Monday, July 17, 2017

Pavan Sukhdev’s TED Talk, “Put a Value on Nature”

A project called TEEB in 2007 initiating conservatism movement towards nature. It consists of environment ministers of the G8+5 whose realizing nature’s contribution to human life and businesses in local, national, and international level. An example lies on Amazon rainforest as the pool of carbon, biodiversity, and rainfall granting the success of agricultural sectors in countries surround it. The coral reef, insects, and deserts also contribute for businesses. However, most big businesses are careless with the sustainability of these natures. Taking into account all of these factors, the nature becomes worsen in recent years. This happens due to people tendency on caring more on private profits rather than common goods.
Pavan Sukhdev has explained rationale environmental issues. As the population in almost part of the world increasing and the advancement of technology keeps growing; replacing jobs by robots and making stiff competitions in getting a job. In order to fulfill demands on certain products as well as providing nutritious foods, people start exploiting natures for their own sake. Although many environmentalists as well as NGOs begin explaining the importance of economic sustainability, only few businesses care with it. They put more attention on getting profits to expand their businesses as globalization makes an ease to open branches in foreign countries. These ego activities are never seeing nature worth for their businesses. The National Geographic reveals the average temperatures in 2016 increase by 1.3 degree Celsius. The sea level is predicted increasing by 2-3 feet in 2100 and Greenland will be uncovered by ice in 2050. When these phenomena happen, human’s goal on providing nutritious foods and gain more profits seem easier to achieve by today but will become harder in 30 years later. Pavan Sukhdev through his TEEB project provide comprehensive understandings on how we should see natures and taking steps to tackle environmental issues. Businesses in any sectors are the key for doing sustainable business practices and value the nature more.

National Geographic. (2016). Seperti ini keadaan bumi seratus tahun lagi. Retrieved from

The Skeptical Environmentalist

In my opinion, the most compelling viewpoint is delivered by the Worldwatch Institute. Hence, the ideas from Bjorn Lomborg are interesting since he supported his arguments with over 2500 footprints and more than 400 articles which in some points, it is considered logic. Although Lomborg tries to use data and interpret it as convincing as he can, his article “Earth Hour is Bad for the Poor” contradicts with my personal point of view. In his article, he stated that switching off the light for an hour ignores the poorest. We all know that electricity might not available for all people, especially for whom living in rural areas or people who are considered poor. This happens due to the bad infrastructure in certain areas, nothing to do with earth hour celebration. Limiting the use of electricity, although an hour, can reduce the use of energy and save the fossil energy. If we want to make electricity available for all people, the infrastructure should be good.
In the other hand, the Worldwatch Institute’s viewpoint is in line with my perspective. Currently, many farms are shifted to housing area, losing some of green areas as well as the job of farmers. The issue in Sumatera, Indonesia, related to the forest fires has distracted the ecosystem stability in the forest, the animals were dead and losing their homes, and the plants were gone. Not only that, the mining industry has received some critics related to low wage, longer working hours, and exploit the environment. These phenomena are real and even happening in my hometown. Therefore, as stated in the Worldwatch Institute, without taking green actions, the healthiness of people and ecosystems will become a question and no one can guarantee the sustainability of it.
Lomborg, B. (2017). Earth hour is bad for the poor. Retrieved from (2001). The skeptical environmentalist: measuring the real state of the world. Retrieved from

