Ambassador Jaeger and Christian Forstner at the First Year Seminar

As we are heading to the end of our Fall semester seminar, we have still three more guests to come and talk to students at the Georgetown McDonough School of Business. Yesterday, Nov. 15th, we had the pleasure to hear from two of these guests: Mr. Christian Forstner and Ambassador Kurt Jaeger.

Mr. Forstner is the Director of the Hanns Seidel Foundation’s Washington D.C. office, working with interested partners across the political spectrum to promote strong German-American ties. Part of his responsibilities is to facilitate high-level political dialog between German and American, covering topics such as international trade policy and transatlantic security and defense policy.

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Mr. Forstner first started working at the Hanns Seidel Foundation in 2000, as Director at Moscow’s office. He also served the EU Commission as a Team Leader for the Technical Assistance to the Commonwealth of Independent States (TACIS) project.

Mr. Forstner has a master’s degree in Political Science, European History and Russian Literature from University of Munich and Moscow University of Foreign Languages, and developed several publications on EU affairs, security policy, and Russian and U.S. politics.
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Ambassador Kurt Jaeger was appointed to the United States in August of 2016. He has over 25 years of experience in international regulatory affairs,

Mr. Jaeger was Ambassador of Liechtenstein to the European Union (EU) and Belgium from 2010 to 2016. Previously, he worked at the Swiss Federal Office for Civil Aviation for six years, being responsible for international air transport regulation and policy, and then became Executive Assistant to the Director General for Civil Aviation.

Before becoming Ambassador, Mr. Jaeger was also elected as one of three members of the Board of the European Free Trade Association (EFTA) Surveillance Authority in charge of monitoring and enforcing the application of EU law in the European Economic Area (EEA) by the three EFTA-States Iceland, Liechtenstein, and Norway.

Ambassador Jaeger has a degree from the University of Fribourg, Switzerland, with a license en droit and with an LL.M. from McGill University, Montreal.

To know more about the First Year Seminar previous guests, please click here.

Language Matters in Ukraine’s Educational Reform | Commentary

john-mark-kuznietsov-134302 (1)Recently, the Washington Post wrote about the law restructuring Ukraine’s education system and establishing Ukrainian as the main language in schools. The new law concerns neighboring countries such as Russia and Hungary about the rights of ethnic minorities.

Why do I consider that important? In addition to creating political tensions in the region, this action may lead the country to a lack of unity and economic inefficiency. By reducing the role of other languages, even though they are clearly present in the country’s cultural mix, the new law segregates between those who speak Ukrainian and those who don’t. It can create an identity problem since language is one of the key-factors that compose one’s sense of belonging.

The new law can have economic consequences as well. It may limit work and educational potential by excluding a part of the population. According to the Post, about 30 percent of Ukrainians called Russian their mother tongue in the 2001 census. There are about 150,000 ethnic Hungarians in the country, accompanied by other minorities such as Romanians and Moldovans. Everyone who does not speak the official language may start facing inequality of payment and lack of work opportunity.

Instead of imposing limitations, it may be worth to embrace the different ethnicities and harness the diverse heritage from its people. Doing so may help inducing an inclusive educational environment and offer steps to guarantee an even more rich economy in the coming years. Just imagine all the business Ukraine can do in Hungary and Russia.

International marketing is a useful answer to a population which benefits from diverse capabilities.

(Click here to read the Washington Post article.)

Great Things Can Happen and Not Just for America

When President Trump attended the G20 meeting in Hamburg, Germany, the aspects publicly reported were mainly uncontrolled demonstrators, burning Porsche cars and police at the end of their rope. Few benefits were attributed to the meeting. That is incorrect.

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2015 Global Markets Trends & Forecasts

Global GDP2

2014 gave us a few unexpected turns in the global economy. There was the concern over the long-lasting effects of Ebola, the ISIS, and Ukraine. Aggressive policies regarding climate change have yet to take effect. The economic recovery of Western Europe and Japan are faltering. Brazil, Russia, and China’s growth have come to a halt and are slowing down. The United States, however, has continued its positive recovery and there seems to be a lot of changes in store for international business this coming year. Let’s get ready for 2015.

