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With a new major industry agreement, favorable demographics and relative good fortune in pandemic management, Asia is taking on global leadership. Has the “Asian century” just begun?
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Likhit Wagle, Managing Director of IBM’s World Bank and Financial Markets, talks to Global Finance about the industry’s urgency to digitize and counteract the risk of primary technologies.
With a new major industry agreement, favorable demographics and relative good fortune in pandemic management, Asia is taking on global leadership. Has the “Asian century” just begun?
For Global Finance’s leading TCM banks, navigating the Covid crisis, AI, innovation, greater FX features and genuine time for virtually everything.
Household savings are explained as the difference between a household’s available source of income and spending on goods and services. During the pandemic, it reached historical levels everywhere.
On October 27, Global Finance organized a panel discussion on sub-departments, moderated by editor and editorial director Joseph Giarraputo. The roundtable timetable focused on key problems in the sub-guardian sector, including: the global and regional have an effect on the COVID-19 pandemic in subcustodies; The effectArray . .
The working citizens and the well-adjusted economy of the ECO are in favour of post-Covid recovery.
As the world continues to fight the Covid-19, Central and Eastern Europe (ECO) and South-Eastern Europe (SEE) pandemic, they appear to have withstood the economic typhoon that followed longer than expected. this year, after a 5. 6% fall in 2020, Hungary is likely to compensate for last year’s 5% fall in GDP with an expected accumulation of 5. 4%. Meanwhile, Poland is expected to grow by 4. 5%. GDP, more than compensating for the 2. 7% contraction in 2020.
“Polish PMI parts show that new orders are emerging sharply, and expected orders have been developing at the fastest speed since September 2017,” ING Bank said, adding that the main demanding situations are “the disruption of the supply chain, the labor market and the third wave of Covid 19. “
Capital Economics echoes this optimism, noting that Romania recorded an impressive expansion of 5. 5% in the fourth quarter of 2020. La a London-based economic studies consultancy forecasts a resumption of activity in the region, attenuated through the announcement that the speed of vaccine deployment, with the first encouraging symptoms”.
Explaining the recoverability of the countries of Central and Eastern Europe and South-Eastern Europe, economists point to their diversified economies, a well-trained pictorial force capable of adapting and moving to where painting is, a developing middle class, close integration into European and global chains of origin, and a dynamic export sector. All this is true, but there are other points at stake more and more.
When the transition to market economies began in 1990, the region’s appeal was a reasonable workforce related to proximity to key EU countries such as Austria and Germany, and a reputation for excellence in sectors such as automotive, electric power and petrochemicals. attracted a definitive expansion until the 2008 currency crisis. Since then, however, governments, investors and businesses have moved towards high-value-added production and services, aware that they cannot, or even need, compete with Asian or North countries. African wage levels, but also aware that they will have to avoid the intermediate source of income trap. However, start-ups know that the region’s profits position it perfectly for expansion.
“Government is a priority to inspire local businesses and start-ups, in many cases using the cash earned through Brussels (including its Cohesion Funds) and IFIs,” says Grzegorz Zielinski, regional director of the EBRD and director of Central Europe and the Baltic countries.
Focus on innovation
Innovation and venture capital have been key drivers, i. e. for the ICT sector and the public and personal sectors are now fully digitized. Estonia, the world’s largest digitized economy, is at one end, but other countries are catching up, helped through the public sector. investment in 5G, fiber optic broadband and increased ICT education.
“The continued progression of generation in this region desires greater recognition,” says Paul Juszkiewicz, Head of Commercial Development at GPW Tech, a member of the Warsaw Stock Exchange Group. It notes that Estonia has nine times the number of IT workers in India, according to 100,000 inhabitants and that emerging Europe in total has 4 times more.
