Exports can turn you into an optimist
about this economy.
A New Year usually makes me feel optimistic. In this grim
economy, optimism is hard to come by. But as I was riding to
work one morning after meeting with my financial planner and
receiving the not unexpected bad news on my investments, I
heard a radio story that helped renew my optimism about the
future. A man was talking about his grandmother and how her
wisdom helped shape his life. She had told him that if you only
focus on the bad, the good will pass you by.
With that in mind, let me dispense with the bad news and
quickly move on to a more positive note.
A report from the International Chamber of Commerce (ICC)
and the Ifo Institute for Economic Research says the world
economic climate will remain in a recessionary period in the
first half of 2009. A Reuters poll of leading world economists
predicts much of the same—the world is likely to be in
recession for another year. On top of that, the fear of
deflation is troubling economists even more than inflation. A
sustained decline in consumer prices will be traumatic for the
economy and much tougher to deal with. Businesses may have to
lay off more workers and may not be able to pay lenders or
shareholders. That, in turn, could prolong the recession.
For the insurance industry, Fitch Ratings predicts that
premium growth will be slow in 2009 because of competition and
the ongoing recession. Fitch doesn’t see a hard market in
the near term, except in hard-hit areas, such as
property-casualty reinsurance, professional liability for
financial institutions and coastal property.
Ever the optimist, J. Hyatt Brown, chairman and CEO of Brown
& Brown, says he is no less optimistic about the future
than before, but the economy, he says, is the “joker in
the deck” and 2009 is going to be difficult.
The ICC did see one bright spot on the horizon: world trade.
The organization reported that it was encouraged that the
leaders of the G-20 countries who met in November rejected
protectionism and agreed to try to reach a successful
conclusion to the world trade negotiations.
It will be an uphill battle, but I’m optimistic. While
world trade has slowed, it is still the engine that keeps the
global economy chugging. The Commerce Department says U.S.
merchandise exports grew 19.1% during the first seven months of
2008—up more than $100 billion from the same time in
Interestingly, more than 97% of U.S. exporters are small or
medium-sized enterprises with fewer than 500 employees. There
is a similar trend in other developed and developing countries.
Open markets and the Internet have made it possible for small
and medium-sized businesses to sell their products worldwide.
They are looking at exports as a way to make up for a slowdown
in domestic sales.
As insurance brokers struggle to maintain their own
profitability, many are also grappling with constriction in
their clients’ business. Clients are facing layoffs,
cutting costs, shutting down facilities and looking for ways to
survive. Brokers provide a lot of value to clients by helping
them manage their risks, but it isn’t often a broker can
do something to help their clients’ businesses grow.
That’s why I am recommending a book published by the
Commerce Department that every broker, whether in the U.S. or
abroad, should think about sending clients as a renewal gift.
A Basic Guide to Exporting is
aimed at helping companies, whatever their size, go global. The
recently updated guide is a step-by-step manual that discusses
financing options, how to identify the best overseas markets,
and how to create a Web site for selling goods to international
buyers. It contains 17 chapters on the nuts and bolts of the
export process, as well as case studies of how companies have
profited from international sales.
FedEx chairman Frederick Smith plans to use the book as a
text for a series of nationwide seminars called Exporting 101.
At $19.95, the book is a bargain—and a good way to add
value for your clients. (Besides, the U.S. Treasury can really
use the money right now.) Order the book at www.export.gov/basicguide.
Optimists are said to be more practical reformers. I hope
so. We have an optimistic new president who comes into office
with the weight of the world on his shoulders, but who offers
hope to millions.
As Hyatt Brown says, 2009 will be tough, but the future is
Kemper is The Council’s vice
president of Industry Affairs.