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Wednesday, July 27, 2005
Export-reliant nations told: Watch currency changes
Countries that are heavily dependent on exports should control the strength of their currencies against other currencies, especially the US dollar, because a country with a strong currency will have difficulty sustaining its export industry.
Economic and Commercial Attache of the Belgium Embassy Vincent Butaye cited the example of the European Union (EU), whose economy has suffered sluggish growth in the last two years.
“The EU is heavily dependent on exports (so that) its economy slowed down when the dollar depreciated and the euro strengthened. But the EU’s economy is now picking up because the dollar is also beginning to regain its strength,” he told Sun.Star Cebu on the sidelines of the “Exploring Market Opportunities in Belgium” event at the Laguna Garden Café yesterday.
Last week, Bangko Sentral ng Pilipinas Monetary Board Member Vicente Valdepenas Jr. said the appreciation of the Chinese yuan will have positive effects on the Philippines, as a stronger yuan will mean an increase in the prices of Chinese exports in the global market.
“This will enable our exports to compete price-wise with China-made products,” he told Sun.Star Cebu.
In yesterday’s interview, Butaye admitted that there are other factors that hold back the growth of the EU.
“We can’t find enough people to fit our economy. The qualifications of the labor force do not match the requirements needed by the companies,” Butaye said.
The ageing population and high employment costs due to required employee benefits were also cited as contributing to the EU economy’s slowdown.
As regards tourism, Butaye said most Europeans prefer to travel to Thailand, Vietnam and Cambodia, than to the Philippines, because the costs of the flights, accommodations and infrastructure are better in these other destinations.
The envoy, however, said that some Europeans, especially those with time and much money to travel, still come to the Philippines.
In regard to trade, Belgium Ambassador Chris-tiaan Tanghe said the Philippine products Belgium may be interested in include furniture and fashion accessories. (JBN)
(July 27, 2005 issue)
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