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Printed Program - Milken Institute
Beverly Hilton Hotel Los Angeles, CA March 8-10, 2000 Contents Welcome ....................................................................................... i From the President ............................................................................................i From the Chairman............................................................................................iii About the Institute.............................................................................................v Milken Institute Staff.........................................................................................xv Sponsors........................................................................................ xvii Nobel Laureates ............................................................................ xxvii Speakers........................................................................................ xxxvii Global Economics and Finance..................................................... I Global Economy Overview...............................................................................I-2 Stock Market Comparisons ...............................................................................I-8 Global Finance Introduction..............................................................................I-17 Capital Access...................................................................................................I-20 Capital Markets.................................................................................................I-26 Banking .............................................................................................................I-33 Debt Securities ..................................................................................................I-38 Capital Flows.....................................................................................................I-41 Sovereign Ratings .............................................................................................I-45 Commodities .....................................................................................................I-47 Technology in the Economy.......................................................... II Technology Overview.......................................................................................II-1 Technology in U.S.............................................................................................II-2 Technology Investment.....................................................................................II-5 The Internet and e-Commerce...........................................................................II-6 Technology Workers.........................................................................................II-10 A Milken Institute Technology Study...............................................................II-11 Computers .........................................................................................................II-14 Internet Demographics ......................................................................................II-16 Telecommunications .........................................................................................II-19 Technology in Education..................................................................................II-23 India — Transformed by Technology...............................................................II-25 Venture Capital..................................................................................................II-27 Technology — The Basics ................................................................................II-28 Technology and Leisure....................................................................................II-29 Global Demographics and Human Capital................................... III United States ................................................................................. IV Overview ...........................................................................................................IV-1 Europe .......................................................................................... V Overview ...........................................................................................................V-1 Europe Comparisons .........................................................................................V-4 Austria ...............................................................................................................V-8 Belgium .............................................................................................................V-12 Czech Republic .................................................................................................V-14 Denmark............................................................................................................V-18 Finland...............................................................................................................V-22 France................................................................................................................V-26 Germany............................................................................................................V-31 Greece................................................................................................................V-36 Hungary.............................................................................................................V-40 Ireland................................................................................................................V-44 Italy....................................................................................................................V-48 Netherlands........................................................................................................V-52 Norway..............................................................................................................V-56 Poland................................................................................................................V-60 Portugal.............................................................................................................V-64 Russia ................................................................................................................V-68 Spain..................................................................................................................V-73 Sweden..............................................................................................................V-77 Switzerland ........................................................................................................V-81 Turkey...............................................................................................................V-86 United Kingdom................................................................................................V-90 The Americas................................................................................ VI Latin America Overview...................................................................................VI-1 Argentina...........................................................................................................VI-4 Bolivia ...............................................................................................................VI-8 Brazil .................................................................................................................VI-10 Canada...............................................................................................................VI-14 Chile ..................................................................................................................VI-20 Colombia ...........................................................................................................VI-24 Costa Rica .........................................................................................................VI-26 Ecuador..............................................................................................................VI-28 Guatemala..........................................................................................................VI-30 Mexico...............................................................................................................VI-32 Panama ..............................................................................................................VI-36 Paraguay............................................................................................................VI-38 Uruguay.............................................................................................................VI-40 Venezuela..........................................................................................................VI-42 Asia and the Pacific....................................................................... VII Overview ...........................................................................................................VII-1 Asian 5 ..............................................................................................................VII-3 Australia ............................................................................................................VII-6 China .................................................................................................................VII-11 Hong Kong........................................................................................................VII-16 India...................................................................................................................VII-21 Indonesia ...........................................................................................................VII-25 Japan..................................................................................................................VII-30 Korea.................................................................................................................VII-37 Malaysia ............................................................................................................VII-42 New Zealand .....................................................................................................VII-47 Pakistan.............................................................................................................VII-50 Philippines.........................................................................................................VII-53 Singapore...........................................................................................................VII-58 Taiwan...............................................................................................................VII-63 Thailand.............................................................................................................VII-66 Africa and Middle East................................................................. VIII Overview ...........................................................................................................VIII-1 Egypt .................................................................................................................VIII-4 Israel..................................................................................................................VIII-8 Mauritius ...........................................................................................................VIII-12 Morocco ............................................................................................................VIII-14 South Africa ......................................................................................................VIII-16 UAE...................................................................................................................VIII-20 From the President Welcome to the Milken Institute 2000 Global Conference. I am very proud of our annual Global Conference series. In the three years since it began in 1998, it has become the largest such event on the West Coast. And this year’s conference is our biggest and most ambitious effort yet. To give you more choices, a wider variety of viewpoints, and a deeper understanding of the issues of greatest concern to the global economy and financial markets – prospects for economic growth, technological change, economic reform, capital market developments, public policy options, the building of human capital, demographic change and more – we have added concurrent sessions to this year’s Global Conference. This has doubled the number of panels (27) and speakers (more than 120) we’re offering. Our first two Global Conferences were devoted mainly to the Asian financial crisis and its aftermath. This year, we focus on the most dominant force in the world today – technology and its impact on the way we do business, live and learn. We have 10 sessions devoted to technology, and every panel will touch on this subject. The Milken Institute Global Conference not only gives you a chance to better understand the driving forces behind today’s financial markets, it offers a unique setting for you to talk to people you might not normally meet – senior people from the financial sector, business, technology, academia, the policy community and all the major media. Our conference is also the perfect opportunity for you to become more familiar with the work of the Institute and become more involved with our research. All of the sessions you will hear touch in some way on our four main research areas: Global Studies, Capital Studies, Regional and Demographic Studies, and Labor Markets and Human Capital Studies. The Briefing Book you have in your hands is another part of our research effort. It, along with other conference materials made available to you, is intended to provide useful information and a range of opinion on today’s global picture. The Briefing Book is by no means exhaustive; it offers a broad look at the diverse global economy. Most important, it is a handy reference guide – a compilation of resources in one place. With this conference and its accompanying materials, we endeavor to form a base of information that will further the discussion and understanding of the changing world economy. It is all part of an effort by the Milken Institute to be intimately involved in the debate over the future of the global economy. Thank you for coming. We hope the time you spend here will be enjoyable and informative. Donald H. Straszheim President March 8, 2000 i ii From the Chairman The proportion of U.S. capital investment going into information technology – only seven percent when I went to Wall Street in 1969 – now approaches 60 percent. This has created a new economy that is changing our lives as profoundly as earlier revolutions in printing, power generation, transportation and telecommunications. But it is also accelerating another revolution that will ultimately change our lives even more – the revolution in biotechnology. While the 20th century was defined largely by the science of physics, I believe the greatest 21st century advances will emerge from biotechnologists’ efforts to decipher the results of 3.7 billion years of evolution. In the single generation since DNA was synthesized and recombined to create different life forms, we’ve seen stunning achievements in the laboratory. Now we stand at the threshold of far-moreimportant practical breakthroughs. Scientists are already working on cancer vaccines, spinal-cord repairs, age-retardation strategies, antiangiogenesis (to cut off a tumor’s blood supply), pharmacogenomics (“designer drugs”) and many other advances that may emerge from our growing understanding of cellular biology. As with any new technology, the translation of laboratory advances into everyday benefits for people may depend as much on our economic wisdom as on our scientific acumen. We must continue the global transfer of the market-based financial techniques – most notably, broader access to capital – that generated the current U.S. economic boom so that people everywhere can afford these lifeenhancing benefits. Scholars at the Milken Institute have been studying and reporting on this nexus of finance and technology for many years. It underlies our selection of technology as the focus of the 2000 Global Conference. The source of all technology is, of course, informed people. Knowledge has already replaced a substantial part of the bricks, mortar and muscle power that comprised most of the old economy. As physical labor becomes relatively less important, we must make sure that people everywhere have the education, training and skills they need to compete in the 21st century. Fortunately, the very technologies that created this issue also contribute to such solutions as distance learning and adaptive learning systems. Through the hundreds of events, publications and speakers that we’ve sponsored since our founding in 1991, the Institute has sought to create a more informed public, more thoughtful policymaking, and improved economic conditions. By providing a forum for the exchange of the differing perspectives you bring from all over the world, we hope to continue that process at this year’s Global Conference. Michael Milken Chairman March 8, 2000 iii iv About the Institute The Milken Institute, formerly known as the Milken Institute for Job & Capital Formation, was founded in 1991 by financier Michael Milken as a private, non-profit research organization studying American economic growth. The Institute’s central goal was to study public policies affecting job and capital formation. The Institute’s economists and affiliated scholars studied monetary, fiscal and regulatory policies, as well as the comparative workings of market, political and bureaucratic institutions. Of primary interest was the creation of new employment opportunities in the U.S. to maintain and enhance the country’s economic vitality. Dr. Lewis C. Solmon, former dean of the UCLA Graduate School of Education, served as president from 1991 to 1997. Under his leadership, the Institute conducted a wide range of research projects, sponsored conferences and seminars, and published numerous books, monographs, and policy papers. The Institute also began a quarterly policy-oriented journal called Jobs & Capital, which last year was revamped and renamed The Milken Institute Review. In 1997, under its new president, Donald H. Straszheim, former chief economist at Merrill Lynch & Co., the Institute undertook a major expansion of both its areas of research focus and its perspective of its primary audience in order to reflect a new emphasis on the everchanging global economy. The research agenda continued to encompass the original focus of the Institute – human capital, labor markets, education and jobs – in its Labor Markets and Human Capital Studies group. But the work of our scholars was broadened to include three new study areas that formalized the attention paid to issues that are becoming more topical in this technology-driven global economy: n Capital Studies: Developments in capital markets and financial institutions. n Global Studies: The issues of globalization, trade and economic development. n Regional and Demographic Studies: Economic performance among and between geographic regions, and demographic developments. It was important to maintain the original goals of studying economic growth, raising the quality of public debate on these critical issues, and creating better public policy to improve people’s lives. At this time, our name was changed to read simply, “Milken Institute.” Under Straszheim, the Institute has continued its efforts to reach out to influential scholars, policy-makers and business people with a series of seminars and conferences, publications, v a World Wide Web site, and other initiatives. The audience the Institute reaches was greatly expanded, and now includes more than 75,000 leaders worldwide in business and finance, government, academia and the media. In 1999, the Institute began a speaking series call the Milken Institute Forum. Held several times a month at the Institute’s Conference Center in Santa Monica, the Forum allows interested individuals to hear leaders in government, academia, business, finance and the media discuss important economic issues in a Town Hall-like setting. The Institute also created a prize to honor some of the country’s best economic studies. The Milken Institute Award for Distinguished Economic Research gives prizes of $2,000 for first place and $1,000 for second place in an annual competition open to anyone doing research in the Institute’s four study areas. Four papers are chosen – one in each study area. The first prizes were awarded in Boston in January 2000. Scholars at the Institute are involved with several major research projects. Among them is the Emerging Domestic Markets Project, which looks for ways to increase access to capital for businesses in emerging U.S. markets, such as those serving minority communities, and the State of the State Project, which takes an in-depth look at the California economy. Other projects look at the relationship between jobs, basic skills and education; how to finance Russia’s “knowledge revolution;” how to use financial innovations to assist in the economic development of Israel and the Middle East; and the role of venture capital on high-technology cluster development. The Institute is in the process of forming advisory boards and research councils, where experts and individuals who are influential in fields relevant to the Institute can offer their counsel and guidance. Our Mission The Milken Institute’s mission is to explore and explain the dynamics of world economic growth. Our goal is to provide understanding of and insights into the effects of economic, political, technological and regulatory changes on the world economy and its societies as a basis for better public policy. Our objective is to disseminate our research as widely as possible through print, electronic and broadcast media; at conferences and smaller forums; and in books, monographs, policy briefs and other publications. We hope our audience – public policy makers, business and financial leaders, economists, academics and the media – will use our research to see their activities in a global context and affect public policy in a way that improves lives around the world. vi Events The Milken Institute has sponsored more than 75 conferences, seminars and presentations over the past nine years. Since our founding in 1991, the Institute has hosted numerous events not only at our conference center in Santa Monica, but at venues throughout Los Angeles, Washington, D.C. and abroad. The following is a list of some of the major conferences held by the Milken Institute: Ø Economic Policy, Financial Markets, and Economic Growth, October 1992, Milken Institute Conference Center, Santa Monica Ø Labor Economics, Employment Policy, and Job Creation, November 1993, Senate Office Buildings, Washington, D.C. Ø Jobs and Capital Formation in the New Century, October 1996, Milken Institute Conference Center, Santa Monica Ø Israel in the New Century: Emerging Economic Growth, November 1996, Milken Institute Conference Center, Santa Monica (with satellite feed from Israel) Ø Los Angeles Charter Reform, January 1997, Milken Institute Conference Center, Santa Monica Ø Los Angeles: Rebuilding for the Next Five Years, April 1997, Los Angeles Convention Center, Los Angeles Ø Urban America: Creating Opportunities for Business and Places for People, July 1997, Milken Institute Conference Center, Santa Monica Ø Israel: Emerging Economic Growth, November 1997, Los Angeles (Four Seasons Hotel) Ø Global Conference, March 1998, Los Angeles (Omni Hotel) Ø Restructuring Regulation and Financial Institutions, March 1998, Milken Institute Conference Center, Santa Monica Ø Democratizing Capital in U.S. History, Business, and Public Policy, June 1998, Milken Institute Conference Center, Santa Monica Ø Municipal Privatization in Israel: Financing Lessons from the United States, June 1998, Jerusalem, Israel Ø Global Conference, March 1999, Los Angeles (Beverly Hilton Hotel) Ø California in the 21st Century: State of the State Conference, November 1999, Milken Institute Conference Center, Santa Monica vii The following is a list of some of the major seminars held by the Milken Institute: Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Financing Constraints and Corporate Investment, Glenn Hubbard, 1995. Regional Unemployment Fluctuations, Steven Davis, 1995. New Jersey’s Minimum Wage and Fast Food Employment, David Neumark, 1995. Entrepreneurship and Job Generation in the 1990s, David Birch, January 1997. Pensions and Economic Development Policy, Richard McGahey, March 1997. The Importance of Place: New Concepts for an Evolving Economic Environment , Joel Kotkin and Glenn Yago, April 1997. Growth Through Acquisition: A Fresh Look, Thomas Copeland, May 1997. The Effects of Class Size on Student Achievement Using Data from Project STAR, Alan Krueger, July 1997. The History of Technology and How It Affects Education and the Labor Market, Claudia Goldin and Larry Katz, February 1998. The Asian Crisis Updated, Marcus Noland, October 1998. What’s Happening on the Regulatory Front, Fred Smith, November 1998. China in Transition: Social and Economic Challenges, Barry Naughton, Vaclav Smil and Anthony Saich, April 1999. Corporate Debt and the Technology Shock, David Goldman and Bob Kricheff, May 1999. Korea Update ’99, See-Young Lee, Ci-Wook Shin and Hilton Root, May 1999. The following is a list of some of the research roundtables held by the Milken Institute: Ø Restructuring Regulation and Financial Institutions, March 1998 Ø The Economy, Politics and the Peace Process in the Middle East, with former Prime Minister Shimon Peres, January 2000. viii Authors and Speakers During the past nine years, the Milken Institute has convened more than 75 conferences, seminars and other presentations at sites throughout Los Angeles, and in Washington, D.C., and abroad. Below is a list of those who have participated in these events as speakers, moderators and panelists. David Graham Gordon Lincoln Joshua Kenneth Haim Theodore Robert Laurie Richard William Anne Gary Robert Nariman Laurence Marc George Boris Fred David Howard Julian Leon David William Nancy Joseph Asher Bill Bill Yvonne Abel Allen Ambach Anderson Angrist Arrow Aviv Barnhill Barro Bassi Baum Baumol Beatty Becker Bednarzik Behravesh Belinsky Benioff Benston Berezovsky Bergsten Berson Berman Betts Bijou Birch Birch Birdsall Bisignano Blass Boyarsky Bradley BrathwaiteBurke Lior Ian Nicholas Paul Roger Jerry Kathleen Tsilah Beverly Gary Julie George Shannon Jo Kim Jack Paulo Safra Ralph Yvonne Karl Stephen Henry Paul Sandy Jeff Joseph James Robert Martha Miguel Thomas Thomas Andrew Bregman Bremmer Brooke Brooks Brossy Brown Brown Burman Burr Burtless Butcher Calhoun Callan Campbell Campbell Carr de Castro Catz Chami Chan Chapman Chapman Cisneros Citron Climan Cole Cole Coleman Comment Connellan Contreras Copeland Cousins Cowin ix Valerie L. Gordon Christopher Judy Linda Crane Crovitz Culp Daher DarlingHammond Michael Davey Gray Davis Linton Deck Concha Delgado-Gaitan Christopher DeMuth Susan Dentzer James Dertouzos Martha Diaz Aszkenazy Joly Dixon William Dudley Greg Duncan Joseph Duncan Patrick Durkin Kirby Dyess Shimon Eckhouse Brad Edmondson Yaakov Efrati William Eggers Shmuel Einav Salvador Enriquez, Jr. Joyce Epstein Richard Erb Steven Erie Debra Esparza Susan Estrich Cheryl Fagnano Denise Fairchild Henry Farber Menachem Sharon George Guillermo Paulo Edward James David Robert Joel Randolph Jonathan Jeffrey Jacob Klaus John Keith Manfred Don Ted George James Diane Jackie Avi Claudia David Marshall Stephen Jon Robert Eran Kenneth Bruce Linda Jeff Bill Fernando Kennen John Jonathan Noriko Daniel Lee Tsachi Kenji Feder Feldman Fenn Fernandez Ferraz Fiske Flanigan Fleming Forsythe Fox Foxworthy Francis Frankel Frenkel Friedrich Fry Gay Gerstenfeld Gevirtz Gibson Gilder Glassman Glossman Goldberg Goldenberg Goldin Goldman Goldman Goldsmith Goodman Gordon Goren Green Greenwald Griego Grogger Gross Guerra Hagen Haltiwanger Ham Hama Hamermesh Hamilton Hanegbi Hanyu William Milton William Jonathan Doug Barry Ernest Day Ronald Ted Richard Paul Nigel Douglas George Glenn Robert Peter Ricardo Andrei Yaakov Madeline Jerry Michael Bruce Anthony Chinhui Linda Gabi Thomas Shlomo Mickey Robert Jehangir Bruce Matty Larry Richard Gary Xandra Debra Michael James Kevin Jack Robert Haraf Harris Hayes Heath Henton Herman Higa Higuchi Hill Hoff Hokenson Holden Holloway Holtz-Eakin Horwich Hubbard Hunter Hurst Icaza Illarionov Israeli Janis-Aparicio Jasinowski Jensen Johnson Jones Juhn Kaboolian Kadosh Kalinske Kalish Kantor Kapp Karamat Karatz Karp Katz Katz Kaufman Kayden Kazanjian Keeley Kelly Kelly Kemp Kemp x Elisabeth Alexander Paul Richard Larry Robert Joel Stephen Hendrik Bob Alan Laurence Joel Jack Robert Nachum Bob Nicholas Annette Richard Robert Guillermo Edward Michael. Kersten Kinmont Kleiman Koo Kosmont Kotick Kotkin Kotkin Kranenburg Kricheff Krueger Kudlow Kurtzman Kyser LaLonde Langenthal Lanier Lardy Lareau Laster Lawrence Le Fort Varela Leamer Ledeen See-Young Lee Moshe Lefkowitz Christopher Legallet Jose Legaspi Ariella Lehrer Henri Lepage Joshua Lerner Stephen Levey Finlay Lewis Peter Linneman John Lipsky Limor Livnat Abraham Lowenthal Ron Lubash Lisa Lynch Timothy Lynch John Mack Harald Malmgren David Malpass Michael Mandel Catherine Mansell Deborah Marchini Harry Jonathan Ray Brian Wesley George Richard Nancy Vern Hamish James David Gurion Gary Ilse Bruce Raymond Nikita Matthew Merton Sanford Valerie Joseph Lawrence Kiichi Mustafa Charles Sidney Juergen Steve Kevin Arnold Brian Barry Arthur Yaakov Barbara David Marcus Douglass Katherine John James Walter Michel Markowitz Marshall Marshall McCall McClendon McCrary McGahey McIsaac Redford McKinley McRae Medoff Meiselman Meltzer Mendoza Metchek Meyer Mikesell Mikhalkov Miller Miller Miller Mills Minarik Mishel Mochizuki Mohatarem Morrison Morse Mueller Murdock Murphy Nachmanoff Napack Naughton Nathan Neeman Nelson Neumark Noland North Nouri Hughes Nunn O’Connell Oi Oksenberg Rick Douglas Gordon Diane Uwe Minxin Robert Pablo Richard Nancy Kitty Sally Jane Robert Beverly John Stephen Leticia Paulo Orlov Ostrom Palmer Palmintera Parpart Pei Pelosky, Jr. Perez Perle Perry Pilgrim Pipes Pisano Poole Popek Praveen Prowse Quezada Rabello de Castro Rasche Ratner Recht Read Reardon Regan Rendell Rind Riordan Roberts, Jr. Rodman Rogstad Romero Roos Ropele Roselius Rosen Rosenberg Rosett Roth Rothstein Rubin Rubinfeld Saich Salpeter Sanchez Robert Bruce Philip Randolph Elaine Edward Edward Kenneth Richard Bert Jack Barry Gloria Mike Don Rebecca Richard Rand Claudia Allen Richard Paul Arthur Anthony Alan Enrique xi Richard Patrick Joseph Gary Stefanie Eric Myron Scott Robert Diane John Bill Andrew Natan David Louise Sassi Brenda Douglas Rohit Dimitri Mark Mark Vaclav George Jeffrey Marva Fred Stanley Aaron Lewis Bernd Vijit Shirley Richard Kamaryn Andrew Michael Thomas Arnon Thomas Robert Stephen Deborah Vincent Sandor Savin Schell Schieneman Schmidt Schockman Scholes Schuh Scott Scott-Jones Semcken Segura Setos Sharansky Shearer Shelley Shilo Shockley Shorenstein Shukla Simes Simonson Slavkin Smil Smith Smith Smith BattleBey Smith, Jr. Smith Sokol Solmon Stecher Supinit Svorny Tan Tanner Tanzer Templeton Thornhill Tiberg Toch Topel Trejo Triant Truglia Linda Norman Daniel Peter Frank Daniel Harold David Stan Murray Beverly Stef Tsao-Yang Ture Tyree Ueberroth Vigil Villanueva Vogel Warsh Watt Weidenbaum Werber Wertheimer Mark Ronald James William Richard Morley Grant Bert Jeffrey Barbara Patrice Elaine Whitlock Whittier Wilburg Wilby Winner Winograd Winter Winterbottom Winters Wolfe Wong Woo Adrian Zhou Elisha Bernard Noam Richard Zhou Stanley Ben-Zion Mortimer Benjamin Wooldridge Xiaochuan Yanay Yeung Yifrach Young Yupeng Zax Zilberfarb Zuckerman Zycher In addition, more than 240 articles have appeared in 28 issues of our quarterly economic journal, formerly Jobs & Capital, and now The Milken Institute Review. Below is a list of those who have written for the magazine. Bruce Alex Robert Anne Elijah Dick Daniel Howard Jagdish Doug Ben Jared Douglas Joseph Louann George Alfred Henning George Barry James Reuven Larry Barry Steve Robert Keith Ackerman Alexiev Aliber Alstott Anderson Armey Bachman Baetjer, Jr. Bhagwati Bandow Bernanke Bernstein Besharov Bessette Bierlein Bittlingmayer Blumstein Bohn Borjas Bosworth Bovard Brenner Caldwell Chiswick Cohen Crandall Crane Chester John David Patricia Michael Steven Brad John Rudiger Nicholas Brad Sebastian Barry Robert Catherine Alain Richard Asim Mark Roger Dianne Roger Chester Al Rebecca Benjamin Victor Crocker Culbertson Cutler Danzon Darby Davis DeLong Dilulio, Jr. Dornbusch Eberstadt Edmondson Edwards Eichengreen Eisner England Enthoven Epstein Erdilek Falcoff Farmer Feinstein Feldman Finn, Jr. Fishlow Ford Friedman Fuchs xii Bill Lowell Charles Marshall Al Michael Mark David Steve Gary Eric Arthur Thomas James Dave Thomas Robert Robert Michael Reed Jerry Dale Tom Eliyahu Joseph Paul Anna Gale Gallaway Gati Goldman Gore, Jr. Graetz Groombridge Hale Hanke Hansen Hanushek Hauptman Hazlett Heckman Henderson Hopkins Howse Huelskamp Huffington Hundt Jordan Jorgenson Kane Kanovsky Kearney Knappenberger Kondratas Laurence Steve Robert Alan Paul Henry Mickey Stan James Lawrence Robert Glenn Tibor Alan Bruno Stephen Jerry Martin Susan Rebecca Bennett Walter Allan Patrick Jim Hyman Rick Mark Stephen Richard Kevin Sylvia Richard William Marcus Roger Dave June Marvin Walter John Uwe Charles William Adam Virginia Kotlikoff Kotkin Krol Krueger Krugman Levin Levy Liebowitz Lilley Lindsey Litan Loury Machan Makovsky Manno Margolis Mashaw Mayer Mayer Maynard McCallum Mead Meltzer Michaels Miller Minsky Mishkin Moore Moore Murnane Murphy Nasar Neu Niskanen Noland Noll O’Neill O’Neill Olasky Olson Ortenzi Parpart Plott Poole Posen Postrel Lalita Jon Robert Uwe Diane Robert Alan Stephen Ramesh Rauch Reich Reinhardt Reklis Repetto Reynolds GotzRichter Eugene Rumer John Sabelhaus Jeffrey Sachs Jason Saving Thomas Saving Max Sawicky Anna Schwartz Simon Serfaty Carl Shapiro Robert Shapiro J. Gregory Sidak Sara Singer Joel Slemrod Mark Alan Stamaty Irwin Stelzer John Stossel Michael Tanner Billy Tauzin Tim Taylor Rich Thomas Robert Topel Kevin Trenberth Gregory Treverton Petrus van Bork Nicolas van de Walle Mark Vaughan Richard Vedder Carolyn Weaver John Weicher Finis Welch Lawrence White Darrell Williams Walter Williams Clifford Winston Charles Wolf, Jr. James Wright David Wurmser xiii Karl Cynthia John Zinsmeister Zoghi Zysman xiv OUR STAFF Michael Milken Chairman Donald Straszheim President Milken Institute Study Directors Ross DeVol Director Regional and Demographic Studies Peter Passell Editor Milken Institute Review Alec Levenson Acting Director Labor Markets and Human Capital Studies Hilton Root Acting Director Global Studies Glenn Yago Director Capital Studies Milken Institute Service Directors Deborah Jordan Director External Affairs and Events Skip Rimer Director Communications Sachin Gupta Director Information Services Jeffrey Schatz Director Finance Senior Fellows James Barth Lowder Eminent Scholar in Finance Auburn University William Frey Professor State University New York R. Dan Brumbaugh Brumbaugh Economics Martin Greenberger Professor and Director Center for Digital Media University of California, Los Angeles Michael Intriligator Professor Economics, Political Science and Policy Studies University of California, Los Angeles xv OUR STAFF Roubina Arakelian Senior Assistant to the President Steve Jing Research Analyst Kristine Berg Senior Research Analyst Cindy Lee Research Assistant Brian Bittner Research Analyst Danielle Marbury Database Manager Faye Carnegie-Carey Executive Assistant Juan Montoya Research Analyst Jon Carr Webmaster Lisa Noshi Event Coordinator John Catapano Research Analyst Robert Pace Research Analyst Patricia Contreras Executive Assistant Aaron Pankratz Research Assistant Anjeanette Deeney Program Coordinator John Quintanar Development and Government Relations Associate Judith Gordon Editor Lalita Ramesh Research Associate Amanda Green Research Analyst Greg Robitshek Research Assistant Tracy Fletcher Administrative Assistant Tharam Singh Database Analyst Thomas Hall Research Associate Ernest Tzou Information Systems Administrator James Hubbard Database Analyst Jorge Velasco Information Center Manager Renee Irlanda Research Analyst Geraldo Villanueva Information Systems Technical Assistant Michael Harrington Research Associate Margaret Wilcox Executive Assistant Sallylynn James Designer Perry Wong Research Associate xvi We gratefully acknowledge the participation of the following companies, whose generous support helped make this conference possible. xvii Conference Underwriters xviii Premier Sponsors xix Platinum Sponsors xx Partner Sponsors sm xxi Student Outreach Program Participants Anderson School of Business, UCLA Argyros School of Business and Economics, Chapman University Freeman School of Business, Tulane University Graduate School of Business, The University of Chicago In-Kind Contributors Audio Visual Services Provided by: Webcasting Provided by: xxii Cooperating Organizations The Milken Institute thanks the following organizations for their help in promoting the Global Conference among their members and clients. Americas Society/Council of the Americas Asian Business Association Asian Women in Business Asia Pacific Media Network Asia Society Southern California Center Association for Corporate Growth Bay Area Economic Forum Beverly Hills Chamber of Commerce Beverly Hills Economic Council Big Sky Capital Business Technology Center of Los Angeles County Canadian Association for Corporate Growth Carnegie Endowment for International Peace Center for the Study of Los Angeles at Loyola Marymount University Center for the Study of Transnational Crime and Corruption, American University Cleveland Business Economists’ Club Dallas Economist Club Detroit Association for Business Economics Detroit Council for World Affairs Digital Coast of Southern California Emerging Markets Traders Association Eurasia Group Fixed Income Management Society of Boston Foreign Exchange Analytics Gorbachev Foundation of North America G7 Group Hong Kong Economic & Trade Office IC2 xxiii Cooperating Organizations Institute for Strategic Thinking and Technology Development International Technology Institute Japan America Society Japan Society Japan Society of Northern California Kayne Anderson Investment Management Kenan Institute of Private Enterprise, University of North Carolina LARTA (Los Angeles Regional Technology Alliance) Los Angeles Chamber of Commerce Los Angeles Chapter of Internal Auditors Los Angeles Chapter of the National Association for Business Economics Los Angeles Consular Corps Los Angeles Society of Financial Analysts Los Angeles Venture Association Los Angeles World Affairs Council Manhattan Institute Miami Economic Association Milwaukee Investment Analysts Society National Association for Business Economics National Association of Corporate Directors, Southeast Chapter National Association of Securities Professionals, Chicago Chapter, Jesse B. Brown, President National Association of Securities Professionals, Detroit Chapter, Aubrey Lee, President National Business Economic Issues Council National Committee on U.S.-China Relations New America Foundation New York Society of Security Analysts Orange County Business Council Pacific Basin Economic Council Pacific Basin Institute Pacific Council on International Policy Pacific Exchange Port of Long Beach xxiv Cooperating Organizations Real Estate Conference Group Real Estate Forum Real Estate Southern California Sacramento Economics Roundtable San Diego World Trade Center San Francisco Chapter, National Association of Business Economics Southern California Technology Calendar Tech Coast Alliance Technolink Association Tierra Partners The American Finance Association The Interlink Company Town Hall Los Angeles Trade Point Los Angeles Tulane University Freeman School of Business UCLA Center for Chinese Studies UCLA Center for Communication Policy UCLA School of Public Policy and Social Research Urban Leadership Los Angeles U.S. Council for International Business U.S.-Mexico Chamber of Commerce, California Pacific Chapter U.S. National Committee of the Pacific Economic Cooperation Council Women’s Bond Club of New York Women’s Economic Round Table Women’s Global Business Alliance World Affairs Council of Ventura County World Trade Center Chicago World Trade Center Denver World Trade Center Detroit World Trade Center Association Los Angeles-Long Beach Zone Magazine xxv xxvi KENNETH ARROW Stanford University K enneth Arrow was awarded the Nobel Prize in Economic Sciences in 1972 "for pioneering contributions to general economic equilibrium theory and welfare theory." Arrow began his graduate study in economics and statistics at Columbia University. He has held positions at the Cowles Commission for Research in Economics, the University of Chicago, Harvard University, and Stanford University. His research, apart from social choice theory, has focused on general economic equilibrium. The profound transformation of the general equilibrium theory is marked by his groundbreaking work. He helped open new productive paths for research in this area, and in so doing, has made fundamental contributions to the renewal of the theory. In a series of papers, Arrow provided the basis for a radical reformulation of the traditional equilibrium theory. His 1954 pioneering work, in collaboration with Gerhard Debreu, stimulated further research in this field. He developed the theory of uncertainty and incorporated it into the framework of general equilibrium theory. An analysis of the possibilities for decentralized decisions in a society where the central authority fixes the price system was done in collaboration with Leonid Hurwicz. One of Arrow’s many contributions to the welfare theory is his “possibility theorem,” according to which it is impossible to construct a social welfare function out of individual preference functions. Important contributions he has made to other fields include the basic economics of innovation; the role of uncertainty, information and organization in the economic system; and the role of learning in technology. Applications of these theories have been made to the measurement of substitution in production, the economics of medical care, and racial discrimination. Kenneth Arrow received his Ph.D. in l951 from Columbia University and is currently Professor Emeritus at Stanford University. xxvii GARY S. BECKER University of Chicago G ary S. Becker received the 1992 Nobel Prize in Economic Sciences “for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including non-market behavior.” He is a Professor of Economics and Sociology at the University of Chicago and a Senior Fellow at the Hoover Institution. He has been a columnist for Business Week for 14 years and is the author of the seminal work, Human Capital, first published in l964. In 1996, Becker was an economic adviser to presidential candidate Robert Dole. An expert in human capital, family economics, and the economic analysis of crime, discrimination and population, Becker was one of the first economists to use classic economic concepts to study racial discrimination in labor markets. Becker’s research contribution consists primarily of having extended the domain of economic theory to aspects of human behavior that had previously been dealt with by other social science disciplines such as sociology, demography and criminology. In so doing, he has stimulated economists to tackle new problems. Becker has extended the applicability of economic theory in his analysis of the functions of the family. These studies are summarized in his book, A Treatise on the Family, written in 1981. He also applied the theory of rational behavior and human capital in the area of crime and punishment. This is detailed in his essays, “Crime and Punishment: An Economic Approach” and “Essays in the Economics of Crime and Punishment.” Becker’s current research focuses on habits and addictions, formation of preferences, human capital and population growth. He taught at Columbia University for 12 years before returning to the University of Chicago in l968. He attended Princeton University as an undergraduate and received a Master’s and a Ph.D. from the University of Chicago. xxviii JAMES M. BUCHANAN George Mason University Jcontributions ames Buchanan received the 1986 Nobel Prize in Economic Sciences “for his to the theory of political decision-making and public economics.” For nearly 40 years, he has devoted himself to development of the contractual and constitutional bases for the theory of economic and political decision-making. In so doing, he became the leading researcher in the field that has come to be known as “public choice theory.” Traditional economics historically lacked an independent theory of political decisionmaking. In a series of studies, Buchanan developed a corresponding theory of decisionmaking in the public sector. Buchanan transferred the concept of gain derived from mutual exchange between individuals to the realm of political decision-making. This comprehensive theoretical formulation is known as “The New Political Economy” or “Public Choice.” Developments over the last few decades have confirmed Buchanan’s realistic view of the scope of economic policy and the importance of continuously reconsidering fundamental rules of the game, while retaining stable rules. Buchanan has authored, co-authored, and co-edited 31 books and hundreds of articles in professional journals. Liberty Fund of Indianapolis is currently publishing a 20-volume set of his Collected Works, of which six volumes have been released. In addition to the Nobel Prize, he has received numerous honors and awards, along with 16 honorary doctorates from around the world. Buchanan received his Ph.D. from the University of Chicago in 1948 and is currently the Advisory General Director, Center for Study of Public Choice, and Distinguished Professor Emeritus of Economics, George Mason University. xxix LAWRENCE R. KLEIN W.P. Carey & Co. L awrence R. Klein received the 1980 Nobel Prize in Economic Sciences “for the creation of economic models and their application to the analysis of economic fluctuations and economic policies.” He founded Wharton Econometric Forecasting Associates At the University of Pennsylvania, and was a principal investigator of Project LINK, which combined models from countries throughout the world for studying international trade, payments, and global economic activity. Klein, an econometrician, constructed several statistical models of the United States and other countries. Through his publications and guidance, Klein stimulated research on building economic forecasting models and utilizing them for practical analysis of economic policies. Klein’s contributions have made the use of econometric models widespread, not only at scientific institutions, but also in public administration, political organizations and large enterprises. Klein has served as president of many learned societies, edited scholarly journals, and advised governments in matters of economic policy. In l976, he coordinated Jimmy Carter’s economic task force in a successful campaign for the Presidency of the United States. Since 1984, he has been Director and Chairman of the Economic Policy Committee of W.P. Carey & Co. Klein has served on the faculties of the University of Chicago, University of Michigan, Oxford University, and the University of Pennsylvania. He was the Benjamin Franklin Professor of Economics and Finance at Pennsylvania, where he taught for 33 years, and is now Benjamin Franklin Professor Emeritus. He received his Bachelor’s degree from the University of California, Berkeley, and his Ph.D. from the Massachusetts Institute of Technology. xxx JOHN F. NASH Princeton University JandohnJohnF. C.NashHarsanyi received the 1994 Nobel Prize in Economic Sciences with Reinhard Selten “for their pioneering analysis of equilibria in the theory of noncooperative games.” Nash developed an equilibrium concept for “non-cooperative games” that later came to be called the Nash equilibrium. It has become a standard tool in almost all areas of economic theory. The most obvious application of the Nash equilibrium is in the study of competition between firms in the theory of industrial organization. The concept has also been used in macroeconomic theory for economic policy, environmental and resource economics, foreign trade theory, and the economics of information to improve our understanding of complex strategic interactions. In addition to his contributions to non-cooperative game theory, Nash developed a basic solution for cooperative games, usually referred to as Nash’s bargaining solution, which has been applied extensively in different branches of economic theory. Nash is the recipient of numerous scholarship and foundation awards, among them the Medal of Operations Research Society, the Business Week award at Erasmus University in The Netherlands, participation in the Steele prize for “seminal research,” and an Honorary Doctorate of Science and Technology from Carnegie-Mellon University. He was also elected to Fellow status in the Econometric Society and the American Academy of Arts and Sciences. Nash received his Ph.D. from Princeton University. xxxi DOUGLASS C. NORTH Washington University D ouglass North received the 1993 Nobel Prize in Economic Sciences “for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change.” North is regarded as a pioneer in the branch of economic history that has been termed the “new economic history,” or cliometrics (i.e. research that combines economic theory, quantitative methods, hypothesis testing, counterfactual alternatives and traditional techniques of economic history to explain economic growth and decline). His work, in collaboration with Robert Fogel, has deepened our knowledge and understanding within fundamental areas of research as to how, why and when economic change occurs. North has studied the long-term development of Europe and the United States. In l961, he presented an explanatory model for American economic growth before 1860 that came to affect the direction of research inside and outside of the U.S. In 1968, he presented an article on productivity in ocean shipping that has become one of the most quoted research works in economic history. In more recent work, he analyzed the role institutions play in economic growth. Concluding that institutions were “inefficient,” North began a search for colleagues interested in developing political economic models. After 33 years at the University of Washington, North moved to Washington University in St. Louis. There, he created the Center in Political Economy that continues to be a productive research center today. North has authored several books, among them, The Economic Growth of the United States from 1790 to 1860 (Prentice-Hall), Institutional Change and American Economic Growth, with Lance E. Davis (Cambridge University Press), The Rise of the Western World: A New Economic History, Structure and Change in Economic History, with Robert P. Thomas (Cambridge University Press), and Institutions, Institutional Change and Economic Performance (Cambridge University Press). North received his Bachelor’s degree and Ph.D. from the University of California, Berkeley. xxxii MYRON SCHOLES Stanford University M yron Scholes received the Nobel Prize in Economic Sciences in 1997 for his work on developing a method to determine the value of derivatives. He is now the Frank E. Buck Professor of Finance (Emeritus) at Stanford University’s Graduate School of Business. He was a Professor of Law as well as Finance at Stanford and was also a Senior Research Fellow at the Hoover Institution. In addition to his seminal work on options pricing and the pricing of corporate liabilities, Scholes’ research includes the effects of global tax policies on decision making. In 1992, he co-authored Taxes and Business Strategy with Stanford Professor Mark Wolfson. In collaboration with Robert C. Merton and the late Fischer Black, Scholes developed a pioneering formula for the valuation of stock options. Their methodology has paved the way for economic valuations in many areas. It has also generated new types of financial instruments and facilitated more efficient risk management in society. Scholes’ method has become indispensable in the analysis of many economic problems. Banks and investment banks use it regularly to value new financial instruments and to offer instruments tailored to their customers’ specific risks. At the same time, such institutions can reduce their own risk exposure in financial markets. In 1990, Scholes became a special consultant to Salomon Brothers, Inc. while continuing to conduct research and teach at Stanford University. In 1994, he became a principal and co-founder of Long-Term Capital Management. His recent research has focused on the interaction and evolution of markets and financial institutions. Scholes is the recipient of several honorary doctorate degrees. He received his Ph.D. from the University of Chicago. xxxiii REINHARD SELTEN University of Bonn R einhard Selten received the 1994 Nobel Prize jointly with John Nash and John Harsanyi “for their pioneering analysis of equilibria in the theory of non-cooperative games.” Selten was the first to refine the Nash equilibrium concept for analyzing dynamic strategic interaction. He has also applied these refined concepts to analyses of competition with only a few sellers. By introducing the concept of subgame perfection, Selten provided the foundation for a systematic endeavor. Selten’s subgame perfection has direct significance in discussions of credibility in economic policy, the analysis of oligopoly, and the economics of information. This and closely related concepts, such as sequential equilibrium, have turned out to be very fruitful in several areas, including the theory of industrial organization and macroeconomic theory for economic policy. In addition to his prize-winning achievements, Selten has contributed powerful new insights regarding evolutionary games and experimental game theory. Selten is the recipient of numerous honorary doctoral degrees and is a member of several scientific academies, including the American Academy of the Arts and Sciences and the American National Academy. He is a Fellow of the Econometric Society and he was the President of the European Economic Association in 1997. The contributions of the three laureates to equilibrium analysis in non-cooperative game theory make a natural combination: John Nash provided the foundations for the analysis, Selten developed it with respect to dynamics, and John Harsanyi built on it with respect to incomplete information. Selton received his Ph.D. in Mathematics from the University of Frankfurt. He is a Professor of Economics at the University of Bonn. xxxiv Speakers Frederick Andresen is founder and Chairman of DirectNet Telecommunications, established in Moscow in 1992, with operations in Prague and London. Currently, Andresen is developing an Internet-based high-tech incubator network in Russia. Prior to turning his attention to Russia and Central Europe, Andresen specialized in business development in Europe and Asia. He is a founding member of The American Chamber of Commerce in Russia, a board member of the Russian-American Chamber of Commerce in the United States, and a member of the Los Angeles/St. Petersburg Sister City Committee and the prominent World Wide Club of St. Petersburg. He is a graduate of The American Graduate School of International Management. Philip Angelides is Treasurer of the State of California. His goals are to protect taxpayer funds, cost-effectively finance schools and other infrastructure and invest more in California communities. Angelides has earned a reputation as an effective leader on public issues, especially in the areas of affordable housing and redevelopment fields. He has played a key role in creating programs to finance needed public facilities and strengthen state and local urban planning. In the private sector, Angelides formed his own investment and management business and became known for his economic innovation. His venture, Laguna West, sparked national dialogue on how to plan and build more livable communities. He is a graduate of Harvard University and a Coro Foundation fellow. Jeffrey T. Arnold is Chief Executive Officer of Healtheon/WebMD, Inc., the first Internet-based healthcare company. The company’s mission is to use the Internet to facilitate a new healthcare delivery system, offering a single, secure environment for all communications and transactions among physicians, consumers, and healthcare institutions. Prior to the merger, Arnold was founder, Chairman of the Board and CEO of WebMD. Before founding WebMD, Arnold was Chairman and CEO of Quality Diagnostic Services, which he grew to the second largest company of its kind. An Atlanta resident, Arnold attended the University of Georgia. James D. Atwell is a Partner at the later-stage venture capital firm, Summit Partners. The firm specializes in growth equity, recapitalizations and buyouts in networking, communications, Internet, software, healthcare and specialized services. Mr. Atwell was with Coopers and Lybrand LLP and its successor, PricewaterhouseCoopers, LLP since 1983 before joining Summit Partners in 2000. He was Managing Partner of the firm’s San Jose/Menlo Park offices and was a member of the Board of Directors, most recently as Global Managing Partner of Private Equities. xxxvii Speakers George B.N. Ayittey is Professor of Economics at American University. He was the recipient of a National Fellowship at the Hoover Institution and one of 13 professors recognized for outstanding scholarly work. He was a Professor at Wayne State College in Nebraska and Bloomsburg University in Pennsylvania before joining the Heritage Foundation as a Bradley Resident Scholar. Ayittey founded The Free Africa Foundation in Washington D.C. to serve as a catalyst for reform in Africa. He is the author of four books on Africa and his articles have been widely published in The Wall Street Journal, Globe and Mail (Canada), The Times of London, USA TODAY and many more. He is a frequent commentator on radio and television and is featured in the documentary on Africa, “Burden On the Land” (1990). Ayittey received his Ph.D. from the University of Manitoba. Martin N. Baily is Chairman of the Council of Economic Advisers, appointed by President Clinton in August 1999. Prior to being sworn into office, Baily was a Principal of McKinsey & Company at the Global Institute in Washington, D.C. Bailey co-led projects on service and manufacturing productivity and employment, and participated in a series of country studies that looked at France, Germany, the Netherlands, United Kingdom, Brazil, Korea and Russia. He served as one of three members of the President’s Council responsible for macroeconomic policy and a range of microeconomic issues. He taught at Massachusetts Institute of Technology and Yale, was a Senior Fellow at the Brookings Institution, a Professor of Economics at the University of Maryland and co-founder of the Microeconomics edition of the Brookings Papers on Economic Activity. Bailey received his Ph.D. in economics from MIT. James R. Barth is the Lowder Eminent Scholar in Finance at Auburn University and a Senior Fellow at the Milken Institute. His research has focused on financial institutions and capital markets, with special emphasis on regulatory issues. Barth was the Chief Economist of the Office of Thrift Supervision and previously served as the Chief Economist of the Federal Home Loan Bank Board. He was Professor of Economics at George Washington University, Associate Director of the Economics Program at the National Science Foundation, Shaw Foundation Professor of Banking and Finance at Nanyang Technological University, and visiting scholar at the U.S. Congressional Budget Office, Federal Reserve Bank of Atlanta, Office of the Comptroller of the Currency, and the World Bank. He has authored more than 100 articles in professional journals, has written and edited several books, serves on several editorial boards and is included in Who's Who in Economics. Barth received his Ph.D. in economics from Ohio State University. xxxviii Speakers Nariman Behravesh is Chief International Economist and Research Director for Standard & Poor’s DRI, specializing in international advisory services. He is DRI’s chief spokesperson on global opportunities and risks. He manages a group of 40 professionals in North America and Europe covering economic, financial and political developments in more than 106 countries. Before joining DRI, Behravesh was President and CEO of Oxford Economics U.S.A, Inc. He spent ten years at the WEFA Group, where he was Chief Economist and Group Senior Vice President, among other positions. He has hosted the PBS television series, “Inside the Global Economy,” and has authored articles in a range of publications. Behravesh received his Ph.D. in Economics from the University of Pennsylvania. Mark Benioff is Chairman of salesforce.com, an Internet startup company in the business services sector. Previously, he was a senior executive at Oracle Corporation for 13 years, most recently serving as a Senior Vice President reporting to Oracle’s chairman, Lawrence Ellison. Prior to coming to Oracle, Benioff held positions at Apple Computer and Liberty Software. He is the recipient of several awards and honors for his civic and professional work and serves on the boards of directors for Internet portal DigitalWork.com, Yield Dynamics, and Notifi.com. His bachelor’s degree in business administration is from the University of Southern California. Boris Berezovsky was recently elected to a four-year term as a Russian Member of Parliament. He served as Deputy Secretary of the Russian Security Council, appointed by former President Boris Yeltsin. In 1969, Berezovsky founded and still heads the systems design laboratory at the Control Sciences Institute of the Russian Academy of Sciences. He has published more than 100 scientific works, three monographs and is the author of Genetic Transformation of Russia: Economy, Politics, Mentality, a concise work on the stages of Russia’s development. Berezovsky set up LogoVAZ Group in 1989, now one of the leading industrial and financial groups in Russia. In 1998, LogoVAZ teamed up with News Corporation to form LogoVAZ News Corporation. Berezovsky is founder and Chairman of the Board of Trustees of the TriumphLogoVAZ Charitable Foundation. He received his Ph.D. from the University of Moscow. xxxix Speakers Ian Bremmer is Senior Fellow and Director of Eurasia Studies at the World Policy Institute and President of the Eurasia Group. An expert on Eurasian states in transition, he has published widely on nation- and state-building, ethnic conflict, and international relations in the region. Bremmer’s recent publications include the book New States, New Politics: Building the Post-Soviet Nations and essays in publications including International Affairs, World Policy Journal, Journal of Democracy, The New Republic, the Los Angeles Times, and The New York Times. He has held positions at the Harriman Institute, Hoover Institution, the East West Institute, and Lawrence Livermore National Laboratory. Bremmer received his Ph.D. in political science from Stanford University. R. Dan Brumbaugh, Jr. is a senior fellow at the Milken Institute. He is an expert in banking and global financial markets and has consulted for a wide range of financial service firms and industries. He was a senior research scholar at the Center for Economic Policy Research at Stanford University, 1989–90. From 1986 to 1987, he was President and CEO of the Californiabased Independence Savings and Loan. He was Deputy Chief Economist at the Federal Home Loan Bank Board from 1983 to 1986. He has authored several books and numerous professional journal articles on subjects in which he has expertise, and has testified frequently before congressional committees. He received his Ph.D. in Economics from George Washington University. Kent E. Calder is Director of the Princeton University Program on U.S.Japan Relations and a tenured Princeton faculty member. He served as Special Advisor to U.S. Ambassadors to Japan, Walter Mondale and Thomas Foley. He held the position of Chair at the Center for Strategic and International Studies in Washington, D.C. after serving as the first Executive Director of Harvard University’s Program on U.S.-Japan Relations. He has authored five books on East Asian politics and security issues, including Pacific Defense, the first publication by an American to receive the Mainichi Grand Prix in Asia-Pacific Studies, in 1997. Calder received his Ph.D. in Government at Harvard University. Gerard Caprio, Jr. is Director of Financial Policy and Head of Financial Sector Research at the World Bank. Before joining the World Bank in 1988, he was Vice President and Head of Global Economics at J.P. Morgan. Caprio served as an economist at the Federal Research Board and the International Monetary Fund, taught at George Washington University, and has written extensively on financial sector policy, financial reform, and monetary policy implementation. He is currently researching the links between financial sector regulation and supervision and financial institution performance, as well as financial crises. xl Speakers Fred H. Cate is a Law Professor, Harry T. Ice Faculty Fellow and Director of the Information Law and Commerce Institute at the Indiana University School of Law, Bloomington, and Senior Counsel for information law with Ice Miller Donadio & Ryan. An internationally recognized authority on information law and policy issues, Cate is a member of the Federal Trade Commission’s Advisory Committee on Online Access and Security. He directed the Electronic Information Privacy and Commerce Study for the Brookings Institution, chairs the International Telecommunication Union’s High-Level Experts on Electronic Signatures and Certification Authorities and directs the American Institute for Contemporary German Studies project on GermanU.S. e-commerce. He has written widely on issues of privacy, the Internet and the First Amendment, and is publisher of the Federal Communications Law Journal. Cate received his law degree from Stanford University. Peter Chernin is President and Chief Operating Officer of News Corporation and Fox Entertainment Group, and Chairman and CEO of the Fox Group, the North American Operations of News Corp. He serves on the Board of News Corp. and the Office of the Chairman, with management responsibility for News Corp.’s worldwide operations. Under his stewardship, 20th Century Fox has become a leading film and television studio, and FOX Broadcasting Co. has joined the major networks. Chernin has also overseen FOX’s exponential growth in sports, cable and general television programming and distribution in the U.S. and internationally. Chernin joined FOX from Lorimar Film Entertainment where he was President and COO. Prior to that he was Executive Vice President, Programming and Marketing for Showtime/The Movie Channel Inc. and Vice President, Development and Production at David Gerber Co. Cliff Cheung is Chief Investment Officer of Prudential Asset Management Asia Limited (PAMA), one of the largest private equity investment companies in Asia, and a member of its Investment Committee. Cheung joined PAMA in 1986 and has worked with the Corporate Finance Group in New Jersey and Prudential-Bache Interfunding Inc., Prudential’s merchant banking and buyout unit based in New York. Cheung is a Director and former Chairman of the Hong Kong Venture Capital Association. He served on the Financial Services Advisory Committee of the Hong Kong Trade Development Council and is currently a member of the Listing Committee of the Growth Enterprise Market of the Stock Exchange of Hong Kong. Cheung holds the Chartered Financial Analyst designation and is a graduate of the University of Hong Kong. xli Speakers Henry Cisneros is President and Chief Operating Officer of Univision Communications, Inc. He served as Secretary of the U.S. Department of Housing and Urban Development from 1993-1997. Prior to becoming a member of the President’s Cabinet, he was Chairman of Cisneros Asset Management Company, a fixed-income money management firm operating nationally. As four-term Mayor of San Antonio, Cisneros rebuilt the city’s economic base, infrastructure and revitalized downtown. Cisneros has served as President of the National League of Cities, Chairman of the National Civic League, Deputy Chair of the Federal Reserve Bank of Dallas, and board member of the Rockefeller Foundation. Steven C. Clemons is Senior Vice President of the New America Foundation, a Washington, D.C.-based public policy center whose objective is to cultivate and encourage new policy voices. Clemons writes and speaks frequently on the subject of U.S.-Japan and Asia Pacific economic and security affairs, as well as on American economic and technology policy. Prior to joining the Foundation, Clemons was Executive Vice President of the Economic Strategy Institute, a Washington-based economic think tank. He was a principal creator of the Presidential Commission on U.S.