most lucrative segment is industrial roundwood, which generates 55% of the market volume, with sawnwood accounting for a further 20%. The US construction industry is a major consumer of sawnwood, but after several years of strong growth the number of housing starts began to fall in late 2006. This led to declining lumber prices, and increased downtime for domestic producers who had hitherto operated at almost full capacity.

The growth of China's secondary wood product industry, which includes areas such as furniture, has been dramatic in recent years. This has led to strong demand for wood raw materials, boosting exports from US players. However, the resolution in 2006 of the softwood timber dispute between the US and Canada is likely to see increased imports from Canada to the US, increasing the competitive pressures on domestic forestry and wood companies. Furthermore, the prevalence of illegal logging operations in many countries means that US and Canadian companies, which are generally considered to operate within the law, may be at a disadvantage in the international markets.

Key players in this industry tend to be large, vertically-integrated businesses. Weyerhaeuser, Universal Forest Products, and Louisiana-Pacific are industry leaders. There is a trend for companies to sell off their timberland to institutional investors such as pension funds and REITs: the sellers may be aiming to reduce indebtedness following acquisitions, while the buyers are looking to diversify their portfolio to include forest assets that have historically offered good returns. Innovation is also important for companies in this industry. It may include the development of faster-growing, straighter trees, or diversification into new areas, such as biorefineries that can generate base chemicals and fuels from forest product raw materials.

Key Issues

Home Starts Falling - Late 2006 saw the number of new homes being built declining from the high levels of 2004 and 2005. As residential construction accounts for about half of wood panel product consumption in the US, this led to production falling to 90% of capacity (it had been close to 100%), with consequent increased downtime at sawmills.

China - Growth in the Chinese secondary wood product sector, such as furniture manufacturing, has seen the country rapidly increasing its lumber imports, to the benefit of US exporters. In the longer term, China is developing its primary wood product sector, with the construction of more sawmills and similar processing plants. This should increase demand for imported logs, but may impact on US lumber producers.

Illegal Logging - It has been estimated that 8-10% of all wood product production globally is due to harvesting without permits, under-reporting of production to avoid taxes, logging in national parks and nature reserves, and other illicit activities. The US industry, however, has a clean record. This means that US wood product players are disadvantaged in export markets, because illegal logging tends to increase supply and lower prices, and allows those companies engaging in such practices to reduce their costs.

Softwood Lumber Dispute - Late 2006 saw a settlement of this longstanding trade dispute. The US had imposed high tariffs on Canadian softwood lumber imports, arguing that its northern neighbor subsidized its production to the detriment of the US forestry sector. The agreement finally reached includes a reduction of tariffs, conditional on prices remaining above a certain level. This will benefit US-absed wood producers going forward.

Significant Trends

Land Ownership - Traditionally, wood companies have been vertically integrated, involved in owning large tracts of timberland, logging, and producing wood products. There is a trend for timberland to be sold to institutional investors, such as pension funds and REITs. The sellers are often carrying more debt than they would prefer, as a result of previous M&A activities, while the buyers aim to diversify their holdings to include forestry assets which have historically offered good returns.

Innovation - Forest product companies are increasing the energy efficiency of their processes in order to reduce costs and environmental impact. Going forward, they are also looking to innovate in their product lines. For example, integrated forest products biorefineries, which can produce base chemicals and fuels, such as acetic acid, ethanol, and synthetic gas. Such processes would diversify revenue streams and allow value to be created using the waste products of existing mill processes, such as pulp residues.

Divestment of Fine Papers Operations - Early in 2007, the US player Weyerhaeuser received regulatory approval for its proposed $3.3 billion merger with Canadian paper company Domtar. When the deal is completed, Weyerhaeuser will be able to divest its poorly performing fine papers business, which will then operate under the Domtar name. In recent years, several major forest products companies have also disposed of their fine papers divisions.

The forest products market consists of chips and particles, sawnwood, wood fuel, wood residues, industrial roundwood and wood-based panels, but excludes paper and pulp. The markets value has been calculated at manufacturers selling price.

