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With all the economic bad news being reported out of Europe and the U.S. this year, it is easy to forget that some economies are actually doing quite well. In today’s episode of Down to Business English, Dez Morgan reports on economies that are bucking the trend and are doing quite well.
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Skip: Hello everyone this is Skip Montreux reporting in from Tokyo.
Dez: And this is Dez Morgan here reporting as usual from Abu Dhabi.
Skip: You are listening to Down to Business English the show that helps you learn useful business words and phrases by looking at business news from around the world.
Dez: Now to begin Skip, you might remember on the last show I talked about my trip to Beirut, Lebanon and said that the economy there seemed to be bucking the trend and was still growing.
Skip: Yes I remember, and I commented that it would be a good topic for a future show.
Dez: To use a popular expression, the future is now. We have really focused on all the bad news coming out of Europe recently and the poor health of the global economy in general, I thought it would be good to report on good news for once.
Skip: And other than what you saw in Lebanon, is there good news to report on?
Dez: I’m happy to say, yes there is.
Skip: Great, so let’s do it. Let’s get D2B Down to Business with Lebanon and some other happy economies that are bucking the trend. Who are they and what are their secrets?
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Dez: Let’s start off with Europe. Let me ask you this Skip, which countries have the fastest growing economies in the Eurozone?
Skip: I’m not sure. I can only really think of Germany. I would include France but I know that there are questions surrounding the French government debt.
Dez: I’m sorry, you are wrong on both counts. The fastest growing economy happens to be Estonia and the second fastest…this might surprise you, is Ireland.
Skip: Ireland as in one of the ‘I’s of the PIIGS countries.
Dez: The very same but let us start off with Estonia.
Skip: Wait a second. Before we go any further, where exactly is Estonia?
Dez: Oh Skip, how American of you. Estonia is on the Baltic Sea, to the east of Russia and just below Finland.
Skip: Okay, that sort of helps, thanks. But hey I’m Canadian by the way.
Dez: Now, similar to Ireland, Estonia had an overheating property market and a building boom that came crashing down in 2008. In response to this Estonia kept corporate taxes low to continue to encourage investment, and the government liberalised labour laws and cut spending.
Skip: That all sounds good.
Dez: Good enough for Estonia to grow it’s economy 8.5% in the first quarter of 2011.
Skip: Wow and what industries are Estonia promoting to manage that sort of growth?
Dez: Technology is the fastest growing sector. Back in June we did a story on Microsoft’s acquisition of Skype. Skype’s development office is situated just outside of Tallinn, the capital of Estonia.
Skip: Of course. Skype was originally created by a Swede, a Dane and four Estonians so I guess that makes sense.
Dez: But there are some clouds on the horizon for Estonia though. 70% of exports are to the EU which of course has many problems at the moment and Estonia has just been asked to contribute 2 billion Euros to the EU stability fund.
Skip: 2 Billion Euros! How do Estonians feel about that?
Dez: Some Estonians are not so happy about giving a relatively large sum while others believe that they’ve received a lot of money from the EU in the past so it’s only fair that they step up to help other ailing EU economies.
Skip: So that’s Estonia. How about Ireland?
Dez: Just 4 years after being bailed out by the EU, Ireland’s economy is back in growth recording a 1.6% growth rate in the second quarter of 2011 compared to a growth rate in Germany of just 0.2%.
Skip: And what is their secret?
Dez: Irish exports have gone up which has helped make up for a depressed domestic demand in Ireland itself. Some analysts have noted that as the Irish economy had fallen so far over the past 4 years, a jump was to be expected but would not continue.
Skip: As we are so fond of saying here on D2B, only time will tell.
Dez: It always does. Moving east now to where this whole topic began, Lebanon grew at 7.5% in 2011, which was a very respectable figure even if it was a little slower than the 8.5% in 2010 and 9.3% in 2009.
Skip: Is that right? None of the developed countries worldwide came anywhere close to that. What has been the secret behind that kind of growth?
Dez: The main reason is the number of Lebanese that have emigrated from the country have formed a business network all over the world. These same emigrants have remitted money to family members back home to the tune of $8.2 billion dollars in 2009, making up ⅕ of the Lebanese economy.
Skip: Interesting.
Dez: The next reason is that Lebanon has a long history of trade in the middle east and so has a very competitive free market with minimal government intervention. Furthermore much like in Switzerland, bank secrecy in Lebanon is strictly enforced which makes Beirut a major banking capital for the region.
Skip: Those all sound like great reasons.