–Pacific Trade and Investment Policy, the first Executive Director of the Nixon Center and co-Founder/Director of the Japan Policy Research Institute. He serves on the Council on Foreign Relations, is a founding member of the Pacific Council on International Policy and a member of the Board of Directors of the Asian Technology Information Program. Jeffrey Cole is Director of the Center for Communication Policy at the University of California, Los Angeles. Cole is a UCLA faculty member in the Anderson Graduate School of Management and the Social Science Division of the College of Letters & Sciences. He is Principal Investigator of the Network Television Violence Monitoring Project, which has received unanimous national praise for the quality of its reports. In 1987, Cole received UCLA’s Distinguished Teaching Award. He is co-author, with U.S. News and World Report, of several national surveys examining the attitudes and values of entertainment industry decision-makers. Cole is a widely sought-after speaker and consultant throughout the world on communications issues. xlii Speakers Kenneth S. Courtis is Managing Director of Goldman Sachs and Vice Chairman of Goldman Sachs Asia. Courtis advises the firm on economics and strategy throughout the Asia-Pacific region, as well as in Europe and North America. Courtis is known for his research in international finance, macroeconomic policy, global capital markets and strategy. Prior to joining Goldman Sachs, he served as Chief Asia Economist and Strategist for Deutsche Bank. Courtis has a Master’s in international economics from Sussex University, England, an MBA in finance and strategy from INSEAD (European Institute of Business Administration) and received his Ph.D. with honors and highest distinction from the Institute of Economic and Political Studies in Paris. Millicent Cox is a Consulting Economist focusing on issues of Economics, Demography and Public Policy. Her background includes positions as Senior Research Economist at the University of California, San Diego; Instructor at the University of Southern California’s Center for Public Affairs; and Associate Social Scientist at Rand Corporation in Santa Monica. Cox’s recent work has focused on Mexico and the United States, and she has prepared studies for the University of California, U.S. Customs Service, U.S. Immigration and Naturalization Service, the Binational Advisory Council for San Diego/Tijuana Land Ports, and other private and public agencies. Cox received her Ph.D. in Urban Studies and Economics from the University of Southern California. Mark Curcio is Chief Executive Officer of Artisan Entertainment, a position to which he was appointed in July 1997. He came to Artisan Entertainment from Bain & Company, one of the world’s largest strategy consulting firms, where he served as Vice President, worldwide leader of its Merger and Acquisition practice and head of its Los Angeles office. Prior positions include Partner at the consulting firm of LEK and Director of Corporate Strategic Planning at Walt Disney, where he was responsible for acquisitions and strategic development for the studio’s assets. Curcio received his MBA from Carnegie Mellon University. K. Blake Darcy has been the Chief Executive Officer of DLJdirect since its founding in 1988. In 1997, under his direction, DLJdirect created a separate technology group that develops online solutions for financial organizations. With DLJ in the 1980s, Darcy formed a new business unit at DLJ’s Pershing Division to provide turnkey discount brokerage services to banks and insurance companies and served as Vice President, Marketing Manager of Direct Brokerage Services. Darcy began his career in the financial services industry as a retail broker with Lehman Brothers in 1982. Darcy received his Bachelor’s degree in Government from Hamilton College. xliii Speakers Gururaj Deshpande is Founder and Chairman of Sycamore Networks, Inc. Prior to that he was founder and Chairman of Cascade Communications, a public network for global computer connectivity, acquired by Ascend Communications in 1997. Cascade was named one of the “Top 25 Very Cool Companies” by Forbes in 1996. Cascade also placed first in the 1996 “New England Fast 50,” an annual ranking of hightech companies by Deloitte and Touche and second in its “National Fast 500.” Deshpande also serves as Chairman of Cimaron Communications, a leader in silicon solutions and ASIC cores for high speed SONET systems, and WebDialogs, Inc., a startup focusing on Internet-based customer interaction technology. He has garnered many top industry awards. Deshpande received his Ph.D. in Data Communications from Queens University in Canada. Ross C. DeVol is the Director of Regional Studies at the Milken Institute, where he oversees research efforts on the dynamics of comparative regional growth performance. Prior to joining the Institute, DeVol was senior vice president at WEFA, Inc., where he supervised their regional economic services group. He supervised the respecification of WEFA’s regional econometric models and played an instrumental role on similar work on its U.S. Macro Model. The firm’s chief spokesman on international trade, he also served as the head of WEFA’s U.S. Long-Term Macro Service and authored numerous special reports on behalf of the U.S. Macro Group. DeVol received his master’s degree in economics from Ohio University. Robert H. Edelstein is Co-Chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. He is active in the fields of real estate economics, finance and property taxation, energy and environmental economics, public finance and urban financial problems. He has published widely in economics and business journals, testified before Congress on a range of issues and is a widely sought-after lecturer and consultant for both government and private sector clients. He has served as President of the American Real Estate and Urban Economics Association, and serves on its Board of Directors and the editorial boards of several professional journals. His is a member of a number of corporate boards. Edelstein received his Ph.D. in Economics from Harvard University. xliv Speakers William S. Elkus is Managing Director and co-Founder of idealab Capital Partners (ICP), a leading venture capital firm in early-stage venture financing of Internet companies, affiliated with idealab! in Pasadena. To date, ICP has funded over 30 Internet startups, including GoTo.com, eToys, CarsDirect.com, NetZero, RealNames and MP3.com. Prior to founding ICP, Mr. Elkus served as President of Nathan Todd & Company where, in addition to being an active venture capital investor, he co-founded five investment partnerships in the areas of securities trading, real estate and merchant banking. He sits on the boards of several public and private firms including Chronicle Publishing Co., GoTo.com, EntryPoint and Health Allies.com. Mr. Elkus earned a Masters in Management from Massachusetts Institute of Technology and he received his JD from Harvard Law School. Bill Emmott is Editor of The Economist. He began his career in The Economist’s Brussels office, writing on EEC affairs and the Benelux countries while doing postgraduate research at Nuffield College. He subsequently became the paper’s economic correspondent in London, then moved to Tokyo, where he covered Japan and South Korea. He returned to London as Financial editor, then became Business Affairs editor responsible for all coverage of business, finance and science. He has authored three books on Japan. Emmott studied politics, philosophy and economics at Oxford and was awarded an honorary Doctor of Laws from the University of Warwick. James Fallows is a writer and broadcaster now writing on technology and politics for the Industry Standard. His articles appear in Slate, the New York Times Magazine, the New York Review of Books, the New Yorker, The American Prospect, and other magazines. He is Chairman of the Board of Advisors of the New America Foundation and is National Correspondent for The Atlantic Monthly. From 1979-1996, Fallows was the Washington Editor for The Atlantic Monthly, where he wrote on immigration, defense policy, entitlements, politics, economics, computer technology, and other subjects. For four years of that time he was based in Asia. He is the author of six books. Fallows studied History and Literature at Harvard College. xlv Speakers Robert Alan Feldman is the Chief Economist for Japan for Morgan Stanley, and is a Managing Director of the firm. As part of Morgan Stanley’s global economics team, he is responsible for forecasting the Japanese economy and interest rates, and he participates in formation of the foreign exchange and equity strategies of the firm. He contributes regularly to the daily, weekly, and other publications of Morgan Stanley. Prior to joining Morgan Stanley in 1998, Feldman was the Chief Economist for Japan for Salomon Brothers from 1990-97, where he was ranked among the top five Japan economists in investor polls taken by the Nikkei Newspaper, Institutional Investor, and Asia Money. He worked for the International Monetary Fund from 1983-89, in the Asian, European, and Research Departments. Feldman has a Ph.D. in Economics from the Massachusetts Institute of Technology, where he concentrated on international finance and development. Albert Fishlow is a Senior Economist with Violy, Byorum & Partners, LLC and Visiting Professor at the Yale University School of Management. Until recently, he was a Paul A. Volcker Senior Fellow for International Economics at the Council of Foreign Relations. Fishlow was Professor of Economics at the University of California, where he was also the first Dean of International and Area Studies. Before that, he was Professor of Economics and Director of the Center for International and Area Studies at Yale University. He served as Deputy Assistant Secretary of State for Inter-American Affairs, 19751976, and he has been a member of several public groups relating to Latin America. He is the recipient of Brazil’s National Order of the Southern Cross and has published research on issues of economic history, Brazilian and Latin American development strategy and economic relations between industrialized and developing countries. William Frey is a Senior Fellow at the Milken Institute and a Professor of Sociology and Senior Demographer at the Center for Social and Demographic Analysis at the State University of New York (SUNY). He was an adjunct professor in the University of Michigan's Department of Sociology and a faculty member at Michigan's Population Studies Center. He is an internationally regarded scholar in the field of migration, population redistribution, and the demography of metropolitan areas. The recipient of numerous awards, grants, and fellowships, Frey was a Visiting Research Scholar at the International Institute for Applied Systems Analysis, the Andrew W. Mellon Research Scholar at the Population Reference Bureau, and the Hewlett Visiting Scholar at Child Trends. He was a consultant to the U.S. Department of Housing and Urban Development for the 1995 President's National Urban Policy Report and has authored well over 70 journal articles and books. Frey received his Ph.D. in sociology from Brown University in 1974. xlvi Speakers Klaus Friedrich is Chief Economist and General Manager Group Economics of Dresdner Bank Group, where he advises the Chairman and the Board of Directors on economic issues. Friedrich is responsible for analysis and forecasts of the German and international economies, overseeing country and industry risk analysis and participating in the bank’s asset and liability management. Before joining Dresdner Bank, he worked for the Board of Governors at the Federal Reserve in Washington, D.C. He subsequently served as the Director for Europe in the Institute of International Finance, an international banking organization concerned with cross-border debt and country risk issues. Friedrich received his Ph.D. from Cornell University. Brenda D. Gavin is President of S.R. One, Ltd., the venture capital subsidiary of SmithKline Beecham and was S.R. One Vice President for ten years prior to that. Before joining S.R. One, Gavin was Director of Business Development of SmithKline Beecham Animal Health Products. Gavin is an epidemiologist and worked at the Center for Disease Control in Atlanta prior to entering business. She serves on the boards of Oxis International, Synbiotics, Therion Biologics, Message Pharmaceuticals, MicroMass Communications, Amerifit Nutrition and Physician Verification Services. Gavin received her Doctor of Veterinary Medicine from the University of Missouri and her MBA from the University of Texas. Frank B. Gibney is President of the Pacific Basin Institute at Pomona College. He served as a correspondent and editor at Time, Newsweek and later, Life magazine. As Time magazine’s bureau chief in Japan, he traveled extensively throughout East Asia. He is fluent in Japanese. He is the author of 14 books and has written extensively for Foreign Affairs, the Los Angeles Times, The Wilson Quarterly and various American and Asian periodicals. Gibney has also been active in public service and is a founding member of the U.S. National Committee for Pacific Economic Cooperation and serves on its board. The Japanese Government presented him with the Order of the Rising Sun and The Order of the Sacred Treasure. He was Adjunct Professor of Far Eastern Studies at the University of California, Santa Barbara, and is a graduate of Yale University. xlvii Speakers Martin Greenberger is a Professor of Information Systems at the Anderson School of Management, University of California, Los Angeles, and a Senior Fellow at the Milken Institute. He has been at UCLA since 1982, where he is also an IBM Professor. He directs the Anderson School's Center for Digital Media, teaching and building scenarios for management decision making. He is President of the nonprofit Council for Technology and the Individual, examining the human dimensions of technology. Prior to UCLA, he was with Johns Hopkins University, where he was Chairman of Computer Science, Director of Information Processing, and Professor of Mathematical Sciences. He was a faculty member of MIT's Sloan School of Management, a Guggenheim Fellow at the University of California, Berkeley, and a visiting professor at Stanford University, the MIT Media Lab, and Technion, Israel Institute of Technology. Greenberger’s Ph.D. is from Harvard University. Jack B. Grubman is Managing Director and Group Leader of the Salomon Smith Barney Global Telecommunications Team. Prior to joining Salomon Brothers in 1994, Grubman was Managing Partner and Communications Equity Research Group Leader at PaineWebber Inc. Grubman was on the Institutional Investor All-Amercian Research Team 13 times. He was ranked first by both Wireline and the newly created CLEC for his coverage of Telecommunications Services in 1999, and first by Wireline in 1998, 1997 and 1994. His direct coverage includes North American Telecom companies such as RBOCs, long distance carriers, competitive local exchange carriers and emerging telco carriers. Grubman also heads a global research team that covers International Telecom Companies in Europe, Latin America, Japan and the Pacific Rim. Grubman received his MS in Probability Theory from Columbia University. Mark G. Heeson is President of the National Venture Capital Association, having formerly served as its Deputy Executive Director. Heesen directs all of the Association’s operations, including its national legislative and regulatory efforts and operates the American Entrepreneurs for Economic Growth, NVCA’s grass-roots program now representing 12,000 emerging-growth companies. Heesen’s work with NVCA over the past eight years has focused on legislative efforts and reform on behalf of venture capitalists. Prior to joining the NVCA, Heesen was an aide to the Governor of Pennsylvania and Deputy Director for Federal Funds reporting to the Texas Legislature. Heesen received his law degree from Dickinson School of Law. xlviii Speakers Robert E. Hendricks, is Founder and Chairman of HOLT Value Associates LLP, a Chicago-based research and consulting firm specializing in linking corporate financial performance to shareholder value. HOLT’s Cash Flow Return on Investment (CFROI) Valuation Framework removes international accounting distortions and provides comparable global data on 18,000 companies in 24 countries. The CFROI Framework is used to manage $1.3 trillion in equity investments at 300 investment firms around the world. HOLT Value Associates Alliance Services, LLC, a subsidiary, provides corporations with access to the HOLT CFROI Framework for use in shareholder value creation initiatives. Previously, Hendricks was Vice President with Continental Bank of Chicago, where he was a member of the Stock Selection Committee responsible for managing over $2 billion in equity funds. He received his MBA from the University of Wisconsin. Richard F. Hokenson is Chief Economist of Donaldson, Lufkin & Jenrette, Inc., and a member of the Investment Policy Committee and Stock Selection Committee. He is responsible for analysis and forecasts of economic and demographic trends and is the author of DLJ Demographics: Profiles of a Changing Society , as well as DLJ’s weekly economic publication, Economic Highlights, among others. Previously, Hokenson was Senior Economist with Merrill Lynch Economics, Inc. and Data Resources, Inc. Hokenson received his Master’s in Economics from the University of Michigan and is currently enrolled in the New York University Ph.D. program in economics. Robert D. Hormats is Vice Chairman of Goldman Sachs (International) and Managing Director of Goldman Sachs & Co. He joined the firm in 1982 as a Vice President in the Investment Banking Division and a Director of Goldman Sachs International. Prior to joining the firm, Hormats served as Senior Deputy Assistant Secretary for Economic and Business Affairs at the Department of State, was Ambassador and Deputy U.S. Trade Representative, and Assistant Secretary of State for Economic and Business Affairs. He also served as a Senior Staff Member for International Economic Affairs on the National Security Council, during which time he was Senior Economic Advisor to Henry Kissinger, Brent Scowcroft and Zbigniew Brzesinski. Hormats received his Ph.D. in International Economics from the Fletcher School of Law and Diplomacy. xlix Speakers Peter W. Huber is a member of the Washington, D.C. firm of Kellogg Huber Hansen Todd & Evans, where he specializes in telecommunications markets, antitrust policy, liability law and high technology. He is also a Senior Fellow at the Manhattan Institute for Policy Research. He is the author of 12 books, including the just published, Hard Green: Saving the Environment from the Environmentalists – A Conservative Manifesto.” He writes a regular column for Forbes and has published articles in a number of academic journals. Prior to earning his law degree, Huber earned a doctorate in Mechanical Engineering from MIT, where he remained as an Assistant and then Associate Professor for six years. He clerked on the D.C. Circuit Court of Appeals for Judge (now Justice) Ruth Bader Ginsburg and on the U.S. Supreme Court for Justice Sandra Day O’Connor. Huber received his law degree from Harvard Law School. Michael Intriligator is Professor of Economics, Political Science, and Policy Studies at UCLA and a Senior Fellow at the Milken Institute. From 1982 to 1992, he directed the UCLA Center for International and Strategic Affairs, the predecessor of the current Center for International Relations. His research focuses on economic theory, econometrics, health economics and strategy, and arms control. Most recently, he has written about healthcare reform, the proliferation of nuclear weapons, global security, and Russia's attempted transition to a market economy. He is a member of several editorial boards and has authored or edited over 200 articles and scholarly texts. His standard work, Mathematical Optimization and Economic Theory, is now in its 13th printing. A fellow of the Econometric Society, Intriligator is a member of the Council on Foreign Relations, the International Institute for Strategic Studies, and a foreign member of the Russian Academy of Sciences. He was the recipient of the Woodrow Wilson Fellowship from Yale University and received his Ph.D. at MIT. Sridar A. Iyengar is Chairman and Chief Executive Officer of KPMG’s operations in India. He advises on corporate strategies for market entry, financing, joint venturing, acquisitions, divestitures and reorganizations. He has particular expertise in effectively positioning Indian and multinational companies from a global perspective and is actively involved in advising foreign corporations on setting up operations in India. Iyengar has been with KPMG since 1968 as North Pacific Area Partner in Charge of KPMG’s International Services in Palo Alto, International Tax Partner in KPMG-UK and Senior Tax Partner of the Northwest UK Practice and a member of the Tax Practice Committee. He is a Fellow of the Institute of Chartered Accountants in England and Wales and a Charter Member of the Indus Entrepreneurs Group. Iyengar received his Bachelor of Commerce degree with honors from the University of Calcutta. l Speakers Roger B. Jantio is Managing Director of Sterling International Group, Inc., with expertise in mobilization of financing on international capital markets for projects in developing countries, particularly Africa. Jantio is also a Director of Sterling Merchant Finance Limited and Sterling Growth Fund. Jantio recently structured the Cameroon privatization/investment fund and is working on the privatization of the State Insurance Corporation of Ghana, among others. Jantio was a Senior Consultant at J.E. Austin Associates, an investment officer at C.S.E. Finance Corporation and at J. Schneider & Associates, he was instrumental in developing the Mergers and Acquisitions division. He was Assistant Vice President at Meridien International Bank working on project finance and international loan syndication. Jantio received Master’s in Finance at the Institut d’Etudes Politiques of Paris, Master’s in Applicable Laws at the University of Paris and his MBA at Harvard Business School. Jerry J. Jasinowski is President and Chief Executive Officer of the National Association of Manufacturers. Prior to that, he was Executive Vice President and Chief Economist at NAM for ten years. His expertise covers political, economic and manufacturing trends and developments. He is the proponent of a national strategy to boost economic growth and improve opportunities for small- and medium-size manufacturers, focusing on e-commerce opportunities. He was Assistant Professor of Economics at the U.S. Air Force Academy, and managed research and legislative activities for the Joint Economic Committee of Congress in the 1970s. He served as Director of the Carter Administration’s economic transition team and was appointed Assistant Secretary for Policy at the U.S. Department of Commerce. He was awarded the Anti-Defamation League’s 1997 Person of the Year Award for his leadership role in advancing more inclusive policies for the workforce. Jasinowski received his Master’s in Economics at Columbia University and is a graduate of the Harvard Business School’s Advanced Management Program. David Jones is Vice Chairman and Chief Economist at Aubrey G. Lanston & Co. Inc. Before joining Lanston & Co. in 1972, he was an economist with Irving Trust Company and the Federal Reserve Bank of New York. Jones received his Ph.D. from the University of Pennsylvania. li Speakers Takeshi Kadota is President and Chief Executive Officer of Mitsubishi Corporation Capital, Ltd. He joined Mitsubishi Corporation’s Finance Department in 1971, then transferred to Mitsubishi Corporation Finance, PLC (MCF) in London in 1984. He became President of MCF in 1991. Kadota returned to Tokyo and in 1997 was appointed General Manager of the Merchant Banking Department, where he supervised investments in marketable securities and private equities, and oversaw financial services. Kadota holds a Bachelor’s in Law from the University of Tokyo and received his MBA from Stanford University Business School. K. Vaman Kamath is Managing Director of Chief Executive Officer of ICICI, Limited, a diversified financial services company for corporate and retail customers in India. The ICICI Group has pioneered various Internet and e-commerce initiatives in India and operates as a virtual universal bank by using technology and e-commerce to provide the complete range of online banking and financial services. Under Kamath’s tutelage, ICICI became the first Indian company and second Asian bank to list on the New York Stock Exchange. He is a member of the Governing Board of various educational institutions, the Economic Times Editorial Advisory Board and was voted most e-savvy CEO amongst Asian banks. He lectures extensively in India and abroad. Kamath received his MBA from the Indian Institute of Management. John D. Kasarda is a Kenan Professor of Business Administration and Director of the Frank Hawkins Kenan Institute of Private Enterprise at the University of North Caorlina, Chapel Hill. Kasarda expanded the Institute’s Center for Emerging Markets, Global Business Research Center for Competitiveness and Employment Growth, Center for Logistics and Global Strategies, Urban Investment Strategies Center, Kenan Institute Asia and Citibank International Fellows Program. He helped form the MBA Enterprise Corps, initiated the U.S. Thailand Development Partnership and the North Carolina Global TransPark. He’s been a consultant to four administrations, the recipient of numerous grants, designated Fellow of the American Association for the Advancement of Science and Senior Fellow of the Urban Land Institute. He has published more than 60 articles and nine books on economic development and business issues. Kasarda received his Ph.D. from the University of North Carolina. lii Speakers Larry J. Kimbell is Professor of Business Economics (Emeritus) at the John E. Anderson Graduate School of Management, University of California, Los Angeles and co-Director of the UCLA Anderson Forecast. Kimbell teaches macroeconomics, business forecasting and the management of location decisions. He also co-founded the Real Estate Center at the Anderson School, which develops methods for analyzing real estate markets using micro-data with application to understanding national and regional trends. Kimbell was Director of the U.S. Macroeconomics Forecasting Service of the WEFA Group, Inc. from 1990-1992. His consulting work includes research for the World Bank, the Bundesbank, the United Nations and governments worldwide. Kimbell received his Ph.D. from the University of Texas, Austin. Dennis Kneale is Executive Editor of Forbes where he is expanding health and technology coverage. Kneale came to Forbes in November 1998 after 17 years at the Wall Street Journal where he served, at various intervals, as advertising/marketing industry reporter, computer industry reporter, television industry reporter, deputy editor of media, marketing and entertainment, technology editor and senior editor. He began his career with the Detroit News, followed by the Ft. Lauderdale News & Sun Sentinel. Mustafa V. Koc is Chairman of the Turkish-U.S. Business Council and President of the Construction and Mining Group of Koc Holding, the largest industrial holding company in Turkey. He began his career with the Tofas Group of Koc Holding, then moved into Ram Foreign Trade Inc., its foreign trade company. Koc is a member of the Turkish Industrialists and Businessmen’s Association (TUSIAD), Board Member of the East-West Institute, Member of the Foreign Economic Relations Board of Turkey, Member of the Young Presidents Organization, the Istanbul Chamber of Industry and the Civil Aviation Association. Koc received his Bachelor’s in Business Administration from George Washington University. liii Speakers Faqir C. Kohli is Deputy Chairman of Tata Consultancy Services, where he has spent most of his career. He is also Chairman of WTI Advanced Technology Ltd. and past Chairman of Tata Elxsi(I) Ltd., and Tata Infotech Ltd. He is actively associated with the Computer Society of India, the Institute of Electrical and Electronics Engineers (New York), the Institution of Electrical Engineers, the Indian National Academy of Engineering and the Institute of Management Consultants of India. He is a Fellow of these institutions. He has served on numerous councils and has been associated with several educational institutions in advisory capacities. Kohli received his M.S. in Electrical Engineering from the Massachusetts Institute of Technology. Jesper Koll is Chief Economist with Merrill Lynch, Japan, Inc. and a researcher of the Japanese economy. Prior to joining Merrill Lynch he was Managing Director of Tiger Management LLC, and Chief Economist and Head of Economic and Market Research for J.P. Morgan in Tokyo. Koll serves on several Japanese Government Advisory Councils, including the MITI committee on “Big Bang 2001 – Japan’s Financial System Reform,” and recently the Economic Planning Agency Council that deliberates policy proposals to counter deflation. For two years after his arrival in Japan, Koll was a research fellow at the Kyoto University Economic Research Center and the Tokyo University Institute for Social Sciences. Before moving to Japan, Koll was an assistant economist for the O.E.C.D. in Paris. He received his Master’s degree from The Johns Hopkins University. Stephen Kotkin is Director of Russian Studies at Princeton University, where he has been teaching since 1989. He is the author of Magnetic Mountain: Stalinism as a Civilization (1995) and Steeltown: USSR (1991), and the editor of Rediscovering Russia in Asia (1995) and Mongolia in the Twentieth Century (1999). He has been a visiting professor in Japan, Italy and Russia, and is a contributor to The New York Times, The New Republic and other periodicals. He is also a radio commentator for BBC (in Russian) and NPR/PRI. Kotkin received his Ph.D. in European History from the University of California, Berkeley. liv Speakers George Kozmetsky is Chairman of the Advisory Board and a Senior Research Fellow of the IC2 Institute and Executive Associate for Economic Affairs with the University of Texas. He is a Professor in the Management and Computer Science Departments, holds the Murray S. Johnson Chair in Economics and the IC2 E.D. Walker Centennial Fellowship at the University of Texas at Austin. His expertise spans service, manufacturing and technology-based industries and venture capital. He is co-Founder and former Executive Vice President of Teledyne, Inc. He has assisted in developing over 100 technology-based companies and sits on the boards of many others. He has served state and federal governments as advisor, commissioner and task force panel member. He has received numerous awards, including first recipient of the Entrepreneurial Leadership Award from the MIT Enterprise Forum of Cambridge, Inc. Kozmentsky received his Doctor of Commercial Science from Harvard University. Joel Kurtzman is Partner with PricewaterhouseCoopers, LLP for Global Thought Leadership and Publishing responsible for the firm's publishing activities globally and for much of the research the firm undertakes. He is an economist and international business consultant who has worked with some of the world's largest international companies in a variety of industries. Kurtzman is Publisher of The Milken Institute Review, past President and Chief Executive of Knowledge Universe Publishing, and an alliance partner with BoozAllen & Hamilton, Microsoft and Heidrick & Struggles. Kurtzman was formerly the Editor of the Harvard Business Review and a columnist and business editor at The New York Times. He was President of Kurtzman Knowledge Ventures and Director of the Manhattan Institute's Program on International Trade. The author of 16 books, Kurtzman appears regularly on CNN and writes a column for Fortune magazine. Alec Levenson is an economist and the Acting Director of Labor Markets and Human Capital Studies at the Milken Institute. His current research focuses on the nature of temporary employment, the importance of basic skills for successful employment in the U.S. labor market, the economic impact of welfare reform, and long-run determinants of part-time employment. A recognized expert in labor issues, Levenson’s work has been published in numerous scholarly economic journals and he has been a featured guest on programs including CNN’s “Moneyline” and National Public Radio’s “Morning Edition.” He is the co-editor of the book Labor Markets, Employment Policy and Job Creation. Levenson’s Ph.D. in Economics is from Princeton University. lv Speakers Ross Levine is a Professor with the Finance Department of the University of Minnesota Carlson School of Management. His work focuses on the links between financial sector policies and economic growth and more generally on the determinants of economic development. He also taught at the University of Virginia. Levine began his career at the Board of Governors of the Federal Reserve System, then joined the World Bank, where he conducted research and ran operational programs. He received his Ph.D. in Economics from the University of California, Los Angeles. Peter D. Linneman is the Albert Sussman Professor of Real Estate, Finance and Public Policy at the University of Pennsylvania, Wharton School of Business, and Principal of Linneman Associates, a financial and real estate strategic advisory firm. He is a recognized financial and real estate strategist, researcher and market analyst and he has published extensively in the areas of real estate, corporate strategy and finance. He served as Chairman of the Board of Rockefeller Center Properties, Inc., and was a founder of Equity International Properties, where he also served as Senior Managing Director. He remains a strategic advisor to the firm. Linneman was founding Chairman of the Wharton School’s Real Estate Department, one of the founding co-editors of The Wharton Real Estate Review and he served as a Director of the Wharton Real Estate Center for 13 years. Linneman received his Ph.D. in Economics from the University of Chicago. Eugene A. Ludwig is Managing General Partner of the Promontory Financial Group, LLC, a newly formed merchant bank specializing in the financial services to technology sectors. He was Vice Chairman and Senior Control Officer of Bankers Trust Corporation/Deutsche Bank, responsible for implementing the firm’s financial global strategy. Prior to this, he was Comptroller of the Currency of the United States, where he spearheaded banking industry modernization by easing burdensome rules and regulations, and is credited with revitalizing the banking system. Ludwig began his career as a partner in the Washington, D.C. law firm of Covington and Burling, where he specialized in banking and international trade. He sits on several boards of civic and educational institutions. Ludwig received his law degree from Yale University. Arjun Malhotra is Founder, Chairman and Chief Executive Officer of TechSpan, a global Internet consulting company with centers in the United States and India. Malhotra’s entrepreneurial successes include HCL, which he built from a six-person garage operation into India’s largest IT corporation with over 8,400 employees. He took over and grew the U.S. Operations to nearly $100 million annually. He ran the HCL-HP joint venture in India, set up and ran the joint venture with Deluxe Corporation and grew the HCL Australasia Operation. Malhotra founded the Prof. G.S. Sanyal School of Telecommunications through a personal endowment. His degree in Electronics and Electrical Communication Engineering is from the Indian Institute of Technology, where he was awarded the Dr. B.C. Roy Gold Medal. He attended the Advanced Management Program at Harvard Business School. lvi Speakers Ronald I. Mandle is a Partner and Senior Research Analyst covering the money-center and regional banking industries. Before joining the firm in 1988, he was a First Vice President at PaineWebber. Prior to that he served as an analyst at Oppenheimer & Co. He has been named to the Institutional Investor All-America Research Team every year since 1981 and is a Chartered Financial Analyst. Mandle is a Director and Past President of the Bank and Financial Analysts Association. He received his M.S. from MIT’s Sloan School of Management. Richard Margolis is First Vice President, China Strategy, Merrill Lynch (Asia Pacific) Limited. He served four years on the Hong Kong Securities and Futures Advisory Committee and is currently an alternate member of the Hong Kong Stock Exchange Listing Committee. Margolis was responsible for business development in Hong Kong and China, and Director of Smith New Court PLC prior to its acquisition by Merrill Lynch in 1995. Prior to joining Smith New Court, Margolis was a British diplomat specializing in China and Hong Kong affairs. He served in the British Embassy in Beijing, was Deputy Political Advisor to the Governor of Hong Kong and a member of the team that negotiated the agreement on Hong Kong’s future. He is a graduate of Cambridge University. Frank McCoy is a Senior Editor at U.S. News & World Report. He was a Deputy Editor in the New Media section of the magazine where he edited the magazine’s web site, usnew.com. Prior to that he was a Senior Editor in the business section. McCoy hosts "Business Chat with Frank McCoy," a live weekly business show for NetNoir Online (America Online). He has also written and edited for several other Web sites. Mr. McCoy has visited Africa frequently and has written about African politics, economics and business for magazine and online publications. He has won 11 journalism awards for economic, investigative, international and political reporting and editing and was a Staff Editor at Business Week. McCoy has an M.S. in Journalism from Columbia University, and an M.A. in International Relations from the Fletcher School of Law and Diplomacy (Tufts University). lvii Speakers Walter Russell Mead, Senior Fellow for Foreign Policy at the Council on Foreign Relations, is a political economist engaged in the study of the evolving global economic system and its implications for American policy and society. He is co-Director of the Task Force on U.S.-Cuba Relations and leads a research group to increase the effectiveness of international financial interventions by taking into account the specific social, cultural, political and historical factors of each recipient country. He is also project director of the Study Group on the History of U.S. Foreign Policy, senior contributing editor at Worth magazine and contributing editor at the Los Angeles Times. He is widely published, the recipient of several academic prizes, and a regular lecturer and commentator on radio and television. Mead is a graduate of Yale University. Richard Medley is Chairman of Medley Global Advisors, a macropolitical advisor to financial institutions, corporations and governments on the G7 and emerging market economies. Before founding Medley Global Advisors, Medley held a variety of positions in academia, on Wall Street and Capitol Hill. He was appointed Associate Director of the Yale University Center for International Finance in 1995 and was the Lester Crowne Distinguished Faculty Member at the Yale University School of Management. He was a Managing Director and Chief Political Advisor at the Soros Fund Management. He also served as Managing Director of Athena Global Investments. Medley is cofounder of International Economy, a bimonthly policy magazine. He is a sought-after speaker and author. He received his Ph.D. degree in Political Science with an economic focus from Yale University. Dewang Mehta is the President of NASSCOM, India’s National Association of Software and Service Companies, the apex body of computer software, dot.com and IT service companies in India. Mehta is a qualified Chartered Accountant, Cost & Management Accountant and he has done extensive research in computer graphics. In May 1998, he was appointed member and spokesman of the National IT Taskforce set up by the Indian Prime Minister to draft a National Informatics Policy. Mehta has written extensively on politics, economics, computer software and the Internet for journals and newspapers in India and overseas. Mehta also anchors two television shows in India, "Computer Show" and "IT Digest.” He is Vice Chairman of Internet Users Community of India (IUCI) and he was instrumental in introducing cyber laws, persuading the government to allow private Internet Service Providers to operate in India, as well as to allow Indian companies to list on foreign exchanges. lviii Speakers Nell Merlino is co-Founder and President of Count-Me-In for Women’s Economic Independence, a nonprofit opportunity organization raising capital from women for women. A living laboratory of community, commerce and compassion, the money contributed will be redistributed in the form of small-business loans and scholarships for business training and technical assistance. Merlino is also the Founder and President of Strategy Communication Action, Ltd., specializing in public education campaigns that motivate people to act. Prior to founding SCA, she worked in two state governments, presidential politics, and the labor movement. A 1977 Fulbright Scholar, Merlino studied labor relations in the England’s National Health Service. She established “Take Our Daughters to Work Day,” was recognized in the book Remarkable Women of the Twentieth Century, 100 Portraits of Achievement, named one of “50 New Yorkers to Watch in 1999” by New York Daily News and was awarded the 1994 Fulbright Award for Outstanding Achievement. She is a graduate of Antioch College. Michael Milken is Chairman of the Milken Institute. He is a philanthropist who founded and chairs CaP CURE (The Association for the Cure of Cancer of the Prostate), a nonprofit public charity that is the largest private funder of prostate cancer research. In 1982, he co-founded the Milken Family Foundation, which funds extensive programs in education and health care. He co-founded and chairs Knowledge Universe, a family of companies providing lifelong learning opportunities. As a financier, he is widely credited with revolutionizing the modern capital marketplace and has been instrumental in building thousands of companies that have created millions of jobs worldwide. A Phi Beta Kappa graduate of UC Berkeley, he earned an MBA from the University of Pennsylvania’s Wharton School. Avram Miller is Chief Executive Officer of The Avram Miller Company, a Strategy and Business Development Corporation. His focus is on opportunities created by the convergence of the communications, computer and media industries and its global impact. He was Vice President and Director of Corporate Business Development for Intel Corporation and played a principle role in establishing Intel's venture group. He is a member of the board of CMGI, Inc., serves on the board of several of its subsidiaries and other companies in the United States and Europe. Before joining Intel, he held a number of senior positions in the computer industry. Miller studied music and held academic positions at two medical schools. He is Chairman of the Board of Directors of Plugged-In, a nonprofit organization committed to bridging the technological gap, and is a member of the Board of Trustees for the California Institute of the Arts, dedicated to the careers of young professionals of the arts. lix Speakers Kevin M. Murphy is the George Pratt Shultz Professor of Business Economics and Industrial Relations at the University of Chicago, an appointment he has held since 1993. He is the author of over 50 publications in the field of human capital and the recipient of several awards and honors. Murphy received his Ph.D. from the University of Chicago. Phaneesh Murthy is Senior Vice President and Head of Sales and Marketing for Infosys Technologies, Ltd. He has over 13 years experience in the IT industry spanning three continents and is largely responsible for orchestrating the Infosys strategy in making it one of the most visible and profitable companies in the industry. Prior to Infosys, Murthy did product management in Asia. He is an engineer and has an MBA. Adebayo O. Ogunlesi is Managing Director and Head of the Global Energy and Project Finance Group of Credit Suisse First Boston. He advises clients on transactions and financing in areas such as oil and natural gas, petrochemicals, power generation, airlines, mining, natural resources, infrastructure, and consumer products. He has worked on transactions in North and South America, the Caribbean, Europe, Africa and the Pacific Basin. He is a lecturer at the Yale School of Organization and Management where he teaches a course on transnational investment projects in emerging countries. Ogunlesi was in the corporate practice group at Cravath Swaine and Moore. He received his law degree, magna cum laude, from Harvard Law School and MBA from Harvard Business School. lx Speakers Kap-Soo Oh is Assistant Governor of the Financial Supervisory Service, the new consolidated financial regulatory body in Korea. Oh served as President of the Management Development Institute and Senior Advisor for Ernst and Young Management Consulting, where he focused on the business and financial restructuring of Korean corporations and financial institutions. He has collaborated on two books, one of which addressed the U.S. Korea Economic Partnership. He has organized and chaired several economic conferences, including one that addressed Asia and the global economy and one on the U.S-Korea Economic Partnership. He was a faculty member of the business schools of Drexel University and Oklahoma State University and a teaching fellow at the Wharton School of the University of Pennsylvania. Oh received his Ph.D. in Finance from the Wharton School. Jonathan S. Orban is Chief Executive Officer of companyfinance.com, a capital matching firm helping middle-market companies find lending institutions. Orban was a founding Principal and Managing Director of WestPark Capital, Inc., where he specialized in private placements. Previously, Orban was with Norcross & Company, Joseph Charles & Associates and EBI Securities Corporation. His corporate finance experience has focused on generating, analyzing, structuring and placing middle-market based finance transactions. Orban built and managed the private equity groups for EBI and Joseph Charles & Associates. Prior to joining Norcross, he was an analyst and trader for First London Securities Corporation. Orban served in special operations in the military and holds a B.Sc. from the University of Phoenix. Bill Owens is co-Chief Executive Officer and Vice Chairman that of Teledesic LLC, a satellite communications network that will enable affordable, worldwide access to “fiber-like” telecommunications services. Owens also serves as Chairman and Chief Executive Officer of affiliated Teledesic Holdings Ltd. Previously, he was President, COO and Vice Chairman of Science Applications International Corporation (SAIC), the nation’s largest employee-owned high-tech company. Prior to joining SAIC, Owens was Vice Chairman of the Joint Chiefs of Staff, and the nation’s second-ranking military officer, widely recognized for bringing commercial high-tech into the Department of Defense for military applications. Owens has written widely on national security and authored the book High Seas. He holds Master’s degrees in politics, philosophy and economics from Oxford University and a Master’s in management from George Washington University. lxi Speakers Peter Passell is the Editor-in-Chief of the Milken Institute’s quarterly economic journal, The Milken Institute Review. Passell joined the Institute after eight years as an economics columnist for the news department of the New York Times. He previously served on the New York Times editorial board and was Assistant Professor at Columbia University’s Graduate Department of Economics. Passell has written for both technical and non-technical publications including The Washington Post, The New Republic, The Nation, American Economic Review, and Journal of Political Economy. His research interests include international finance and trade, economic history, and the economics of crime. Passell received his Ph.D. in Economics from Yale University. Alan J. Patricof is Chairman of Patricof & Co. Ventures, Inc., a leading venture capital firm operating in six countries with more than $5.5 billion under management. Prior to founding Patricof & Co., he was Chairman of Northwest Industries, and Assistant Vice President and then Vice President of Central National Corp. While at Central National, he was a Founder and Chairman of the Board of New York magazine. He also participated in the founding of Datascope Corporation and LIN Broadcasting Corporation. Patricof & Co. has participated in the financing and development of public and private companies including Johnny Rockets, Apple Computer, America On-Line and Office Depot. Patricof was Treasurer and Member of the Board of Governors of the New York Academy of Sciences and has served on numerous other committees and commissions. Patricof received his MBA from Columbia Univeristy. Jean-Michel Paul is Head of Research, Asia-Pacific at Rabobank International specializing in Asian economies and financial risk engineering. Prior to joining Rabobank, he worked at the United Bank of Switzerland and the International Monetary Fund, and was advisor to the Prince of Belgium. Paul is a regular contributor to the Wall Street Journal. He received his Ph.D. in Finance and Real Estate from the University of California, Berkeley. Randall Peerenboom is Acting Professor of Law at the University of California, Los Angeles, School of Law. He teaches international and comparative law with an emphasis on Chinese law. His intensive transactional clinic on doing business in China is the only one of its kind in the United States. Peerenboom spent four years in Beijing negotiating international business transactions while co-editing, Doing Business in China. He is working on a comparative project on the role of law in Chinese society. Peerenboom received his Master’s degree in Chinese religion and his Ph.D. in comparative philosophy from the University of Hawaii and his law degree from Columbia University. lxii Speakers Minxin Pei is a Senior Associate at the Carnegie Endowment for International Peace in Washington, D.C. His work focuses on the development of democratic political systems, the politics of economic reform, the growth of civil society, and legal institutions. He was Assistant Professor of Politics at Princeton University for six years. He is the author of From Reform to Revolution: The Demise of Communism in China and the Soviet Union, a book on Chinese and Soviet reforms. His research is widely published and he has edited numerous books. Dr. Pei is the recipient of a National Fellowship at Hoover Institution, the Robert McNamara Fellowship of the World Bank, 1994-95, and the Olin Faculty Fellowship. He received his Ph.D. in Political Science from Harvard University. Anthony B. Perkins is Chief Executive Officer and Editor in Chief of Red Herring Communications, Inc., a San Francisco-based media company that provides strategic news, analysis and opinion on the business of technology. Red Herring is the only international monthly magazine that focuses on the business of technology. The company also produces Red Herring Online. Perkins appears weekly on CNNfn’s Digital Jam and is a regular commentator for ZDTV and European Business News. Perkins, ranked one of the top business/technology journalists, also writes the Red Eye, a weekly online column. He is a frequent speaker at conferences around the world, serves on the Board of American Entrepreneurs for Economic Growth in Washington, D.C., and is founding Chairman of the Churchill Club, for which he earned the 1997 Entrepreneur of the Year Award for a nonprofit organization. Perkins was found and CEO of Upside Publishing Co. and Vice President of Business Development at Silicon Valley Bank. Thomas Plate, Los Angeles Times Contributing Editor and columnist, writes about America’s relationship with the Pacific Rim and travels frequently to Asia. His columns appear in newspapers in Asia and the United States, including the Korea Herald, Japan Times, Hong Kong Standard, China Post, Honolulu Advertiser, and the International Herald Tribune. He is founder of the nonprofit Asia Pacific Media Network based at the University of California, Los Angeles, where he is an Adjunct Professor in the School of Public Policy and College of Letters and Science. He is the author of five books, winner of journalistic awards and was named a Media Fellow at Stanford University, an East West Center Fellow, and Fellow at the Foreign Press Center’s annual Asia Pacific Media Conference. Plate received his Master’s in U.S. Foreign Policy from Princeton University, Woodrow Wilson School of Public Policy. lxiii Speakers Susan Kaufman Purcell is Vice President of the Americas Society/ Council of the Americas in New York City. She was a Senior Fellow and Director of the Latin American Project at the Council on Foreign Relations and a member of the U.S. State Department’s Policy Planning Staff for Latin America and the Caribbean. She is a Director of Valero Energy Corporation, The Argentina Fund and the Scudder Global High Income Fund and sits on the boards of the Council for the Advancement of Democracy, Freedom House and the Women’s Foreign Policy Group. Purcell is a former Professor of Political Science at the University of California, Los Angeles, coeditor and co-author of several books and publications and sits on the editorial board of Journal of Democracy. She received her Ph.D. from Columbia University. Joshua Cooper Ramo is Senior Editor of TIME Magazine’s World section, overseeing all of its international coverage. He has written ten TIME cover stories, including the 1997 Man of the Year profile. His articles cover economics, politics and business from almost 20 countries. Ramo was the youngest Senior Editor in the history of the magazine. He was also launch editor of TIME Digital and supervised TIME’s electronic operations. Before that, Ramo was President and CEO of Time Warner’s AthenaNow, which produced digital journalism products, tools and technologies. He is a member of the Council on Foreign Relations and the World Economic Forum’s Global Leaders of Tomorrow. Ramo received his degree in Latin American Studies from the University of Chicago. Bertrand Renaud is an Advisor in the Capital Markets Department of the World Bank. His primary responsibility is to improve the quality of World Bank policy advice and operations in real estate finance, housing finance and the development of capital markets, especially bond markets and related securities. He has recently been involved in housing finance and financial market reforms in China, Mexico, Thailand, the Philippines and Malaysia. His earlier work as Housing Finance Advisor has extended to Central Asia, the Middle East and North Africa. Dr. Renaud was a Professor of Economics at the University of Hawaii where he created the urban and regional economics program with a focus on urban development in East Asia. He is the author of several books and papers and the recipient of several honors and awards. He received his Ph.D. from the University of California ,Berkeley. lxiv Speakers Uwe E. Reinhardt is James Madison Professor of Political Economy and Professor of Economics and Public Affairs at Princeton University, where he focuses on health economics and policy. He has served on numerous government committees and commissions, including the National Council on Health Care Technology and the Special Medical Advisory Group, and served three consecutive terms as a Commissioner on the Physician Payment Review Commission established by Congress. He was elected to the Institute of Medicine of the National Academy of Sciences, the National Leadership Commission on Health Care, and continues to serve with its successor. He is a member of the Council on the Economic Impact of Health Reform and the Board of Advisors of the national Institute of HealthCare Management. He is the recipient of numerous awards and honors. He received his Ph.D. in economics from Yale University. Stephan-Göetz Richter is Founder and President of TheGlobalist.com, a leading Internet daily magazine on the global economy. He has headed TransAtlantic Futures, Inc., a global strategy consulting firm based in Washington, D.C. since 1990. He is also the publisher of two weekly global strategy letters, the "TransAtlantic Wire" and "Facts of the Week." Richter's comments and analyses have appeared in the New York Times, Wall Street Journal, Financial Times, Foreign Affairs, Le Monde, and Wirtschaftswoche, among others. A frequent contributor to Marketplace Radio in the United States, Richter is also a weekly columnist in the new German edition of the Financial Times. Leonard Riggio is Chairman and Chief Executive Officer of Barnes & Noble, Inc. (BKS), parent company of Barnes & Noble Bookstores, B. Dalton Booksellers, and Doubleday Book Shops. He is also Chairman of Barnes & Noble College Bookstores, MBS Textbook Exchange and Babbages, Etc., a national chain of retail software stores. Riggio opened his first book- store, SBX, in Greenwich Village in 1965. He lectures widely, is a philanthropist, the recipient of numerous civic awards and holds an honorary doctorate from City University of New York. lxv Speakers Richard Riordan is Mayor of the City of Los Angeles, serving his second term. As Mayor, Riordan has created several programs, including the Mayor’s Alliance for a Safer Los Angeles, designed to enhance public safety; L.A.’s Business Team, dedicated to attracting and retaining businesses locally; and the City Volunteer Bureau, created to increase community service within the city. Riordan is a founding member of KIDS FIRST! and LEARN, organizations for reforming public school education, and led efforts to create the Community Development Bank, which invests in economic development in underserved areas. Before serving as Mayor, Riordan was a principal of the law firm Riordan & McKinzie and was also an entrepreneur. His law degree is from the University of Michigan. Bert C. Roberts, Jr. is Chairman and Chief Executive Officer of MCI WorldCom, Inc. and the MCI WorldCom Strategic Investment Fund. He is a 26-year veteran of the telecommunications industry and was instrumental in transforming MCI from a long-distance company into a global communications leader. Roberts was President and Chief Operating Officer before being named Chairman in 1992. Roberts serves on the board of Telefonica de Espana, developing a Latin American joint venture with MCI WorldCom. He also serves on the boards of News Corporation, Ltd., Valence Technology, Inc., Johns Hopkins University and CaP CURE, among other corporate advisory boards. Roberts has made a personal commitment to improving technological literacy and has initiated a range of programs that positively impact millions of teachers, parents and children across the U.S., advancing education and community development through communications technology. Roberts received his B.Sc. in Electrical Engineering at Johns Hopkins University. Liliana Rojas-Suarez is Managing Director and Chief Economist, Latin America for Deutsche Bank Securities, responsible for assessment and forecast of economic and financial variables of all major Latin American countries. She directs teams of economists in New York and Latin America that produce publications that include specific country reports, and weekly and monthly regional reviews. Before joining Deutsche Bank, Rojas-Suarez was Principal Advisor in the Office of Chief Economist at the Inter-American Development Bank. She held several positions with the International Monetary Fund, including Deputy Division Chief, Capital Markets. Rojas-Suarez was a Professor at Anahuac University in Mexico and an Advisor for PEMEX, Mexico’s National Petroleum Company. She has published widely in macroeconomic policy, international economics and financial markets. Rojas-Suarez received her Ph.D. in Economics from the University of Western Ontario. lxvi Speakers Harvey Rosenblum is Senior Vice President and Director of Research of the Federal Reserve Bank of Dallas. He is chief economic policy advisor to the Bank’s president and associate economist for the Federal Open Market Committee, which formulates the nation’s monetary policy. His current research centers on banking structure and regulation, electronic money and U.S. savings rates. Rosenblum began his career as an economist with the Federal Reserve Bank of Chicago where he rose to Assistant Vice President, Vice President and Economic Advisor and Vice President and Associate Director of Research. Rosenblum is a Visiting Professor of Finance and Economics at Southern Methodist University and Chairman of the Business Executives Advisory Council to the Department of Economics there. Rosenblum received his Ph.D. in Economics at the University of California, Santa Barbara. Hilton Root is a Senior Fellow and Acting Director of Global Studies at the Milken Institute, where his research focuses on the global economy. Root came to the Institute from the Hoover Institution, where he directed the Initiative on Economic Growth and Democracy. From 1994–97, he was Chief Adviser on Governance at the Asian Development Bank, where he initiated the restructuring of the Sri Lanka civil service system. He has consulted for international development organizations since 1992. His book co-authored with J. Edgardo Campos, The Key to the East Asian Miracle: Making Shared Growth Credible, won the International Political Science Association’s Charles H. Levine Award for best book of the year. Root’s Ph.D. in Economics and History is from the University of Michigan. Prannoy Roy is President of New Delhi Television Ltd., India’s largest private television production company, and Editor-in-Chief of the Star News 24 Hour News channel. He is the winner of several awards as anchor for current affairs programming, news election analysis and financial programs. He is the author of four books on Indian elections. He was Economic Advisor to the Government of India Finance Ministry, is a Chartered Accountant and Fellow of the Chartered Accountant Associations of England and Wales. He worked with Deloitte Haskin and Sells in London and subsequently, with Price Waterhouse in India. Roy is the recipient of several academic awards and received his Ph.D. in Economics from the Delhi School of Economics, Delhi Univeristy. lxvii Speakers Scott A. Ryles is President and Chief Executive Officer of Epoch Partners, Inc., an online investment bank formed by three of the largest online brokers and three leading venture capital firms. The bank is based upon a new model combining Internet-based distribution and research, principal investing and technology-driven capital markets applications. The customers of the firm’s online partners have assets of approximately $1 trillion, more than half the assets invested online. Ryles headed Merrill Lynch’s Global Technology Investment Banking Group, was Managing Director of its West Coast operations and a member of its Investment Banking Executive Committee. Ryles received his BA in Economics from Northwestern University. Richard Santos is Associate Professor of Economics at the University of New Mexico and affiliated with the Southwest Hispanic Research Institute and the College of Pharmacy. His areas of expertise are labor and health economics, with a specialization in Hispanic employment issues. He is the author of a book on Hispanic youth and articles on education and employment. He has served on the Hispanic Business Magazine Board of Economists. His most recent research addresses access and costs aspects of Medicaid and managed care in New Mexico. Santos received his Ph.D. from Michigan State University. Sylvester J. Schieber is Vice President and Director of Watson Wyatt Worldwide’s Research and Information Center in Washington, D.C. Prior to joining the Wyatt Company in 1983, Scheiber served as the first Research Director of the Employee Benefit Research Institute in Washington, D.C. and Deputy Director of the Office of Policy Analysis, Social Security Administration. He has served on the Board of Directors of the Pension Research Council at the Wharton School, University of Pennsylvania, since 1985. He was a member of the Social Security Advisory Council from 1994-96 and was appointed in 1998 to a six-year term on the Social Security Advisory Board. He has authored and co-authored six books on retirement issues, coedited four volumes on changing demographics and retirement security and published numerous journal articles and policy analysis papers on retirement and health benefits. Schieber received his Ph.D. in Economics from the University of Notre Dame. lxviii Speakers Robert J. Shapiro is Under Secretary for Economic Affairs at the US Commerce Department, its senior economic adviser responsible for the Census and the Bureau of Economic Analysis. Prior to that he was Vice President of the Progressive Policy Institute and Director of Economic Studies of the Progressive Foundation. He has published widely on the economy and U.S. economic policy and participated in debates addressing tax and budget policy, the global economy, trade policy, Social Security reform and industry subsidies. He was President of the Committee on Free Trade and Economic Growth, a Fellow of Harvard University and the National Bureau for Economic Research. Shapiro has an M.Sc. form the London School of Economics and Political Science and a Ph.D. from Harvard University. Louise Shelley is a Professor in the Department of Justice, Law, and Society and the School of International Service at American University, and Founder, Director and Principal Investigator of the Transnational Crime and Corruption Center. She is an authority on crime, law and law enforcement in the former Soviet Union, and an expert on transnational organized crime and corruption. Shelley works in coordination with specialists in Russia and the Ukraine on the problem of organized crime and corruption. She is the author of Policing Soviet Society, numerous articles and book chapters, and co-editor of Demokratizatsiya, the Journal of Post-Soviet Democratization, and Trends in Organized Crime. She is the recipient of Guggenheim, NEH, Kennan Institute and Fulbright fellowships and received a MacArthur Grant to establish the Russian Organized Crime Study Centers. Shelley studied at the Law Faculty of Moscow State University on IREX and Fulbright Fellowships and holds a Ph.D. in Sociology from the University of Pennsylvania. Allen Sinai is President and Chief Global Economist of Primark Decision Economics, Inc., which provides analyses and forecasts to financial institutions, corporations and governments. Sinai is widely known for his ability to translate external economic policy and financial market events into understandable language relevant to bottom-line decisions. Prior to establishing PDE in 1996, Sinai was Chief Economist and a Managing Director with Lehman Brothers. He was also Executive Vice President and Chief Economist at the Boston Company, an asset management and banking subsidiary of Lehman. Before joining Lehman, he was Chief Financial Economist and Senior Vice President at Data Resources, Inc. and Chairman of the Financial Information Group. He is a member of TIME magazine Board of Economists, author and commentator. Sinai received his Ph.D .in Economics from Northwestern University. lxix Speakers Donald Straszheim is President of the Milken Institute. While serving as Chief Economist of Merrill Lynch & Co. from 1985 until early 1997, he was the architect of its global economic viewpoint. There, he gained expertise in the transnational economic issues that have become the focus of the Institute. Straszheim’s expertise on the economy and growth, the impact of technology in the global economy, and financial market innovations has led him to regular guest appearances on CNN and CNBC as well as to national speaking engagements before business and academic groups. Before joining Merrill Lynch in 1985, Straszheim was responsible for U.S. operations at Wharton Econometrics and earlier was Chief Economist at Weyerhaeuser Corporation and at Fluor Corporation. He received his Ph.D. from Purdue University. John Sweeney is a recognized authority on economic, political andecurity issues in Latin America, and co-host of “Choque de Opiniones” (“Crossfire” in Spanish), broadcast by CNN en Espanol throughout Latin America and parts of the United States. Sweeney founded the VenEconomy Group, Venezuela’s most influential publisher of business, political and legal newsletters and a leading advocate of trade liberalization and economic freedom in Venezuela. He was a policy analyst with the Heritage Foundation, where he conducted the Latin America policy research programs, and worked closely with Congress on hemispheric policy issues relating to international trade and security. He left the Foundation recently to complete a book about the 1994 collapse of the Venezuelan financial system. Sweeney received his Master’s in International Commerce and Policy is from George Mason University in Virginia. Richard Tan is founder, Chief Executive Officer and President of the Pacific Millenium Company, a privately owned conglomerate headquartered in San Diego with offices and factory locations in China and Southeast Asia. Tan has grown Pacific Millennium Group from startup to major player in the trans-Pacific paper industry and successfully expanded the company’s business from paper manufacturing and distribution, packaging provider and forestry product provider to “intelligence intensive” industries such as logistics, IT, e-commerce, marketing/branding and investment banking. Tan received his MBA from the University of Southern California. lxx Speakers John F. Tsui is President of Peninsula House, Inc., a cross-border merchant banking firm involved in venture investing in e-commerce businesses in Asia, U.S./Asia and