Thursday, September 6, 2007

West Virginia "Open for Business"

News reports say that West Virginina Gov. Joe Manchin’s highly unpopular slogan for the state — “Open for Business” — might be about to go belly up.

The governor’s office announced Wednesday an online and telephone poll for people to come up with a new slogan for the 107 welcome signs posted along roads leading into the state.

“With our state heading in the right direction and our citizens taking a renewed sense of pride and ownership in West Virginia and its future, I believe that now is the time for us to engage the people of West Virginia in choosing a permanent welcome slogan — one that they would want all the world to see as they journey into the Mountain State,” Manchin said in a news release.

Manchin unveiled the “Open for Business” slogan during his 2006 State of the State address as an overt statement about his administration’s focus on economic development.

Criticism has been rampant ever since. His office has always maintained that the wording on the larger welcome signs was designed for easy removal.

Reda more.

Wednesday, September 5, 2007

U.N. Says U.S. Growth Will Slip

The U.S. economy will slow sharply this year and fall behind growth rates in most of the world, according to forecasts in a U.N. report released this week.

For the first time since 2001, both the European Union, at 2.8 percent, and Japan, 2.3 percent, are predicted to have higher GDP growth than the United States.

Global growth, meanwhile, is pegged at 3.4 percent, down from 4 percent in 2006, largely because of the U.S. slowdown, the report said.

High commodity prices continue to boost growth in developing countries, which accounted for a 37 percent share of global trade last year, the report said. A decade ago their share of trade was 29 percent.

The economic outlook for developing countries is positive for the first time since the early 1970s, driven in large part by the growth in China and India, according to an annual report by the United Nations Conference on Trade and Development (UNCTAD) released today.

Developing countries – including many of the world’s poorest nations – will see ongoing benefits from strong demand for primary commodities, and this positive trend in terms of trade since 2003 has allowed such countries globally to bolster investment in their economies, said the Trade and Development Report 2007.

Per capita gross domestic product has increased nearly 30 per cent between 2003 and 2007, compared to 10 per cent for the Group of Seven (G-7) highly industrialized countries, the Report noted. Overall, the world economy will mark growth for a fifth consecutive year, with a 3.4 per cent expansion this year.

UNCTAD warned that a major recession in the United States could lead to diminished exports for China and India, which are setting the pace for growth of developing countries.

The Report also cautioned that North-South bilateral and regional free trade or preferential trade agreements could prevent poorer nations from developing their industrial sectors and reduce their control over foreign direct investment.

Instead, UNCTAD pointed to the example of today’s industrialized and developing countries which have recorded tremendous economic growth in the past several years through protection of nascent industries, thus allowing them to hone their abilities to meet the challenges of international competition.

Additionally, the Report called for intensified regional cooperation in exchange rate arrangements as a means to reduce the vulnerability of developing countries. The absence of appropriate global exchange rate arrangements could lead to exchange rate instability, especially in developing nations by impeding their overall competitiveness.

Regional collaboration could also benefit developing countries in terms of long-term development, UNCTAD said, as it can help countries build up their economic capabilities to allow them to compete globally. Such cooperation should include joint policy action – focusing on macroeconomic, financial, infrastructure and industrial policies – to boost growth and structural change potential.

U.S. economic developer should be asking what impact this drop-off in growth will have on local and state economies.

Read more here.

Download report here: UNCTAD

Tuesday, September 4, 2007

U.S. Workers Most Productive

American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year.

They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States "leads the world in labor productivity."

The average U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, followed by Luxembourg at $55,641, Belgium at $55,235 and France at $54,609.

The productivity figure is found by dividing the country's gross domestic product by the number of people employed. The U.N. report is based on 2006 figures for many countries, or the most recent available.

Only part of the U.S. productivity growth, which has outpaced that of many other developed economies, can be explained by the longer hours Americans are putting in, the ILO said.

The U.S., according to the report, also beats all 27 nations in the European Union, Japan and Switzerland in the amount of wealth created per hour of work — a second key measure of productivity.

Norway, which is not an EU member, generates the most output per working hour, $37.99, a figure inflated by the country's billions of dollars in oil exports and high prices for goods at home. The U.S. is second at $35.63, about a half dollar ahead of third-place France.

