Skip: Hi everyone. Skip Montreux here with two short pre show announcements.
First, Dez and I are sorry for being away for so long but as you can imagine things here in Japan have been somewhat unsettling since the Earthquake on March 11.
At the time of the quake Down to Business English had a several episodes in the production pipeline and today’s episode is one of them. I apologize if today’s topic seems a little bit out of date. The others will be released in short order and Dez and I should be back on track with current business stories very soon.
The 2nd point I’d like to make is in regard to the Year in Review 2010 eZine. You will hear Dez & I talking about it later in the show and I just wanted to announce that 25% of proceeds of the Year in Review will be donated to Japanese Red Cross Earthquake Donation Fund.
Thank you for your support
Skip: My name is Skip Montreux in Tokyo Japan. And today on the show we have a very, very special guest.
Dez: Very funny Skip. Yes, welcome back everyone. This is Dez Morgan reporting from Abu Dhabi in the United Arab Emirates. And you’re listening to an all new episode of Down to Business English.
Dez: So Skip, I’ve been busy, okay? Have you been lonely without me?
Skip: Of course and with the last few episodes being solo recordings I think our listeners have been thinking that we have had a falling out and would not be recording together again any time soon.
Dez: Well fortunately that is not the case. As I mentioned in our last episode, I’ve moved to Abu Dhabi and I haven’t had an Internet connection at home for the last few weeks. But that is all behind us now and I want to assure our listeners that regular service will be resumed from now on and we will be recording together a lot more over the next few months and hopefully my being in the Middle East will add a different business perspective to the show.
Skip: How is life shaping up over there in Abu Dhabi?
Dez: Pretty good, I’m living pretty centrally in a nice place, there are some great restaurants nearby…oh and I went to see the camel racing last weekend.
Skip: Sorry, you went to see what?
Dez: Camel racing. Now if there is one creature on the face of the earth not designed to run it’s the camel.
Skip: You know what they say about camels, don’t you?
Dez: No what?
Skip: Well, they say that if an animal was designed by a committee they would come up with the camel.
Dez: That’s a pretty good analogy and judging by some of the committees that I’ve sat on pretty true.
Skip: Did you catch my recent episode on Egypt: ‘The ousting of a dictator’?
Dez: Of course, I was really disappointed to have missed out on that one as I’m now living in the region. Did you catch my recent episode on inflation?
Skip: Yes I did. I edited it, remember?
Dez: That you did indeed and thanks for that as ever. What is interesting is that these two stories although they seem on the surface to be unconnected are inextricably linked with one being the cause of the other and then the other adding to the former.
Skip: Now, on the surface that may sound a little confusing to everyone, but with a little explanation it is actually very interesting. So let’s do it. Let’s get D2B….Down to Business with Inflation Part 2 and how it is causing so much unrest in the Middle East.
Dez: Starting out with a quick recap on inflation. What is the main cause of inflation?
Skip. That is an easy one. Inflation is caused by countries making money too readily available with the result that all of the additional money in the economy is chasing after the same number of goods.
Dez: Very true, and where is a lot of that money showing up as inflation?
Skip: Another easy one. As a Canadian I know that the prices of a lot of the cereal crops grown in Canada have been on a tear recently as have the prices of livestock as well.
Dez: Again true, and it’s not hard to see why. People across Asia have been getting richer and the first thing people do when they have a bit more money is to seek a more varied diet.
Skip: You mean like when I take myself out for a nice juicy steak on payday?
Dez: Exactly like that but on a more consistent basis. Do you have some figures for our listeners?
Skip: Yes, as a matter of fact I do. The Canadian province of Saskatchewan is a big producer of wheat and I know that prices have pretty much doubled in the last year, although some of the causes for that were supply disruptions in Australia and the Ukraine. That was something we covered in our episode on Wheat: the mechanics of a man made crisis in September last year.
Dez: I urge listeners to go back and listen to that show if they haven’t already. Corn prices have also doubled over the last year and the prices of meats have also gone through the roof. All of this is leading to huge inflation in the cost of basic food items. Do you remember what the inflation figure I mentioned in part 1 was for food last year?
Skip: Yes, you quoted the figure of 10% I think.
Dez: I did and what is the important statistic here is the percentage of a person’s take home pay they spend on food. So Skip how much do you spend on food?
Skip: I would say around 20%.
Dez: I probably spend somewhere around the same or perhaps a little less. The figure for the average American is just less than 10%.
