July is a period of providing 6 months outcomes and annual reports for international business. Significantly negative forecast has been approved – major US and European giants except for oil companies ended this period with loss (only BP gained profit of 6.75 billion pounds.
37 million pounds per day). Significantly low indicator of pharmaceutical giants and transnational companies in the sphere of food production and trade is worth noting. Level of decline in pharmaceutical companies even reach 18-20. Losses in financial and banking sectors are quite important. Experts believe that crisis is still ready to blow. Moreover, it has touched new directions. Nobel Peace Prize laureate Professor Muhammad Yunus (famous for his successful application of microcredit – the extension of small loans) declared in July: ‘The world’s biggest banks risk creating a subprime-style arisis for millions of the poorest people if they Continue to plough money into the booming microfinance sector’ (FT, 29, july ,pg8).
In addition, involving micro finance sphere in this crisis is quite noteworthy and dangerous for us, as population’s loans exceed incomes quite often.
The world experts believe that financial crisis and economic recession of the US is still far away. FED plans to change its strategy and from August it will concentrate not on the economic growth, but on overcoming inflation. FED Board member Frederik Mishkin (his guidebooks on banking and financial as well as monetary policy are familiar to us) states by the end of July: ‘The Federal Reserve should adopt a specific numerical inflation objective’. He also pointed at the growth of accounting interest rate as well as the possible increase of unemployment. On the other hand LIBOR rates have quite interesting dynamics in leading currencies. Let’s take a look at three months market Libor:
1. By September 2007 USD Libor reached 5.8%, as for FED account rate – 5.25%. Three month Libor fell to 3% in January 2008 and to 2.8% in July.
2. Three-month British pound sterling LIBOR during the same period of time reached 6.8% and dropped to 5.5%, currently it reaches to 5.8%.
3. During the same period of time interest rate of English bank was 5.75%, 5.5%. Now it is 5.0%.
4. Te same indicators for European three month Libor rates equaled to 4.8%, 4.4%. currently it is 4.8%, while rate of European Central Bank was only 4.0% and in July it increased to 4.25%.
5. The world faces huge inflation. Policies of all central banks were anti inflectional, except for the US. However, they did not have significant outcomes due to drastic price increase. The fact, that Fed changed its policy impels that we’ll witness even more important inflation pressure.
6. Ttherefore, we have decided to offer you a special article, exclusive materials from London on what happens in Europe regarding inflation and how leading financial markets react. You can find overview of my colleague, Emzar jgerenaia (pg.17) in the present edition. this is quite an important issue and is directly connected to the country’s internal problems. The same applies to a new story of the world, waiting for political changes. Who will be the next president of United States; what changes does the world expect; is a country just nowadays.
Democratic world celebrates the 350th anniversary of Cromwell’s death. What has changed and what remained the same out of European ideals? What are possible changes in the world, including the sphere of economic separation (pg.8).
Representatives of the US, India and China started negotiations over trade barriers in Geneva on July 27. The world goes back to Doha round TWO resolutions again (even more intensively this time). The issue remains significant for Georgia too. The present edition offers you a discussion on EU non trade barriers as well as the review of trade agreements between Georgia and turkey provided on students’ page. Turkey is an important partner for us from the trade turnover point of view, as well as purely strategically. We considered the trade agreement to be really perspective. What has happened? Where did the development stop?
Turkey has launched the project of the coming century: construction of Karsi – Akhalkalaki – Baku railway and has begun an actual fight for a new gas pipeline – NABUKO project. We are supposed to improve our relations with this neighboring country and establish it on equal initials.
We believe Maka Ghaniahsivli’s research on our media, its freedom, its mission in a society and relations to business development problems is quite interesting. The issue remains to be of utmost importance nowadays – freedom of media relies on business development and political willingness. Market and media are interrelated nowadays. It is a fascinated circle – media is one of the means of business transparency, competitiveness, increasing level of business education, if you wish to call it. Achieving success in this field can hardly be imagined without media and vise versa. Free media first of all implies free advertising market (pg.22).
We traditionally offer you the world and home market statistics, news in the sphere of economy and scientific researches.
I wish you a happy vocation time and I hope you’ll not be angry with us for involving you in number of problems during the beautiful vocations.