East Eats West

Off to Asia again...

Picture: Old meets new in Singapore.

On the heel of the newest designer hotels in Singapore and swanky suites in Hong Kong I am off again to Asia again. I will fit in business meetings with kid's birthdays and reunion with friends. And for sure I need a break: big time!

Big Foot is not welcome

Picture: Heinrich Dinkelacker hand-made shoes from Budapest.

It is common in countries like England or in the USA to get shoes in different sizes, length and width that is. Somehow on my East eats West-trip my feet got wider and therefore I had to look for wider shoes. So I ventured recently to shoe-shops across Zurich and nearly lost my mind. My question if a shop stocks shoes in different widths was mostly greeted with a blank stare from the staff. One staff proposed that I try all the different shoes they have to see if one fits! Finally, in a over 100 years old shoe-shop called Gräb I finally found very classic shoes that fit me snugly. The shoes are handmade by the German company Heinrich Dinkelacker and they produce their shoes by hand in Budapest (home of a long-gone but famous shoe-industry). And as you can imagine are those shoes not exactly cheap. But I learned that people with wide feet cannot be choosers. Better to have expensive shoes instead of shoes that hurt.

http://www.heinrich-dinkelacker.de/

Oetenbachgasse in Zurich: from dull to lively

Picture: Enea Garden Design Shop.

Oetenbachgasse off Bahnhofsstrasse and below Lindenhof used to be a quite and dull and quite little street in Zurich. Due to new shops, from Enea Garden Design to Oetenbach 11 furniture and bar to Ojo di Agua, an Argentinean wine and beef shop, the little street is quickly developing into a trendy and pleasant little side street.

Switzerland – a schizophrenic economy

Picture: The Swiss Re Insurance Centre in Rüschlikon

Professor Silvio Borner of University Basle painted Switzerland at a recent presentation as a schizophrenic economy. Here are his insights:

After 150 years without war Switzerland has the highest asset rate per head in the world. With its internationally competitive banking, insurance and pharmaceutical sectors it attracts a lot of foreign investment as well. With UBS, Novartis and Credit Suisse it has some of the world’s leading companies. On the other hand Switzerland has not really grown since the 1970ies as the state still controls over half of the prices, similar to Japan. Some domestic sectors as agriculture and social welfare are highly unproductive. While the banking and pharmaceutical sector only employs 4.5% of the work force and generates 10% of GDP, the less productive sectors in contrary employ over 50% of the workforce. The less productive sectors are also over-represented in politics, effectively blocking structural reforms.

Professor Borner blames the big coalition government that is consensus-oriented to resist major changes. He sees especially the social welfare sector that accounts for 26% of GDP as the main culprit for the lagging growth: Switzerland in his eyes has just too many cows, hospital beds and post offices. On top of that Switzerland maintains a very costly wealth transfer system for the aged-people. As open and multi-national Switzerland may look, it still blocked the last Doha-round for trade-liberation because it wants to protect its farmers.

Bright economical outlook for Asian economies

I recently attended a presentation about the economical outlook for Asia at an investor’s forum in Zurich. Here is what I learned:

The huge inflow of foreign capital into China and India is slowly inspiring locals to invest as well. Urbanization drives apparently development and investment: e.g. in China 16mio. people per year move to the cities. Saving is still high in those countries but slowly people start to spend. Chinese and Indians also start to invest in pension plans for their retirement. So slowly a home-grown service economy is emerging with gaming and gambling on the forefront. For example is Singapore, after years of prohibition, gearing up its gambling plans with a huge resort on its Sentosa Island. Macau also is beefing up its operations with the vision to become Asia’s Monte Carlo. At the same time the travel industry is booming and people start to go on shopping sprees as easily witness in Hong Kong.

Analysts expect Asia without Japan to grow its GDP by 6.5% next year. Singapore for example is expected to grow by 6% and India by over 8%. The future seems to be rosy at least in the eyes of investors.

Zurich Autumn evening

Fraumünster Church on an autumn evening.