U.S./Latin America buyouts, buy-ins, recapitalizations, technology transfers, and joint ventures, as well as property and property company buyouts. Peninsula House, Inc. assists American clients in Asian debt and equity placements and offers value opinions of commercial and residential properties with market value totaling over $5 billion. Tsui’s prior experience includes management positions with Marriot Hotel Corporation, Sheraton Hotel in the Pacific, Landauer Associates and Bankers Trust Company. Tsui is the founder of PACT, Pacific Americas Commerce & Technology. Tsui received his Master’s from Columbia University. Robert H. Topel is the Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics at the University of Chicago. Prior to joining the University of Chicago, Topel was at the University of California, Los Angeles, worked at RAND Corporation in Santa Monica and was a research associate with the National Bureau of Economic Research. He serves on several journal editorial boards and is the Editor of the Journal of Political Economy. Topel received his Ph.D. from the University of California, Los Angeles. K. Robert Turner is Managing Partner of Canyon Capital Realty Advisors, LLC, and Canyon Capital Advisors, money management firms and registered investment advisors with over $1 billion in assets currently under management. Turner is also a Managing Director of the Canyon-Johnson Urban Fund, a closed-end real estate fund jointly managed by Canyon and Magic Johnson Development Corporation focusing on inner city and urban real estate development. Turner has more than 15 years experience in acquisition and development. Among the projects he has been involved in is the East River Plaza in Harlem, the biggest urban revitalization project in the country. Turner received his Bachelor of Science in Finance from the Wharton School, University of Pennsylvania. lxxi Speakers Daniel D. Villanueva is Chairman of Bastion Capital Corporation and the Villanueva Companies. He began his career in broadcast media as KMEX-TV’s Spanish language News Director, then Station Manager and soon after, Vice President and General Manager. He became director of the Spanish International Corporation covering five television stations in San Antonio, Miami, Florida, New York and Los Angeles. He moved on to oversee research and construction of several other television stations, initiated regular news coverage of Mexico and organized the Telethons that raised $15 million for Mexico City’s earthquake relief. His is on the Advisory Board to Secretary of Energy and served on Board of Directors of the Stanford University Graduate School of Business among many others. He played football with the Los Angeles Rams and Dallas Cowboys. Villanueva received an Honorary Doctorate of Laws from New Mexico State University. George Vradenburg, III is Senior Vice President for Global and Strategic Policy and a Member of the Office of the Chairman at America Online, Inc. Vradenburg is a key voice in shaping interactive policy and is working toward utilizing the Internet as a means to promote the public interest. He has been instrumental promoting policies that protect consumer privacy online, “zero tolerance” for crimes against children online, anti-spam, protection of intellectual property and developing a new framework for e-commerce and international trade. Vradenburg was Senior Vice President and General Counsel of CBS, Inc. and Executive Vice President of FOX, Inc. Before joining AOL, he was a senior partner with Latham and Watkins and co-chair of its Entertainment & Media Practice Group. Vradenburg received his law degree from Harvard Law School. Steven M.H. Wallman is a Senior Fellow at the Brookings Institution and serves on the Board of Directors at OffRoad Capital. He was a commissioner of the U.S. Securities and Exchange Commission from 1994-1997 and played a leading role in formulating policies that brought the Internet and other advanced technologies into wide use within the securities industry. He is an expert in securities markets and trading and a recognized authority on the application of technology to financial services. Wallman was a partner at the Washington, D.C. law firm, Covington and Burling. He holds two degrees from MIT, an Master of Science from the Sloan School of Management and received his law degree from Columbia. lxxii Speakers Jeff Watson is Chief Information Officer of enba, a leading European Internet-based financial services firm. Watson began his career in financial services, working in mortgage, consumer and small business lending with a California-based bank. After receiving his MBA, he joined Security First Network Bank where he was charged with developing an online lending platform. Shifting to their Securities First Technologies subsidiary, he took over as product manager for their retail banking bill pay and credit card products. In 1997 he joined net.B@nk as Chief Lending Officer to develop their expansion into lending and online loan products. Watson received his MBA from Harvard Business School. Robert F. Wescott serves as Special Assistant to the President for International Economics at the White House, where he helps develop policies on international economic and financial issues at the National Economic Council. He was Deputy Division Chief at the International Monetary Fund, where he prepared the World Economic Outlook and served in the Fund’s European Department. His research at the Fund included issues in fiscal policy, exchange rate determination, inflation targeting and economic development. He was Senior Economist and then Chief Economist at the U.S. Council of Economic Advisers, where he participated in the Administration’s macroeconomic forecasts and analyzed U.S. macroeconomic policies. He was Senior Vice President and Chief Economist with the WEFA Group and helped the University of Pennsylvania establish the International Center for the Study of East Asia Development in Japan. Wescott received his Ph.D. in Economics from the University of Pennsylvania. James A. Wilcox is Chief Economist at the Office of the Comptroller of the Currency (OCC). The Economics Department assesses the impact of OCC policies and regulations on national banks, analyzes the implications of major developments affecting banking, monitors the financial health of the banking industry, develops quantitative measures of risks in bank portfolios and conducts economic research on banking issues. Prior to joining OCC in 1999, Wilcox was Professor of Economics and Finance at the Haas School of Business, University of California, Berkeley, and chaired the Finance Group there for two years. He has published widely on banking and macroeconomic issues and worked as an economist for the Federal Reserve Board and the President’s Council of Economic Advisers. lxxiii Speakers Glenn Yago is Director of Capital Studies at the Milken Institute. He specializes in financial innovations, financial institutions, and capital markets, and has extensively analyzed public policy and its relation to high-yield markets, initial public offerings, industrial and transportation concerns, and public and private sector employment. Most recently, Yago has studied Emerging Domestic Markets. These projects have involved the U.S. Department of Commerce and its Minority business Development Agency and the California State Treasurer’s Office, among others. Yago previously held positions as an economics faculty member at the City University of New York Graduate Center and senior research associate at the Center for the Study of Business Government at Baruch College–City University of New York. He was also a Faculty Fellow at the Rockefeller Institute of Government. He was also the Director of the Economic Research Bureau at the State University of New York at Stony Brook and Chairman the New York State Network for Economic Research. Yago is the author of three books. He received his Ph.D. from the University of Wisconsin, Madison. Linda Tsao Yang served as U.S. Executive Director on the Board of Directors of the Asian Development Bank until December 1999, the first woman appointed by the U.S. Government to the Board of a multilateral development bank. She is the recipient of the Distinguished Service Award presented by the U.S. Secretary of the Treasury. She previously served as the State of California’s Savings and Loan Commissioner, responsible for regulating and supervising the statechartered savings and loan industry, and was Vice Chairman of the California Public Employee’s Retirement System (CALPERS) Investment Committee. She chaired the Research Management Committee of the 1990 Institute, a nonprofit think tank that cosponsored major policy-oriented studies on China’s economic system with the Federal Reserve Bank of San Francisco. She received her MA in Economics from Columbia University. Fareed Zakaria is Managing Editor of Foreign Affairs and Contributing Editor of Newsweek , where he writes on international affairs. He also writes for The New York Times, Wall Street Journal, Foreign Affairs, the Times Literary Supplement and webzines, Slate and Intellectual Capital, and is the author and co-editor of several books. Zakaria ran the “Project on the Changing Security Environment” at Harvard University, where he taught international politics and economics, and was Adjunct Professor at Columbia University and Case Western Reserve University. He serves on the Board of Omnia Asset Management and is a trustee of the Manhattan Institute, the New America Foundation and the Shakespeare and Company theater group. Zakaria received his Ph.D. from Harvard University. lxxiv Speakers Albert C. Zapanta is President and Chief Executive Officer of the United States–Mexico Chamber of Commerce and is responsible for operations in 12 regional offices in the United States and three in Mexico, including Washington, D.C. and Mexico City. This coalition of businesspeople created the bilateral organization to promote trade, investment and joint ventures on both sides of the border. In the private sector, Zapanta was an executive with ARCO for 18 years. He was responsible for negotiations with PEMEX on oil and gas matters and the copper mines owned by Anaconda, an acquisition of ARCO. He was also ARCO’s representative to the government on issues of environment, transportation, legislation and public affairs. In public service, Zapanta has held a number of presidential appointments and was a member of the Department of State’s Advisory Committee on International Trade, Technology and Development. He is a graduate of Harvard School of Business. Note: Biographies of the Nobel laureates are listed separately in this Briefing Book. lxxv Speakers lxxvi Global Economy: Preface This Chartbook presents a review of overall global economic and financial conditions in 54 countries in all major regions of the world. The country reports present a summary of recent developments, along with comments on current issues. For each region a brief overview is presented. This introductory section highlights some overall themes that are played out in the several regions and their individual countries. Also this report looks at several overview topics. The first section covers “Global Finance.” While clearly not exhaustive, the topics we have included are: • Global Accessibility of Capital • Market Structure and Financial Intermediation • Sovereign and Other Risk Ratings • Equity, Securities, and Bond Markets • Banking Industry: International Exposure, Portfolio Quality, and Financial Concentration • High-Yield Debt Markets and Cross-Border M&A Activity • International Money and Capital Markets and Direct Investment Flows • The “Democratization of Capital” Technology is covered second. Technology is changing everything. Keep up or get left behind. Who uses it? How has it changed our economy? What industries are involved? Topics include: • Technology in the US economy • The Internet and e-commerce • The technology workforce • A summary version of a Milken Institute technology study • Internet demographics • Technology and education • Telecommunications • Technological transformation in India • Venture capital to finance it all The third section covers “Global Demographics.” Basic population characteristics are an important part of the overall socioeconomic condition. Trends in consumption, production and standards of living derive from these characteristics. The topics include: • International Migration Trends • Population Growth and Distribution Patterns • Ratio and Movement of Productive to Dependent Populations • Human Capital Attainment: Education and Skills Development, and Health Care • Income and Wealth Characteristics • Gender Equity Attainment • Labor Force Patterns Each regional section contains a regional overview, which is then followed by a more detailed analysis of select economies within that region. The Chartbook is organized into the following geographic sections: • United States • Europe • The Americas • Asia and the Pacific Rim • Africa and the Middle East I-1 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Global – Market Capitalization Market Capitalization 1950 Other 6% Europe 26% U.S. 59% Japan 9% • 1950, world’s market cap broke down like this: Europe 26%, US 59%, Japan 9%. Industrialization launched. • By 1988, Japan heyday, bubble economy, up to 40% of world market cap. Economic output did not reflect this dominance. Then collapse. • 1999, Japan back to 11%, close to where it started in 1950; Japan recovery rests on economic reforms that will require real cultural adaptation. • Emerging markets now 15% of world – still small. • European equity markets doing well overall; 30% of world market cap total. Market Capitalization 1970 Market Capitalization 1980 Other 8% Other 12% Europe 20% Europe 19% U.S. 65% Japan 7% U.S. 53% Japan 16% Market Capitalization 1988 Other 14% Market Capitalization 1999 Other 15% U.S. 29% Japan 11% Europe 17% Europe 30% Japan 40% GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-2 U.S. 44% Global – Geography, Output, Population Shares World Geographic Shares Total Land Mass North America 19% Asia 35% South America 14% Africa 24% • North America comprises 19% of world’s land mass; 7% of people ; 30% of wealth. The globe’s most prosperous region. • Europe more densely populated than US – eight percent of land; 12% of people ; 34% of income. • Africa the clear loser here. Large, lots of poverty. 24% of land mass; 13% of people; 2% of income. • South America – almost as many people as North America, but less than a seventh the wealth. • 62% of the world lives in Asia. Greatest wealth gains here: 21% of total GDP shares in 1970; 30% today. Europe 8% World GDP Shares 1970 World GDP Shares 1998 Asia 21% Asia 28% North America 37% Africa 2% North America 31% Africa 2% Europe 33% South America 7% Europe 35% World Population Shares 1970 North America 6% South America 4% World Population Shares 1998 North America 7% South America 6% Europe 12% South America 8% Europe 19% Asia 57% Asia 62% Africa 10% I-3 Africa 13% GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Global – Trade Share Of World Trade Exports 1998 EU 19.7% • World trade (exports plus imports) fell slightly in 1998, but globalization continues. • Exports hovering around 22% of global GDP – up from 17% in 1990 and just 12% in 1980. • Export-led growth the propellant of development Rest of World 41.0% Share of World Exports 1998 US 16.3% Japan 9.3% Hong Kong China 4.2% 4.4% United States Germany Japan France United Kingdom Italy Canada Hong Kong Belgium-Luxembourg China Netherlands Korea Mexico Singapore Spain Sweden Switzerland Malaysia Russia Ireland Austria Australia Thailand Indonesia Brazil Denmark Finland Norway India South Africa Philippines Poland Turkey Argentina Venezuela World Canada 5.1% World - Trade Imports and Exports US$ Trillions 6 Imports Exports 5 4 3 2 1 0 70 75 80 85 90 95 Source: IFS World - Exports As Percent of GDP Percent Change Exports as Percent GDP 50 25 Exports as Percent GDP - R World Exports - L 40 20 30 15 20 10 10 0 5 -10 -20 70 75 80 85 90 95 Source: IMF, Direction of Trade 0 Sources: IFS; WEFA GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-4 Exports (US$ Billions) 680.4 540.7 388.0 303.9 268.2 242.6 211.4 183.7 174.8 173.7 152.7 132.3 117.5 109.9 107.4 84.7 78.8 73.5 71.4 64.6 61.3 55.9 54.5 54.0 51.2 47.9 42.1 39.5 36.7 34.9 29.5 28.2 27.0 26.0 19.2 5495.7 Percent of World Exports 12.4% 9.8% 7.1% 5.5% 4.9% 4.4% 3.8% 3.3% 3.2% 3.2% 2.8% 2.4% 2.1% 2.0% 2.0% 1.5% 1.4% 1.3% 1.3% 1.2% 1.1% 1.0% 1.0% 1.0% 0.9% 0.9% 0.8% 0.7% 0.7% 0.6% 0.5% 0.5% 0.5% 0.5% 0.3% --- Global – Growth World - Inflation Rate Consumer Price Index Percent Per Annum 35 • Trend of steady, stable growth continues. • General – but not complete – victory over inflation. • Trade and globalization have driven GDP growth and economic development in a widening list of countries. • High-tech industries, economies and capital goods are booming. Concentrated in developed world. • Low inflationary systems continue to enjoy increased output and productivity, more sophisticated and efficient debt/equity markets, higher living standards. • Oil-revenue-dependent nations getting a little relief from lift in oil prices. Brent crude now $30/barrel. • Inflation to follow? 30 25 20 15 10 5 0 70 75 80 85 90 95 Source: IFS Crude Oil Prices World - Real GDP Growth Benchmark Brent Oil Spot Prices, London 1990 Prices US$ per Barrel US$ Trillions 45 30 Percent Change 7 World GDP - L Percent Change, World GDP - R 40 35 6 25 5 30 4 25 20 3 20 15 2 15 1 10 5 84 86 88 90 92 94 96 98 10 00 Source: Bloomberg 70 75 85 90 95 0 Source: WEFA World Equities World - Trade Volume MSCI All Country World Free Price Index Compared to World Output Index US$ Trillions 350 30 300 25 250 20 200 15 150 10 100 5 50 80 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream World GDP World Exports and Imports 70 75 80 85 90 95 Source: WEFA I-5 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Global – Capital Access • The global challenge – how to get more capital to the have-not nations. 100 • The IT sector of the US stock market expanded from 10% early ‘90s to 33% today. 80 • Changes in composition of stock market and surge in IPO activity allows US to put more resources into high-growth IT, Internet. • IT sector needs equity financing. US leading role partly because financing available: stock market cap to bank assets ratio is 3 to 1; other parts of world bank assets typically 3 to 5 times larger. • Result: R&D spending in US is 2.7% of GDP, up from 2.4% in mid ‘90s. Sweden the leader in R&D spending – most of the world lags far behind. Distribution of Assets by Major Classes, 1999 Selected Countries' Holdings by Percent Percent 60 40 20 0 Stocks Bank Assets Bonds Japan UK Italy HK Swe Sing US Ger Fra Can Austl Fin Mex Sources: Financial Times, Zurich Financial Services • Technology Market Capitalization U.S. Leads in Private Equity As Percent of Total Market Capitalization, 1999 Funds Raised, 1998 Percent US$ Billions 60 100 50 80 40 60 30 20 40 10 20 0 Sweden Canada Japan Germany Finland US Taiwan France UK 0 Source: Financial Times Asia Latin America Gross Domestic Expenditure on R&D Percent of GDP, 1996 Percent Percent 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 Japan Sweden 0.0 Switzerland Finland Korea United States France GLOBAL ECONOMICS AND FINANCE Poland Spain Source: OECD March 8, 2000 www.milken-inst.org U.S. Gross Domestic Expenditure on R&D Percent of GDP, 1996 0.0 Europe Sources: Thompson Financial; Milken Institute Source: OECD I-6 Portugal Turkey Hungary Greece Mexico Global – Economy The March of Technology Largest Market Capitalization, 1999 Nasdaq versus Dow Jones US$ Billions and Percent of FTSE World Index Series Index, 1990=100 US$ Billions 1200 14000 Dow Jones Nasdaq Percent Market Value - L Percent of World - R 12000 1000 60 50 10000 40 800 8000 30 600 6000 400 4000 200 2000 20 10 0 0 Euro UK Ger Neth Italy US Japan Fra Switz Can HK 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 0 Sources: Financial Times, Primark Datastream IPOs: Biggest of 1999 Worldwide Offer Price $50.00 53.00 19.00 23.00 97.00 30.00 25.60 17.00 33.34 45.23 Issue Date Nov. 9 May 3 Nov. 8 March 30 July 20 Nov. 17 Oct. 12 Feb. 4 Oct. 14 Nov. 1 Issuer United Parcel Service Goldman Sachs Group Charter Communications Pepsi Bottling Group Genentech Agilent Technologies Sonera Group Delphi Automotive Systems Epcos Enel Societa Per Azioni U.S. Proceeds (Millions) $4,376.0 2,925.6 2,745.5 1,955.0 1,940.0 1,818.0 1,725.9 1,445.0 1,212.4 1,108.1 Ticker Symbol UPS GS CHTR PBG DNA A SNRA DPH EPC EN % Change Offer Date to Dec. 31 38.0 77.7 15.2 -28.0 177.3 157.7 170.5 -7.4 123.5 -8.8 Source: The Wall Street Journal Foreign Direct Investment Foreign Direct Investment Inflows, 1993-1998 Outflows, 1993-1998 US$ Billions US$ Billions 800 1200 1000 600 800 400 600 400 200 200 0 EU Emerg Mkts UK US 0 Neth Sweden France Belg & Lux Canada US EU Source: UNCTAD, World Investment Report 1999 Emerg Mkts France Japan UK Germany Neth Canada Source: UNCTAD, World Investment Report 1999 I-7 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Stock Market Comparisons Argentina - Equity Index Merval Index • If applicable, subsequent country reports in this chartbook have stock market data included. • This section is for ease of comparison. Data, if available, begins January 1990. Index basis is same, January 1990. Countries alphabetical. • Many countries display independent strength/weakness in the face of major global forces. • Greatest growth in 1999: Turkey, Greece. Index 1990=100 4000 3000 2000 1000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Australia - Equity Index Austria - Equity Index All Ordinaries Equity Index Austrian Traded Index Index 1990=100 Index, 1990=100 200 140 180 120 160 100 140 120 80 100 60 80 60 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Belgium - Equity Index Brazil - Equity Index Brussels Stock Exchange BEL 20 Index Bovespa Index Index, 1992=100 Index 1995=100 300 500 250 400 200 300 150 200 100 100 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg I-8 Stock Market Comparisons Canada - Equity Index Chile - Equity Index TSE 300 Index IPSA Index Index 1990=100 Index 1990=100 220 1600 200 1400 180 1200 160 1000 140 800 120 600 100 400 80 200 60 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg China - Equity Index Colombia - Equity Index Shanghai B Index Colombia Stock Exchange Bog-Bosa Index Index 1995=100 Index 1991=100 180 1600 160 1400 1200 140 1000 120 800 100 600 80 400 60 40 200 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Costa Rica - Equity Index Czech Republic - Equity Index Costa Rica Stock Market HN-Wood Index Index 1994=100 Index, 1993=100 1000 400 350 800 300 600 250 400 200 200 0 150 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg I-9 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Stock Market Comparisons Denmark - Equity Index Ecuador - Equity Index Copenhagen Stock Exchange General Index Ecuador Stock Market Interinvest Index Index, 1990=100 Index 1994=100 220 300 200 250 180 160 200 140 150 120 100 100 80 60 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Egypt - Equity Index Finland - Equity Index HERMES Egypt Stock Market Index HEX Index Index, Aug. 1992 = 100 Index, 1991=100 800 1400 700 1200 600 1000 500 800 400 600 300 400 200 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg France - Equity Index Germany - Equity Index CAC 40 Index DAX Index Index, 1990=100 Index, 1990=100 350 400 300 350 300 250 250 200 200 150 150 100 50 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg I-10 Stock Market Comparisons Greece - Equity Index Hong Kong - Equity Index Athens Stock Exchange General Index Hong Kong Hang Seng Index Index, 1990=100 Index 1990=100 1200 700 1000 600 800 500 600 400 400 300 200 200 0 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg Hungary - Equity Index India - Equity Index Budapest Stock Index (BUX) Bombay Stock Exchange 100 Index Index, 1991=100 Index 1992=100 1200 350 1000 300 800 250 600 200 400 150 200 100 0 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Indonesia - Equity Index Ireland - Stock Exchange Indonesia Jakarta SE Index ISEQ General Index Index 1990=100 Index, 1990=100 180 300 160 250 140 200 120 100 150 80 100 60 40 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream I-11 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Stock Market Comparisons Israel - Equity Index Italy - Equity Index Stock Exchange General Index MIB 30 Index Index, Jan. 1992 = 100 Index, 1993=100 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Japan - Equity Index Korea - Equity Index Nikkei 225 Korea KOSPI Index Index 1990=100 Index 1990=100 100 140 90 120 80 100 70 80 60 60 50 40 40 30 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Malaysia - Equity Index Mauritius - Equity Index Malaysia Kuala Lumpur Index SEMDEX Stock Market Index Index 1990=100 Index, Jan. 1990 = 100 250 450 400 200 350 150 300 250 100 200 50 0 150 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream I-12 Stock Market Comparisons Mexico - Equity Index Morocco - Equity Index Bolsa Index CFG 25 Stock Market Index Index 1990=100 Index, Jan. 1990 = 100 2000 1000 800 1500 600 1000 400 500 0 200 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Netherlands - Equity Index New Zealand - Equity Index EOE Index New Zealand Stock Exchange Top 40 Index, 1990=100 Index 1990=100 600 140 500 120 400 300 100 200 80 100 0 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Norway - Equity Index Pakistan - Equity Index Oslo Stock Exchange General Index Karachi Stock Exchange Index Index, 1990=100 Index 1990=100 250 450 400 200 350 300 150 250 200 100 150 100 50 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg I-13 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Stock Market Comparisons Panama - Equity Index Philippines - Equity Index Panama Stock Exchange Index Philippines Manila SE Index Index 1994=100 Index 1990=100 500 350 300 400 250 200 300 150 100 200 50 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Poland - Equity Index Portugal - Equity Index Warsaw Stock Exchange General Index Lisbon Stock Exchange General Index Index, 1991=100 Index, 1993=100 2500 600 500 2000 400 1500 300 1000 200 500 0 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Russia - Equity Index Singapore - Equity Index RTS Index Singapore Straits Times Index Index, 1995=100 Index 1990=100 600 220 200 500 180 400 160 300 140 120 200 100 100 0 80 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg I-14 Stock Market Comparisons South Africa - Equity Index Spain - Equity Index Johannesburg Stock Exchange All Share Index Madrid Stock Exchange General Index Index, Jan. 1990 = 100 Index, 1990=100 270 350 240 300 210 250 180 200 150 150 120 100 90 60 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Sweden - Equity Index Switzerland - Equity Index OMX Index Swiss Market Index Index, 1990=100 Index, 1990=100 600 500 500 400 400 300 300 200 200 100 100 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Taiwan - Equity Index Thailand - Equity Index Taiwan Weighted Index Thailand Bangkok SET Index Index 1990=100 Index 1990=100 100 200 80 150 60 100 40 50 20 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream I-15 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Stock Market Comparisons Turkey - Istanbul Stock Exchange United Kingdom - Equity Index Istanbul National 100 Financial Times Stock Exchange 100 Index Index, 1990=100 Index, 1990=100 40000 300 250 30000 200 20000 150 10000 0 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream United States - Equity Index Venezuela - Equity Index Dow Jones Industrial Average Venezuela Stock Exchange Index Index 1990=100 Index 1994=100 450 1200 400 1000 350 800 300 250 600 200 400 150 200 100 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg I-16 Global Finance – Introduction This section provides an overview of the capability of financial institutions and capital markets to finance new entrepreneurial activity around the world. Here we examine the international, regional, and countryspecific markets. The data measure the breadth, depth, and liquidity of capital markets globally. The data paint a clear picture – economies do best when capital is available and fairly allocated and where government policies lift financial market stability. Economies fare worse when politicians control the purse strings, especially when checks and balances are not in place. The unifying theme for this section is the Milken Institute’s Capital Access Index, which measures what we have called the democratization of capital – the extent to which capital markets and financial institutions can be mobilized to finance new ideas that generate new jobs and capital. The old methods of evaluating capital accumulation and distribution (e.g., exclusive examinations of data on domestic saving) are too highly aggregated to differentiate impacts on long-term growth. How best to create capital access to finance ideas that can generate jobs, income, and wealth is the critical issue in today’s global capital markets. The concept of democratization of capital introduces how the decentralization of capital and the multiplication of capital-distribution technologies channel money toward its most productive uses. We evaluate how countries are doing by summarizing a series of indicators. Economies that have more open and liquid financial markets tend to outperform, by a wide margin, countries that stress autonomy and autarky. If improvements in using financial technologies that successfully align the interests of investors, entrepreneurs, producers, consumers, and markets, are made this effect is amplified. The 2000 edition of the global Milken Institute Capital Access Index has been modified in order to account for several aspects of capital market development in various countries around the world. The general categories and specific measures are listed on the following page. I-17 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Global Finance – Introduction Milken Institute Global Capital Access Index 2000 Specific Measures General Category General Environment (E) Macroeconomic Environment (EM) Institutional Environment (EI) Banking Sector (B) Banking Sector-Depth (BD) Banking System-Governance (BG) Banking System-Repression (BR) Capital Markets (K) Capital Markets-Equity (KE) Capital Markets-Bonds (KB) Capital Markets-Advanced (KA) International Capital Access (I) International Capital AccessGeneral (IG) International. Capital Access-FDI (IF) International Capital AccessPortfolio (IP) Sovereign Bond Ratings (S) Inflation, Short-term interest rate, Interest rate volatility, government spending over GDP, Corporate income tax level, Capital gains tax, Firm concentration ratio, Value-added tax, Tax system measure, Tax evasion measure, M2 over reserves, velocity of M2, Government debt over GDP Risk of expropriation, Risk of contract violation, Rule-of-law principles, Corruption perception index, Foreign exchange black market premium, IMF program, State interference in business, Role of state-controlled enterprises, Government regulation, Government policies, Enforcement of regulation, Investment climate, Legal system, Shareholder rights, Creditor rights, Accounting transparency Claims of nonfinancial private sector to GDP, Bank assets over GDP, Domestic assets over GDP, Claims to private sector over total domestic assets, Household savings rate, Various other ratios of IFS data State ownership of banks, Entry to banking industry, Moody’s Bank Strength rating, Bank concentration ratio, Interest margins, Bank financial condition survey Share of domestic credit to private sector, Restrictions on banking activity, Real interest rates, Interest rate controls, Requirements on holding government securities, Share of domestic credit through central banks Equity market capitalization over GDP, Equity market liquidity, Stock market renewal rate, Equity market volatility, IPOs over market capitalization, Firm concentration ratio Market-adjusted debt ratio (MAD), Private sector domestic debt securities over GDP, Public sector domestic securities over GDP Capital- or Bank-Based financial system measure, Secondary mortgage market, VC funds, Syndicated loan volume, S&P capital markets rating Currency volatility, Total reserves over GDP, Foreign investment ceiling, foreign access to capital markets, Corporate control by foreign investors, International bonds and equities issued by private corporations over total international bonds and equities issued, International short-term debt over foreign exchange reserves, Foreign investment protection Foreign direct investment (FDI) over GDP, Cumulative FDI flows Portfolio flows (stocks and bonds) over GDP, Capital market controls Moody’s, Standard and Poor’s, others as applicable (including Institutional Investor, Composite ICRG Credit Rating, Euromoney Credit Rating) Note: for information on sources and years covered, see the Milken Institute policy brief, Global Capital Access Index 2000. GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-18 International Equity Issues, 1998 Entire World $121.1 Billion USA and Canada $18.9 Billion Public Public finance (other) corporate 1% Private bank 5% 9% Private finance (other) 26% Source: Capital Data Private bank 1% Private finance (other) 37% Private corporate 62% Private corporate 59% Source: Capital Data Western Europe $62.4 Billion Far East $19.7 Billion Public Public finance corporate (other) 9% 1% Private bank Public corporate 2% 11% Private finance (other) 18% Private finance (other) 14% Private corporate 65% Source: Capital Data Others $16.5 Billion Public Public finance corporate (other) 3% 1% Public bank Private bank 1% 12% Private bank 4% Source: Capital Data Private corporate 68% Source: Capital Data Australia Region $3.7 Billion Private finance (other) 23% Private bank 12% Private corporate 24% Private finance (other) 59% Private corporate 73% Source: Capital Data I-19 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Access Index Milken Institute Capital Access Index - Global 2000 Country United States Hong Kong Switzerland Luxembourg United Kingdom Singapore Netherlands Estonia New Zealand Australia Canada Germany Taiwan Malaysia Finland Spain Ireland Sweden France Japan Thailand Israel Denmark South Korea Croatia Hungary Italy Portugal Belgium Norway Chile South Africa Iceland Slovenia Austria Mauritius Tunisia Egypt Latvia Argentina Philippines Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 27 29 30 31 32 33 34 35 36 37 38 39 40 41 Score 5.42 5.37 5.36 5.34 5.33 5.22 5.13 5.08 4.96 4.94 4.92 4.81 4.78 4.71 4.69 4.65 4.64 4.63 4.60 4.57 4.56 4.52 4.52 4.52 4.50 4.49 4.48 4.48 4.47 4.45 4.45 4.42 4.41 4.41 4.29 4.23 4.21 4.21 4.19 4.15 4.14 1 Country El Salvador Poland Costa Rica Lithuania Nigeria Slovak Republic China Peru Greece Jordan Czech Republic Bolivia Indonesia India Morocco Botswana Mexico Guatemala Brazil Ghana Colombia Paraguay Pakistan Ecuador Turkey Zimbabwe Romania Honduras Jamaica Venezuela Kenya Bulgaria Vietnam Uruguay Cote d' Ivoire Ukraine Kyrgystan Malawi Russia Belarus 1. Best possible score is 7. GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-20 Rank 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 68 70 71 72 73 74 75 76 77 78 79 80 81 1 Score 4.12 4.10 4.07 4.07 4.06 4.04 4.04 4.02 4.02 4.00 3.98 3.97 3.96 3.91 3.90 3.83 3.77 3.77 3.71 3.69 3.65 3.63 3.57 3.56 3.56 3.53 3.50 3.50 3.41 3.41 3.34 3.31 3.17 3.10 2.95 2.90 2.87 2.83 2.76 2.73 Capital Access Index Milken Insitute Capital Access Index - Global 2000 - Category Scores Category Scores Country United States Hong Kong Switzerland Luxembourg United Kingdom Singapore Netherlands Estonia New Zealand Australia Canada Germany Taiwan Malaysia Finland Spain Ireland Sweden France Japan Thailand Israel Denmark South Korea Croatia Hungary Italy Portugal Belgium Norway Chile South Africa Iceland Slovenia Austria Mauritius Tunisia Egypt Latvia Argentina Philippines Rank Final Score 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 27 29 30 31 32 33 34 35 36 37 38 39 40 41 5.42 5.37 5.36 5.34 5.33 5.22 5.13 5.08 4.96 4.94 4.92 4.81 4.78 4.71 4.69 4.65 4.64 4.63 4.60 4.57 4.56 4.52 4.52 4.52 4.50 4.49 4.48 4.48 4.47 4.45 4.45 4.42 4.41 4.41 4.29 4.23 4.21 4.21 4.19 4.15 4.14 1 1 Environment Banking Capital Markets International Sovereign 5.2 6.5 5.7 6.0 6.0 6.2 5.8 4.6 5.9 4.8 5.2 5.4 4.9 5.3 5.4 5.1 5.5 5.3 4.5 4.3 4.7 4.7 5.4 4.6 5.3 4.8 4.5 4.5 4.6 5.1 4.6 4.5 4.8 4.2 5.2 4.9 5.6 5.0 4.0 4.8 4.8 5.4 5.6 5.6 6.3 5.5 5.0 5.4 5.6 5.3 5.4 4.7 4.8 5.3 5.2 4.2 4.8 4.8 3.9 5.3 5.7 5.0 4.1 4.4 5.2 5.3 4.7 4.5 5.1 5.1 4.8 4.4 4.8 4.5 4.8 5.0 4.1 4.4 3.5 3.2 3.7 4.3 5.3 3.9 4.6 3.2 4.4 4.3 4.3 4.8 3.3 4.5 4.6 3.9 4.2 3.4 4.1 3.7 3.3 4.3 3.8 3.2 3.9 3.6 3.4 3.8 3.2 3.7 3.7 3.1 3.5 3.5 3.1 3.5 4.6 3.4 2.6 3.3 2.9 2.3 4.2 2.6 3.2 5.8 6.0 5.6 6.2 5.3 5.4 4.8 5.3 4.9 4.9 5.0 5.1 4.3 4.6 4.9 4.8 5.0 4.7 4.9 4.9 4.5 5.8 4.8 4.5 4.7 5.0 5.1 5.2 4.9 4.0 5.5 4.8 3.3 4.8 4.8 4.8 4.3 5.8 5.4 5.7 4.3 7.0 5.5 7.0 7.0 7.0 7.0 7.0 5.0 7.0 7.0 7.0 7.0 6.5 4.5 7.0 7.0 7.0 7.0 7.0 7.0 4.5 5.5 7.0 4.5 4.5 5.0 7.0 7.0 7.0 7.0 5.5 4.0 6.0 5.5 7.0 5.0 4.5 4.5 5.0 3.5 4.0 I-21 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Access Index Milken Insitute Capital Access Index - Global 2000 - Category Scores (cont.) Category Scores Country El Salvador Poland Costa Rica Lithuania Nigeria Slovak Republic China Peru Greece Jordan Czech Republic Bolivia Indonesia India Morocco Botswana Mexico Guatemala Brazil Ghana Colombia Paraguay Pakistan Ecuador Turkey Zimbabwe Honduras Romania Jamaica Venezuela Kenya Bulgaria Vietnam Uruguay Ivory Coast Ukraine Kyrgystan Malawi Russia Belarus 1 Rank Final Score Environment Banking Capital Markets International Sovereign 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 68 70 71 72 73 74 75 76 77 78 79 80 81 4.12 4.10 4.07 4.07 4.06 4.04 4.04 4.02 4.02 4.00 3.98 3.97 3.96 3.91 3.90 3.83 3.77 3.77 3.71 3.69 3.65 3.63 3.57 3.56 3.56 3.53 3.50 3.50 3.41 3.41 3.34 3.31 3.17 3.10 2.95 2.90 2.87 2.83 2.76 2.73 5.3 3.7 4.4 4.8 5.0 4.2 4.5 4.5 3.8 3.8 4.4 4.3 4.2 4.2 5.2 4.7 4.2 4.5 4.0 4.5 3.0 4.2 5.2 4.1 3.6 3.4 3.8 4.2 4.0 2.8 4.6 3.4 3.2 3.3 3.3 2.1 3.3 3.3 3.0 3.0 4.0 3.9 4.1 2.6 4.0 3.3 4.5 3.4 3.2 4.1 4.2 4.4 4.2 4.5 3.1 3.6 3.6 3.8 3.4 2.8 4.5 3.4 2.4 3.8 2.5 4.2 3.6 2.0 2.9 3.6 2.6 2.5 4.0 2.3 2.7 3.4 2.0 2.1 2.5 2.4 2.4 3.6 2.8 3.7 1.8 4.2 2.9 2.8 3.9 2.9 2.5 2.1 3.3 3.0 2.7 2.5 2.6 1.8 3.1 3.0 2.4 3.2 3.7 2.2 3.2 3.3 2.3 3.9 2.6 2.6 2.4 3.3 2.0 2.0 1.8 2.2 2.5 2.5 2.8 1.0 5.5 4.8 4.6 5.3 5.5 4.5 4.6 5.5 5.2 5.1 5.1 4.9 4.4 3.8 5.0 5.7 5.0 5.0 4.6 5.0 4.8 4.0 4.6 4.3 4.8 3.0 4.3 4.3 5.0 4.7 3.7 4.5 3.0 4.3 4.8 3.9 4.3 3.7 3.0 4.0 4.0 5.0 4.0 4.5 0.0 4.0 5.0 3.5 5.5 3.5 5.5 3.5 2.0 4.0 4.0 0.0 4.0 4.0 3.5 0.0 4.5 3.5 1.5 2.0 3.0 0.0 3.0 2.5 3.0 3.0 0.0 3.0 3.0 4.5 0.0 2.0 0.0 0.0 2.0 0.0 1. Best possible score is 7 in all categories. GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 1 I-22 Capital Access Index Milken Institute Capital Access Index - Asia Country Singapore Hong Kong Japan Taiwan Malaysia China Korea Thailand India Indonesia Philippines Pakistan Scores Quantitative 99.88 100 93.72 93.95 92.35 90.69 80.95 74.71 74.11 76.89 62.55 69.82 Total 100 97.47 94.85 92.57 79.42 78.48 73.77 70.24 66.93 63.34 61.18 57.33 Rank 1 2 3 4 5 6 7 8 9 10 11 12 Risk 64.72 100 61.23 91.55 34.81 23.82 37.76 47.54 36.52 39.45 30.40 31.96 Qualitative 100 81.80 96.18 80.12 68.66 72.09 68.01 63.84 60.11 46.78 62.44 43.32 Quantitative Measures: Qualitative Measures: Risk Measures: 1. GDP per Capita 21. Risk of Expropriation 31. Currency Volatility 2. Government Spending / GDP 22. Risk of Contract Violation 32. Interest Rate Volatility 3. Claims of Non-Fin. Priv. Sector/GDP 23. Rule of Law Principles 33. Stock Market Volatility 4. Total Reserves / GDP 24. Corruption Perception Index 34. Forex Black Market Premium 5. Average GDP Growth 25. Composite ICRG Rating 6. Inflation Rate 26. Institutional Investor Credit Rating 7. Equity Market Cap / GDP 27. Euromoney Country Credit Worthiness Rating 8. Firm Concentration Ratio 28. Moody’s Bank Rating 9. Equity Market Liquidity 29. Moody’s Sovereign Rating 10. New Listing Rate 30. S & P Sovereign Rating 11. Foreign Investment Ceiling 12. Short Term Interest Rate 13. Corporate Income Tax 14. Capital Gains Tax 15. Bank Assets/GDP 16. Bank Concentration Ratio 17. Foreign Direct Investment / GDP 18. Portfolio Investment Flows (Stock) / GDP 19. Portfolio Investment Flows (Bonds) / GDP 20. Gini Index I-23 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Access Index Milken Institute Capital Access Index - Africa Country South Africa Egypt Mauritius Botswana Morocco Cote d' Ivoire Ghana Nigeria Kenya Zimbabwe Zambia Scores Quantitative 100.0 99.7 96.9 87.2 80.1 81.6 73.7 76.4 65.5 65.8 59.4 Total 100.0 98.2 96.4 87.2 86.7 80.8 77.9 75.8 69.8 66.7 59.8 Rank 1 2 3 4 5 6 7 8 9 10 11 Risk 91.7 100.0 94.1 90.8 94.9 93.9 91.2 98.4 88.5 49.3 35.9 Qualitative 96.9 88.6 90.8 100.0 93.5 70.5 78.8 63.2 69.5 70.3 64.4 Quantitative Measures: Qualitative Measures: Risk Measures: 1. GDP per Capita 21. Risk of Expropriation 28. Currency Volatility 2. Government Spending / GDP 22. Risk of Contract Violation 29. Forex Black Market Premium 3. Claims of Non-Fin. Priv. Sector/GDP 23. Rule of Law Principles 4. Total Reserves / GDP 24. Corruption Perception Index 5. Average GDP Growth 25. Composite ICRG Rating 6. Inflation Rate 26. Institutional Investor Credit Rating 7. Equity Market Cap / GDP 27. Euromoney Country Credit Worthiness Rating 8. Firm Concentration Ratio 9. Equity Market Liquidity 10. Foreign Investment Ceiling 11. Short Term Interest Rate 12. Corporate Income Tax 13. Capital Gains Tax 14. Value Added Tax 15. Bank Assets/GDP 16. Bank Concentration Ratio 17. Foreign Direct Investment / GDP 18. Portfolio Investment Flows (Stock) / GDP 19. Portfolio Investment Flows (Bonds) / GDP 20. Gini Index GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-24 Capital Access Indicators Tax Rate Comparisons Country Argentina Australia Belgium Brazil Canada Chile China Colombia Czech Republic Denmark Ecuador Egypt Finland France Germany Greece Hong Kong Hungary India Indonesia Ireland Israel Italy Japan Malaysia Mexico Netherlands New Zealand Norway Philippines Poland Portugal Russia Singapore Slovak Republic South Africa South Korea Spain Sweden Switzerland Taiwan Thailand Turkey Ukraine United Kingdom United States Venezuela Corporate Income Tax 33 36 39 25 38 35 30 35 39 34 25 42 28 42 45 35 17 18 35 30 10 36 37 38 30 34 35 33 28 35 38 36 40 26 40 35 28 35 28 26 25 30 25 30 31 35 34 Capital Gains Tax 0 47 40 10 38 20 20 35 43 40 0 0 25 19 0 0 0 20 20 30 40 0 13 26 0 0 0 0 28 1 40 0 20 0 0 0 0 20 0 0 0 37 0 30 40 0 1 Source: Milken Institute Note: Capital Gains Tax Rate reflects the rate asessed to for foreign investors; tax rates are rounded to the nearest percentage point I-25 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Markets Structure of Financial Markets Developed Countries Percent of GDP 350 Domestic Debt Securities Equity Market Capitalization Bank Assets 300 250 200 150 100 50 0 US Switz. Germany Neth. Spain France Belgium Austria UK Portugal Sources: International Financial Statistics, Bank for International Settlements, Emerging Stock Markets Factbook Structure of Financial Markets Developed Countries Percent of GDP 350 300 Domestic Debt Securities Equity Market Capitalization Bank Assets 250 200 150 100 50 0 Australia Canada Sweden Finland Greece Italy NZ Denmark Norway Ireland Sources: International Financial Statistics, Bank for International Settlements, Emerging Stock Markets Factbook GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-26 Capital Markets Structure of Financial Markets Asia Percent of GDP 500 Domestic Debt Securities Equity Market Capitalization Bank Assets 400 300 200 100 0 HK US Singap. China Thai. Philip. India Japan Malay. Taiwan Korea Indo. Sources: International Financial Statistics, Bank for International Settlements, Emerging Stock Markets Factbook Structure of Financial Markets Latin America Percent of GDP 160 Domestic Debt Securities Equity Market Capitalization Bank Assets 140 120 100 80 60 40 20 0 Chili US Columbia Brazil Arg. Venez. Mexico Sources: International Financial Statistics, Bank for International Settlements, Emerging Stock Markets Factbook I-27 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Markets Structure of Financial Markets Transition Countries Percent of GDP 160 Domestic Debt Securities Equity Market Capitalization Bank Assets 140 120 100 80 60 40 20 0 Czech Rep. US Poland Hungary Russia Sources: International Financial Statistics, Bank for International Settlements, Emerging Stock Markets Factbook Largest Market Values, 1999 US$ Billions and Percent of FTSE World Index Series US$ Billions Percent 14000 Market Value - L Percent of World - R 12000 60 50 10000 40 8000 30 6000 20 4000 10 2000 0 Euro UK Ger Neth Italy US Japan Fra Switz Can HK Sources: Financial Times, Primark Datastream GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-28 0 Capital Markets Institutional Structure of Financial Markets: Developed Markets Non-bank institutions 29% Deposit banks 37% Central banks 3% Long term securities 31% Source: World Bank Institutional Structure of Financial Markets: Emerging Markets Non-bank institutions 16% Long term securities 16% Deposit banks 48% Central banks 20% Source: World Bank I-29 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Markets Distribution of Assets by Major Classes Percent 80 Stocks Bank Assets Bonds 60 40 20 0 Jp US UK Ger Italy Fra HK Can Swe Sing Austl Fin Mex Sources: Financial Times, Zurich Financial Services Investor Profiles in Europe/U.S. Percent Held by Sector, 1999 Percent 70 Individual Investors Institutional Investors Public Sector Foreign Investors 60 50 40 30 20 10 0 Fin Spa Neth Italy UK Belg Ger Swe Sources: Financial Times, U.S. Federal Reserve 1999, ProShare, Banque de France, JP Morgan estimates GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-30 US Fra Capital Markets Firm Concentration Ratios Market Capitalization of Ten Largest Firms as a Percentage of Total Market Capitalization Percent 100 80 60 40 20 0 Italy Ire Can Fin Switz HK Belg Sing Swed Arg India Neth Phil Indo Source: Salomon Smith Barney Firm Concentration Ratios Market Capitalization of Ten Largest Firms as a Percentage of Total Market Capitalization Percent 100 80 60 40 20 0 Thai Ger Nor Isr Mal Japan Austl Mex Kor Chil Fra Braz UK US Source: Salomon Smith Barney I-31 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Markets Relative Size of Capital Markets vs GDP Percent of GDP 200 Equity Market Bond Market Bank Loans 150 100 50 0 U.S. Europe Sources: Financial Times, Morgan Stanley Dean Witter GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-32 Banking Bank Concentration Ratios Concentration of Three Largest Banks Percent 100 80 60 40 20 0 Fin Nor Ire Neth Braz Belg Can Swed Isr HK Switz Sing Austl Mex Sources: Office of the Comptroller of the Currency, Milken Institute Bank Concentration Ratios Concentration of Three Largest Banks Percent 100 80 60 40 20 0 Arg UK Thai Mal Phil Chil Indo Fra Kor US Ger India Italy Japan Sources: Office of the Comptroller of the Currency, Milken Institute I-33 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Banking Bank Rankings by Assets 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bank Dai-Ichi Kangyo Bank Mitsubishi Bank Sumitomo Bank Mitsui Taiyo Kobe Bank Sanwa Bank Fuji Bank Credit Agricole Banque Nationale de Paris Industrial Bank of Japan Credit Lyonnais Assets, 1990 US$ Millions 426,855 412,783 407,907 407,502 401,465 398,321 302,983 289,747 289,179 285,238 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bank Deutsche Bank UBS Citigroup BankAmerica Corp Bank of Tokyo-Mitsubishi ABN AMRO Bank HSBC Holdings Credit Suisse Group Credit Agricole Groupe Societe Generale Assets, 1998 US$ Millions 732,534 685,882 668,641 617,679 598,720 504,122 484,655 473,983 457,037 447,545 Source: The Banker Bank Rankings by Pre-Tax Profits 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bank Sumitomo Bank Deutsche Bank Sanwa Bank Rafidain Bank Dai-Ichi Kangyo Bank Credit Lyonnais Barclays Bank Banco Bilbao Vizcaya Fuji Bank BankAmerica Corp. Profits, 1990 US$ Millions 1,953 1,631 1,623 1,560 1,525 1,513 1,465 1,460 1,413 1,399 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bank Citigroup BankAmerica Corp. HSBC Holdings Chase Manhattan Corp Lloyds TSB Group Deutsche Bank Bank One Corp First Union Corp Credit Agricole Groupe National Westminster Bank Source: The Banker GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-34 Profits, 1998 US$ Millions 9,269 8,048 6,591 5,980 5,016 4,713 4,465 3,965 3,765 3,563 Banking Bank Exposure to Emerging Markets As a Percent of Claims to all Emerging Markets Percent 100 Asia Latin America Middle East Africa 80 60 40 20 0 Japan US UK Europe Source: Bank for International Settlements International Bank Lending Claims on Selected Regions, 1999 US$ Billions 200 Claims on Non-Banks Claims on Banks Claims on Public Sector 150 100 50 0 Eastern Europe Latin America Asia Source: Bank for International Settlements I-35 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Banking International Bank and Debt Securities Financing in Asia US$ Billions 20 Bank Borrowing Securities Issuance 10 0 -10 -20 -30 -40 II 1997 III IV I 1998 II III IV I 1999 II Source: Bank for International Settlements International Bank and Debt Securities Financing in Latin America US$ Billions 20 Bank Borrowing Securities Issuance 15 10 5 0 -5 -10 -15 II 1997 III IV I 1998 II Source: Bank for International Settlements GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-36 III IV I 1999 II Banking Fifteen Largest Development Banks, 1998 (Billions of U.S. Dollars) Bank World Bank European Investment Bank Inter-American Development Bank Export-Import Bank of Japan Asian Development Bank Japan Development Bank European Bank for Reconstruction and Development Korea Development Bank Islamic Development Bank Industrial Development Bank of India African Development Bank Export-Import Bank of Korea Export-Import Bank of the U.S. Mediocredito Centrale Industrial Credit and Investment Corporation Location United States Luxembourg United States Japan Philippines Japan Equity 26.5 22.6 11.0 10.9 10.1 9.9 Assets 205.0 206.0 54.6 78.1 41.7 127.6 United Kingdom Republic of Korea Saudi Arabia India Cote d'Ivoire Republic of Korea United States Italy 5.8 3.6 2.3 2.0 1.9 1.7 1.6 1.5 18.7 66.3 2.5 15.2 6.5 14.9 13.5 8.7 India 1.3 11.6 Source: The Banker I-37 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Debt Securities High Yield Securities New Issuance US$ Billions 50 U.S. Europe Rest of World 40 30 20 10 0 1997 1998 1999 Source: Securities Data Company Value of European Buyout Market 1995-1999 US$ Billions 6 5 4 3 2 1 0 Ger Neth Swed Fin Aus Belg Port Fra Switz Ire Spain Nor Italy Lux Den Source: Securities Data Company GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-38 Debt Securities Emerging Market Bond Index Spread Relative to the Theoretical U.S. Zero-Coupon Curve Basis Points 1600 Brazilian Real Devalued 1/13/99 1400 Thai Baht Devalued 7/1/97 1200 1000 800 600 LTCM Bailout 9/98 400 Russian Default 8/16/98 200 0 1996 1997 1998 1999 2000 Source: Bloomberg Cross-border Merger and Acquisition Sales, 1991-1998 (Millions of US dollars) 1991 Region/economy 1992 Majority Total Majority 1995 Total Majority 1996 Total Majority 1997 Total Majority 1998 World 49,062 85,279 73,769 121,894 66,812 162,344 Developed countries 46,544 71,439 61,611 83,712 54,956 97,832 96,669 129,123 127,880 168,420 142,292 186,411 190,983 233,768 363,236 467,758 United States 17,851 23,815 10,463 13,938 19,792 34,727 46,556 56,372 50,944 62,903 60,953 70,921 58,166 84 1,399 309 775 81 279 1,302 1,690 681 1,573 2,163 4,780 342 1,053 3,683 6,909 1,425 10,659 8,460 32,174 9,648 48,670 9,297 60,983 9,166 52,746 18,443 83,396 41,029 95,620 45,635 67,760 China 16 2,988 94 5,197 639 13,458 976 20,126 636 11,993 602 15,533 960 11,011 546 4,955 Hong Kong 90 371 1,252 3,225 2,882 7,372 891 1,769 458 880 637 2,886 2,031 6,160 1,057 2,270 Emerging Markets Total 1994 Total Japan Majority 1993 Majority Total Majority Total 109,356 196,367 140,813 237,184 162,686 274,611 236,216 341,653 410,704 544,311 65,151 166,783 201,181 Asia India 52 213 13 262 105 1,854 327 2,880 148 3,311 45 3,768 194 2,855 782 1,954 Indonesia 13 275 42 2,287 286 1,421 199 6,507 126 4,125 118 2,654 2,328 4,312 876 1,705 Korea 14 712 31 122 34 59 827 102 270 122 716 724 1,387 4,522 6,298 Malaysia 57 1,004 14 1,197 139 541 215 393 16 821 40 4,497 198 2,361 1,083 1,693 2,238 Philippines 55 123 89 576 30 679 577 1,824 177 2,966 956 2,708 2,059 2,835 1,790 Singapore 4 127 149 450 403 2,071 306 1,145 323 597 659 1,692 95 1,208 295 548 Taiwan 4 145 822 22 165 32 581 860 21 2,410 724 1,108 584 1,541 152 2,556 20 330 36 605 2,963 5 2,063 317 1,405 815 1,820 Thailand 171 Latin America 110 280 3,917 4,843 1,097 2,050 699 2,177 1,505 2,346 2,399 3,907 2,612 5,900 1,544 3,056 Brazil Argentina 67 68 392 470 1,084 1,226 8 1,351 1,458 2,557 3,112 4,675 10,381 12,568 21,282 24,611 Chile 131 283 10 2,295 81 275 817 1,377 183 1,036 1,116 2,135 1,263 2,253 1,011 1,511 Mexico 297 813 529 797 183 3,947 295 2,326 503 1,435 791 2,847 5,821 8,034 392 1,386 Note: Majority refers to business combinations of which the investor acquires at least 50 percent voting securities of the resulting business. Source: UNCTAD, based on data provided by KPMG I-39 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org International Debt Issues, 1998 Entire World $891.5 Billion USA & Canada $298.5 Billion Central government 10% Public finance (other) Public 15% corporate 1% Public bank 12% Central government Private bank 3% 12% Public finance (other) 33% Private corporate 19% Private bank 27% Private finance (other) 21% Private corporate 14% Source: Capital Data Source: Capital Data Private finance (other) 33% Western Europe $400.8 Billion Public finance (other) 5% Far East $29.2 Billion Public corporate Public finance (other) Central 1% 2% government Public bank 6% 24% Central government 8% Public bank 24% Private finance (other) 26% Private bank 42% Private finance (other) 10% Private corporate 11% Private bank 9% Source: Capital Data Source: Capital Data Australia Region $13.1 Billion Others $150.0 Billion Public corporate 12% Public finance Central (other) government Public bank 2% 1% 1% Public bank 5% Private finance (other) 41% Source: Capital Data Private bank 47% Private finance (other) 20% Central government 52% Private corporate 7% Private corporate 8% GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Private corporate 32% Private bank 4% I-40 Source: Capital Data Capital Flows Emerging Market Economies: Net Capital Flows 1 (Billions of U.S. dollars) 1991 1998 1999 2000 Total 2 Net private capital flows 118.1 66.2 68.3 118.5 Net direct investment 31.5 132.4 118.5 128.4 Net portfolio investment 24.7 27.1 21.6 40.2 Other net investment 62.0 -93.3 -71.8 -50.1 Net official flows 36.0 43.6 9.4 -2.4 3 Change in reserves -51.2 -49.9 -51.1 -76.1 4 Current Account -85.1 -42.0 -24.7 -45.2 Africa 2 Net private capital flows 6.1 13.2 11.7 18.3 Net direct investment 2.1 4.8 8.4 8.7 Net portfolio investment -2.0 6.6 2.4 4.7 Other net investment 6.1 1.7 0.9 4.8 Net official flows 9.1 2.2 4.8 -3.5 3 Change in reserves -3.0 -2.5 -1.4 -8.2 4 Current Account -7.4 -18.8 -18.8 -15.2 5 Asia 6 Crisis Countries 2 Net private capital flows 24.8 -29.6 -18.1 -8.2 Net direct investment 6.2 9.7 9.4 8.4 Net portfolio investment 3.2 -7.3 4.5 5.6 Other net investment 15.4 -32.0 -32.0 -22.2 Net official flows 4.4 20.2 -4.5 -0.6 3 Change in reserves -8.3 -52.1 -39.9 -29.9 4 Current Account -25.2 68.8 49.3 29.4 Other Asian Emerging Markets 2 Net private capital flows 7.4 -14.7 -11.5 4.9 Net direct investment 8.3 46.9 32.2 34.7 Net portfolio investment -2.0 -12.3 -12.8 -8.5 Other net investment 1.2 -49.2 -30.8 -21.3 Net official flows 6.5 7.3 4.1 2.9 3 Change in reserves -31.5 -17.6 -2.3 -17.4 4 Current Account 23.7 43.2 26.2 26.4 1991 1998 1999 2000 65.7 10.3 1.2 2.6 10.8 -8.6 53.7 16.3 3.9 -1.1 -3.9 11.5 -64.2 -20.9 17.4 3.8 6.5 7.1 -1.7 -6.8 -8.9 7 Middle East and Europe 2 Net private capital flows Net direct investment Net portfolio investment Other net investment Net official flows 3 Change in reserves 4 Current Account Western Hemisphere 2 Net private capital flows Net direct investment Net portfolio investment Other net investment Net official flows 3 Change in reserves 4 Current Account Countries in Transition 2 Net private capital flows Net direct investment Net portfolio investment Other net investment Net official flows 3 Change in reserves 4 Current Account 11.1 9.5 6.2 -4.7 -2.0 -5.1 -9.2 24.1 73.8 11.3 48.1 14.7 39.7 -2.0 -14.0 2.7 4.1 -17.4 12.9 -16.9 -89.1 47.2 62.7 42.8 43.1 12.0 23.6 -7.7 -4.0 4.8 -0.1 6.7 -4.1 -56.5 -56.5 -9.9 13.2 2.4 20.3 --9.0 -12.3 -16.1 9.3 10.8 13.0 -2.1 4.9 -25.1 21.6 29.7 21.9 23.9 9.0 8.6 -9.3 -2.8 1.9 1.1 -7.4 -11.5 -16.1 -20.2 Source: IMF World Economic Outlook 1999 1. Net Capital Flows comprise net direct investment, net portfolio investment, and other long- and short-term net investment flows, including official and private borrowing. Emerging markets include developing countries, countries in transition, Korea, Singapore, Taiwan Province of China, and Israel. No data for Hong Kong SAR are available. 2. Because of data limitations, "other net investment" may include some official flows. 3. A minus sign indicates an increase. 4. The sum of the Current account balance, net private capital flows, net official flows, and the change in reserves equals, with the opposite sign, the sum of the capital account and errors and omissions. 5. Includes Korea, Singapore, and Taiwan Province of China. No data for Hong Kong SAR are available. 6. Indonesia, Korea, Malaysia, the Philippines, and Thailand. 7. Includes Israel. I-41 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Flows Gross Private Financing to Emerging Market Economies (Billions of U.S. dollars) 1997 1998 Total 286.1 148.5 Asia 127.5 34.1 Europe 37.5 36.1 Middle East & Africa 30.8 13.7 Western Hemisphere 90.3 64.6 Q1 39.5 7.1 7.5 3.3 21.7 1998 Q2 Q3 50.9 30.5 14.1 5.5 12.7 9.9 2.4 4.9 21.8 10.2 Bond issues 128.1 Asia 45.5 Western Hemisphere 54.4 Other regions 28.2 77.7 11.5 38.3 27.9 25.3 2.7 14.8 7.8 28.0 6.7 13.3 8.1 14.1 0.3 5.1 8.7 10.3 1.8 5.2 3.3 21.8 7.0 10.8 4.1 25.5 6.3 13.1 7.1 6.1 2.4 3.2 0.6 3.4 1.7 1.1 0.6 10.0 9.8 0.0 0.2 0.5 0.5 0.0 0.0 0.1 0.1 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Loan commitments 123.2 Asia 58.9 Western Hemisphere 30.9 Other regions 33.4 60.4 17.7 26.1 16.6 11.0 2.5 6.9 1.5 18.7 5.0 8.5 5.2 16.2 5.2 5.0 6.0 14.2 4.9 5.3 4.0 8.4 3.5 2.2 2.7 17.6 5.1 6.7 5.8 3.4 2.3 0.1 0.9 2.2 1.1 0.4 0.6 9.9 4.4 0.2 5.3 3.1 1.7 0.0 1.4 3.7 1.9 0.1 1.7 0.2 0.0 0.1 0.2 2.8 0.7 0.0 2.0 2.4 1.4 0.2 0.8 6.6 5.6 0.0 0.9 5.1 2.4 0.1 2.6 1.2 1.0 0.2 0.1 Other fixed income Asia Western Hemisphere Other regions Equity issues Asia Western Hemisphere Other regions 24.8 13.2 5.1 6.5 Source: IMF World Economic Outlook 1999 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-42 Q4 27.2 7.5 6.1 3.2 10.5 Q1 32.6 11.9 3.1 4.4 13.2 1999 Q2 July 49.7 14.6 15.3 7.1 7.8 4.8 6.8 -0.7 19.8 3.4 Aug. 6.7 3.9 4.8 -3.5 1.6 Capital Flows Regional Net Private Capital Flows US$ Billions 100 80 60 40 20 0 -20 Africa Asia: Other Emerging Markets Western Hemisphere -40 -60 Asia: Crisis Countries Middle East and Europe Countries in Transition 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IMF, World Economic Outlook, October 1999 Globalization Continues World Total Foreign Direct Investment US$ Billions 700 600 500 400 300 200 100 0 1995 1996 1997 1998 Sources: Business Week, UNCTAD I-43 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Capital Flows Foreign Direct Investment Inflows, 1993-1998 US$ Billions 800 600 400 200 0 EU Emerg Mkts UK US France Neth Sweden Belg & Lux Canada Source: UNCTAD, World Investment Report 1999 Foreign Direct Investment Outflows, 1993-1998 US$ Billions 1200 1000 800 600 400 200 0 US EU Emerg Mkts France Japan UK Germany Neth Canada Source: UNCTAD, World Investment Report 1999 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-44 Sovereign Ratings Moody's Aaa Austria Denmark Finland France Germany Ireland Liechtenstein Luxembourg Netherlands Norway Switzerland United Kingdom United States Aa1 Bermuda Belgium Japan (-) Singapore Sweden A1 Baa1 Chile Czech Republic Estonia Hungary (+) Kuwait (+) Poland Ba1 Bahrain Barbados Costa Rica Egypt Fiji Lithuania Mexico (+) Morocco Panama Philippines Slovak Republic (-) Thailand Trinidad & Tobago Ba2 Belize Colombia Guatemala India B1 Bolivia Dominican Republic Kazakhstan Lebanon Papua New Guinea Turkey (+) Vietnam (-) B2 Brazil Bulgaria (+) Honduras Iran Moldova (-) Nicaragua Paraguay Turkmenistan Venezuela B3 Indonesia Romania Russia Ukraine (-) Aa2 Andorra Australia Canada New Zealand Portugal Spain (+) Aa3 Iceland Italy (+) Taiwan A2 Cyprus Greece United Arab Emirates Baa2 Latvia Mauritius Oman Qatar A3 Bahamas China Hong Kong Israel Malta (-) Slovenia (+) Baa3 Croatia El Salvador Korea (+) Malaysia Saudi Arabia (+) South Africa Tunisia Uruguay Ba3 Argentina (-) Jamaica Jordan (-) Peru AA+ Australia Belgium Canada Denmark (+) Finland Ireland New Zealand (-) Spain Sweden Taiwan A+ Iceland (+) BBB+ Estonia BB+ Colombia El Salvador Panama Philippines Slovak Republic South Africa B+ Brazil (-) Dominican Republic Kazakhstan(-) Papua New Guinea (-) Venezuela (-) A Cyprus Hong Kong Kuwait Malta (-) Slovenia BBB China Hungary (+) Korea (+) Latavia Malaysia Poland (+) Qatar BBBCroatia (-) Egypt Lithuania Oman (-) Thailand Trinidad & Tobago Tunisia Uruguay BB Argentina Costa Rica India Mexico Morocco Peru B+ Bulgaria (+) Paraguay Turkey BBBolivia Jordan Lebanon (-) BCook Islands Romania (-) S&P AAA Austria France Germany Japan Liechtenstein Luxembourg Netherlands Norway Singapore Switzerland United Kingdom United States AA Bermuda Italy Portugal AA- AChile Czech Republic Greece (+) Israel I-45 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Sovereign Ratings Fitch IBCA AAA Austria Finland France Germany Ireland Luxembourg Netherlands Norway Switzerland United Kingdom United States AA+ Denmark Japan Singapore Spain A+ Hong Kong BBB+ Czech Republic Greece Hungary Poland AA Australia (-) Bermuda Canada Portugal Sweden AABelgium Italy A+ Kuwait Malta BBB Estonia Latvia Korea AChile China Israel BBBEgypt Malaysia (+) Thailand Bold indicates a recent rating or rating's change (+) Positive outlook or Watchlist Positive Source: Merrill Lynch, European Credith Monthly - December 8, 1999 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-46 BB+ Croatia Lithuania Panama Philippines Slovak Republic BB Argentina Mexico Peru South Africa B+ Bulgaria Turkey BBKazakhstan Lebanon Venezuela BIndonesia Moldova Romania Turkmenistan (-) Negative outlook or Watchlist Negative B Brazil Global – Commodities World Commodity Prices World Commodity Index Index 110 100 • Commodities mixed. • Big relief for oil-export dependent nations: Venezuela, Mexico, Gulf States, etc. • Brent crude oil prices at a nine-year high: $30 per barrel now. Still low in real terms, but energy prices starting to creep up. • Slight recovery for some metals, aluminum, copper. Gold, silver still flat: gold reached a 20-year low in August 1999. • No recovery in sight for grains. • Did you know nuclear power plants supplied 16% of the world’s electricity in 1998? 90 80 70 60 50 75 80 85 90 95 Source: IFS Commodity Prices Commodity Prices Commodity Research Bureau Futures Price Index Commodity Research Bureau Futures Price Index Index Index 350 260 300 240 250 220 200 200 150 75 80 85 90 180 95 Source: Datastream 1996 1997 1998 1999 2000 Source: Datastream, Bloomberg Grain Prices World Food Prices CRB Grain Index Food Commodities Index Index, 1967=100 Index 350 130 120 300 110 250 100 90 200 80 150 100 70 75 80 85 90 60 95 Source: Datastream 75 80 85 90 95 Source: IFS I-47 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Commodities – Energy Utility Costs Energy Prices Average Annual Costs for Homes and Apartments Commodity Research Bureau Energy Index US$ Thousands Index, 1977=100 5 300 Heat and electricity Water 4 250 3 200 2 150 1 0 Japan Brazil US Eqypt 100 China France Russia Source: ECA Windham 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Nuclear Energy Nuclear Energy - Consumption by Region Share of Electricity Generation Total Electricity Production Percent Percent 100 100 80 80 60 60 40 40 20 North America Asia Pacific Former Soviet Union 20 0 France Ukraine Hungary Japan UK Russia Lithuania Belgium Sweden Korea Germany US 0 Source: IAEA 88 89 90 91 92 Europe Rest of World 93 94 95 96 97 98 99 98 99 Source: BP Amoco Natural Gas Production 1998 Natural Gas Production - 1998 Total Cubic Meters Cubic Meters, Trillions 2.3 Europe 12% Asia 11% US 24% 2.2 Middle East 8% 2.1 2.0 Canada 7% 1.9 Russia Federation 24% Other 9% Africa 5% 1.8 88 89 90 Source: BP Amoco Source: BP Amoco GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org I-48 91 92 93 94 95 96 97 Commodities – Oil Top Oil Producing Nations Unleaded Gas Prices Crude Oil Production, October 1999 Unleaded Gasoline, Price Per Gallon Million Barrels per Day Cents per Gallon 8 120 100 6 80 4 60 2 40 0 Iran Venezuela Nigeria Libya Algeria Saudi Arabia Iraq UAE Kuwait Indonesia Qatar 20 Source: Financial Times 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Crude Oil Prices Real 1990 Crude Oil Price Benchmark Brent Oil Spot Prices, London Per Barrel US$ per Barrel US$ 45 70 40 60 1864 = $67.14 1981 = $45.68 35 50 30 40 25 30 20 1947 = $11.29 20 15 10 10 5 0 1931 = $5.58 84 86 88 90 92 94 96 98 00 1860 Source: Bloomberg 1875 1890 1905 1920 1998 = $8.71 1935 1950 1965 1980 1995 Sources: Milken Institute; Dept. of Energy Oil Consumption 1998 World Oil Production - 1998 Total Metric Tons and Growth Metric Tons, Billions Percent Change, Year Ago 3.6 US 24% 4 3.5 3 Germany 4% 2 France 3% 3.4 3.3 China 6% Russia Federation 4% 1 3.2 0 3.1 3.0 88 89 90 91 92 93 94 95 96 97 98 99 Other 48% -1 Japan 8% South Korea 3% Source: BP Amoco Source: BP Amoco I-49 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Commodities – Metals Metals Prices Copper Prices Economist Commodity Industry/Metals Price Index London Metal Exchange, Grade A Cathodes Spot Price Index US Cents per Pound 120 160 110 140 100 120 90 100 80 80 70 60 60 50 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 75 80 85 90 95 Source: IFS Aluminum Prices Silver Prices London Metal Exchange, Spot Price Average Daily Prices, New York US Cents per Pound US$ per Ounce 180 40 160 140 30 120 100 20 80 60 10 40 20 75 80 85 90 0 95 Source: IFS 75 80 U.S. Germany France Italy Switzerland Netherlands Japan U.K. 95 Tons 8,137 3,700 3,184 2,593 2,590 1,052 754 715 Gold Spot Price $ per ounce Grams per Capita 30.5 45.1 54.3 45.0 365.5 68.9 6.0 12.3 700 600 500 400 300 200 Sources: Financial Times, Swiss National Bank 100 0 75 80 Source: Bloomberg GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org 90 Gold Prices Gold Reserves 1. 2. 3. 4. 5. 6. 7. 8. 85 Source: IFS I-50 85 90 95 00 Commodities – Agriculture Livestock and Meat Prices Grain Prices Commodity Research Bureau Livestock & Meat Index CRB Grain Index Index, 1967=100 Index, 1967=100 300 350 300 250 250 200 200 150 100 150 75 80 85 90 100 95 Source: Datastream 75 80 85 90 95 Source: Datastream Coffee Prices Live Hogs Prices Robusta, 15-day Average Prices Omaha Hogs Cents per Pound Cents per Pound 200 70 60 150 50 40 100 30 20 50 10 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: Datastream Soybean Prices Wheat Prices US Bulk Soybeans, Rotterdam No. 1, Hard Red Winter Wheat, Gulf Prices US$ per Metric Ton US$ per Bushel 400 8 7 350 6 300 5 250 4 200 150 3 75 80 85 90 2 95 Source: IFS 75 80 85 90 95 Source: IFS I-51 GLOBAL ECONOMICS AND FINANCE March 8, 2000 www.milken-inst.org Technology in the Economy • Technology is changing everything – the way we live, work and learn. There is no place to hide. The U.S. leads; globally, it is just getting started. • This section designed to help set the stage for discussion. Technology in the classroom. Affecting the workforce. Telecommunications explosion. Who surfs the ’net? Technology transforms India. • • Countries, companies and individuals that do not keep up get left behind. Understand, adapt, and proliferate the new technologies – or die. Competition harsh; opportunities great. In earlier eras – electricity; telephone; the automobile. Massive changes; not fully understood at the outset. Like the Internet in recent years, investors are deciding; some overly exuberant. • Cellular is here. Telecommunications changing the way we communicate. Worldwide. Even countries with few fixed lines have access to cellular. Virtually no one out of reach who doesn’t want to be. • With more bandwidth and info proliferation, every middleman in the economy is at risk. People will pay for ideas, perspective -- but not for info. Communication, 24-7, globally. • America’s heroes of the ‘90s are computer/tech industry leaders, and their tools, for what they let us do – faster, smaller, cheaper. Bill Gates; Andy Grove; Michael Dell; Steve Case, etc. • All markets, all sources, all competitors are global, not local. An cottage industry firm can launch with a web site. World Technology Spending 1997 Stocks in the '90s How Sectors Faired Over the Decade Percent Increase 1000 Other 26% 800 US 36% 600 Italy 3% 400 France 5% UK Germany 6% 7% 200 Japan 18% 0 Health Care Financial Basic Ind. Energy Technology Retailers S&P 500 Transport Utilities Sources: Time Magazine; Standard & Poors Source: Business Rankings Annual 2000 High Tech Exports Technology Market Capitalization As Percent of Total Exports As Percent of Total Market Capitalization, 1999 Percent Percent 40 60 35 50 30 40 25 30 20 20 15 10 10 5 0 Japan U.K. NetherlandsDenmark Germany Ireland U.S. France Sweden Finland EU Avg. Source: World Trade Organization Sweden Canada Japan Germany Finland US Taiwan France UK Source: Financial Times TECHNOLOGY IN THE ECONOMY II-1 March 8, 2000 www.milken-inst.org U.S. – Technology in the Economy Most Wired Cities 1999 U.S. Households With PCs Percentage of Total U.S. Households Percent 1 2 3 4 5 6 7 8 9 10 55 50 45 40 35 30 25 San Francisco Austin Seattle Washington DC Boston San Jose San Diego Minneapolis-St. Paul Atlanta Dallas-Fort Worth Source: Yahoo! Internet Life 1993 1994 1995 1996 1997 1998 Source: bLink Magazine TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-2 U.S. – Technology in the Economy High Tech Beats Everything Else High Tech Boosting GDP Growth Industrial Index GDP Growth Index, 1977=100 Percent Change, Year Ago 1200 5 Information Processing Durables Primary Metal 1000 High Tech Real GDP Low Tech Real GDP 4 800 3 600 2 400 1 200 0 70 75 80 85 90 0 95 Source: WEFA 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bureau of Economic Analysis, Milken Institute United States - Information Technology Spending On a New, Lower Track Information Technology Spending as a Percent of GDP Value of Manufacturers' Inventories/Shipments Percent Ratio 4.5 2.20 1995 1999 4.0 2.00 3.5 1.80 3.0 1.60 2.5 2.0 1.5 1958-90 Average = 1.71 1.40 1.20 Sweden Canada Norway Denmark Finland SingaporeGermany U.S. Britain Australia Israel Neth. France Belgium Japan 60 The March of Technology 70 75 80 85 90 95 United States - Technology over Autos Nasdaq versus Dow Jones Market Cap of Ford, GM vs. Intel, Microsoft Index, 1990=100 1200 65 Source: WEFA Source: Business Week US$ Billions 1000 Dow Jones Nasdaq 1000 800 GM plus Ford Intel plus Microsoft 800 600 600 400 400 200 200 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg TECHNOLOGY IN THE ECONOMY II-3 March 8, 2000 www.milken-inst.org U.S. – Technology in the Economy (Fast Movers) the Inc. 500 Percent that are High Tech Companies Percent • US leads the world in IT/GDP spending. • US – 5% of the world’s population, 50% of world’s home computers linked to Internet. • High-income households 20 times as likely to be connected to Internet as lowest income level. • The Internet generated an estimated $300b in revenues in 1998, approaching the size of the automobile industry. • Value of US consumer purchases in 1999: $3 trillion. Value of US purchases bought online: $12 billion. 