Mixed Signals on Global Economy: #Investment Up, #Trade Down!

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Photo Credit: investmentpolicyhub.unctad.org
The latest data from the UN for 2015 evidences record global foreign direct investment. However, measures of trade, at least according to shipping data indicate something worse than a mere slowdown – the “Baltic Dry Index” has hit a record historical low. Perhaps the truth regarding the health of the global economy and the presumably symbiotic relationship delivered by trade and direct investment lies somewhere in between. Also, new equations have to be considered from income inequality to the impact of such on everything from the health of democracy, populist politics, and risk/reality of violent conflict on regional or even global level.

While the new global economy has favored some winners, there are also many who have been displaced, from employment to benefits traditionally linked to jobs in advanced economies. Most believe that capital has fared better than labor, and very frequently expediency over safety and health. On the other hand, government directed investments have not proven to be an effective alternative in job creation or innovation. Government may facilitate jobs as it does the work of artists. However, creating art or enterprise relies upon the vision and endeavor of the individual(s) even when motivated by the social.

The “Global Investment Trends Monitor” has hit a record high. This measure though, compiled by the UN Conference on Trade & Development, is highlighted in the release by the following headline:  “FDI is unexpectedly strong but lacks productive impact.”

Perhaps the answer lies in new perspectives. Greed may not be the only measure of the success of capitalism and global trade/investment. On the other hand, private enterprise may still be the most effective driver of capital, employment and intellectual resources. A new paradigm may be on the horizon where profit and altruism are complementary: Read our definition of “Social Responsibility Entrepreneurship” vs “Socially Responsible Enterprises.”

 

 

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