Skip: That’s relatively low.
Dez: Yes, but let’s have a look at the numbers for Egypt. 40% of the population live on $2 a day and the cost of bread has risen 20%. Even before the rise in commodity prices, Egyptians were spending over 40% of their take home salary on food. Other staples such as oils for cooking and sugar have risen even further. And it’s important to remember that in developed countries when you buy a pack of cornflakes a lot of the cost is in the manufacture and the packaging of the product so the increase in commodity costs isn’t quite so direct.
Skip: As people in developing countries survive on more basic staple products than in developed economies, the effect of rising prices is more direct.
Dez: Yes that’s correct.
Skip: So if this is happening across the developing world, why is it impacting the Middle East so severely? I mean why is there so much unrest there rather than in say, South America?
Dez: A good question. Well it is happening in South America too with food riots recently in Bolivia for example. But there are two crucial differences between the Middle East and other developing regions.
Skip: Presumably one is that the regimes in the Middle East tend to have unelected or dubiously elected leaders that have been in power for a long time with all of the corruption that goes along with that type of government.
Dez: That is one and the other is the populations in the region are in general very young with the average age of Egypt’s 83 million population being just 24.
Skip: And if there are problems with youth unemployment in developed countries, developing countries must have the same problems in spades.
Dez: Absolutely, in fact many critics have called the factors of rising unemployment and food prices coupled with young populations a perfect storm for unrest.
Skip: Sounds like a bad situation all around.
Dez: I am afraid to say this but it gets worse. Some of the richer countries in the region reacted to this by promising people free money and free food.
Skip: I read that Kuwait has promised its people $3500 and free food for a year.
Dez: Exactly and as we all know what does free money lead to?
Dez: That’s right. Furthermore other countries like Saudi Arabia, fearing further supply disruptions have increased imports to move their wheat stockpile up to a year of consumption.
Skip: So another perfect storm; an increase in the supply of money and a decrease in the supply of commodities.
Dez: And as you talked about in your last issue, oil prices are on the rise too.
Skip: That’s right. Unrest in such a sensitive area of the world feeds directly into the price of oil which in turn adds to inflation as everything that has to be delivered requires oil. And so prices rise even further.
Dez: Right again. So this is a situation that is not going away anytime soon and one that we will certainly keep an eye on here at D2B.
Skip: Maybe I should get down to the supermarket right now and stock up on noodles and rice?
Dez: Steady on Skip you don’t want to add to the problem by taking supply out of the market.That is the story on inflation and how it is causing so much trouble here in the Middle East. Now let’s get D2V… Down to vocabulary.
Skip: To start things off I have a two part verb for you to shape up. In the story I ask Dez how his life is shaping up over there in Abu Dhabi which means how is his life going or proceeding.
Dez: A further example would be in a meeting your boss shows you some very positive sales data and everyone agrees that it is shaping up to be a very good year for the company. For my first word I have the adverb inextricably which is used to show when two things are interconnected or linked in some way. In the story I use it to discuss how the unrest in Egypt and the topic of inflation are linked and so cannot be separated. Can you give us another example Skip? ………….Skip!
Skip: Oh…I’m sorry I have become inextricably linked to Angry Birds on my iPhone and I play it all the time. A good example from here in Japan would be how the profits of the big Japanese exporters are inextricably linked to the strength of the Japanese currency. For my next word I have the verb to recap which means to summarize something from earlier to be sure that everyone understands before continuing. In the story Dez recaps the information from Inflation Part 1 before introducing today’s new information.
Dez: When giving presentations using PowerPoint it’s often a good idea to run back through earlier slides to recap on the information at important points in the presentation.
Skip: Very true.
Dez: And next up I have another two-parter, the adjective to be on a tear which means when the number or value of something has risen very quickly. In the story Skip stated that cereal prices have been on a tear recently rising beyond all expectations.
Skip: I did and I can tell you another thing that has been on a tear recently, the Toronto Maple Leafs. They are a great hockey team and have been on a bit of a tear recently winning quite a few games.
Dez: Great. Do you have a business example for our listeners?
Skip: Yes, sorry about that. Here’s a business example. There is nothing that makes stock investors happier than seeing that one or more stocks in their portfolios have been rising rapidly, or have been on a tear.
Dez: Right. Certainly makes my day.
Skip: My next word comes from the same sentence as on a tear. And that word is livestock which means any animals like sheep or cows that a farmer raises for meat. It doesn’t include animals kept for milk which are categorized as dairy.