35 30 25 20 15 10 1982 1987 1992 1998 Source: Inc. Magazine Internet Banking is Cheaper Cost Per Transaction Time to Download Video Clip 2.5 Minute Video Off the Internet US$ 1.2 $1.07 1.0 Transfer Rate 46 Minutes 10 Minutes 20 Seconds 10 Seconds 8 Seconds 28.8 Kbps Modem 128 Kbps ISDN 4 Mbps Cable Modem 8 Mbps ADSL 10 Mbps Cable Modem 0.8 0.6 52¢ 0.4 Source: Milken Institute 27¢ 0.2 1¢ 0.0 1.5¢ Internet PC Banking ATM Telephone Branch Source: Booz, Allen & Hamilton Projected Fiber Optic Equipment Sales Projected Fiber Optic Equipment Sales Land Lines Cable Television US$ Billions US$ Billions 14 0.60 12 0.55 0.50 10 0.45 8 0.40 6 0.35 4 2 0.30 1999 2000 2001 2002 2003 0.25 2004 Source: Invesor's Business Daily TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org 1999 2000 2001 Source: Invesor's Business Daily II-4 2002 2003 2004 U.S. – Investment Spending on Information Technology IT Industries Share of the Economy As Percent of GDP Percent of Real GDP Percent Percent 16 5 14 4 1995 1999E 12 3 10 2 8 1 6 4 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 U.S. Euro Zone Source: Business Week Sources: BEA; Milken Institute IT Investment - Top 10 Industries United States - Information Technology IT Investment Per Worker, 1996 IT as Percent of Producer Durable Equip. Investment US$ Thousands Percent 30 60 25 50 20 40 15 30 10 20 5 10 0 Nondeposit Radio/TV Petroleum Chem. Deposit Telecomm. Pipelines Electric R. Estate Insurance 0 Source: U.S. Department of Commerce 70 75 80 85 90 95 Source: Bureau of Economic Analysis Growth in Corporate IT Training IT Net Capital Stock - Top 10 Industries Total Spending IT Equipment Share of Total Equipment, 1996 Percent US$ Billions 30 90 $28.3 $25.8 CAGR: 12% 25 80 $23.4 84 79 $20.9 70 $18.8 20 $16.7 15 $14.7 60 56 56 56 51 50 10 49 45 41 40 5 39 30 0 1996 1997 1998 1999 2000 2001 Radio/TV Health Services Invest. Co's Wholesale Telecomm. Securities Movies Bus. Serv. Legal 2002 Source: Merrill Lynch Source: U.S. Department of Commerce TECHNOLOGY IN THE ECONOMY II-5 March 8, 2000 www.milken-inst.org The Internet and e-Commerce Leading e-Commerce Purchasing Catergories Percent of Total, 1998 Clothing Music 8% 12% World Market Share of e-Commerce 1999 Japan Canada 4% 4% Software 26% Asia 2% Rest of World 2% W. Europe 9% Travel 14% Hardware 21% Books 19% US 79% Source: Headcount.com Source: Merrill Lynch Future Online Spending Estimated Total Spending US$ Billions 80 Projected Online Spending By Sector, US$ Billions Travel Hardware & Software Media Apparel & Footwear 2000E 8.3 7.4 2.7 1.6 2001E 9.0 9.5 4.1 2.8 70 2002E 12.8 12.2 6.0 4.7 2003E 16.6 15.8 8.6 7.8 Source: Financial Times 60 50 40 30 20 10 1999E 2000E 2001E 2002E 2003E Source: Financial Times Composition Of Internet Commerce 1997 Total $15bn Advertising Supported 13.3% Composition Of Internet Commerce 2002 Total $1,053bn Subscription Based 6.7% Consumer Transactions 26.7% Advertising Supported Consumer 2% Transactions 17% Business To Business 53.3% Business To Business 80% Source: Financial Times Source: Financial Times TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org Subscription Based 1% II-6 The Internet and e-Commerce Online Investing Online Brokerages Number of Individuals Actively Trading Online Market Share as of September, 1999 Millions Percent 10 25 9 20 8 15 7 6 10 5 5 4 0 3 1999 2000 2001 2002 Source: www.emarketer.com E*Trade Fidellity Ameritrade Morgan Stanley Cybercorp C. Schwab TD Waterhouse Datek DLJdirect .Suretrade Source: The Wall Street Journal Top 30 Internet Companies by Advertising Spending 2000 Estimate Projected Online Trading Trades Per Day Thousands 1 1 3 4 5 5 5 5 9 10 11 11 13 14 14 Charles Schwab E*Trade Ameritrade Holdings HomeGrocer.com AltaVista (CMGI) TD Waterhouse Group Value America Webvan Group NBCi Datek Online America Online MindSpring Enterprises DLJ Direct CNET Monster.com Ad Spending, US$ Millions $300 $300 $200 $120 $100 $100 $100 $100 $95 $80 $75 $75 $65 $60 $60 1400 1200 1000 800 600 400 200 0 Speed 14.1 28.8/33.6 56 High Speed Unique Audience 6,050,900 32,991,289 29,671,057 4,266,023 Source: Nielsen/NetRatings Pages / Person 282 451 587 1036 Visits / Person 11 15 18 28 Percent of Net Users 8.3% 45.2% 40.7% 5.9% 1998 1999 2000 2001 2002 Top Internet Service Providers 1998 Source: Donaldson, Lufkin & Jenrette Bandwidth in the US November, 1999 1997 Source: Merrill Lynch 1 2 3 4 5 6 7 8 9 10 11 AOL Compuserve MSN Internet AT&T WorldNet Earthlink Sprint IBM Internet GTE Internet Solutions MindSpring Prodigy RCN.net SBC Internet Number of Subscribers 15,000,000 2,000,000 1,500,000 1,400,000 1,000,000 1,000,000 824,000 650,000 643,000 500,000 455,000 Market Share 53.3% 7.1% 5.3% 5.0% 3.6% 3.6% 2.9% 2.3% 2.3% 1.8% 1.6% Source Deutsche Bank TECHNOLOGY IN THE ECONOMY II-7 March 8, 2000 www.milken-inst.org The Internet and e-Commerce .com Ad Spending 1999 Internet Advertising Number of Websites Seeking Ads Direct Mail 6.0% Other Outdoor 2.0% 4.0% Magazine 7.0% Number of Websites 2600 2400 2200 Online 36.0% 2000 1800 Newspaper 10.0% 1600 Radio 12.0% 1400 1200 TV 23.0% 1000 1998 Source: Donaldson, Lufkin & Jenrette Advertising Revenue 4th Quarter, 1999 Internet Advertising Internet Advertising Revenues US$ Millions 1200 Yahoo! MSN Go Geocities AOL Lycos Netscape Altavista ESPN Cnet CNN FortuneCity Xoom Tripod ZDNet Excite 1000 800 600 400 200 1998 1999 Source: Financial Times 1999 Source: Financial Times Revenue, US$ Millions 125.0 48.0 40.0 35.0 33.0 20.0 18.0 15.0 15.0 10.0 10.0 8.7 8.4 8.2 8.1 7.7 Source: Financial Times Adults Seeking Health Content Online Technology in Latin America Millions of Adults Estimated Annual Spending on E-Commerce Millions US$ Billions 30 8 25 6 20 4 15 2 10 5 1996 1997 1998 1999 0 2000 E Source: Cyber Dialogue/Find SVP TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 Sources: Business Week; International Data Corp. II-8 1994 1995 1996 The Internet and e-Commerce Internet Hosts by Domain Name Percent of Total Hosts, July 1999 Government Other Organizations (.gov) 14% (.org) 1% Australia (.au) Commercial 1% 2% (.com) Canada (.ca) 33% 2% Germany (.de) 3% United States (.us) U.S. Military 3% Networks (.net) (.mil) 22% Educational 3% Japan (.jp) (.edu) United Kingdom 4% 9% (.uk) Source: Network Wizards (http://www.nw.com) 3% Ways in Which the Internet is Used, 1999 Percent of E-Shoppers in the U.S. Using Internet For: Percent 94 67 67 47 43 39 30 21 E-mail News Research/Education Financial Services/Information Games Automobile Information Medical Services/Information Real Estate Listings How The Internet Compares to Other Shopping Channels Percent of Consumers Surveyed, 1999 Offers most competitive price Everything from one source Convenience Saves time Internet 21% 12% 59% 62% Catalog 10% 7% 41% 33% Stores 13% 13% 12% 3% Source: Andersen Consulting Source: Scarborough Research Features That Will Drive e-Commerce Percent of Consumers Surveyed, 1999 Top 10 Problems Experienced by Internet Shoppers 1999 Problem Gift wanted to purchase was out of stock Product was not delivered on time Paid too much for delivery Connection or download trouble Didn't receive confirmation or status report on purchase Selections were limited Web site difficult to navigate Web site didn't provide information needed to make purchase Prices not competitive Site didn't offer enough gift ideas Percent of Internet Buyers 64 40 38 36 Feature Free product delivery On-time delivery guarantees No sales tax Coupons/promotions Toll-free customer assistance Live, online customer assistance Customers reviews or recommendations Helpful hints for colors, sizes, etc. Free gift wrapping Gift suggestions 28 27 26 25 22 16 Source: Andersen Consulting Percent of Consumers 98 95 91 83 68 62 62 58 58 46 Source: Andersen Consulting TECHNOLOGY IN THE ECONOMY II-9 March 8, 2000 www.milken-inst.org Technology Workers IT Industry Wages • By 2006, nearly half the US workforce will be employed in industries that produce or intensively use information technology, products, and services. • Between appearance of first PCs in the mid-’70s and 1983, computer industry jobs in US grew nearly 80%; total US manufacturing employment grew only 4%. • Tech workforce is younger than rest; pay is higher. • Tech workers in demand; Western Europe will have a shortage of almost 600,000 in two years. IT Industries vs. Average Wages, 1989 and 1997 US$ Thousands 60 1989 1997 $52.9 50 40 $33.5 $34.6 $29.8 30 $24.8 $22.2 20 10 0 Average All Industries IT-Using Demand and Supply of Tech Workers in Europe Number of Workers, 2002E IT-Producing Source: U.S. Department of Commerce Age of Technology Workforce United States, Percentage Age Distribution Percent 50 National Technology 40 30 20 10 0 Under 34 35 to 44 45 to 54 Over 55 Source: National Software Alliance Jobs of Yesterday... and Tomorrow Yesterday's Jobs Keypunch operator Typewriter repair technician Boston, MA Chicago, IL Atlanta, GA Washington, D.C. New York, NY San Francisco, CA Seattle, WA Las Vegas, NV St. Louis, MO Austin, TX Tomorrow's Jobs Webmaster LAN operator Mechanical calculating machine repair technician Help-desk operator Word-processing machine repair technician Knowledge engineer Based on survey results Source: Computerworld COBOL and FORTRAN instructors CAD/CAM operator Mimeograph production technician Desktop publishing operator Source: Dept. of Commerce TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org Supply 44,970 32,714 11,134 12,344 89,215 261,512 1,518 5,074 96,640 1,185 63,634 10,813 10,443 50,719 37,408 39,595 264,502 1,033,420 Source: Financial Times Information Technology Job Markets Top Cities, 1999 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Demand 74,088 67,382 19,804 20,577 156,204 449,737 2,382 8,567 155,387 1,469 121,637 15,414 12,572 76,791 44,419 59,823 346,270 1,632,522 Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland UK Western Europe II-10 Shortage 29,118 34,668 8,670 8,233 66,989 188,225 864 3,493 58,747 284 58,003 4,601 2,129 26,072 7,011 20,228 81,768 599,102 A Milken Institute Technology Study • The Milken Institute research report, America’s High-Tech Economy: Growth, Development, and Risks for Metropolitan Areas, by Ross C. DeVol, explored the dynamics of high-tech in regions across the country and the economic impact of technology on these metros’ economic growth. Technology is ubiquitous, directly or indirectly invading nearly all sectors of the U.S. economy. A compelling case can be made that the high-tech sector is boosting the long-term potential growth path of the U.S. economy and determining the relative economic success of metropolitan areas around the country. Since the 1990-91 recession, growth in the high-tech sector has been four times as large as in the overall economy. Over the past three years, growth in high-tech products and services exceeded 20%, lifting the GDP growth rate by 1.5 percentage points. We applied a series of statistical approaches to examine the importance of high-tech industries in determining the relative economic growth of metros. Growth in high-tech, and its concentration in a metro, can explain nearly 70% of the variation in relative economic growth (growth relative to the U.S. average) between metros in the 1990s. The Milken Institute Tech Poles are the nation’s top technology centers. We combined approaches to create a spatial concentration measurement. The composite index is a measure of local high-tech concentration with its share of national high. • • • • High Tech Boosting GDP Growth The Productivity Paradox GDP Growth Output per Man-hour (Nonfarm, Private) Percent Change, Year Ago Percent Change 5 3.0 High Tech Real GDP Low Tech Real GDP 4 2.5 3 2.0 2 1.5 1 0 1992 1993 1994 1995 1996 1997 1998 1.0 1999 Source: Bureau of Economic Analysis, Milken Institute 1946-'73 1974-'94 1995-'98 Sources: BEA; Milken Insitute Metro Growth Explained by High-Tech IT Dominates Capital Spending Information Processing as a Percent of Capital Spending Acutal vs. Predicted (Cross-sectional) Relative Growth Index, U.S. Aver.=100 Percent 60 200 50 180 Actual Predicted 160 40 140 30 120 20 100 10 0 80 70 75 80 85 90 95 60 00 Sources: BEA, National Income and Product Accounts; Milken Institute MSAs In Descending Order Sources: Milken Institute; RFA TECHNOLOGY IN THE ECONOMY II-11 March 8, 2000 www.milken-inst.org A Milken Institute Technology Study Milken Institute Tech Poles Composite Index High-Tech Relative Growth Top 50 Indexed to 1990 TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-12 A Milken Institute Technology Study Top 10 High-Tech Metros by Growth Relative High-Tech Real Output Growth, 1990 to 1998 Top 10 High-Tech Metros by Size, 1998 Percent of National High-Tech Real Output 1 2 3 4 5 6 7 8 9 10 Metro* San Jose, CA Los Angeles-Long Beach, CA New York, NY Boston, MA Chicago, IL Dallas, TX Washington, DC-MD-VA-WV Atlanta, GA Seattle-Bellevue-Everett, WA Philadelphia, PA Percent 5.79 5.11 4.23 4.18 3.76 3.67 3.50 2.53 2.52 2.09 * Each metro must contain either a place with a minimum population of 50,000 or a Census Bureau defined urbanized area and total population of a least 100,000 (75,000 in New England). A metro comprises one or more counties. Sources: Milken Institute, RFA 1 2 3 4 5 6 7 8 9 10 Metro* Albuquerque, NM Pocatello, ID Boise City, ID Cedar Rapids, IA Harrisburg-Lebanon-Carlisle, PA Columbus, GA-AL Merced, CA Richland-Kennewick-Pasco, WA Yuma, AZ Austin-San Marcos, TX Relative Growth** 4.37 3.08 2.93 2.68 2.58 2.39 2.23 2.02 1.95 1.92 * Each metro must contain either a place with a minimum population of 50,000 or a Census Bureau defined urbanized area and total population of a least 100,000 (75,000 in New England). A metro comprises one or more counties. ** Relative growth in high-tech real output is equivalent to metro output indexed to 1990 then divided by U.S. index. A metro with a value of >1 grew faster than the national average from 1990 to 1998. Sources: Milken Institute, RFA Top 10 High-Tech Concentration Leaders Total High-Tech Real Output,1998 1 2 3 4 5 6 7 8 9 10 Metro* Rochester, MN San Jose, CA Albuquerque, NM Lubbock, TX Cedar Rapids, IA Boulder-Longmont, CO Boise City, ID Kalamazoo-Battle Creek, MI Richland-Kennewick-Pasco, WA Middlesex-Somerset-Hunterdon, NJ Location % of MSA Quotient** Total Output 5.56 50.54 4.09 37.17 3.55 32.30 3.08 28.00 3.07 27.93 2.89 26.28 2.68 24.32 2.66 24.21 2.41 21.92 2.30 20.92 % of U.S. Industry Total 0.35 5.79 1.40 0.31 0.30 0.39 0.53 0.41 0.16 1.48 Employment (Thou.) 10.48 279.06 35.73 3.63 16.10 31.88 19.76 10.67 23.06 78.70 * Each metro must contain either a place with a minimum population of 50,000 or a Census Bureau defined urbanized area and total population of a least 100,000 (75,000 in New England). A metro comprises one or more counties. * *The Location Quotient (LQ) equals % output in metro divided by % output in the U.S. If LQ > 1.0, the industry is more concentrated in the metro area than in the U.S. on average. Sources: Milken Institute, RFA TECHNOLOGY IN THE ECONOMY II-13 March 8, 2000 www.milken-inst.org Computers Largest PC Hardware Producers, 1999 • The average life of a PC fell from 4½ years in ‘92 to just over 3 years in ’99. It will be 2 years by 2007. • The market for under-$1,000 PCs makes up half of all US computer sales. Half of US homes have PCs. • A standard PC in ’97 came with 32 megabytes of memory and a 4-gigabyte hard drive; in 1998, a similarly priced model came with twice the memory and a zip drive or a DVD drive as well. • Fighting computer viruses like the Melissa virus and the Explore.zip worm cost businesses worldwide $7.6 billion in the first half of 1999. • It took only 7 years for the Internet to be adopted by 25% of Americans, compared with 26 years for TV, 35 years for the telephone. Billions of Dollars and Percent Change Previous Year US$ Billions 120 100 $95.2 (+5%) 80 60 $44.1 (+4%) 40 $21.0 (+9%) 0 U.S. Japan Taiwan $18.5 (+30%) $18.5 (-1%) 20 Singapore China Source: Market Intelligence Center, Institute for Information Industry The Speed of Change Years to Penetrate 25 Percent of the Market World PC Sales Third Quarter, 1999 Percent Change, Year Ago 90 80 Household Electricity Telephone Radio Television PC Cellular Phone Internet 70 60 50 40 Year Invented 1873 1875 1906 1925 1975 1983 1991 Years to Penetrate 46 35 22 26 15 13 7 Source: Federal Reserve Bank of Dallas 30 20 10 Mexico Latin America U.S. Worldwide Source: Investor's Business Daily Top 10 Software Companies By Worldwide Sales, 1998 1. Microsoft Corp. 2. IBM Corp. 3. Oracle Corp. 4. Computer Associates International Inc. 5. Hitachi Ltd. 6. SAP AG 7. Hewlett-Packard Company 8. Sun Microsystems Inc. 9. Compaq Computer Corp. 10. PeopleSoft Inc. Total Software Revenue Worldwide, 1998 US$ Millions 16,327 11,863 5,318 4,854 4,184 3,154 1,412 1,367 1,174 1,042 TOP U.S. Personal Computer Vendors 1998 1. 2. 3. 4. 5. 6. Ranked by market share Source: Business Rankings Annual 2000 Source: Software Magazine TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org Company Compaq Dell Packard Bell IBM Gateway Others II-14 Percent 16.7 13.2 8.4 8.2 7.8 45.7 Computers Top Selling Business Software United States, December, 1999 1. Microsoft Windows 98 Upgrade 2nd Ed. 2. Norton Antivirus 2000 6.0 3. Norton System Works 2000 3.0 4. VirusScan 4.0 Classic 5. VirusScan 4.0 Deluxe 6. Y2K Survival Kit 7. QuickBooks 99 8. QuickBooks Pro 99 9. Microsoft Windows 98 2nd Ed. 10. McAfee Office 2000 Projected Fiber Optic Equipment Sales Sonet Computer Networks US$ Billions Company Microsoft Symantec Symantec Network Associates Network Associates Network Associates Intuit Intuit Microsoft Network Associates 4.0 3.5 3.0 2.5 Source: pcdata.com 2.0 1.5 1999 2000 2001 2002 2003 2004 Source: Invesor's Business Daily Estimated Trade Losses Due to Piracy Top 12 Countries, Millions of U.S. Dollars, 1998 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. China Russian Federation Brazil Japan Italy Germany Mexico South Korea Taiwan Paraguay India Canada Total Worldwide Business Applications Piracy Loss Percent 843.2 96 209.5 92 283.2 59 496.4 32 273.8 44 377.3 28 122.0 61 117.6 65 110.8 58 5.2 83 156.3 65 276.2 43 4,693.9 Entertainment Software Piracy Loss Percent 1,420.1 95 240.8 97 103.2 89 NA NA 58.2 50 94.2 52 170.1 85 122.1 65 103.2 65 8.4 99 36.8 84 NA NA 3,429.0 Total Losses 1998 2,588.3 977.3 821.4 645.4 613.0 453.5 469.1 304.7 303.0 298.1 295.1 276.2 12,380.8 Source: International Intellectual Property Alliance On Computer Memory “Who in their right mind would ever need more than 640k of ram!?” Microsoft Founder Bill Gates 1981 TECHNOLOGY IN THE ECONOMY II-15 March 8, 2000 www.milken-inst.org Internet Demographics Top 15 Nations in Internet Use Year-End 1999 Internet Access By Region, May 1999 Latin America 3% Africa 1% Middle East 1% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Asia/Pacific 15% U.S. & Canada 57% Europe 23% United States Japan United Kingdom Canada Germany Australia Brazil China France South Korea Taiwan Italy Sweden Netherlands Spain Internet Users (Thousands) 110,825 18,156 13,975 13,277 12,285 6,837 6,790 6,308 5,696 5,688 4,790 4,745 3,950 2,933 2,905 Source: Computer Industry Almanac Source: U.S. Department of Commerce Internet Usage in Languages Other than English 109 Million People Worldwide Portuguese 4% Other Swedish 9% Projected Ratios of English to NonEnglish Net Users Worldwide Japanese 18% 4% Korean 4% Russian 5% Dutch 1999 2001 2003 2005 German 13% 5% Spanish 11% Italian 9% French 9% English 54% 51% 46% 43% Non-English 46% 49% 54% 57% Source: bLink Magazine Chinese 9% Source: Global Reach Latin America - Internet Penetration Prediction Latin America - Where the Internet Users Are Number of Internet Users, 1997-2003 Percent of Region's 7.5 Million Internet Users by Country Millions Percent 20 50 40 15 30 10 20 5 10 0 0 1997 1998 1999 2000 2001 2002 2003 Brazil Sources: Business Week; International Data Corp. Sources: Business Week; International Data Corp. TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org Mexico Colombia Chile Argentina Venezuela II-16 Other Internet Demographics Percent of Population with Internet Access US - Percent of Population with Computers, Internet At Home or at Work, Selected Countries, 1998 Central City Households with Access By Race, 1998 Percent Percent 40 36 35 60 37 33 Households with Internet Access Households with Computers 50 31 30 40 25 30 20 15 15 10 10 20 10 8 10 5 France Japan U.K. Nordics U.S. Germany Australia Canada 0 Source: U.S. Department of Commerce Asian Caucasian Black Hispanic Source: Department of Commerce Age of Home Internet Users 1998 The Online Generation Number of Hours Kids Spend Online Per Week Number of Hours 8 50+ 14% 6 12-17 40% 18-34 17% 4 2 35-49 29% 0 2-5 Years Old 6-11 Years Old 15-17 Years Old 12-14 Years Old Source: Time Magazine Source: IDC Internet User Demographics United States, 1999 Internet Use Category, Percent E-Shoppers* Wired but Wary** Unwired*** Gender Men Women Age 18-34 35-49 50+ Household Income <$50,000 $50,000-$74,999 75,000+ 57 43 50 50 45 55 40 41 18 37 37 26 27 26 46 41 22 36 49 22 29 72 14 14 Notes:*"E-Shoppers" are classified as adults 18 and over who shop on the Internet. **"Wired but Wary" are Internet users who are not yet shopping online. ***"Unwired" are those who do not have Internet access. Source: Scarborough Research TECHNOLOGY IN THE ECONOMY II-17 March 8, 2000 www.milken-inst.org Internet Demographics Computer Ownership & Internet Use Older Americans, 50+ Years, 1995 and 1998 Profile of U.S. Internet User July, 1999 Percent 70 1995 1998 60 Number of Internet Sessions per Month Number of Unique Websites Visited Time Spent per Site Time Spent per Month Time Spent During Surfing Session Duration of a Page Viewed 50 40 30 20 17 12 39 Min. 7 Hrs. 39 Min. 27 Min. 1 Min. 17 Sec. Source: Neilsen-NetRatings Inc. 10 0 Computer Ownership Internet Access 10+ Hours Online/Week Sources: Charles Schwab & Co.; Headcount.com Online Spending 1998 Online Spending Prediction 2002 Women 33% Men 49% Women 51% Men 67% Source: Jupiter Communications Source: Jupiter Communications Top 10 Online Cities 1999 1 2 3 4 5 6 7 8 9 10 Austin Denver Washington DC - Baltimore Nashville San Francisco Seattle Salt Lake City Dallas Raleigh-Durham Norfolk Bottom 10 Online Cities 1999 Percent of Population Online 59 52 50 49 48 46 45 44 44 44 41 42 43 44 45 46 47 48 49 50 Source: Headcount.com Source: Headcount.com TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org Cleveland Pittsburgh Chicago San Antonio Las Vegas Charlotte West Palm Beach New Orleans Grand Rapids Louisville II-18 Percent of Population Online 0.27 0.27 0.27 0.25 0.25 0.25 0.24 0.23 0.21 0.21 Telecommunications Cellular Subscribers, 1998 As Percent of All Phone Subscribers Share of World Mobile Market By Region, 1990-98 Percent 100 Developing World 80 North America 60 40 Developed Asia-Pacific 20 Western Europe 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: International Telecommunication Union Mobile Cellular Access Percent of Population, Top Countries, 1998 Percent 60 56.9 55 50 47.5 47.4 45 46.4 41.8 40 37.5 36.4 35.5 35 30 Hong Kong Sweden Japan Italy Finland Norway Israel Denmark Source: International Telecommunication Union Mobile Cellular Networks Percent of Countries Percent 100 With Without 80 60 40 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: International Telecommunication Union Cambodia Finland Hong Kong Lebanon Italy Israel Portugal Japan Paraguay Venezuela Norway Korea Sweden Singapore Ireland Philippines Australia Denmark United Arab Emirates Austria Malaysia South Africa United Kingdom Spain New Zealand Taiwan Bolivia Brazil Thailand United States Argentina Greece The Netherlands Switzerland Belgium Mexico France Ecuador Chile Hungary Germany Colombia Canada China Guatemala Czech Republic Mauritius Uruguay Poland Turkey Indonesia Costa Rica Morocco Pakistan India Panama Russia Egypt 72.0 50.8 46.0 45.0 44.1 43.2 42.8 42.7 42.7 42.6 41.8 41.1 40.8 38.1 37.2 37.1 36.0 35.6 35.0 33.7 33.4 33.0 31.2 30.2 29.7 29.1 29.0 28.0 28.0 27.9 27.8 27.1 26.4 25.8 25.6 25.2 24.8 24.4 24.0 23.8 23.0 22.0 21.7 21.4 20.6 20.5 19.8 19.2 18.0 17.1 16.1 14.1 7.1 6.8 5.2 4.4 2.5 2.2 Source: International Telecommunication Union TECHNOLOGY IN THE ECONOMY II-19 March 8, 2000 www.milken-inst.org Telecommunications Main Telephone Lines Per 100 Inhabitants, 1998 Worldwide Mobile Handset Sales 163 Million Units Total, 1998 Alcatel 4% Panasonic 8% Others 30% Ericsson 15% Motorola 20% Switzerland Sweden United States Denmark Norway Canada The Netherlands France Germany Singapore Hong Kong United Kingdom Finland Taiwan Greece Japan Belgium New Zealand Israel Italy Ireland Korea Portugal Spain United Arab Emirates Czech Republic Hungary Turkey Uruguay Poland Mauritius Chile Malaysia Russia Colombia Costa Rica Panama Brazil Venezuela South Africa Mexico Thailand Ecuador China Bolivia Egypt Paraguay Morocco Guatemala Philippines Indonesia India Pakistan Australia Austria Argentina Nokia 23% Source: International Telecommunication Union Nokia, Ericsson and Motorola Share Prices Index February 1996=100 2500 Nokia Motorola Ericsson 2000 1500 1000 500 0 1996 1997 1998 1999 2000 Source: Bloomberg New Telephone Connections Worldwide New Mobile and Fixed Subscribers, 1990-98 Millions 100 Mobile Fixed 80 60 40 20 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: International Telecommunication Union 67.5 67.4 66.1 66.0 66.0 63.4 59.3 57.0 56.7 56.2 55.8 55.6 55.4 52.4 52.2 50.3 50.0 47.9 47.1 45.1 43.5 43.3 41.4 41.4 38.9 36.4 33.6 25.4 25.0 22.8 21.4 20.6 19.8 19.7 17.4 17.2 13.4 12.1 11.7 11.5 10.4 8.4 7.8 7.0 6.9 6.0 5.5 5.4 4.1 3.7 2.7 2.2 1.9 51.2 49.1 20.3 Source: International Telecommunication Union TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-20 Telecommunications Price of Monthly Cellular Subscription Average Monthly Local Cellular Bill Plus 100 Minutes of Calls, Selected Countries, 1999 United States US$ US$ 70 70 $62 $62 60 50 60 $56 $51 $48 $43 40 $41 $43 $35 30 $48 50 $39 40 $27 $25 30 $22 $17 20 20 $10 10 10 0 S. Africa U.K. Finland H.K. Indonesia Germany Italy Brazil U.S. Israel 0 Source: International Telecommunication Union Mobile Cellular Subscribers By Region, 1998 Developing 22% 1993 1994 1995 1996 1997 1998 Source: International Telecommunication Union Worldwide Wireless Infrastructure Net Sales, 1998 Nortel 10% Western Europe 30% Ericsson 30% Nokia 11% Lucent 12% Developed AsiaPacific 24% Motorola 16% North America 24% Source: International Telecommunication Union Other 21% Source: International Telecommunication Union Top 10 Mobile Equipment Manufacturers Worldwide Ranked by 1998 Estimated Mobile Equipment Sales 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Motorola (USA) Nokia (Finland) Ericsson (Sweden) Lucent (USA) Nortel (Canada) NEC (Japan) Qualcomm (USA) Matsushita (Japan) Siemens (Germany) Alcatel (France) Mobile Equipment Revenue (Percent of (US$ Billions) Total Sales)* 17.9 61 14.7 94 14.5 64 4.3 14 3.7 21 3.7 9 3.3 100 3.1 5 3.0 4 2.7 11 Foreign Sales** (Percent) 59 94 95 26 36 5 34 51 69 83 Notes: * Mobile equipment revenue as a percentage of companies total reported revenue. ** As a percent of total sales. Source: International Telecommunication Union TECHNOLOGY IN THE ECONOMY II-21 March 8, 2000 www.milken-inst.org Telecommunications Worldwide Telecom Equipment Sales US$ 191 Billion Total, 1998 Worldwide Cellular Subscribers by Technology 1998 Mobile 26% Digital 30% Analog 70% Fixed-Line and Other 74% Source: International Telecommunication Union Source: International Telecommunication Union Top 10 Mobile Cellular Operators Ranked by Equity-Based Global Subscribers, 1998 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Subscribers* (Thousands) 23,897 14,299 14,072 10,445 8,600 8,235 7,198 6,851 6,531 6,190 NTT DoCoMo (Japan) TIM (Italy) AirTouch (USA)** Vodafone (UK)** Bell Atlantic (USA) BellSouth (USA)*** AT&T (USA) SBC (USA) China Telecom (Hongkong SAR)**** Omnitel (Italy) Revenue (US$ Millions) 26,163 7,169 5,181 5,417 3,798 4,725 5,406 4,184 3,182 2,792 Notes: * Consolidated worldwide subscribers (equity-based). ** Vodafone and AirTouch merged in July 1999. *** Revenue refers to domestic wireless and international operations. **** Subsidiary of China Telecom and holding company for three operators on the mainland. Source: International Telecommunication Union On Telephones “That is an amazing invention, but who would ever want to use one of them?” President Rutherford B. Hayes 1876 TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-22 Technology - Education Students Per Instructional Computer* 1999 Students Per Internet-Connected Computer* 1999 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Wyoming Nebraska Kansas North/South Dakota Montana Alaska/Indiana Wisconsin Iowa/West Virginia Minnesota Florida/Washington 3.5 3.9 4.1 4.2 4.4 4.5 4.6 4.7 4.9 5.0 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Delaware Alaska Nebraska South Dakota North Dakota Missouri Iowa/Minnesota Utah/Wyoming Oregon Hawaii/Washington/West Virginia 5.8 6.0 7.2 7.3 9.1 9.3 9.6 10.0 10.1 10.5 46. 47. 48. 49. 50. Alabama/Mississippi Nevada Louisiana Rhode Island California 7.0 7.3 7.4 7.5 8.1 46. 47. 48. 49. 50. Mississippi North Carolina Louisiana Alabama District of Colombia 20.1 24.9 25.0 30.2 31.4 Note: * "Internet-connected computer" refers to any computer that can access the Internet, including noninstructional computers. Sources: Education Week Note: * "Instructional computer" refers to any computer used for student instruction. Sources: Education Week Student Access to Computers Student Computer Use for Schoolwork At Home and School, By Household Income Level, 1997 Percent of Students Who Use A Computer for Schoolwork Percent of Students Percent 100 60 80 Use Computers at Home Use Computers at School Use Computers at Home for Schoolwork 4th Grade 8th Grade 12th Grade 50 40 60 30 40 20 20 0 10 0 $10-20K $30-40K $50-75K < $10K $20-30K $40-50K $75K+ Once/Twice A Week Never/Hardly Ever Almost Every Day Once/Twice A Month Sources: U.S. Department of Commerce; Education Week Sources: U.S. Department of Commerce; Education Week Teacher Training in Technology Teacher Technology Use Hours of Training in Past Twelve Months Percent of Schools Where at Least 50 Percent of Teachers: Percent of Teachers Percent 40 70 Basic Technology Skills Training Curriculum-Intergration Training 60 30 1998 1999 50 40 20 30 20 10 10 0 0 None 1 to 5 6 to 10 Use Internet for Instruction Have School-Based E-Mail Use Computer Daily 11 to 20 More than 20 Sources: Education Week Sources: Market Data Retrieval; Education Week TECHNOLOGY IN THE ECONOMY II-23 March 8, 2000 www.milken-inst.org Technology – Education Access to the Internet in School Types of Computers Primary/Secondary Schools in the U.S., 1994-1998 Primary/Secondary Schools in the U.S., 1998-99 Percent Percent of Computers 100 35 Schools Classrooms Windows & Dos Macintosh & Apple 30 80 25 60 20 15 40 10 20 5 0 0 1994 1995 1996 1997 1998 Pentiums Sources: U.S. Department of Education; Education Week 486 Power Macs Apple II 386 or Earlier Earlier Macs Other Sources: Market Data Retrieval; Education Week Number of Students Per Instructional Computer Student Access to Computers Primary/Secondary Schools in the U.S., 1992-1999 By Percent Disadvantaged Students Per School, 1998 Students Per Computer Students Per Computer 25 20 20 All Instructional Computers Instructional Multimedia Computers Internet-Connected Computers Instructional Computers Instructional Computers with Internet Access 15 15 10 10 5 5 0 1992 1993 1994 1995 1996 1997 1998 0 1999 Sources: Market Data Retrieval; Education Week Fewer than 11 11 to 30 31 to 70 71 or More Sources: U.S. Department of Education; Education Week Children Online United States, 1996-2002 Total U.S. Children Age 2-12 (in millions) Total Children Online Access Only From Home Access Only From School Percent Online 1996 42.7 1.4 1.4 0.0 3 1997 43.1 2.7 2.6 0.1 6 Sources: The Industry Standard; Jupiter Communications TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-24 1998 43.3 5.1 4.6 0.5 12 1999 43.4 7.9 6.7 1.2 18 2000 43.6 11.5 9.0 2.5 26 2001 43.6 15.9 11.6 4.3 36 2002 44.3 20.9 14.9 6.0 47 India – Transformed by Technology India's Top 10 Software Exporters (1998-1999) Rank 1 2 3 4 5 6 7 8 9 10 Company Tata Consultancy Services Wipro Infotech Pentafour Software & Exports Infosys Technologies NIIT Satyam Computer Services Cognizant Tech. Solutions IBM Global Services India DSQ Software Tata Infotech Exports Growth (Rs M) (%) 15,185 60 6,325 63 5,118 88 5,002 102 3,949 53 3,766 111 2,900 n/a 2,276 n/a 2,233 91 2,208 28 Sources: Financial Times; Nasscom • India neglected primary education, has vast poverty, only 52% literacy, brownouts regular, PC penetration only 8%, phone penetration only 49% • But investment in first rate technology schools in 1950s, ’60s, paying off big. Large pool of technically skilled, English-speaking workers. • Software, IT services will add an extra 1% to GDP growth in this fiscal year. May push growth over 7%, the level estimated to reduce poverty. Export earnings from sector predicted to reach $3.9b in ’99. • Not just Bangalore, but also New Delhi, Gurgaon, Mumbai, Prune, etc. • Infosys first Indian company to trade on Nasdaq. Market cap now above $35 billion. Indian Software Export Destination 1998-99 Growth in The Indian Technology Sector, 1992-98 Compound Annual Growth Rate Australia & New Zealand West Asia South East Asia 2.0% 1.5% 4.0% Japan Percent 4.0% Rest of World 4.5% Europe 23.0% U.S. & Canada 61.0% Hardware Consumer Electronics Industrial Electronics Computer Hardware Communications & Broadcasting Equipment Electronic Components Total Hardware Software 20 14 10 3 16 17 53 Source: Indian Ministry of Information Technology Source: Indian Ministry of Information Technology India - Domestic IT Market Revenue India - Domestic Software Market In Billions of Rupees, 1993-2001 1995-2000 IR Billions US$ Billions 200 1.8 188.0 1.6 160.0 150 $1.7 135.7 1.4 $1.3 112.7 1.2 96.9 100 72.0 50 42.3 0.8 32.1 0.6 0 $0.9 1.0 1994-95 1996-97 1998-99 2000-01E 1993-94 1995-96 1997-98 1999-00E 0.4 Source: Indian Ministry of Information Technology $0.7 $0.5 1995-96 1996-97 1997-98 1998-99 1999-2000E Source: Indian Ministry of Information Technology TECHNOLOGY IN THE ECONOMY II-25 March 8, 2000 www.milken-inst.org India – Transformed by Technology Multinational Technology Companies in India Research, Software, and Manufacturing Acer Alcatel Apple Bull Compaq Cray Dell Digital Fujitsu Hewlett-Packard Hitachi IBM H1-B Workers in the U.S. Top 10 Countries of Origin, 1997 Thousands Microsoft Motorola NEC Novell Oracle Seimens SGS-Thompson Silicon Graphics Sun Texas Instruments Toshiba Unisys 50 40 30 20 10 Source: Indian Ministry of Information Technology 0 U.K. India Germany Mexico China/Taiwan Brazil Japan France Canada Venezuela Source: U.S. Immigration & Naturalization Service Electronics Production in India In Billions of Rupees, 1994-99 `94-`95 `95-`96 `96-`97 `97-`98 `98-`99 Hardware Consumer Electronics Industrial Electronics Computers Communication & Broadcasting Equipment Strategic Electronics Components Total Hardware Software Software for Export Domestic Software Total Software Total Electronics Production Percent Hardware Percent Software Source: Indian Ministry of Information Technology TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-26 46.7 21.1 24.5 32.5 6.0 31.5 162.3 58.0 29.0 22.3 26.0 10.8 35.0 181.1 65.0 31.0 27.4 30.0 13.0 37.0 203.4 76.0 31.5 28.0 32.5 9.0 44.0 221.0 92.0 28.5 23.0 36.5 13.0 50.0 243.0 15.4 10.7 26.1 188.4 86.2 13.8 25.5 16.9 42.4 223.5 81.0 19.0 37.0 26.0 63.0 266.4 76.4 23.6 65.0 34.7 99.7 320.7 68.9 31.1 110.0 58.0 168.0 411.0 59.1 40.9 Venture Capital United States - Private Equity Funds Raised, 1990 - 1998 US$ Billions • The money for new technologies... • Entrepreneurship, innovation key to promoting growth, increasing productivity, creating jobs. • 37% of all venture capital invested in 1999 was invested in Silicon Valley. • Compared to other areas of the world, the availability of private venture capital is substantial in the US. 71% of total is managed here. • Venture capitalists provide about $4 billion for US high-end start-ups; 37% of new investments each year. • Formal start-up funds are provided in the US at four times the rate per 1,000 citizens, as in Europe and 60 times the rate as in Asia. 100 80 60 40 20 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: Thompson Financial U.S. Leads in Private Equity Entrepreneurial Activities Funds Raised, 1998 Percent Engaged in Start-ups, Informal Investing US$ Billions Percent 100 10 80 8 60 6 4 40 2 20 0 0 Asia Latin America Europe U.S. Sources: Thompson Financial; Milken Institute Israel UK Denmark Japan US Canada Italy Germany France Finland Source: Global Entrepreneurship Monitor Venture Capital Investment 1999 Venture Capital Investment 1999 Others 25% Communications 25% Others 25% Silicon Valley 37% DC/Metroplex 5% Consumer 6% LA/Orange 7% Southeast New England 7% NY Metro 12% 7% DistributionRetailing Business 8% Services 14% Source: PriceWaterhouseCoopers Software & Information 22% Source: PriceWaterhouseCoopers TECHNOLOGY IN THE ECONOMY II-27 March 8, 2000 www.milken-inst.org Technology – The Basics Computers In Use Per 100 Inhabitants, 1998 United States Singapore Switzerland Australia Denmark Norway Sweden Finland Canada The Netherlands Germany Belgium New Zealand Ireland United Kingdom Hong Kong Japan Austria Israel France Italy Taiwan Korea Spain United Arab Emirates Czech Republic Uruguay Mauritius Portugal Hungary Malaysia Greece Chile Mexico South Africa Poland Venezuela Russia Argentina Brazil Colombia Turkey Thailand Philippines China Egypt Indonesia Pakistan India Morocco Paraguay Television Receivers Per 100 Inhabitants, 1998 45.9 45.8 42.2 41.2 37.4 37.3 36.1 34.9 33.0 31.8 30.5 28.6 28.2 27.2 26.3 25.4 23.7 23.3 21.7 20.8 17.3 15.9 15.7 14.5 10.6 9.7 9.1 8.7 8.1 5.9 5.9 5.2 4.8 4.7 4.7 4.4 4.3 4.1 3.9 3.0 2.8 2.3 2.2 1.5 0.9 0.9 0.8 0.4 0.3 0.3 0.1 United States Canada Japan United Kingdom Finland Australia France Denmark Germany Norway The Netherlands Portugal Switzerland Sweden Austria Belgium Spain New Zealand Italy Greece Ireland Czech Republic Hungary Hong Kong Russia Poland Costa Rica Singapore Korea Taiwan Israel Brazil United Arab Emirates Ecuador Argentina Turkey China Mexico Uruguay Thailand Chile Mauritius Colombia Panama Venezuela Malaysia Morocco Indonesia Egypt Guatemala South Africa Bolivia Philippines Paraguay Pakistan India Source: International Telecommunication Union Source: International Telecommunication Union TECHNOLOGY IN THE ECONOMY March 8, 2000 www.milken-inst.org II-28 84.7 71.5 70.7 64.5 64.0 63.9 60.1 58.5 58.0 57.9 54.3 54.2 53.5 53.1 51.6 51.0 50.6 50.1 48.6 46.6 45.6 44.7 43.7 43.1 42.0 41.3 38.7 34.8 34.6 34.2 31.8 31.6 29.4 29.3 28.9 28.6 27.2 26.1 24.2 23.6 23.2 22.8 21.7 18.7 18.5 16.6 16.0 13.6 12.7 12.6 12.5 11.5 10.8 10.1 8.8 6.9 Has Technology Brought You More Leisure? International Tourist Arrivals and Receipts Worldwide, 1989 - 1998 Millions “For the first time since his creation, man will be faced by his real, his permanent problem... how to use his freedom from passing economic cause, how to occupy the leisure, which science and compound interest have won for him.” US$, Billion 650 450 Arrivals (L) Receipts (R) 600 400 550 350 500 300 450 250 400 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 John Maynard Keynes 1930 200 Source: World Tourism Organization International Tourism By Region Annual Vacation Days 1998 Millions US$ Billion 400 Countries Italy France Germany Brazil U.K. Canada Korea Japan U.S. 400 Arrivals (L) Receipts (R) 300 300 200 200 100 100 0 Africa Americas Europe South Asia East Asia/Pacific Middle East Days 42 37 35 34 28 26 25 25 13 Source: World Tourism Organization 0 Source: World Tourism Organization Americans Travel Abroad In Millions Year 1992 1993 1994 1995 1996 1997 1998 Source: World Tourism Organization Number 43.9 44.4 46.5 50.8 52.3 52.7 54.4 US - Less Work, More Leisure Age starting work (avg) Life expectancy at age 20 Retirement age (avg.) Years on job Retirement years Annual hours worked Lifetime leisure hours 1870 13 62.5 death 49.5 0 3,069 299,315 1950 17.6 72 68.5 50.9 3.5 1,903 444,972 1990 19.1 76.5 63.6 44.5 12.9 1,584 519,736 1996 19.4 77.1 62.2 42.8 14.9 1,570 528,386 Source: The Myths of Rich & Poor, 1999 TECHNOLOGY IN THE ECONOMY II-29 March 8, 2000 www.milken-inst.org International Migration Immigration by Type Inflows of Foreign Population 1997 1997 Percent Thousands 100 800 80 600 60 400 40 20 High Skill Labor Accompanying Skilled Labor Family Reunification Refugees 0 U.K. Switzerland Canada Australia France 200 0 U.S. Sweden Source: OECD Germany Canada France Nether. Belgium Norway Luxemb. U.S. Japan U.K. Australia Switz. Sweden Hungary Finland Source: OECD Foreign or Foreign Born Population and Labor Force 1997 Stock of Foreign-Born Population 1996 Population (Thous.) (percent) 733 9.1 903 8.9 250 4.7 81 1.6 3,597 6.3 7,366 9.0 114 3.1 1,241 2.2 1,483 1.2 148 34.9 678 4.4 158 3.6 175 1.8 610 1.5 522 6.0 1,341 19.0 2,066 3.6 3,908 21.1 4,971 17.4 24,600 9.3 Percent of Total Population Canada Netherlands Sweden Australia Denmark Norway U.S. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Source: OECD Note: * 1996 25 20 15 10 5 0 Austria Belgium Denmark Finland France Germany Ireland Italy Japan Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland UK Australia* Canada* US* Labor Force (Thous.) (percent) 326 9.9 333 7.9 88 3.1 19 0.8 1,570 6.1 2,522 9.1 52 3.4 332 1.7 660 1.0 125 55.1 208 2.9 60 2.8 88 1.8 176 1.1 220 5.2 693 17.5 949 3.6 2,239 24.6 2,681 18.5 14,300 10.8 Source: OECD Naturalization Rate in the OECD United States - Immigration 10 Year Average 1988-1997 Region of Last Residence Per 100 Foreigners Millions 6 3.5 5 3.0 4 2.5 1951-60 1971-80 1991-97 2.0 3 1.5 2 1.0 1 0.5 0 Swed Fin UK Den US Spain Kor Italy Neth Nor Ger Belgi France Austr Switz Japan 0.0 Source: OECD Europe Asia North & South America Source: US Immigration and Naturalization Service GLOBAL DEMOGRAPHICS III-1 March 8, 2000 www.milken-inst.org Literacy Adult Literacy Rate Secondary and University Education Completed Country Over age 15 (%) Albania 100 Andorra 100 Austria 100 Belgium 100 Czech Republic 100 Denmark 100 Finland 100 Germany 100 Japan 100 Netherlands 100 New Zealand 100 Norway 100 Sweden 100 Switzerland 100 United Kingdom 100 Percentage of Population Aged 25-34 Percent 100 Secondary University 67 33 0 Italy Canada France Hungary 98.9 France 98.8 Poland 98.8 Russia 98.2 Italy 97.1 South Korea 96.3 Canada 95.7 United States 95.5 Argentina 95.3 Uruguay 95.0 Israel 94.9 Spain 94.8 Chile 93.4 Greece 93.4 Taiwan 93.1 Costa Rica 92.9 Venezuela 92.3 Singapore 90.7 Paraguay 90.1 Peru 89.3 Thailand 88.9 Philippines 88.7 Ecuador 88.4 Panama 88.2 Mexico 87.3 Percent Portugal 86.8 100 Colombia 86.7 Brazil 81.7 Turkey 79.2 Malaysia 78.5 Indonesia 77.8 Bolivia 77.7 China 77.5 South Africa 76.5 Guatemala 60.7 Egypt 48.4 India 47.8 Source: US Germany Japan Regional Illiteracy Rates Population Aged 15 Years and Older Percent 100 Americas Asia Africa Europe 80 60 40 20 0 1970 1980 1990 1995 2000 Source: UNESCO Developing World Illiteracy Rates Population Aged 15 Years and Older Sub-Saharan Africa Arab States South Asia East Asia Latin America 80 60 40 20 0 UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997. 1970 Source: UNESCO GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org UK Source: National Center for Education Statistics III-2 1980 1990 1995 2000 Education Educational Expenditures as Percentage of GNP Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 12 13 14 18 19 33 38 42 46 51 52 53 56 57 58 59 60 61 65 66 69 70 73 78 80 81 92 93 96 100 101 110 111 115 120 122 124 128 130 134 136 137 139 145 149 152 153 160 Source: Distribution of Direct Expenditures on Education Country Moldova Libya Sweden Norway Mongolia Seychelles Suriname Puerto Rico Russia Barbados Government Expenditures % Percent 100 26.4 9.6 8.8 8.7 8.5 8.5 8.3 8.2 8.2 7.9 Canada Denmark Finland Hungary New Zealand Netherlands Austria Israel France Poland Australia Malaysia Italy United States Belgium Switzerland United Kingdom Venezuela Czech Republic Egypt Brazil Portugal Japan Spain Costa Rica Mexico South Korea Nicaragua Germany Turkey India Taiwan Thailand Singapore Argentina Colombia Greece Chile Philippines Uruguay Bolivia Ecuador Pakistan Indonesia Paraguay China El Salvador Peru 80 60 40 Pre-school through Secondary Post-Secondary Unallocated 20 7.4 7.4 7.4 7.2 7.2 6.2 5.8 5.8 5.7 5.6 5.5 5.5 5.4 5.3 5.2 5.2 5.2 5.2 5.0 5.0 4.8 4.8 4.7 4.6 4.5 4.5 4.1 4.1 4.0 3.9 3.9 3.6 3.6 3.4 3.1 3.1 3.1 2.9 2.9 2.8 2.7 2.7 2.7 2.2 1.9 1.7 1.7 1.4 0 US Japan Italy Mexico Spain Germany Korea Netherlands Switzerland Source: OECD Education at a Glance 1999 Foreign Student Destinations Percent Studying by Destination, 1996 Percent 35 30 25 20 15 10 5 0 US France UK Germany Australia Other Japan Canada Source: UNESCO The US as an Academic Destination Percent of Foreign Students Choosing the US Percent 100 80 60 40 20 UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997. 0 Brazil Mexico HK Indonesia Korea Philippines Argentina Chile China India Japan Malaysia Source: UNESCO GLOBAL DEMOGRAPHICS III-3 March 8, 2000 www.milken-inst.org Education Academic Attainment % of Population Age 25 & Over w/ Third Level Education Distribution of Entrants into University Education Percent Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 12 13 14 15 16 18 19 20 23 28 32 34 35 36 37 38 39 40 41 46 47 48 53 54 57 58 61 66 67 76 77 80 82 83 88 90 100 101 114 Country Percent 100 Canada United States Japan Israel Ukraine Germany Andorra Ireland Australia Norway 44.4 39.8 31.7 31.2 29.9 26.5 24.9 24.4 21.5 18.5 Sweden Philippines Uruguay Costa Rica South Korea Panama Ecuador Finland United Kingdom Mexico Greece Czech Republic Chile Hungary Spain Venezuela Argentina New Zealand Colombia Poland Austria Taiwan Brazil Peru Egypt Italy Turkey Paraguay Singapore Guatemala Thailand India El Salvador South Africa Malaysia Pakistan Indonesia China Portugal 15.4 15.2 14.8 14.2 14.2 13.2 12.7 11.2 11.0 8.3 7.4 7.2 7.1 7.0 7.0 7.0 6.9 6.9 6.8 6.5 6.1 6.0 5.0 4.8 4.1 4.1 3.9 3.4 3.4 3.0 2.9 2.5 2.3 2.3 1.9 1.9 1.2 1.1 0.4 80 60 15-19 20-24 25-29 30-34 35-39 40 plus 40 20 0 Denmark US UK Switzerland Germany Netherlands Source: OECD Education at a Glance 1999 School Year Length Rank Country Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 12 14 15 16 17 18 Days China Japan Korea Israel Russia Germany Switzerland Netherlands Scotland Thailand 251 243 220 215 210 210 207 200 200 200 Hungary Finland New Zealand Ontario, Canada Sweden United States 192 190 190 186 180 180 Source: Hornbeck, Mark. “Ringing School Bell Longer.” Detroit News, 5 December 1993, p.1C. Primary source: Education Commission of the States. The Illustrated Book of World Rankings, Kurian, 1997. University Teachers Percent 100 Female Male 80 Source: UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997. 60 40 20 0 US Canada France Italy Korea Denmark Germany Japan UK Source: OECD Education at a Glance GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-4 Education U.S. - Education Over the 20th Century U.S. - Weekly Earnings by Education US$ Percent of Population with Education Level 1000 Percent 100 Less than 5 years Elementary High School College 80 800 600 60 400 40 200 20 0 Less than HS High School Some College or Associates College 1910 30 50 60 70 80 90 92 94 96 0 98 Source: US Census Bureau 1979 U.S. - Enrollment in High School U.S. - Bachelor's Degrees As Percent of 14-17 Year-Olds Percent of High School Graduates Percent Percent 100 50 80 40 60 30 40 20 20 10 0 1998 Source: Bureau of Labor Statistics 0 1900 10 20 30 40 50 60 70 80 90 92 94 96 Source: US Census Bureau 1905 15 25 35 45 55 65 75 85 90 95 98 Source: US Census Bureau OECD - Educational Attainment For 25-29, and 55-65 Year Olds 25-29 Year Olds Unknown Primary Junior High High School JC/Trade School University U.S. 0.0 10.5 12.0 51.8 5.4 20.2 Canada Denmark 0.0 2.8 23.7 0.0 20.1 48.3 21.8 34.5 23.3 3.7 11.2 10.6 France 0.0 46.3 15.4 28.7 4.1 5.5 Germany 6.8 2.3 24.6 50.0 8.1 8.3 Italy 0.0 64.1 19.1 12.2 0.0 4.6 Korea Netherlands 0.0 0.0 60.3 23.4 15.1 29.1 17.7 31.9 0.0 0.0 6.9 15.6 Spain 0.0 82.2 6.7 4.0 1.6 5.5 Sweden 0.7 39.2 7.6 34.1 8.3 10.1 Switzerland 0.0 0.0 29.0 54.1 10.6 6.2 U.K. 0.0 0.0 39.6 43.9 8.8 7.8 U.S. 0.0 3.6 9.2 51.9 8.3 27.1 Canada Denmark 0.0 6.6 2.6 0.0 11.1 23.3 30.9 51.1 33.6 5.2 21.8 13.9 France 0.0 2.5 20.8 47.8 15.2 13.7 Germany 4.0 2.1 11.0 66.8 6.2 9.9 Italy 0.0 5.9 40.0 47.0 0.0 7.1 Korea Netherlands 0.0 0.0 1.2 7.5 6.1 18.9 62.0 48.1 0.0 0.0 30.8 25.6 Spain 0.0 13.5 32.1 22.1 10.7 21.7 Sweden 0.5 0.9 10.3 60.6 17.8 9.9 Switzerland 0.0 0.0 12.0 69.1 9.4 9.5 U.K. 0.0 0.0 12.8 63.7 8.2 15.3 55-65 Year Olds Unknown Primary Junior High High School JC/Trade School University Source: OECD Education at a Glance GLOBAL DEMOGRAPHICS III-5 March 8, 2000 www.milken-inst.org Education Primary School Enrollment Ratio Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 11 14 16 24 27 28 30 32 34 35 36 37 40 41 42 45 47 49 50 53 54 59 62 63 66 67 68 70 75 84 92 Source: Country Secondary School Enrollment Ratio Primary Level Bahamas Canada France Jamaica Japan South Korea Mexico New Zealand Portugal Singapore 100 100 100 100 100 100 100 100 100 100 Spain Sweden Turkey Australia Paraguay United States Indonesia United Kingdom China Philippines Poland Switzerland Denmark Netherlands Peru Greece Panama Austria Costa Rica Uruguay Venezuela Germany Brazil Hungary Pakistan Chile Colombia Bolivia Nicaragua El Salvador Guatemala 100 100 100 98 98 98 97 97 96 96 96 96 95 95 95 93 92 91 91 91 91 89 86 86 85 83 83 81 80 70 58 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 11 12 13 15 16 18 21 22 23 24 25 26 33 39 41 43 45 48 50 51 52 53 54 59 60 61 65 70 73 76 Source: UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997. Primary School Teachers Secondary Level Japan Canada Finland Austria Cyprus Spain Sweden Norway South Korea Bahamas 97 93 93 90 90 90 90 89 88 87 Belgium France Greece Germany New Zealand Netherlands Switzerland United Kingdom United States Australia Poland Hungary Denmark Philippines Chile Panama Mexico Taiwan Turkey Peru Costa Rica Colombia Indonesia Paraguay Bolivia Nicaragua Venezuela Brazil El Salvador Guatemala 87 87 87 85 85 81 80 80 80 79 78 77 66 58 53 50 46 44 44 42 39 38 38 28 27 25 19 16 15 15 UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997. Secondary School Teachers Percent Percent 100 100 80 80 60 60 40 40 20 20 Female Male 0 Country Female Male 0 Canada France Italy Korea US Denmark Germany Japan UK US Source: OECD Education at a Glance GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org Canada France Italy Korea Denmark Germany Japan UK Source: OECD Education at a Glance III-6 Labor Force Labor Force Structure Employment by Industry Total Labor Force Country Argentina Australia Austria Belgium Bolivia Brazil Canada Chile China Colombia Costa Rica Czech Republic Denmark Ecuador Egypt El Salvador Finland France Germany Greece Guatemala Hong Kong Hungary India Indonesia Israel Italy Japan Korea Malaysia Mexico Netherlands New Zealand Nicaragua Norway Pakistan Panama Paraguay Peru Philippines Poland Portugal Russia Singapore South Africa Spain Sweden Switzerland Thailand Turkey United Kingdom United States Uruguay Venezuela 1980 mil 11 7 3 4 2 48 12 4 539 9 1 5 3 3 14 14 2 24 37 4 2 2 5 300 59 1 23 57 16 5 22 6 1 1 2 29 1 1 5 19 19 5 76 1 10 14 4 3 24 19 27 110 1 5 1996 2010 mil mil 14 18 9 10 4 4 4 4 3 4 72 87 16 17 6 7 718 804 16 22 1 2 6 5 3 3 4 6 22 32 22 32 3 2 26 27 41 40 4 5 4 6 3 4 5 4 408 519 91 124 2 3 25 24 66 66 22 26 8 12 37 52 7 7 2 2 2 3 2 2 48 76 1 1 2 3 9 13 30 42 19 20 5 5 78 78 1 2 15 19 17 17 5 5 4 4 35 39 29 38 29 29 134 150 1 2 9 13 1998 Average Annual Growth 1980-96 1996-10 Percent Percent 1.5 1.9 1.8 0.7 0.5 -0.1 0.3 -0.2 2.4 2.4 2.4 1.2 1.5 0.5 2.3 1.9 1.7 0.7 3.2 2.0 3.1 1.9 0.3 -0.3 0.4 -0.3 3.2 2.5 2.4 2.5 2.3 2.9 0.4 -0.3 0.5 0.3 0.5 0 1.0 0.3 2.9 3.1 1.6 0.7 -0.4 -0.4 1.8 1.6 2.6 2 2.8 2.5 0.6 -0.2 0.9 0 2.1 1.2 2.6 2.4 3 2.3 1.4 0 1.7 0.9 3.1 3.4 0.8 0.3 2.9 3.1 2.7 1.9 2.7 2.7 2.9 2.4 2.7 2.3 0.3 0.3 0.4 0 0.1 0 2 0.8 2.2 1.6 1.1 0.2 0.6 -0.2 1.2 0.2 2.1 0.8 2.5 1.8 0.5 0.1 1.2 0.7 1.3 0.9 3.2 2.4 Percent 100 Agriculture Industry Service 80 60 40 20 0 Canada US Italy France Sweden Japan Source: US Bureau of Labor Statistics Change in Manufacturing Employment Average Annual Percent Change Percent 2 0 -2 -4 1979-85 1985-90 1990-97 -6 Canada US France Japan Italy Germany UK Source: US Bureau of Labor Statistics Change in Manufacturing Output Per Hour Average Annual Percent Change Percent 5 1979-85 1985-90 1990-97 4 3 2 1 0 Canada US France Japan Italy Germany UK Source: US Bureau of Labor Statistics Source: World Bank (1998) GLOBAL DEMOGRAPHICS III-7 March 8, 2000 www.milken-inst.org Employment Did you know... Ethnic Distribution of the US Labor Force • In 1998, 60% of American women were in the workforce, compared to 28% in 1940. • The high school graduation rate for AfricanAmericans almost equaled the rate for whites for the first time in 1997. • Baby boomers make up almost half (47%) of today’s workforce. • Young women are enrolling in college at a higher rate (70%) than young men (64%). • From 1987 to 1999, the number of women-owned firms in the US more than doubled. • Between 1979 and 1998, women’s earnings have risen 63% compared to 76% by men. • 20 to 25% of employed mothers would work longer hours if they didn’t have childcare constraints. • Percent 100 80 60 40 20 0 1988 1998 2008 Source: US Bureau of Labor Statistics Long-Term Unemployment in the OECD 1998 th More than 20% of adults read at or below the 5 grade level. Percent of Total Unemployment 100 • The top 10% of full-time workers average $1200 per week while the bottom 10% average $275. • In 1996, almost 20% of American households provided informal healthcare to a relative or friend 50 years or older. • White Asian African-American Hispanic 6 Months + 12 Months + 80 Dollars spent on benefits grew more rapidly than those spent on wages and salaries during most of the 1980s and the first half of the 1990s. 60 40 20 0 France Italy Korea UK Canada Germany Japan Netherlands US Source: OECD Part-Time Employment Part-Time Employment By Gender As Proportion of Total Employment, 1998 As Proportion of Total Employment, 1998 Percent Percent 30 60 50 25 Men Women 40 20 30 15 20 10 5 10 France Italy Korea UK Canada Germany Japan Netherlands 0 US Source: OECD Employment Outlook June 1999 Source: OECD Employment Outlook June 1999 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org France Italy Korea UK Canada Germany Japan Netherlands III-8 US United States Demographics United States - Real Median Family Income United States - High Income Households 1997 Prices Percent of Households with Incomes of $100,000 or More US$ Thousands Percent 45 10 40 8 35 30 6 25 4 20 15 50 60 70 80 90 91 92 93 94 95 96 2 97 Source: Census Bureau 70 75 80 85 90 95 Source: Census Bureau United States - Growing Older Decline of the American Male Life Expectancy Shares of Population by Age Years Percent 80 100 75 80 70 60 65 60 40 Male Female 55 20 50 45 0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 1999 Sources: US National Center For Health Statistics; Census Bureau 30-34 40-44 United States - National Health Care Expediture Health Expediture as % of GDP - R Total Health Expenditure - L 80-84 90-94 Millions 16 65 14 60 55 12 800 50 10 600 45 8 400 40 6 200 0 70-74 Total Circulation Percent 1200 1000 60-64 United States - Daily Newspapers Total Expediture and as Percent of GDP US$ Billions 50-54 Source: Census Bureau 30 40 50 60 70 80 90 91 92 93 94 95 96 97 35 4 30 2 25 Sources: US National Center For Health Statistics; Census Bureau 20 30 40 50 60 70 80 90 98 Source: Editor & Publisher International Yearbook GLOBAL DEMOGRAPHICS III-9 March 8, 2000 www.milken-inst.org Labor Force US - The Aging Workforce US - The Aging Workforce Median Age of Workers Labor Force Growth 1996-2006 By Age Group Years Old Percent Change 45 5 4 40 3 35 2 1 30 0 25 1976 1986 1996 -1 2006 20-24 Source: Howard N. Fullerton, Monthly Labor Review, 11/97 25-34 35-44 US - Labor Force Participation Rate of Women 55-64 65-74 75+ Labor Force Participation Rate of US Mothers With Children Under The Age of 6 By Age of Children Percent Percent 100 100 1975 1996 80 80 60 60 40 40 20 20 0 1975 1980 1985 1990 0 1995 Source: Bureau of Labor Statistics Under 18 6 to 17 3 to 5 Under 3 Source: Bureau of Labor Statistics U.S. - Dual Working Couples Female Labor Force Participation Rates Percent of Married Couples Working 40+ Hours/Week 1997 Percent 12 45-54 Source: Bureau of Labor Statistics Percent 75 All With Children Under 6 70 10 65 8 60 6 55 4 50 2 45 40 0 1969 1979 1989 1998 Source: BLS, Current Population Survey Source: OECD, Labor Force Statistics GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org France Italy Korea Sweden Canada Germany Japan Mexico UK III-10 US Female Employment Women in the Labor Force Female Share of Earned Income (Female Economic Participation as Percentage of Male) Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 11 15 22 24 26 27 41 42 46 50 52 54 55 66 71 77 84 86 87 88 89 90 94 97 101 105 106 108 109 110 117 118 119 120 121 122 126 127 130 134 135 136 140 144 146 148 150 153 159 162 Source: Country % Armenia Bulgaria Benin Mozambique Tanzania Czech Rep. Mongolia Niger Rwanda Burundi 88 88 85 85 85 84 83 83 83 82 Finland China Denmark Poland Sweden Thailand Hungary Russia Norway United States France Japan Canada Austria United Kingdom Singapore Malaysia South Africa Turkey New Zealand Switzerland Korea Portugal Israel Belgium Indonesia Italy Philippines Uruguay Netherlands Chile Venezuela Argentina Brazil Mexico Nicaragua El Salvador Greece India Peru Bolivia Spain Costa Rica Colombia Honduras Paraguay Ecuador Guatemala Pakistan Egypt 82 81 77 77 77 77 70 70 68 65 64 64 63 60 60 58 55 54 54 53 53 52 51 49 47 44 44 44 44 42 39 39 38 38 37 37 35 35 34 32 31 31 29 28 27 26 24 21 16 12 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 15 16 20 23 26 27 30 31 33 34 47 49 50 51 53 55 56 58 64 66 69 72 74 76 80 83 85 86 88 89 90 91 94 95 96 97 99 100 101 102 110 113 115 116 121 123 Source: Country Percentage Tanzania Vietnam Sweden Finland Czech Republic Burundi Benin Mozambique Latvia Denmark 45.0 44.9 41.6 40.6 40.5 40.2 40.0 40.0 39.9 39.8 Poland Hungary Russia Norway Australia France Thailand United States Austria Japan China New Zealand United Kingdom Turkey Portugal Canada Malaysia Singapore Italy Belgium Switzerland Uruguay Indonesia Netherlands Nicaragua Brazil Panama Venezuela Mexico El Salvador Greece Korea, South Philippines Argentina Colombia Chile Peru India Costa Rica Spain Honduras Paraguay Guatemala Ecuador Pakistan Egypt 39.3 39.1 38.4 37.8 36.0 35.7 34.6 34.6 33.6 33.5 31.2 30.9 30.8 30.2 29.9 29.3 29.2 28.9 27.6 27.3 27.1 26.2 25.3 25.2 24.2 22.9 22.8 22.8 22.3 22.2 22.2 22.0 21.1 20.9 20.1 19.8 19.4 19.2 19.0 18.6 16.7 16.1 13.8 13.3 10.1 8.2 Compendium of Statistics and Indicators on the Situtation of Women,The Illustrated Book of World Rankings, Kurian, 1997. Yearbook of Labour Statistics, The Illustrated Book of World Rankings, Kurian, 1997. GLOBAL DEMOGRAPHICS III-11 March 8, 2000 www.milken-inst.org Demographics Birth Rate Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 43 58 59 61 67 71 72 74 83 84 89 91 95 97 98 99 100 105 106 113 117 118 121 124 125 132 136 142 144 146 147 151 152 153 158 159 161 162 165 169 170 171 172 174 176 179 180 183 184 186 187 188 Source: Country Death Rate Per 1000 Niger Mali Malawi Yemen Rwanda Uganda Burkina Zaire Benin Mauritania 57.35 51.73 51.10 51.00 49.92 49.86 48.80 48.43 48.09 47.97 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Pakistan Guatemala Honduras Nicaragua South Africa El Salvador Egypt Bolivia India Malaysia Philippines Mexico Turkey Ecuador Venezuela Peru Costa Rica Panama Indonesia Colombia Brazil Chile Israel Thailand Argentina China Singapore New Zealand Taiwan Korea United States Canada Australia Ireland Sweden Norway Poland United Kingdom France Netherlands Russia Finland Denmark Switzerland Belgium Portugal Austria Germany Spain Italy Greece Japan 42.59 36.19 35.82 35.61 33.77 33.12 33.00 32.83 29.11 28.93 27.90 27.67 26.62 26.54 26.37 26.19 26.07 25.08 24.84 23.40 21.77 20.90 20.72 19.97 19.75 18.29 17.12 15.93 15.88 15.72 15.48 14.48 14.43 14.39 13.78 13.75 13.59 13.58 13.24 12.81 12.73 12.61 12.50 12.37 11.94 11.59 11.54 11.00 10.88 10.65 10.42 10.31 Other: 38 41 54 55 58 61 62 64 67 68 69 71 74 75 76 78 80 85 86 87 90 91 92 93 95 98 100 101 111 116 117 119 121 123 125 138 141 142 148 151 155 159 160 162 163 168 174 175 176 178 182 Source: Demographic Yearbook. The Illustrated Book of World Rankings , Kurian, 1997. GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-12 Country Per 1000 Djibouti Somalia Uganda Malawi Niger Burundi Chad Rwanda Mali Central African Republic 76.06 28.41 22.98 22.87 22.44 21.25 20.93 20.87 20.81 20.49 Hungary Pakistan Czech Republic Denmark Russia Germany Sweden United Kingdom Norway India Austria Belgium Finland Portugal Italy Poland Uruguay Greece France Switzerland Egypt Spain Indonesia Ireland Argentina Netherlands Brazil New Zealand South Africa Australia China Japan Peru Philippines Nicaragua El Salvador Israel Honduras Thailand Korea Turkey Ecuador Malaysia Chile Taiwan Singapore Panama Colombia Mexico Venezuela Costa Rica 13.02 12.60 11.44 11.42 11.32 11.00 10.96 10.87 10.54 10.52 10.42 10.32 9.91 9.77 9.66 9.59 9.52 9.36 9.30 9.24 9.00 8.76 8.73 8.71 8.64 8.53 8.30 8.11 7.65 7.38 7.34 7.17 7.15 7.03 6.94 6.53 6.45 6.44 6.33 6.16 5.97 5.80 5.77 5.55 5.54 5.25 4.94 4.82 4.82 4.69 3.57 Demographic Yearbook. The Illustrated Book of World Rankings , Kurian, 1997. Demographics Population Density Average Household Size Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 17 32 37 47 55 56 64 65 73 74 76 94 99 103 104 108 112 113 116 117 118 126 130 131 132 133 137 142 147 150 151 152 163 166 168 169 171 172 173 175 176 178 179 180 181 182 183 185 186 187 Source: Country Family Size Iraq Senegal Gambia Nauru Western Samoa Kuwait Maldives Algeria Nicaragua United Arab Emirates 8.9 8.8 8.3 8.0 7.8 7.4 7.1 6.9 6.9 6.8 Pakistan Philippines India Colombia Thailand Venezuela Mexico Peru Egypt El Salvador Malaysia Paraguay South Africa Indonesia Turkey Panama Brazil Costa Rica Chile China Ecuador Singapore Bolivia Korea, South Portugal Taiwan Israel Poland Spain Greece Uruguay Argentina Japan Hungary New Zealand Italy Belgium Canada Czech Republic United Kingdom Austria France United States Netherlands Finland Germany Denmark Norway Sweden Switzerland 6.3 5.7 5.6 5.4 5.3 5.3 5.1 5.1 4.9 4.9 4.9 4.7 4.6 4.5 4.5 4.4 4.2 4.2 4.1 4.1 4.1 3.9 3.8 3.8 3.8 3.8 3.7 3.6 3.5 3.3 3.2 3.2 3.0 2.9 2.9 2.8 2.7 2.7 2.7 2.7 2.6 2.6 2.6 2.4 2.3 2.3 2.2 2.2 2.2 2.2 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 12 13 19 21 22 25 27 28 34 35 37 40 41 52 53 54 58 59 62 64 66 74 85 86 88 92 97 99 109 122 126 127 128 129 133 140 142 146 147 150 152 154 156 157 158 166 172 184 Source: UN Population Division.The Illustrated Book of World Rankings, Kurian, 1997. Country Monaco Singapore Bermuda Malta Bahrain Bangladesh Maldives Taiwan Mauritius Barbados Korea, South Netherlands Belgium Japan India El Salvador Israel United Kingdom Haiti Philippines Italy Switzerland Pakistan Poland China Denmark Thailand Portugal Hungary Indonesia France Guatemala Greece Turkey Spain Costa Rica Egypt Malaysia Mexico Ecuador South Africa Panama Colombia Nicaragua United States Venezuela Sweden Brazil Chile Uruguay Finland Norway Paraguay Argentina New Zealand Russia Bolivia Australia Per Square Mile 40,155 11,731 3,208 2,935 2,379 2,365 2,099 1,693 1,550 1,538 1,177 1,166 860 818 787 705 627 621 600 595 511 455 416 328 327 316 297 296 290 280 273 250 207 205 203 167 151 149 122 98 91 88 87 86 73 59 55 48 48 47 47 36 33 32 32 23 18 6 Demographic Yearbook. The Illustrated Book of World Rankings, Kurian, 1997. GLOBAL DEMOGRAPHICS III-13 March 8, 2000 www.milken-inst.org Population Dependency Dependents - Developed World Young and Old Dependents as Percent of Working Age Population Percent 80 0-14 years old 65 years and older 60 40 20 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Dependents - Developing World Young and Old Dependents as Percent of Working Age Population Percent 80 0-14 years old 65 years and older 60 40 20 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-14 Population Dependency Japan - Young and Old Dependents Italy - Young and Old Dependents Young and Elderly as Percent of Total Population Young and Elderly as Percent of Total Population Percent Percent 60 60 0 - 19 Years Old 60 Years and Older 50 50 40 40 30 30 20 20 10 10 0 1950 1960 1970 1980 1990 2000 2010 0 2020 Source: United Nations 1960 1970 1980 1990 2000 2010 2020 United States - Young and Old Dependents China - Young and Old Dependents Young and Elderly as Percent of Total Population Young and Elderly as Percent of Total Population Percent 60 60 0 - 19 Years Old 60 Years and Older 50 50 40 40 30 30 20 20 10 10 1950 1960 1970 1980 1990 2000 2010 0 2020 Source: United Nations 0 - 19 Years Old 60 Years and Older 1950 1960 1970 1980 1990 2000 2010 2020 Source: United Nations Mexico - Young and Old Dependents Malaysia - Young and Old Dependents Young and Elderly as Percent of Total Population Young and Elderly as Percent of Total Population Percent Percent 60 60 0 - 19 Years Old 60 Years and Older 50 50 40 40 30 30 20 20 10 10 0 1950 Source: United Nations Percent 0 0 - 19 Years Old 60 Years and Older 1950 1960 1970 1980 1990 2000 2010 0 2020 Source: United Nations 0 - 19 Years Old 60 Years and Older 1950 1960 1970 1980 1990 2000 2010 2020 Source: United Nations GLOBAL DEMOGRAPHICS III-15 March 8, 2000 www.milken-inst.org Population Demographics Estimated Population in 2000 Rank Top 10: Country 1 2 3 4 5 6 7 8 9 10 China India United States Indonesia Brazil Pakistan Russian Bangladesh Japan Nigeria Annual Population Growth Projection (000) Rank Top 10: 1,277,558 1,013,662 278,357 212,107 170,115 156,483 146,934 129,155 126,714 111,506 1 2 3 4 5 6 7 8 9 10 Mexico Germany Philippines Egypt Turkey Thailand France United Kingdom Italy Korea Colombia South Africa Spain Poland Argentina Canada Morocco Venezuela Malaysia Australia Netherlands Chile Ecuador Guatemala Greece Czech Republic Belgium Hungary Portugal Sweden Bolivia Austria Switzerland Hong Kong El Salvador Israel Paraguay Denmark Finland Norway Costa Rica New Zealand Ireland Singapore Uruguay Panama United Arab Emirates Mauritius 26 36 39 49 62 72 75 76 80 82 83 85 86 91 92 100 107 111 112 123 113 126 127 132 135 137 145 147 148 149 150 152 157 158 160 163 165 166 169 170 175 177 178 181 182 183 184 185 187 189 192 193 194 197 200 201 208 98,881 82,220 75,967 68,470 66,591 61,399 59,080 58,830 57,298 46,844 42,321 40,377 39,630 38,765 37,032 31,147 28,351 24,170 22,244 18,886 15,786 15,211 12,646 11,385 10,645 10,244 10,161 10,036 9,875 8,910 8,329 8,211 7,386 6,927 6,276 6,217 5,496 5,293 5,176 4,465 4,023 3,862 3,730 3,567 3,337 2,856 2,441 1,158 Source: United Nations Liberia Rwanda Gaza Strip Somalia Eritrea Yemen Western Sahara Saudi Arabia Oman Gambia 8.2 7.7 4.3 4.2 3.8 3.7 3.4 3.4 3.3 3.2 Pakistan Guatemala Paraguay Costa Rica Bolivia Israel Hong Kong Philippines El Salvador Venezuela Malaysia United Arab Emirates Ecuador Egypt Colombia Morocco Turkey India Panama South Africa Mexico Indonesia Singapore Chile Brazil Argentina Australia New Zealand Canada Taiwan Thailand China United States Korea Mauritius