GM achieves record sales

A worker walks amidst newly-produced cars at the parking lot of a General Motors factory in Shanghai June 2, 2009. General Motors Corp said on Tuesday it will need to build another China plant in the next five years if it is to meet a goal of selling 2 million cars in China within five years. REUTERS/Aly Song (CHINA BUSINESS TRANSPORT)

GM’s sales rose 38 percent to a record high during the first half of the year of 2009. This seems shocking to anyone who has heard about the bailouts of the auto industry or other financial problems facing the automakers. While the auto industry is struggling at best here in the United States, it is flourishing in China. With growing rural markets and small-vehicle sales, boosted by the Chinese government’s stimulus package, GM is planning to report record numbers.

GM sold a record 814,442 vehicles in the first six months, in large part due to its Wuling minivans, Buick sedans and its new compact car, the Chevrolet Cruze. GM’s minivan venture posted an increase of 49.9 percent in sales to a record 524,598 vehicles in the first six months.

Total vehicle sales in China are expected to increase by 17 percent this year from 2008 while auto sales in the United States are expected to fall by 13 percent during 2009.

-Daniel Smart

Additional $500M to help African Trade

Donald Kaberuka, president of the African Development Bank. (AP Photo/J. Scott Applewhite)

The African Development Bank (AfDB) said it will provide an additional $500 million to banks in Africa to finance trade. The AfDB allocated $500 million for the same purpose in March. This second investment will go through the Global Trade Liquidity Program.

Trade finance has long been integrally tied to international banking, but became unavailable in 2008 as banks could no longer raise funds and instead shied away from risk.

In total, the GTLP will amount to $5 billion and will finance up to $50 billion in revolving trade finance operations during the following three years. The AfDB claims that $15 billion will be utilized in Africa during this same time period.

-Daniel Smart

Health Emergency in Buenos Aires

People wearing masks as preventive measures against the H1N1 flu talk at a public square in Buenos Aires July 1, 2009. The flu, which first flared in Mexico but has since subsided there, is spreading in Argentina during the southern hemisphere winter, killing at least 43 people and forcing health officials to extend school vacations. REUTERS/Enrique Marcarian (ARGENTINA HEALTH)

Buenos Aires declared a health emergency today following the deaths of 26 people from the H1N1 virus. As a result of this emergency, schools will be closed for an additional two weeks during their winter recess starting July 20th.

While the Health Ministry is claiming 26 are dead, local press reports suggest that this number is much greater. Argentina is currently the country with the third highest death rate from this outbreak following the United States and Mexico.

Following on the heels of the recent dengue outbreak, this outbreak has brought to light the serious inadequacies with the national health system. These inadequacies are largely due to the ever present economic crises that plaque Argentina.

Students are being asked to stay inside their houses and avoid groups of people for the entire month that they are out of school. If students staying home all day is the solution to the outbreak, then we should expect further contamination and widespread infection.

-Daniel Smart

Croatian PM Steps Down – But Why?

Croatian prime minister Ivo Sander adresses his emitted resignation as Prime minister and president of the Croatian Democratic Union (HDZ) at a press conference in Zagreb on July 01, 2009. (Zeljko Lukunic/AFP/Getty Images)

Croatian Prime Minister Ivo Sanader, a strong favorite for a presidential run in next year’s elections, shocked Croatian politics today by announcing not his candidacy, but his resignation and planned departure from politics.

“I have decided to withdraw from active politics and not to run for the presidency,” Mr. Sanader said. Mr. Sanader’s goals as Croatia’s PM were two-fold: gain access to NATO and the European Union. He accomplished one goal when Croatia joined NATO in April, but the EU, while tantalizingly close, has hovered just out of reach, shackled by a continuing border dispute with Slovenia.

Speculation over why Sanader has stepped down, especially now, will likely center around his frustrations with the Slovenian dispute. Croatia is ready in almost all other aspects of their accession negotiations with the EU, but must receive the blessing of each of the 27 EU member states. Without Slovenia’s permission, Croatia will not be allowed entry to the elite European club.

Although Mr. Sanader has said that his “job has been done,” one has to wonder – how many more politicians will fruitlessly bang against Europe’s door and only come away with a bloodied fist? Mr. Sanader is the first, but will his Macedonian, or even Turkish, counterparts be far behind?