  • Slow but steady growth in the global economy

The global economy is taking longer than anticipated to recover from the debt bubble. The IMF projected that the world economy would be at 4.8 percent by 2015. However, 2014 ended with only a 3 percent growth overall. While the United States has pretty much met its growth targets, the disappointments came from the BRIC (Brazil, Russia, India, China) economies, Western Europe, and Japan. Forecasts have been adjusted for the coming year with an estimated growth of 3.4 percent for 2015.

  • Emerging markets dominate

Emerging markets rather than developed economies will fuel much of the growth. The United States will still be a major player in the overall growth of the global economies. However, Western Europe and Japan will grow only an estimated 1 percent and China’s 7 percent will be its lowest in 15 years. Much of the growth will come from Asia and Africa. Specifically, Mexico, Indonesia, Nigeria and Turkey will be on the watchlist for booming economies.

  • Oil prices will continue to fall

The demand for oil will decline due to alternative sources and supply in other areas of the world. This will lead to the continued fall of oil prices affecting countries such as Iran, Nigeria, and Russia.

  • Climate change will still be a threat

Record-high temperatures continue to be seen with Antartica experiencing its coldest winter so far. Coal is still highly used and international policies to curb this practice are weak. This may lead to drastic effects such as shortages in water and the supply of world’s food system and inevitably contributing to world hunger.

  • Innovation, new technologies and hacks will continue to affect us

While spending is somewhat low and demand is weak, businesses are in a better position for recovery by investing in new technologies to get ahead of competition and for future savings. The search for more fuel-efficient machines by Boeing and Airbus is an example of this trend. Another example, is with the United States, who has contributed to innovations in oil drilling thus resulting in an oil boom and affecting world prices.

The global outlook for 2015 should be better than 2014. It may not be much, but it’s way better than negative.

How will these trends affect you and your company? Tell us what you think.

Sources:

  1. http://www.goldmansachs.com/our-thinking/outlook/2015/index.html#infographic
  2. http://www.businessweek.com/articles/2014-11-06/2015-global-economic-outlook-better-than-2014-but-not-by-much
  3. http://www.businessinsider.com/business-insider-global-20-2014-2014-1?op=1 

Of Crimea and Punishment

Governments attempt to impose comparable sanction burdens on each other. However, due to cultural and historic differences, a policy based mainly on sanctions will lead to inequities and substantially therefore increase the risk in international trade.

Key differences exist between Russia and western nations regarding profit, competition, risk and reward, private property and growth, and   how they affect the outcome of sanctions.

In the U.S., profit is the expected result of doing business, and low profits are usually blamed on management. By contrast, lower profits in Russia allow its government to shift the blame onto foreign culprits.

Private property is a key reward in the United States, while in Russia ‘private’ often means responsibility and risk exposure.  Since growth is key in the U.S., any inhibitors of growth are seen with concern. A wide variety of economic performance in Russia, makes its growth much less of a pressure point.

Sanctions against the U.S. may burden the population and lead to new candidates and policies.  In Russia, the sacrifices imposed by sanctions seem to indicate dedication and strength. Declining U.S. profits or growth cause doomsday scenarios, while time is expected to bring economic improvement.

Losing out on the very latest technology means falling behind for Americans. For Russians, pretty good technology is a pretty good achievement. Russian ownership of space ferries and satellites and their use by the U.S. makes them proud.

Russia’s size of 6.6 million square miles makes it the largest country in the world.  The 300 million U.S. population more than doubles that of Russia. Still, the Russian market is of great importance for many global firms.

There are only few historical rewards for former leaders. For example, though Greece invented the Olympic Games, no points are given for that ancient super action. Going first with the Greek flag when marching into the Olympic Stadium is just about all there is. Russia may well see its existing strength and market size as an opportunity for leadership.

We all are said to understand each other so much better than in the past. Yet, much of our thinking is based on our history, culture and outlook. They define our spheres of interest, which we aim to preserve. Ukraine, for example, will tend to be closer to Russia than to the United States. The average Russian understands as much about Columbus, Ohio as the average American does about Sevastopol.

Global relationships between Russia, Asia, Europe and the United States are being re-balanced. Key changes are likely to come from outside the United States. It would be unwise to undertake transformations without dampening the key concerns of key players on all sides.  

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Prof. Michael R. Czinkota