http://blog.taragana.com/index.php/archive/massive-mobile-boom-in-india-over-10-million-new-customers-in-september-alone/
Over ten million customers in September alone have subscribed to TRAI, the indian mobile company. The firm is trying to encourage telecoms growth in the booming economy. Over 1.2 billion people live in India as potential customers, so it seems that the growth will not be over anytime soon.
-Growing markets for a good signify growing demand for new product
-Complimentary goods like telecoms services are getting better sales
-Highly inelastic market because of high demand
Thursday, 20 November 2008
Daewoo Take Liberties in Madagascar
http://www.ft.com/cms/s/0/6e894c6a-b65c-11dd-89dd-0000779fd18c,dwp_uuid=a955630e-3603-11dc-ad42-0000779fd2ac.html?nclick_check=1
Daewoo predict not having to pay anything for the farming of maize and palm oil in Madagascar. The farmland the size of Belgium is under "free" cultivation by Daewoo after they agreed to sign a memorandum with the Madagascan government. Food exports are "said to be a weapon in this world" claims Hong Jong-wan, a manager at Daewoo.
The 99 year leasing of 1.3m hectares to help produce more oils for Korea, I suspect, will have a notable impact on the economy, even though the market for Oil is not monopolized. Such a big potential supply for such a large company, lowered production costs not included, could really mean that this valuable resource will earn Daewoo a foreseeable future, even considering the growing concerns about the worlds economy. The thing is, the oil market is inelastic. The demand for oil is too high for people just to not buy it if it's prices are raised. It has become more of a necessity in the modern world for all the automobiles and the ever expanding middle class. It was very lucky that the firm has been offered this opportunity.
On the other hand, this deal will also become profitable for the Madagascan authorities as well. Although it might seem like a bad move giving free cultivation rights to the Korean business, the Madagascans have actually thought this one through. By allowing them to harvest the maize and palm oil on their land, they are opening up nice new job opportunities for the unemployed citizens in the country. The economic growth for each country will be appreciated in times such as these, when the prices of oil have been rising due to dwindling supply. Also the food element that comes out of it will give the Koreans the upper hand.
Increasing the "Food security" of Korea with the large amounts of corn that will be shipped there is something the country will look forward to. Korea says it will export very little of the said corn. Supposedly the quantity demanded for corn in Korea would help achieve a higher equilibrium price if the quantity supplied were to increase.
The growing population would aid in the increase of demand for basic foodstuffs. Obviously, in the case of food and of oils, the increase in supply means a fall in price and therefore to increased demand for both goods. An increase in demand for one good will lead to a decrease in demand for substitute products. People will be more inclined to buying corn as opposed to wheat products now that corn is cheaper. Fallen price equals increase in demand.
Interestingly, if the situation has been read well, we will see a positive outcome come from government intervention in the economy. Both economies are profiting from the deal, and even though neither market is directly under a command economy, the help of the Madagascan government is prevalent. This exception to the general rule that involvement with the government will have negative returns makes this article exceptionally interesting. The fact that they did not implement a price floor or ceiling probably helps, since that would increase the dead weight loss.
Hopefully the full potential of this great idea will be actualized and both economies will feel the effects.
Daewoo predict not having to pay anything for the farming of maize and palm oil in Madagascar. The farmland the size of Belgium is under "free" cultivation by Daewoo after they agreed to sign a memorandum with the Madagascan government. Food exports are "said to be a weapon in this world" claims Hong Jong-wan, a manager at Daewoo.
The 99 year leasing of 1.3m hectares to help produce more oils for Korea, I suspect, will have a notable impact on the economy, even though the market for Oil is not monopolized. Such a big potential supply for such a large company, lowered production costs not included, could really mean that this valuable resource will earn Daewoo a foreseeable future, even considering the growing concerns about the worlds economy. The thing is, the oil market is inelastic. The demand for oil is too high for people just to not buy it if it's prices are raised. It has become more of a necessity in the modern world for all the automobiles and the ever expanding middle class. It was very lucky that the firm has been offered this opportunity.
On the other hand, this deal will also become profitable for the Madagascan authorities as well. Although it might seem like a bad move giving free cultivation rights to the Korean business, the Madagascans have actually thought this one through. By allowing them to harvest the maize and palm oil on their land, they are opening up nice new job opportunities for the unemployed citizens in the country. The economic growth for each country will be appreciated in times such as these, when the prices of oil have been rising due to dwindling supply. Also the food element that comes out of it will give the Koreans the upper hand.
Increasing the "Food security" of Korea with the large amounts of corn that will be shipped there is something the country will look forward to. Korea says it will export very little of the said corn. Supposedly the quantity demanded for corn in Korea would help achieve a higher equilibrium price if the quantity supplied were to increase.
The growing population would aid in the increase of demand for basic foodstuffs. Obviously, in the case of food and of oils, the increase in supply means a fall in price and therefore to increased demand for both goods. An increase in demand for one good will lead to a decrease in demand for substitute products. People will be more inclined to buying corn as opposed to wheat products now that corn is cheaper. Fallen price equals increase in demand.
Interestingly, if the situation has been read well, we will see a positive outcome come from government intervention in the economy. Both economies are profiting from the deal, and even though neither market is directly under a command economy, the help of the Madagascan government is prevalent. This exception to the general rule that involvement with the government will have negative returns makes this article exceptionally interesting. The fact that they did not implement a price floor or ceiling probably helps, since that would increase the dead weight loss.
Hopefully the full potential of this great idea will be actualized and both economies will feel the effects.
World Food Price Crisis
http://www.time.com/time/world/article/0,8599,1717572,00.html
This is an article concerning the rising food prices of the world. People from Mexico to Pakistan are protesting and rioting against the doubling costs of feeding themselves and their families. It is said to be because booming populations and growing middles classes are demanding ever greater amounts of food. Also making the problem worse is the encouragement to use bio-fuels, which consume great amounts of potential feed. Demand for a necessity has never been so high.
This is an article concerning the rising food prices of the world. People from Mexico to Pakistan are protesting and rioting against the doubling costs of feeding themselves and their families. It is said to be because booming populations and growing middles classes are demanding ever greater amounts of food. Also making the problem worse is the encouragement to use bio-fuels, which consume great amounts of potential feed. Demand for a necessity has never been so high.
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