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Managing Working Capital Through Uncertainty

by Jiten Arora, Global Head of Sales, Transaction Banking, Standard Chartered Bank

Anyone hoping that 2012 would herald brighter economic horizons will so far have been disappointed. Economic stagnation is affecting both sides of the Atlantic, with extreme volatility in Europe. The effects of globalisation mean that no region is immune, but although growth in Asia, for example, has cooled, it has the policy tools available to rebound.

Despite anticipated growth of only 2.6% this year, which masks considerable differences globally, there is light ahead, particularly in emerging economies such as China that are likely to see some growth acceleration in 2013, supported by government policy stimulus. The dark clouds still sit over the west, however, as many economies are running out of policy tools with which to respond in the event of another shock. A potential rise in energy prices if, for example, relations between the United States and Iran worsen, ongoing challenges in Europe, lack of growth and huge government debt owed by the developed economies, equalling an average 105%  of their total GDP, combine to form a ‘perfect storm’ of risk facing the global economy in 2013.

In this environment of ongoing uncertainty, OECD and emerging market multinational corporations (MNCs) alike are focusing on developing markets in pursuit of growth and potentially greater resilience. The working capital and risk implications of their changing footprints differ however, as do the bank solutions they require to address them.

OECD Corporates

Supply chain financing and receivables services