A Canadian in charge of Microsoft? Seven international predictions for 2014

From Brazil’s World Cup fiasco to a very messy year for European banks

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(Reuters; Getty)

(Reuters; Getty)

1. Brazil’s World Cup is a fiscal fiasco: Brazil has enjoyed a certain swagger over the past decade, as rising incomes and low unemployment fuelled a sustained burst of growth. But now, as it scrambles to host the world’s two largest sporting events, there’s a creeping sense that the country may have bitten off more than it can chew.

The FIFA World Cup kicks off in São Paulo on June 12; the Olympics will open in Rio de Janeiro on Aug. 5, 2016. Both are running behind schedule and over budget, and Brazilians appear increasingly angry that their government is lavishing billions on a dozen stadiums while basic infrastructure like roads and public transit suffers. A 50 centavo increase in São Paulo bus fares helped spark huge street protests last summer that disrupted the FIFA Confederations Cup, and similar protests look likely during June’s festivities.

Splashy global sporting events seemed like a chance to show off Brazil’s go-go economy when they were granted years ago. But as growth sputters, they risk becoming a fiasco with a fiscal hangover for decades to come. In November, a crane rushing to finish the stadium that will host the World Cup opening match collapsed, killing two construction workers; in December another World Cup stadium sprang a roof leak less than a year after completing a $500-million renovation. As both high-stakes events draw near, the cracks are showing—in every sense of the word.

(Shutterstock)

(Shutterstock)

2. Scotland votes ‘no’ on independence: On Sept. 18, 2014, Scottish voters will answer a referendum question more than 300 years in the making: “Should Scotland become an independent country?” Hanging on the answer are several billion-dollar economic questions, the biggest of which is ownership of the North Sea oilfields and their associated $19 billion in annual tax revenue. (Geographically, nearly 90% of reserves reside in what would become Scottish territory.)

Nine months out, polls are wildly variable, but most put the No campaign in the lead. As always in Britain, you can count on the bookies for the last word: both Ladbrokes and William Hill bookmakers now offer 5-to-1 odds on a Yes vote—the longest since betting began.

3. Europe’s banks have a very messy year: The EU is scrambling to set up a new central watchdog that will police Europe’s banks, and a short runway promises a bumpy takeoff. Danièle Nouy, the French chair of what will be called the Single Supervisory Mechanism, has until only Nov. 4, 2014, to set up a new regulator to co-ordinate one set of rules for up to 6,000 banks across at least 18 countries. In the long term, a single regulator makes sense for Europe; but this year’s transition is likely to be a messy affair.

(iStock)

(iStock)

4. The Tea Party gets put on ice: The Republicans have just had a humiliating year, full of self-inflicted wounds and infighting over the government shutdown and debt ceiling impasse. Now the GOP leadership is reasserting control: the party has changed its nomination rules to discourage rebellious Tea Party candidates and warned mutinous congressmen to behave, or lose their committee seats.

The U.S. Chamber of Commerce has even announced a $50-million war chest devoted to nominating centrist, business-friendly Republicans and fighting Tea Partiers, bluntly stating that its goal is “no fools on our ticket.” On most fronts, it’s clear the party establishment is trying to reclaim its grip on the wheel, so look for a more orderly debt-ceiling negotiation this spring, and a slightly less colourful field of Republican presidential candidates as the 2016 race heats up.

5. China’s IPO dam bursts: China’s government imposed an IPO freeze on the country’s stock markets in October 2012 as part of a crackdown on fraud, leaving hundreds of companies unable to raise equity. That ban ended on Dec. 30 when five companies received permission to go public, with 50 more reportedly coming in January. But hundreds more are waiting in line for approval, and investors worry that the flood of new listings will harm valuations across the board as traders draw down their existing holdings to chase newcomers.

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(Stephen Lam/Getty)

6. A Canuck takes over Microsoft: Canadian Stephen Elop is the front-runner to replace outgoing CEO Steve Ballmer. Elop previously served as an executive at Microsoft before leaving to head Nokia. He understands Microsoft’s culture and, more important, gets mobile—the area where Microsoft needs to up its game.

7. The Datsun makes a comeback—in India: Nissan is looking to make a major splash in emerging markets with its newly resurrected budget brand. The Datsun Go, the first new Datsun since the 1980s, will launch in India early this year, with a sticker price of about US$6,500. If it sells well, the company plans to roll out its new compact hatchback in Russia, Indonesia and other countries where the middle class is growing. The company’s eventual goal: a Datsun for emerging markets that sells for as little as US$3,000.

One comment on “A Canadian in charge of Microsoft? Seven international predictions for 2014

  1. “[Elop] gets mobile” ROTFLMAO. Right. That would explain how he so successfully destroy Nokia. If Elop is put in charge of MS, then short MS.

    Reply

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