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Issue 31 | October 19, 2012

With new sanctions, European Union tightens screws on Iran over nuclear work
The European Union toughened sanctions against Iran over its disputed nuclear program, banning trade in industries like finance, metals and natural gas, and making other business transactions more troublesome. Sanctions have restricted Iran's ability to sell oil and conduct international banking transactions. Iran is now suffering acute inflation from the weakening of the rial, the national currency, which lost 40 percent of its value against the dollar. Iran has been showing new signs of problems, including severe drops in monthly oil and automotive production and in the number of foreign commercial ships docking at its ports. Read more.  

 
China exports rise, hinting at a glimmer of a revival
With China's recently expanding money supply, the yuan devalued increasing its exports to foreign countries. Amongst the major buyers of Chinese goods was the United States and South East Asia. Exports to the United States rose 5.5 percent over the same month last year. China's export total rose to 9.9 percent for all countries, while imports rose 2.4 percent. Most import totals revolved around materials used by the export industry, making the reading on local Chinese demand somewhat misrepresented. The money supply expanded by 14.8 percent, which indicates relief in a credit squeeze that has impeded many local businesses.  Read more
 
Making U.S. exports easier between the United States and Israel
With a recent agreement signing between the United States and Israel, manufacturers will be saving time and money on the additional product testing and certification that goes on for telecommunication products sent to Israel. In the agreement, the products will still maintain the United States' high technical standards while having Israeli authorities accept tests that recognize U.S. laboratories to determine the conformity of the equipment. Once the agreement is imposed, American products can be sold in Israel at a faster rate, product prices will be lowered for consumers and exports to Israel will increase. Just in 2011, a two-way trade between the United States and Israel amounted to $31 billion with mutually beneficial transactions. Read more.
 
Peru's economic activity increases 6.3 percent on construction
With the recent construction of malls, homes and copper mines, Peru's economic activity has increased 6.3 percent. The country's economic growth was held at a steady rate above 6 percent for a fourth straight month as construction activity continued to rise. In August, construction activity rose 18 percent while export demand for textiles and furniture drove a 4.1 percent gain in manufacturing. Even the unemployment rate in Lima decreased to 6.6 percent last month compared to a 6.7 percent in August. It is clear that Peru's economy will continue to grow at the core of construction continuing to drive the economic activity. Read more.
 
China and India investing heavily in research and development
Over the past five years, China and India have put in $200 billion and $40 billion respectively into research and development. These combined totals now make up one-fifth of the world's spending on innovation. A possible source of the research and development funds will be allocated into "frugal products" for the local consumer. Frugal products are goods that are frequently used by the low and middle segments. Due to their high functionality and low cost approach it has become a growing market in developing economies. With foreign manufactures putting more focus to satiate local demands there will be an increase in the local economy which will equate to more import opportunities into these growing economies.
Read more.
 
Compiled by Global Initiatives Interns Brittany Garcia, Tanya Gonzalez and Galaxy Kaji. 

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.