Dez: Wait I haven’t finished. Beirut is also a very popular tourist destination for residents in the region. In fact, prior to the troubles in the 80s, it was known as the Paris of the Middle East. All of which has led to a construction boom with a lot of Saudis and people from the other Arab countries buying second homes there.
Skip: You mentioned the troubles of the 80s. Dez, when you were there on holidays, did you notice any signs of the damage remaining?
Dez: Most of the city has been rebuilt, the old town has been completely refurbished but they have left one devastated tower block standing in the middle of the city as a symbol for peace.
Skip: They did a similar thing in Hiroshima where the only building that was left standing after the Atomic bombing has been kept as a symbol of peace.
Dez: It’s important that we don’t forget the terrible things that have happened in the past so that they never happen again.
Skip: Very true.
Dez: Well that certainly isn’t an exhaustive list as there are other countries such as Singapore bucking the trend but that’s about all we have time for today.
Skip: It is good to hear that even with today’s bleak outlook there is at least some good economic news. Now it is time for us to get D2V…Down to Vocabulary.
Skip: I will start off today with the verb to overheat. Literally this just means to make something too hot. You might ask; could you turn up the air conditioning up as I am overheating over here. However in the story Dez talks about how the property market in Estonia had overheated, which in this case means it had increased in value too much, too fast.
Dez: A further example of economic overheating is a few years ago the Chinese economy was overheating or growing too quickly and the government took steps to slow it down which were successful at the time.
Skip: But now I hear they are worried the economy is slowing down.
Dez: I have heard the same thing. Next up I have another verb to liberalise which is spelt ‘ise’ in the UK and ‘ize’ in North America and means to make something easier and more open. In the story I say that labour laws were liberalised in Estonia which means they were made more simple and easier to understand.
Skip: A lot of people think that the U.S. should liberalise its tax code as it is one of the most complicated in the world.
Dez: Which is what Herman Cain, the Republican Presidential nominee candidate is promoting with his 9-9-9 tax plan.
Skip: Moving on I have the expression clouds on the horizon which initially would have meant that bad weather was coming but is generally used idiomatically to mean the possibility that something bad might happen in the relatively near future.
Dez: I think it was sailors that would have first used that expression.
Skip: Sounds about right. In the story Dez said that there were clouds on the horizon for the Estonian economy indicating that Estonia might face a few problems in the future.
Dez: With oil again around the $100 mark and 149 years of supply left in the ground I think it is fair to say that there aren’t too many clouds on the horizon for Abu Dhabi.
Skip: Really? Only 149 years?
Dez: That’s what they say. Next I have the verb to ail which literally means to be sick or ill in some way. In the story I talk about the ailing economies in the Eurozone that need money to be bailed out.
Skip: I can see that the economy of Abu Dhabi is certainly not ailing but Dubai’s economy was a few years ago, I believe.
Dez: It certainly had some problems in 2008 which we covered in an earlier show on September 16th. Now I have the verb to remit which is often used in its noun form remittance and means to send money to another person or place. In the story I say that Lebanese living overseas remit a lot of money home.
Skip: A further example would be the payment website Paypal that enables people to remit money to other individuals to pay for goods and services online.
Dez: Yeah, I use it all of the time.
Skip: So do I. Moving on I would like to talk about the economic expression a free market. A free market is a market where prices of goods and services are driven by demand with little or no interference by the government. In the story Dez states that the free market in Lebanon is one of the reasons for its success.
Dez: I believe Hong Kong has one of the freest markets in the world.
Skip: Which is ironic as the ruling party in China is still, in some form, communist.
Dez: It is rather. I would like to finish off with the verb to refurbish which means to renew or rebuild something old so that it’s returned to its original condition. In the story I talk about how the old town in Beirut has been rebuilt or refurbished.
Skip: We are having our offices refurbished at the moment, it is a bit noisy but they will look great when they are finished.
Dez: Sounds like business is good for you.
Skip: Not really but corporate image is important. Well, that is about all we have for vocabulary today.
Skip: Thanks so much for that report Dez. I hope our listeners found it as interesting as I did.
Dez: You’re more than welcome. Everyone please remember that the free pdf audio script is available for download from our website at downtobusinessenglish.com. I’ll say that again that’s downtobusinessenglish.com.
Skip: And while you are there please sign up for the newsletter. A new one is coming out soon where Dez will be discussing some more countries that are bucking the economic trend.
Dez: Hope that you all enjoyed the show. Bye for Now
Skip: Bye everyone.
