Bulgarian Hoteliers to Start Own Bank to Tame Credit Crisis

The Bulgarian hotel owners are all geared up to start their own banking initiative to overcome the high interest rates as rentals and revenues are receding owing to the ongoing economic downturn and other obstacles. According to Sofia News Agency, to strengthen its plans, the hoteliers are in talks for a joint venture with the Bulgarian Construction Chamber, which also announced similar plans to establish their own financial institution.

The President of the Bulgarian Association of Hotel and Restaurant Owners, Blagoy Ragin, said that the only way to deal with the negative effects of the economic crisis was to create a bank of its own. The unique way of funding the hotel industry with its own means is the brainchild of Georgi Shterev, the owner of a Black Sea beach resort in Golden Sands.

The concept was overwhelmingly accepted by all major hoteliers in Bulgaria including owners from the top Bulgarian tourist destinations such as Golden Sands and the other major beach resort Sunny Beach. And that includes the winter resorts of Bansko, Chepelare, Smolyan and Ribaritsa, the SPA centers of Velingrad, and Sandanski, the cities of Sofia, Veliko Tarnovo and Dobrich.

Ragin stated that those who wished to become the members of the new financial institution would have to deposit close to $40,000. The association intends to raise funds of about 8mn as a minimum required capital for this venture. Ragin feels that raising that amount is an achievable target, if just 200 out of the 1000-odd members of the association chipped in for the cause.

The president of the hoteliers’ association informed the funds would be used to buy out the default loans and grant new ones with interest rate 2 percent lower than the commercial banks. He warned that anyone who backed out of the initiative would find themselves isolated and eventually succumb to the crisis.

Since the onset of the global economic crisis the revenues of hotel business in Bulgaria have fallen by about 30 percent, and the recent H1N1 advisories made matters worse for the hotel owners. Besides, they face challenges such as, redundancy and lowered rentals, and the competitive pricing by hotels of the neighbouring Turkey and Greece have even lured away the domestic tourists.

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Canada Aims to Feed the Growing Seafood Appetite of Asia

The Canadian fish industry is agog over capturing the new emerging markets of Asia through aggressive promotion programs in spite of competition from ASEAN fishing industry. The Canadian fishing industry see great business potential in marketing their products in emerging Asian economies including China, Japan and S. Korea.

They argue the sudden economic growth of many Asian countries have brought about change in their dietary needs aided by higher purchasing power to go for expensive food products such as, lobsters and shrimps. Currently, major chunk of the Canadian fish products are exported to the US, however, the effects of downturn force the industry to expand to far-off markets of Asia despite likely stiff competition from the local and neighbouring producers.

As part of promotion, representatives from the lobster industry in Nova Scotia and the government recently completed a 10-day trade mission to China. Last week, Alberta government too took similar initiatives to send feelers to Japan and Hong Kong to show its interest in increasing its presence in their seafood markets. In a partnership running through April 2010, Agriculture and Agri-Food Canada have teamed up with the Canadian Tourism Commission to export food products to South Korea.

Estelle Bryant, the mission market development officer with the Department of Agriculture in Nova Scotia opined that lobsters were a luxury product and there were only a finite number. He added that if one wanted a strong lobster industry one had to increase what one got for them, and China had the real appetite for it.

It has been observed that there was great demand for live seafood and could attract good price from the burgeoning Chinese middle class, which is annually growing by about 300,000. These days, the Chinese middle class serve expensive lobsters as a special delicacy during wedding banquets and other festivities.

Ivy Wang, who owns the consultancy business Atlantic Canada Business Network in China, felt that Canada’s seafood products were not aggressively promoted in China. Wang’s agency is collaborating with governments of New Brunswick and Prince Edward Island and private-sector companies for a18-month regional campaign to market frozen lobster products in China.

Canada’s exports of fish and seafood products reached around $3.7bn in 2008, and more than half of it went to the US markets. The exports to the US were up by just 2 percent from the previous year, at about $2.25bn.

The EU remained as another important market, importing $460mn, or about 14 percent of Canada’s fish and seafood products in 2008. Japan was the third largest with exports worth $294mn followed by China with exports increasing to $243mn during the same period.

Canada largely exports lobster, crab, salmon and shrimp, and these seafood products accounts for 46 percent of all fish and seafood exports by volume and 65 percent by value. Lobster remains number one, with exports in excess of one billion dollar.

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India Awaits Major Surge in Investments from the GCC

The Indian Ambassador to Qatar, Deepa Gopalan Wadhwa told the 12th Industrialists’ Conference, organised by the Gulf Organisation for Industrial Consulting that her country was expecting a surge in investments from the GCC bloc in view of the potential investment opportunities available today. She informed this while delivering the keynote address at the event on behalf of India’s Minister of Commerce and Industry Anand Sharma.

Wadhwa stated that India’s trade and investments in the Gulf bloc were set to rise sharply as the fast economic growth had boosted energy demand in the country. She said India offered a “secure and predictable” market for oil and gas from the GCC, but should not be confined to these sectors alone.

It has been observed that India’s geographical proximity and historical trade links make the country a prospective parking place for the Gulf bloc’s investments, and guaranteed higher returns. India’s total trade with the six-member bloc increased from $19.58bn in 2005-2006 to $86.9bn in 2008-09, and is well ahead of the EU’s $80.6bn and the ASEAN’s $44.6bn.