Uruguay Switzerland Ireland Norway Austria Netherlands France Greece Finland Denmark Sweden Japan United Kingdom Belgium Germany Poland Portugal Spain Italy Czech Republic Russia Hungary 2.8 2.6 2.6 2.5 2.3 2.2 2.1 2.1 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.8 1.7 1.6 1.6 1.5 1.6 1.4 1.4 1.4 1.3 1.3 1.0 1.0 1.0 1.0 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.0 0.0 -0.2 -0.2 -0.4 Source: United Nations GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org 1995-2000(%) Other: Other: 11 12 14 15 17 19 20 21 22 25 27 28 29 30 32 35 39 42 49 54 60 61 65 68 74 76 78 80 81 85 87 90 95 96 101 102 106 109 110 118 121 124 126 129 131 136 141 155 Country III-16 Population Demographics Argentina: Demographics Australia: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 17.2 Growth Rate (%) 1.8 Year 1950 Population (mil) 8.3 Growth Rate (%) 2.3 1960 1970 20.6 24 1.5 1.6 1960 1970 10.4 12.7 2 1.4 1980 1990 28.2 32.6 1.4 1.3 1980 1990 14.6 17 1.5 1.1 2000 2010 37.2 42 1.2 1 2000 2010 19 20.4 0.8 0.6 46.4 0.8 21.7 0.4 Population (mil) 9.9 3.6 % of Population 27.5 10.2 Population (mil) 4 2.3 % of Population 21.2 12.4 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Austria: Demographics Belgium: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 6.9 Growth Rate (%) 0.2 Year 1950 Population (mil) 8.6 Growth Rate (%) 0.5 1960 1970 7.1 7.5 0.6 0.1 1960 1970 9.1 9.6 0.6 0.2 1980 1990 7.6 7.7 0.2 0.5 1980 1990 9.9 10 0.1 0.2 2000 2010 8.2 8.2 0 -0.2 2000 2010 10.2 10.1 -0.1 -0.3 8 -0.6 9.8 -0.5 Population (mil) 1.4 1.3 % of Population 17 15.5 Population (mil) 1.8 1.7 % of Population 17.4 16.8 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Bolivia: Demographics Brazil: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 2.8 Growth Rate (%) 2.2 Year 1950 Population (mil) 53.4 Growth Rate (%) 2.9 1960 1970 3.4 4.4 2.4 2.2 1960 1970 71.7 95.7 2.9 2.5 1980 1990 5.4 6.6 2 2.1 1980 1990 122.9 151 2.1 1.4 2000 2010 8.1 9.7 1.8 1.5 2000 2010 173.8 191 0.9 0.7 11.3 1.2 204.2 0.5 Population (mil) 3.1 .4 % of Population 39.4 4.6 Population (mil) 51.2 8.6 % of Population 30.2 5.1 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS III-17 March 8, 2000 www.milken-inst.org Population Demographics Canada: Demographics Chile: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 14 Growth Rate (%) 2.7 Year 1950 Population (mil) 6.1 Growth Rate (%) 2.2 1960 1970 18.3 21.8 1.7 1.2 1960 1970 7.6 9.4 2.1 1.7 1980 24.6 1.2 1980 11.1 1.7 1990 2000 27.8 31.3 1.2 0.9 1990 2000 13.1 15.2 1.4 1 2010 2020 34.3 36.9 0.7 0.5 2010 2020 16.8 18.2 0.8 0.5 Population (mil) % of Population Population (mil) % of Population 6.1 3.8 19.8 12.5 4.2 1 28.3 6.9 Dependant Population, 1998 Age 0-14 65+ Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 China: Demographics Colombia: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 562.6 Growth Rate (%) 1.5 Year 1950 Population (mil) 11.6 Growth Rate (%) 3.2 1960 1970 650.7 820.4 2.3 1.8 1960 1970 16 21.4 3 2.2 1980 1990 984.7 1138.9 1.5 1 1980 1990 26.6 33 2.2 1.9 2000 2010 1256.2 1334.5 0.6 0.5 2000 2010 40 47.3 1.7 1.4 1397.4 0.1 54.6 1.2 Population (mil) 319.5 82 % of Population 25.8 6.6 Population (mil) 12.8 1.7 % of Population 33.2 4.5 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Costa Rica: Demographics Czech Republic: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 0.9 Growth Rate (%) 3.6 Year 1950 Population (mil) 8.9 Growth Rate (%) 0.8 1960 1970 1.3 1.7 3.3 2.8 1960 1970 9.7 9.8 0.1 0.5 1980 1990 2.3 3 2.7 2.1 1980 1990 10.3 10.3 0 0 2000 2010 3.7 4.4 1.7 1.3 2000 2010 10.3 10.5 .2 -0.1 5 1 10.3 -0.4 Population (mil) 1.2 .2 % of Population 33.6 5 Population (mil) 1.8 1.4 % of Population 17.2 13.7 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-18 Population Demographics Denmark: Demographics Ecuador: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 4.3 Growth Rate (%) 0.7 Year 1950 Population (mil) 3.3 Growth Rate (%) 2.9 1960 1970 4.6 4.9 0.7 0.4 1960 1970 4.4 6.1 3.2 2.9 1980 1990 5.1 5.1 0 0.4 1980 1990 8.1 10.3 2.4 2.2 2000 2010 5.4 5.5 0.1 -0.1 2000 2010 12.8 14.9 1.5 1.3 5.4 -0.3 16.9 1 Population (mil) 1 .8 % of Population 18.2 14.9 Population (mil) 4.4 .5 % of Population 35.9 4.4 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Egypt: Demographics El Salvador: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 21.2 Growth Rate (%) 2.4 Year 1950 Population (mil) 1.9 Growth Rate (%) 2.8 1960 1970 26.9 33.6 2.2 2.3 1960 1970 2.6 3.6 3.3 2.3 1980 1990 42.4 56.1 2.8 2 1980 1990 4.5 5 1.1 1.6 2000 2010 68.5 80.7 1.6 1.3 2000 2010 5.9 6.9 1.5 1.4 92.2 1 7.9 1.3 Population (mil) 23.8 2.4 % of Population 36.1 3.7 Population (mil) 2.1 0.3 % of Population 37 5.2 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Finland: Demographics France: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 4 Growth Rate (%) 1 Year 1950 Population (mil) 41.8 Growth Rate (%) 0.9 1960 1970 4.4 4.6 0.4 0.4 1960 1970 45.7 50.8 1.1 0.6 1980 1990 4.8 5 0.4 0.4 1980 1990 53.9 56.7 0.5 0.4 2000 2010 5.2 5.2 0 -0.2 2000 2010 59.1 59.7 0.1 -0.2 5.1 -0.4 58.7 -0.4 Population (mil) 1 0.8 % of Population 18.6 14.7 Population (mil) 11.1 9.3 % of Population 18.9 15.8 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS III-19 March 8, 2000 www.milken-inst.org Population Demographics Germany: Demographics Greece: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 68.4 Growth Rate (%) 0.6 Year 1950 Population (mil) 7.6 Growth Rate (%) 1 1960 1970 72.5 77.8 0.7 0.1 1960 1970 8.3 8.8 0.5 0.9 1980 1990 78.3 79.4 0.1 0.3 1980 1990 9.6 10.1 0.5 0.6 2000 2010 82.1 81 -0.1 -0.4 2000 2010 10.8 11 0.2 -0.2 77.9 -0.7 10.7 -0.6 Population (mil) 12.8 13.1 % of Population 15.6 16 Population (mil) 1.7 1.8 % of Population 16.1 16.5 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Guatemala: Demographics Hong Kong: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 3 Growth Rate (%) 2.9 Year 1950 Population (mil) 2.2 Growth Rate (%) 3.2 1960 1970 4 5.3 2.9 3.1 1960 1970 3.1 4 2.5 2.5 1980 1990 7.2 9.6 2.9 2.7 1980 1990 5.1 5.7 1.2 2 2000 2010 12.7 16.3 2.5 2.2 2000 2010 7 7.7 1 .2 20.3 1.9 7.9 -0.2 Population (mil) 5.2 .4 % of Population 42.9 3.5 Population (mil) 1.2 0.7 % of Population 18.3 10.3 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Hungary: Demographics India: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 9.3 Growth Rate (%) 0.7 Year 1950 Population (mil) 369.9 Growth Rate (%) 1.9 1960 1970 10 10.3 0.3 0.4 1960 1970 445.9 555 2.2 2.2 1980 1990 10.7 10.4 -0.3 -0.2 1980 1990 690.5 850.6 2.1 1.8 2000 2010 10.2 10 -0.2 -0.4 2000 2010 1017.7 1182.2 1.5 1.3 9.6 -0.5 1340.9 1 Population (mil) 1.8 1.5 % of Population 17.5 14.4 Population (mil) 339.3 45.3 % of Population 34.5 4.6 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-20 Population Demographics Indonesia: Demographics Ireland: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 83.4 Growth Rate (%) 1.9 Year 1950 Population (mil) 3 Growth Rate (%) -0.5 1960 1970 100.7 122.9 2 2.3 1960 1970 2.8 3 0.4 1.4 1980 1990 154.9 187.7 1.9 1.6 1980 1990 3.4 3.5 0.3 0.4 2000 2010 219.3 249.7 1.3 1 2000 2010 3.7 3.8 0.4 0.3 276 0.8 3.9 0 Population (mil) 65.7 8.5 % of Population 30.8 4 Population (mil) 0.8 0.4 % of Population 21.9 11.3 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Israel: Demographics Italy: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 1.3 Growth Rate (%) 5.1 Year 1950 Population (mil) 47.1 Growth Rate (%) 0.6 1960 1970 2.1 2.9 3 2.5 1960 1970 50.2 53.7 0.7 0.5 1980 1990 3.7 4.5 1.9 2.6 1980 1990 56.5 56.8 0.1 0 2000 2010 5.9 6.7 1.3 1.1 2000 2010 56.7 55.3 -0.2 -0.6 7.4 0.8 52.2 -0.8 Population (mil) 1.6 0.6 % of Population 28.2 10 Population (mil) 8.2 10 % of Population 14.4 17.6 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Japan: Demographics Korea: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 83.8 Growth Rate (%) 1.2 Year 1950 Population (mil) 20.9 Growth Rate (%) 1.7 1960 1970 94.1 104.4 1 1.1 1960 1970 24.8 32.2 2.6 1.7 1980 1990 116.8 123.5 0.6 0.2 1980 1990 38.1 42.9 1.2 1 2000 2010 126.4 127.1 0.1 -0.3 2000 2010 47.4 51.2 0.8 0.4 123.1 -0.6 53.5 0.3 Population (mil) 19.2 20.2 % of Population 15.2 16 Population (mil) 10.4 3 % of Population 22.4 6.4 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS III-21 March 8, 2000 www.milken-inst.org Population Demographics Malaysia: Demographics Mauritius : Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 6.4 Growth Rate (%) 2.7 Year 1950 Population (mil) 0.5 Growth Rate (%) 3.2 1960 1970 8.4 10.9 2.6 2.3 1960 1970 0.7 0.8 2.2 1.5 1980 1990 13.8 17.5 2.4 2.2 1980 1990 1.0 1.1 1.1 1.1 2000 2010 21.8 26.5 1.9 1.8 2000 2010 1.2 1.3 1.0 0.8 31.6 1.6 1.4 0.6 Age 0-14 Population (mil) 7.5 % of Population 35.6 Age 0-14 Population (mil) 0.3 % of Population 26.2 65+ 0.8 4 65+ 0.1 6.0 2020 Dependant Population, 1998 Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Source: U.S. Bureau of the Census, 1999 Mexico: Demographics Morocco: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 28.5 Growth Rate (%) 3 Year 1950 Population (mil) 9.3 Growth Rate (%) 2.8 1960 1970 38.6 52.8 3.1 2.6 1960 1970 12.4 15.9 2.5 2.0 1980 1990 68.7 84.8 2.1 1.9 1980 1990 19.5 24.7 2.4 2.0 2000 2010 102 118.8 1.5 1.2 2000 2010 30.2 35.6 1.7 1.4 134.4 1 40.8 1.1 Population (mil) 35.1 4 % of Population 35.6 4.1 Age 0-14 Population (mil) 10.6 % of Population 35.7 65+ 1.3 4.5 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Netherlands: Demographics New Zealand: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 10.1 Growth Rate (%) 1.3 Year 1950 Population (mil) 1.9 Growth Rate (%) 2.2 1960 1970 11.5 13 1.3 0.8 1960 1970 2.4 2.8 1.7 1 1980 1990 14.1 15 0.6 0.6 1980 1990 3.1 3.3 0.6 1.1 2000 2010 15.9 16.2 0.2 -0.1 2000 2010 3.7 4 0.9 0.7 16.1 -0.4 4.3 0.5 Population (mil) 2.9 2.1 % of Population 18.3 13.5 Population (mil) 0.8 0.4 % of Population 23 11.6 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-22 Population Demographics Norway: Demographics Pakistan: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 3.3 Growth Rate (%) 0.9 Year 1950 Population (mil) 39.5 Growth Rate (%) 2.4 1960 1970 3.6 3.9 0.8 0.5 1960 1970 50.4 65.7 2.7 2.6 1980 1990 4.1 4.2 0.4 0.5 1980 1990 85.2 113.9 2.9 2.1 2000 2010 4.5 4.6 0.3 0.1 2000 2010 141.2 170.8 1.9 1.5 4.6 -0.2 198.7 1.2 Population (mil) .9 .7 % of Population 19.6 15.7 Population (mil) 56.5 5.5 % of Population 41.8 4 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Panama: Demographics Paraguay: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 0.9 Growth Rate (%) 2.5 Year 1950 Population (mil) 1.5 Growth Rate (%) 2.6 1960 1970 1.2 1.5 2.9 2.5 1960 1970 1.9 2.5 2.6 2.5 1980 1990 2 2.4 2 1.7 1980 1990 3.2 4.2 2.8 2.8 2000 2010 2.8 3.2 1.4 1.1 2000 2010 5.6 7.2 2.5 2.2 3.6 0.9 9 2 Population (mil) 0.9 0.2 % of Population 32 5.7 Population (mil) 2.1 0.3 % of Population 39.5 4.7 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Philippines: Demographics Poland: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 21.1 Growth Rate (%) 3 Year 1950 Population (mil) 24.8 Growth Rate (%) 1.8 1960 1970 28.6 38.7 3 2.8 1960 1970 29.6 32.5 0.9 0.9 1980 1990 51.1 65 2.4 2.2 1980 1990 35.6 38.1 0.7 0.1 2000 2010 81 97.1 1.8 1.5 2000 2010 38.6 39.9 0.3 0.1 113 1.2 40.3 -0.1 Population (mil) 29.3 2.8 % of Population 37.6 3.6 Population (mil) 8 4.6 % of Population 20.6 11.8 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS III-23 March 8, 2000 www.milken-inst.org Population Demographics Portugal: Demographics Russia: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 8.4 Growth Rate (%) 0.7 Year 1950 Population (mil) 101.9 Growth Rate (%) 1.6 1960 1970 9 9 0 0.8 1960 1970 119.6 130.3 0.9 0.7 1980 1990 9.8 9.9 0.1 0 1980 1990 139.1 148.1 0.6 -0.1 2000 2010 9.9 9.6 -0.3 -0.4 2000 2010 145.9 143.9 -0.1 -0.2 9.2 -0.5 141.3 -0.4 Population (mil) 1.7 1.5 % of Population 17.3 15.1 Population (mil) 29 18.4 % of Population 19.7 12.5 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Singapore: Demographics South Africa: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 1 Growth Rate (%) 4.8 Year 1950 Population (mil) 13.6 Growth Rate (%) 2.5 1960 1970 1.7 2.1 2.3 1.5 1960 1970 17.4 22.7 2.7 2.5 1980 1990 2.4 3 2.3 1.6 1980 1990 29.3 37.2 2.4 1.7 2000 2010 3.6 3.9 0.9 0.6 2000 2010 44 47.5 0.8 0.3 4.1 0.4 49 0.4 Population (mil) 0.8 0.2 % of Population 21.4 6.8 Population (mil) 14.9 1.9 % of Population 34.7 4.5 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Spain: Demographics Sweden: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 28.1 Growth Rate (%) 0.9 Year 1950 Population (mil) 7 Growth Rate (%) 0.6 1960 1970 30.6 33.9 1 1 1960 1970 7.5 8 0.7 0.3 1980 1990 37.5 38.8 0.3 0.1 1980 1990 8.3 8.6 0.3 0.4 2000 2010 39.2 39.2 0 -0.3 2000 2010 8.9 9.1 0.2 0.1 37.9 -0.6 9.2 -0.2 Population (mil) 5.9 6.4 % of Population 15.2 16.3 Population (mil) 1.7 1.6 % of Population 18.7 17.4 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-24 Population Demographics Switzerland: Demographics Taiwan: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 4.7 Growth Rate (%) 1.3 Year 1950 Population (mil) 8 Growth Rate (%) 3.4 1960 1970 5.4 6.3 1.6 0.2 1960 1970 11.2 14.6 2.6 2 1980 1990 6.4 6.8 0.7 0.6 1980 1990 17.9 20.3 1.3 1 2000 2010 7.3 7.4 0.1 -0.2 2000 2010 22.3 24.2 0.8 0.5 7.2 -0.5 25.5 0.3 Population (mil) 1.3 1.1 % of Population 17.3 14.9 Population (mil) 4.9 1.8 % of Population 22.4 8.2 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 Thailand: Demographics Turkey: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 20 Growth Rate (%) 3.2 Year 1950 Population (mil) 21.1 Growth Rate (%) 2.9 1960 1970 27.5 37.1 3 2.4 1960 1970 28.2 35.8 2.4 2.3 1980 1990 47 55.1 1.6 1.1 1980 1990 45.1 56.1 2.2 1.7 2000 2010 61.2 66.1 0.8 0.5 2000 2010 66.6 76.6 1.4 1.1 69.3 0.2 85.7 0.9 Population (mil) 14.6 3.6 % of Population 24.3 6 Population (mil) 20 3.7 % of Population 30.9 5.7 2020 Dependant Population, 1998 Age 0-14 65+ 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Source: U.S. Bureau of the Census, 1999 United Arab Emirates: Demographics United Kingdom: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 0.1 Growth Rate (%) 3.7 Year 1950 Population (mil) 50.1 Growth Rate (%) 0.4 1960 1970 0.1 0.2 8.8 13.9 1960 1970 52.4 55.6 0.6 0.1 1980 1990 1.0 1.9 6.7 2.0 1980 1990 56.3 57.5 0.2 0.3 2000 2010 2.4 2.9 1.8 1.4 2000 2010 59.3 60 0.1 0 3.3 0.8 60.2 -0.1 Age 0-14 Population (mil) 0.7 % of Population 30.8 65+ 0.1 2.0 Population (mil) 11.4 9.3 % of Population 19.3 15.7 2020 Dependant Population, 1998 Source: U.S. Bureau of the Census, 1999 2020 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 GLOBAL DEMOGRAPHICS III-25 March 8, 2000 www.milken-inst.org Population Demographics United States: Demographics Uruguay: Demographics Population Growth, 1950-2020 Population Growth, 1950-2020 Year 1950 Population (mil) 152.3 Growth Rate (%) 1.7 Year 1950 Population (mil) 2.2 Growth Rate (%) 1.4 1960 1970 180.7 205.1 1.3 1 1960 1970 2.5 2.8 1.1 0.3 1980 227.7 0.9 1980 2.9 0.6 1990 2000 250 274.9 1 0.8 1990 2000 3.1 3.3 0.7 0.7 2010 2020 298 323.1 0.8 0.7 2010 2020 3.6 3.8 0.6 0.5 Population (mil) % of Population Population (mil) % of Population 58.1 34.3 21.5 12.7 0.8 0.4 24.1 12.9 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 Dependant Population, 1998 Age 0-14 65+ Source: U.S. Bureau of the Census, 1999 World Population 1950 Venezuela: Demographics Population Growth, 1950-2020 Year 1950 Population (mil) 5 Growth Rate (%) 4.1 1960 1970 7.6 10.8 3.5 3.2 1980 1990 14.8 19.3 2.7 2 2000 2010 23.6 27.4 1.5 1.2 30.9 0.9 Population (mil) 7.7 1 % of Population 33.8 4.5 2020 Dependant Population, 1998 Age 0-14 65+ Oceania 1% Europe 22% Asia 55% World Population 2025 World Population 1998 Oceania 1% Africa 18% Africa 13% Europe 12% Asia 61% Source: United Nations Europe 9% Asia 59% Americas 13% Source: United Nations GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org Americas 13% Source: United Nations Source: U.S. Bureau of the Census, 1999 Oceania 1% Africa 9% III-26 Americas 13% Life Expectancy Male Life Expectancy Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 11 12 14 15 16 17 19 23 25 26 27 28 31 32 33 35 37 39 40 41 42 43 49 56 61 62 64 70 71 75 76 78 79 88 100 102 109 110 115 116 118 120 126 127 131 133 134 135 136 139 Source: Female Life Expectancy Country Years San Marino Costa Rica Iceland Japan Israel Andorra Sweden Greece Switzerland Cuba 77.09 76.56 76.45 76.35 75.72 75.35 75.30 75.02 74.60 74.59 Canada Netherlands Australia Italy Spain France Norway Belgium United Kingdom Austria Singapore Germany Denmark Ireland United States New Zealand Panama Finland Taiwan Portugal Paraguay Chile Uruguay Venezuela Colombia Mexico Czech Republic Turkey Argentina Korea Ecuador Hungary China Malaysia Thailand Honduras El Salvador Russia Peru South Africa Philippines Guatemala Nicaragua Bolivia Egypt Brazil Indonesia Poland India Pakistan 74.54 74.48 74.24 74.22 74.22 74.04 73.79 73.41 73.31 73.18 73.07 73.00 72.63 72.56 72.49 72.46 71.99 71.85 71.84 71.43 71.42 71.16 70.52 69.76 68.99 68.99 68.90 68.11 67.91 67.10 67.09 66.81 66.78 65.96 65.05 64.82 63.93 63.59 63.02 62.67 62.59 61.46 60.70 60.34 58.61 58.28 58.28 58.14 57.69 56.54 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 12 13 14 15 17 18 19 20 21 23 24 25 26 27 30 31 32 33 34 39 40 41 46 47 51 56 61 68 71 75 76 77 82 88 91 94 102 105 109 114 115 116 117 121 122 127 135 136 144 145 Source: Demographic Yearbook, . The Illustrated Book of World Rankings, Kurian, 1997. Country Years San Marino France Japan Canada Switzerland Monaco Andorra Iceland Spain Sweden 85.27 82.16 82.15 81.60 81.54 81.49 81.34 81.04 81.04 81.02 Italy Netherlands Norway Australia Belgium Greece New Zealand Israel Austria Finland Costa Rica United Kingdom United States Germany Singapore Denmark Portugal Taiwan Ireland Chile Panama Uruguay Czech Republic Poland Mexico Venezuela Hungary Paraguay Colombia Argentina Russia Korea Turkey Ecuador Malaysia Thailand Honduras El Salvador China Philippines South Africa Peru Brazil Guatemala Nicaragua Bolivia Egypt Indonesia India Pakistan 80.85 80.78 80.73 80.63 80.21 80.12 79.95 79.93 79.80 79.62 79.52 79.43 79.29 79.00 78.63 78.56 78.56 78.39 78.36 77.29 77.27 77.11 76.58 76.51 76.30 75.77 75.12 74.62 74.53 74.65 74.04 73.68 72.82 72.25 71.81 71.66 69.62 69.20 68.80 67.69 67.63 67.44 67.33 66.55 66.41 65.33 62.41 62.34 58.59 57.52 Demographic Yearbook. The Illustrated Book of World Rankings, Kurian, 1997. GLOBAL DEMOGRAPHICS III-27 March 8, 2000 www.milken-inst.org Global Statistics Scientists and Engineers Nobel Prize Winners Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Other: 11 12 13 14 15 16 17 18 20 21 22 24 25 26 27 28 29 30 31 31 32 33 37 Sources: Country # of Winners United States United Kingdom Germany France Sweden Switzerland Russia Netherlands Denmark Italy 261 92 71 52 27 18 15 14 12 11 Austria Canada Norway Belgium Japan Spain South Africa Argentina Israel Australia India Poland Egypt Czech Republic Chile Finland Greece Hungary Mexico Columbia Costa Rica Guatemala Pakistan 9 9 8 7 7 6 5 4 3 3 3 3 2 2 2 2 2 2 2 1 1 1 1 Number of Scientists and Engineers Country United States 949,200 Japan 638,817 Ukraine 348,600 Germany 293,063 India 119,027 France 115,163 Italy 74,833 Canada 61,130 Romania 59,670 South Korea 56,545 Czech Republic 55,475 Brazil 52,863 Burkina 50,585 Belarus 44,100 Australia 38,568 Netherlands 37,520 Yugoslavia 34,770 Poland 32,500 Indonesia 32,038 Sweden 22,725 Egypt 20,893 Spain 20,890 Hungary 20,431 Israel 20,100 Vietnam 20,000 Mexico 16,679 Belgium 16,646 Switzerland 14,910 Norway 12,100 Cuba 12,052 Finland 11,317 Turkey 11,276 Argentina 11,088 Denmark 10,662 Pakistan 6,641 Ireland 6,351 Thailand 5,539 Malaysia 5,537 Portugal 5,004 Peru 4,858 Philippines 4,830 Chile 4,630 Venezuela 4,568 Singapore 3,361 Iran 3,194 Sri Lanka 2,790 Uruguay 2,093 Senegal 1,948 Austria 1,609 Kuwait 1,511 Nigeria 1,338 Costa Rica 1,328 Source: UNESCO Statistical Yearbook, The Illustrated Book of World Rankings, Kurian, 1997 World Almanac. The Illustrated Book of World Rankings, Kurian, 1997. The Nobel Prize Internet Archive GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-28 Global Statistics Agriculture’s Share of the GDP Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 40 41 48 50 51 57 63 64 67 71 73 74 75 76 82 89 93 97 98 99 101 106 107 108 109 110 112 114 115 119 121 123 125 127 129 131 133 134 135 136 137 139 140 141 143 147 Source: Country Industry’s Share of GDP % of GDP Myanmar (Burma) Ethiopia Tanzania Albania Burundi Laos Armenia Central African Rep. Equatorial Guinea Uganda 63 57 56 55 55 51 50 50 50 49 India Nicaragua Paraguay Guatemala Pakistan Philippines Egypt Honduras China Indonesia Colombia Costa Rica Greece Turkey Malaysia Ecuador Peru Panama Thailand El Salvador Uruguay Mexico Hungary South Korea New Zealand Russia Argentina Czech Republic Poland Finland South Africa Denmark Australia Italy Netherlands Spain Austria Belgium France Japan Sweden United Kingdom United States Venezuela Germany Singapore 30 30 26 25 25 22 20 20 19 17 16 16 16 16 14 12 11 10 10 9 9 8 7 7 7 7 6 6 6 5 5 4 3 3 3 3 2 2 2 2 2 2 2 1 1 0 Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 11 19 20 23 24 25 28 31 33 34 36 39 43 45 46 47 48 49 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 67 68 71 72 73 75 76 77 78 83 85 86 87 91 92 95 96 99 109 World Development Report, The Illustrated Book of World Rankings, Kurian, 1997. Source: Country % of GDP Tajikistan Bosnia & Herzegovina Slovakia Azerbaijan Armenia China Romania Yugoslavia Belarus Croatia 60 58 53 48 46 45 45 45 44 44 Czech Republic Poland Russia Taiwan Japan Malaysia Portugal Germany Singapore Thailand South Korea Austria South Africa Philippines Switzerland Belgium Brazil Hungary Peru Spain Argentina Finland Israel Mexico Nicaragua United Kingdom Uruguay Indonesia Venezuela Colombia Ecuador France Italy Netherlands Sweden Costa Rica Denmark El Salvador Turkey United States Canada Chile Egypt India New Zealand Paraguay Bolivia Australia Greece Guatemala Pakistan Norway 44 38 36 33 31 30 29 28 28 28 27 26 25 24 24 23 23 23 23 23 22 22 22 22 22 22 22 21 21 20 20 20 20 20 20 19 19 19 19 19 18 18 17 17 17 17 16 15 15 15 15 13 World Development Report, The Illustrated Book of World Rankings, Kurian, 1997. GLOBAL DEMOGRAPHICS III-29 March 8, 2000 www.milken-inst.org Statistical Comparison Source: GNP Per Capita Rate of Inflation Communications Technology Political Freedom Civil Rights 10 10 19 10 10 10 10 10 10 10 10 5 3 7 5 6 2 8 6 7 8 7 8 6 6 7 7 7 7 9 10 10 10 9 9 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 9 9 9 10 8 9 10 10 10 9 8 10 10 9 10 8 4 10 10 10 10 10 10 10 10 10 10 8 10 9 10 10 8 9 7 8 7 7 10 10 10 10 8 10 6 8 8 93 92 89 89 89 88 87 86 86 85 5 8 8 5 6 8 3 4 3 4 8 4 4 2 4 3 2 4 4 3 2 2 2 2 0 2 2 2 2 0 1 2 1 1 0 0 1 0 0 0 1 1 0 0 1 1 1 2 5 2 2 0 4 1 4 0 1 0 3 3 0 0 1 1 0 2 0 0 2 2 1 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 3 3 0 0 1 0 0 0 4 5 4 5 6 2 7 4 2 7 3 4 2 3 1 0 1 0 2 2 3 1 1 1 1 2 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 8 9 5 7 4 2 6 7 0 7 4 7 3 6 5 4 8 5 4 2 2 4 0 4 1 6 0 0 5 5 4 0 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 10 10 10 10 10 10 10 7 10 9 8 8 10 9 10 8 9 10 5 8 6 8 5 4 10 3 4 5 0 5 6 3 9 1 4 1 3 4 0 2 0 2 1 1 4 1 0 8 8 9 7 9 9 7 7 9 6 8 7 7 7 7 7 6 6 8 6 6 7 7 6 7 5 7 6 3 2 2 4 5 5 3 5 1 0 3 0 0 2 0 0 0 0 0 7 7 6 7 5 6 9 10 7 7 5 9 2 8 10 9 9 10 6 0 10 0 8 10 8 5 10 9 5 5 0 7 6 1 7 8 5 5 3 6 1 1 0 0 0 0 2 10 9 10 9 10 10 9 9 10 5 9 9 10 6 6 7 6 6 10 6 5 5 7 51 5 3 5 5 5 1 1 3 3 3 1 2 1 1 2 0 1 0 1 1 1 1 0 6 2 5 5 6 4 5 4 10 7 6 2 7 5 2 5 3 3 3 6 1 4 2 1 0 3 3 2 5 5 6 2 0 4 2 1 1 0 0 0 2 0 2 1 0 0 1 9 5 8 7 8 8 6 7 10 8 8 5 6 7 8 7 6 6 6 7 4 5 3 3 2 5 2 3 6 5 7 4 1 5 4 2 4 2 3 0 0 2 3 3 0 3 1 69 68 67 64 64 63 63 63 61 61 59 58 54 53 53 51 51 50 50 40 39 38 37 37 34 34 33 32 31 29 28 25 25 25 21 19 16 12 11 11 8 8 7 7 6 6 5 Population Action International, The Illustrated Book of World Rankings , Kurian, 1997. GLOBAL DEMOGRAPHICS March 8, 2000 www.milken-inst.org III-30 HUMAN SUFFERING INDEX Secondary School Enrollment Guatemala Bolivia Pakistan El Salvador Indonesia India Paraguay Peru China South Africa Egypt Ecuador Thailand Mexico Turkey Colombia Venezuela Brazil Philippines Malaysia Argentina Panama Chile Uruguay Costa Rica South Korea Poland Hungary Russia Hong Kong Singapore Czech Republic Portugal Taiwan Israel Greece United Kingdom Italy Spain Sweden Finland New Zealand France Japan Austria Germany United States Infant Immunization Mozambique Somalia Afghanistan Haiti Sudan Zaire Laos Angola Guinea Ethiopia Clean Drinking Water Country Daily Calorie Supply Rank Top 10: 1 2 3 4 5 6 7 8 9 10 Others: 38 41 43 51 53 56 57 58 61 64 65 67 73 75 77 78 80 81 83 94 96 98 99 101 102 103 105 107 109 111 114 115 116 117 118 119 120 121 124 125 126 127 128 130 132 133 134 Life Expectancy Human Suffering Index U.S. – Real Growth and Inflation • The U. S. economy just won’t quit – 9 years of growth and counting. • U.S. economy is at full employment. Jobs are plentiful for people with any kind of job skill. • Virtually all the major macro statistics are at record levels – growth, income, employment. • • Fed has raised rates – most think more is coming to fend off threatened inflation. Employers are troubled by labor shortages. Strong upward pressure on wages in the high-tech area. Hard to keep workers. • Technology is the key – great advances. Utterly transforming companies, industries, countries. Keep up or get left behind. • Great availability of risk capital. Unprecedented. Silicon Valley. Investors want to participate. • Mergers and acquisition activity remains strong. No end in sight. • The financial markets continue to evolve – technology is changing everything. • Budget situation much better – thanks to solid macro performance. • All key sectors are strong – consumer, housing, capital spending. • Productivity gains have improved – the payoff from technology and corporate rationalization. • Inflation still is not a problem – just a fear. United States - Real GDP Growth United States - Real GDP Growth 1992 Prices 1992 Prices Percent Change, Year Ago Percent Change, Year Ago 5 10 4 8 3 6 2 4 1 2 0 0 -1 -2 -2 -3 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bureau of Economic Analysis 50 55 60 65 70 75 80 85 90 95 Source: Bureau of Economic Analysis United States - Inflation Rate United States - Inflation Rate Consumer Price Index Consumer Price Index Percent Change, Year Ago Percent Change, Year Ago 7 15 6 10 5 4 5 3 0 2 1 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 50 55 60 65 70 75 80 85 90 95 Source: IFS UNITED STATES IV-1 March 8, 2000 www.milken-inst.org U.S. – Interest Rates United States - Interest Rates United States - Interest Rates Fed Funds Rate and 10-year Government Bond Fed Funds Rate and 10-year Government Bond Percent Percent 9 20 Fed Funds Rate 10-year Government Bond Fed Funds 10-year Government Bond 8 15 7 6 10 5 4 5 3 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 55 Source: Federal Reserve 60 65 70 75 80 85 90 95 Source: Federal Reserve United States - Yield Curve United States - Yield Curve 10-year Government Bond minus Fed Funds Rate 10-year Government Bond minus Fed Funds Rate Percent Percent 4 4 3 2 2 0 1 -2 0 -1 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Federal Reserve 55 60 65 70 75 80 85 90 95 Source: Federal Reserve United States - Corporate Spread United States - Corporate Spread Moody's Corporate Aaa Minus 10 Year Treasury Bond Moody's Corporate Aaa Minus 10 Year Treasury Bond Percent Percent 2.0 2.0 1.8 1.5 1.6 1.0 1.4 1.2 0.5 1.0 0.0 0.8 0.6 -0.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Moody's Investors Service; Federal Reserve 55 60 65 70 75 80 Sources: Moody's Investors Service; Federal Reserve UNITED STATES March 8, 2000 www.milken-inst.org 50 IV-2 85 90 95 00 U.S. – Labor United States - Unemployment Rate United States - Unemployment Employment Growth and Unemployment Rate Percent Change, Year Ago Civilian Unemployment Rate Percent 4 Percent 9 11 Unemployment Rate - R Estab. Employment - L 3 8 2 7 1 6 0 5 -1 4 10 9 8 7 6 5 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 4 3 3 Source: WEFA 60 65 70 75 80 85 90 95 00 Source: Bureau of Labor Statistics United States - Labor Costs United States - Labor Costs Unit Labor Costs - Business Sector Unit Labor Costs, Manufacturing Percent Change, Year Ago Percent Change, Year Ago 6 15 5 10 4 3 5 2 1 0 0 -1 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bureau of Labor Statistics 70 US - Labor Cost Comparisons 80 85 90 95 United States - Wages and Unemployment International Manufacturing Unit Labor Costs Average Hourly Earnings and Unemployment Index, 1992=100 Percent 110 9 105 75 Source: Bureau of Labor Statistics United States Japan Germany Percent Change, Year Ago 4.5 Unemployment Rate - L Average Hourly Earnings - R 8 4.0 7 100 3.5 6 95 3.0 5 90 85 2.5 4 3 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: Bureau of Labor Statistics 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2.0 Source: Bureau of Labor Statistics UNITED STATES IV-3 March 8, 2000 www.milken-inst.org U.S. – Capital Markets United States - Mergers & Acquisitions United States - IPO Activity Total Value and Total Number of Deals Completed Total Value and Total Number of Deals Completed Number US$ Billions 10000 1200 Number of Deals - L Value of Deals - R US$ Billions 1000 Total Value - L Total Number - R 1000 8000 Thousands 80 800 60 800 600 6000 600 40 400 4000 400 20 2000 0 200 200 80 82 84 86 88 90 92 94 96 0 98 0 Source: Securities Data Corp. 0 82 84 86 88 90 92 94 96 98 Source: Securities Data Corporation United States - Mutual Funds and Banks United States Equity Fund Inflows Total Number of Mutual Funds and Commerical Banks Net New Cash Flow to Equity Mutual Funds Thousands US$ Billions 16 250 Mutual Funds Banks 200 12 150 8 100 50 4 0 0 80 82 84 86 88 90 92 94 96 -50 98 Sources: Investment Company Institute; FDIC 84 86 88 90 92 94 96 98 Source: Investment Company Institute United States - Foreign Direct Investment United States - Foreign Purchases of US Securities Direct Investment Inflows Net Foreign Purchases of US Securities US$ Billions US$ Billions 35 80 30 60 25 40 20 15 20 10 0 5 -20 0 -5 -40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS UNITED STATES March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bureau of Economic Analysis IV-4 U.S. – Savings & Assets United States - Household Savings United States Equity and Real Estate Holdings Percent of Disposable Personal Income (4 Qtr. Smoothed) Equities and Real Estate as Percent of Household Assets Percent Percent 12 35 Corporate Equity Real Estate 30 10 25 8 20 6 15 4 2 10 60 65 70 75 80 85 90 5 95 Source: Federal Reserve Board 55 Composition of Household Assets 1980 Durable Goods 8% Deposits 14% 60 65 70 75 80 85 90 95 Source: Federal Reserve Composition of Household Assets 1998 Durable Goods 8% Private Business 20% Equities 13% Bonds 12% Deposits 12% Private Business 11% Real Estate 27% Equities 27% Real Estate 33% Bonds 15% Source: Federal Reserve Board Source: Federal Reserve Board United States - Family Finances United States - Equity Ownership Percent of Stocks & Mutual Funds Held by Wealth Class Family Income Median, Before Tax Percentage Family of Families Net Worth withMedian Equity Holdings Median Value of Holdings Debt as a Percentage of Total Family Assets Families with Debt Payments Greater Than 40% of Income 1989 $32,800 59,700 31.6% $10,800 1998 $33,400 71,600 48.8% $25,000 12.4% 14.4% 10.1% 12.7% Percent 60 50 40 30 20 Sources: Federal Reserve; The Wall Street Journal 10 0 Top 1% Next 9% Bottom 90% Sources: New York University; Donaldson, Lufkin & Jenrette UNITED STATES IV-5 March 8, 2000 www.milken-inst.org U.S. – Consumer Sector United States - Consumer Inflation Rate United States - Non-Core Inflation Consumer Prices and Wages CPI minus Core CPI Percent Change, Year Ago Percent Change, Year Ago 6 5 Core CPI Average Hourly Earnings 4 5 3 2 4 1 3 0 -1 2 -2 1 -3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bureau of Labor Statistics 70 75 80 85 90 95 Source: Bureau of Labor Statistics United States - Consumer Confidence Index United States - Consumer Credit Conference Board Credit/Income and Credit Growth Index 1985=100 Percent 160 19 140 18 120 17 Percent Change, Year Ago 20 Credit/Income - L Credit Growth - R 15 10 100 16 80 15 60 14 5 40 75 80 85 90 13 95 Source: The Conference Board 0 70 75 80 85 90 95 00 Sources: Federal Reserve; Bureau of Economic Analysis United States - Light Vehicle Sales United States - Durables and Non-durables US Light Trucks and Cars Share of Total Consumption Millions of Units Percent 20 60 18 Non-durables Services Durables 50 16 40 14 30 12 20 10 8 75 80 85 90 95 10 00 Sources: Bureau of Economic Analysis; Motor Vehicle Manufacturers Ass'n. 75 80 Source: Bureau of Economic Analysis UNITED STATES March 8, 2000 www.milken-inst.org 70 IV-6 85 90 95 -5 U.S. – Housing & Consumer Spending United States - Housing Affordability Index United States - Consumer Price Index Seasonally Adjusted Housing CPI vs. Education CPI Index Index 1982/1984=100 160 300 Housing CPI Education CPI 140 250 120 200 100 150 80 100 60 70 75 80 85 90 95 50 00 Source: National Association of Realtors 80 82 86 88 90 92 94 96 98 United States - Housing Market United States - Construction New and Existing Home Sales Real Industrial and Commercial Structures Consumption Millions US$ Billions, 1992 70 120 New Home Sales Existing Home Sales 60 84 Source: Bureau of Labor Statistics Industrial Structures Commercial Structures 100 50 80 40 30 60 20 40 10 0 70 75 80 85 90 20 95 Source: National Association of Realtors 80 85 90 95 00 United States - Durable Equipment United States - Household Durables Percent of Private Fixed Investment Real Consumer Spending, Furniture and Computers Percent 80 75 Source: Census Bureau Percent Change, Year Ago 80 Structures Producers Durable Equipment 70 Furniture & Household Equipment Computers (in Consumption) 60 60 40 50 20 40 0 30 20 70 75 80 85 90 -20 95 Source: Bureau of Economic Analysis 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bureau of Economic Analysis UNITED STATES IV-7 March 8, 2000 www.milken-inst.org U.S. – Economic Conditions United States - Capacity Utilization United States - Industrial Production Capacity Utilization, FRB Industrial Production Index, FRB Percent Percent Change, Year Ago 90 15 10 85 5 80 0 -5 75 -10 70 70 75 80 85 90 -15 95 Source: Federal Reserve 70 75 80 85 90 95 Source: Federal Reserve United States - Employment United States - Employment Growth Shares of Total Employment One-Digit Employment Growth, 1990-1998 Percent Percent 30 40 Manufacturing Services 20 35 10 30 0 25 -10 -20 20 -30 15 70 75 80 85 90 95 Total Source: Bureau of Labor Statistics Mining Manuf. Wholesale & Retail Services Construction TPCU FIRE Gov't Source: Bureau of Labor Statistics United States - Interest Rates and Inflation United States - Help-Wanted Fed Funds Rate and Consumer Prices Index of Help-Wanted Ads Percent Index 1987=100 10 100 Fed Funds Rate Consumer Price Index 8 90 6 80 4 70 2 60 0 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Federal Reserve; WEFA UNITED STATES March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: The Conference Board IV-8 U.S. – Economic Structure US Employment by Industry: 1960 US Employment by Industry: 1999 Manufacturing 23% Other 39% Other 7% Agriculture 3% Fin./Ins./Real Estate 7% Services 39% Transportation 7% Trade 19% Teachers 3% Agriculture Domestics Construction 8% 3% 5% Manufacturing 16% Trade 21% Source: Census Bureau Source: Bureau of Labor Statistics United States - Official Reserves United States - Trade Weighted Dollar Total Reserves Minus Gold and as Percent of GDP US$ Billions Real Broad Dollar Index Index March 1973=100 Percent 1.4 80 Reserves Minus Gold - L Reserves as % of GDP - R 130 1.2 120 60 1.0 110 0.8 40 0.6 100 0.4 20 90 0.2 0 0.0 70 75 80 85 90 80 95 Source: IFS 70 75 80 85 90 95 00 Source: Federal Reserve Board United States - Exchange Rates United States - Exchange Rates US Dollar per Yen and Deutsche Mark US Dollar per Yen and Deutsche Mark Index, January 1990 = 100 Index, 1960 = 100 180 400 US$/DM US$/Y US$/DM US$/Y 350 160 300 140 250 200 120 150 100 80 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 60 65 70 75 80 85 90 95 Source: IFS UNITED STATES IV-9 March 8, 2000 www.milken-inst.org U.S. – Demographics US Immigration 1994-1998 US Immigration 1820-1960 Asia 3% Other 7% Other 11% Europe 17% Latin America 41% Latin America 4% Asia 35% Europe 82% Source: Census Bureau Source: Census Bureau United States - Living Arangements United States - Family Size Unrelated Individuals Living Together Average Family Size and % of Families with Five or More Millions Number 45 3.8 40 3.7 35 Percent Average Population Per Family - L Five or More - R 13 3.6 30 12 3.5 25 11 3.4 20 10 3.3 15 9 3.2 10 5 14 60 65 70 75 80 85 90 3.1 95 Source: Census Bureau 55 60 65 70 75 80 85 90 95 Source: Census Bureau Personal Health Care Payments United States - Divorce Out-Of-Pocket vs. Other Sources Divorce Rate Percent Percent 100 60 Out-Of-Pocket Private Insurance and Government 80 50 60 40 40 30 20 20 0 10 1920 30 35 40 45 50 55 60 65 70 75 80 85 90 95 Source: Health Care Finance Administration UNITED STATES March 8, 2000 www.milken-inst.org 30 40 50 Source: Monthly Vital Statistics IV-10 60 70 80 90 8 U.S. – Labor Issues Ethnic Distribution of the US Labor Force The Aging Workforce Percent Median Age of Workers 100 Years Old 45 80 40 60 35 40 30 White Asian African-American Hispanic 20 25 1976 1986 1996 0 2006 1988 1998 2008 Source: US Bureau of Labor Statistics Source: Howard N. Fullerton, Monthly Labor Review, 11/97 Top 10 Occupations with Fastest Wage & Salary Employment Growth: 1998-2008 The Aging Workforce Labor Force Growth 1996-2006 By Age Group Percent Change 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Computer Engineers Computer Support Specialists Systems Analysts Database Administrators Desktop Publishing Specialists Paralegals & Legal Assistants Personal Care & Home Health Aides Medical Assistants Social & Human Service Assistants Physician Assistants 5 Percent Increase 108 102 94 77 73 62 58 58 53 48 4 3 2 1 0 -1 Source: Bureau of Labor Statistics -2 20-24 25-34 35-44 45-54 55-64 65-74 75+ Source: Bureau of Labor Statistics Labor Force Participation Rate of US Mothers Labor Force Participation Rate of Women By Age of Children With Children Under The Age of 6 Percent Percent 100 100 1975 1996 80 80 60 60 40 40 20 20 0 Under 18 6 to 17 3 to 5 0 Under 3 Source: Bureau of Labor Statistics 1975 1980 1985 1990 1995 Source: Bureau of Labor Statistics UNITED STATES IV-11 March 8, 2000 www.milken-inst.org U.S. – Labor Issues United States - Working Population Life Expectancy and Retirement Age Employment Relative to Working Age Population Males Percent Years 66 74 64 72 Retirement Age Life Expectancy 70 62 68 60 66 58 64 56 54 62 60 65 70 75 80 85 90 60 95 Source: Bureau of Labor Statistics 40 United States - Labor Force 50 55 60 65 70 75 80 85 90 95 United States - Young and Old Dependents Participation Rates, Male/Female Young and Elderly as Percent of Total Population Percent Percent 90 60 80 0 - 19 Years Old 60 Years and Older 50 Female Male Total 70 40 60 30 50 20 40 10 30 45 Source: US Census Bureau 60 65 70 75 80 85 90 95 0 00 Source: Bureau of Labor Statistics 1950 1960 1970 1980 1990 2000 2010 2020 Source: United Nations United States - Labor Force United States - Births Percent of Total Civilian Labor Force Live Births and Crude Birth Rate Percent Millions 12 5.0 Per Thousand 30 Live Births - L Crude Birth Rate - R 4.5 10 25 4.0 8 Black Hispanic Other (Non-White) 6 3.5 20 3.0 15 4 2 2.5 80 82 84 86 88 90 92 94 96 2.0 1915 98 Source: Bureau of Labor Statistics UNITED STATES March 8, 2000 www.milken-inst.org 25 35 45 Source: Monthly Vital Statistics IV-12 55 65 75 85 95 10 U.S. – Current Economic Conditions United States - Current Account Balance United States - Current Account Balance Nominal and As Percent of GDP US$ Billions As Percent of GDP Percent 100 Percent 1 2 Level - L % of GDP - R 0 0 -100 -1 1 0 -1 -200 -2 -2 -300 -3 -400 80 85 90 -3 -4 95 -4 Source: Bureau of Economic Analysis 70 75 80 85 90 95 Source: Bureau of Economic Analysis United States - Goverment Debt United States - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 70 2 60 0 50 -2 40 -4 30 20 60 65 70 75 80 85 90 -6 95 Source: WEFA 60 65 70 75 80 85 90 95 Sources: Bureau of Economic Analysis; Milken Institute Commodity Prices Unleaded Gas Prices Commodity Research Bureau Index Unleaded Gasoline, Price Per Gallon Index Cents per Gallon 260 120 100 240 80 220 60 200 180 40 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Source: Datastream, Bloomberg UNITED STATES IV-13 March 8, 2000 www.milken-inst.org U.S. – International Trade United States - Principal Exports 1998 United States - Exports to Asia Asian Newly Industrialized Countries Percent Change, Year Ago Food, Feed & Other Beverages 5% 7% Automotive Goods 11% 40 20 Capital Goods 43% Consumer Goods 12% 0 -20 Industrial Supplies 22% -40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Census Bureau; US International Trade in Goods and Services Source: Economist Intelligence Unit United States - Principal Imports 1998 United States - Exports to Latin America Merchandise Exports Food, Feed & Other 4% Beverages 5% Automotive Goods 16% Percent Change, Year Ago 40 Mexico Other Latin America 30 Capital Goods 29% 20 10 0 Industrial Supplies 22% Consumer Goods 24% -10 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Census Bureau; US International Trade in Goods and Services Source: Economist Intelligence Unit United States - Destination of Imports 1998 United States - Destination of Exports 1998 Canada 19% Other 41% Other 37% Japan 13% Mexico 12% Taiwan Mexico 4% China 10% UK Germany 8% 4% 5% Netherlands 3% France Germany 3% 4% Source: Economist Intelligence Unit Source: Economist Intelligence Unit UNITED STATES March 8, 2000 www.milken-inst.org Canada 23% IV-14 UK 6% Japan 8% U.S. – International Trade United States - Trade Balance United States - Role of Trade Merchandise Exports, Imports, and Balance As Percent of GDP US$ Billions 100 Percent 13 Exports Imports Trade Balance 80 Exports Imports 12 60 11 40 10 20 9 0 8 -20 7 -40 -60 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Globalization Is Here To Stay United States - Trade Gap Exports Plus Imports as Percent of GDP Real Exports and Imports Percent US$ Billions 25 1500 Exports Imports 1000 20 500 15 0 1929-1973 Average = 9.5% 10 -500 5 0 -1000 -1500 30 35 40 45 50 55 60 65 70 75 80 85 90 95 Source: Bureau of Economic Analysis 75 80 85 90 95 Source: Bureau of Economic Analysis United States - Corporations Foreign Sales as Percent of Total Sales United States - Exports to G-7 Merchandise Exports Percent Change, Year Ago 30 Company Motorola McDonald's Dow Chemical IBM Intel Hewlett-Packard Johnson & Johnson General Electric Ford Microsoft 70 1999 63.0 60.8 59.7 56.7 55.6 54.2 46.8 31.3 30.3 29.8 20 Japan West Europe Canada 10 0 -10 -20 Source: Compustat 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Census Bureau; US International Trade in Goods and Services UNITED STATES IV-15 March 8, 2000 www.milken-inst.org U.S. – Equity Markets United States - Equity Returns United States - Market Cap to GDP Dow Jones Industrial Average U.S. Market Capitalization as % of GDP Index Percent 12000 160 10000 120 8000 Annual Return 7.7% 6000 4000 80 Annual Return 14.5% 40 2000 0 Annual Return 1.0% 65 70 75 80 85 90 95 0 00 30 Source: Bloomberg 40 United States - S&P 500 Earnings Per Share US$ Trillions 80 14 60 12 40 10 20 8 0 6 -20 4 -40 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Standard & Poor's 80 70 60 25 35 45 55 65 75 85 95 Sources: CRSP; Milken Institute United States - S&P 500 Yield Dividend/Price Ratio Ratio 40 7 35 6 30 5 25 4 20 3 15 2 10 1 70 100 90 Ratio 75 80 85 90 0 95 Source: Standard & Poor's 60 65 70 Source: Standard & Poor's UNITED STATES March 8, 2000 www.milken-inst.org 90 Percent S&P 500 Price/Earnings Ratio 65 80 Total Market Cap - L Top 200 Firms as % of Total Market - R United States - S&P 500 Price/Earnings Ratio 60 70 Market Cap of Top 200 Firms Percent Change, Year Ago 5 60 United States - Market Capitalization S&P 500 EPS Growth -60 50 Sources: Milken Institute; CRSP IV-16 75 80 85 90 95 50 U.S. – Market Capitalization Leaders 1929 Market Capitalization US$ Billions 1949 Market Capitalization US$ Billions Company Market Capital AT&T 2.9 GM 1.8 GE 1.8 Standard Oil NJ 1.6 US Steel 1.4 Du Pont 1.2 Consolidated Gas Co. 1.1 Pennsylvania Railroad Co. 1.0 New York Cent. RR Co. 0.8 Standard Oil CA 0.8 Total 14.4 26.2% of Total Market & 14.0% of GDP Company Market Capital AT&T 3.7 GM 3.1 Du Pont 2.8 Standard Oil NJ 2.0 Union Carbide & Carbon 1.3 GE 1.2 Sears 1.0 Kress SH 0.9 Standard Oil CA 0.9 Texas Co. 0.8 Total 17.7 26.1% of Total Market & 6.6% of GDP 1979 Market Capitalization US$ Billions 1989 Market Capitalzation US$ Bilions Company Market Capital Tokio Marine & Fire 126.6 IBM 37.6 AT&T 36.6 Exxon 24.2 GM 14.6 Schlumberger LTD 11.9 Standard Oil 11.8 Mobil Oil 11.7 GE 11.5 Royal Dutch 10.6 Total 297.1 23.1% of Total Market & 11.6% of GDP Company Market Capital Exxon 62.6 GE 58.2 IBM 54.5 AT&T 48.9 Philip Morris 38.6 GM 31.5 Merck 30.6 Bristol Myers & Squibb 29.2 Du Pont 28.7 Amoco 28 Total 410.8 12.3% of Total Market & 7.6% of GDP 1999 Market Capitalization US$ Billions Company Market Capital Microsoft 601.0 GE 507.0 Wal-Mart 355.0 Intel 307.0 Lucent 228.0 AT&T 226.0 IBM 196.0 Exxon 195.0 Citigroup 187.0 America Online 167.0 Total 2969.0 22.8% of Total Market & 33% of GDP Number of Companies in Top 100 Market Cap Old Industries Railroads Oil & Gas Metals Auto & Parts New Industries Telecommunications Technology Financial Services Pharmaceuticals 1925 1955 1975 1985 1999 23 16 4 10 5 18 13 4 1 17 3 6 3 14 2 5 0 8 0 3 2 0 0 0 3 5 2 1 6 9 7 10 9 9 9 10 14 28 15 13 UNITED STATES IV-17 March 8, 2000 www.milken-inst.org U.S. – Economic Structure Composition of Output 1999 State/Local Government Federal 11% Government 6% Housing 4% Fixed Investment 15% Consumption 64% • Note the changes over the last half-century. • Consumer spending at 50-year high. Within consumer, large decrease in consumer durables, more in nondurables, substantial hike in services. • 1999 government share 17%, lowest since 1950 at 16%. These are government purchases. Much more flows through government as transfer payments. Tax one party, give it to another to spend. Massive, growing disincentive. • Housing big after WWII, cyclical ups and downs, important that way, small in size. • Capital spending relatively stable share of total. Larger would lift growth rate if deployed well. Changes in composition – to high tech. Source: Bureau of Economic Analysis Composition of Output 1990 Composition of Output 1980 State/Local Government 12% Federal Government 9% Housing 4% Fixed Investment 10% State/Local Government Federal 12% Government 9% Housing 4% Fixed Investment 12% Consumption 65% Source: Bureau of Economic Analysis Source: Bureau of Economic Analysis Composition of Output 1970 Composition of Output 1950 State/Local Government Federal 7% Government 9% Housing 7% State/Local Government 12% Federal Government 11% Housing 4% Fixed Investment 10% Fixed Investment 10% Consumption 63% Source: Bureau of Economic Analysis Source: Bureau of Economic Analysis UNITED STATES March 8, 2000 www.milken-inst.org Consumption 63% IV-18 Consumption 67% U.S. – California Economy & Industry California vs. U.S. - Real GDP Growth California's Three Regions - Gross Product 1975-1998 Real GSP Growth, 1980-1998 Percent Change, Year Ago Percent Change, Year Ago 10 10 California United States 8 8 6 6 4 4 2 2 0 0 -2 -2 Southern California Central Valley Northern California -4 -4 75 80 85 90 -6 95 Sources: BEA; BLS; U.S. Bureau of the Census; RFA 80 82 84 California - Net Migration 92 94 96 98 Percent 300 26 200 24 100 22 0 20 -100 18 -200 16 -300 14 Foreign Migration Doemstic Migration -400 12 10 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Califonia Department of Finance 1940 1950 1960 1970 1980 1990 1996 1997 Source: Immigration and Naturalization Service California - 7th Largest Economy California - Motion Pictures Dwarfs Aerospace Current Dollars (1998) Employment US$ Trillion Thousands 180 90 As Percent of Total Population Thousands 200 88 California - Foreign Born Population Domestic and foreign Net Migration -500 86 Sources: BEA; BLS; U.S. Bureau of the Census; RFA 10 Motion Pictures Aerospace 8 160 6 140 4 120 100 2 80 0 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 US Source: Bureau of Labor Statistics Japan France Italy China Mexico Germany UK California Canada Korea Source: WEFA UNITED STATES IV-19 March 8, 2000 www.milken-inst.org U.S. – California Economy & Industry Manufacturing Employment Sector Shares of Total Manufacturing Job Growth in Selected States State NV TX CA MI TN PA OH IL NY DC US 1994 9.9% 3.6% 0.9% 3.5% 4.1% 1.4% 3.2% 2.5% 0.9% -1.7% 2.8% 1995 6.5% 3.5% 2.2% 3.1% 3.1% 1.2% 2.9% 2.4% 0.7% -2.4% 2.6% 1996 7.2% 2.9% 2.6% 2.0% 1.4% 1.0% 1.4% 1.6% 0.6% -3.0% 2.1% 1997 5.6% 4.2% 3.3% 2.0% 2.0% 1.8% 1.7% 1.6% 1.4% -1.3% 2.6% 1998 3.9% 3.8% 3.4% 1.6% 2.1% 1.7% 1.5% 2.2% 2.0% -0.5% 2.7% Source: Bureau of Labor Statistics 1990 1998 Electronics CA US 12.2% 8.8% 13.7% 9.0% Computers CA US 4.9% 2.3% 4.8% 1.9% Instruments CA US 10.7% 1.5% 9.4% 0.8% Source: Bureau of Labor Statistics Where Does California's Foreign Born Population Come From? Percent of Total Immigration Share of Total California Exports 1997 Computer & Machinery 25.9% Mexico Canada El Salvador Other Latin America Europe Philippines Other Asia Elsewhere Electronics 26.7% Instruments 8.1% ` Other 39.3% 1940 15 11 0 1 57 1 5 10 1970 22 10 1 7 35 4 9 12 1990 60 1 8 7 3 5 15 1 Source: Immigration and Naturalization Service Source: California Trade & Commerce Agency Ethnic Diversity at UC Irvine California - San Jose Cools Off A Comparison of 1979 and 1997 Undergraduates Nonagricultural Employment Percent Percent Change, Year Ago 70 7 1979 1997 60 San Jose California Los Angeles 6 5 50 4 40 3 30 2 20 1 10 0 0 Black Asian Hispanic Caucasian -1 JAN 1996 Other Source: Health Care Finance Administration UNITED STATES March 8, 2000 www.milken-inst.org IV-20 JAN 1997 JAN 1998 JAN 1999 JAN 2000 Europe – Overview Europe - Real GDP Growth EU Growth, 1990 Prices Percent Change, Year Ago • European growth averaging 2.5%. • In general, low inflation, loose monetary conditions, low euro, rising exports, increasing consumer confidence, decreasing unemployment, strong capital investment. Increased GDP growth ahead? • After promising start last year, euro in steady fall against the dollar. Worrisome? • Wide disparity in tax rates throughout the continent. • UK, Ireland can teach the rest a lesson. • Backgrounds, differences in standard of living, highly varied senses of appropriate fiscal stance, and macro labor issues will continue to dominate. 4 3 2 1 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Europe - Trade Balance Euro - Exchange Rate EU Trade Balance Euro Per US Dollar US$ Billions Euro/US$ 200 0.85 150 0.90 100 0.95 50 0 1.00 -50 1.05 -100 JAN MAR 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1999 Source: WEFA Source: Datastream JUL SEP NOV Europe - Unemployment Europe - Capital Investment EU Unemployment Rate EU Real Gross Fixed Investment Percent Change, Year Ago 11.5 6 11.0 4 10.5 2 10.0 0 9.5 -2 9.0 -4 8.5 -6 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA JAN 2000 Percent 8.0 MAY 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-1 EUROPE March 8, 2000 www.milken-inst.org Europe – Overview Europe - Consumer Confidence Europe - Capacity Utilization EU Consumer Confidence on Business Climate EU Capacity Utilization Balance of Opinion Percent 0 86 -5 84 -10 82 -15 80 -20 78 -25 -30 76 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Eurozone - Total Tax Revenue in 1998 Eurozone - Changes in Tax Revenue As Percent of GDP Tax Revenue as Percent of GDP, 1990 vs. 1998 Percent Percent 50 6 4 45 2 40 0 -2 35 -4 30 -6 Spain Germany Italy Luxem. Belgium Ireland Portugal Neth. Austria France Finland Source: Lehman Brothers Ireland Germany Finland Belgium Italy Neth. Spain Luxem. France Austria Portugal Source: Lehman Brothers European Pension Assets European Corporate Tax Rates 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Germany France Belgium Italy Greece Spain Netherlands Austria Portugal Denmark Ireland Luxembourg UK Sweden Finland Source: Financial Times EUROPE March 8, 2000 www.milken-inst.org Percent 45 40 40 37 35-40 35 35 34 34 34 32 30 30 28 28 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Austria Belgium Denmark Finland France Germany Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Sources: Financial Times , William Mercer V-2 $Billions 8 26 166 41 95 286 35 195 558 39 12 26 226 286 1241 %GDP 4 10 89 31 6 12 43 19 141 24 10 4 90 105 86 $Thousands* 1.0 2.5 31.2 7.9 1.6 3.5 9.7 4.3 35.5 8.9 1.2 0.7 25.3 40.3 21.0 *Per capita Europe – Overview Survival Rate of Business Start-ups Share of Business Owners Percent Still In Business After Four Years Percent of Labor Force Percent Percent 65 12 60 10 55 1986 1996 8 50 6 45 4 40 2 35 30 Netherlands Japan Germany 0 U.S. Sources: EIM, Financial Times Netherlands EU* Sources: EIM, Financial Times Ireland and European Union Comparison U.S. Japan * Excluding Mediterranean countries Ireland and European Union Comparison Real GDP Productivity Percent Change, Year Ago 12 EU Total Percent Change, Year Ago Ireland EU 10 8 Ireland EU 6 8 6 4 4 2 2 0 0 -2 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: WEFA European Employment Rates Europe - Comparative GDP Per Capita 1998 1999 Percent US$ Thousands 75 38 36 70 34 65 32 30 60 28 55 26 24 50 Sweden Neth. Portugal Germany France Belgium Italy Denmark U.K. Austria Finland Ireland Greece Spain Switerland Finland Japan Norway Denmark Sweden U.S. Source: WEFA Sources: Danish Government, Financial Times V-3 EUROPE March 8, 2000 www.milken-inst.org Europe – Real GDP Comparisons European Union - Real GDP Austria - Real GDP 1990 Prices 1990 Prices Percent Change, Year Ago 8 Percent Change, Year Ago 10 8 6 6 4 • EU average growth estimated to be about 2.1% for 1999. • Leader still Ireland – more than 6% growth. • Germany, powerhouse for the region, predicted to have 1.4% growth in ’99. • Italy lower still: 1.1% – slowest growth in region. 4 2 2 0 0 -2 -4 -2 80 82 84 86 88 90 92 94 96 98 -4 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA Belgium - Real GDP Denmark - Real GDP 1990 Prices 1990 Prices Percent Change, Year Ago 10 Finland - Real GDP 1990 Prices Percent Change, Year Ago 10 Percent Change, Year Ago 10 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 -2 -2 -2 -4 -4 -4 Note: -7.07% growth in 1991 80 82 84 86 88 90 92 94 96 98 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA France - Real GDP Germany - Real GDP 1990 Prices 1990 Prices Percent Change, Year Ago 10 6 6 6 4 4 4 2 2 2 0 0 0 -2 -2 -2 82 84 86 EUROPE March 8, 2000 www.milken-inst.org 88 90 92 94 96 98 -4 80 82 84 86 88 90 92 94 96 98 96 98 Percent Change, Year Ago 10 8 80 84 1990 Prices Percent Change, Year Ago 10 8 Source: WEFA 82 Greece - Real GDP 8 -4 80 Source: WEFA 86 88 90 Sources: IFS; Milken Institute V-4 92 94 96 98 -4 80 82 84 Source: WEFA 86 88 90 92 94 Europe – Real GDP Comparisons Ireland - Real GDP Italy - Real GDP 1990 Prices 1990 Prices Percent Change, Year Ago 10 Netherlands - Real GDP 1990 Prices Percent Change, Year Ago 10 Percent Change, Year Ago 10 Note: 11.12% growth in 1995 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 -2 -2 -2 -4 80 82 84 86 88 90 92 94 96 98 -4 Source: WEFA 80 82 84 86 88 90 92 94 96 98 -4 Source: WEFA Norway - Real GDP Portugal - Real GDP 1990 Prices 1990 Prices Percent Change, Year Ago 10 8 6 6 6 4 4 4 2 2 2 0 0 0 -2 -2 -2 82 84 86 88 90 92 94 96 98 -4 80 82 84 86 88 90 92 94 96 98 -4 Source: WEFA Switzerland - Real GDP 1990 Prices 1990 Prices 6 6 6 4 4 4 2 2 2 0 0 0 -2 -2 -2 82 84 86 88 90 92 94 96 98 -4 80 82 84 94 96 98 80 82 84 86 88 90 92 94 96 98 Percent Change, Year Ago 10 8 80 92 1990 Prices Percent Change, Year Ago 10 8 Source: WEFA 90 United Kingdom - Real GDP 8 -4 88 Source: WEFA Sweden - Real GDP Percent Change, Year Ago 10 86 Percent Change, Year Ago 10 8 80 84 1990 Prices Percent Change, Year Ago 10 Source: WEFA 82 Spain - Real GDP 8 -4 80 Source: WEFA 86 88 90 Source: WEFA 92 94 96 98 -4 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-5 EUROPE March 8, 2000 www.milken-inst.org Europe – Per Capita Income EU - Per Capita Real Income 1990 Prices US$ Thousands 40 35 30 25 20 15 10 80 82 84 86 88 90 92 94 96 98 • Per capita income for the entire EU is US $21,100. • But disparities are wide. • Norway has the highest per capita income in Europe at $37,000 • Greece and Portugal have been excluded from this list because per capita income never exceeded $10,000 between 1980 and 1999. • Among European countries, Portugal has the lowest per capita income, just $8,500. • Turkey, has a per capita income of just $3,400. • Euroland opportunities perhaps best in the world. Consolidation, costcutting, restructuring. • Greater wealth for all ahead? Source: WEFA Austria - Per Capita Real Income Belgium - Per Capita Real Income 1990 Prices 1990 Prices Denmark - Per Capita Real Income 1990 Prices US$ Thousands 40 US$ Thousands 40 US$ Thousands 40 35 35 35 30 30 30 25 25 25 20 20 20 15 15 15 10 80 82 84 86 88 90 92 94 96 98 10 Source: WEFA 80 82 84 86 88 90 92 94 96 98 10 Source: WEFA Finland - Per Capita Real Income France - Per Capita Real Income 1990 Prices 1990 Prices US$ Thousands 35 30 80 82 84 86 88 90 92 94 96 98 Source: WEFA Germany - Per Capita Real Income 1990 Prices US$ Thousands 40 US$ Thousands 40 35 35 30 30 25 25 20 20 15 15 25 20 15 10 80 82 84 86 Source: WEFA EUROPE March 8, 2000 www.milken-inst.org 88 90 92 94 96 98 10 80 82 84 86 88 90 Source: WEFA 92 94 96 98 10 80 82 84 Source: WEFA V-6 86 88 90 92 94 96 98 Europe – Per Capita Income Ireland - Per Capita Real Income Italy - Per Capita Real Income 1990 Prices 1990 Prices Netherlands - Per Capita Real Income 1990 Prices US$ Thousands 40 US$ Thousands 40 US$ Thousands 40 35 35 35 30 30 30 25 25 25 20 20 15 15 20 1980=9.4 1981=9.6 15 1982=9.7 1983=9.6 1984=9.9 10 80 82 84 86 88 90 92 94 96 98 10 Source: WEFA 80 82 84 86 88 90 92 94 96 98 10 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA Norway - Per Capita Real Income Spain - Per Capita Real Income 1990 Prices 1990 Prices Sweden - Per Capita Real Income 1990 Prices US$ Thousands 40 US$ Thousands 40 US$ Thousands 40 35 35 35 30 30 30 25 25 25 20 20 20 1980=9.8 1981=9.7 15 15 15 1982=9.8 1983=10.0 1984=10.0 10 80 82 84 86 88 90 92 94 96 98 10 Source: WEFA 80 82 84 86 Switzerland - Per Capita Real Income 35 35 30 30 25 25 20 20 15 15 84 Source: WEFA 94 96 98 86 88 90 92 10 80 82 84 86 88 90 92 94 96 98 1990 Prices US$ Thousands 40 82 92 UK - Per Capita Real Income US$ Thousands 40 80 90 Source: WEFA 1990 Prices 10 88 Source: WEFA 94 96 98 10 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-7 EUROPE March 8, 2000 www.milken-inst.org Austria – Current Economic Conditions Austria - Real GDP Growth 1990 Prices Percent Change, Year Ago • GDP growth is expected to be 2% in 1999. • New car registrations flat, consumer spending up slightly. • Industrial production still growing, but down from 1998 highs. • The equity market has underperformed other European countries’ markets. • Exports sluggish, higher consumer imports. EU growth will help here. • Business confidence has started to recover after a large dip in the latter half of ’98, early ’99. • Job vacancies are increasing, though still well below early 1990 levels. • Unemployment has recently fallen. 6 5 4 3 2 1 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS, OECD Austria - Inflation Rate Austria - Interest Rates Consumer Price Index Short-Term and Long-Term Percent 10 Percent Change, Year Ago 5 3 Month Interbank 10 Year Government Bond 4 8 3 6 2 1 4 0 -1 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Bloomberg Source: IFS Austria - Equity Index Austria - Exchange Rate Austrian Traded Index Schillings Per US Dollar Index 1800 AS/US$ 9 1600 10 1400 11 1200 12 1000 13 14 800 600 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg V-8 Austria – Current Economic Conditions Austria - Official Reserves Austria - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 11 2 10 20 0 9 15 8 -2 7 10 6 5 0 -4 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 4 -6 80 Source: IFS 82 84 86 88 90 92 94 96 98 Source: IFS Austria - Industrial Production Austria - Unemployment Industrial Production Index Unemployment Rate Percent Change, Year Ago Percent 7.5 15 7.0 10 6.5 5 6.0 0 5.5 -5 5.0 4.5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Austria - Government Debt Austria - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent -1.5 70 -2.0 -2.5 60 -3.0 -3.5 50 -4.0 -4.5 40 -5.0 -5.5 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-9 EUROPE March 8, 2000 www.milken-inst.org Austria – International Trade Austria - Principal Exports 1998 Austria - Trade Balance Merchandise Exports, Imports, and Balance Raw materials Other Food, drink & 3% US$ Billions 8 Exports Imports Trade Balance 1% tobacco 5% Chemical products 9% Consumer mfg. 14% 6 Machinery & transport equip. 42% 4 2 0 Intermediate mfg. 26% -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Austria - Principal Imports 1998 Austria - Role of Trade As Percent of GDP Fuels Other 3% Food, drink & 4% tobacco 6% Chemical products 11% Percent 44 Exports Imports 42 Machinery & transport equip. 41% 40 38 Consumer mfg. 17% 36 Intermediate mfg. 18% 34 Austria - Destination of Exports 1998 Other 45% Switzerland Hungary 5% 5% 82 84 86 88 90 92 94 96 Austria - Origin of Imports 1998 Other 41% Germany 36% Italy 9% Germany 41% France 5% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 80 Source: IFS Source: Economist Intelligence Unit US 5% Source: Economist Intelligence Unit V-10 Italy 8% 98 Austria – Current Economic Conditions Austria - Foreign Direct Investment Austria - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 7 10 Inflows into Austria Outflows from Austria 6 5 5 4 0 3 2 -5 1 0 80 82 84 86 88 90 92 94 96 -10 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Austria - New Car Registrations Austria - Retail Sales Not Seasonally Adjusted Volume, Not Seasonally Adjusted Thousands Index 1973=100 70 220 60 200 50 180 40 160 30 140 20 120 10 0 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Austria - Business Confidence Austria - Job Vacancies Seasonally Adjusted Three Month Moving Average Balance of Opinion Thousands 0 70 -5 60 -10 50 -15 40 -20 30 -25 20 -30 -35 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-11 EUROPE March 8, 2000 www.milken-inst.org Belgium – Current Economic Conditions • Consensus Economics predicts GDP growth of 1.7% in ’99. 4 • Unemployment rate declining. 3 • But participation rate of active population in labor market is one of EU’s lowest – 56.8%. • Debt to GDP should fall to 115% in 1999, down from 135% in 1993. • Inflation well under control. • Equity market underperformed last year compared to other European markets. • Consumer confidence approaching highs not seen for 10 years. Belgium - Real GDP Growth 1990 Prices Percent Change, Year Ago 2 1 0 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Belgium - Inflation Rate Belgium - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 5 14 3 Month Interbank 10 Year Government Bond 12 4 10 3 8 2 6 1 0 4 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: IFS; Datastream Belgium - Unemployment Belgium - Equity Index Unemployment Rate, 12-Month Moving Average Brussels Stock Exchange BEL 20 Index Percent Index 15 4000 14 3500 13 3000 12 2500 11 2000 10 1500 9 1000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-12 Belgium – Current Economic Conditions Belgium - Official Reserves Belgium-Luxembourg - Foreign Direct Investment Total Reserves Minus Gold and as Percent of GDP US$ Billions Foreign Investment Flows Percent 25 US$ Billions 7.0 Reserves Minus Gold - L Reserves as % of GDP - R 25 6.8 20 20 6.6 6.4 15 15 6.2 10 10 6.0 5.8 5 5 5.6 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 5.4 0 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Belgium - Government Debt Belgium - Role of Trade As Percent of GDP Exports and Imports as % of GDP Percent Percent 135 80 Exports Imports 130 75 125 70 120 65 115 110 80 82 84 86 88 90 92 94 96 60 98 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: IFS Belgium - Industrial Production Belgium - Consumer Confidence Industrial Production Index Seasonally Adjusted Percent Change, Year Ago Percent Balance of Opinion 15 5 0 10 -5 -10 5 -15 0 -20 -25 -5 -30 -10 -35 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA V-13 EUROPE March 8, 2000 www.milken-inst.org Czech Republic – Current Economic Conditions Czech Republic - Real GDP Growth 1990 Prices Percent Change, Year Ago • Zero (or negative) GDP growth in 1999. • The unemployment rate continues to climb, hovering around 9%. Wage inflation persists. • Productivity gains disappointing. • Weak retail sales. • Consumer prices in steady fall since early 1998 – now in line with Eurozone levels. • The crown has appreciated sharply – bad news for exports. • Strong foreign direct investment flows. • HN-Wood Index lackluster. 30 20 10 0 -10 1993 1994 1995 1996 1997 1998 1999 Source: IFS Czech Republic - Inflation Rate Czech Republic - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago 14 Percent 20 12 3 Month Interbank 7 Year Government Bond 18 10 16 8 14 12 6 10 4 8 2 6 0 1993 1994 1995 1996 1997 1998 4 1999 Source: IFS 1993 1994 Czech Republic - Exchange Rate 1996 1997 1998 1999 Czech Republic - Equity Index Crown per US Dollar HN-Wood Index CK/US$ Index 0.028 4000 0.030 3500 0.032 3000 0.034 2500 0.036 2000 0.038 1500 0.040 1995 Sources: Datastream; Bloomberg 1993 1994 1995 1996 1997 1998 1000 1999 Source: WEFA EUROPE March 8, 2000 www.milken-inst.org 1993 1994 Source: Bloomberg V-14 1995 1996 1997 1998 1999 Czech Republic – Current Economic Conditions Czech Republic - Official Reserves Czech Republic - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 16 Reserves Minus Gold - L Reserves as % of GDP 14 Percent 30 2 25 0 20 -2 15 -4 10 -6 5 -8 0 -10 12 10 8 6 4 2 0 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1993 1994 1995 1996 1997 1998 1999 Source: IFS Czech Republic - Industrial Production Czech Republic - Unemployment Industrial Production Index Unemployment Rate Percent Change, Year Ago Percent 9 30 8 20 7 10 6 5 0 4 -10 3 2 1993 1994 1995 1996 1997 1998 -20 1999 Source: WEFA 1993 1994 1995 1996 1997 1998 1999 Source: IFS Czech Republic - Budget Balance Czech Republic - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent Of GDP Percent Percent 0 45 -1 40 -2 35 -3 30 -4 -5 1993 1994 1995 1996 1997 1998 25 1999 Source: Datastream 1993 1994 1995 1996 1997 1998 1999 Source: Datastream V-15 EUROPE March 8, 2000 www.milken-inst.org Czech Republic – International Trade Czech Republic - Principal Exports 1998 Czech Republic - Trade Balance Merchandise Exports, Imports, and Balance Raw materials Other & fuels 5% 7% US$ Billions 4 Machinery & equipment 40% Chemicals 8% Exports Imports Trade Balance 3 2 1 0 Manufactured goods 40% -1 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Czech Republic - Principal Imports 1998 Czech Republic - Role of Trade Exports and Imports as % of GDP Percent Other Food & live 12% animals 5% 64 Exports Imports 62 60 Machinery & equipment 40% Chemicals 12% 58 56 54 Raw materials and fuels 10% 52 Manufactured goods 21% 50 48 Source: Economist Intelligence Unit Czech Republic - Destination of Exports 1998 Other 32% U.K. 3% Italy 4% PolandAustria 6% 6% 1994 1995 1996 1997 1998 Czech Republic - Origin of Imports 1998 Other 34% Germany 38% Germany 34% U.K. Slovakia 4% France 7% Austria 4% Italy 5% Russia 6% 6% Slovakia 11% Source: Economist Intelligence Unit Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 1993 Source: IFS V-16 1999 Czech Republic Czech Republic - Foreign Direct Investment Czech Republic - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 1.6 1.5 Inflows into Czech Republic Outflows from Czech Republic 1.4 1.2 1.0 1.0 0.8 0.5 0.6 0.4 0.0 0.2 0.0 1993 1994 1995 1996 1997 1998 Note: Outflow data not available for 1995Q4, 1996Q1-2 -0.5 1999 1993 Source: IFS 1996 1997 1998 1999 Czech Republic - Retail Sales Job Vacancies Retail Sales Volume, Three Month Moving Average Index 1994=100 60 115 40 110 20 105 0 100 -20 95 -40 90 1993 1995 Czech Republic - Job Vacancies Percent Change, Year Ago -60 1994 Source: IFS 1994 1995 1996 1997 1998 85 1999 1993 Source: IFS 1994 1995 1996 1997 1998 1999 Source: IFS Czech Republic - GDP Per Capita Czech Republic - Life Expectancy at Birth Purchasing Power Parity GDP Per Capita Total Years US$ Thousands Years 11.0 80 Males Females Total 10.5 75 10.0 70 9.5 9.0 65 8.5 8.0 1993 1994 1995 1996 1997 1998 60 1999 1975 1996 Source: World Bank Source: Datastream V-17 EUROPE March 8, 2000 www.milken-inst.org Denmark – Current Economic Conditions • Denmark experiencing slower growth. Government predicts GDP growth will be 1.3% in 1999, 1.6% in 2000. • Unemployment continues to decline after innovative government effort, now just over 5%. OECD estimates structural unemployment down by 2% from labor market reforms. 3 • Government budget in surplus. 2 • Inflation above EU average, still low at 2.4%. 