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Georgia Hispanic Chamber of Commerce (GHCC) Women Legislator’s Luncheon “Economic Crisis: A Woman’s Opportunity for Leadership” January 31, 2009 Tisha R. Tallman, President & CEO December 5, 2008
Outline • Background (financial and economic crisis) • What the national and international leaders have to say: identification of the problems and solutions • National and local context: economic crisis • Possible solutions: education; small business job creation and innovation; purchasing power • Call to Action
Background • U.S. financial crisis • Global financial crisis • Global and U.S. economic crisis • Predictions (David Hale and Steve Forbes)
APEC Summit • 1996 created for CEOs to participate in the APEC Leaders’ meeting • Most important annual meeting of economic and business leaders whose decisions shape the future of the Asia Pacific and beyond • APEC leaders, business leaders from Asia Pacific and Latin America
Solutions for Global Financial Crisis • Economic stimulus packages • Free trade • Human capital investments: education • Economic development: ports, infrastructure • Regulations: banking
“What are the implications of the current Global Financial Turmoil?” • Keynote Address by: Prime Minister John Key of New Zealand • Remarks by: George Yeo, Minister of Foreign Affairs, Republic of Singapore; David Hale, Chairman David Hale Global Economics; Luis Alberto Moreno, President Inter-American Development Bank; Emilson Alonso, Group Managing Director, HSBC Latin America • Moderated by: Dato Timothy Ong, Chairman, Brunei Economic Development Board and former ABAC Chair (2000)
Comments: • Prime Minister Key talked about credit boom and bust. • Minister of Foreign Affairs Yeo talked of decline of US power and growth of China and India (a multi-polar world). Sharing of power. Trust. Result will be formation of new divisions, and diversity.
“Are FTAs building blocks or stumbling blocks? How can APEC help advance the WTO trade talks?” • Mari Pangestu, Minister of Trade, Republic of Indonesia • Vinod K. Aggarwal, Professor and Director, Berkeley APEC Study Center, University of California at Berkeley and Chief Economist, Frost & Sullivan • Rob Scollay, Associate Professor and Director of APEC Study Centre, University of Auckland • Juan Francisco Raffo, Chairman, APEC Business Advisory Council (ABAC) 2008 • Moderated by: Felipe Aldunate, Chief Editor, America Economia Comments: consensus for WTO to resume talks on comprehensive solution
“China’s Quest for Sustainable Development” • Keynote by: President Hu Jintao of the People’s Republic of China • Remarks by: Michael Enright, Sun Hung Kai Professor of Business Administration, University of Hong Kong and leading expert on competitiveness; Vincent Cheng, Chairman HSBC Asia; Xiao Yaqing, President CHINALCO; Cesar Alierta, Chairman of the Board of Directors, Telefonica; Hermann Ude, CEO, DHL Global Forwarding • Moderated by: Alberto Padilla, Financial Business News Anchor, CNN en Espanol
Comments: Discussion of growth of the East Asian markets. Portion of surpluses will go back into infrastructure investment. For example, in China, a $600 billion or 15% of GDP economic stimulus package.
“Growth, Equity and Sustainable Development: Ideas for APEC’s Future Agenda” Keynote by: Prime Minister Kevin Rudd of Australia Comments: What happened and what needs to be done; 1.4% GDP economic stimulus package
“Economic Growth and Poverty Alleviation: What are the Challenges for APEC’s developing economies?” • Keynote by: President Susilo Bambang Yudhoyono of Indonesia • Remarks by: Craig Mundie, Chief Research and Strategic Officer, Microsoft Corporation; Richard Adkerson, CEO, Freeport McMoRan Copper and Gold; Jack Ma, CEO, Alibaba Group • Moderated by: Nick Reilly, President, General Motors Asia Pacific Comments: human capital investment; education (20% of the budget)
“Meeting the Challenge of Globalization” Keynote by: President Michelle Bachelet of Chile Comments: on the economic crisis
“Asia’s Economic Rise: What Does it Mean for the World?” Keynote by: President Lee Myung-Bak of Korea Comments: energy and climate crisis in addition to global financial crisis; “stand still” policy (no free trade barriers); investment in education, science and technology; from average income of $100 - $20,000; support FTAs
“What can APEC do to strengthen the Asia Pacific Community?” Keynote by: President George W. Bush of the USA Comments: financial crisis; free trade; 2/3 trade in world with APEC; we have tripled our trade w/ China
“Strengthening Global Free Trade and Investment: What Should the Key Priorities be?” Keynote by: Chief Executive Donald Tsang of Hong Kong, China Comments: regional trade; WTO support; no consumption taxes; no capital gains tax