Choosing the Location for the Major Transshipment Point

The company plans to build a hub in the Southeast Asia region for shipping products to other specific countries. Among nine countries in this region, there must be one selected country to locate the hub. Before making this plan real, the company needs to consider several factors including the customs, quality of transport, and all the necessary logistics functions.
The World Bank has released the Logistics Performance Index (LPI) 2016 and indicated Germany as the best country for logistics. Following Germany, one of the Southeast Asia countries ranked 5 among all countries in the world. The country is Singapore. Since the company is looking for the transshipment hub in Southeast Asia region, Singapore deserves as the best choice. The LPI is measured by several indicators including customs, infrastructure, international shipment, logistics competence, tracking and tracing, and timeliness. Each of which Singapore is included in the top 10 country. Singapore achieved first rank for the custom indicator with the score of 4.18 where Germany is only 4.12. This indicates customs in Singapore will not become a burden for company to locate the hub and do transshipment. The transshipment activities are regulated by Singaporean Government under the Customs Act, the Strategic Goods (Control) Act, the Regulation of Imports and Exports Act, and other related legislations. A specific system for this matter is called TradeFirst. This system will provide company a greater convenience and facilitation through six assessment frameworks; company profile, procedures and processes, security, inventory management, other scheme-specific requirements, and compliance (Singapore Government, n.d.).
Furthermore, Singapore commits to create efficiency in the supply chain and logistics hub. They transform the procedure and regulation related to security and the operation to be simpler allowing company better adapt with Singaporean and any international customs. This creates an ease for company to get clearance, documentation, as well as a permit towards their products. An application has been built in Singapore called TradeNet. This gathers around 35 controlling agencies to assess and give permit to company for trading activities. Despite the business-friendly customs, Singapore is located strategically in the heart of Southeast Asia making it an important hub for the meeting point of major shipping lanes. The quality of the transport is measured by the facilities provided in this country. Singapore hub is facilitated by the world class infrastructure such as Airport Logistics Park of Singapore, Changi International LogisPark, and Banyan LogisPark. All of these infrastructures are specialized to serve domestic and international distribution. Thus, among 25 global logistic firms, 20 of them are operated in Singapore (EDB, n.d.).
The aviation hub in Singapore has AS9120 certification with various capabilities.
1.      Aircraft-on-ground (AOG) for fast delivery of missing part to the waiting-aircraft.
2.      Service Parts Logistics (SPL) for aftermarket facilities.
3.      Integration of the airline inventories.
4.      Master of the engines and other related functions of the transportation.
In addition, it is also providing packaging facilities and chemical processing in the Jurong hub by implementing the system of Katoen Natie. The Vopak has also built its facilities there, providing the chemical storage, distribution system for domestic market, and other services for better chemical substances quality. The electronics product is also be supported by the DB Schenker by building the Competence Center focusing on the Production Vendor Managed Inventory (PVMI). This will help Singapore managing the electronics and other manufacturing sector. In terms of healthcare and cold chain logistics, Singapore is facilitated by the Coolport offering storage with the temperature ranging from -28°C to 19°C. This Coolport has also a Halal certification (EDB, n.d.).
The potential of transshipment in Singapore will be maintained by its domestic resources, especially the human resources mastering in supply chain management and logistics. The education in science and engineering offer variety programs for creating potential talents in this industry. The EDB mentioned that the graduates with specialization in Supply Chain Management in Singapore have reached 8,500 people. It also offers double masters program nurturing over 150 professional who work in SCM field. Despite the educational system, Singapore conducts TLI-AP THINK Forum gathering experts and professionals in SCM to discuss and outline potential SCM and logistics to be developed and maintained in Singapore (EDB, n.d.).
Singapore is ranked first for logistics in Southeast Asia. It has a business-friendly customs and world class infrastructures supporting the transshipment. These infrastructures ranging from aerospace to healthcare and cold chain logistics will ensure the quality of the transport. The government has also collaborated with educational and other institutions to maintain the quality of the logistics and supply chain processes. Its human resource will be prepared to be the expert and professional in the SCM field.

Singapore Government. (2017). TradeFirst. Retrieved from

Singapore Government. (n.d.). Transhipment procedures. Retrieved from

EDB. (n.d.). Logistics and supply chain management. Retrieved from

Global Debt

Global debt keeps increasing from 2007 to 2016. It exposes countries to challenges related to government debt, household debt, financial-sector debt, and china’s debt. There are some ways to address this problem with the big goal to deleverage the economy.
The global financial crisis and recession led global debt to grow by $57 trillion. According to an article of Business Insider Australia written by David Scutt, the 2016 global debt reached $215 trillion. The emerging market contributed to a large portion of its increase where in 2006 the global debt of emerging market was only $16 trillion and jumped to $56 trillion in 2016. Below is the graph showing the growth of global debt both in emerging markets as well as mature markets.

The McKinsey & Company report shows that some areas including government debt, household debt, financial-sector debt, and china’s debt contributed the growth of global debt. These areas remain a challenge. Since 2007, the government debt reaches $25 trillion urging the decline of the demand in the private sector. Unfortunately, this growing will continue to the five years afterwards in most developed countries such as Japan, European, and US. Encountering this growth, the fiscal balances need to deleverage into 2% of GDP in these countries. Hence, it remains challenging since the private sectors seems not improving to make these countries gaining benefit from high demand of the export. Despite all that, the experts underline increasing the inflation rate and the taxes imposed to the wealth as well as distribute the sales of public asset into wider areas might reduce government debt.
Furthermore, the household debt serves as the main factor causing global debt. The declining of housing price while financial crisis happen will lead to a recession. Deleveraging the household depends on the mortgage and limits by regulation as well as urbanization. Thus, managing the population to be widespread within a country is needed. This happens since highly concentrated population has a potential to a higher household debt. Moving into financial sector debt which increased by $17 trillion in 2007 from $20 trillion in 2000 leading to the existence of shadow banking system. This increasing debt can be reduced by the increasing non-bank credit. The online lending system contributed to this growth. Although the online system might be risky in terms of the security, the regular and advance monitoring system can tackle this potential problem.
In addition, Chinas as the second largest economy in the world contributes largely on the global trade as well as the global GDP. China’s debt in 2014 reached $28.2 trillion, four times bigger than its debt in 2007. Its debt reaches 250% of GDP. This could be resulted on fatality. Unfortunately, China seems to be addicted towards corporate debt which may weaken their financial system.
“We find three particular areas of potential concern in China: the concentration of debt in real estate, the rapid growth and complexity of shadow banking, and the off-balance sheet borrowing by local governments.” (McKinsey Global Institute 2015, 11).
All of these challenges can be addressed through several ways.
  1. The flexibility of mortgage contracts is needed. Although it seems to be risky and costly, however, it may eliminate the cost against social and economical aspects thus making better the stability of the financial system.
  2. The private-sector debt has to have a good process. This involves non-resource loans to eliminate the potential of bad debt.
  3. The macro-prudential regulations are needed to reduce borrower’s intention to increase their debts. This will also provide an ease to leverage the economy.
  4. The tax imposed in debt has to be reduced in order to trigger company allocates their budget in capital goods.
  5. Paying attention on the total government debt can be done by utilizing several tools to encounter sovereign debt. This will lead to sustainable economy.
  6. The lenders and regulation making have to collect more data to analyze the global debt and its potential risk towards the global economy. They also need to monitor every single change in this debt.
  7. Although the bank credit keeps increasing, however, this can be tackled by improving the non-bank credit.
  8. Developing economies contribute largely to a global debt in current year. In increased by $40 trillion in 2016. Thus, the focus to monitor and manage the debts in these developing economies should become the priority.

