Ex. 8.2. Read and translate the following text:
GEOPOLITICS AND THE WORLD ECONOMY
What big-picture issues are likely to dominate geopolitics and the world economy in the coming decades? Here are some suggestions:
- The growth of the BRICS. The big story of the 21st century is the growth of Brazil, Russia, India and China (plus the Middle East). This is certain to translate into increased geopolitical influence for these countries.
- The decline of the dollar. One impact of the previous trend is that the dollar will lose its status as the world’s reserve currency. Central banks will hold fewer dollars, and oil will be priced in a range of currencies. But else will happen in the currency area? Will a common Asian or Latin American currency emerge? And what about the internal conflict over the euro – should it be strong to fight inflation or weak to help exporters?
- Climate change. Global warming is happening. However, any solution that holds back the progress of developing countries is likely to be resisted. Developing countries can accuse the developed nations of hypocrisy – western countries have already been through their industrial phase and have the luxury of thinking about sustainable growth. Developing countries don’t have this luxury.
- Peak oil. Global oil production is going to peak very soon – there’s just not enough left in the ground. So supply is shrinking. Also, developing nations are hungry for oil – for transport, industry, etc. So demand is rising. Put together falling supply and rising demand and you get one thing: much higher prices for the foreseeable future.
- Energy security and alternative energy. Some countries have energy resources, others don’t. And if you don’t, you have a major geopolitical problem. It’s called dependency. Put this issue together with peak oil, and it points in one direction: alternative energy. But some green activists are unrealistic about this – solar, wind, tidal, etc can only meet a fraction of the world's energy needs. The one technology that might make a difference is nuclear. And that, of course, is controversial.
- Shortages of other resources and commodities. The bad news continues. As well as a shortage of energy, we're also short of water (in China, Southern Europe and the Middle East). And as living standard rise, we'll find that many agricultural commodities (e.g. wheat, corn, meat) are in short supply as well.
Japanese industry in Europe
The growing role of Japanese manufacturers in Europe has attracted critical or even fearful comments. Little is heard about the achievements on both sides after 25 years of the Japanese at work in Europe. The excitement 26 years ago of England winning its first football World Cup overshadowed the significance of the opening of a factory in Runcorn, Cheshire, by zip fastener maker YKK. But that factory opening and the setting up of a plant in France by Pentel were to have more far-reaching effects on Europe, and the UK in particular, than any football match Both companies were Japanese and their ventures were the first trickle of a wave of Japanese manufacturing investment that has since swept Europe.
The volume has increased steadily. A few years ago there were 157 Japanese companies manufacturing in Europe. By last year the number had grown to 676. They are spread among several countries and industries. In terms of Japan’s total investment, the UK has attracted the lion’s share - about 40% - followed by France.
Iceland, not normally a beacon for inward investment, boasts a Sumitomo plant, though none of the executives are Japanese. The only major European country without a Japanese manufacturing presence is Norway.
Italy, which like France harbours pockets of anti-Japanese sentiment, has attracted few factories, but politics play little part in Japanese decisions on where to invest. Less than 10% of companies questioned for its annual survey by the Japan External Trade Organisation (Jetro) said pro-Japanese sentiment was a factor in their choice. Among companies that said it was important, most opted for the UK or Ireland. What matters to most companies, according to Jetro, is a good location for distribution, good infrastructure, quality of labour and availability of English- speaking staff.
The greatest activity has been in the electronics and electrical appliances sector. A decade ago there were 178 manufacturers in that category. Small to medium-sized businesses make up the bulk of investment. Japanese manufacturers across Europe employ an average of only 320 workers in each national company. Despite problems at home caused by the economic downturn in Japan, so far there is no hint of Japanese companies cutting back on investment abroad. But where it goes may be under review. Earlier this year Sanyo dropped plans to build battery factory in Barcelona, saying it was investigating eastern Germany and Poland as possible alternatives. However, Japanese companies generally have been very cautious in their approach to investment in eastern Europe.