During the first half of 2011, we seem to still suffer from a global crisis with dire economic indicators all over the world. A number of countries are struggling with high inflation partially due to the second round of quantitative easing by the US. Several European countries as well as the US are trying to tackle massive fiscal deficits. A huge amount of speculative money has flooded into the international energy market, and simultaneously energy resource nationalism has spread among countries rich in resources. As a result, the prices of oil and natural resources have increased tremendously.
The Research Centre for State-Owned Entities at the Korea Institute of Public Finance keeps updating domestic and overseas public institution news. The first half of 2011 trends of overseas public institutions could be summarized pretty easily. In order to relieve a significant fiscal deficit, the UK government planned National Health Service (NHS) reform at the beginning of this year, but still cannot launch yet. In response to the Japanese Nuclear disaster, there have been many cooperative activities among public institutions such as The French Nuclear Corporation, Areva, and the Tokyo Electricity Power Corporation (Tepco). Postal service corporations in the US, Canada and Japan have been suffering from financial problems mainly due to the world wide spread of email and smart mobile phones. Major energy corporations in France and Sweden, such as Avera, GDF Suez, and Vattenfall have invested and developed offshore wind energy plants.
The Case of the US Export-Import Bank
First of all, The US trade surplus was at a record high. According to data released by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department, the exports of US goods and services in March recorded $172.7 billion which was the largest monthly total ever.
Some may think it is the natural corollary of the weakening dollar caused by the second quantitative easing.
However, it is notable that the US Export-Import Bank has played a vital role in driving the record-breaking US trade surplus. The US Export-Import Bank completed $13.4 billion in total authorizations for the first half of fiscal year 2011 (Oct. 2010 through March 2011), supporting $15.9 billion in U.S. exports and more than 115,000 American jobs. The six month authorization figure is the highest in the Bank's history.
"These numbers demonstrate that Ex-Im Bank is on a solid path toward a third consecutive record-breaking year," said Ex-Im Chairman & President Fred P. Hochberg. "Increasing exports is critical to our economic recovery, and I am confident that we will meet the President's goal of doubling U.S. exports by 2014." (U.S Ex-Im Bank, News releases May 11, 2011)
As mentioned above, public institutions build up infrastructures in the market where few private companies are willing to enter because of a massive initial cost. Public institutions also provide universal services such as postal service and railway on behalf of governments. In short, they make direct or indirect contributions to the national economy. Monitoring and analyzing public institutions' trend would be useful to predict the future of government policies and market trend.