“How has the Global Financial Crisis affected the APEC Agenda: Is a re-thinking of priorities required?” Keynote by: Prime Minister Stephen Harper of Canada Comments: long term flexible exchange rates; long term tax reductions; still at surplus; long term plan to not have structural budgetary deficits; 40 million jobs created through NAFTA
“The Global Financial Crisis and Latin America: What are the implications for Latin America and the world?” Keynote by: President Felipe Calderon of Mexico Comments: Asian market surplus without adjusting exchange rates; need flexible exchange rates to end crisis; mistrust; structural reforms in education, judiciary, and energy; to build port in Baja California; Goldman Sachs 2050 prediction (China, U.S., India, Mexico, Brazil)
“Surviving the Crisis: Are the measures taken so far enough? How long will the recovery take? What are the implications for the Global Financial Architecture?” Keynote by: David Hale, Chairman, David Hale Global Economics • Remarks by: Angel Gurria, Secretary General, Organization for Economic Cooperation and Development; Reuben Jeffery III, Under Secretary of State, Economic, Energy and Agricultural Affairs, USA; Richard Waugh, President and CEO, Scotiabank; Robert Priday Woodworth, CEO, Cervecerias Peruanas Backus • Moderated by: Raul Ferro, Editor, BN America’s
Comments: • David Hale: global financial crisis now an economic crisis; Citibank from $300 billion to $36 billion; May or June rebound; 2011 or 2012 back to stable; financial institution regulations (increase in capital); G 20 must address emissions China and US • Robert Woodworth: 150 page report on failures; regulations; Canada at 9-10% capitalization, US at 4% and one bank 60 times leveraged assets
“Economic Reform at a Time of Crisis: The experience of Latin America” Keynote by: President Alvaro Uribe Comments: invest in Colombia; changes made in Colombia
National and Local Context Economic Crisis
Economic Crisis • Unemployment from 3.2% to 9.6% from state to state; prediction upwards of 10% by Spring for GA • $10.6 trillion national debt • Bailouts – estimates in trillions of dollars • State Unemployment 7.5% (ranked 43) • $2 billion in budget cuts (CNN Money.com, Unemployment Rates by State, December 2008; About.com: US Economy, updated January 2009)
Possible Solutions Education Small business Purchasing power
Education • Education is critical to our ability to attract and keep businesses • Education is a direct link to global and national competitiveness • Education is a direct link to economic growth and development
Education Challenge • High dropout rates • Public school enrollment is 12th fastest growing in the nation • Teacher hiring – in 2006, teacher slots remained unfilled, affecting tens of thousands of students
Graduation rates – National • 71% of all students graduate from high school with a regular diploma ( 50.6% American Indian; 55.3% Black; 57.8% Hispanic) • Large disparities are found across racial and ethnic groups (Diplomas Count 2008: School to College: Can State P-16 Councils Ease the Transition, EPE Research Center, 2008)
Graduation Rates – Georgia • 58.1% of all students graduate (High School Graduation Rates, 2005) • 45.1% American Indian students • 80.9% Asian students • 39.1% Hispanic students • 49% Black students • 64.5% White students (Diplomas Count 2008: School to College: Can State P-16 Councils Ease the Transition, EPE Research Center, 2008)
Negative Outcomes • Average income of 18 to 65 year olds without a high school diploma was about $20,100 in 2005 • Average income of with a diploma or GED was nearly $29,700 • Dropouts are more likely to be unemployed if they are in the labor force • Dropouts report to be in worse health than those with a diploma regardless of income • Dropouts make up disproportionately high percentages of the nation’s prison and death row inmates (Dropout Rates in the United States: 2005, National Center for Education Statistics, NCES 2007-059, June 2007)
Small Business • GA relies on small business for job creation, creativity, and innovation • From 2004 to 2005 small businesses created all of GA’s net new jobs • US SBA reported in 2008 that there are 831,122 small businesses in GA
Hispanic Owned Businesses • 2 million Hispanic-owned businesses in the nation generating almost $300 billion in annual gross receipts (Small Business Administration, HispanicTelligence) • Hispanic firms grew by 31 percent between 1997 and 2002, more than three times faster than the 10 percent increase in the number of all U.S. firms. (Census Bureau, data release 2006)