Follow the Money

Malcolm Latarche
Malcolm Latarche

26 October 2016


To anyone taking an interest in the wider world outside of shipping, the accelerating anti-globalisation movement is beginning to make waves and may soon result in the election of a US President that few would have predicted at the beginning of this year. For some in shipping, globalisation and free trade are sacred cows that must not be tampered with and which they believe have driven the growth experienced in the 21st Century. For others predictions about the detrimental long terms effects made in the last century are now becoming reality. Whatever side of the political fence you may sit on, it is a fact that global growth has slowed and in important consumer markets the ability of people to consume has gone into reverse. This week, Eurostat updated its figures for the Europe 2020 strategy. The 2020 strategy is the EU's common agenda for the current decade. It emphasises smart, sustainable and inclusive growth as a way to overcome the structural weaknesses in Europe's economy, improve its competitiveness and productivity and underpin a sustainable social market economy. It also promotes “social inclusion, in particular through the reduction of poverty, by aiming to lift at least 20 million people out of the risk of poverty and social exclusion”. A Daily Telegraph story based around the figures which appears to look to highlight the failings of the Euro, highlights some interesting facts. Apparently and according to the EU’s own data, the numbers of people “at risk of poverty or social exclusion”, comparing 2008 and 2015 has jumped markedly. Across the 28 members, five countries saw really significant rises compared with the year of the financial crash. In Greece, 35.7% of people now fall into that category, compared with 28.1% back in 2008. Cyprus was up by 5.6 points, with 28.7% of people now categorised as poor. Spain was up 4.8 points, Italy up 3.2 points and even Luxembourg, hardly known for being at risk of deprivation, up three points at 18.5%. Shipping does not exist in a vacuum and exists only to serve the needs of trade, if so many people in the wealthiest area of the world cannot even afford some of the basics of life, there is little chance that the baubles and trappings of wealth that come from the factories of Asia will be needed. That has an impact on the liner trade primarily but ultimately even the bulk trades are not immune. For quite some time now, investment in shipping both by players within and outside the industry has been driven by economists’ predictions that mainly have failed to recognise what has been happening around them. It is time for the shipowners and operators to pay a little more attention to what has been so long ignored – reality.