Canada-Pakistan Trade Expo ‘09 – A Window of Opportunity

The current economic slowdown has once again highlighted the significance of globalization and diversification of trade for Canada. Though Canada’s economic indicators (sub-prime loans, real estate and job markets) were better positioned than the US, Canadian economy got badly bruised due to over dependence on a single market, the United States. (79% of the Canadian merchandise was exported to the USA in 2006). The government is encouraging diversification of international trade, however, much more needs to be done by both the government and the private sector to expedite the diversification process and reap economic benefits from moving into emerging markets.

There is a need to focus on second-tier countries, beyond the BRIC, to expand the market base. Anecdotally, mostly  western and Canadian businesses focus on the BRIC turning these countries into pure-competition markets for many products and services. From long-term economic and social perspective, it is prudent to shift focus to the second-tier markets and Pakistan is one of the potential market with 172 million people, 7% GDP growth rate and existing US$750 million bi-lateral trade between Canada and Pakistan.

Advertising in Recession

Some advertisers tend to pull back on advertising during economic downturn. I see several advertisers are contemplating to cut down on advertising and few have already done so. This knee-jerk reaction is natural amid news of slowing economy, job losses, turmoil in auto sector and sub-par (read sub-prime) performance by the financial sector. I believe that retrenchment decisions are largely influenced by emotional and psychological stimuli from the external environment. I would digress momentarily to share a joke with you in support of the above premise. A friend, Ahad Rasheed, sent this joke and I quote with some additions.

 

An old man used to sell hot dogs. His eyesight was weak so he neither read newspapers nor watched TV. All he did was selling hot dogs and he sold lots of them and had a good income. Old man son graduates from a business school and joins him in business. He tells his father that economy is not doing well and he should save some cash, as Cash is King! The old man started buying fewer buns and meat, closed his shop before sunset to save on Hydro bills and consequently his sales went down. His brother retired from a government job and had seen the old man prosper by selling hot dogs. So he wanted to invest in hot dog business too. He seeks old man advice. Guess what, the old man advised; the economy is slow and hot dog sales are down. It is recession!

 

Economic Meltdown, Is it

The $700 billion bailout plan by the US government and latest short term interest rates cut by Central Banks of United States, Canada, Sweden, Switzerland, England and the European Union have not resulted in the expected positive effect on the world stock markets. Specially in the United States, the real estate market continues to be in doldrums, unemployment rate jumped to 6.1%, stock market is down and car sales shrinking. In  Canada, exports are down, CA$ had a free fall, real estate market has stagnated, stock market performance is listless, and increasing unemployment / layoffs a major threats.

The million dollar question is how to check the impending economic meltdown and recuperate the Canadian economy?

There are 101 ways to skin a cat. My way is to diversify the economy & trade in order to reduce dependence on the US markets. (As Canadian economic fundamentals are better, however we are still badly affected due to over-reliance on south of border). I think trade can be expeditiously diversified by encouraging and facilitating new Canadians to look for business opportunities with their country of origin. This will be a win-win situation for the government and the unemployed & underemployed new Canadians.

Do you agree with the above strategy? Please comment below.