Dez: There are not a lot of livestock farms in my area in the UK as most farms are for vegetables and the few cows around are generally for dairy products.
Skip: You call call those tiny things farms? Back in Canada we call those backyard gardens.
Dez: Yes well we do what we can. Next I have the adverbial phrase to go through the roof which is similar to being on a tear and indicates that the value of something has increased way beyond expectations. In the story I state that the prices of all meats have gone way up or have gone through the roof. Skip can you give us another business example?
Skip: Sure. The sales of hybrid cars have gone through the roof recently as people are getting more concerned about the environment and the cost of fuel.
Dez: I even saw one lonely hybrid here the other day among the huge four wheel drives and other luxury cars.
Skip: Progress of a sort then.
Dez: Indeed, Now I have the adverb dubiously which like the adjective dubious means that something is questionable or that you find it difficult to believe. In the story you say that many of the leaders were dubiously elected showing that you find the result of the elections difficult to believe.
Skip: Another example would be the inflation rate reported by the Argentinian government which was a very dubious 7.7% in 2010. Most critics put it at over 20% showing that the government figure is very difficult to believe.
Dez: Yeah, well I lived there and I would certainly say that a lot of what the Argentinian government reports is dubious.
Skip: Is that right? Well, next I have the somewhat casual adjective phrase in spades, which is used to indicate when something happens in great numbers or by a great degree. In the story I say that the problem developing countries have with youth unemployment is very great or in other words they have the problem in spades.
Dez: A good example would be how Apple computer users have brand loyalty in spades and will defend their choice often beyond all logic.
Skip: Well, Apple is a great company and I most certainly couldn’t live without my vast number of Apple products.
Dez: See what I mean. Okay, my next word is the verb and noun stockpile which means to collect a supply of something so that it will last a long time if needs be. In the story it is used as a noun and talks about the stockpile of wheat that Saudi Arabia is gathering in case of supply disruptions in the future.
Skip: The U.S. keeps a huge stockpile of oil known as the strategic reserve for public and military use that it can fall back on in times of emergency. As a verb, to stockpile has the same meaning as our final word today-to stock up on something. To stock up on something means to buy a lot of something and store it for future use. In the story I jokingly say that I am going to go out and buy a lot of rice and noodles to protect myself from rising prices.
Dez: On a larger scale a company might stock up on the basic materials it needs for production while prices are low and then use that stock when prices are higher. An example would be a paper company stocking up on wood pulp when prices are low when they think that prices are going to rise in the future.
Skip: One of most challenging parts of any manufacturing operation is knowing when and how many vital parts and supplies to stock up on.
Dez: Yeah. Very true.
Skip: Well that is all the time we have for D2V today. Please go back, listen to our report again, and this time focus on those key words and phrases.
Skip: Well Dez, I can not tell you how good it is to be back behind the microphones with you.
Dez: Yes, it’s good to get back to doing a show together and I look forward to producing shows on a more regular basis.
Skip: As do I. Just before we finish up today, there are a few reminders we have for everyone.
Dez: First please follow me on Twitter. I’m finally getting into Twitter and would love to more followers as at the moment I only have two.
Skip: And I’m one of those two!
Dez: Anyway, you can find me at www.twitter.com/dezmorgan.
Skip: And while you’re there you can find me at www.twitter.com/skipmontreux.
Dez: Also, be sure to visit the Down to Business English website to download the PDF audio script for today’s show. As always, it is the show in its entirety and it is 100% free. You can download it at www.downtobusinessenglish.com.
Skip: And the final reminder we have is about the Down to Business English Year in Review eZine. Today’s show is the 25th episode of D2B and we not only hope to continue bringing you more business stories we also hope to do it on a more regular basis. One way you can help us achieve that goal is by purchasing the Year in Review.
Dez: And not only would you be supporting the show, the YIR is also a very good study resource, complete with 50 new words and phrase explanations, TOEIC style listening comprehension questions, and over an hour of never before released audio. Both Skip and I are confident you will find it is well worth its price of $20.10
Skip: I certainly agree. You can get your copy of The D2B Year in Review digitally delivered to you by going to www.downtobusinessenglish.com and clicking on the Year in Review link at the top of the page. Once again, we appreciate your support.
Dez: Thanks for listening everyone. See you next time.
Skip: Yes, thank you everyone. Bye bye.