Economic Digest – May 2018

THERMAL
A tiny North Atlantic island known best for icebergs, geysers and volcanoes is helping China fight pollution. Iceland has just signed the biggest deal in its history to provide the world’s second-largest economy with the technology it needs to deliver clean, geothermal heat. The agreement affects up to 15-million people in a new economic area close to Beijing. With more than 100 volcanoes, Iceland has become a world leader in geothermal technology. The heat produced from the Earth’s core not only doesn’t pollute, but it is also cheap. So cheap, in fact, that Iceland can afford to heat sidewalks in its biggest cities.

COMPLAINTS
Banking-related complaints in Canada handled by an industry ombudsman rose 28 per cent in 2017, reaching the highest level in five years as disputes over credit cards nearly doubled. The ombudsman opened 370 banking-related cases last year, mostly related to credit cards, mortgages and personal accounts, compared with 290 a year earlier. Investment-related cases remained roughly flat at 351. The increase has been attributed mainly to increased consumer awareness. Meanwhile, telecom complaints were up 73 percent for 2017-18 to 6,849 from 3,955 a year earlier, mainly concerning contracts with missing or misleading terms.

PAPERWORK
The enormous ships steaming into and out of the world’s ports do not only carry cargo, they also represent paperwork: among them, bills of lading, packing lists, letters of credit, insurance policies, orders, invoices, sanitary certificates, and certificates of origin. One of the world’s largest container shipping companies found that a shipment of avocados from Mombasa to Rotterdam in 2014 entailed more than 200 communications involving 30 parties. A giant container vessel may be associated with hundreds of thousands of documents. It is claimed that removing administrative blockages in supply chains could do more to boost international trade than eliminating tariffs.

INFRASTUCTURE
Latin America is hobbled by its inadequate infrastructure. More than 60% of the region’s roads are unpaved, compared with 45% in emerging economies in Asia and 17% in Europe. Two thirds of sewage is untreated. Poor sanitation and lack of clean water are the second-biggest killer of children under five years old. Losses of electricity from transmission and distribution networks are among the highest in the world. Latin America spends a smaller share of GDP on infrastructure than any other region except sub-Saharan Africa. The biggest need, say economists, is for roads, railways, ports and urban transport to speed exports and the travels of workers.

ADVERTISING
The advertising and related services industry in Canada generated C$9.4-billion in operating revenue in 2016, up 1.4% from 2015. Operating expenses rose 1.7% to $8.1-billion resulting in an operating profit margin of 13.4%. Firms in Ontario accounted for 57.1% of total operating revenues, followed by Quebec (21.6%), British Columbia (10.3%) and Alberta (6.6%). Sales to clients outside Canada rose 2.5 percentage points to account for 11.0% of total sales to clients.

BEDS
Airbus has found a new way for passengers to stretch out, as long as they are willing to sleep in the cargo hold. The European airplane maker is to create cargo sleeper berths for Airbus A330 jets. The mini-cabins, or passenger modules, will sit directly on the cargo floor and will not affect the loading of freight and luggage. Airlines will be able to swap the sleeping modules in and out of planes in place of regular cargo containers. Claustrophobia sufferers may have a problem as the cabins do not have windows. There are more than 1,300 A330s currently in operation around the world.

HERITAGE
The ancient population of Britain was almost completely replaced by newcomers about 4,500 years ago according to a new study. The findings mean modern Britons trace just a small fraction of their ancestry to the people who built Stonehenge. The astonishing result comes from analysis of DNA extracted from 400 ancient remains across Europe. The reasons remain unclear, but climate change, disease and ecological disaster could have all played a role.

EMISSIONS
Tensions were high recently at a meeting of the International Maritime Organisation in talks aimed at curbing emissions from global shipping. The industry collectively produces more CO2 than Germany. European countries are pushing for binding targets in line with the proposed Paris climate-change agreement. Big commodity exporting countries such as Brazil and Saudi Arabia say more onerous curbs could penalize their economies. But as more products are shipped, at faster rates and over greater distances, the industries share of CO2 emissions will rise.

BANDAGES
A “smart bandage” has been developed by the University of Victoria that detects the first signs of infections and changes colour which could reduce deadly infections and reduce amputations. Right now, the bandage begins to sterilize the wound as soon as it is applied, even if its sensors have not detected an infection. The health system costs of wound management are growing with challenges of an aging population and increases in obesity and chronic diseases such as diabetes.

CARIBOU
The Canadian government is warning it will impose tougher rules for resource companies working in the boreal forests unless Provinces act to protect endangered caribou. Companies involved in oil and gas, mining and forestry are facing a call from scientists and environmental groups that many threatened boreal caribou herds face extinction unless urgent action is taken to protect and restore habitat.

AIRPORTS
Daxing International Airport will serve Beijing after it opens in late 2019 and will be the world’s biggest airport. It will have eight runways and room for 100-million passengers a year. The new facilities will be needed to serve a fast-growing appetite for air travel. Between 2010 and 2017 passenger numbers on China’s three biggest carriers grew by 70 per cent to 339-million. As China’s carriers expand, their Gulf rivals, which for a decade have seen passenger growth of over 10 per cent a year, are languishing. IATA predicts than China will overtake America as the world’s biggest aviation market by 2036.