1 • But wages rising faster than abroad, big concern for export competitiveness. Denmark - Real GDP Growth 1990 Prices Percent Change, Year Ago 6 5 4 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Denmark - Inflation Rate Denmark - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 4 20 3 Month Interbank 10 Year Government Bond 3 15 2 10 1 5 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Denmark - Exchange Rate Denmark - Equity Index Kroner Per US Dollar Copenhagen Stock Exchange General Index DK/US$ Index 5.0 800 700 5.5 600 6.0 500 6.5 400 7.0 7.5 300 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-18 Denmark – Current Economic Conditions Denmark - Official Reserves Denmark - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 As Percent of GDP Percent Percent 14 4 20 12 2 15 10 0 10 8 -2 5 6 -4 4 -6 0 Reserves Minus Gold - L Reserves as % of GDP - R 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 80 Source: IFS 82 84 86 88 90 92 94 96 98 Source: IFS Denmark - Industrial Production Denmark - Unemployment Rate Industrial Production Index 12 Month Moving Average Percent Change, Year Ago Percent 13 15 12 10 11 10 5 9 0 8 7 -5 6 5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Denmark - Government Debt Denmark - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 4 90 80 2 70 0 60 50 -2 40 -4 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-19 EUROPE March 8, 2000 www.milken-inst.org Denmark – International Trade Denmark - Principal Exports 1998 Denmark - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 6 Ships Other 8% Fuels 2% Exports Imports Trade Balance 5 3% 4 Agricultural products 12% 3 2 1 Manufactured goods 75% 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Denmark - Principal Imports 1998 Denmark - Role of Trade As Percent of GDP Percent Transport equipment 7% Capital goods 13% Fuels 4% 40 Exports Imports 38 36 Intermediate goods 47% 34 32 30 Consumer goods 29% 28 26 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Denmark - Destination of Exports 1998 Denmark - Origin of Imports 1998 Germany 21% Germany 23% Other 48% Sweden 11% Other 47% U.K. 9% U.K. 8% U.S. Norway 4% 5% U.S. Norway 6% 5% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org Sweden 13% Source: Economist Intelligence Unit V-20 98 Denmark – Current Economic Conditions Denmark - Foreign Direct Investment Denmark - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 7 15 6 Inflows into Denmark Outflows from Denmark 10 5 5 4 3 0 2 -5 1 -10 0 -1 80 82 84 86 88 90 92 94 96 -15 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Denmark - Gross Capital Formation Denmark - Retail Sales As Percent of GDP Volume of Retail Sales, Seasonally Adjusted Percent Index 1990=100 22 125 21 120 20 115 19 110 18 105 17 100 16 15 95 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Denmark - Comparative Employment Rates Denmark - Consumer Confidence European Employment Rates, 1998 Not Seasonally Adjusted Percent Percent Balance of Opinion 75 15 10 70 5 65 0 60 -5 -10 55 -15 50 Sweden Neth. PortugalGermany France Belgium Italy Denmark U.K. Austria Finland Ireland Greece Spain -20 Sources: Danish Government, Financial Times 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-21 EUROPE March 8, 2000 www.milken-inst.org Finland – Current Economic Conditions • Strong growth continues for the Finnish economy. Expect 3.5% growth for 1999, following average growth rates of 4.5% from 1993 to 1998. • Unemployment now under 10% after rising to 18% in early 1990s. Manufacturing exports, employment trend up. 2 • Budget is in surplus again. 0 • Thanks to Nokia, 60% of the Helsinki exchange’s market value, the stock market continues to climb. -4 • Inflation well under control. -6 • Retail sales, consumer confidence are high. Finland - Real GDP Growth 1990 Prices Percent Change, Year Ago 8 6 4 -2 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Finland - Inflation Rate Finland - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 8 20 10 Year Benchmark Bond 3 month Interbank 6 15 4 10 2 5 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream Finland - Exchange Rate Finland - Equity Index Markka Per US Dollar HEX Index FM/US$ Index 3.5 16000 14000 4.0 12000 10000 4.5 8000 5.0 6000 4000 5.5 2000 6.0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-22 Finland – Current Economic Conditions Finland - Official Reserves Finland - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 12 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 12 8 6 10 10 4 8 2 6 8 0 4 -2 6 2 0 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 4 -6 80 Source: IFS 82 84 86 88 90 92 94 96 98 Source: IFS Finland - Industrial Production Finland - Unemployment Rate Industrial Production Index Three Month Moving Average Percent Change, Year Ago Percent 20 15 10 15 5 10 0 -5 5 -10 0 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Finland - Government Debt Finland - Budget Balance As Percent of GDP Government Deficit/Surplus as Percent of GDP Percent Percent 6 60 4 50 2 40 0 -2 30 -4 20 -6 -8 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-23 EUROPE March 8, 2000 www.milken-inst.org Finland – International Trade Finland - Principal Exports 1998 Finland - Trade Balance Merchandise Exports, Imports, and Balance Metal, machinery, & transport products 27% Other 17% Wood products 6% US$ Billions 5 Exports Imports Trade Balance 4 3 2 Electrical & optical equipment 26% Paper products 24% 1 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Finland - Principal Imports 1998 Finland - Role of Trade As Percent of GDP Percent Energy 8% 40 Exports Imports 35 Intermediate goods 45% Consumer goods 25% 30 25 Capital goods 30% 20 80 82 84 86 88 Finland - Destination of Exports 1998 94 96 Gemany 15% Sweden 9% Sweden 12% Other 45% UK 9% US 8% US 7% Russia France 6% 5% UK Japan 6% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 92 Finland - Origin of Imports 1998 Germany 12% Other 52% 90 Source: IFS Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-24 Russia 7% 7% 98 Finland – Current Economic Conditions Finland - Portfolio Investment Finland - Foreign Direct Investment Inflows and Outflows Foreign Investment Flows US$ Billions US$ Millions 1000 5 800 3 600 Inflows into Finland Outflows from Finland 1 400 -1 200 -2 0 -4 -200 -400 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Finland - Retail Sales Finland - Consumer Confidence Seasonally Adjusted Seasonally Adjusted Index, 1995=100 Percent Balance of Opinion 125 20 120 10 115 110 0 105 100 -10 95 90 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Finland - Manufactured Goods Finland - Manufacturing Employment As Percent of Exports Seasonally Adjusted Percent Index = 1990 90 140 130 85 120 80 110 75 70 100 80 82 84 86 88 90 92 94 96 90 98 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-25 EUROPE March 8, 2000 www.milken-inst.org France: Current Economic Conditions • GDP growth was strong in the second half of ’99, fed by strong domestic demand, recovery in exports. 4 • Inflation began to increase slightly by the end of 1999. Unemployment fell. Interest rates to rise? 3 • Consumer confidence at highest point in ten years. Retail sales very strong. • Improvement in budget deficit in 1999 due to increased corporate tax and VAT receipts, not changes in spending. Public spending at 54% of GDP – above EU average. • Stock market climbed sharply last year. More than 40% of the stock in the CAC-40 is in the hands of foreign investors. France - Real GDP 1995 Prices Percent Change, Year Ago 2 1 0 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA France - Inflation Rate France - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 4 14 12 3 Month Interbank 10 Year Government Bond 3 10 2 8 6 1 4 0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream France - Exchange Rate France - Equity Index Francs per US Dollar CAC 40 Index FF/US$ Index 4.5 6000 5.0 5000 5.5 4000 6.0 3000 6.5 2000 7.0 1000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-26 France – Current Economic Conditions France - Official Reserves France - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 50 Reserves Minus Gold - L Reserves as % of GDP - R 45 Percent 13.0 3 12.0 2 11.0 40 10.0 35 1 9.0 30 8.0 25 20 0 7.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 6.0 -1 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA France - Unemployment Rate France - Industrial Production Seasonally Adjusted Industrial Production Percent 13 Percent Change, Year Ago 8 12 6 4 11 2 10 0 -2 9 -4 8 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS France - Budget Balance France - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent 0 Percent 60 -1 50 -2 40 -3 30 -4 20 -5 -6 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-27 EUROPE March 8, 2000 www.milken-inst.org France – Current Economic Conditions France - Principal Exports 1998 France - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Other 14% 30 Motor vehicles & transport equip. 14% Exports Imports Trade Balance 25 Investment goods 30% 20 15 10 5 Agricultural produce 13% Chemicals 14% Non-durable consumer goods 15% 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit France - Principal Imports 1998 France - Role of Trade As Percent of GDP Other 17% Investment goods 28% Agricultural produce 11% Percent 26 Exports Imports 25 24 23 Motor vehicles & transport equip. 11% Chemicals 16% 22 21 Non-durable consumer products 17% 20 19 80 82 84 86 88 France - Destination of Exports 1998 92 Germany 17% UK 10% Italy 10% Other 41% US 9% Italy 9% US 7% BelgiumSpain Luxembourg 8% 9% Spain 7% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 94 France - Origin of Imports 1998 Germany 16% Other 41% 90 Source: IFS Source: Economist Intelligence Unit UK 8% BelgiumLuxembourg 8% Source: Economist Intelligence Unit V-28 96 98 France – Current Economic Conditions France - Foreign Direct Investment France - Portfolio Investment Direct Investment Inflows Inflows and Outflows US$ Billions US$ Billions 12 40 10 20 8 0 6 -20 4 -40 2 -60 0 -80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Inflows into France Outflows from France 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS France - Gross Fixed Capital Formation France - Consumer Confidence As Percent of GDP Seasonally Adjusted Percent Percent Balance of Opinion 23 0 22 -5 -10 21 -15 20 -20 19 -25 18 17 -30 -35 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA France - Retail Sales France - Terms of Trade Retail Sales Volume, Seasonally Adjusted Export Price/Import Price Index 1990=100 110 Ratio 1.04 108 1.02 106 1.00 104 102 0.98 100 0.96 98 0.94 96 0.92 94 0.90 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS V-29 EUROPE March 8, 2000 www.milken-inst.org France – Labor & Demographics France - Job Vacancies France - Hourly Wages Cost Seasonally Adjusted Labor Costs Thousands 260 Index 1995=100 110 240 105 220 100 200 95 180 90 160 85 140 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: IFS France - Young and Old Dependents France - Life Expectancy at Birth Young and Elderly as Percent of Total Population Total Years Years 85 Percent 35 Males Females Total 0 - 19 Years Old 60 Years and Older 80 30 75 25 70 20 15 1950 1960 1970 1980 1990 2000 2010 65 2020 France - Inflows of Foreign Population By Nationality 1990 1996 France - Stock of Foreign Population By Nationality 1997 1. 2. 3. 4. 5. 6. 7. Algeria Morocco Turkey Tunisia Zaire China Haiti Thousands 13.8 12.2 18 10.3 7 5.1 4 3.6 ... 2.9 ... 2.8 ... 1.9 8. 9. 10. 11. 12. 13. Former Yugoslavia Japan Poland Vietnam Russian Federation Lebanon 1.2 1.3 2.9 3.5 ... 6.4 1.5 1.2 .8 .7 .7 .7 Source: Trends in International Migration, OECD EUROPE March 8, 2000 www.milken-inst.org 1962 Source: World Bank Source: United Nations 1. 2. 3. 4. 5. 6. 7. Portugal Algeria Morocco Italy Spain Tunisia Turkey 8. 9. 10. 11. 12. 13. Former Yugoslavia Cambodia Poland Senegal Vietnam Laos Source: Trends in International Migration, OECD V-30 1990 Thousands 649.7 614.2 572.7 252.8 216 206.3 197.7 52.5 47.4 47.1 43.7 33.7 31.8 Germany – Current Economic Conditions • GDP – strong growth in latter half of 1999. 1.4% growth predicted for the year. • Exports have regained strength as Asia recovers. • Manufacturing orders grew substantially last year. Industrial production growing again. 10 • The budget deficit has fallen to 1.2% of GDP, from 1.7% in 1998. 5 • Unemployment in the east is still high, around 18%. In the west it has fallen below 10%. Overall, unemployment declined significantly in December, by 68,000, to just 10.2% • Retail sales provide little evidence of sustained growth in consumer demand, and consumer confidence has fallen from 1998’s highs. Germany - Real GDP Growth 1991 Prices Percent Change, Year Ago 20 15 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Germany - Interest Rates Germany - Inflation Rate Short-Term and Long-Term Consumer Price Index Percent Change, Year Ago Percent 7 10 3 Month Interbank 10 Year Government Bond 6 8 5 4 6 3 2 4 1 0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Germany - Exchange Rate Germany - Equity Index Deutsche Marks per US Dollar DAX Index DM/US$ Index 1.3 7000 1.4 6000 1.5 5000 1.6 4000 1.7 3000 1.8 2000 1.9 2.0 1000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-31 EUROPE March 8, 2000 www.milken-inst.org Germany - Current Economic Conditions Germany - Current Account Balance Germany - Official Reserves As Percent of GDP Total Reserves Minus Gold and as Percent of GDP US$ Billions Percent Percent 140 5.5 4 120 5.0 3 100 4.5 80 4.0 Reserves Minus Gold - L Reserves as % of GDP - R 2 1 0 60 40 3.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -1 3.0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Sources: IFS; WEFA Germany - Unemployment Rate Germany - Industrial Production Seasonally Adjusted Three Month Moving Average Percent Percent Change, Year Ago 14 10 12 5 10 0 8 -5 6 4 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Germany - Government Debt Germany - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent 65 Percent 0 60 55 -1 50 -2 45 40 -3 35 -4 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Financial Times EUROPE March 8, 2000 www.milken-inst.org 80 82 Source: WEFA V-32 84 86 88 90 92 94 96 98 Germany – International Trade Germany - Principal Exports 1998 Germany - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 60 Other 28% Exports Imports Trade Balance 50 Machinery 29% 40 30 Textiles & clothing 4% Metals & manufactures Chemicals 8% 13% 20 10 Motor vehicles 18% 0 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Germany - Principal Imports 1998 Germany - Role of Trade As Percent of GDP Percent 40 Machinery 19% Exports Imports 30 Other 44% Motor vehicles 10% 20 Chemicals 9% 10 Office equipment Agriculture & 5% Clothing food 9% 4% 0 80 82 84 86 88 92 94 96 98 Germany - Origin of Imports 1998 Germany - Destination of Exports 1998 France 11% France 11% US 9% Other 49% 90 Source: IFS Source: Economic Intelligence Unit Netherlands 8% Italy 8% Other 47% UK 9% US 8% Italy 7% Netherlands Japan 7% Belgium2% Luxembourg Source: Economist Intelligence Unit 6% Japan 5% BelgiumLuxembourg 6% Source: Economist Intelligence Unit V-33 UK 7% EUROPE March 8, 2000 www.milken-inst.org Germany – Current Economic Conditions Germany - Portfolio Investment Germany - Foreign Direct Investment Inflows and Outflows Foreign Investment Flows US$ Billions US$ Billions 15 60 10 40 5 20 0 0 -5 -20 -10 -40 -15 Inflows into Germany Outflows from Germany -60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Germany - Trade Balance with Europe Germany - Trade with United States EU Merchandise Trade Balance US Merchandise Trade Balance US$ Billions US$ Billions 30 5 25 4 20 Exports to US Imports from US Trade Balance with US 3 15 2 EU Trade Balance Exports to EU Imports from EU 10 1 5 0 0 -5 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IMF, Direction of Trade 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Germany - Unemployment Rate Germany - Manufacturing Orders East Germany vs. West Germany Volume, Seasonally Adjusted Percent Index 1995=100 125 25 Former E. Germany (not SA) Former W. Germany (SA) 120 20 115 110 15 105 10 100 95 5 90 0 85 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: WEFA V-34 Germany – Demographics & Labor Germany - Consumer Confidence Germany - Job Vacancies Seasonally Adjusted Seasonally Adjusted Percent Balance of Opinion Thousands 5 500 0 450 -5 400 -10 -15 350 -20 300 -25 250 -30 -35 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: WEFA Germany - Life Expectancy at Birth Germany - Young and Old Dependents Total Years Young and Elderly as Percent of Total Population Years Percent 35 80 0 - 19 Years Old 60 Years and Older Males Females Total 78 30 76 74 25 73 20 71 69 15 67 10 1950 1960 1970 1980 1990 2000 2010 65 2020 1962 1996 Source: World Bank Source: United Nations Germany - Inflows of Foreign Population By Nationality 1990 Germany - Stock of Foreign Population By Nationality 1997 1. 2. 3. 4. 5. 6. 7. Poland Turkey Italy Former Yugoslavia Portugal Russian Federation Greece Thousands 200.9 71.2 83.6 56.0 36.9 39.0 65.2 31.2 7.0 26.4 ... 24.8 26.5 16.4 8. 9. 10. 11. 12. 13. United States Romania Hungary Croatia Spain Bosnia Herzegovina ... 78.2 15.9 ... 5.1 ... 15.1 14.2 11.2 10.0 7.8 6.9 Source: Trends in International Migration, OECD 1. 2. 3. 4. 5. 6. 7. Turkey Former Yugoslavia Italy Greece Poland Bosnia Herzegovina Croatia 8. 9. 10. 11. 12. 13. Austria Portugal Spain U.K. Iran Netherlands 1997 Thousands 2107.4 721.0 607.9 363.2 283.3 281.4 206.6 185.1 132.3 131.6 115.2 113.8 112.8 Source: Trends in International Migration, OECD V-35 EUROPE March 8, 2000 www.milken-inst.org Greece – Current Economic Conditions • GDP growth of 3.5% predicted for 1999. • Revaluation of the drachma ahead to contain inflation? Low inflation is last Maastricht Treaty requirement before Greece can enter Eurozone. 4 • Qualify for Eurozone in January 2001? 3 • Debt burden high, but lower than Italy, Belgium. 2 • High unemployment – official rate above 10%. Many immigrants from eastern Europe to be assimilated. 1 • Athens stock exchange booming. Household savings pouring in. • Gross fixed investment as percent of GDP rising. • Retail sales strong. Greece - Real GDP Growth 1990 Prices Percent Change, Year Ago 5 0 -1 80 82 84 86 88 90 92 94 96 98 Source: WEFA Greece - Inflation Rate Greece - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 25 100 3 Month Interbank 10 Year Benchmark Bond 20 80 15 60 10 40 5 20 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Bloomberg; Datastream Source: IFS Greece - Exchange Rate Greece - Equity Index Drachmas Per US Dollar Athens Stock Exchange General Index DR/US$ Index 150 6000 5000 200 4000 250 3000 2000 300 1000 350 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-36 Greece - Current Economic Conditions Greece - Official Reserves Greece - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 As Percent of GDP Percent Percent 16 Reserves Minus Gold - L Reserves as % of GDP - R -6 14 20 -8 12 15 -10 10 8 10 -12 6 5 0 -14 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 -16 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Greece - Industrial Production Greece - Unemployment Industrial Production Index Unemployment Rate Percent Change, Year Ago Percent 12 10 10 5 8 0 6 -5 4 2 80 82 84 86 88 90 92 94 96 -10 98 Sources: Datastream; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Greece - Government Debt Greece - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 0 120 100 -5 80 -10 60 40 -15 20 -20 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-37 EUROPE March 8, 2000 www.milken-inst.org Greece – International Trade Greece - Destination of Exports 1997 Greece - Trade Balance Merchandise Exports, Imports and Balance US$ Billions 4 Germany 25% Trade Balance Exports Imports 3 2 Other 40% 1 0 -1 US 16% U.K. 8% -2 Italy 11% -3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Source: Economist Intelligence Unit Greece - Principal Imports 1997 Greece - Role of Trade As Percent of GDP Percent 35 Other 18% Manufactured consumer goods 34% Iron & steel 3% Chemicals 4% Exports Imports 30 25 20 Crude oil 8% 15 Food 12% Capital goods 21% 10 80 82 84 86 88 90 Greece - Principal Exports 1997 96 Italy 16% Germany 16% Other 49% Food & beverages 9% Petroleum products 5% U.S. 11% France 8% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 94 Greece - Origin of Imports 1997 Manufactures 26% Other 60% 92 Source: IFS Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-38 98 Greece – Current Economic Conditions Greece - Foreign Direct Investment Greece - Portfolio Investment Foreign Investment Flows Portfolio Investment Flows US$ Billions US$ Billions 5 1.2 4 1.0 3 2 0.8 1 0 0.6 -1 0.4 80 82 84 86 88 90 92 94 96 -2 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Greece - Business Climate Greece - Government Public Expenditures Consumer Confidence Survey As Percent of GDP Balance of Opinion Percent 10 45 0 40 -10 35 -20 30 -30 -40 80 82 84 86 88 90 92 94 96 25 98 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA Greece - Gross Fixed Investment Greece - Retail Sales As Percent of GDP Three Month Moving Average Percent Index, 1988=100 23 400 350 22 300 21 250 20 200 19 18 150 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-39 EUROPE March 8, 2000 www.milken-inst.org Hungary – Current Economic Conditions Hungary - Real GDP Growth • Rising deficits in the government budget and current account have dampened GDP growth only slightly. The country has withstood the negative impact of collapse of the Russian economy, war in Yugoslavia (which hurt tourism), and heavy flooding. • Inflation has continued to fall (10% in ’99 versus 14.5% in ’98) allowing interest rates to decline. • Foreign direct investment very strong; foreign corporations are leading exporters, they bring R&D. • Export led growth. Sales to EU up about 15% for 1999. • Stock market at historical highs by end of 1999. The BUX broke 10,000 in January. • Joined NATO in ’99, EU membership ahead? 1990 Prices Percent Change, Year Ago 10 5 0 -5 -10 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Hungary - Inflation Rate Hungary - Short-Term Interest Rate Consumer Price Index Three Month Interbank Percent Change, Year Ago Percent 40 40 35 35 30 30 25 25 20 20 15 15 10 5 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Hungary - Exchange Rate Hungary - Equity Index Forints Per US Dollar Budapest Stock Index (BUX) HF/US$ Index 50 12000 10000 100 8000 150 6000 200 4000 250 300 2000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-40 Hungary - Current Economic Conditions Hungary - Official Reserves Hungary - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 14 As Percent of GDP Percent Percent 35 0 12 30 -2 10 25 8 20 6 15 4 10 2 5 -14 0 -16 Reserves Minus Gold - L Reserves as % of GDP - R -4 -6 -8 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -10 -12 Sources: IFS; Datastream 80 82 84 86 88 90 92 94 96 98 Source: IFS Hungary - Unemployment Rate Hungary - Industrial Production Three Month Moving Average Industrial Production Index Percent Percent Change, Year Ago 14 20 12 10 10 0 8 6 -10 4 -20 2 0 -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Hungary - Budget Balance Hungary - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 80 -2 60 -4 40 -6 20 -8 -10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: Datastream V-41 EUROPE March 8, 2000 www.milken-inst.org Hungary – International Trade Hungary - Principal Exports 1998 Hungary - Trade Balance Merchandise Exports, Imports, and Balance Fuels & Raw materials electricity 3% 2% Food & beverages 11% US$ Billions 2.5 2.0 1.5 1.0 Machinery & equipment 51% Other manufactures 33% Exports Imports Trade Balance 0.5 0.0 -0.5 -1.0 -1.5 Note: Data not available for 1991 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Hungary - Principal Imports 1998 Food & beverages 4% Hungary - Role of Trade As Percent of GDP Raw Materials 3% Fuels 7% Percent 45 Exports Imports 40 Machinery & equipment 46% 35 Other manufactures 40% 30 25 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Hungary - Destination of Exports 1998 Hungary - Origin of Imports 1998 Germany 28% Germany 36% Other 42% Other 47% Netherlands 5% Italy 6% Italy Russia 8% 7% Austria 11% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org Austria 10% Source: Economist Intelligence Unit V-42 98 Hungary – Current Economic Conditions Hungary - Foreign Direct Investment Hungary - Portfolio Investment Foreign Investment Flows Portfolio Investment Liabilities US$ Millions US$ Billions 800 2.5 Inflows into Hungary Outflows from Hungary 2.0 600 1.5 1.0 400 0.5 0.0 200 -0.5 0 Note: Outflow data not availabe for 1995Q1, 1996Q2 -1.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Hungary - Population Hungary - Fixed Capital Investment Millions of People As Percent of GDP Millions Percent 10.8 30 28 10.6 26 24 10.4 22 20 10.2 18 16 10.0 80 82 84 86 88 90 92 94 96 14 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: WEFA Hungary - Life Expectancy at Birth Hungary - Literacy Total Years Adult Literacy Rate Years Percent 76 99.0 74 98.5 Males Females Total 72 98.0 71 97.5 69 97.0 96.5 67 1960 65 1980 1962 1996 Source: World Bank Source: World Bank V-43 EUROPE March 8, 2000 www.milken-inst.org Ireland – Current Economic Conditions • Fastest growing economy in the Eurozone. Small country success story. • Emigrants are returning to work in dynamic economy. Young, highly educated workers will lead Europe in e-commerce, multimedia. • Ireland’s annual inflation rose to 3.4% in December, the highest rate in the Eurozone. 6 • Foreign direct investment very strong. 4 • Consumer confidence highest in ten years. 2 • Productivity far above EU average. • Second largest exporter of software behind US. • Exports made up almost 85% of GDP in 1998. Huge export growth. Ireland - Real GDP Growth 1990 Prices Percent Change, Year Ago 12 10 8 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Ireland - Inflation Rate Ireland - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 5 25 4 20 3 15 2 10 1 5 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 3 Month Interbank 10 Year Benchmark Bond 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Ireland - Exchange Rate Ireland - Stock Exchange Irish Pound Per US Dollar ISEQ General Index IP/US$ Index 0.50 6000 0.55 5000 0.60 4000 0.65 3000 0.70 2000 0.75 1000 0.80 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-44 Ireland - Current Economic Conditions Ireland - Official Reserves Ireland - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 12 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 14 4 10 3 12 8 2 6 10 1 4 8 0 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 6 -1 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Ireland - Unemployment Ireland - Industrial Production Unemployment Rate Industrial Production Index Percent Percent Change, Year Ago 16 25 14 20 12 15 10 10 8 5 6 4 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Ireland - Government Debt Ireland - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 4 120 3 110 2 100 1 90 0 80 -1 70 -2 60 -3 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-45 EUROPE March 8, 2000 www.milken-inst.org Ireland – International Trade Ireland - Principal Exports 1998 Ireland - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 7 Other Food & live 12% animals 9% Exports Imports Trade Balance 6 Machinery & transport equipment 36% Miscellaneous manufactures 12% 5 4 3 2 1 0 Chemicals 31% -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Ireland - Principal Imports 1998 Ireland - Role of Trade Exports and Imports as % of GDP Percent 85 Other 13% Manufactured materials 10% Miscellaneous manufactures 12% 75 70 Machinery & transport equipment 53% 65 60 55 Chemicals 12% 50 45 Ireland - Destination of Exports 1998 84 86 88 90 Other 28% France 4% Singapore 5% Germany Japan 6% 7% Germany 15% US 14% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 82 92 94 96 Ireland - Origin of Imports 1998 UK 22% Belgium and Luxembourg 6% Netherlands 6% France 8% 80 Source: IFS Source: Economist Intelligence Unit Other 29% Exports Imports 80 Source: Economist Intelligence Unit V-46 UK 34% US 16% 98 Ireland – Current Economic Conditions Ireland - Foreign Direct Investment Ireland - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 3.0 3 2.5 2 Inflows into Ireland Outflows from Ireland 1 2.0 0 1.5 -1 1.0 -2 0.5 -3 0.0 -0.5 -4 80 82 84 86 88 90 92 94 96 -5 98 80 Source: IFS 82 84 86 88 90 92 94 96 98 Source: IFS Ireland - Consumer Confidence Ireland - Real GDP Seasonally Adjusted Ireland and European Union Comparison Percent Balance of Opinion Percent Change, Year Ago 30 12 20 10 Ireland EU 8 10 6 0 4 -10 2 -20 -30 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Ireland - Capital Formation Ireland - Productivity Gross Fixed Investment Total and as % of GDP US$ Billions Ireland and European Union Comparison Percent 20 30 Percent Change (right) Total (left) Percent Change, Year Ago 8 28 15 Ireland EU 26 6 24 4 10 22 20 5 2 18 0 16 0 80 82 84 86 88 90 92 94 96 98 14 -2 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-47 EUROPE March 8, 2000 www.milken-inst.org Italy – Current Economic Conditions Italy - Real GDP Growth • Economic growth still lagging that of its main European partners: EU average is 2.1% growth, Italy’s growth expected to be 1.1% in 1999. • Unemployment trending down but still over 11%. • Fixed exchange rate of the euro means country cannot rely on currency devaluation to be competitive: trade surplus steadily eroding. • Milan stock market did not show gains until very end of ’99. Market capitalization is now 53% of GDP – in the range of other European countries. • Industrial production gains best in ten years. • Italy the world’s first industrialized country to have more elderly dependents than young dependents. Who will pay for all the pensions? 1990 Prices Percent Change, Year Ago 4 3 2 1 0 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Italy - Inflation Rate Italy - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 7 20 6 15 5 4 10 3 5 3 Month Interbank 10 Year Government Bond 2 1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Italy - Exchange Rate Italy - Equity Index Lire per US Dollar MIB 30 Index L/US$ Index 1000 50000 1200 40000 1400 30000 1600 20000 1800 2000 10000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: Datastream V-48 Italy - Current Economic Conditions Italy - Current Account Balance Italy - Official Reserves As Percent of GDP Total Reserves Minus Gold and as Percent of GDP US$ Billions 70 Percent Percent Reserves Minus Gold - L Reserves as % of GDP - R 60 7 4 3 6 2 50 5 1 40 0 4 30 -1 3 20 10 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 -3 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Italy - Unemployment Rate Italy - Industrial Production Seasonally Adjusted Seasonally Adjusted Percent Index, 1975=100 13 145 140 12 135 11 130 10 125 9 8 120 115 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Italy - Budget Balance Italy - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 130 120 -2 110 -4 100 -6 90 80 -8 70 -10 -12 60 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Financial Times 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-49 EUROPE March 8, 2000 www.milken-inst.org Italy – International Trade Italy - Principal Exports 1998 Italy - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Non-metal Other minerals 17% 4% 30 Engineering products 35% Minerals & nonferrous metals 4% Food & tobacco 4% Exports Imports Trade Balance 20 10 Chemicals 9% Transport equip. 11% 0 Textiles, clothing & leather 16% -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Italy - Principal Imports 1998 Italy - Role of Trade As Percent of GDP Percent Other 20% 26 Engineering products 26% Textiles, clothing & leather 8% Minerals & nonferrous metals 10% Energy products 8% Exports Imports 24 22 20 Chemicals 14% 18 Transport equip. 14% 16 14 80 82 84 86 88 90 92 Italy - Destination of Exports 1998 Other 49% Germany 19% Other 50% France 13% France 13% US 9% UK 7% US 5% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 96 Italy - Origin of Imports 1998 Germany 16% Spain 6% 94 Source: IFS Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-50 UK 6% Netherlands 6% 98 Italy – Current Economic Conditions Italy - Foreign Direct Investment Italy - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 3.0 60 2.5 40 2.0 20 1.5 0 1.0 -20 0.5 -40 0.0 Inflows into Italy Outflows from Italy -60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Italy - Consumer Confidence Italy - Capacity Utilization Seasonally Adjusted Capacity Utilization Percent Balance of Opinion Percent 0 81 80 -10 79 78 -20 77 76 -30 75 -40 74 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Italy - Life Expectancy at Birth Italy - Young and Old Dependents Total Years Young and Elderly as Percent of Total Population Years Percent 85 35 0 - 19 Years Old 60 Years and Older 30 80 25 75 20 70 15 65 10 1950 1960 1970 1980 1990 2000 2010 60 2020 Males Females Total 1962 1996 Source: World Bank Source: United Nations V-51 EUROPE March 8, 2000 www.milken-inst.org Netherlands – Current Economic Conditions Netherlands - Real GDP Growth 1990 Prices • Economic growth still going strong. Growth rate a full percentage point above EMU average. Sixth largest in EU both in population and economic size. • Exports steadily increasing. • Ranks 10th in the world in purchasing power parity GDP per capita, advancing two places since 1982. • Strong economy brings confidence – Dutch want more say in international political arena. • Budget predicted to be in surplus soon. • Unemployment barely above 3 percent. • Equity inflows, foreign direct investment, capital investment all growing. • Consumer confidence also strong. Percent Change, Year Ago 5 4 3 2 1 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Netherlands - Inflation Rate Netherlands - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 4.5 10 3 Month Interbank 10 Year Benchmark Bond 4.0 8 3.5 3.0 6 2.5 2.0 4 1.5 1.0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: WEFA; Datastream Netherlands - Exchange Rate Netherlands - Equity Index Guilders Per US Dollar EOE Index Index 700 NG/US$ 1.5 600 1.6 500 1.7 400 1.8 300 1.9 2.0 200 2.1 100 2.2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: Datastream V-52 Netherlands – Current Economic Conditions Netherlands - Official Reserves Netherlands - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 40 Reserves Minus Gold - L Reserves as % GDP - R 12 Percent 10 10 30 8 8 6 20 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 6 4 4 2 2 0 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Netherlands - Unemployment Rate Netherlands - Industrial Production Monthly Unemployment Industrial Production Index Percent 8 Percent Change, Year Ago 10 7 5 6 5 0 4 -5 3 2 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Netherlands - Budget Balance Netherlands - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent 0 Percent 85 80 -1 75 -2 70 65 -3 60 55 -4 50 -5 45 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Merrill Lynch 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-53 EUROPE March 8, 2000 www.milken-inst.org Netherlands – International Trade Netherlands - Principal Exports 1998 Netherlands - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 20 Other 26% Machinery & transport equip. 34% Animal & vegetable materials 3% Fuels 5% Chemicals, plastics, etc. 16% Exports Imports Trade Balance 15 10 5 0 Food, drink & tobacco 16% -5 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Netherlands - Principal Imports 1998 The Netherlands - Role of Trade As Percent of GDP Percent 65 Other 31% Exports Imports Machinery & transport equip. 38% 60 55 Clothing 4% 50 Fuels 5% Food, drink & tobacco 10% 45 Chemicals, plastics, etc. 12% 40 Source: Economist Intelligence Unit Netherlands - Destination of Exports 1998 84 86 88 90 92 96 98 00 Germany 20% Other 43% BelgiumLuxembourg 11% BelgiumLuxembourg 13% UK 10% 94 Netherlands - Origin of Imports 1998 UK 10% France 11% France 7% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 82 Germany 27% Other 33% Italy 6% 80 Source: IFS Source: Economist Intelligence Unit V-54 US 9% Netherlands – Current Economic Conditions Netherlands - Foreign Direct Investment Netherlands - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 35 15 30 10 25 Inflows into Netherlands Outflows from Netherlands 5 20 0 15 -5 10 -10 5 0 80 82 84 86 88 90 92 94 96 -15 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Netherlands - Capital Investment Netherlands - Consumer Confidence Gross Fixed Capital Formation Balance of Opinion Percent 30 US$ Billions 85 20 80 10 75 70 0 65 -10 60 -20 55 50 -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Survival Rate of Business Start-ups Share of Business Owners Percent Still In Business After Four Years Percent of Labor Force Percent Percent 65 12 60 10 55 1986 1996 8 50 6 45 4 40 2 35 30 Netherlands Japan Germany 0 U.S. Sources: EIM, Financial Times Netherlands EU* Sources: EIM, Financial Times V-55 EU Total U.S. Japan * Excluding Mediterranean countries EUROPE March 8, 2000 www.milken-inst.org Norway – Current Economic Conditions • GDP growth expected to be 0.7% in 1999, following 3.3% growth in 1998. 8 • The country not hurting though – still the highest GDP per capita in Europe. 6 • Retail sales maintaining strength. • Inflation under 3%. • Unemployment not a problem. • The recovery in oil prices good for growth, made up 43% of exports in 1998. The US dollar value of petroleum exports reached an all time high at the end of last year. Norway - Real GDP Growth 1996 Prices, Seasonally Adjusted Percent Change, Year Ago 4 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Norway - Inflation Rate Norway - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 5 16 3-Month Norwegian Interbank Gov't. Bond Yield Long-Term 14 4 12 3 10 8 2 6 1 4 0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; IFS Norway - Exchange Rate Norway - Equity Index Kroner Per US Dollar Oslo Stock Exchange General Index NK/US$ Index 5.0 1400 5.5 1200 6.0 1000 6.5 800 7.0 600 7.5 400 8.0 8.5 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-56 Norway - Current Economic Conditions Norway - Official Reserves Norway - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 35 Reserves Minus Gold - L Reserves as % of GDP - R 30 As Percent of GDP Percent Percent 20 8 6 18 25 4 16 20 15 2 0 14 10 -2 12 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -4 10 -6 80 Source: IFS 82 84 86 Norway - Unemployment 90 92 94 96 98 Norway - Industrial Production Unemployment Rate Industrial Production Index Percent Percent Change, Year Ago 7 15 6 10 5 5 4 0 3 -5 2 88 Source: IFS -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Norway - Budget Balance Norway - Government Debt Government Deficit/Surplus as Percent of GDP As Percent of GDP Percent Percent 8 50 6 45 4 40 2 0 35 -2 30 -4 -6 25 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-57 EUROPE March 8, 2000 www.milken-inst.org Norway – International Trade Norway - Principal Exports 1998 Norway - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Other 11% Chemicals & related products 7% 6 Oil, gas & related products 43% Exports Imports Trade Balance 5 4 Food & tobacco 10% 3 2 Metal products 13% 1 Machinery & transport equipment Source: Economist Intelligence Unit 16% 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Norway - Principal Imports 1998 Norway - Role of Trade Exports and Imports as % of GDP Percent 44 Other 25% Exports Imports 42 Machinery & transport equipment 35% 40 38 Food & tobacco 6% 36 34 Chemicals & Metal products minerals 10% Motor vehicles 15% 9% 32 30 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Norway - Destination of Exports 1998 Norway - Origin of Imports 1998 Sweden 14% UK 17% Other 36% Netherlands 10% Other 43% UK 10% Germany 12% US 7% Japan 5% France Sweden 8% 10% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org Germany 14% US 7% Source: Economist Intelligence Unit V-58 Denmark 7% 98 Norway – Current Economic Conditions Norway - Foreign Direct Investment Norway - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 4 5 Inflows into Norway Outflows from Norway 3 0 2 -5 1 -10 0 Data missing from Q1 1992 to Q4 1993 -1 80 82 84 86 88 90 92 94 96 -15 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Norway - Petroleum Exports Norway - Retail Sales Crude Petroleum Exports Volume of Retail Sales, Seasonally Adjusted US$ Billions Index 1995=100 2.5 120 2.0 110 1.5 100 1.0 90 0.5 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Norway - Life Expectancy at Birth Norway - Comparative GDP Per Capita Total Years 1999 Years US$ Thousands 85 38 Males Females Total 36 80 34 32 75 30 28 70 26 24 65 1962 1996 Source: World Bank Switzerland Finland Japan Norway Denmark Sweden US Source: WEFA V-59 EUROPE March 8, 2000 www.milken-inst.org Poland – Current Economic Conditions • GDP grew just 1.5% in Q1 1999, and 3% in Q2. • Industrial production contracted in the latter half of 1998 into 1999, but has since rebounded. • Unemployment rose last year, but job vacancies continued to fall due to job layoffs in the chemical and metals sectors. Retail sales remained strong. • Gross fixed investment as a percentage of GDP continued its upward trek. -2 • Inflation inched up last year. -4 • Continual weakening of the zloty to the dollar. Poland - Real GDP Growth 1990 Prices Percent Change, Year Ago 8 6 4 2 0 -6 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Poland - Inflation Rate Poland - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 100 50 80 40 60 30 40 20 20 10 0 3 Month Interbank Long Term Bond 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Datastream; Milken Institute Poland - Exchange Rate Poland - Equity Index Zlotys Per US Dollar Warsaw Stock Exchange General Index PZ/US$ Index 0.5 25000 1.0 20000 1.5 2.0 15000 2.5 10000 3.0 3.5 5000 4.0 4.5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg V-60 Poland - Current Economic Conditions Poland - Official Reserves Poland - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 30 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 16 25 14 20 12 15 10 10 8 5 6 5 0 -5 -10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -15 4 -20 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Poland - Unemployment Poland - Industrial Production Unemployment Rate Industrial Production Index Percent Percent Change, Year Ago 17 30 16 20 15 14 10 13 0 12 11 -10 10 9 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Poland - Budget Balance Poland - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 90 -1 80 -2 70 -3 60 -4 50 -5 40 -6 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream V-61 EUROPE March 8, 2000 www.milken-inst.org Poland – International Trade Poland - Principal Exports 1998 Poland - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 6 Other Chemicals 5% 7% 4 Manufactured goods 48% Food & live animals 11% Exports Imports Trade Balance 2 0 Machinery & transport 29% -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Poland - Composition of Imports 1998 Poland - Role of Trade As Percent of GDP Percent Other 11% Food & live animals 7% 35 Exports Imports 30 Machinery & transport 38% 25 Chemicals 14% 20 15 Manufactured goods 30% 10 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Poland - Destination of Exports 1998 Other 42% Poland - Origin of Imports 1998 Germany 20% Germany 36% Other 51% Italy 8% France 7% Russia 6% Netherlands Italy France 5% 5% 6% US 4% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org Source: Economist Intelligence Unit V-62 Russia UK 5% 5% Poland – Current Economic Conditions Poland - Foreign Direct Investment Poland - Portfolio Investment Foreign Investment Flows Portfolio Investment Flows US$ Billions US$ Billions 7 1.5 6 1.0 5 0.5 4 3 0.0 2 -0.5 1 0 80 82 84 86 88 90 92 94 96 -1.0 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Datastream Poland - Gross Fixed Investment Poland - Retail Sales As Percent of GDP Retail Sales Volume Percent Index 28 180 26 160 24 140 22 20 120 18 100 16 14 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: Datastream Poland - Job Vacancies Poland - Life Expectancy at Birth Three Month Moving Average Total Years Thousands Years 70 80 Males Females Total 60 75 50 40 70 30 20 65 10 0 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1962 1996 Source: World Bank V-63 EUROPE March 8, 2000 www.milken-inst.org Portugal – Current Economic Conditions Portugal - Real GDP Growth • After a 4% growth rate in 1998, GDP is expected to grow about 3% in 1999. • Job vacancies up – unemployment is under 5% now – close to full employment. Low wages keep the economy competitive. • High current account deficit a problem – only to increase as trade deficit grows. • Consumer, business confidence near highest level in a decade. • Per capita income compared with EU countries is improving, now 74% of EU average. • But has EU’s highest adult illiteracy. 1990 Prices Percent Change, Year Ago 8 6 4 2 0 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Portugal - Inflation Rate Portugal - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 16 25 3 Month Interbank 10 Year Government Bond 14 20 12 10 15 8 10 6 4 5 2 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Portugal - Exchange Rate Portugal - Equity Index Escudos Per US Dollar Lisbon Stock Exchange General Index PE/US$ Index 120 3500 3000 140 2500 2000 160 1500 180 1000 200 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: Datastream V-64 Portugal – Current Economic Conditions Portugal - Official Reserves Portugal - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 30 Reserves Minus Gold - L Reserves as % of GDP - R 25 Percent 24 -5 22 -10 20 20 -15 18 15 -20 16 10 5 0 -25 14 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 12 -30 10 -35 Sources: IFS; WEFA 80 82 84 Portugal - Unemployment 88 90 92 94 96 98 Portugal - Industrial Production Unemployment Rate Seasonally Adjusted Percent Percent Change, Year Ago 8 15 7 10 6 5 5 0 4 -5 3 86 Source: IFS -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Portugal - Government Debt Portugal - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent -1 70 -2 60 -3 -4 50 -5 40 -6 -7 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA V-65 EUROPE March 8, 2000 www.milken-inst.org Portugal – International Trade Portugal - Composition of Exports 1998 Portugal - Trade Balance Exports, Imports, and Balance Energy products 1% Capital goods 28% US$ Billions 5 Exports Imports Trade Balance 4 Consumer goods 41% 3 2 1 0 Raw materials & intermediate products 30% -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit Portugal - Composition of Imports 1998 Portugal - Role of Trade Exports and Imports as % of GDP Energy products 6% Consumer goods 23% Percent 45 Exports Imports 40 Capital goods 37% 35 30 25 Raw materials & intermediate products 34% 20 Portugal - Destination of Exports 1998 Netherlands 5% UK 12% 86 88 90 92 94 96 98 Spain 24% Germany 15% Netherlands 5% UK 7% Italy 8% France 14% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 84 Other 30% Spain 16% US 5% 82 Portugal - Origin of Imports 1998 Germany 20% Other 28% 80 Source: IFS Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-66 France 11% Portugal – Current Economic Conditions Portugal - Foreign Direct Investment Portugal - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 3.0 6 2.5 Inflows into Portugal Outflows from Portugal 4 2.0 2 1.5 0 1.0 -2 0.5 0.0 80 82 84 86 88 90 92 94 96 -4 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Portugal - Productivity Portugal - Job Vacancies GDP/ Employment Not Seasonally Adjusted Thousands Index, 1990 = 100 0.16 130 0.14 120 0.12 110 0.10 100 0.08 90 0.06 80 0.04 70 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Portugal United States 80 82 84 86 88 90 92 94 96 98 Source: WEFA Portugal - Literacy Adult Literacy Rate Portugal - Life Expectancy at Birth Percent Total Years 85 Years 80 75 Males Females Total 80 75 70 70 65 65 60 60 1962 1960 1990 Source: World Bank 1996 Source: World Bank V-67 EUROPE March 8, 2000 www.milken-inst.org Russia – Current Economic Conditions Russia - Real GDP Growth • GDP grew 1.6% in 1999. New political leadership against the backdrop of fledging economic recovery. Will Mr. Putin bring stability? • Annual inflation came down late last year; still high by most standards, but under predictions. • Budget revenues came in larger than planned. • Strong gains in industrial production. • Unemployment down slightly as recovery begins. • RTS index rebounded at end of last year. • Imports down dramatically in 1999 – trade surplus high. • New EU sanctions applied over Chechnya campaign not good economic news. 1990 Prices Percent Change, Year Ago 5 0 -5 -10 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Economist Intelligence Unit Russia - Inflation Rate Russia - Short-Term Interest Rates Consumer Price Index 90 Day Interbank Rate Percent Change, Year Ago Percent 125 200 100 150 75 100 50 50 25 0 Note: 1067% in September 1993 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Russia - Equity Index RTS Index Russia - Exchange Rate Index Rubles per US Dollar 600 RU/US$ 0 500 5 400 300 10 200 15 100 20 0 25 Sources: IFS; Bloomberg EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 V-68 Russia - Current Economic Conditions Russia - Official Reserves Russia - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 5 15 10 20 4 5 15 3 0 10 -5 2 5 0 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1 -15 Sources: IFS; EIU; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Russia - Unemployment Rate Russia - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 16 20 14 10 12 0 10 -10 8 -20 6 4 -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Russia - Budget Balance Russia - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 100 -2 80 -4 -6 60 -8 40 -10 -12 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream V-69 EUROPE March 8, 2000 www.milken-inst.org Russia – International Trade Russia - Principal Exports 1998 Russia - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 10 Other 25% Exports Imports Trade Balance 8 Fuels & energy 39% 6 Chemicals 9% 4 2 Machinery & equip. 11% 0 Metals 16% -2 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Russia - Principal Imports 1998 Russia - Role of Trade As Percent of GDP Percent 35 Exports Imports Machinery & equip. 35% Other 43% 30 25 20 Clothing & Household Items 6% Food & agricultural raw materials Industrial Goods 10% 6% 15 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Economist Intelligence Unit Source: Economist Intelligence Unit Russia - Destination of Exports 1998 Russia - Origin of Imports 1998 Ukraine 9% Germany 9% Other 29% Belarus 8% Other 48% U.S. 7% Belarus 11% Commonwealth of Independent States 19% Commonwealth of Independent States 35% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org Germany 12% Ukraine 7% Source: Economist Intelligence Unit V-70 US 6% Russia – Current Economic Conditions Russia - Foreign Direct Investment Russia - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 2.5 10 8 2.0 Inflows into Russia Outflows from Russia 6 1.5 4 2 1.0 0 0.5 -2 0.0 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Russia - Capital Investments Russia - Crude Petroleum Percent of Production/Non-Production Facility Investment Production Facilities Crude Petroleum Production Million Metric Tons Non-Production Facilities 500 Percent 100 450 80 400 60 40 350 20 300 0 250 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Goskomstat 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Goskomstat Russia - Wages and Salaries Russia - Agriculture Per Employee Real Agriculture Production Rubles Index, 1990 = 100 2000 100 90 1500 80 1000 70 500 0 60 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA V-71 EUROPE March 8, 2000 www.milken-inst.org Russia – Current Demographic Conditions Russia - Birth and Death Rate Russia - Consumption Per 1000 Real Private, Government, and Total Consumption Per 1000 Index, 1990=100 20 100 15 95 Total Private Government 90 10 85 5 80 0 75 -5 70 Birth Rate -10 Death Rate Natural Decrease 65 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Goskomstat Source: WEFA Russia - Housing Russia - Life Expectancy at Birth Increase of New Housing Total Years Million Sq. Meters of Total Living Space 60 Years 68 Residential Housing Individual Private Construction 50 67 40 66 30 65 20 64 10 0 63 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Goskomstat 1992 1993 1994 1995 1996 1997 Russia - Migration Russia - Population Migration In-and-Outflow With Non-CIS and Baltic States Total Population and Percent Growth Thousand Persons 150 100 1998 Source: Goskomstat Millions Percent Change, Year Ago 149.0 1996 1997 1998 Population Growth - R Total Population - L 148.5 -0.6 -0.5 148.0 -0.4 50 147.5 Migration Difference -0.2 0 Arrivals 147.0 Departures 146.0 -100 -0.1 146.5 -50 Source: Goskomstat EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Goskomstat V-72 0.0 Spain – Current Economic Conditions • GDP growth was expected to be 3.7% in 1999. Above EU average for four years. • Recent recovery in France and Germany – Spain’s main export markets – has revived growth expectations for 2000. 3 • Cost of strong growth: uptick in inflation. 2 • Budget deficit 1.4% of GDP last year, continuing to fall – helped along by lower interest rates. • Unemployment 15.1% in ’99, the highest in the EU, but economy is creating jobs faster than any other. • Consumer confidence at highest level in 10 years. • Huge gains in Madrid Stock Exchange. Spain - Real GDP Growth 1990 Prices Percent Change, Year Ago 5 4 1 0 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Spain - Inflation Rate Spain - Interest Rates Consumer Price Index Short-Term and Long-Term Interest Rates Percent Change, Year Ago Percent 8 16 7 14 6 12 5 10 4 8 3 6 2 4 1 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 3 Month Interbank 10 Year Government Bond 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Spain - Exchange Rate Spain - Equity Index Pesetas per US Dollar Madrid Stock Exchange General Index SP/US$ Index 80 1000 100 800 120 600 140 400 160 180 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-73 EUROPE March 8, 2000 www.milken-inst.org Spain - Current Economic Conditions Spain - Official Reserves Spain - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 80 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 14 70 12 60 10 50 8 5 0 -5 -10 -15 40 30 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -20 4 -25 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Spain - Unemployment Spain - Industrial Production Unemployment Rate Industrial Production Percent Percent Change, Year Ago 26 15 24 10 22 5 20 0 18 -5 16 14 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Spain - Government Debt Spain - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent -1 75 -2 70 -3 65 -4 60 -5 55 -6 50 -7 45 -8 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Spanish Ministry of Economy and Finance EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA V-74 Spain – International Trade Spain - Principal Exports 1998 Spain - Trade Balance Merchandise Exports, Imports and Balance Capital goods 14% US$ Billions Energy products 2% 15 Exports Imports Trade Balance 10 Raw materials & intermediate products 43% 5 0 Consumer goods 41% -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Spain - Principal Imports 1998 Spain - Role of Trade As Percent of GDP Percent Energy products 7% 30 Exports Imports 28 Capital goods 17% 26 Raw materials & intermediate products 50% 24 22 20 18 Consumer goods 26% 16 14 80 82 84 88 90 92 94 96 98 Spain - Destination of Exports 1998 Spain - Origin of Imports 1998 Other 15% Other 18% OPEC 3% Latin America 4% OPEC 5% US 6% 86 Source: IFS Source: Economist Intelligence Unit Latin America 7% US 4% EU 71% EU 67% Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-75 EUROPE March 8, 2000 www.milken-inst.org Spain – Current Economic Conditions Spain - Foreign Direct Investment Spain - Portfolio Investment Direct Investment Inflows Inflows and Outflows US$ Billions US$ Billions 5 30 Inflows into Spain Outflows from Spain 20 4 10 3 0 2 -10 1 -20 0 -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Spain - Capacity Utilization Spain - Consumer Confidence Capacity Utilization Seasonally Adjusted Percent Percent Balance of Opinion 82 20 80 10 78 0 -10 76 -20 74 -30 72 -40 70 -50 68 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Spain - New Industry Orders Spain - Literacy Rate Cyclical Indicators Adult Literacy Rate Percent Balance of Opinion Percent 20 96 0 94 -20 92 -40 90 -60 88 -80 86 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA EUROPE March 8, 2000 www.milken-inst.org 1960 Source: World Bank V-76 1990 Sweden – Current Economic Conditions • GDP growth expected to be 3.5% for ’99. Much faster than 1998’s 2.6%. • Retail sales trending upward – consumer confidence high. 6 • Interest rates have remained relatively low. 4 • Consumer prices increased less than 1% for the year. Core inflation higher, but wage settlements are fixed until early 2001. • Unemployment rate decreasing, just 5.5% in 1999. People on government-financed employment schemes have also come down. • Industrial production still lackluster. Sweden - Real GDP Growth 1991 Prices Percent Change, Year Ago 8 2 0 -2 -4 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Sweden - Inflation Rate Sweden - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 14 20 3 Month Interbank 10 Year Government Bond 12 10 15 8 6 10 4 2 5 0 -2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Bloomberg Sweden - Exchange Rate Sweden - Equity Index Kronor Per US Dollar Affarsvarlden General Index SK/US$ Index 5.0 4000 3500 6.0 3000 2500 7.0 2000 1500 8.0 1000 9.0 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg V-77 EUROPE March 8, 2000 www.milken-inst.org Sweden – Current Economic Conditions Sweden - Official Reserves Sweden - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 30 Reserves Minus Gold - L Reserves as % of GDP - R 14 Percent 6 25 12 20 10 15 8 10 6 5 4 -2 2 -4 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 80 Source: IFS 84 86 88 90 92 94 96 Sweden - Unemployment Sweden - Industrial Production Unemployment Rate Industrial Production Index 98 Percent Change, Year Ago Percent 10 15 8 10 6 5 4 0 2 -5 0 82 Source: IFS -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Sweden - Budget Balance Sweden - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent 5 Percent 90 0 80 70 -5 60 -10 50 -15 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream EUROPE March 8, 2000 www.milken-inst.org 80 82 Source: WEFA V-78 84 86 88 90 92 94 96 98 Sweden – Current Economic Conditions Sweden - Principal Exports 1998 Sweden - Trade Balance Merchandise Exports, Imports, and Balance Crude materials 8% Other 3% US$ Billions 10 Chemicals 9% Machinery incl. electrical 35% Exports Imports Trade Balance 8 6 Transport equipment 15% 4 2 0 Mfg. goods 30% -2 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Sweden - Principal Imports 1998 Sweden - Role of Trade As Percent of GDP Percent 45 Exports Imports Machinery incl. electrical 33% Other 32% 40 35 Minerals & fuels 6% Food & tobacco Chemicals 7% 11% 30 Transport equipment 11% 25 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Sweden - Destination of Exports 1998 Sweden - Origin of Imports 1998 Germany 11% Germany 19% UK 9% Other 44% Norway 9% Other 51% UK 10% Norway 8% US 9% Finland 5% Denmark 6% US 6% Denmark France 7% 6% Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-79 EUROPE March 8, 2000 www.milken-inst.org Sweden – Current Economic Conditions Sweden - Foreign Direct Investment Sweden - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions 10 US$ Billions Inflows into Sweden Outflows from Sweden 20 5 15 0 10 -5 5 0 -10 80 82 84 86 88 90 92 94 96 -15 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Sweden - Investment Sweden - Social Security As a Percentage of GDP As Percent of GDP Percent 22 Percent Sweden United States 30 20 Sweden United States 25 20 18 15 16 10 14 80 82 84 86 88 90 92 94 96 5 98 Source: WEFA 80 82 84 Sweden - Life Expectancy at Birth 88 90 92 94 96 98 Sweden - Retail Sales Total Years Retail Sales Volume Years 85 86 Sources: WEFA, IFS Index 150 Males Females Total 140 80 130 120 75 110 100 70 90 65 1980 80 1981 Source: World Bank EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-80 Switzerland – Current Economic Conditions Switzerland - Real GDP Growth • GDP growth has fallen from highs at end of 1997 and early 1998. Swiss economy still in recovery after long recession early in the 1990s. • Unemployment, interest rates are well below those of other European nations. • Banking sector is strong, estimated to contribute 9% to GDP. Home to two of Europe’s top ten banks. • Gold reserves very high for the size of the economy. • But industrial production has fallen back. • Low wage increases and lower consumer confidence have kept private consumption growth sluggish. • Swiss franc has weakened against the dollar. Export growth to follow? 1990 Prices Percent Change, Year Ago 5 4 3 2 1 0 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS • Switzerland - Inflation Rate Switzerland - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 7 10 3 Month Interbank 10 Year Government Bond 6 8 5 4 6 3 4 2 1 2 0 -1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream Switzerland - Exchange Rate Switzerland - Equity Index Swiss Francs Per US Dollar Swiss Market Index SF/US$ Index 1.1 10000 1.2 8000 1.3 6000 1.4 4000 1.5 2000 1.6 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-81 EUROPE March 8, 2000 www.milken-inst.org Switzerland - Current Economic Conditions Switzerland - Official Reserves Switzerland - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 50 Reserves Minus Gold - L Reserves as % of GDP - R Percent 16 12 15 10 40 14 30 8 13 6 12 20 4 11 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 10 2 9 0 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Switzerland - Unemployment Switzerland - Industrial Production Unemployment Rate Industrial Production Index Percent Percent Change, Year Ago 6 10 8 5 6 4 4 3 2 0 2 -2 1 0 -4 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Switzerland - Budget Balance Switzerland - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0.0 60 -0.5 50 -1.0 40 -1.5 30 -2.0 -2.5 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 80 82 Source: WEFA V-82 84 86 88 90 92 94 96 98 Switzerland – International Trade Switzerland - Principal Exports 1998 Switzerland - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Textiles, clothing & shoes 4% Metals & metal manufactures 9% Precision instruments, watches & jewelry 15% 10 Other 14% Exports Imports Trade Balance 8 Machinery 29% 6 4 2 0 Chemicals 29% -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Switzerland - Principal Imports 1998 Switzerland - Role of Trade As Percent of GDP Percent Agriculture, forestry & fish products 11% 42 Other 11% Exports Imports 40 Machinery 29% 38 36 Metals & metal manufactures 12% 34 Chemicals 22% Motor Vehicles 15% 32 30 Source: Economist Intelligence Unit 80 82 84 86 88 90 92 94 96 98 Source: IFS Switzerland - Destination of Exports 1998 Switzerland - Origin of Imports 1998 Germany 23% Other 29% Germany 33% Other 39% US 10% Japan 4% UK 6% Italy 8% UK 5% Netherlands 5% France 10% Source: Economist Intelligence Unit US 6% Italy 10% France 12% Source: Economist Intelligence Unit V-83 EUROPE March 8, 2000 www.milken-inst.org Switzerland – Current Economic Conditions Switzerland - Foreign Direct Investment Switzerland - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 6 20 5 10 4 0 3 -10 2 -20 1 -30 0 80 82 84 86 88 90 92 94 96 -40 98 Source: IFS Inflows into Switzerland Outflows from Swizterland 80 82 84 86 88 90 92 94 96 98 Source: IFS Switzerland - Bank Assets Switzerland - Gross Fixed Capital Formation Top 10 Bank's Assets as Percent of GDP Seasonally Adjusted Percent US$ Billions 5.0 18 17 4.0 16 15 3.0 14 13 2.0 12 1.0 11 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: The Banker; IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA Switzerland - Relative Normalized Unit Labor Costs Gold Reserves 1990 Prices Index 1990=100 1. 2. 3. 4. 5. 6. 7. 8. U.S. Germany France Italy Switzerland Netherlands Japan U.K. Tons 8,137 3,700 3,184 2,593 2,590 1,052 754 715 Grams per Capita 30.5 45.1 54.3 45.0 365.5 68.9 6.0 12.3 105 100 95 90 85 Sources: Financial Times, Swiss National Bank 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org V-84 Switzerland – Current Economic Conditions Switzerland - Short-Time Workers Switzerland - Job Vacancies Number of Persons Seasonally Adjusted Thousands Millions 60 20 50 15 40 30 10 20 5 10 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Switzerland - Public Consumption Switzerland - New Car Registrations Including Social Security Not Seasonally Adjusted Thousands US$ Billions 40 11 35 10 30 25 9 20 8 15 10 7 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA Switzerland - Per Capita Real Income Switzerland - Life Expectancy at Birth Total Years 1990 Prices US$ Thousands Years 40 85 Switzerland Western Europe 35 80 30 75 25 70 20 65 15 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Males Females Total 1962 1996 Source: World Bank V-85 EUROPE March 8, 2000 www.milken-inst.org Turkey – Current Economic Conditions • GDP growth estimated to decline by at least 2% for 1999. 15 • Budget deficit estimated at 12% of GDP for 1999. 10 • Earthquake demands more government spending – fiscal spending already soaring. • Industrial production, capacity utilization, consumer indicators all trending down. Turkey - Real GDP Growth 1987 Prices Percent Change, Year Ago 5 0 • Inflation about 65% per year. -5 • Interest rates similarly high. -10 • Official unemployment estimated to be less than 7% for the year. • Bright spot for equity investors: Istanbul stock exchange still climbing. -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Turkey - Inflation Rate Turkey - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 130 400 Long Term Bond Interbank Money Market Rate 120 300 110 100 200 90 80 100 70 60 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Turkey - Exchange Rate Turkey - Istanbul Stock Exchange Thousands of Liras Per US Dollar Istanbul National 100 TL/US$ Index 0 16000 14000 100 12000 10000 200 8000 300 6000 4000 400 2000 500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-86 Turkey - Current Economic Conditions Turkey - Official Reserves Turkey - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 30 Percent 10 Reserves Minus Gold - L Reserves as % GDP - R 25 5 9 0 8 20 -5 7 15 6 10 5 5 0 -10 -15 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 3 -20 Sources: IFS; WEFA 80 82 84 86 88 90 92 94 96 98 Source: IFS Turkey - Industrial Production Turkey - Unemployment Industrial Production Index Unemployment Rate Percent Change, Year Ago Percent 8.5 20 8.0 15 10 7.5 5 7.0 0 6.5 -5 6.0 5.5 -10 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Turkey - Budget Balance Turkey - Debt Service Government Surplus/Deficit as Percent of GDP Debt Service as Percent of GDP Percent Percent -2 8.0 -4 7.0 -6 -8 6.0 -10 5.0 -12 -14 4.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream V-87 EUROPE March 8, 2000 www.milken-inst.org Turkey – International Trade Turkey - Principal Exports 1998 Turkey - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 5 Clothing & textiles 34% Other 49% Exports Imports Trade Balance 4 3 2 1 Iron & steel 6% Machinery & parts 3% 0 -1 Vegetables & fruits 8% -2 -3 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Turkey - Principal Imports 1998 Turkey - Role of Trade As Percent of GDP Percent Industrial machinery 13% Motor vehicles 8% 35 Exports Imports 30 Electrical machinery 6% Petroleum & products 6% Textiles 5% Other 62% 25 20 15 10 80 82 84 86 88 92 94 Turkey - Origin of Imports 1998 Turkey - Destination of Exports 1998 Germany 20% Germany 16% US 9% US 8% Other 50% France UK 5% 6% Other 48% Italy 6% Russia 5% Italy 9% France 7% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 90 Source: IFS Source: Economist Intelligence Unit Source: Economist Intelligence Unit V-88 UK 6% Russia 5% 96 98 Turkey – Current Economic Conditions Turkey - Foreign Direct Investment Turkey - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 1.0 4 Inflows into Turkey Outflows from Turkey 2 0.8 0 0.6 -2 0.4 -4 0.2 0.0 -6 80 82 84 86 88 90 92 94 96 -8 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Turkey - Exports to EU Turkey - Manufacturing Output Exports to the European Union Real Manufacturing Output US$ Billions Percent Change, Year Ago 1.6 15 1.4 10 1.2 5 1.0 0.8 0 0.6 -5 0.4 0.2 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: WEFA Turkey - New Car Registrations Turkey - Capacity Utilization Seasonally Adjusted Capacity Utilization Thousands Percent 50 90 85 40 80 30 75 20 70 10 0 65 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream V-89 EUROPE March 8, 2000 www.milken-inst.org U.K. – Current Economic Conditions United Kingdom - Real GDP Growth 1990 Prices Percent Change, Year Ago • Recovery. 1.75% GDP growth predicted for 1999. • Manufacturing output growing at fastest rate in four years – led by high-tech sector goods. • Huge amounts of foreign direct investment – only the U.S. brings in more. • Strong pound keeps imports cheap, dampens inflation. Prices of clothing, household goods falling. • Job vacancies climbing, unemployment falling. • Retail sales, consumer confidence recovering. • Exports growing. • Economy overheating? Interest rates to rise further? Convergence with Eurozone anytime soon? 5 4 3 2 1 0 -1 -2 -3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS United Kingdom - Inflation Rate United Kingdom - Interest Rates Consumer Price Index Short-Term and Long-Term Interest Rates Percent Change, Year Ago Percent 12 16 10 14 3 Month Interbank 10 Year Government Bond 12 8 10 6 8 4 6 2 4 0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream United Kingdom - Exchange Rate United Kingdom - Equity Index Pounds per US Dollar Financial Times Stock Exchange 100 Index £/US$ Index 0.50 7000 6000 0.55 5000 0.60 4000 3000 0.65 2000 0.70 1000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-90 U.K. - Current Economic Conditions United Kingdom - Official Reserves United Kingdom - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 50 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent 4.5 1 4.0 45 0 3.5 40 -1 3.0 35 -2 2.5 30 25 -3 2.