Vocabulary

to bleed cash (to be in the red) – испытывать дефицит наличности (нести убытки)

venture capital – венчурный (рисковый) капитал; venture capital community – учреждения, банки, специализирующиеся на выдаче кредитов на осуществление проектов с повышенным уровнем риска; joint venture – совместное предприятие

vast, dynamic marketplace – обширный, динамично развивающийся рынок

to run a business – управлять предприятием, компанией

Useful phrases to memorize

to have deep pockets – обладать огромными средствами, капиталом

to roll out a concept (product)– представить идею, концепцию (продукцию)

to buy basic necessities – покупать товары первой необходимости

trendy clothes (goods) – модная одежда (товары)

Exercises

1. Pronounce the following:

housewares, bargain, dynamic, competitive, specialize, entrepreneurship, browsing

2. Explain in English:

fashion designers basking in the international limelight, various entertainment media.

3. Find in the text synonyms to:

fashionable, salesman, clothes, to have much capital, property, to suffer chronic deficits;

antonyms to:

retailer, to be in the red, to import, dressy clothes, consumer

4. What, in the author’s opinion,

   1. brought about the failure of most British businessmen in the U.S.?

   2. could have contributed to the success of British salespeople in the U.S.?

In Search of Elusive Domestic Demand

The region still depends on exports, which can be fickle

Conversations about South-East Asia’s economic performance tend to revolve around trade. A double-digit surge in exports helped to lift the region’s growth to 6.3% last year. This year, a slowdown in exports, along with a bigger bill for oil imports, will cut growth to 5% or so. Economists hope that growing demand for electronic components and other exports will put growth on a rising path once more next year. But one thing is clear: “The region,” says Tim Cordon of ING bank, “remains export-driven.”

It was not supposed to be this way. After the Asian crisis of 1997, when plunging currencies, free-falling asset prices and bankrupt banks had brought regional economies to a standstill, various national leaders – most notably Thaksin Shinawatra of Thailand – declared that South-East Asia should not look solely to exports to resuscitate its economic fortunes. Instead, Mr.Thaksin argued, governments should try to revive domestic consumption, which would help insulate the region from the vagaries of the world economy.

Mr.Thaksin attempted to put this theory into practice by suspending farmers’ debts, instituting cheap universal health care and handing out loans to villagers, small businesses and home-buyers. His government also began subsidising all manner of goods, from computers to cows, to increase Thais’ spending power. Gloria Arroyo, the president of the Philippines, enthusiastically endorsed his idea. New governments in Malaysia and Indonesia, too, promised to put more emphasis on the “grassroots economy”, to use one of Mr.Thaksin’s favourite phrases.

There is nothing wrong with these ideas, says Jesus Felipe of the Asian Development Bank. Indeed, he recently published a study showing that the economies of various Asian countries performed best, naturally enough, when both exports and domestic demand were buoyant.

In general, in South-East Asia, the richer the country, the higher the share of exports in the economy. Moreover, exports as a share of output are still rising steadily throughout the region, despite all the rhetoric about boosting the domestic sector. In the region’s richest country, Singapore, they reached 168% of GDP last year. (Exports can be more than 100% of GDP because most of the components used to produced them are imported.) Net exports doubled their share of output in East Asia’s richest countries between 1993 and 2003, from 5% to 10%.

Supavud Saichevua of Phatra Securities, an investment bank, argues that the Thai government has implicitly acknowledged that exports remain the country’s chief engine of growth, by setting an export growth target of 20% this year. Despite the slowing world economy, such an ambitious goal may prove attainable, thanks to the diversity of Thai exports in terms of both products and markets. Thailand sells both manufactured goods (cars) and agricultural ones (rice) to both rich countries (America and Japan) and poor ones (the other members of the Association of South-East Nations). Much the same applies in the rest of the region. Malaysia exports palm oil as well as electronic components; the Philippines computer chips and fruit, and so on. Booming China is the region’s fastest growing export market.

Consumption, meanwhile, has faltered throughout South-East Asia in the face of rising fuel prices, which have fed inflation and prompted higher interest rates. If oil prices started falling, and inflation and interest rates with them, consumption would doubtless improve. But that would also give the world economy a shot in the arm, and boost exports even more.

The Economist, 2005

Notes

1. “the grassroots economy” – экономика страны, цель которой оказывать положительное воздействие на благосостояние и жизненный уровень простого населения

2. to give the world economy a shot in the arm -= to encourage growth of the world economy (a shot = an injection)