Seven years ago, French workers produced over a dollar more on average than their American counterparts. The country led the U.S. in hourly productivity from 1994 to 2003.

The U.S. employee put in an average 1,804 hours of work in 2006, the report said. That compared with 1,407.1 hours for the Norwegian worker and 1,564.4 for the French.

It pales, however, in comparison with the annual hours worked per person in Asia, where seven economies — South Korea, Bangladesh, Sri Lanka, Hong Kong, China, Malaysia and Thailand — surpassed 2,200 average hours per worker. But those countries had lower productivity rates.

America's increased productivity "has to do with the ICT (information and communication technologies) revolution, with the way the U.S. organizes companies, with the high level of competition in the country, with the extension of trade and investment abroad," said Jose Manuel Salazar, the ILO's head of employment.

The ILO report warned that the widening of the gap between leaders such as the U.S. and poorer nations has been even more dramatic.

Laborers from regions such as southeast Asia, Latin America and the Middle East have the potential to create more wealth but are being held back by a lack of investment in training, equipment and technology, the agency said.

In sub-Saharan Africa, workers are only about one-twelfth as productive as those in developed countries, the report said.

"The huge gap in productivity and wealth is cause for great concern," ILO Director-General Juan Somavia said, adding that it was important to raise productivity levels of the lowest-paid workers in the world's poorest countries.

China and other East Asian countries are catching up quickest with Western countries. Productivity in the region has doubled in the past decade and is accelerating faster than anywhere else, the report said.

But they still have a long way to go: Workers in East Asia are still only about one-fifth as productive as laborers in industrialized countries.

The vast differences among China's sectors tell part of the story. Whereas a Chinese industrial worker produces $12,642 worth of output — almost eight times more than in 1980 — a laborer in the farm and fisheries sector contributes a paltry $910 to gross domestic product.

The difference is much less pronounced in the United States, where a manufacturing employee produced an unprecedented $104,606 of value in 2005. An American farm laborer, meanwhile, created $52,585 worth of output, down 10 percent from seven years ago, when U.S. agricultural productivity peaked.

Read more.

Monday, September 3, 2007

Max Planck for $190 Million

The Max Planck Society, an international research giant based in Germany, is poised to open its first U.S. institute in Palm Beach County — if the county and the state can meet its requirements, the county Business Development Board announced Wednesday.

Board President Kelly Smallridge said the renowned research organization, which has 78 institutes worldwide, has agreed in concept to come to the county and set up shop alongside The Scripps Research Institute, the California-based group that opened a branch in Jupiter two years ago.

The deal is contingent on the county and the state chalking up a $190 million incentive package, which would include land for the institute on the Jupiter campus of Florida Atlantic University. The price could prove too rich for some county commissioners, weary after the county's $340 million payout to lure Scripps.

Could this deal have anything with German winters?

Read more.

Sunday, September 2, 2007

Forbes Article: Ohio Lags in Good Paying Jobs

Though no longer America's poorest big city, Cleveland remains dead last in median income, a distinction shared by Youngstown among midsize cities.

Ohio also isn't faring well in the category, seeing a steep decline since 1999. The remedies for the problem aren't easy ones.

Cleveland actually had an increase in median income last year, up more than $2,400 from 2005 to $26,535, according to data released by the U.S. Census Bureau this week. But it was still worst among cities with a population over 250,000.

Youngstown's median income was $21,850 last year, a more than 17 percent drop from 2005, according to the Census Bureau.

Cities like Youngstown are magnets for people with low incomes because of their low housing costs, said Thomas Finnerty, associate director of Youngstown State University's Center for Urban and Regional Studies.

"We have these central cities that have become the collection sites for the poor," he said. "We have an incredibly old population. When people retire, retirement income is less than working income. That's a big factor, too."

And what does Don Iannone have to say about this article: "I don't dispute Ohio and many of its communities need to work harder at developing more high wage/high skilled jobs. The key is educational attainment. Until Ohio communities, especially the more poor ones, make strides in educational improvement, good jobs will simply not come. We need to accelerate the education curve in Ohio."

Read more.