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1.5 -4 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA United Kingdom - Unemployment United Kingdom - Industrial Production Unemployment Rate Seasonally Adjusted Percent Percent Change, Year Ago 11 8 10 6 9 4 8 2 7 0 6 -2 5 -4 4 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS United Kingdom - Budget Balance United Kingdom - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 55 0 50 -2 45 -4 40 -6 35 -8 -10 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 80 82 84 86 88 90 92 94 96 98 Source: WEFA Source: Economist Intelligence Unit, OECD V-91 EUROPE March 8, 2000 www.milken-inst.org U.K. – International Trade United Kingdom - Principal Exports 1998 United Kingdom - Trade Balance Merchandise Exports, Imports, and Balance Basic materials 2% Fuels Other 5% 1% Food & tobacco 6% US$ Billions 30 20 Finished manufactures 60% Semimanufactures 26% Exports Imports Trade Balance 10 0 -10 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS United Kingdom - Principal Imports 1998 Fuels Basic materials 3% 3% United Kingdom - Role of Trade As Percent of GDP Percent Other 1% 30 Exports Imports Food & tobacco 9% 28 Finished manufactures 60% Semimanufactures 24% 26 24 22 Source: Economist Intelligence Unit 80 82 84 86 88 United Kingdom - Destination of Exports 1998 94 96 US 14% Germany 12% Germany 13% Other 52% France 10% France 9% Netherlands Ireland 8% 6% Italy 5% Source: Economist Intelligence Unit EUROPE March 8, 2000 www.milken-inst.org 92 United Kingdom - Origin of Imports 1998 US 13% Other 51% 90 Source: IFS Source: Economist Intelligence Unit V-92 Netherlands 7% 98 U.K. – Current Economic Conditions United Kingdom - Foreign Direct Investment United Kingdom - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 30 150 Inflows into UK Outflows from UK 25 100 20 50 15 10 0 5 -50 0 -5 -100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS United Kingdom - Trade Balance with EU United Kingdom - Trade Balance with US Merchandise Exports, Imports, and Balance Merchandise Exports, Imports, and Balance US$ Billions US$ Billions 15 5 Trade Balance with EU Exports to EU Imports from EU 10 Trade Balance with US Exports to US Imports from US 4 3 2 5 1 0 0 -1 -5 80 82 84 86 88 90 92 94 96 -2 98 Sources: WEFA; IMF, Direction of Trade 80 82 84 86 88 90 92 94 96 98 Sources: WEFA; IMF, Direction of Trade United Kingdom - Exchange Rate United Kingdom - Interest Rates Pounds per Deutsche Mark 10 Year Government Bond £/DM Percent 0.30 14 Germany U.K. 12 0.34 10 0.38 8 0.42 6 0.46 0.50 4 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS, Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream V-93 EUROPE March 8, 2000 www.milken-inst.org U.K. – Current Economic Conditions United Kingdom - Retail Sales Government Consumption Volume, Seasonally Adjusted As Percent of GDP Percent Change, Year Ago Percent 8 21.5 6 21.0 20.5 4 20.0 2 19.5 0 19.0 -2 18.5 -4 18.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: WEFA United Kingdom - Manufacturing Production United Kingdom - Labor Productivity Seasonally Adjusted Productivity, Seasonally Adjusted, Excluding Construction Index 1990=100 Index 1995=100 104 105 102 100 100 98 95 96 94 90 92 90 85 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA United Kingdom - Savings Ratio United Kingdom - Consumer Confidence Percent of Disposable Income Seasonally Adjusted Percent Percent Balance of Opinion 12 10 0 10 -10 8 -20 6 4 -30 -40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA EUROPE March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA V-94 U.K. – Current Economic Conditions United Kingdom - Job Vacancies United Kingdom - Manufacturing Unit Labor Costs Seasonally Adjusted Seasonally Adjusted Thousands Index 1990=100 350 120 115 300 110 250 105 100 200 95 150 100 90 85 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: WEFA United Kingdom - FDI in EU Comparison Stock of Foreign Direct Investment 1. UK 2. France 3. Belgium/Luxembourg 4. Germany 5. Netherlands 6. Spain 7. Italy 8. Sweden 9. Denmark 10. Greece 11. Austria 12. Ireland 13. Finland 14. Portugal Total $bn 274 174 143 137 127 110 78 43 25 21 21 18 9 8 1,195 United Kingdom - Inflows of Foreign Population By Nationality % 22.95 14.57 11.97 11.52 10.70 9.25 6.57 3.67 2.17 1.83 1.81 1.53 .76 .72 100 1992 1997 Thousands 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. United States Australia India South Africa New Zealand Japan Pakistan Canada Philippines Poland Korea Bangladesh Russian Federation 43.9 25.0 9.2 2.3 10.6 10.4 8.3 6.4 2.6 3.5 .. 3.2 .. 42.5 26.5 16.1 13.0 12.1 10.4 9.6 8.3 7.5 5.4 4.2 4.0 4.0 Source: Trends in International Migration, OECD Sources: Financial Times , UNCTAD World Investment Report 1999 United Kingdom - Life Expectancy United Kingdom - Young and Old Dependents Total Years As Percent of Total Population Years Percent 80 35 0 - 19 Years Old 60 Years and Older 78 30 Males Females Total 76 74 25 73 20 71 69 15 67 10 1950 1960 1970 1980 1990 2000 2010 65 2020 1962 1996 Source: World Bank Source: United Nations V-95 EUROPE March 8, 2000 www.milken-inst.org Latin America – Overview Latin America - Economic Profile Real GDP Growth* Inflation** Current Account Balance*** 1997 5.2 8.9 -57.0 1998 2.1 6.0 -85.6 1999 -1.2 13.5 -65.3 Notes: * Percent • Average real GDP growth declined 1.2% in ’99. Reduced commodity prices, lower exports, financial crisis in Brazil, nervous investors. • Industrial production down in many countries. • The good news: it could have been worse. • Credit still difficult to come by. • Commodity prices recovering, improving investor confidence. • Political change has swept the region. In 1999-2000 almost every country will have a new government and new policies. Success uncertain. • Bright spots: Mexico, Costa Rica. Continued growth. ** Annual percent change in CPI, end period *** US$ Billions Latin America - GDP Growth Latin America - GDP Growth Argentina, Brazil, Chile, 1990 Prices Costa Rica, Mexico, Venezuela, 1990 Prices Percent Change, Year Ago Percent Change, Year Ago 15 15 Argentina Brazil Chile 10 10 5 5 0 0 -5 -5 -10 -10 -15 80 82 84 Costa Rica Mexico Venezuela 86 88 90 92 94 96 -15 98 Source: IFS; WEFA 80 82 Latin America - Interest Rates 88 90 92 94 96 98 Selected Short-Term Rates Index 1996=100 Index 1996=100 250 250 Argentina Brazil Chile 200 150 100 100 50 50 1997 1998 1999 Costa Rica Mexico Venezuela 200 150 1996 86 Latin America - Interest Rates Selected Short-Term Rates 0 84 Source: IFS 0 2000 Source: IFS 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS VI-1 March 8, 2000 www.milken-inst.org Latin America – Overview Latin America - Exchange Rates Latin America - Exchange Rates Selected Currencies Per US Dollar Selected Currencies Per US Dollar Index 1996=10 Index 1996=10 8 8 10 10 12 12 14 14 16 16 18 18 20 22 24 20 Argentina Brazil Chile 1996 Costa Rica Mexico Venezuela 22 1997 1998 1999 24 2000 1996 Source: IFS 1997 1998 1999 2000 Source: IFS Latin America - Effective Control by Foreign Banks Latin America - Exchange Rate Regimes Percent of Banking System Percent Managed Colombia Chile Venezuela Bolivia El Salvador Honduras Nicaragua Uruguay Costa Rica Floating Brazil Ecuador* Mexico Peru Guatemala Paraguay 40 Fixed Argentina Panama December, 1996 March, 1998 30 20 10 0 Note: * Dolarization in process. Brazil Argentina Chile Colombia Mexico Peru Venezuela Sources: Salomon Smith Barney; Financial Times Latin America - Inflation Rate Latin America - Inflation Rate Selected Countries, CPI Selected Countries, CPI Percent Change, Year Ago Percent Change, Year Ago 120 120 Argentina Brazil Chile 100 80 80 60 60 40 40 20 20 0 0 -20 1996 1997 1998 1999 -20 2000 Sources: IFS; Datastream 1996 1997 Sources: IFS; Datastream THE AMERICAS March 8, 2000 www.milken-inst.org Costa Rica Mexico Venezuela 100 VI-2 1998 1999 2000 Latin America – Overview Latin America - Net Capital Flows Latin America - Trade Balance Argentina, Brazil, Chile, Colombia, Mexico, Venezuela Exports, Imports, and Balance of Goods US$ Billions US$ Billions 120 300 Foreign Direct Investment Portfolio Investment Exports Imports Trade Balance 100 200 80 60 100 40 0 20 0 1996 1997 1998 -100 1999 Source: Financial Times 75 80 85 Latin America - Equity Index Index 1996=100 700 700 Argentina Brazil Chile 525 525 350 350 175 175 1997 1998 1999 0 2000 Source: Bloomberg Mexico Venezuela 1996 1997 1998 1999 2000 Source: Bloomberg Latin America - Equity Markets Latin America - Stock Market Performance Daily Trading Volume as Percent of Total Market Cap. January 1, 1999 through January 12, 2000 Percent Percent Change 70 100 Jan.-Aug., 1998 Jan.-Aug., 1999 60 80 50 60 40 40 30 20 20 0 10 -20 0 00 Selected Exchanges Index 1996=100 1996 95 Latin America - Equity Index Selected Exchanges 0 90 Source: Datastream Brazil Mexico Argentina -40 Venezuela Sources: Secretary of Finance, Mexico; Wall Street Journal Argentina Brazil Chile Colombia Mexico Source: Financial Times THE AMERICAS VI-3 March 8, 2000 www.milken-inst.org Argentina – Current Economic Conditions • Low commodity prices, devaluation in Brazil, a strong U.S. dollar (to which the peso is tied), and decreased domestic demand pushed GDP down an estimated 3.2% in ’99. • Export revenues declined 15% last year. • Industrial production in steep decline. • The fiscal deficit increased to $7 billion. 0 • Deflation – projected at 1.6% for consumer prices – a concern. -5 • But some recent recovery in retail sales. • New President, Fernando de la Rúa, promises increased taxes, decreased spending. • Increased commodity prices will help. Argentina - Real GDP Growth 1986 Prices Percent Change, Year Ago 15 10 5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Argentina - Inflation Rate Argentina - Short-Term Interest Rate Consumer Price Index Seven Day Interbank Rate Percent Change, Year Ago Percent 40 60 50 30 40 30 20 20 10 10 0 Note: 20,263% in March 1990 -10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Source: Datastream Argentina - Exchange Rate Argentina - Equity Index Peso per US Dollar Merval Index Peso/US$ Index 0.0 1000 0.2 800 0.4 600 0.6 400 0.8 200 1.0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-4 Argentina – Current Economic Conditions Argentina - Official Reserves Argentina - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 Industrial Production Percent Reserves Minus Gold - L Reserves as % of GDP - R Percent Change, Year Ago 8 20 6 10 4 0 2 -10 0 -20 20 15 10 5 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Argentina - Current Account Balance Argentina - Unemployment As Percent of GDP Unemployment Rate Percent Percent 20 10 18 0 16 -10 14 12 -20 10 -30 -40 8 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Sources: Datastream; WEFA Argentina - Budget Balance Argentina - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 7 6 1 5 0 4 -1 3 -2 -3 2 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream THE AMERICAS VI-5 March 8, 2000 www.milken-inst.org Argentina – Current Economic Conditions Argentina - Principal Exports 1998 Argentina - Trade Balance Merchandise Exports, Imports, and Balance Grains & Vegetable Products 21% Other 27% US$ Billions 3 Exports Imports Trade Balance 2 Live Animals & Animal Products 7% 1 Food Products 13% 0 Minerals 10% Oil & Fats 10% Transport Equipment 12% -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: Economist Intelligence Unit Argentina - Principal Imports 1998 Argentina - Role of Trade As Percent of GDP Percent 14 Paper & Cardboard 4% Machinery & Electrical Equipment 33% Other 21% 12 10 Plastics 6% Metals 6% Exports Imports 8 6 Transport Equipment 17% Chemicals 13% 4 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Argentina - Destination of Exports 1998 Argentina - Origin of Imports 1998 Brazil 23% Brazil 30% Other 42% Other 48% US 8% US 19% Chile 7% Uruguay 3% Italy 5% Netherlands 4% Source: Economist Intelligence Unit Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org France 5% VI-6 Germany 6% 98 Argentina – Current Economic Conditions Argentina - Foreign Direct Investment Argentina - Portfolio Investment Direct Investment Inflows Portfolio Investment Flows US$ Billions US$ Billions 5 25 Inflows into Argentina Outflows from Argentina 20 4 15 3 10 5 2 0 1 0 -5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Argentina - Gross Capital Formation Argentina - Automobile Sales As Percent of GDP Domestic Market Percent Thousands 20.5 35 20.0 30 19.5 25 19.0 20 18.5 15 18.0 10 17.5 5 17.0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Argentina - Bank Assets Argentina - Exports Deposit Money Banks From Manufacturing Origin US$ Billions Percent 25 45 Farm Industry 40 20 35 15 30 10 25 5 0 20 15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Source: Datastream THE AMERICAS VI-7 March 8, 2000 www.milken-inst.org Bolivia – Current Economic Conditions • GDP growth expected to slow to 3.4% in 1999. • Inflation steady at 3.3% despite increased oil prices. • Low world prices on agricultural goods, devaluation in Brazil, lingering effects of El Niño hit farmers hard. Possible rescheduling of debts. 2 • Industrial production fell sharply last year. 0 • Oil and gas output has increased with world prices, discovery of new reserves. Bolivia - Real GDP Growth 1990 Prices Percent Change, Year Ago 6 4 -2 -4 -6 80 82 84 86 88 90 92 94 96 98 Source: IFS Bolivia - Short-Term Interest Rate Bolivia - Inflation Rate Prime Rate Consumer Price Index Percent Change, Year Ago Percent 100 70 80 60 60 50 40 40 20 30 0 Note: 14,700% in 1985 80 82 84 86 88 90 92 94 96 20 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Bolivia - Exchange Rate Bolivia - Trade Balance Bolivianos per US Dollar Merchandise Exports, Imports, and Balance BP/US$ US$ Billions 0.3 3.0 0.2 3.5 Exports Imports Trade Balance 0.1 4.0 0.1 0.1 4.5 0.0 5.0 -0.0 5.5 6.0 -0.1 -0.1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org Note: Data not available July 1992 - Sept. 1994 for imports 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 VI-8 Bolivia – Current Economic Conditions Bolivia - Official Reserves Bolivia - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions 1.2 Industrial Output Percent Reserves Minus Gold - L Reserves as % of GDP - R 1.0 Percent Change, Year Ago 14 10 12 8 6 10 0.8 4 8 2 0.6 6 0.4 0.2 0.0 0 4 80 82 84 86 88 90 92 94 96 98 -2 2 -4 0 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Sources: IFS; Datastream Bolivia - Foreign Direct Investment Bolivia - Current Account Balance Foreign Investment Flows As Percent of GDP US$ Billions Percent 0 1.0 -2 0.8 0.6 -4 0.4 -6 0.2 -8 -10 -0.0 -0.2 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: IFS Bolivia - Budget Balance Bolivia - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 4 8.5 8.0 2 7.5 7.0 0 6.5 -2 6.0 5.5 -4 5.0 -6 4.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream THE AMERICAS VI-9 March 8, 2000 www.milken-inst.org Brazil – Current Economic Conditions • GDP growth rose a mere 0.3% in 1999. • Recession proving to be shorter and shallower than initially feared. • Devaluation pushed inflation up to 9%, not as much as many feared. • Low commodity prices and weather also played a role. Is the worst over? • Budget deficit estimated to be about 10% of GDP in 1999. -2 • Debt service more than 7% of GDP. -4 • Industrial production, new car sales lackluster. • Equity market booming. Brazil - Real GDP Growth 1990 Prices Percent Change, Year Ago 10 8 6 4 2 0 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Brazil - Inflation Rate Brazil - Interest Rates Consumer Price Index Short-Term and Long-Term Interest Rates Percent Change, Year Ago Percent 100 80 80 Overnight Rate Long Term Interest Rate (Fixed for the Quarter) 60 60 40 40 20 20 Note: 6,821% in April 1990 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Brazil - Exchange Rate Brazil - Equity Index Brazil Reals per US Dollar Bovespa Index R/US$ Index 0.0 20000 0.5 15000 1.0 10000 1.5 5000 2.0 2.5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-10 Brazil – Current Economic Conditions Brazil - Industrial Production Brazil - Official Reserves Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 70 Reserves Minus Gold - L Reserves as % of GDP - R 60 Percent Change, Year Ago Percent 10 20 8 10 50 6 40 0 30 4 20 10 0 -10 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 -20 Sources: IFS; Economist Intelligence Unit; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Brazil - Current Account Balance Brazil - Unemployment Rate As Percent of GDP Seasonally Adjusted Percent Percent 2 8.5 1 8.0 7.5 0 7.0 -1 6.5 -2 6.0 -3 5.5 -4 5.0 -5 4.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Brazil - Budget Balance Brazil - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 8 -10 7 6 -20 5 -30 4 -40 3 -50 -60 2 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Source: Datastream THE AMERICAS VI-11 March 8, 2000 www.milken-inst.org Brazil – Current Economic Conditions Brazil - Principal Exports 1998 Brazil - Trade Balance Merchandise Exports, Imports and Balance Transport Equipment & Parts 15% US$ Billions 0.25 Exports Imports Trade Balance 0.20 0.15 Metallurgical Products 11% Other 51% 0.10 0.05 0.00 Iron Ore 7% Source: Economist Intelligence Unit Soybeans, Bran & Oils 9% Chemical Products 7% -0.05 -0.10 Note: Data not available for 1992-94 -0.15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Brazil - Principal Imports 1998 Brazil - Role of Trade As Percent of GDP Percent 16 Machinery & Electrical Equipment 32% Other 41% Exports Imports 14 12 10 Oil & Derivatives 6% Source: Economist Intelligence Unit Chemical Products 12% Transport Equipment & Parts 9% 8 6 4 80 82 84 86 88 90 Brazil - Destination of Exports 1998 Other 41% Argentina 14% Germany 6% Italy 6% Netherlands 5% Source: Economist Intelligence Unit Japan 6% Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org 96 US 24% Argentina 13% Japan 4% 94 Brazil - Origin of Imports 1998 US 19% Other 53% 92 Source: IFS VI-12 Germany 9% 98 Brazil – Current Economic Conditions Brazil - Foreign Direct Investment Brazil - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 10 40 Inflows into Brazil Outflows from Brazil 8 30 6 20 4 10 2 0 0 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream, Economist Intelligence Unit, Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Brazil - Gross Capital Formation Brazil - New Motor Vehicle Sales As Percent of GDP Not Seasonally Adjusted Percent Thousands 21.0 180 160 20.5 140 20.0 120 19.5 100 80 19.0 60 18.5 18.0 40 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Brazil - Bank Assets Brazil - Capacity Utilization Deposit Money Banks Capacity Utilization US$ Billions Index 1989=100 25 82 80 20 78 15 76 10 5 74 72 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA THE AMERICAS VI-13 March 8, 2000 www.milken-inst.org Canada – Current Economic Conditions • Canada’s GDP grew an estimated 4% in 1999. Inflation 1.8%. 6 • Growth has been driven by rising exports to the U.S. Increased consumer spending also playing a role. 4 • Exports are 40% of GDP versus 11% for U.S. Commodities are 44% of exports. 2 • Unemployment at 18-year low. • Consumer spending is strong. • Industrial production on an uptick. • Foreign direct investment increasing. • Budget in surplus for three years now. Debt falling. Canada - Real GDP Growth 1986 Prices Percent Change, Year Ago 0 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Canada - Inflation Rate Canada - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 7 14 6 3-month Interbank 10 Year Government Bond 12 5 10 4 3 8 2 6 1 4 0 -1 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Canada - Exchange Rate Canada - Equity Index Canadian Dollars per US Dollar TSE 300 Index C$/US$ Index 1.1 10000 1.2 8250 1.3 6500 1.4 4750 1.5 1.6 3000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream VI-14 Canada – Current Economic Conditions Canada - Official Reserves Canada - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 30 Industrial Production Percent Percent Change, Year Ago 4.5 Reserves Minus Gold - L Reserves as % of GDP - R 25 4.0 20 3.5 10 5 0 15 3.0 10 2.5 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 -5 2.0 -10 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Canada - Current Account Balance Canada - Unemployment Rate As Percent of GDP Seasonally Adjusted Percent Percent 1 12 0 11 -1 10 -2 9 -3 8 -4 7 -5 80 82 84 86 88 90 92 94 96 98 6 00 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Canada - Budget Balance Canada - Government Debt As Percent of GDP As Percent of GDP Percent Percent 4 110 2 100 0 90 -2 80 -4 70 -6 60 -8 50 -10 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA THE AMERICAS VI-15 March 8, 2000 www.milken-inst.org Canada – International Trade Canada - Principal Exports 1998 Canada - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Other 15% 25 Motor Vehicles & Parts 25% Agricultural Products 7% Exports Imports Trade Balance 20 15 10 Forest Products 11% 5 Machinery & Equipment 24% Other Industrial Products 18% 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: Economist Intelligence Unit Canada - Principal Imports 1998 Canada - Role of Trade As Percent of GDP Agricultural Products 6% Percent Other 8% 45 Machinery & Equipment 33% Other Consumer Goods 11% Exports Imports 40 35 30 Other Industrial Goods 20% 25 Motor Vehicles & Parts 22% 20 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Canada - Destination of Exports 1998 Other EU 4% UK 2% Canada - Origin of Imports 1998 Other 7% Other EU 6% Japan 3% Other 12% UK 2% Japan 3% US 77% US 84% Source: Economist Intelligence Unit Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org VI-16 98 Canada – International Trade and Business Canada - Exports Canada - Exports To the U.S. To the EU US$ Billions US$ Billions 18 1.20 16 1.10 1.00 14 0.90 12 0.80 10 0.70 8 6 0.60 0.50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Canada - Exports Canada - Business Survey To Asia Percentage Expecting Production To Be Lower US$ Billions Percent 0.80 50 0.70 40 0.60 30 0.50 20 0.40 10 0.30 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Canada - Capacity Utilization Rate Canada - Capital Expenditures Non-Farm Goods Producing Industries Machinery & Equipment Percent CN$ Billions 90 10.5 10.0 85 9.5 9.0 80 8.5 8.0 75 7.5 70 80 82 84 86 88 90 92 94 96 98 7.0 00 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream THE AMERICAS VI-17 March 8, 2000 www.milken-inst.org Canada – Commodities Canada - Commodity Prices Canada - Commodity Exports Canadian Commodity Price Index 43.9% of Exports, 1998 Index Percent 120 20 110 18 17.8 16 100 14 90 12 80 10 70 60 10.9 7.4 7.8 Energy Agriculture 8 75 80 85 90 95 6 00 Source: Datastream Forestry Industrial Source: Statistics Canada Canada - Energy Products Canada - Agriculture Products Export Price Index Export Price Index Index Index 300 220 Crude Petroleum Natural Gas Wheat Other Farm & Fish Products 200 250 180 160 200 140 150 120 100 100 80 50 80 82 84 86 88 90 92 94 96 98 60 00 Source: Datastream 80 82 84 86 88 90 92 94 96 98 00 98 00 Source: Datastream Canada - Forestry Products Canada - Industrial Products Export Price Index Export Price Index Index Index 200 140 Lumber & Sawmill Pulp & Paper 180 Chemicals & Fertilizers Metals & Minerals 130 160 120 140 120 110 100 100 80 60 80 82 84 86 88 90 92 94 96 98 90 00 Source: Datastream THE AMERICAS March 8, 2000 www.milken-inst.org 80 82 84 Source: Datastream VI-18 86 88 90 92 94 96 Canada – Current Economic Conditions Canada - Foreign Direct Investment Canada - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 5 25 Inflows into Canada Outflows from Canada 20 4 15 3 10 5 2 0 1 -5 0 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Canada - Gross Capital Formation Canada - Retail Sales As Percent of GDP Retail Sales Index Percent Index 23 120 22 110 21 100 20 90 19 80 18 70 17 16 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 80 82 84 86 88 90 92 94 96 98 00 Source: Datastream Canada - Housing Starts Canada - New Motor Vehicle Sales Total Dwelling Starts in All Areas Seasonally Adjusted Percent Change, Year Ago Thousands 60 140 40 130 20 120 0 110 -20 100 -40 -60 90 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream THE AMERICAS VI-19 March 8, 2000 www.milken-inst.org Chile – Current Economic Conditions • The Chilean economy floundered the first half of 1999; energy and construction sectors led the decline. • GDP growth estimated to fall 1.1% in 1999. • Unemployment rose above 10%. 10 • But, signs of recovery. Monetary and fiscal policies stimulated the economy in the second half of 1999. 5 • Inflation at record low 2.5% in 1999. • Copper output increasing as prices recover. • Equity market back up since drop in ’98. Chile - Real GDP Growth 1990 Prices Percent Change, Year Ago 15 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Chile - Inflation Rate Chile - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 35 16 30 14 25 12 20 10 15 8 10 6 5 4 0 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 90 Day CD Inflation Adjusted 8 Year Coupon 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Chile - Exchange Rate Chile - Equity Index Pesos per US Dollar IPSA Index CP/US$ Index 250 120 300 100 350 80 400 60 450 40 500 20 550 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-20 Chile – Current Economic Conditions Chile - Official Reserves Chile - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 18 16 Industrial Production Index Percent Reserves Minus Gold - L Reserves as % of GDP - R 14 Percent Change, Year Ago 26 80 24 60 22 12 40 20 10 20 18 8 4 2 0 16 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 14 -20 12 -40 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Chile - Current Account Balance Chile - Unemployment Rate As Percent of GDP Three Month Moving Average Percent Percent 12 0 -2 10 -4 -6 8 -8 -10 6 -12 -14 -16 80 82 84 86 88 90 92 94 96 98 4 00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Source: IFS Chile - Budget Balance Chile - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 3.0 12 2.5 11 10 2.0 9 1.5 8 1.0 7 0.5 0.0 6 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream THE AMERICAS VI-21 March 8, 2000 www.milken-inst.org Chile – International Trade Chile - Principal Exports 1998 Chile - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 2.5 Other 8% Exports Imports Trade Balance 2.0 Copper 37% 1.5 1.0 0.5 Industrial 45% 0.0 -0.5 Agricultural 10% -1.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: Economist Intelligence Unit Chile - Principal Imports 1998 Chile - Role of Trade As Percent of GDP Percent Consumer Goods 19% 40 Exports Imports 35 30 Intermediate Goods 54% Capital Goods 27% 25 20 15 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Chile - Destination of Exports 1998 Chile - Origin of Imports 1998 US 18% Other 46% US 23% Other 44% Japan 13% Argentina 11% UK 8% Brazil 6% Germany Japan Mexico 5% 6% 5% Brazil Italy Argentina 5% 5% 5% Source: Economist Intelligence Unit Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org VI-22 98 Chile – Current Economic Conditions Chile - Foreign Direct Investment Chile - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 6 2.0 Inflows into Chile Outflows from Chile 5 1.0 4 3 0.0 2 -1.0 1 0 -2.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Chile - Gross Capital Formation Chile - Consumer Spending As Percent of GDP Annual Growth Percent Percent Change, Year Ago 26 14 25 12 24 10 23 8 22 6 21 4 20 19 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Source: Datastream Chile - Employment Chile - Copper Production Selected Industries Copper Production Percent 45 40 Index 1995=100 180 Agriculture & Fishing Manufacturing Services 160 35 140 30 120 25 100 20 80 15 10 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS VI-23 March 8, 2000 www.milken-inst.org Colombia – Current Economic Conditions Colombia - Real GDP Growth 1990 Prices Percent Change, Year Ago • In recession. GDP growth fell 4.6% last year. • Inflation about 10% in 1999 – has remained in single digits for about six months (not shown in chart). • Unemployment near record highs. • Export situation mixed. Poor coffee crop hurt agricultural exports, but prospects in the energy sector have improved with rising oil prices. • Industrial production in steep decline. 6 5 4 3 2 1 0 80 82 84 86 88 90 92 94 96 98 Source: IFS Colombia - Inflation Rate Colombia - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 35 55 50 30 45 40 25 35 30 20 25 15 80 82 84 86 88 90 92 94 96 20 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Colombia - Exchange Rate Colombia - Equity Index Pesos per US Dollar Colombia Stock Exchange Bog-Bosa Index CP/US$ Index 0 1600 1400 500 1200 1000 1000 800 1500 600 400 2000 200 2500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-24 Colombia – Current Economic Conditions Colombia - Official Reserves Colombia - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 10 Reserves Minus Gold - L Reserves as % of GDP - R 8 6 4 2 0 80 Industrial Production Percent 82 84 86 88 90 92 94 96 98 Percent Change, Year Ago 18 15 16 10 14 5 12 0 10 -5 8 -10 6 -15 4 -20 2 -25 Sources: IFS; WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Colombia - Current Account Balance Colombia - Unemployment As Percent of GDP Unemployment Rate Percent Percent 2 22 0 20 -2 18 -4 16 -6 14 -8 12 -10 10 -12 8 -14 80 82 84 86 88 90 92 94 96 6 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Colombia - Budget Balance Colombia - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 10 0 9 -2 8 -4 7 -6 6 -8 5 -10 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Sources: IMF; WEFA THE AMERICAS VI-25 March 8, 2000 www.milken-inst.org Costa Rica – Current Economic Conditions • GDP growth in Costa Rica remained strong in 1999, expanding by 4% (official estimates place it at 8%). 10 • Inflation was over 10%, but down from 12.3% in 1998. 5 • Output growth is expected to exceed 7% for 1999. Intel’s chip factory (opened in 1998) almost entirely the reason. • Coffee and banana exports continue to suffer from low commodity prices. Export earnings over 20%; but without Intel they would have contracted. • Continued growth in stock market. Costa Rica - Real GDP Growth 1990 Prices Percent Change, Year Ago 0 -5 -10 80 82 84 86 88 90 92 94 96 98 Source: IFS Costa Rica - Inflation Rate Costa Rica - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 100 45 80 40 60 35 40 30 20 25 0 80 82 84 86 88 90 92 94 96 20 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Costa Rica - Exchange Rate Costa Rica - Equity Index Colones per US Dollar Costa Rica Stock Market CC/US$ Index 50 10000 100 8000 150 6000 200 4000 250 2000 300 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-26 Costa Rica – Current Economic Conditions Costa Rica - Official Reserves Costa Rica - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 1.4 Percent Change, Year Ago 18 Reserves Minus Gold - L Reserves as % of GDP - R 1.2 Industrial Production Index Percent 30 16 25 14 1.0 20 12 0.8 10 0.6 8 0.4 10 6 0.2 0.0 15 5 4 80 82 84 86 88 90 92 94 96 2 98 0 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Costa Rica - Current Account Balance Costa Rica - Unemployment As Percent of GDP Unemployment Rate Percent Percent 0 7.0 -5 6.5 6.0 -10 5.5 -15 5.0 -20 4.5 -25 -30 4.0 80 82 84 86 88 90 92 94 96 3.5 98 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Source: IFS; WEFA Costa Rica - Budget Balance Costa Rica - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent -1 9.0 -2 8.0 -3 -4 7.0 -5 6.0 -6 -7 5.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream THE AMERICAS VI-27 March 8, 2000 www.milken-inst.org Ecuador – Current Economic Conditions • GDP contracted 6.6% in 1999. • Industrial output down. • Inflation at 59.6% (the highest in Latin America). 10 • Dollarization of currency proposed. Coup followed. Result? 5 • Unemployment at about 20%. Only one in three work full time. Ecuador - Real GDP Growth 1990 Prices Percent Change, Year Ago 15 0 -5 -10 80 82 84 86 88 90 92 94 96 98 Source: IFS Ecuador - Inflation Rate Ecuador - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 80 80 60 60 40 40 20 20 0 80 82 84 86 88 90 92 94 96 0 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 00 Source: IFS Ecuador - Exchange Rate Ecuador - Equity Index Sucres per US Dollar Ecuador Stock Market Interinvest Index ES/US$ Index 0 3000 2000 2500 4000 2000 6000 8000 1500 10000 1000 12000 14000 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-28 Ecuador – Current Economic Conditions Ecuador - Official Reserves Ecuador - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions 2.5 Industrial Output Percent Percent Change, Year Ago 10 12 Reserves Minus Gold - L Reserves as % of GDP - R 2.0 10 1.5 8 5 0 1.0 6 0.5 4 0.0 80 82 84 86 88 90 92 94 96 -5 -10 2 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Source: IFS Ecuador - Current Account Balance Ecuador - Unemployment As Percent of GDP Unemployment Rate Percent Percent 11 0 10 -5 9 -10 8 -15 -20 7 80 82 84 86 88 90 92 94 96 6 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Source: IFS Ecuador - Budget Balance Ecuador - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 3 12 11 2 10 1 9 8 0 7 -1 -2 6 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream THE AMERICAS VI-29 March 8, 2000 www.milken-inst.org Guatemala – Current Economic Conditions • GDP rose 5.1% in 1998, but expected to slow in 1999 to 3.5% 6 • Quetzal depreciated; increased prices on imports; uptick in inflation. 4 • Interest rates also up, over 20% by the end of ’99. • Coffee and fruit production increased, but exports still plagued by low commodity prices. Guatemala - Real GDP Growth 1990 Prices Percent Change, Year Ago 2 0 -2 -4 80 82 84 86 88 90 92 94 96 98 Source: IFS Guatemala - Inflation Rate Guatemala - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 50 35 40 30 30 25 20 20 10 15 0 80 82 84 86 88 90 92 94 96 10 98 Source: IFS 82 84 86 88 90 92 94 96 98 Guatemala - Exchange Rate Guatemala - Trade Balance Quetzales per US Dollar Merchandise Exports, Imports, and Balance GQ/US$ 00 US$ Billions 3 0.6 4 0.4 5 0.2 6 -0.0 7 -0.2 8 80 Source: IFS -0.4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org Exports Imports Trade Balance VI-30 Guatemala – Current Economic Conditions Guatemala - Official Reserves Guatemala - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions Industrial Output Percent 1.4 Percent Change, Year Ago 8 10 7 1.2 8 6 1.0 6 0.8 0.6 5 4 4 3 0.4 2 0.2 0.0 80 82 84 86 88 90 92 94 96 2 1 0 98 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Source: IFS Guatemala - Current Account Balance Guatemala - Foreign Direct Investment As Percent of GDP Foreign Investment Flows Percent US$ Billions 0 0.70 -2 0.60 0.50 -4 0.40 -6 0.30 -8 0.20 -10 -12 0.10 80 82 84 86 88 90 92 94 96 0.00 98 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: IFS Guatemala - Budget Balance Guatemala - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 1.0 5.5 0.5 5.0 4.5 0.0 4.0 -0.5 3.5 -1.0 3.0 -1.5 2.5 -2.0 -2.5 2.0 1.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream THE AMERICAS VI-31 March 8, 2000 www.milken-inst.org Mexico – Current Economic Conditions Mexico - Real GDP Growth 1993 Prices Percent Change, Year Ago • Good news from Mexican economy. • Recovery from recession in the mid ‘90s, propelled mostly from the private sector. GDP grew 3.6% in 1999. • Inflation has eased: 12.8% in 1999. Stability of the peso, lower produce costs responsible. • Unemployment at lowest level since 1991. Job creation. • Industrial production still positive, unlike most latin neighbors. Strong capital formation. • Bolsa index setting records. • Exports up sharply in 1999, increasing 15% in the second quarter alone. • Maquiladora industries booming. 10 5 0 -5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Mexico - Inflation Rate Mexico - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 60 80 1 Month T-Bill 1 Year Federal Dev. Bond 50 60 40 30 40 20 20 10 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA Mexico - Exchange Rate Mexico - Equity Index Pesos per US Dollar Bolsa Index Pesos per US$ Index 2 8000 4 6000 6 4000 8 2000 10 12 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-32 Mexico – Current Economic Conditions Mexico - Official Reserves Mexico - Industrial Production Total Reserves Minus Gold and as Percent of GDP US$ Billions 35 Reserves Minus Gold - L Reserves as % of GDP - R 30 Industrial Production Percent Percent Change, Year Ago 8 15 7 10 25 6 20 5 15 4 10 3 5 2 -10 1 -15 5 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 -5 Source: IFS Note: Data not available, Sept.- Nov., 1997 and 1998 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Mexico - Current Account Balance Mexico - Unemployment Rate As Percent of GDP Three Month Moving Average Percent Percent 6 8 4 7 2 6 0 5 -2 4 -4 3 -6 -8 80 82 84 86 88 90 92 94 96 2 98 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Mexico - Budget Balance Mexico - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 30 14 20 12 10 10 0 8 -10 6 -20 4 -30 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Sources: Banco De Mexico; IFS THE AMERICAS VI-33 March 8, 2000 www.milken-inst.org Mexico – International Trade Mexico - Principal Exports 1998 Mexico - Trade Balance Merchandise Exports, Imports, and Trade Balance US$ Billions 15 Exports Imports Trade Balance 10 Manufactured Goods 45% Other 46% 5 0 Agricultural Goods 3% Oil 6% -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: Economist Intelligence Unit Mexico - Principal Imports 1998 Mexico - Role of Trade As Percent of GDP Consumer Goods 9% Capital Goods 14% Percent 35 Exports Imports 30 25 20 15 10 Intermediate Goods 77% 5 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Mexico - Destination of Exports 1997 Spain 1% Mexico - Origin of Imports 1997 Other 16% Other 10% France 1% Japan 1% Canada 2% Germany 4% Canada 4% US 86% Source: Economist Intelligence Unit Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org VI-34 US 75% 98 Mexico – Current Economic Conditions Mexico - Foreign Direct Investment Mexico - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 6 15 Inflows into Mexico Outflows from Mexico 5 10 4 5 3 0 2 -5 1 0 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Mexico - Gross Capital Formation Mexico - Retail Sales As Percent of GDP Retail Sales Index Percent Index 23 180 22 160 21 20 140 19 120 18 17 100 16 15 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Mexico - Bank Assets Mexico - Maquiladora Industries Deposit Money Banks Industrial Production US$ Billions Index 1993 = 100 6 240 220 5 200 4 180 3 160 140 2 120 1 0 100 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA THE AMERICAS VI-35 March 8, 2000 www.milken-inst.org Panama – Current Economic Conditions • GDP predicted to grow 3.3% in `99. • Industrial output still positive in 1999. • Inflation low and stable. 5 • The transfer of the Panama Canal to Panama went smoothly; traffic is up. 0 • Exports disappointed in 1999. Depressed agricultural prices and the end of sales to U.S. bases were to blame. Trade deficit growing. Panama - Real GDP Growth 1990 Prices Percent Change, Year Ago 10 -5 -10 -15 80 82 84 86 88 90 92 94 96 98 Source: IFS Panama - Inflation Rate Panama - Trade Balance Consumer Price Index Merchandise Exports, Imports, and Balance Percent Change, Year Ago US$ Billions 14 0.4 12 0.3 10 0.2 8 0.1 6 0.0 4 -0.1 2 -0.2 0 -0.3 80 82 84 86 88 90 92 94 96 98 Exports Imports Trade Balance Note: Data not available for Nov. - Dec. 1996 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: IFS Panama - Exchange Rate Panama - Equity Index Balboas per US Dollar Panama Stock Exchange Index PB/US$ Index 0.4 800 0.6 700 600 0.8 500 1.0 400 1.2 300 1.4 200 Note: Balboas are pegged to the US dollar 1.6 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-36 Panama – Current Economic Conditions Panama - Official Reserves Panama - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions 1.2 Industrial Output Percent Percent Change, Year Ago 20 14 Reserves Minus Gold - L Reserves as % of GDP - R 12 1.0 10 10 0.8 0 8 0.6 6 0.4 4 -20 0.2 0.0 -10 2 80 82 84 86 88 90 92 94 96 -30 0 98 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Sources: IFS; Datastream Panama - Current Account Balance Panama - Unemployment Rate As Percent of GDP Unemployment Rate Percent Percent 15 17 10 16 15 5 14 0 13 -5 12 -10 11 -15 10 80 82 84 86 88 90 92 94 96 98 Note: Data for 1990 not available 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Source: Datastream Source: IFS Panama - Budget Balance Panama - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 6 80 4 Note: 1986 data not available 60 2 40 0 20 -2 -4 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 80 82 84 86 88 90 92 94 96 98 Sources: Datastream; IFS THE AMERICAS VI-37 March 8, 2000 www.milken-inst.org Paraguay – Current Economic Conditions Paraguay - Real GDP Growth 1990 Prices Percent Change, Year Ago • GDP expected to shrink by 1.5% in 1999. • Contraction in domestic demand. Guaraní continues to fall against the dollar – down 16.4% from January to August 1999. • Consumer imports fell 50% in the first seven months of the year. • Inflation down in 1999, to about 10%. • Cold weather, drought predicted to affect agricultural exports. • United Nations ranked Paraguay 84th out of 174 countries in its 1999 Human Development Index – up from previous years; gains in life expectancy, literacy, access to medical care. 12 10 8 6 4 2 0 -2 -4 80 82 84 86 88 90 92 94 96 98 Source: IFS Paraguay - Inflation Rate Paraguay - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 40 40 35 38 36 30 34 25 32 20 30 15 28 10 5 26 80 82 84 86 88 90 92 94 96 24 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Paraguay - Exchange Rate Paraguay - Trade Balance Guaranies per US Dollar Merchandise Exports, Imports, and Balance PG/US$ US$ Billions 1.0 1000 1500 Exports Imports Trade Balance 0.5 2000 0.0 2500 -0.5 3000 3500 -1.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org Note: Import data not available Q3 & Q4, 1996 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 VI-38 Paraguay – Current Economic Conditions Paraguay - Official Reserves Paraguay - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions Industrial Output Percent 1.2 Reserves Minus Gold - L Reserves as % of GDP - R 1.0 Percent Change, Year Ago 6 18 16 4 14 0.8 2 12 0.6 10 0.4 8 -2 0.2 0.0 0 6 80 82 84 86 88 90 92 94 96 -4 4 98 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Sources: IFS Paraguay - Current Account Balance Paraguay - Foreign Direct Investment As Percent of GDP Foreign Investment Flows Percent US$ Billions 0.30 10 0.25 5 0.20 0 0.15 -5 0.10 -10 -15 0.05 80 82 84 86 88 90 92 94 96 0.00 98 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: IFS Paraguay - Foreign Liabilities Paraguay - Debt Service Paid As Percent of GDP As Percent of GDP Percent Percent 2.0 10 8 1.5 6 1.0 4 0.5 0.0 2 80 82 84 86 88 90 92 94 96 0 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 00 Source: Datastream THE AMERICAS VI-39 March 8, 2000 www.milken-inst.org Uruguay – Current Economic Conditions Uruguay - Real GDP Growth 1990 Prices • GDP is projected to decline by 1.4% in 1999. • Inflation at a modest 4.7% in 1999. 10 • Fiscal deficit widened as Uruguay’s economic downturn shrank tax receipts. 5 • Spending on social security, public investment are up. 0 • Interest rates in steady decline. Central Bank reducing interest rates to weaken the peso, improve export competitiveness. • Unemployment in Montevideo was 12.2% in AprilJune, up from 9.6% a year earlier. Percent Change, Year Ago -5 -10 80 82 84 86 88 90 92 94 96 98 Source: WEFA Uruguay - Inflation Rate Uruguay - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 120 200 180 100 160 80 140 60 120 100 40 80 20 0 60 80 82 84 86 88 90 92 94 96 40 98 Source: IFS Uruguay - Exchange Rate Uruguay - Trade Balance Pesos per US Dollar Merchandise Exports, Imports, and Balance UP/US$ US$ Billions 0 0.4 2 0.3 4 0.2 6 0.1 8 -0.0 10 -0.1 12 -0.2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Exports Imports Trade Balance 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS VI-40 Uruguay – Current Economic Conditions Uruguay - Official Reserves Uruguay - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions Industrial Output Percent Percent Change, Year Ago 12 15 2.0 10 10 1.5 8 5 1.0 6 0 0.5 4 -5 2 -10 2.5 Reserves Minus Gold - L Reserves as % of GDP - R 0.0 80 82 84 86 88 90 92 94 96 98 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Source: Datastream Source: IFS Uruguay - Current Account Balance Uruguay - Foreign Liabilities As Percent of GDP As Percent of GDP Percent Percent 4 70 2 60 50 0 40 -2 30 -4 20 -6 -8 10 80 82 84 86 88 90 92 94 96 0 98 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: IFS Uruguay - Budget Balance Uruguay - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 1.0 12 0.5 10 0.0 8 -0.5 -1.0 6 -1.5 4 -2.0 -2.5 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; IFS 80 82 84 86 88 90 92 94 96 98 00 Source: Datastream THE AMERICAS VI-41 March 8, 2000 www.milken-inst.org Venezuela – Current Economic Conditions • Recession continues. 9.5% contraction in GDP in the first half of 1999. 10 • Rising oil prices help (up 100% since April 1999). Petroleum comprises 80% of export earnings. 5 • Unemployment still above 15% • Industrial output way down. • Inflation fell in 1999 – around 20% now. • Increases in the government and petroleum sectors are expected to boost growth and the prospect for recovery in 2000. • December 1999 floods killed over 30,000, left many homeless. Will impact the economy well into 2000. Venezuela - Real GDP Growth 1990 Prices Percent Change, Year Ago 0 -5 -10 80 82 84 86 88 90 92 94 96 98 Source: WEFA Venezuela - Inflation Rate Venezuela - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 120 100 100 Prime Rate Government Long-Term Bond Yield 80 80 60 60 40 40 20 20 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Venezuela - Exchange Rate Venezuela - Equity Index Bolivares per US Dollar Venezuela Stock Exchange Index VB/US$ Index 0 12000 100 10000 200 8000 300 6000 400 4000 500 2000 600 700 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS THE AMERICAS March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VI-42 Venezuela – Current Economic Conditions Venezuela - Official Reserves Venezuela - Industrial Output Total Reserves Minus Gold and as Percent of GDP US$ Billions 16 Percent Change, Year Ago 15 25 Reserves Minus Gold - L Reserves as % of GDP - R 14 Real Industrial Output Percent 10 20 12 5 15 10 0 8 10 -5 6 4 2 80 82 84 86 88 90 92 94 96 98 5 -10 0 -15 80 82 84 Venezuela - Current Account Balance 90 92 94 96 98 00 Unemployment Rate Percent Percent 20 16 15 14 10 12 5 10 0 8 -5 6 80 88 Venezuela - Unemployment As Percent of GDP -10 86 Source: Datastream Source: IFS 82 84 86 88 90 92 94 96 4 98 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: IFS Venezuela - Budget Balance Venezuela - Debt Service Paid Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 11 4 10 2 9 0 8 7 -2 6 -4 -6 5 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 80 82 84 86 88 90 92 94 96 98 00 Source: Datastream Source: IFS THE AMERICAS VI-43 March 8, 2000 www.milken-inst.org Venezuela – International Trade Venezuela - Principal Exports 1995 Venezuela - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 3.0 Other 15% Exports Imports Trade Balance 2.5 Chemicals 4% 2.0 1.5 Base Metals 9% 1.0 0.5 Oil 72% 0.0 -0.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS Source: Economist Intelligence Unit Venezuela - Principal Imports 1995 Venezuela - Role of Trade As Percent of GDP Percent 40 Machinery 23% Exports Imports 35 Other 39% 30 25 Chemicals 13% Agricultural Produce 7% Base Metals 8% 20 15 Transport Equipment 10% 10 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Venezuela - Destination of Exports 1997 Venezuela - Origin of Imports 1997 Other 27% Other 29% Germany 5% Japan 1% Germany 2% US 53% US 57% Italy 5% Brazil 5% Colombia 6% Colombia 5% Source: Economist Intelligence Unit Source: Economist Intelligence Unit THE AMERICAS March 8, 2000 www.milken-inst.org Japan 5% VI-44 98 Venezuela – Current Economic Conditions Venezuela - Foreign Direct Investment Venezuela - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 6 20 5 Inflows into Venezuela Outflows from Venezuela 15 4 10 3 5 2 0 1 0 80 82 84 86 88 90 92 94 96 -5 98 Source: IFS Note: Data not available for 1984-88 80 82 84 86 88 90 92 94 96 98 Source: IFS Venezuela - Gross Capital Formation Venezuela - Motor Vehicle Sales Gross Fixed Capital Formation Not Seasonally Adjusted Percent Thousands 22 16 Local Production Imported Units 14 20 12 10 18 8 6 16 4 2 14 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream Venezuela - Petroleum Sector Venezuela - Petroleum Sector As Percent of Export Earnings As Percent of GDP Percent Percent 28 100 26 90 24 80 22 70 20 18 60 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Source: Datastream 80 82 84 86 88 90 92 94 96 98 00 Source: IFS THE AMERICAS VI-45 March 8, 2000 www.milken-inst.org Asia – Overview Asia - Real GDP Japan, Korea, Indonesia, 1990 Prices Percent Change, Year Ago • Asia has rebounded strongly from the crisis. • Exports are the surging force in the region’s recovery. • Political issues throughout Asia have stabilized, giving greater confidence to external investment. • Prices have flattened out and only modest inflation is expected in the near term. • Asia equity markets are up and have exceeded emerging regions. • Interest rates are expected to remain low to stimulate economic growth. • Much of Asia’s financial sector fragile, in need of reform. 15 10 5 0 -5 Japan Korea Indonesia -10 -15 Note: 1999 Estimated -20 80 82 84 86 88 90 92 94 96 98 Source: WEFA Asia - Real GDP Asia - Real GDP Thailand, Malaysia, and Singapore, 1990 Prices China, Hong Kong, Taiwan, 1990 Prices Percent Change, Year Ago Percent Change, Year Ago 15 20 Thailand Malaysia Singapore 10 China Hong Kong Taiwan 15 5 10 0 5 -5 0 Note: 1999 Estimated -10 80 82 84 86 88 90 92 94 96 Note: 1999 Estimated -5 98 Source: WEFA 80 82 84 86 88 90 92 Asia - Real GDP Asia - Real GDP Australia and New Zealand, 1990 Prices India, Pakistan, 1990 Prices Percent Change, Year Ago Percent Change, Year Ago 8 10 Australia New Zealand 96 98 India Pakistan 6 8 4 6 2 4 0 2 Note: 1999 Estimated -2 94 Source: WEFA 80 82 84 86 88 90 92 94 96 Note: 1999 Estimated 0 98 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA VII-1 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Asia – Overview Asia - Inflation Asia - Trade Volume CPI, 26 Asian Economies minus Japan Exports and Imports, 20 Asian Economies minus Japan Percent US$ Trillions 20 1.2 1.0 15 0.8 10 0.6 0.4 5 0.2 0 80 82 84 86 88 90 92 94 96 0.0 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Asia - Foreign Exchange Rates Asia - Foreign Exchange Rates Japan and Singapore Exchange Rates per US$ China and Hong Kong Exchange Rates per US$ Index 1995=100 Index 1995=100 80 50 60 100 China Hong Kong 70 120 80 140 Japan Singapore 90 160 180 100 110 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Asia - Foreign Exchange Rates Asia - Foreign Exchange Rates Australia and New Zealand Exchange Rates per US$ India, Pakistan, Exchange Rates per US Dollar Index 1995=100 Index 1995=100 80 40 90 60 India Pakistan 80 100 100 110 120 120 140 Australia New Zealand 130 140 160 180 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VII-2 Asian 5 Comparisons – CPI • Asian 5 suffered a great loss in real GDP growth with an average loss of -7.1% in 1998. 20 • After two years of mostly negative returns, Asian 5 equity markets rebounded in 1999. 15 • Inflation remains under control and moderate deflationary pressure in Thailand. 10 • High import costs; trade balances turned positive in 1998, 1999. 5 • Bank lending took a deep fall in 1998. Indonesia - Inflation Rate Consumer Price Index Percent Change, Year Ago 0 Note: Inflation rate was 82% in September 1998 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Korea - Inflation Rate Malaysia - Inflation Rate Consumer Price Index Consumer Price Index Percent Change, Year Ago Percent Change, Year Ago 20 20 15 15 10 10 5 5 0 0 -5 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Philippines - Inflation Rate Thailand - Inflation Rate Consumer Price Index Consumer Price Index Percent Change, Year Ago Percent Change, Year Ago 20 20 15 15 10 10 5 5 0 0 Note: Inflation rate was 21% in August 1991 -5 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VII-3 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Asian 5 Comparisons – Equity Index and Exchange Rate Indonesia - Equity Index and Exchange Rate Asian 5 Equity Markets Jakarta Composite and Rupiah per US Dollar Index Jan. 1, 1999=100 180 60 Equity Index - L Exchange Rate - R 160 Annual Growth Index Jan. 1, 1999=100 95 96 97 98 99 9% 24% -37% -1% 70% -14% -26% -42% 49% 83% 2% 24% -52% -1% 39% 70 Indonesia 140 80 Korea 120 90 Philippines -6% 22% -41% 5% 9% 100 100 Thailand -6% -35% -55% -5% 35% 80 110 Source: Bloomberg 60 JAN MAR MAY JUL SEP NOV 1999 JAN MAR Malaysia 120 2000 Source: Datastream Korea - Equity Index and Exchange Rate Malaysia - Equity Index and Exchange Rate KOSPI Index and Won per US Dollar Kuala Lumpur Composite and Ringgit per US Dollar Index Jan. 1, 1999=100 180 Index Jan. 1, 1999=100 Index Jan. 1, 1999=100 Index Jan. 1, 1999=100 60 180 70 160 140 80 140 80 120 90 120 90 100 100 100 100 80 110 80 110 120 60 Equity Index - L Exchange Rate - R 160 60 JAN MAR MAY JUL SEP NOV 1999 JAN MAR 2000 JAN MAR MAY JUL 70 SEP NOV 1999 Source: Datastream JAN MAR 120 2000 Source: Datastream Philippines - Equity Index and Exchange Rate Thailand - Equity Index and Exchange Rate Philippines Composite and Pesos per US Dollar Index Jan. 1, 1999=100 180 60 Equity Index - L Exchange Rate - R Bankok Set and Baht per US Dollar Index Jan. 1, 1999=100 Index Jan. 1, 1999=100 Index Jan. 1, 1999=100 60 180 70 160 140 80 140 80 120 90 120 90 100 100 100 100 80 110 80 110 120 60 Equity Index - L Exchange Rate - R 160 60 JAN MAR MAY JUL 1999 SEP NOV JAN MAR 2000 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org JAN MAR MAY 1999 Source: Datastream Source: Datastream VII-4 60 Equity Index - L Exchange Rate - R JUL 70 SEP NOV JAN 2000 MAR 120 Asian 5 Comparisons – Trade and Income Asian 5 - Official Reserves Asian 5 Bank Lending Total Reserves Minus Gold Bank Investment US$ Billions US$ Billions 180 15 160 Philippines Korea Malaysia 10 Thailand Indonesia 140 5 120 100 0 80 -5 60 -10 40 20 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 80 82 84 86 Asian 5 - Real Per Capita Income 92 94 96 98 1990 Prices US$ Thousands 8 90 Asian 5 - Real GDP Growth 1990 Prices 10 88 Source: IFS Millions 15 1990 1994 1998 10 5 6 0 4 Indonesia Korea Malaysia Philippines Thailand -5 2 0 -10 Indonesia Korea -15 Malaysia Philippines Thailand Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Asian 5 Exports and Imports Asian 5 - Trade Surplus Three-Month Moving Average Trade Balance Percent Change, Year Ago 40 US$ Billions Exports Imports 30 10 20 5 10 0 0 -10 -5 -20 -30 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA VII-5 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Australia – Current Economic Conditions Australia - Real GDP Growth • Australia has averaged over 4% real GDP growth in the past six years and is forecast to increase by 4.3% in 1999. • Continued growth in part due to strong domestic demand. • Consumer confidence strong throughout 1999, real household disposable income climbing. • Foreign investment rules have recently been relaxed to encourage new direct investment. • Commodity prices began to recover after two years of decline. 1990 Prices Percent Change, Year Ago 8 6 4 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Australia - Inflation Rate Australia - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 10 18 8 16 3 Month Interbank 10 Year Government Bond 14 6 12 4 10 2 8 0 -2 6 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Australia - Exchange Rate Australia - Equity Index Australian Dollar per US Dollar All Ordinaries Equity Index A$/US$ Index 1.2 3500 1.3 3000 1.4 2500 1.5 2000 1.6 1500 1.7 1.8 1000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VII-6 Australia – Current Economic Conditions Australia - Official Reserves Australia - Current Account Balance Total Reserves Minus Gold and As Percent of GDP US$ Billions As Percent of GDP Percent 22 Reserves Minus Gold - L Reserves as % of GDP - R 20 18 Percent 5.5 -3.0 5.0 -3.5 4.5 -4.0 16 4.0 14 -4.5 3.5 12 8 -5.0 3.0 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2.5 -5.5 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Australia - Unemployment Rate Australia - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 12 8 11 6 4 10 2 9 0 8 -2 7 6 -4 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: WEFA Australia - Budget Balance Australia - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 3 45 2 40 1 35 0 -1 30 -2 25 -3 -4 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA VII-7 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Australia – International Trade Australia - Principal Exports 1998 Australia - Trade Balance Merchandise Exports, Imports, and Trade Balance US$ Billions Other 36% Cereals & preparations 6% 8 Metal ores, minerals & metals 21% Exports Imports Trade Balance 6 4 Coal, coke & petroleum 16% 2 0 Gold 9% Machinery 12% -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Australia - Principal Imports 1998 Australia - Role of Trade Exports and Imports as Percent of GDP Percent 23 Other 22% Chemicals 3% 22 Machinery 29% Exports Imports 21 20 19 Fuels & lubricants 5% 18 17 Transport equip. 18% 16 Consumer goods 23% 15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Australia - Destination of Exports 1998 Australia - Origin of Imports 1998 US 10% EU 14% ASEAN 12% Japan 14% Developing countries 45% ASEAN 11% US 22% Japan 20% Source: Economist Intelligence Unit Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Developing countries 28% VII-8 EU 24% Australia – Finance Australia - Foreign Direct Investment Australia - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 7 10 6 8 5 6 4 4 3 2 2 0 1 -2 0 Inflows into Australia Outflows from Australia -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Australia - Short-Term Interest Rate Australia - Capital Investment Prime Rate Gross Fixed Capital Formation Percent US$ Billions 22 100 20 18 90 16 14 80 12 10 70 8 6 80 82 84 86 88 90 92 94 96 60 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Commodity Prices Australia - Employment Growth Commodity Research Bureau Index Seasonally Adjusted Index Percent Change, Year Ago 260 6 4 240 2 220 0 -2 200 -4 180 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream, Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-9 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Australia – Consumers and Demographics Australia - Household Consumption Spending Australia - Household Disposable Income Consumer Expenditure Real Australian Dollars Percent Change, Year Ago Billions 7 360 6 340 5 320 4 300 3 280 2 260 1 240 0 220 -1 80 82 84 86 88 90 92 94 96 200 98 80 Source: Datastream 82 84 86 88 90 92 94 96 98 Source: Datastream Australia - Consumer Confidence Australia - Labor Costs Sentiment of Economic Conditions in One Year Normalized Unit Labor Costs Index Index 1995=100 140 120 120 110 100 80 100 60 90 40 20 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Australia - Population Growth Australia - Life Expectancy Population Statistics Total Years Millions Percent Change Years 1.8 85 18 1.6 80 17 1.4 75 16 1.2 70 15 1.0 65 0.8 60 19 14 Percent Change - R Population - L 80 82 84 86 88 90 92 94 96 98 1962 Sources: World Bank; Census Bureau Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Males Females Total VII-10 1999 China – Current Economic Conditions China - Real GDP Growth • China is one of the world’s fastest growing economies, averaging almost 10% growth annually over the past two decades. • Forecasts estimate China’s real GDP to expand 7.3% in 1999. • • Consumer prices turned negative in 1999. • • Will China’s economy gain WTO membership? 1990 Prices Percent Change, Year Ago 18 16 14 12 10 8 6 4 80 82 84 86 88 90 92 94 96 The Shanghai B index fell after a brief recovery in 1999. Unemployment is very low–expected to rise if foreign competition increases. 98 Sources: WEFA China - Inflation Rate China - Interest Rates Consumer and Retail Price Indexes Short-Term and Long-Term Percent Change, Year Ago Percent 30 14 Consumer Price Index Retail Price Index 12 20 10 10 8 0 6 -10 -20 3 Month Interbank Chase Benchmark Chinese 10 Year Bond 4 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA 1996 1997 1998 1999 Source: Bloomberg China - Exchange Rate China - Equity Index Yuan per US Dollar Shanghai B Index CH/US$ Index 4 100 5 80 6 60 7 40 8 9 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: IFS VII-11 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org China – Current Economic Conditions China - Official Reserves China - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 160 Reserves Minus Gold - L Reserves as % of GDP - R 140 As Percent of GDP Percent 120 16 4 14 3 12 100 2 10 80 1 8 60 0 6 40 20 0 Percent 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 4 -1 2 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; Milken Institute Source: Datastream China - Unemployment Rate China - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 5 100 80 4 60 3 40 20 2 0 1 80 82 84 86 88 90 92 94 96 -20 98 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA China - Budget Balance China - Capital Accounts Government Surplus/Deficit as Percent of GDP Capital Accounts Percent US$ Billions 0.0 90 -0.2 80 70 -0.4 60 -0.6 50 -0.8 40 -1.0 -1.2 30 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VII-12 China – International Trade China - Principal Exports 1998 China - Capital Investment Gross Fixed Capital Formation US$ Billions 350 Machinery & transport equip. 27% Clothing and Textiles 22% 300 250 Food & tobacco 2% Other 35% 200 150 100 Mineral fuels 3% Chemical products 5% Footwear & umbrellas 6% 50 0 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit China - Principal Imports 1998 China - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Iron & steel 5% 25 Other 25% 20 Mineral fuels 5% Trade Balance Exports Imports 15 Chemical products 15% 10 5 Textiles & textile articels 8% 0 Machinery & transport equip. 42% -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit China - Destination of Exports 1998 Singapore 2% Taiwan 2% China - Origin of Imports 1998 Other 29% Other 29% Hong Kong 21% Netherlands 3% S. Korea Japan 3% 15% Taiwan 12% Russia 3% Singapore 3% Germany 4% US 21% Germany 5% Source: Economist Intelligence Unit Japan 20% US 12% Hong Kong South Korea 5% 11% Source: Economist Intelligence Unit VII-13 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org China – International Trade and Consumer Interests China - Trade with United States China - Trade with Europe Trade Balance with US Trade Balance with EU US$ Billions US$ Billions 5 5 Trade Balance with US Exports to US Imports from US 4 Trade Balance with EU Exports to EU Imports from EU 4 3 3 2 2 1 1 0 0 -1 -1 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Sources: WEFA; IMF China - Trade with Japan China - Trade with Hong Kong Trade Balance with Japan Trade Balance with Hong Kong US$ Billions 5 US$ Billions 6 Trade Balance with Japan Exports to Japan Imports From Japan 4 Trade Balance with H.K./Macao Exports to H.K./Macao Imports from H.K./Macao 5 3 4 2 3 1 2 0 1 -1 -2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; IMF 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA China - Cost-of-Living Index China - Real Per Capita Income Cost-of-Living Index 1990 Prices Index 100=Same as Previous US$ 130 700 125 600 120 500 115 400 110 300 105 200 100 95 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 78 80 82 Sources: WEFA VII-14 84 86 88 90 92 94 96 98 China – Finance and Demographics China - Foreign Direct Investment China - Portfolio Investment Flows Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 50 8 Inflows into China Outflows from China 6 40 4 30 2 0 20 -2 10 -4 Note: Inflow data for 1990 not available 0 80 82 84 86 88 90 92 94 96 -6 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS China - Short-Term Interest Rate China - Literacy Rate Prime Lending Rate Adult Literacy Rate Percent Percent 14 85 80 12 75 10 70 65 8 60 6 4 55 80 82 84 86 88 90 92 94 96 50 98 Source: IFS 1970 China - Population Growth China - Life Expectancy Population Statistics Total Years Years Billions 75 1.30 70 1997 Source: UNDP Males Females Total Percent 1.8 Population - L Percent Change - R 1.25 1.6 1.20 65 1.4 1.15 1.10 60 1.2 1.05 55 1.0 1.00 50 1962 0.95 1999 Sources: World Bank; Census Bureau 80 82 84 86 88 90 92 94 96 98 0.8 Source: WEFA VII-15 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Hong Kong – Current Economic Conditions Hong Kong - Real GDP Growth • Hong Kong has bounced back from –5.1% real GDP decline in 1998; predicted to reach 1.7% growth in 1999. • Hong Kong experiencing deflation since November 1998. • Hong Kong’s unemployment rate was 6% in 1999, the highest in over 20 years. • Manufacturing production continues its three-year decline. • Decreased demand for imports has put current account well into positive territory. • Hang Seng index recovered all ground lost since early 1997. 1990 Prices Percent Change, Year Ago 8 6 4 2 0 -2 -4 -6 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Hong Kong - Inflation Rate Hong Kong - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 16 15 3 Month Interbank 10 Year Government Treasury 14 10 12 5 10 8 0 6 -5 -10 4 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg Source: IFS Hong Kong - Exchange Rate Hong Kong - Equity Index Hong Kong Dollar per US Dollar Hong Kong Hang Seng Index HK$/US$ Index 7.72 18000 7.74 14000 7.75 10000 7.77 7.79 6000 7.80 7.82 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg Source: IFS VII-16 Hong Kong – Current Economic Conditions Hong Kong - Official Reserves Hong Kong - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 100 60 Reserves Minus Gold - L Reserves as % of GDP - R 84 10 8 55 68 Percent 50 Note: Data not available for 1991Q1-3, 1992Q1-3, 1993Q1-3 6 4 2 52 45 36 40 0 -2 -4 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 35 -6 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Hong Kong - Unemployment Rate Hong Kong - Manufacturing Production Seasonally Adjusted Manufacturing Production Percent Percent Change, Year Ago 7 5 6 0 5 4 -5 3 -10 2 1 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Hong Kong - Capital Formation Hong Kong - Output by Sector Gross Fixed Investment Growth Output by Sector Percent Index 1980=100 25 1200 20 Agriculture Manufacturing Finance Construction 1000 15 800 10 5 600 0 400 -5 200 -10 -15 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: WEFA VII-17 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Hong Kong – International Trade Hong Kong - Pricipal Exports 1998 Hong Kong - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 20 Office machinery 5% Other 29% Exports Imports Trade Balance 15 Clothing 39% 10 5 Watches & photographic equip. Textiles 7% 6% 0 Electrical machinery & appartus 14% -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Hong Kong - Principal Imports 1998 Hong Kong - Exports to Japan As Percent of Total Exports Percent Food 5% Fuels 2% 8 7 Consumer goods 35% Capital goods 24% 6 5 4 3 Raw materials & semimanufactures 34% 2 80 82 84 86 88 90 92 94 96 Source: Datastream Source: Economist Intelligence Unit Hong Kong - Destination of Exports 1998 Hong Kong - Origin of Imports 1998 Other 29% Other 27% China 35% China 40% South Korea 5% UK 4% Germany 4% Japan 5% Taiwan 7% US 23% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org US 8% Japan 13% Source: Economist Intelligence Unit VII-18 98 Hong Kong – International Trade and Real Estate Hong Kong - Exports to United States Hong Kong - Imports From United States As Percent of Total Exports As Percent of Total Imports Percent Percent 50 16 14 40 12 30 10 8 20 6 10 80 82 84 86 88 90 92 94 96 4 98 Source: Datastream 80 82 84 Hong Kong - Exports to China Percent 40 50 30 40 20 30 10 20 82 90 92 94 96 98 As Percent of Total Imports Percent 80 88 Hong Kong - Imports From China As Percent of Total Exports 0 86 Source: Datastream 84 86 88 90 92 94 96 10 98 80 82 84 86 88 90 92 94 96 98 96 98 Source: Datastream Source: Datastream Hong Kong - Housing Prices Hong Kong - Office Prices Domestic Price Growth Private Office Price Growth Percent Change, Year ago Percent Change, Year Ago 80 100 80 60 60 40 40 20 20 0 0 -20 -20 -40 -40 80 82 84 86 88 90 92 94 96 -60 98 Source: Datastream 80 82 84 86 88 90 92 94 Source: Datastream VII-19 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Hong Kong – Consumer Interests and Demographics Hong Kong - Retail Sales Hong Kong - Private Consumption Retail Volume Growth As Percent of GDP Percent Change, Year Ago Percent 20 64 62 10 60 0 58 -10 56 -20 54 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Hong Kong - International Reserves Hong Kong - Tourism As Percent of Total Debt Number of Tourists Ratio Millions 260 1200 240 1000 220 800 200 600 180 400 160 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Hong Kong - Life Expectancy at Birth Hong Kong - Population Total Years Total Population and Population Growth Years 85 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Millions Percent Change, Year Ago 7.0 Males Females Total 3.5 Population Growth - R Total Population - L 3.0 6.5 2.5 75 6.0 70 5.5 65 5.0 2.0 1.5 1.0 60 1962 4.5 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 0.5 80 82 Source: IFS VII-20 84 86 88 90 92 94 96 98 0.0 India – Current Economic Conditions India - Real GDP Growth • Very strong growth since 1992. India’s real GDP growth is estimated to increase by 6.2% in fiscal year 1999. • The Bombay stock exchange reached an all-time high in 1999 with an annual return of 63%. 