-Chris Hildebrand

Norway: Where Socialism (Oh No!) Shines

Yngve Slyngstad, Chief Executive Officer of Norges Bank Investment Management (NBIM), attends the presentation of 2009 first quarter results of the Norwegian Government Pension Fund - Global in Oslo May 20, 2009. REUTERS/Scanpix/Stian Lysberg Solum

Europe’s economy will contract, on average, 4.6% this year, according to the European Central Bank (ECB). Norway’s economy? 1%.

In fact, Norway has weathered the economic recession so well that when world stock markets were at their lowest levels in years Norway’s government gobbled up nearly $60 billion dollars worth of cheap stocks – just before stocks began their slow, if inexorable, recovery. As a result, Norway’s sovereign wealth fund is one of the fattest in the world, and the country’s GDP per capita, at $52,000, is one of the highest in Europe.

How is this economic success story – made even more palatable and enviable during the current recession – possible? According to the NY Times, the secret is in the (black) gold: instead of spending oil profits from its vast off-shore oil reserves (which make it the 3^rd largest exporter of oil in the world), Norway saved the profits, even decreasing spending at times. Their state welfare program is still reaping the benefits, sustaining many Norwegians for most of their lives.

The ironic rub? Norway’s finance minister is socialist. If only Senator McCarthy were alive today…

-Chris Hildebrand

Russia – Despite Branding Blunder – Invests in Resource-Rich Africa

ussia's President Dmitry Medvedev and Angola's President Jose Eduardo dos Santos take part in the welcoming ceremony in Luanda, June 26, 2009. REUTERS/RIA Novosti/Kremlin/Mikhail Klimentyev

Russian President Dimitry Medvedev journeyed to Africa last week, securing several high-profile energy and military deals with a select few African nations. Although the trip was marred by an unfortunate branding error – a joint Nigerian-Gazprom gas company was named “Nigaz” – the trip demonstrates the Kremlin’s burgeoning African interests.

Russia came to Africa bearing many gifts – including cheap nuclear reactors – and did not leave empty-handed. In Egypt, Medvedev secured a 10-year strategic cooperation pact with an eye to future arms dealings between the two nations, as well as a hopeful bid to build a civilian nuclear reactor.

In Angola, Russia agreed to another economic cooperation pact, as well as pledging to improve the country’s telecommunications infrastructure and launch Angola’s first satellite. Additionally, Russia agreed with the Namibian government to expand existing economic cooperation, especially with regards to fisheries and uranium mining. Finally, Russia signed a large energy deal with Nigeria, creating the afore-mentioned “Nigaz” company.

Africa is a treasure trove for some natural resources such as diamonds, oil, and uranium – all of which Russia, and the rest of the world, would love to gain access to. On behalf of the Africans, of course…there is no more economic imperialism these days. It’s not like there’s a crisis on or anything.

-Chris Hildebrand

Papal Diplomacy Might be Dead, but Don’t Tell the Pope

Pope Benedict XVI looks to the faithful during his meeting at Renzo Piano church, dedicated to Padre Pio, in San Giovanni Rotondo, southern Italy on June 21, 2009. (ANDREAS SOLARO/AFP/Getty Images)

Most world leaders have viewed the financial crisis as a chance to re-think vital financial systems, including free trade, market regulation, and to some extent even capitalism. Not so, the Pope, who in a new encyclical due to be released soon, will demand globalization be harnessed not to make the rich richer, but to help the poor survive during this time of crisis.

It has been well established that poorer and developing countries have been most impacted by the recession, despite the evolution (ahem…sorry, Pontiff) of international financial institutions such as the World Bank or the International Monetary Fund. Yet, in an age of interconnectedness, many developed countries are closing ranks and neglecting to honor established methods of assisting their less fortunate neighbors – even the EU, an economic union, has fallen prey to the Hobbesian practice.

Aiming to reverse this trend, Pope Benedict XVI’s third encyclical urges world leaders to not burden the poor with the costs of financial reregulation – but to instead design the new system with them explicitly in mind. It’s a great idea – now if only the Papacy had the same influence it did, many years ago…

-Chris Hildebrand