This has led to the emergence of a success of local ICT SMEs and unicorns along with more well-known foreign names such as Orange. Romania has earned a foreign reputation for robotic procedure automation corporations run through UiPath, which started at a local garage in 2005, but is now the historic city of Cluj, Transylvania, has one of the most important emerging IT centers in Europe, while Poland has noticed the emergence of primary IT centers in Katowice , Poznan and Wroclaw. On the other hand, it has a primary outsourcing center, described through Kearney as “the first location of IT centers, which offers many facilities to both multinational corporations and national corporations. “
There has also been a dramatic increase in pandemic-driven e-commerce. Alegro, Poland’s reaction to Amazon, is now the largest company indexed on the Warsaw Stock Exchange with a market capitalization of $15 billion, making it bigger than domestic oil. Corporate PKN Orlen. In Romania, eMag has the largest online store and has also established a physical presence.
Horst Ebhardt, Vienna-based spouse and co-director of the Corporate/M team
“In addition to expanding and attracting more complex types of investment, the region is also making a profit from quasi-support,” says Theiss. “Multinationals and others are moving from China to this region, with smart legal and educational systems and, [countries] that are safer, either near or within the EU. “
This escalation has been evident in the automotive industry. For more than 20 years, it has been the main driving force for production in Central and Eastern Europe, with Slovakia being the world’s largest car manufacturer in line with capital, followed by Hungary and the Czech Republic. Republic. The factories in the region produce the newest high-tech cars from Audi, BMW and other brands. Poland and the Baltic countries also play a vital role in supplying spare parts for the industry, and last year Poland unveiled its new electric car, the Izera. , along with other models to follow. As the global automotive industry modernizes, becomes eco-friendly, and switches to electric cars, the CKD will not be left behind.
“There is already a massive price chain to serve the existing automotive industry, so everything deserves to be in position for the electricity revolution when it happens,” Zielinski says, noting that the transformation has only slowed down due to a shortage of electric batteries. .
However, even that is becoming as corporations established services to generate electricity. The EBRD and EED have provided loans for LG Chem’s new gigaplant in Wroclaw, while Johnson Matthey has also opened a new battery fabric plant in Poland, backed by a LOAN from the EBRD. . Zielinski says other production sites are being worked on in Slovakia and Hungary.
It argues that the pandemic has caused disruptions in the AUTOMOTIVE industry in the ECO countries – that is, in the call for aspects – complex production processes, related to social estating and other measures, have kept it to a minimum.
The other primary sector that is becoming is renewable energy. Aware of the desire to improve the environment and reduce dependence on Russian oil, the government has put a green schedule at the forefront of its plans, however, countries are at various stages: Latvia now has 40% of its electricity generated through hydropower, while at the other end, Poland remains heavily dependent on coal and lignite , which still account for 70% of energy production. , however, there is obviously a long way to go.
“Sticking to the production of electricity from coal is not sustainable, which means opting for nuclear or renewable energy. Nuclear force is expensive, and power plants take perhaps a decade and a part to build; so it leaves it renewable, ” says Zielinski. “With the ever-increasing and cheaper generation, we are seeing abundant activity, especially with solar and solar photovoltaic [photovoltaic] wind energy, but offshore wind energy has large investments. It suggests that Polish banks that are too liquid to invest. “In this area, as the government passed a law on offshore wind production in January, the plan is to install 3. 8 gigawatts of turbines until 2030, 10 gigawatts until 2040 and 28 gigawatts until 2050, making Poland the largest manufacturer of marine wind power in the Baltic.
A margin of expansion for renewable energy
Konrad Kosicki, who advises Wolf Theiss’ energy customers, says the alternative/renewable energy market in Poland and Central and Eastern Europe is lately very hot. “Rising costs of electricity and new technologies have given the industry a boost,” he says. “The 10 gigawatts generated through the wind and the 2 gigawatts through solar energy are just the beginning. “
A long-term priority will be infrastructure improvements, which are falling behind in key countries such as Poland and Romania. Many governments have prioritized investment in railways, highlighting their ecological appeal, and the European budget has been made necessary to help modernise Road investment is also developing at a stable pace, although much remains to be done, namely to strengthen north-south connectivity. The eventual final touch of the Via Carpatia, which connects the Baltic Sea with the port of Klaipeda in Lithuania to the Black Sea in Constanta, Romania, through Poland, Slovakia, Hungary and Romania, will be a major asset.
In addition to ongoing upgrades to broadband and 5G networks, Zielinski believes district heating is another priority, and local businesses need to connect more to local power grids and use green energy such as biomass to improve air quality.