11-12-2005, 05:10 AM
High energy prices are here to stay HSBC chief economist warns CIMA conference
11 November 2005
Speaking at yesterdayâs CIMA Annual Conference, HSBCâs Stephen King - one of the UKâs leading economists - warned delegates that âHigh energy prices are not just the result of immediate events such as hurricane Katrina and war in Iraq. The increase in demand is fuelling higher oil prices that are here to stay. This is not a temporary rise.â
Globalisation, said Mr King, was a game in which some would profit, while others would lose, both economically and in terms of energy consumption. âThe trend in recent years has been to try to apply a mathematical model to the economy, but that no longer stacks up. Globalisation means that there will be winners and losers. Higher oil prices will reward oil producing nations rather than oil consumers but, because of an absence of wage pressures, there should be no major problem for inflation in the industrialised world.
However, he continued âIf energy consumption continues to rise at the levels expected, China will be consuming the equivalent of all of todayâs energy supplies in the next 20 to 30 years. The winners in this will be the oil consuming nations, not the energy consumers.
Coming to issue of management and employment, Mr King told delegates that âOne of the key trends is a shift in economic power from Western workers to workers in developing markets. This is driven by the size of their working populations. While the EU has 250m people of working age and the US has 200m, China has 900m and India has 680m and rising. And where we were once complacent that this shift - and the outsourcing of jobs - used only to apply to less skilled occupations, there is evidence that this is changing.â
He warned against complacency over the outsourcing of work to developing countries. For while this has traditionally applied to the less skilled end of the employment market, he said, a recent United Nations study reported the fact that in future multi-national corporations expect to spend their R&D budget in
China
US
India
Japan
The fact that no EU countries feature in this list of top four economies likely to benefit from multi-national R&D spend was also identified as potentially having implications for the future labour market for educated and skilled workers.
Mr King also emphasised the fact that both political changes and the cost of communications have been key influences on the global economy. Political changes have led to the integration of countries such as China into the global economy, while reductions in the cost of communications mean western workers are now competing with the rest of the world. A primary example of this is the fact that in 2000 a one minute telephone call from India to the US cost 60 rupees and now costs around seven rupees, while the cost of the same call from India to the UK was 48 rupees in 2000 and also costs approximately seven rupees in 2005.
- ends â
For further information, please contact
Lynda Hardy Maskell, CIMA
+44 (0) 20 8849 2347
[email protected]
BELIEVING IN YOURSELF IS THE FIRST STEP TO SUCCESS.
never tell Allah how big ur worris are?...........just tell ur worries how big ALLAH is .....
[email protected]
11 November 2005
Speaking at yesterdayâs CIMA Annual Conference, HSBCâs Stephen King - one of the UKâs leading economists - warned delegates that âHigh energy prices are not just the result of immediate events such as hurricane Katrina and war in Iraq. The increase in demand is fuelling higher oil prices that are here to stay. This is not a temporary rise.â
Globalisation, said Mr King, was a game in which some would profit, while others would lose, both economically and in terms of energy consumption. âThe trend in recent years has been to try to apply a mathematical model to the economy, but that no longer stacks up. Globalisation means that there will be winners and losers. Higher oil prices will reward oil producing nations rather than oil consumers but, because of an absence of wage pressures, there should be no major problem for inflation in the industrialised world.
However, he continued âIf energy consumption continues to rise at the levels expected, China will be consuming the equivalent of all of todayâs energy supplies in the next 20 to 30 years. The winners in this will be the oil consuming nations, not the energy consumers.
Coming to issue of management and employment, Mr King told delegates that âOne of the key trends is a shift in economic power from Western workers to workers in developing markets. This is driven by the size of their working populations. While the EU has 250m people of working age and the US has 200m, China has 900m and India has 680m and rising. And where we were once complacent that this shift - and the outsourcing of jobs - used only to apply to less skilled occupations, there is evidence that this is changing.â
He warned against complacency over the outsourcing of work to developing countries. For while this has traditionally applied to the less skilled end of the employment market, he said, a recent United Nations study reported the fact that in future multi-national corporations expect to spend their R&D budget in
China
US
India
Japan
The fact that no EU countries feature in this list of top four economies likely to benefit from multi-national R&D spend was also identified as potentially having implications for the future labour market for educated and skilled workers.
Mr King also emphasised the fact that both political changes and the cost of communications have been key influences on the global economy. Political changes have led to the integration of countries such as China into the global economy, while reductions in the cost of communications mean western workers are now competing with the rest of the world. A primary example of this is the fact that in 2000 a one minute telephone call from India to the US cost 60 rupees and now costs around seven rupees, while the cost of the same call from India to the UK was 48 rupees in 2000 and also costs approximately seven rupees in 2005.
- ends â
For further information, please contact
Lynda Hardy Maskell, CIMA
+44 (0) 20 8849 2347
[email protected]
BELIEVING IN YOURSELF IS THE FIRST STEP TO SUCCESS.
never tell Allah how big ur worris are?...........just tell ur worries how big ALLAH is .....
[email protected]