Despite having extended and strong ties with the GCC, India just has been able to attract investments from the UAE. The cumulative investments from the UAE were just over $1bn during April-July this year, but the two-way trade between both countries stood at $44.5bn in 2008-09.

Although GCC is the largest trading bloc, the investments to India from the region did not keep pace with the growth. Currently GCC member states’ share is less than 1 percent of the FDI in India.

According to a recent United Conference for Trade and Development study, India’s FDI inflows jumped 85 percent in 2008 against a 14.5 percent decline in overall global FDI inflows. With the likely conclusion of FTA between India and the GCC by next year the country is expecting investments to pour in from the region.

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Survey Finds No Country is Immune to Economic Crimes

PricewaterhouseCoopers’ (PwC) bi-annual Global Economic Crime Survey which gives exhaustive data on the business frauds found that no country was immune to corporate frauds. The findings of the survey indicated that besides the global economic stress, one-third of the organizations across the world, fell victim to economic crimes.

The online survey that was conducted between July and November with more than 3,000 respondents from 54 countries regarded asset misappropriation during the past 12 months as the number one enemy of corporate growth. The report stated that economic crime was intractable because of the many kinds of fraud and the broad range of employees involved in it.

Asset misappropriation or theft at 67 percent topped the economic crime chart, is the most pervasive, followed by financial statement fraud, at 38 percent, and bribery and corruption came third with 27 percent. Other reported crimes included intellectual property infringement, money laundering, tax fraud, insider trading and espionage.

The survey with assistance from the Fontainebleau, France-based INSEAD business school found economic crime remained rampant among organisations of all sizes, in all countries and industries despite increased regulatory action and anti-fraud controls in place. Of those respondents that identified underlying business pressures or incentives as the main reason for rising incidence of fraud, 47 percent said difficulty in achieving business targets and resultant job losses was the motivation for breaking the law.

71 percent of the respondents voted, Russia has the highest level of economic crime, followed by South Africa, 62 percent, Kenya, 57 percent, Canada, 56 percent and Mexico, 51 percent in the crime top 5 list. Low levels of economic crime were reported from Japan, 10 percent, Hong Kong (and China) 13 percent, and the Netherlands and Turkey, 15 percent each.

The most startling find was the change in internal fraudster profile with economic crimes committed by middle managers witnessing sharp rise at 42 percent of all internal frauds, up from 26 percent of 2007. On the contrary, the number of frauds involving senior execs declined over the same period from 26 percent to 14 percent. Tony Parton, a partner in forensic services at PwC said that increase in so-called “cappuccino crime,” or offences committed by middle managers, made sense because that cross-section of the workforce had felt a particular pinch during the downturn.

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UN Urges Online Haves to Chip in to the World Food Basket

The UN is pinning hopes on its “A Billion for a Billion” campaign, which appeals internet users to donate $1.50 or €1 a week to combat global hunger after the three-day UN food security summit ended on a dismal note. The non-committal from 192 nations about providing $44bn annually in agricultural development aid to the third world countries coupled with opposition over the UN’s proposal for foreign farmland investments sealed the fate of the recently concluded summit on the first day itself.

The World Food Program (WFP) Executive Director Josette Sheeran highlighted the campaign in a statement issued on the second day of the World Summit on Food Security taken place in Rome. She said food security was not only a matter of humanitarian assistance and agricultural development but also of national security, peace and stability.

Sheeran opined that the world it at critical crossroads due to food shortage that could spark off uprising, migration and death. Secretary-General Ban Ki-moon too raised similar concerns by saying that it was a vicious cycle that impoverished not only its immediate victims but all people. He was speaking at the backdrop of the political unrest that followed since severe food shortage and famine hit some parts of Africa and Asia.

As aid experts predicted, the summit began with the rejection of annual agricultural development aid. Besides, the participants devoid of G8 heads except the Prime Minister of Italy, Silvio Berlusconi did not commit on any time-frame on the promises they made during the summit.

The resentment was more obvious while the UN literature distributed in the summit calling for FDI in farmlands of poor countries was rejected outright. Libyan leader Muammar al-Gadhafi called it the ‘new feudalism’ and groups representing farmers termed it as ‘land grabs’.

According to some peasant watchdog groups, the ‘land grabs’ are found to be violating the rights of poor farmers, who are either thrown out or evicted by making them farmless and homeless after their plots were taken over for a pittance by foreign investors. Moreover, the produce from these farms are exported directly to the investors’ home country without leaving anything for the produced nation. As a result, it is feared, instead of hunger eradication it would only add to the misery by creating more food shortage and political unrest in these countries.

However, Ban informed the meet that more than 1bn people go hungry every day and 6mn children die of hunger every year, 17000 every day. He added the ‘food crisis of today’ was a wakeup call for ‘tomorrow’.

“A Billion for a Billion” slogan was evolved from the idea that more than a billion people go hungry, but more than a billion people are on the internet. The campaign intends to make a link between the ‘on-line haves’ and the ‘offline have nots’.

The WFP will need $1bn to provide food aid in the next six months to famine-hit countries that includes Ethiopia and Somalia. More than half of those hungry are in Ethiopia, and include some 4mn to 5mn children under five.

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