The global debt is triggered by the government debt, household debt, financial-sector debt, and china’s debt. The 2016’s global debt reached $215 trillion and indicated by emerging markets debt that increased significantly in this year. There are several ways to tackle this. One of them is focusing on the development of developing economies since their debt has increased significantly in past year. Another focus has also be addressed to China’s debt since it serves as the second largest economy in the world, thus, contributing a large portion of the global GDP.
McKinsey Global Institute. (2015). Debt and (not much) deleveraging. Retrieved from
Scutt, D. (2017). Global debt has hit an eye-watering $215 trillion. Retrieved from
France-Presse, A. (2016). China’s debt is 250% of GDP and ‘could be fatal’, says government expert. Retrieved from

Foreign Direct Investment (FDI)

The Foreign Direct Investment (FDI) has its trend, growing or declining. The financial crisis happened in 2008-2009 has an impact to FDI. Hence, it does not mean that FDI will collapse in the upcoming years. Comparing the FDI overall flow and specifically FDI inflows in developed and developing economies, the sectors and industries in both economies, as well as determine the largest type of FDI growth can be done to comprehend this trend.
The recent FDI was growing globally. It reached $1.76 trillion, increasing by 38% compared to FDI in 2014. The major cause of this growth was mergers and acquisitions (M&As) that reached $721 billion. Similar to M&As, the greenfield investment was also high reaching $766 billion. Both developed and developing economies showing FDI growth. Hence, the growing of FDI flow in developed countries remained higher than developing countries. The 2015 FDI in developed economies reached $962 billion with the strongest growth in European countries, following by the United States. Europe became the most favored region to invest due to its high FDI flows reaching $576 billion. Meanwhile, the FDI flow in developing economies, except the Caribbean, was growing by 9%, reaching $765 billion in 2015. Unfortunately, FDI in the upcoming years is predicted declining due to global economic fragility and related tax and policies.
Although the overall FDI flow of developed economies higher than FDI flow in developing economies, however, the FDI inflows in 2015 based on region showing that developing Asia had the highest FDI inflows, reaching $541 billion. Europe, in the same year, has significant growth of their FDI inflows from $306 billion to $504 billion, made them achieved the second highest FDI inflows in 2015. In Asia, the largest FDI inflows achieved by Singapore, having $65 billion in developing economies while $68 billion for the transition economies. Furthermore, Brazil as a part of Latin America reached the largest FDI inflows among other Latin American countries. It reached $65 billion for developing economies and $73 billion for transition economies.
Moving into the sector, it is reported that service sector become the largest industry in 2015. It was dominated the FDI stock into two third of it. The second largest sector was manufacturing, worth 27% of the total FDI stock. Among these manufacturing industries, pharmaceuticals achieved largest M&As in 2015, worth $61 billion. It was followed by non-metallic mineral products,, furniture, then chemicals and chemical products.
Comparing the two FDI types, the M&As reached $721 billion whereas the greenfield investment served as the largest FDI in 2015. It was worth $766 billion although it did not significantly increasing.
The FDI in 2015 was growing significantly, reaching $1.76 trillion. According to the FDI inflows report, developing economies achieved higher FDI inflows compared to developed economies. It was achieved by developing Asia region with Singapore as the second largest FDI inflows getter after China. In Latin America, it was achieved by Brazil. Although M&As increased significantly in 2015, the greenfield investment remained the largest. The largest sector of FDI stock was service followed by manufacturing as the second with pharmaceuticals served as the largest industry.
United Nations. (2016). World investment report 2016. Retrieved from