Governments want to know: Are you Happy?

At a time when daily headlines announce death tolls from natural disasters, on-going wars, and disease it is a surprise to discover that governments around the world are asking their citizens:  are you happy?   

For years the idea that individuals, much less governments, were concerned with personal happiness was thought to be a frivolous preoccupation of Americans, especially those in California.  That may no longer be true.  Today governments of countries as diverse as Britain, France and China are evidencing concern and curiosity about the Happiness of their citizens.

For Americans the subject is an integral part of the culture. Their concern with happiness dates back to the words of one of the country’s founding fathers, Thomas Jefferson.   He cited as an inalienable right of all people the “pursuit of happiness”.  These words came to be understood as each person having the right to Be Happy.  That search for that happiness has been the subject of movies, books and songs throughout history and even serious research and studies. There is a  Journal of Happiness Studies that includes articles such as Who is Happy to Work More:  Americans or Europeans?  What Makes Entrepreneurs Happy?

As the titles of these articles suggest that Being Happy doesn't just create smiling people.  Now it seems that around the world there is growing sense that levels of a population's happiness may have an impact on the economic well being of a nation.   According to a recent article in the Economist, France’s President has suggested a new measure: GDH, Gross Domestic Happiness as an alternate to the traditional measure, GDP, Gross Domestic Product. (http://www.economist.com/node/18678991)   The term Gross Domestic Happiness isn’t new – it dates back to 1972 and was attributed to Bhutan's former King Jigme Singye Wangchuck.  President Sarkozy’s idea is new. 

In Britain the government plans to study the happiness of the population to help guide policy making.  According to a recent Reuter’s article,) in 2012 Britain’s Office of National Statistics will conduct a Well Being survey  (www.ons.gov.uk/well-being).  Their plan – to ask 200,000 people questions including:  How satisfied are you with your life nowadays? And How happy did you feel yesterday? (http://uk.reuters.com/article/2011/02/24/uk-britain-wellbeing-idUKTRE71N3C620110224)

But the idea doesn't rest just with European Union member countries.    The Los Angeles Times recently ran a piece titled “China Checks its Own Mood” that describes China’s efforts to convey the idea that the government is working to “let people live more happily and with more dignity.”
(http://articles.latimes.com/2011/may/16/world/la-fg-china-happiness-20110516).

Does your government want to know if you're happy today? 

What will I have to pay?

Wherever financial analysis appears - in print, on line, podcasts, the radio or early morning TV shows, there’s likely be to be a discussion of the value of one currency in relation to another.  China needs to revalue, the euro is shooting up, the yen is not moving--- followed by endless of discussions of what that means.  Then, we struggle to understand the implications of all these movements on our business, our national economy. 

However, sometimes our interest in exchange rate relationships is more personal. We just want to know if our favorite snack, drink or gifts we plan to purchase will be more or less expensive when we travel than when we buy them at home.    What will it take to buy a hamburger in Paris?  A martini in Cape Town?   Thanks to the Economist (www.economist.com) or Travel+Leisure (www.travelandleisure.com) we can find some answers.

Twenty-five years ago, in 1986, the Economist created the Big Max index.  At the most simple level it tells us the price of a Big Mac, in US dollars in over 100 countries around the world. If you look at the chart of the  July 2010 index posted on the currency website Oanda (www.oanda.com) you can see that the Big Mac has an average cost of $3.73 in the US.  However if you’re in China you’ll likely pay about $2.02 (the lowest cost of the countries listed) while in Norway the Big Mac is hits $8.16 (the most expensive in this list).  (http://www.oanda.com/currency/big-mac-index).  The purpose of the chart and analysis isn’t to help us to budget for our visits to McDonald’s but rather to illustrate the relationship, the parity or lack of it, between the currencies of multiple countries.  It’s a serious and interesting study.

There is an also an Alternate Big Mac index reported in 2009 that looks at how long people in 19 cities have to work in order to earn enough to purchase that Big Mac.  In Toronto it's 12 minutes while in Nairobi, it’s two hours.    www.economist.com/node/14288808?story_id=E1_TQNRRRDR

But as readers of this blog know from an August 2010 post it’s not just our Big Mac that’s used to compare costs around the world.  In  2004 the Tall Latte index appeared, in 2007 it was the I-pod and 2010 the cupcake was the measure.

Today it’s the martini.  The June issue of Travel+Leisure includes the Martini Index. www.travelandleisure.com/travel-blog/carry-on/2011/5/19/cost-of-martinis-around-the-world

According to this report in New York a martini will cost $19, $10 in Prague and in Paris, $25.  This report updates Travel+Leisure’s 2005 study of the same drink.  It isn't a surprise that costs have changed.   Six years ago a martini at a luxury hotel in Paris cost $26,  $15 in New York’s and in Shanghai it was $8  (today it’s $13). 

For me what's more  interesting than the changes in cost are the differences in cities listed.  In 2011we  see Cape Town, Singapore, Mumbai or Dubai  none of which appeared in 2005.   Warsaw, Geneva, and Seoul all included in 2005 aren't shown in this year.   In both lists:  Paris, New York, Shanghai, Buenos Aires and Mexico City. 

Martinis, Big Macs, I-pods and cupcakes give us a way to understand not only what a snack or gift may cost but also the relationships between currencies and the flow of travel and business around the globe.  What will be compared next?  What would you consider?

Africa: Land of Opportunities?