1990 Prices Percent Change, Year Ago 10 8 • Exchange rates continue descent against dollar. 6 • Large imbalances in public accounts pose risk to growth. 4 • India continues to expand its software exports, 60% comes to the United States/Canada. • Inflation less than 5% in 1999. 2 0 80 82 84 86 88 90 92 94 96 98 Sources: IFS; WEFA India - Inflation Rate India - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 20 16 91 Day Treasury 10 Year Government Bond 14 15 12 10 10 5 0 8 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg India - Exchange Rate India - Equity Index Rupees per US Dollar Bombay Stock Exchange 100 Index IR/US$ Index 15 3500 20 3000 25 2500 30 2000 35 1500 40 1000 45 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: IFS VII-21 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org India – Current Economic Conditions India - Official Reserves India - Current Account Balance Total Reserves Minus Gold and as Percent of GDP Current Account Balance as % of GDP US$ Billions 35 Percent Reserves Minus Gold - L Reserves as % of GDP - R 30 7 Percent -0.5 6 25 5 20 4 15 3 10 2 5 1 -1.0 -1.5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 -2.0 -2.5 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream India - Portfolio Investment India - Industrial Production Inflows and Outflows Industrial Production US$ Billions Percent Change, Year Ago 2.5 20 Inflows into India 2.0 15 1.5 10 1.0 5 0.5 0 0.0 -0.5 Note: Data not available for 1992Q2 Note: Outflows not available -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS India - Budget Balance India - Foreign Direct Investment Government Surplus/Deficit as Percent of GDP Foreign Investment Inflows Percent US$ Billions 0 1.2 1.0 -2 0.8 -4 0.6 -6 0.4 -8 -10 0.2 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VII-22 India – International Trade India - Principal Exports 1998 India - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 4 Other 16% Textiles 23% Leather Goods 4% Exports Imports Trade Balance 3 2 1 Chemicals 9% Engineering Goods 15% 0 Handicrafts 18% -1 Jewelry 14% -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economic Intelligence Unit India - Principal Imports 1998 India - Software Exports Total Exports and Growth US$ Billions Percent Change, Year Ago 4 100 Export Growth - R Total Exports - L Petroleum 20% 80 3 Other 43% 60 2 40 Capital goods 22% Fertilizer 3% Iron & steel 4% 1 Gems 8% 0 20 80 82 84 86 88 90 92 94 96 98 E 0 Sources: Heeks, Richard, "The Uneven Profile of Indian Sofware Exports," IDPM, Univ of Manchester, WP #3, 1998; Financial Times Source: Economic Intelligence Unit India - Destination of Exports 1998 India - Origin of Imports 1998 UK Germany 6% 6% Other 59% Hong Kong 5% US 10% US 21% Other 53% UAE 4% Germany 6% Saudi Arabia 6% Japan 5% Belgium 7% Source: Economic Intelligence Unit UK 6% Japan 6% Source: Economic Intelligence Unit VII-23 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org India – Software Exports and Demographics India - Software Exports by Destination 1998-1999 H1-B Workers in the U.S. Top 10 Countries of Origin, 1997 Southeast Asia Japan 4% 4% Europe 23% Thousands Australia/New Zealand 2% Rest of the World 5% 50 40 30 20 West Asia 2% 10 0 US/Canada 60% U.K. India Germany Mexico China/Taiwan Brazil Japan France Canada Venezuela Source: U.S. Immigration & Naturalization Service Sources: Financial Times; Nasscom India's Top 10 Software Exporters (1998-1999) India - Literacy Rank Company 1 Tata Consultancy Services 2 Exports Growth (Rs M) (%) 15,185 60 Wipro Infotech 6,325 63 3 Pentafour Software & Exports 5,118 88 4 Infosys Technologies 5,002 102 5 NIIT 3,949 53 6 Satyam Computer Services 3,766 111 7 Cognizant Tech. Solutions 2,900 n/a 8 IBM Global Services India 2,276 n/a 9 DSQ Software 2,233 91 10 Tata Infotech 2,208 28 Percent 55 50 45 40 35 30 25 Sources: Financial Times; Nasscom 60 1961 1997 Sources: World Bank; UNDP India - Life Expectancy at Birth India - Population Total Years Total Population and Annual Growth Millions Years 65 Adult Literacy Rate Percent Change, Year Ago 1000 Males Females Total 2.4 Total Population - L Population Growth - R 950 2.2 900 55 850 2.0 800 50 750 1.8 45 700 40 1962 650 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 80 82 84 Sources: WEFA VII-24 86 88 90 92 94 96 98 1.6 Indonesia – Current Economic Conditions • Indonesia suffered the Pacific Rim’s greatest decline in 1998 reporting a 13.6% decrease in real GDP. 10 • Estimates predict a small recovery of 0.1% growth in 1999. 5 • Exports have fallen – but large increase relative to GDP – helping to keep economy alive. 0 • Prices have subsided and inflation recently fell to normal levels. -5 • Manufacturing industrial production rebounded, strength in early ‘99. -10 • Increase in oil prices lifted productivity; good news for economic growth. Indonesia - Real GDP Growth 1990 Prices Percent Change, Year Ago -15 80 82 84 86 88 90 92 94 96 98 Source: WEFA Indonesia - Inflation Rate Indonesia - Short-Term Interest Rate Consumer Price Index Three-Month Interbank Rate Percent Change, Year Ago Percent 100 70 60 80 50 60 40 30 40 20 20 10 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Indonesia - Exchange Rate Indonesia - Equity Index Rupiah per US Dollar Indonesia Jakarta SE Index RI/US$ Index 800 0 2000 700 4000 600 6000 500 8000 10000 400 12000 300 14000 16000 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg Source: IFS VII-25 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Indonesia – Current Economic Conditions Indonesia - Official Reserves Indonesia - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 30 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R 25 20 14 15 4 2 12 10 10 8 5 0 6 18 16 20 Percent 0 -2 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -4 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Sources: IFS; Milken Institute Indonesia - Unemployment Rate Indonesia - Industrial Production Seasonally Adjusted Manufacturing Production Percent Percent Change, Year Ago 8 30 7 20 6 10 5 0 4 -10 3 2 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Merrill Lynch 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Indonesia - Foreign Debt Indonesia - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 3 180 2 160 1 140 0 120 -1 100 -2 80 -3 60 -4 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-26 Indonesia – International Trade Indonesia - Principal Exports 1998 Plywood 4% Natural gas 8% Indonesia - Role of Trade Imports and Exports as Percent of GDP Percent Garments Electrical 5% appliances 7% 45 40 35 Metal goods 3% Crude oil & products 8% Exports Imports 30 25 20 15 Other 65% 10 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Indonesia - Principal Imports 1998 Indonesia - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 5 Raw materials 41% Others 1% 4 Exports Imports Trade Balance 3 2 Fuels & lubricants 10% Machinery & transport equip 39% Food, drinks & tobacco 9% 1 0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Indonesia - Destination of Exports 1998 Indonesia - Origin of Imports 1998 Other 44% Japan 18% Other 41% S. Korea 8% US 16% Germany 3% China 5% Japan 16% Australia 5% Singapore 11% S. Korea 6% Germany Singapore 7% 12% Source: Economist Intelligence Unit US 8% Source: Economist Intelligence Unit VII-27 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Indonesia – Trade and Finance Indonesia - Trade with US Indonesia - Production of Petroleum Export and Import Levels Crude Petroleum US$ Millions Percent Change, Year Ago 800 100 Exports Imports Trade Balance 600 80 60 400 40 200 20 0 0 -20 -200 -40 -400 -60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Indonesia - Foreign Direct Investment Indonesia - Portfolio Investment Foreign Investment Inflows Inflows US$ Billions US$ Billions 2.5 4 Inflows into Indonesia 2.0 2 1.5 0 1.0 -2 0.5 -4 0.0 Note: Data not available for 1991Q1, Q4,1992Q1,Q3,Q4 Note: Outflows not available -0.5 -6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Indonesia - Gross Fixed Capital Investment Indonesia - Foreign Debt Service Due As Percent of GDP As Percent of GDP Percent Percent 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-28 Indonesia – Investment and Demographics Indonesia - Capital Flight Indonesia - Consumption Investment Outflows Real Private Consumption US$ Billions Percent Change, Year Ago 10 20 5 15 0 10 -5 5 -10 0 -15 -20 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: Datastream Indonesia - Literacy Indonesia - Population Adult Literacy Rate Total Population and Population Growth Percent Millions 90 210 80 200 70 Percent Change, Year Ago 3.5 Population Growth - R Total Population - L 3.0 190 2.5 180 2.0 170 1.5 160 1.0 150 0.5 60 50 40 30 1961 140 1997 84 86 88 90 92 94 96 0.0 98 Indonesia - Life Expectancy at Birth Indonesia Old and Young Dependents Total Years Young and Elderly as Percent of Total Popuation Percent Years 70 60 0 - 19 years old 60 years and older Males Females Total 50 60 40 55 30 50 20 45 10 40 82 Source: IFS Sources: World Bank; UNDP 65 80 1962 0 1999 Sources: World Bank; Census Bureau 1950 1960 1970 1980 1990 2000 2010 2020 Source: United Nations VII-29 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Japan – Current Economic Conditions Japan - Long-Term Real GDP • Japan has recovered from negative growth in 1998 and is expected to grow by 0.9% in 1999. • Growth financed by deficit spending. Debt now 123% of GDP – highest in industrialized world. • Unemployment reached a post-‘WWII high of 5% in March 1999. • Bank lending has been declining since 1998. • Foreign direct investment increased to record highs in the second quarter 1999 with over US $7.5 billion. • The yen hit a four-year high at the end of 1999. • Business sentiment still down. 1990 Prices Percent 15 1957-1973=9.4% 10 1974-1991=3.8% 5 0 1992-1999=0.8% -5 60 65 70 75 80 85 90 95 E Source: IFS Japan - Inflation Rate Japan - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 10 4 3 Month Interbank 10 Year Government Bond 3 8 2 6 1 4 0 2 -1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Japan - Exchange Rate Japan - Equity Index Yen per US Dollar Nikkei 225 Y/US$ Index 80 40000 35000 100 30000 120 25000 20000 140 15000 160 10000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VII-30 Japan – Current Economic Conditions Japan - Current Account Balance Japan - Official Reserves As Percent of GDP Total Reserves Minus Gold and as Percent of GDP US$ Billions Percent 300 6 Reserves Minus Gold - L Reserves as % of GDP - R 250 5 Percent 4.0 3.5 3.0 200 4 150 3 100 2 2.5 2.0 1.5 1.0 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1 0.5 Sources: IFS; WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA Japan - Unemployment Rate Japan - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 5.0 10 4.5 5 4.0 3.5 0 3.0 2.5 -5 2.0 1.5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Japan - Budget Balance Japan - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 130 120 0 110 100 -2 90 -4 80 70 -6 60 -8 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA VII-31 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Japan – International Trade Japan - Principal Exports 1998 Japan - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 50 Office machinery 7% Chemicals 7% Motor vehicles 16% 30 20 Semiconducters 8% Other 55% Exports Imports Trade Balance 40 10 0 Iron & steel products 7% -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Japan - Principal Imports 1998 Japan - Role of Trade As Percent of GDP Percent 11 Mineral fuels 17% Other 45% 10 9 8 Food 16% 6 Chemicals 8% Office machinery 6% Exports 7 Imports 5 Textiles 8% 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA Source: Economist Intelligence Unit Japan - Destination of Exports 1998 Japan - Origin of Imports 1998 US 31% Taiwan 7% US 24% Other 50% China 13% Hong Kong 6% Other 46% China 5% S. Korea 4% Germany 5% Australia 5% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Source: Economist Intelligence Unit VII-32 Indonesia 4% Japan – Finance Japan - Foreign Direct Investment Japan - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 8 80 Inflows into Japan Outflows from Japan 60 6 40 4 20 0 2 -20 0 -2 -40 -60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Japan - Key Manufacturing Sectors Japan - Business Sentiment Industrial Production Tankan Survey Percent Change Year Ago 30 20 Percent Improving Minus Percent Declining 60 Semiconductor Electrical Machinery Transport. Equip. Total Manufacturing 40 20 10 0 -20 0 -40 -10 -20 -60 -80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bank of Japan Source: WEFA Japan - Corporate Profitability Japan - Corporate Bankruptcies Corporate Profit Growth Bankruptcy Filings Percent Change, Year Ago Number of Cases 40 2000 20 1500 0 1000 -20 500 -40 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: WEFA VII-33 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Japan – Finance and Real Estate Japan - Business Investment Japan - Capacity Utilization Fixed Investment and Machinery and Equipment Growth Percent Change, Year Ago 15 Index Index January 1990=100 105 Business Fixed Investment Machinery and Equipment Investment 10 100 5 95 0 90 -5 85 -10 -15 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Japan - Foreign Liabilities Japan - Housing Starts As Percent of GDP Applications for Construction of Housing Units Percent Thousands 35 440 420 30 400 25 380 20 360 340 15 320 10 5 300 80 82 84 86 88 90 92 94 96 280 98 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Japan - Total Construction Japan - Land Prices New Buildings Tokyo Real Estate US$ Billions Index 1990=100 110 120 100 100 90 80 80 60 70 40 60 50 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Bloomberg; Milken Institute VII-34 Japan – Banking Japan - Bank Lending Japan - Banking Nonperforming Loans TOPIX Banking Index Index 1990=100 Yen Trillion 100 40 80 35 60 30 40 25 20 20 0 15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Japan Central Bank; FSA Japan - Official Discount Rate Japan - Bank Lending Government Interbank Lending Rate Commercial and Private Banks Percent Percent Change, Year Ago 10 3 2 8 1 6 -1 0 99=0.5 -2 4 -3 -4 2 -5 -6 0 50 55 60 65 70 75 80 85 90 -7 95 Source: IFS 1993 1994 1995 1996 1997 1998 1999 Sources: Bank of Japan; Milken Institute US and Japan Equity Markets Japanese Bank Performance Japan's 10 Largest Banks of World's 1,000 Largest Dow Jones vs. Nikkei 225 Index 1990=100 500 Dow Jones Nikkei 225 400 300 1990 Return on Assets Rank 586 1999 909 Source: The Banker 200 100 0 82 84 86 88 90 92 94 96 98 00 Source: Bloomberg VII-35 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Japan – Consumers and Demographics Japan - Real Wages Japan - Retail Sales Seasonally Adjusted Index Seasonally Adjusted Percent Change, Year Ago Percent Change Year Ago 4 15 3 10 2 5 1 0 0 -5 -1 -10 -2 -3 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Japan - Per Capita Real Income Japan - Population 1990 Prices Annual Growth US$ Thousands Percent 30 2.0 25 1.5 20 1.0 15 0.5 10 70 75 80 85 90 0.0 95 Sources: WEFA; Milken Institute 80 60 65 70 75 80 85 90 95 Japan - Life Expectancy at Birth Japan - Young and Old Dependents Total Years Young and Elderly as Percent of Total Population Percent 50 Males Females Total 0 - 19 Years Old 60 Years and Older 40 75 30 70 20 65 10 60 55 Source: IFS Years 85 50 1962 0 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1950 1960 1970 Source: United Nations VII-36 1980 1990 2000 2010 2020 Korea – Current Economic Conditions • 9.4% growth in real GDP predicted for 1999. • The rapid recovery is due to strong private consumption, fixed investment, cheaper export prices. Strong export growth. 10 • Industrial production has increased dramatically since the slump in mid-1998. 5 • Unemployment rates reached a 10-year high at the beginning of 1999; now coming down. 0 • Equities in recovery. Korea - Real GDP Growth 1990 Prices Percent Change, Year Ago 15 -5 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Korea - Inflation Rate Korea - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 12 25 3 Month CD Long Term Bond 10 20 8 6 15 4 10 2 0 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; Datastream Korea - Exchange Rate Korea - Equity Index Won per US Dollar Korea KOSPI Index KW/US$ Index 600 1200 800 1000 1000 800 1200 600 1400 400 1600 1800 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Source: IFS VII-37 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Korea – Current Economic Conditions Korea - Official Reserves Korea - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 70 18 Reserves Minus Gold - L Reserves as % of GDP - R 60 12 40 10 5 10 0 8 30 6 20 10 15 16 14 50 Percent -5 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 -10 Sources: IFS; Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Korea - Unemployment Rate Korea - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 9 40 8 30 7 20 6 5 10 4 0 3 -10 2 1 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Korea - Budget Balance Korea - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 1 50 0 40 -1 -2 30 -3 20 -4 -5 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-38 Korea – International Trade Korea - Principal Exports 1998 Korea - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Electronic products 19% 15 Exports Imports Trade Balance 10 Other 44% Textiles 12% 5 0 Motor vehicles 8% Machinery 11% Ships & floating structures 6% Source: Economist Intelligence Unit -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Korea - Principal Imports 1998 Korea - Role of Trade Exports and Imports as Percent of GDP Percent Change, Year Ago Crude petroleum 12% Chemicals 7% 60 Light industry inputs 4% Exports Imports 50 Electric Machinery 20% Machinery & equip 10% 40 30 Other 47% 20 Source: Economist Intelligence Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Korea - Destination of Exports 1998 Korea - Origin of Imports 1998 US 17% Other 54% US 22% Other 43% Japan 9% China 9% Australia 5% Hong Kong 7% Taiwan 4% Japan 18% Saudi Arabia 5% China 7% Source: Economist Intelligence Unit Source: Economist Intelligence Unit VII-39 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Korea – Finance Korea - Foreign Direct Investment Korea - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 2.5 8 Inflows into Korea Outflows from Korea 6 2.0 4 1.5 2 1.0 0 0.5 0.0 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: IFS Korea - Gross Fixed Capital Investment Korea - Foreign Debt Service Due As Percent of GDP As Percent of GDP Percent Percent 40 22 38 20 18 36 16 34 14 32 12 30 10 28 26 8 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Korea - Bank Investments Korea - Capital Flight Bank Investment Flows Investment Outflows US$ Billions US$ Billions 10 15 Investment Abroad Investment in Korea 10 0 5 -10 0 -20 -5 -30 -10 80 82 84 86 88 90 92 94 96 -40 98 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS VII-40 Korea – Demographics Korea - New Passenger Car Registrations Korea - Productivity Seasonally Adjusted Labor Productivity Index Percent Change, Year Ago Percent Change, Year Ago 150 18 16 100 14 50 12 10 0 8 -50 -100 6 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg Korea - Literacy Korea - Population Adult Literacy Rate Total Population and Population Growth Percent Millions 100 48 95 46 90 Percent 1.6 Population Growth - R Total Population - L 1.5 1.4 44 1.3 85 42 1.2 80 40 75 38 70 65 1960 36 1997 80 82 84 86 88 90 92 94 96 0.9 98 Korea - Life Expectancy at Birth Korea Young and Old Dependents Total Years Young and Elderly as Percent of Total Popuation Percent Years 80 60 0 - 19 years old 60 years and older Males Females Total 50 70 40 65 30 60 20 55 10 50 1.0 Source: IFS Source: World Bank 75 1.1 1962 0 1999 Source: World Bank 1950 1960 1970 1980 1990 2000 2010 2020 Source: United Nations VII-41 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Malaysia – Current Economic Conditions Malaysia - Real GDP Growth • The economy rebounded quickly after experiencing over 10% negative growth in the second and third quarter of 1998. • Malaysia is expected to report 5.0% growth in real GDP for 1999. • High government spending and low interest rates have stimulated increase in retail sales figures. • Malaysia’s export recovery is among the strongest in the region. • Manufacturing sector continues to surge. Constant Prices Percent Change, Year Ago 15 10 5 0 -5 -10 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Malaysia - Inflation Rate Malaysia - Short-Term Interest Rates Consumer Price Index Three-Month Interbank Percent Change, Year Ago Percent 7 12 6 10 5 8 4 6 3 4 2 1 2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: WEFA; Bloomberg Malaysia - Exchange Rate Malaysia - Equity Index Ringgit per US Dollar Malaysia Kuala Lumpur Index MR/US$ Index 2.0 1400 2.5 1200 3.0 1000 3.5 800 4.0 600 4.5 400 5.0 200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream VII-42 Malaysia – Current Economic Conditions Malaysia - Official Reserves Malaysia - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 40 Percent 50 20 35 45 15 30 40 25 35 20 30 15 25 10 20 -5 15 -10 Reserves Minus Gold - L Reserves as % of GDP - R 10 5 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Malaysia - Unemployment Rate Malaysia - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 9 20 8 15 7 10 6 5 5 0 4 -5 3 -10 2 80 82 84 86 88 90 92 94 96 -15 98 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Malaysia - Budget Deficit Malaysia - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 3 60 2 55 1 50 0 -1 45 -2 40 -3 35 -4 -5 30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-43 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Malaysia – International Trade Malaysia - Principal Exports 1998 Malaysia - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Palm oil 6% Petroleum 5% Electronic machinery 56% 8 6 Textiles 3% 4 Chemicals 4% Other 23% Exports Imports Trade Balance Transport equip. 3% 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit Malaysia - Principal Imports 1998 Metals 5% Malaysia - Role of Trade As Percent of GDP Consumer durables 2% Food 3% Percent 120 Exports Imports 100 Other 29% Transport equip. 6% 80 Machinery 8% 60 40 Mfg. inputs 47% 20 Malaysia - Destination of Exports 1998 UK 4% Taiwan 4% S. Korea 4% 84 86 88 90 Other 34% Other 30% 92 94 96 Singapore 18% S. Korea 7% US 21% Source: Economist Intelligence Unit VII-44 Japan 16% US 14% Germany 3% Taiwan 5% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 82 Malaysia - Origin of Imports 1998 Hong Kong 5% Japan 10% 80 Source: WEFA Source: Economist Intelligence Unit Singapore 25% 98 Malaysia – Finance Malaysia - Foreign Direct Investment Malaysia - Portfolio Investment Foreign Investment Inflows Inflows US$ Billions US$ Billions 6 2 5 1 4 3 0 2 -1 1 0 80 82 84 86 88 90 92 94 96 -2 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 96 98 Source: Datastream Malalysia - Gross Fixed Capital Investment Malaysia Bank Lending As Percent of GDP Bank Investment Percent US$ Billions 45 8 6 40 4 35 2 30 0 25 20 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 Source: IFS Malaysia - Net Capital Flight Malaysia - Foreign Debt Service Due Investment Outflows As Percent of GDP US$ Billions Percent 5 11 10 0 9 -5 8 -10 -15 7 80 82 84 86 88 90 92 94 96 6 98 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-45 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Malaysia – Output and Demographics Malaysia - Output Malaysia - Output Construction Sector Manufacturing Sector Percent Change, Year Ago Percent Change, Year Ago 30 40 20 30 10 20 0 10 -10 0 -20 -10 -30 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Malaysia - Literacy Malaysia - Population Adult Literacy Rate Total Population and Population Growth Percent Millions 90 22 Percent 3.5 Total Population - L Population Growth - R 85 20 3.0 80 18 75 2.5 70 16 65 60 55 1970 12 1997 Source: World Bank 70 80 82 84 86 88 90 92 94 96 1.5 98 Source: IFS Malaysia - Life Expectancy at Birth Malaysia Old and Young Dependents Total Years Young and Elderly as Percent of Total Popuation Years 75 2.0 14 Percent 60 Males Females Total 0 - 19 years old 60 years and older 50 40 65 30 60 20 55 50 10 1962 0 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1950 1960 1970 Source: United Nations VII-46 1980 1990 2000 2010 2020 New Zealand – Current Economic Conditions New Zealand - Real GDP • New Zealand rebounded from negative growth in 1998; 2.5% real GDP growth in 1999 predicted. • Consumer prices have fallen and resulted in three quarters of moderate deflation in 1999. • Domestic demand is expected to remain upbeat as retail sales continue to grow and unemployment falls. • The external sector has been strengthened by export growth, but trade balances remain negative due to even greater demand for imports. 1990 Prices Percent Change, Year Ago 8 6 4 2 0 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA New Zealand - Inflation Rate New Zealand - Interest Rates Consumer Price Index Short-Term and Long-Term Percent Change, Year Ago Percent 8 16 3 Month Interbank 10 Year Government Bond 14 6 12 4 10 2 8 0 -2 6 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg New Zealand - Exchange Rate New Zealand - Equity Index New Zealand Dollar per US Dollar New Zealand Stock Exchange Top 40 NZ$/US$ Index 1.40 2600 2400 1.55 2200 1.70 2000 1800 1.85 1600 2.00 2.15 1400 1200 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg VII-47 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org New Zealand – Current Economic Conditions New Zealand - Official Reserves New Zealand - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 6.5 Reserves Minus Gold - L Reserves as % of GDP - R 6.0 As Percent of GDP Percent 5.5 10 -1 -2 9 -3 5.0 -4 4.5 8 -5 4.0 3.5 -6 7 -7 3.0 2.5 Percent 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 6 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Datastream New Zealand - Unemployment New Zealand - Industrial Production Unemployment Rate Manufacturing Production Index Percent Percent Change, Year Ago 11 10 10 5 9 0 8 -5 7 6 -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS New Zealand - Budget Balance New Zealand - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 6 70 65 4 60 2 55 50 0 45 -2 -4 40 35 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 80 82 Source: WEFA VII-48 84 86 88 90 92 94 96 98 New Zealand – International Trade New Zealand - Principal Exports 1998 New Zealand - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 2.0 Dairy produce 17% 1.5 1.0 Meat 12% Other 49% Exports Imports Trade Balance 0.5 Fish 3% Forest products 10% Fruit & Wool vegetables 5% 4% 0.0 -0.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit New Zealand - Principal Imports 1998 New Zealand - Role of Trade Imports and Exports as Percent of GDP Percent 28 Machinery & appliances 16% Exports Imports 26 24 Vehicles & aircraft 15% Other 52% 22 Electrical machinery 11% Mineral fuels 6% 20 18 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit New Zealand - Destination of Exports 1998 New Zealand - Origin of Imports 1998 Australia 21% Other 47% Australia 22% Other 42% Japan 13% UK 6% US 20% US 13% UK 5% Source: Economist Intelligence Unit Japan 11% Source: Economist Intelligence Unit VII-49 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Pakistan – Current Economic Conditions • Pakistan predicted to experience 2.7% real GDP growth in 1999. 8 • Uncertainty prevails after military coup in October, foreign investors losing confidence. 6 • Exchange rate of the rupee continues to plummet. • Trade deficit doesn’t look good as imports increased by over 20% in the first half of 1999. • Equities relatively lackluster, but inflation has remained low. • Manufacturing production still gaining. Pakistan - Real GDP Growth 1990 Prices Percent Change, Year Ago 4 2 0 -2 80 82 84 86 88 90 92 94 96 98 Source: IFS Pakistan - Inflation Rate Pakistan - Equity Index Consumer Price Index 1990 Karachi Stock Exchange Index Percent Change, Year Ago Index 16 3000 14 2500 12 2000 10 8 1500 6 1000 4 2 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Bloomberg Pakistan - Exchange Rate Pakistan - Foreign Direct Investment Rupees per US Dollar Foreign Investment Flows PR/US$ US$ Billions 20 1.0 25 0.8 30 0.6 35 40 0.4 45 0.2 50 55 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 80 82 84 Source: Datastream VII-50 86 88 90 92 94 96 98 Pakistan – Current Economic Conditions Pakistan - Official Reserves Pakistan - Current Account Balance Total Reserves Minus Gold and As Percent of GDP US$ Billions As Percent of GDP Percent 3.5 Reserves Minus Gold - L Reserves as % of GDP - R 3.0 6 Percent -5 5 -6 2.5 4 2.0 3 -7 1.5 2 1.0 -8 1 0.5 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 -9 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Pakistan - Portfolio Investment Pakistan - Manufacturing Production Portfolio Investment Liabilities Manufacturing Production US$ Billions Percent Change, Year Ago 1.6 15 1.4 1.2 10 1.0 0.8 5 0.6 0.4 0 0.2 0.0 80 82 84 86 88 90 92 94 96 -5 98 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Pakistan - Budget Balance Pakistan - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 0 53 52 -2 51 50 -4 49 -6 48 47 -8 46 -10 45 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-51 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Pakistan – International Trade Pakistan - Principal Exports 1998 Pakistan - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Apparel & clothing accss. 22% 1.5 Exports Imports Trade Balance 1.0 Food 13% Textile yarn & fabrics 51% 0.5 Leather goods 2% 0.0 Other Scientific equip 2% 10% -0.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Pakistan - Principal Imports 1998 Pakistan - Gross Fixed Investment As Percent of GDP Percent Wheat 4% Plastics 3% 20 Other 48% 19 18 17 Palm oil 7% 16 15 Petroleum & products 15% 14 Machinery 23% 13 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: Economist Intelligence Unit Pakistan - Destination of Exports 1998 Pakistan - Origin of Imports 1998 US 11% US 21% Kuwait 7% Hong Kong 7% Other 54% UAE 5% Other 53% Germany 6% UK 7% Saudi Arabia 7% UAE 7% Malaysia 7% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Japan 8% Source: Economist Intelligence Unit VII-52 Philippines – Current Economic Conditions • After bouncing back from negative growth in 1998, real GDP is forecast to grow 3.0% in 1999. 8 • Official reserves have been on the rise since the beginning of 1999. 6 • Peso continues downward trek versus dollar. • Industrial production showed strong positive growth in 1999. • Construction sector still in decline. • Gross fixed investment over 20% of GDP. Philippines - Real GDP Growth 1990 Prices Percent Change, Year Ago 4 2 0 -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Philippines - Inflation Rate Philippines - Short-Term Interest Rate Consumer Price Index Three-Month Interbank Rate Percent Change, Year Ago Percent 25 35 30 20 25 15 20 15 10 10 5 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg Philippines - Exchange Rate Philippines - Equity Index Pesos per US Dollar Philippines Manila SE Index PP/US$ Index 20 3500 3000 25 2500 30 2000 35 1500 40 45 1000 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream VII-53 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Philippines – Current Economic Conditions Philippines - Official Reserves Philippines - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 14 20 Percent 2 Reserves Minus Gold - L Reserves as % of GDP - R 12 15 10 0 -2 8 10 6 -4 4 5 -6 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 -8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; Milken Institute Source: Datastream Philippines - Industrial Production Philippines - Unemployment Rate Industrial Production Seasonally Adjusted Percent Change, Year Ago Percent 11.0 30 10.5 20 10.0 10 9.5 0 9.0 -10 8.5 8.0 -20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Philippines - Budget Balance Philippines - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 75 1 70 0 65 -1 60 -2 55 -3 50 -4 45 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-54 Philippines – International Trade Philippines - Principal Exports 1998 Machinery & transport equip. Garments 11% 8% Philippines - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 5 Coconut products 3% Exports Imports Trade Balance 4 3 2 Other 20% 1 0 -1 Electronic equip. 58% -2 -3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Philippines - Principal Imports 1998 Philippines - Role of Trade Exports and Imports as Percent of GDP Power generation equip. 9% Percent 55 Exports Imports 50 Semiprocessed raw material 34% Semiprocessed mfg. 10% 45 40 35 30 Telecomm. equip. 23% 25 Electrical parts 16% Other 8% 20 15 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Philippines - Destination of Exports 1998 Philippines - Origin of Imports 1998 Other 27% Other 29% US 34% UK 6% Taiwan 5% Hong Kong 5% Singapore 6% US 23% Netherlands 8% Hong Kong 5% Singapore 6% Japan 14% Source: Economist Intelligence Unit Japan 22% EU 10% Source: Economist Intelligence Unit VII-55 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Philippines – Sector Growth and Finance Philippines - Foreign Direct Investment Philippines - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 1.5 2.0 1.5 Inflows into the Philippines Outflows from the Philippines 1.0 1.0 0.5 0.5 0.0 0.0 -0.5 -0.5 -1.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Philippines - Sectors of the Economy 1998 Philippines - Output Manufacturing Sector Percent Change, Year Ago 10 Agriculture, forestry & fishing 19% Services 46% 5 0 Mining 1% -5 Manufacturing 25% Utilities 3% Construction 6% -10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit Philippines - Output Philippines - Output Construction Sector Agriculture, Fishery, and Forestry Sectors Percent Change, Year Ago Percent Change, Year Ago 25 15 20 10 15 5 10 5 0 0 -5 -5 -10 -10 -15 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA VII-56 Philippines – Finance and Demographics Philippines - Gross Fixed Capital Investment Philippines - Foreign Debt Service Due As Percent of GDP As Percent of GDP Percent Percent 25 10 24 9 23 8 22 7 21 6 20 19 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Philippines - Bank Lending Philippines - Literacy Bank Investment Adult Literacy Rate US$ Billions Percent 3 95 2 90 1 85 0 80 -1 75 -2 70 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1960 1997 Source: World Bank Philippines - Life Expectancy at Birth Philippines - Population Total Years Total Population and Population Growth Years Millions 70 80 Males Females Total 3.6 Population Growth - R Total Population - L 75 65 Percent Change, Year Ago 3.4 3.2 70 3.0 65 60 2.8 60 2.6 55 55 2.4 50 50 1962 45 1999 Sources: World Bank; Census Bureau 2.2 80 82 84 86 88 90 92 94 96 98 2.0 Sources: IFS VII-57 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Singapore – Current Economic Conditions Singapore - Real GDP Growth • Singapore’s real GDP is expected grow by 5.4% in 1999. • Second-quarter 1999 growth fueled by strong manufacture production and retail sales growth. • Exports continue to outpace imports in 1999. • Singapore has lost significant market share in global electronics market since the Asian crisis; Electronics make up 70% of Singapore’s non-oil exports. • Deflationary trends over. CPI now above 1%. • Equity market at 10-year high. 1990 Prices Percent Change, Year Ago 15 10 5 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Singapore - Inflation Rate Singapore - Short-Term Interest Rate Consumer Price Index Three-Month Interbank Percent Change, Year Ago Percent 4 14 3 12 10 2 8 1 6 0 4 -1 -2 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Bloomberg Singapore - Exchange Rate Singapore - Equity Index Singapore Dollar per US Dollar Singapore Straits Times Index S$/US$ Index 1.3 2500 1.4 2000 1.5 1.6 1500 1.7 1000 1.8 1.9 500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg VII-58 Singapore – Current Economic Conditions Singapore - Official Reserves Singapore - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 90 100 Reserves Minus Gold - L Reserves as % of GDP - R 80 As Percent of GDP Percent 90 70 60 Percent 25 20 80 50 15 70 40 30 10 60 20 10 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 50 5 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Singapore - Unemployment Rate Singapore - Industrial Production Seasonally Adjusted Industrial Production Percent Percent Change, Year Ago 7 30 6 20 5 10 4 0 3 -10 2 -20 1 80 82 84 86 88 90 92 94 96 -30 98 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Singapore - Labor Force Singapore - Foreign Debt Labor Force By Sector As Percent of GDP Thousands 600 Percent 14 Manufacturing Trade Transportation & Communication 500 13 400 12 300 11 200 10 100 80 82 84 86 88 90 92 94 96 9 98 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-59 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Singapore – International Trade Singapore - Principal Exports 1998 Singapore - Trade Balance Merchandise Exports, Imports, and Balance Crude materials 1% Foods 2% US$ Billions Other 10% 15 Exports Imports Trade Balance 10 Machinery & equipment 66% Manufactured goods 6% 5 0 Chemicals 6% Mineral fuels 9% -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Singapore - Principal Imports 1998 Singapore - Role of Trade Exports and Imports as Percent of GDP Crude materials 1% US$ Billions Other 9% 220 Exports Imports 200 Food 2% 180 Chemicals 7% Machinery & equip. 67% Mineral fuels 9% 160 140 120 Manufactured goods 5% 100 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Singapore - Destination of Exports 1998 Singapore - Origin of Imports 1998 Japan 17% Saudi Arabia 3% US 20% Other 42% Taiwan 4% Thailand 4% Malaysia 16% Hong Kong 8% Japan 7% Taiwan 4% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Germany 3% Other 47% Malaysia 15% Source: Economist Intelligence Unit VII-60 China 5% Thailand 5% Singapore – Finance Singapore - Foreign Direct Investment Singapore - Portfolio Investment Direct Investment Inflows Inflows and Outflows US$ Billions US$ Billions 3.5 5 Inflows into Singapore Outflows from Singapore 3.0 0 2.5 2.0 -5 1.5 1.0 -10 0.5 0.0 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 Singapore - Industrial Production 90 92 94 96 98 As Percent of GDP Index 1990Q1=100 Percent 350 3.5 Electronics Chemicals Machinery Textiles 250 88 Singapore - Foreign Debt Service Due Output by Sector 300 86 Source: IFS 3.0 2.5 200 2.0 150 1.5 100 1.0 50 0 0.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Singapore - Capital Formation Singapore - Retail Sales Gross Fixed Investment and Growth Constant Prices US$ Billions 35 Percent Percent of GDP - R Total - L 30 Percent Change, Year Ago 50 30 45 20 40 10 35 0 30 -10 25 -20 25 20 15 10 5 0 80 82 84 86 88 90 92 94 96 98 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-61 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Singapore – Finance and Demographics Singapore - Net Capital Flight Singapore - New Business Investment Outflows New Company Formations US$ Billions Number 5 1000 0 900 -5 800 -10 700 -15 600 -20 500 -25 400 -30 300 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Singapore - Real Per Capita Income Singapore - Literacy Rate 1990 Prices Adult Literacy Rate US$ Thousands Percent 22 95 20 90 18 85 16 14 80 12 75 10 70 8 6 80 82 84 86 88 90 92 94 96 65 98 Source: WEFA 80 1997 Singapore - Life Expectancy at Birth Singapore - Population Total Years Total Population and Population Growth Years 85 1970 Source: World Bank Millions Percent 4.0 Males Females Total 12 Population Growth- R Total Population - L 10 3.5 8 6 75 3.0 4 70 2 2.5 65 0 -2 60 1962 2.0 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 80 82 Source: IFS VII-62 84 86 88 90 92 94 96 98 -4 Taiwan – Current Economic Conditions Taiwan - Real GDP Growth • Asia crisis slowed growth in 1998, Taiwan is estimated to report a 5.4% real GDP growth in 1999. • September earthquake contributed but never turned it negative in weakened third quarter. • Industrial production increase driven by strong demand for electrical and communications products. 1991 Prices Percent Change, Year Ago 9 8 7 • Inflation has risen due to higher import prices. 6 • Unemployment now climbing. 5 • Equities rebounding from 1998’s losses. 4 3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Taiwan - Inflation Rate Taiwan - Interest Rates Consumer Price Index Three-Month Money Market Percent Change, Year Ago Percent 8 16 14 6 12 4 10 2 8 0 -2 6 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Taiwan - Exchange Rate Taiwan - Equity Index Taiwan Dollars per US Dollar Taiwan Weighted Index T$/US$ Index 24 14000 26 12000 28 10000 30 8000 32 6000 34 4000 36 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Sources: Datastream; Bloomberg VII-63 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Taiwan – Current Economic Conditions Taiwan - Gross Fixed Capital Investment Taiwan - Current Account Balance As Percent of GDP As Percent of GDP Percent Percent 24.0 7 23.5 6 23.0 5 22.5 4 22.0 3 21.5 2 21.0 20.5 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Taiwan - Unemployment Rate Taiwan - Industrial Production Seasonally Adjusted Industrial Production Percent Percent 3.0 3.5 3.0 2.5 2.5 2.0 2.0 1.5 1.0 1.5 1.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Taiwan - Portfolio Investments Taiwan - Foreign Direct Investment Inflows and Outflows Foreign Investment Inflows US$ Billions US$ Billions 4 2.5 2 2.0 0 1.5 -2 1.0 -4 -6 -8 Inflows Outflows 0.5 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-64 Taiwan – International Trade Taiwan - Principal Exports 1998 Taiwan - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 12 Chemicals Other 3% 13% Vehicles, aircraft & ships 5% Plastic & rubber articles 6% Base metals 10% Exports Imports Trade Balance 10 8 6 Machinery & electrical equip. 50% 4 2 0 -2 Textiles 13% -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Taiwan - Principal Imports 1998 Taiwan - Role of Trade Exports and Imports as Percent of GDP Percent 54 Vehicles, aircraft & ships 6% Other 23% Exports Imports 52 Machinery & electrical equipment 42% Crude petroleum 4% 50 48 46 44 Precision instruments 5% Base metals 10% 42 40 Chemicals 10% 38 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit Taiwan - Destination of Exports 1998 Germany 4% UK 3% Taiwan - Origin of Imports 1998 Other 30% Japan 26% Other 36% Netherlands 4% US 26% Singapore 3% Japan 8% US 19% Malaysia 4% France 5% Hong Kong 22% S. Korea 5% Germany 5% Source: Economist Intelligence Unit Source: Economist Intelligence Unit VII-65 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Thailand – Current Economic Conditions Thailand - Real GDP Growth • Thailand is expected to rebound from its 1998 decline and report a real GDP growth of 4.2% in 1999. • Modest pace of debt restructuring should limit the speed of recovery in production, employment, and consumption • Government spending and exports expected to drive growth. • Corporate restructuring and downsizing has increased the unemployment rate and dampened income growth. • Consumer prices turned negative in 1999. • Very strong recovery in manufacturing production. 1988 Prices Percent Change, Year Ago 15 10 5 0 -5 -10 -15 80 82 84 86 88 90 92 94 96 98 Source: WEFA Thailand - Inflation Rate Thailand - Short-Term Interest Rate Consumer Price Index Three-Month Interbank Rate Percent Change, Year Ago Percent 12 30 10 25 8 20 6 15 4 10 2 5 0 -2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Thailand - Exchange Rate Thailand - Equity Index Baht per US Dollar Thailand Bangkok SET Index TB/US$ Index 20 2000 25 1500 30 35 1000 40 45 500 50 55 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: Datastream VII-66 Thailand – Current Economic Conditions Thailand - Official Reserves Thailand - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 40 26 Reserves Minus Gold - L Reserves as % of GDP - R 35 As Percent of GDP Percent 24 Percent 15 10 22 30 20 5 25 18 20 16 15 10 0 14 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 12 -5 -10 Sources: IFS; WEFA; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Thailand - Unemployment Rate Thailand - Manufacturing Production Seasonally Adjusted Manufacturing Production Percent Percent Change, Year Ago 6 20 5 10 4 3 0 2 -10 1 0 80 82 84 86 88 90 92 94 96 -20 98 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Thailand - Budget Balance Thailand - Government Domestic Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 6 60 50 4 40 2 30 0 20 -2 -4 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: Datastream; Milken Institute VII-67 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Thailand – International Trade Thailand - Principal Exports 1998 Thailand - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions Computers & parts 14% 8 Textiles 8% 4 Integrated circuits 4% Other 70% Exports Imports Trade Balance 6 2 0 Rice 4% -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit Thailand - Principal Imports 1998 Thailand - Role of Trade Exports and Imports as Percent of GDP Percent Fuel & lubricants 7% 50 Other 4% Exports Imports 40 Consumer goods 11% 30 Capital goods 51% 20 Raw materials & intermediates 27% 10 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit Thailand - Destination of Exports 1998 Thailand - Origin of Imports 1998 US 22% Japan 24% Other 47% Other 46% US 14% Japan 14% Singapore Malaysia Hong Kong 9% 3% 5% Malaysia 5% Source: Economist Intelligence Unit ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Source: Economist Intelligence Unit VII-68 Germany 5% Singapore 6% 98 Thailand – Finance Thailand - Foreign Direct Investment Thailand - Portfolio Investment Foreign Investment Inflows Inflows and Outflows US$ Billions US$ Billions 3.0 4 2.5 Inflows into Thailand Outflows from Thailand 3 2.0 2 1.5 1 1.0 0 0.5 0.0 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Thailand - Consumption Plummets Thailand - Gross Fixed Capital Investment Real Private Consumption As Percent of GDP Percent Change, Year Ago Percent 15 45 10 40 5 35 0 30 -5 25 -10 -15 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Thailand - Foreign Debt Thailand - Foreign Debt Service Due As Percent of GDP As Percent of GDP Percent Percent 80 16 14 70 12 60 10 50 8 40 30 6 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VII-69 ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org Thailand – Finance and Demographics Thailand - Capital Flight Thailand - Bank Lending Investment Outflows Bank Investment US$ Billions US$ Billions 10 15 5 10 0 5 -5 0 -10 -5 -15 -10 -20 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: IFS Thailand - Real Per Capita Income Thailand - Literacy 1990 Prices Adult Literacy Rate US$ Thousands Percent 2.5 95 90 2.0 85 1.5 80 75 1.0 70 0.5 80 82 84 86 88 90 92 94 96 65 98 Source: WEFA 70 1997 Thailand - Life Expectancy at Birth Thailand - Population Total Years Total Population and Population Growth Years 75 1960 Source: World Bank Millions Percent 65 Males Females Total 2.2 Total Population - L Population Growth - R 2.0 60 1.8 65 1.6 55 1.4 60 50 1.2 50 55 1.0 1962 45 1999 Sources: World Bank; Census Bureau ASIA AND THE PACIIFIC RIM March 8, 2000 www.milken-inst.org 80 82 Source: IFS VII-70 84 86 88 90 92 94 96 98 0.8 Africa and Middle East – Overview • Economic growth for both Africa and Middle East rebounded in 1999; world commodity prices, especially oil, recovered. • Political instability, dependence on oil and other commodities, high defense spending, government control over economics are the norm. • Economies in the regions face the ongoing challenge of privatization and diversification. 2 • Government deficits prevail. 1 • In many countries, economic growth is eclipsed by population growth. • Financial markets and institutions are the least developed in the world. Optimism is hard to find. Africa - Real GDP Growth 1990 Prices, Excluding South Africa Percent Change, Year Ago 7 6 5 4 3 0 -1 80 82 84 86 88 90 92 94 96 98 Source: WEFA Oil Countries - Exports Middle East - Real GDP Growth Income vs. Prices 1990 Prices Percent Change, Year Ago US$ per Barrel 10 24 Index 1990=100 World Oil Prices - L Unit Value of Exports - R 22 120 110 5 20 100 0 18 90 16 -5 80 14 -10 80 82 84 86 88 90 92 94 96 12 98 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Africa - Inflation Rate Middle East - Inflation Rate Consumer Price Index Consumer Price Index Percent Change, Year Ago Percent Change, Year Ago 40 25 30 20 20 15 10 10 0 70 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VIII-1 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Africa and Middle East – Overview Africa - Official Reserves Middle East - Official Reserves Total Reserves Minus Gold and as Percent of GDP Total Reserves Minus Gold and as Percent of GDP US$ Billions 50 Percent US$ Billions Percent 12 100 40 10 90 10 30 8 80 9 20 6 70 8 10 4 60 7 2 50 0 Reserves Minus Gold - L Reserves as % of GDP - R 80 82 84 86 88 90 92 94 96 98 Sources: IFS; WEFA 11 Reserves Minus Gold - L Reserves as % of GDP - R 80 82 84 86 88 90 92 94 96 98 6 Sources: IFS; WEFA Africa and Middle East - Budget Balance Africa and Middle East - Current Account Balance Government Surplus/Deficit as Percent of GDP In Billions of US Dollars Percent US$ Billions 0 20 -2 Africa Middle East and North Africa 0 -4 -20 -6 -40 -8 -60 -10 -12 Africa Middle East and North Africa -80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IMF 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IMF Exchange Rates - Middle Eastern Countries Exchange Rates - Selected African Countries Local Currency Per US Dollar Local Currency Per US Dollar Index 1990=100 Index 1990=100 50 50 100 100 150 150 200 200 250 250 300 300 350 400 450 350 Jordan Lebanon Saudi Arabia 400 450 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Cote d' Ivoire Kenya Uganda 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS VIII-2 Africa and Middle East – Overview Africa - Trade Balance Middle East - Trade Balance Merchandise Exports, Imports, and Balance Merchandise Exports, Imports, and Balance US$ Billions US$ Billions 14 20 Exports Imports Trade Balance Exports Imports Trade Balance 15 9 10 5 5 -0 -5 0 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Africa and Middle East - Nonfuel Commodity Prices Africa and Middle East - Population Annual Percent Change Total Residential Population Percent Change, Year Ago Percent Change, Year Ago 30 6 Africa Middle East and North Africa Africa Middle East 5 20 4 10 3 2 0 1 -10 -20 0 Note: Data not available for Middle East and North Africa, 1996 -1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IMF 80 82 84 86 88 90 92 94 96 98 Source: WEFA Market Capitalization of African Stock Exchanges (As of Dec. 31, 1998) Market Value Country (US$ Millions) Botswana 724.00 Côte d' Ivoire 1,818.00 Egypt 24,381.00 Ghana 2,938.00 Kenya 2,024.00 Mauritius 1,849.00 Morocco 15,676.00 Nigeria 2,887.00 South Africa 170,371.00 Tunisia 2,268.00 Zimbabwe 1,310.00 Others (4) 1,062.65 Total in Africa 227,308.65 Top Oil Producing Nations No. of Issues 14 34 680 25 64 40 28 175 775 20 73 Turnover Ratio 10.6% 2.6% 22.3% 4.8% 4.0% 5.9% 10.1% 5.2% 30.4% 0.9% 9.2% Percent of the region 0.32% 0.80% 10.73% 1.29% 0.89% 0.81% 6.90% 1.27% 74.95% 1.00% 0.58% 0.47% 100.00% Crude Oil Production, October 1999 Million Barrels per Day 8 6 4 2 0 Iran Venezuela Nigeria Libya Algeria Saudi Arabia Iraq UAE Kuwait Indonesia Qatar Source: Financial Times Source: Milken Institute VIII-3 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Egypt – Current Economic Conditions Egypt - Real GDP Growth • GDP growth remained moderate in recent years. 1990 Prices • Stable pound and weak global commodity prices have kept inflation on a steady downward path, reaching below 5% – a twenty-year-low in 1999. • Equity market experienced remarkable gains in the second half of 1999. Egypt’s reform efforts under the IMF arrangements, and its participation in the Gulf War have led to massive debt relief. Budget deficits have been reduced and foreign reserves have reached all-time highs. Percent Change, Year Ago 14 12 10 • 8 6 • 4 2 0 80 82 84 86 88 90 92 94 96 • Albeit at a slow pace, Egypt’s steps toward a more market-oriented economy have prompted increased foreign investment. • Trade deficit remained in place. 98 Source: WEFA Egypt - Inflation Rate Egypt - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 25 22 20 20 18 15 16 10 14 5 0 12 80 82 84 86 88 90 92 94 96 10 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Egypt - Exchange Rate Egypt - Equity Index Egyptian Pounds per US Dollar HERMES Egypt Stock Market Index E£/US$ Index 1.0 16000 14000 1.5 12000 2.0 10000 8000 2.5 6000 3.0 3.5 4000 2000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg VIII-4 Egypt – Current Economic Conditions Egypt - Official Reserves Egypt - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 20 Reserves Minus Gold - L Reserves as % of GDP - R Percent 30 -4 25 -6 15 -8 20 -10 10 15 -12 10 -14 5 0 80 82 84 86 88 90 92 94 96 98 5 -16 0 -18 Source: IFS 80 82 84 86 88 90 92 94 96 98 96 98 96 98 Source: IFS Egypt - Unemployment Egypt - Industrial Output Unemployment Rate Industrial Output Percent Percent Change, Year Ago 12 10 11 8 10 6 9 4 8 2 7 6 80 82 84 86 88 90 92 94 96 0 98 Source: Datastream 80 82 84 86 88 90 92 94 Source: Datastream Egypt - Budget Balance Egypt - Foreign Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 2 200 0 150 -2 100 -4 50 -6 -8 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream 80 82 84 86 88 90 92 94 Source: Datastream VIII-5 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Egypt – International Trade Egypt - Principal Exports 1998 Egypt - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 30 Petroleum & products 26% Exports Imports Trade Balance 20 Other 45% 10 Raw cotton 2% Other agr. goods 3% Source: Economist Intelligence Unit Cotton yarn, textiles & garments 15% 0 -10 Engineering & metal. goods 9% -20 80 82 84 86 88 90 92 94 96 98 96 98 Source: WEFA Egypt - Principal Imports 1998 Egypt - Role of Trade As Percent of GDP Percent 45 Other 14% Wood, paper & textiles 11% Chem., rubber & leather 13% Fats & min. incl. fuels 15% Transport equipment & machines 30% Exports Imports 40 35 30 25 20 15 Livestock, food & drink 17% 10 80 82 84 86 88 90 94 Egypt - Origin of Imports 1998 Egypt - Destination of Exports 1998 Afro-Asian countries 25% Afro-Asian countries 10% Arab countries 12% EU 51% US 44% US 24% EU 34% Source: Economist Intelligence Unit Source: Economist Intelligence Unit AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 92 Source: IFS Source: Economist Intelligence Unit VIII-6 Egypt – Finance Egypt - Foreign Direct Investment Egypt - Gross Fixed Capital Formation Foreign Investment Flows As Percent of GDP US$ Billions Percent 1.4 35 1.2 30 1.0 25 0.8 0.6 20 0.4 0.2 80 82 84 86 88 90 92 94 96 15 98 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: IFS Egypt - Capital Flight Egypt - Petroleum Production Net Capital Flight Barrels Per Day US$ Billions Thousands 4.0 900 3.0 850 2.0 800 1.0 0.0 750 -1.0 700 -2.0 -3.0 80 82 84 86 88 90 92 94 96 650 98 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: Datastream VIII-7 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Israel – Current Economic Conditions • Since 1996, slowing economic growth. Tighter fiscal and monetary policies. GDP growth about 0.5% in 1999. 10 • Equity market soared a whopping 65% in 1999. 8 • After a sharp devaluation in 1998, shekel held up through most of 1999; devaluation-led inflation runup was halted and reversed in 1999. • Unemployment rates hovering around 8%-9%, due to economic slowdown and immigrant inflow. • U.S. remains Israel’s largest trading partner. Roughly half of its external debt is owed to the U.S. – a major source of economic and military aid. Israel - Real GDP Growth 1990 Prices Percent Change, Year Ago 12 6 4 2 0 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Israel - Inflation Rate Israel - Short-Term Interest Rate Consumer Price Index Three Month T-Bill Percent Change, Year Ago Percent 25 18 20 16 15 14 10 12 5 10 0 8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream Source: IFS Israel - Exchange Rate Israel - Equity Index Shekels per US Dollar Stock Exchange General Index NIS/US$ Index 1.5 450 400 2.0 350 2.5 300 3.0 250 200 3.5 150 4.0 4.5 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg VIII-8 Israel – Current Economic Conditions Israel - Official Reserves Israel - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions 25 As Percent of GDP Percent Reserves Minus Gold - L Reserves as % of GDP - R 20 Percent 100 1.0 80 0.5 60 0.0 40 -0.5 20 -1.0 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; Milken Institute 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Sources: IFS; WEFA Israel - Industrial Production Israel - Unemployment Rate Industrial Production Seasonally Adjusted Percent Change, Year Ago Percent 12 20 11 15 10 10 9 5 8 0 7 6 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Israel - Budget Balance Israel - Government Debt Government Surplus/Deficit as Percent of GDP As Percent of GDP Percent Percent 450 2 400 0 350 -2 300 250 -4 200 -6 -8 150 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 80 82 84 86 88 90 92 94 96 98 Source: Datastream Source: IFS VIII-9 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Israel – International Trade Israel - Principal Exports 1998 Israel - Trade Balance Merchandise Exports, Imports, and Balance US$ Billions 10 Unworked diamonds Agricultural 3% goods 4% Worked diamonds 18% Exports Imports Trade Balance 8 6 4 2 0 -2 Industrial goods 75% -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA Source: Economist Intelligence Unit Israel - Principal Imports 1998 Israel - Role of Trade As Percent of GDP Percent 60 Consumer goods 14% Fuel 7% Exports Imports 55 50 45 Raw materials 48% Diamonds 14% 40 35 30 Investment goods 17% 25 80 82 84 86 88 90 92 94 96 98 Source: IFS Source: Economist Intelligence Unit Israel - Destination of Exports 1998 Israel - Origin of Imports 1998 US 19% US 35% Other 41% Other 40% UK Hong Kong 6% 3% Germany Netherlands Belgium5% 5% Luxembourg Source: Economist Intelligence Unit AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Switzerland 6% 5% BelgiumLuxembourg 11% Germany 9% Italy UK 7% 8% Source: Economist Intelligence Unit VIII-10 Israel – Finance Israel - Foreign Direct Investment Israel - Portfolio Investment Direct Investment Inflows Inflows and Outflows US$ Billions US$ Billions 1.00 1.5 Inflows into Israel Outflows from Israel 0.80 1.0 0.60 0.5 0.40 0.0 0.20 -0.5 0.00 Note: Data not available for 1991Q2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -1.0 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Israel - Gross Fixed Investment Israel - Gross Fixed Capital Formation As Percent of GDP As Percent of GDP Percent Percent 24 25 20 22 15 20 10 18 16 5 80 82 84 86 88 90 92 94 96 0 98 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: IFS Israel - Domestic Demand Israel - Private Consumption Domestic Demand Durable Goods Percent Change, Year Ago NIS(1995), Billions 8 6.5 6.0 6 5.5 4 5.0 2 0 4.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 4.0 Source: Datastream 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA VIII-11 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Mauritius – Current Economic Conditions Mauritius - Real GDP Growth • Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial services, and tourist sectors. • Economic performance – characterized as solid growth, stable inflation, low unemployment. • Annual economic growth between 5% and 6%. Highest GDP per capita among all African countries. • Exports are as important to the nation’s economy as private consumption. Both components together account for about two-thirds of the total GDP. • Sugarcane is grown on about 90% of the cultivated land area and accounts for 25% of export earnings. 1990 Prices Percent Change, Year Ago 9 8 7 6 5 4 3 80 82 84 86 88 90 92 94 96 98 Source: Datastream Mauritius - Inflation Rate Mauritius - Short-Term Interest Rate Consumer Price Index Prime Rate Percent Change, Year Ago Percent 50 24 40 22 20 30 18 20 16 10 14 0 -10 12 80 82 84 86 88 90 92 94 96 98 10 Source: IFS 80 84 86 88 90 92 94 Mauritius - Exchange Rate Mauritius- Equity Index Mauritian Rupees per US Dollar SEMDEX Stock Market Index Rupees/US$ Index 12 560 14 490 16 420 18 350 20 280 22 210 24 140 26 82 96 98 Source: IFS 70 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VIII-12 Mauritius - Current Economic Conditions Mauritius - Official Reserves Mauritius - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 1.00 Percent 30 Reserves Minus Gold - L Reserves as % of GDP - R 5 25 0.80 0 20 0.60 -5 15 0.40 -10 10 0.20 0.00 5 80 82 84 86 88 90 92 94 96 98 0 -15 -20 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Mauritius - Principal Exports 1996 Mauritius - Principal Imports 1996 Other 21% Other 22% Manufactured goods 33% Chemicals 8% Clothing & textiles (EPZ) 54% Sugar 25% Food & beverages 15% Source: Economist Intelligence Unit Source: Economist Intelligence Unit Mauritius - Destination of Exports 1997 Other 25% Mach. & trans. equipment 22% Mauritius - Origin of Imports 1997 France 19% UK 31% Other 47% Italy 4% Germany 6% US 15% South Africa 12% India 9% Hong Kong UK 7% 6% France 19% Source: Economist Intelligence Unit Source: Economist Intelligence Unit VIII-13 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Morocco – Current Economic Conditions • Drastic fluctuations in economic growth caused by heavy dependence on agricultural output. 15 • Agriculture 18% of GDP; productivity subject to frequent drought. 10 • Tough fiscal control has allowed the government to reduce the budget deficit significantly. 5 • Low inflation mainly the result of slowing domestic demand. 0 • Interest rates have dropped substantially in recent years, bank lending for industrial investment encouraged. • Foreign direct investment has remained largely subject to the pace of economic liberalization. Morocco - Real GDP Growth 1990 Prices Percent Change, Year Ago -5 -10 80 82 84 86 88 90 92 94 96 98 Source: IFS Morocco - Inflation Rate Morocco - Short-Term Interest Rate Consumer Price Index Money Market Rate Percent Change, Year Ago Percent 14 13 12 12 10 11 8 10 6 9 4 8 2 7 Note: Data not available for Dec. 83 - Nov. 84, Aug. 87 - Dec. 93 0 80 82 84 86 88 90 92 94 96 6 98 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Morocco - Exchange Rate Morocco - Equity Index Moroccan Dirhams per US Dollar CFG 25 Stock Market Index Dirhams/US$ Index 7.5 14000 8.0 12000 10000 8.5 8000 9.0 6000 9.5 4000 10.0 10.5 2000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream VIII-14 Morocco – Current Economic Conditions Morocco - Official Reserves Morocco - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 5 Percent 16 Reserves Minus Gold - L Reserves as % of GDP - R -5 14 4 12 -10 10 3 8 2 -15 6 4 1 -20 2 0 80 82 84 86 88 90 92 94 96 98 0 -25 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS Morocco - Principal Imports 1997 Morocco - Principal Exports 1997 Food, drink & tobacco 20% Others 35% Raw materials 9% Semi-finished goods 17% Energy & lubrincants 1% Raw materials 3% Semi-finished goods 20% Others 17% Machinery & equipment 17% Food, drink & tobacco 11% Consumer goods 12% Minerals Finished goods 15% 9% Energy & lubricants 14% Source: Economist Intelligence Unit Source: Economist Intelligence Unit Morocco - Origin of Imports 1997 Morocco - Destination of Exports 1997 France 28% France 32% Other 39% India 6% Other 41% Spain 9% Germany 7% Italy 7% UK 7% Spain 10% Germany UK 7% 7% Source: Economist Intelligence Unit Source: Economist Intelligence Unit VIII-15 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org South Africa – Current Economic Conditions South Africa - GDP • Economic growth has been slowing down since the dramatic turnaround in early 90s. Negative in 19981999 from weak export demand in the Far East. 4 • Following an over-30% loss in the prior year, the equity market bounced back in 1999. 2 • Inflation slid in 1999, dropping below 5% for the first time in the decade. 0 • Weak export growth, coupled with a marked increase in import demand for high-value capital equipment, resulted in the trade balance moving from a surplus to a deficit. • Gold and diamond production down significantly in 1999. 1990 Prices Percent Change, Year Ago 6 -2 -4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA South Africa - Inflation Rate South Africa - Interest Rates Consumer Price Index 1990 Short-Term and Long-Term Percent Change, Year Ago Percent 20 30 Prime Rate Long Term Bond Yield 15 25 10 20 5 15 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 10 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS South Africa - Exchange Rate South Africa - Equity Index Rand per US Dollar Johannesburg Stock Exchange All Share Index R/US$ Index 2 9000 8000 3 7000 4 6000 5000 5 4000 6 7 3000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Bloomberg VIII-16 South Africa – Current Economic Conditions South Africa - Current Account Balance South Africa - Official Reserves As Percent of GDP Total Reserves Minus Gold and as Percent of GDP US$ Billions 5 Percent Percent 5 Reserves Minus Gold - L Reserves as % of GDP - R 4 6 4 4 2 3 3 2 2 1 1 0 -2 -4 -6 0 80 82 84 86 88 90 92 94 96 98 0 -8 Sources: IFS; Milken Institute 80 82 84 86 88 90 92 94 96 98 Source: IFS South Africa - Manufacturing Production South Africa - Unemployment Manufacturing Production Unemployment Rate Percent Percent Change, Year Ago 38 15 36 34 10 32 30 5 28 26 0 24 22 -5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: IFS South Africa - Government Debt South Africa - Budget Balance As Percent of GDP Government Surplus/Deficit as Percent of GDP Percent Percent 0 60 55 -2 50 -4 45 40 -6 35 -8 30 -10 80 82 84 86 88 90 92 94 96 98 25 Source: Datastream 80 82 84 86 88 90 92 94 96 98 Source: WEFA VIII-17 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org South Africa – International Trade South Africa - Trade Balance South Africa - Principal Exports 1996 Merchandise Exports, Imports, and Balance US$ Billions 4 Metals & metal products 21% Exports Imports Trade Balance 3 2 Other 40% 1 Gold 20% 0 -1 Mach. & trans. equip. 9% Diamonds 10% -2 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS Source: Economist Intelligence Unit South Africa - Principal Imports 1997 South Africa - Role of Trade As Percent of GDP Percent 40 Machinery & appliances 31% Other 38% Exports Imports 35 30 25 Mineral products Transport & 13% equipment Chemicals 6% 12% 20 15 80 82 84 86 88 90 92 94 96 Source: IFS Source: Economist Intelligence Unit South Africa - Destination of Exports 1998 US 8% Other 58% Germany 6% South Africa - Origin of Imports 1998 US 13% UK 6% Other 38% Japan 6% Italy 6% UK 9% Other EU 10% Japan 7% Source: Economist Intelligence Unit AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org Germany 13% Source: Economist Intelligence Unit VIII-18 Other EU 20% 98 South Africa – Finance South Africa - Foreign Direct Investment South Africa - Portfolio Investment Foreign Investment Flows Inflows and Outflows US$ Billions US$ Billions 4 15 3 Inflows into South Africa Outflows from South Africa 10 2 5 1 0 0 -1 80 82 84 86 88 90 92 94 96 -5 98 Source: IFS Note: Outflow data not available for 1987-95 80 82 84 86 88 90 92 94 96 98 Source: IFS South Africa - Mining Industry South Africa - Role of Trade All Mining Production As Percent of GDP Percent Change, Year Ago Percent 8 40 Exports Imports 6 35 4 2 30 0 25 -2 -4 20 -6 -8 80 82 84 86 88 90 92 94 96 98 15 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: IFS South Africa - Mining Industry South Africa - Mining Industry Gold Production Diamond Production Percent Change, Year Ago Percent Change, Year Ago 10 30 20 5 10 0 0 -5 -10 -10 -15 -20 80 82 84 86 88 90 92 94 96 98 -30 Source: WEFA 80 82 84 86 88 90 92 94 96 98 Source: WEFA VIII-19 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org UAE – Current Economic Conditions UAE - Real GDP Growth • The UAE has an open economy with one of the world’s highest per capita incomes. Sizable annual trade surplus. • Wealth based on oil and gas output (about one third of GDP). The fortunes of the economy fluctuate with energy prices. • The government has been encouraging increased privatization and diversification within the economy. Aluminum, high-tech, tourism on the rise. • In 1999, inflation remained low at 4%, real GDP grew at 2.5%. 1990 Prices Percent Change, Year Ago 20 10 0 -10 -20 -30 80 82 84 86 88 90 92 94 96 98 Source: Datastream UAE - Inflation Rate UAE - Short-Term Interest Rate Consumer Price Index Lending Interest Rate Percent Change, Year Ago Percent 8 6.0 6 5.5 4 5.0 2 0 4.5 -2 4.0 -4 -6 80 82 84 86 88 90 92 94 96 98 3.5 Source: IFS 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: Datastream UAE - Exchange Rate UAE - Crude Petroleum Production UAE Dirhams per US Dollar Index 1995 = 100 Dirhams/US$ Index 3.6705 110 100 3.6710 90 80 3.6715 70 60 3.6720 50 3.6725 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: IFS AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org 80 82 Source: IFS VIII-20 84 86 88 90 92 94 96 98 UAE - Current Economic Conditions UAE - Official Reserves UAE - Current Account Balance Total Reserves Minus Gold and as Percent of GDP US$ Billions As Percent of GDP Percent 10 Percent 25 -4 Reserves Minus Gold - L Reserves as % of GDP - R 8 20 6 15 -5 -6 -7 4 10 -8 2 0 5 80 82 84 86 88 90 92 94 96 98 0 -9 -10 Source: IFS 80 82 84 86 88 90 92 94 96 98 Source: IFS UAE - Principal Exports 1998 UAE - Principal Imports 1998 Intermediate goods 11% Crude oil 32% Others 33% Consumer goods 52% Capital goods 37% Re-exports 35% Source: Economist Intelligence Unit Source: Economist Intelligence Unit UAE - Destination of Exports 1998 UAE - Origin of Imports 1998 Japan 10% UK 9% Japan 29% Others 42% Other 57% South Korea 11% Iran India 3% 6% Oman Singapore 4% 5% Source: Economist Intelligence Unit US 8% Germany 6% Italy 5% South Korea 5% Source: Economist Intelligence Unit VIII-21 AFRICA AND THE MIDDLE EAST March 8, 2000 www.milken-inst.org