TRENDS
Palm oil can be found in everyday items ranging from peanut butter and chocolate to instant noodles. Now, a UK supermarket chain Iceland, is to ban palm oil which is used in more than half its products from cookies to soap. Iceland has said that growing demand for oils is devastating tropical rainforests across southeast Asia. The ban only applies to Iceland-brand products and Iceland says it has already found alternative recipes for 50 per cent of its own-label brands. Iceland was the first UK supermarket to ban GM-grown crops and drastically reduce plastic packaging.

BACTERIA
Antibiotics were heralded as life-savers when they became widely available in the 1940s. Today, they are fast becoming killers themselves. The more any given antibiotic is used, the greater the chances that bacteria will develop antimicrobial resistance that renders the drug ineffective. By one estimate, 700,000 people currently succumb to antibiotic resistant infections every year. If current trends continue, the number of deaths will rise to a devastating 10-milion a year by 2050. That toll would amount to US$100-trillion in foregone economic output.

WARNINGS
A Los Angeles judge has ruled that California law requires that coffee companies should carry a cancer warning label. The judge ruled that Starbucks and other coffee companies failed to show that the threat from a chemical compound produced in the coffee-roasting process was insignificant. The coffee industry claimed that the chemical was present at harmless levels and should be exempt from the law because it results naturally from the cooking process to make the beans flavourful.

HEADLIGHTS
According to a UK automobile association (RAC), drivers are being temporarily blinded by modern vehicle headlights. Two thirds of 2,061 drivers surveyed said they are regularly dazzled by oncoming headlights, even though they are dipped. 67 per cent of those said it can take up to five seconds for their sight to clear with a further 10 per cent claiming the effect on their eyes lasts up to 10 seconds. The RAC says advances in headlight technology were causing the problem. 15 per cent of drivers polled said they had nearly suffered a collision as a result of being dazzled by other drivers.

TRADE
The leaders of 44 African countries have signed a deal to create one of the world’s largest free trade blocs. It is hoped that the deal, which will need to be ratified by all 44 national parliaments before the bloc becomes a reality, will come into force in the next six months and increase prosperity for 1.2-billion Africans. But 10 countries, including Nigeria, have refused to sign the deal. The African Continental Free Trade area will remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members.

HAPPINESS
This year’s happiest place on Earth is Finland according to a new UN report, toppling Norway from the top spot. Nordic countries regularly appear in the top five. War-hit countries and a number of sub-Saharan African countries regularly appear in the bottom five. The UN survey ranks some 156 countries by their happiness levels and 117 by the happiness of their immigrants. Canada was 7th and the UK and US were 19th and 18th respectively.

CARE
Researchers at Harvard Medical School found that when heart specialists are away at academic conferences, the survival rate at their hospitals actually improves. It is believed that specialists who attend the meetings are more prone to using intensive interventions for their patients which may do more harm than good, rather than taking a more holistic approach.

WOOL
The price of wool has reached an historic high after decades of poor returns and Australian woolgrowers are saying the market is stronger than it has been in 30 years. The hike has been driven by strong demand from China and European fashion houses, as well as growing interest from shoe and sportswear companies in the US. Prices recently reached US$18.30 per kilogram, double where it was eight years ago. Almost 80 per cent of Australian wool exports go to China but there is also strong demand for high-quality superfine wool from Italy.

SELF-DRIVE
A US retirement village is to have the largest self-driving taxi scheme. The US firm Voyage will start rolling out the service at The Villages, Florida which is home to 125,000 senior residents. The scheme spans some 750 miles of roads and will be the largest by area in the world. It comes as safety concerns about self-driving cars persist after testing problems and some accidents. Once the scheme is fully operational residents will be able to summon a self-driving car using a mobile app. The sprawling Villages encompasses three distinct downtown areas, more than 100 dining options, eight major supermarkets and 7.8-million square feet of commercial real estate.

DEATHS
The total number of deaths in Canada was 264,333 in 2015, the highest annual total since the introduction of the vital statistics registration system in 1921. The increase in the total number of deaths can be attributed to two factors. The first is the population of Canada is growing at the fastest pace among G7 countries. A larger population generates more deaths. The second factor is population aging. An increasing share of the population is now older and death rates increase with aging. There were slightly more male deaths (133,441) than female deaths (130,892) in Canada in 2015.

OIL
Bahrain says a newly-discovered oil field contains up to 80-billion barrels of shale oil dwarfing the Persian Gulf island kingdom’s current reserves. It is also estimated that it contains 280-billion to 560-billion cubic metres of natural gas. The finds could turn Bahrain into a major player in the global market.

FINES
Social media reacted with outrage after a pregnant Frenchwoman was fined US$74.00 for walking the wrong way at a Paris metro station. The ticket was issued when she tried to shorten her journey by walking counter to a one-way system at the station.