It’s easy to think of Africa of a continent of civil wars, famine, epidemics and lost hopes.  But that’s not the full story.  The May issue of Harvard Business Review (www.hbr.org) includes an article “The Globe: Cracking the Next Growth Market: Africa” that tells us there’s more to the story than doom and gloom.
http://hbr.org/2011/05/the-globe-cracking-the-next-growth-market-africa/ar/1

First of all, Africa is not one place.  It’s a continent with over 50 different countries, both large and small.  (As of this writing Sudan is the largest but July 9 when it splits in two, Algeria with over 33 million people  moves into that spot.  Smallest?  On the continent it’s Gambia with a population of approximately 1.5 million people.)

This article points out three factors that are changing the view of Africa as a potential market.  There is increased political stability in countries like Angola and Mozambique, reduced inflation and deficits and third more market friendly policies in places like Nigeria and Morocco.  The possibilities are drawing companies from China, India, Canada, France and the US to invest and expand.  (Among US companies Wal-Mart, Coca Cola and Yum Brands all are represented in multiple countries on the continent.)

But having noted that these countries present exciting opportunities the article goes on to caution the reader  to look carefully at each country.  History, culture, currency, income levels vary significantly.  The economies and possibilities differ in many ways.  Drawing on the research done by the McKinsey Global Institute (www.mckinsey.com), the authors divided the countries into four groups based on their economies.    The categories and examples of countries included?   Oil Exporter (Nigeria, Algeria, Gabon and Botswana); Diversified (South Africa, Cote D’Ivoire, Morocco) Transition (Kenya, Mozambique, Ghana) and Pretransition (Mali, Ethiopia, DRC). 

Simply looking at the chart used to illustrate the differences in these economies tells us that no two places are likely to be alike. Differences abound.  But looking forward, asking where should we be in 2013, 2016 and beyond, Africa and its many countries seem to merit consideration.   The challenges of entering these markets will be significant but as this article suggests, the rewards are likely to be significant also.

Do you know your cities?

Major metropolitan areas around the world are often thought of in terms of congestion, population density, as destinations for tourists, centers of political and economic activity.  As drivers of the world’s GDP?  Maybe not so precisely.   Yet what happens in these areas matters today and their impact is likely to increase.  It is predicted that by 2030 approximately 60% of the world population will live in urban areas.

 To begin to understand the contributions of these areas that combine cities and suburbs  take the Marketplace Globalist Quiz: When Cities Rule the World (http://www.theglobalist.com/storyid.aspx?StoryId=9029) published in a recent edition of The Globalist magazine. (http://www.theglobalist.com)    The quiz was drawn from the December 2010 Global MetroMonitor report prepared by The Brookings Institution and the  London School of Economics.  This document details the economic experience of  150 metropolitan areas around the world  - pre, during and post the most recent Financial Crisis/Great Recession.   (http://www.brookings.edu/reports/2010/1130_global_metro_monitor.aspx). 

The basic query of the Quiz:  What significant economic value do these collections of people, buildings, innovation, commercial activity bring to our world?

Their answer:  46%, almost half of the global GDP comes from these economic centers.  By contrast their populations estimated at 800 million people represent just 12% of our global population.  Relatively few people with significant impact.

Which of the countries studied performed best in income and employment growth during the recovery?  Istanbul, Shenzhen, China, Lima, Peru; Singapore and Santiago, Chile.   The best performing area in the US?  Austin, Texas and in Europe,  Krakow, Poland. Surprised?

Wondering about the prospects for your city, one where you plan to open a business,  or to visit for a holiday?  Check out the Global MetroMonitor for all the details and see where the recovery is strong and where the struggles continue.

From BRICs to BRICS – Five no longer Four

The BRICs -Brazil, India, China, Russia just became the BRICS (note the change in the letter “S”) with the addition of South Africa. According to the Economist (www.economist.com) these five countries represent “around 40% of the world’s population and nearly a quarter of its economic output.” http://www.economist.com/blogs/banyan/2011/04/emerging_economic_powers
Already known as an entity with growing influence on matters of trade and development this addition, the move to five from four, is likely to magnify the importance of this group.

According to Brent Radcliffe’s article “The Fab Five:  South Africa Joins BRIC”
(http://financialedge.investopedia.com/financial-edge/0411/The-Fab-Five-South-Africa-Joins-BRIC.aspx), South Africa’s addition may surprise some.  It’s smaller by population and size of its economy than the original four.  But it does represent a link the emerging economies throughout the continent.  (In fact China and India are already active investors throughout the Africa.  This extends their ties.) Radcliffe points out the addition of South Africa gives this group of developing (and emerging) economies representation on three continents along with a strong presence (Russia) in Eastern Europe.   

While articles will explore what this means for investors, the major industrialized nations, and the world trade agreements there’s another question to consider:  What will this mean for South Africa?  Writing in Times Live,  Abdullah Verachia explores this question in his article "SA needs to step up to the Bric plate."
http://www.timeslive.co.za/sundaytimes/article1043854.ece/SA-needs-to-step-up-to-the-Bric-plate
He considers this an opportunity for South Africa, one that requires thoughtful consideration of how to proceed in order to obtain the benefits of "membership".  He concludes his articles by saying:

“Individuals, companies and countries have to find new compasses to navigate the new economic path. South Africans know the way. It is how we chart that road that will make all that difference.”

We will all watch with interest as South Africa moves from being known to many as the host of a successful World Cup to an increasingly important member of the global trade community.