FSG Conference 2023
‘The Risk of a Globalised World, What's the Next Step?’
Currently, we are living in a globalized society, but to what extent will this still be beneficial or even feasible in the future? The logistic world is coming to a standstill, taxes are being evaded, production is being forced back to its own country, see “America first”, and countries face the risk of being disconnected from the global payment system. Is it really such a nightmare, or can the globalized world still be saved? During the conference, we hope to be able to answer those questions.
The power of the global shift, what price will you pay?During the corona crisis, it became clear how fragile the global supply chain is. This also became clear by the war in Ukraine, where grain export came to a halt. The effects are felt deep in the economy. For example, the prices of many products in the supermarket have increased. What are the costs of this failing supply chain? Are there possible and affordable alternatives? Is a transition required from a just-in-time towards an economy with larger inventories? And if so, can this be done without noticing large price increases in production? The failing supply chain and a possible change in it creates many uncertainties in the economy.
Disconnection from an economic powerhouse.This will be about the consequences of excluding a world power from the payment system. One of the sanctions imposed against Russia is the ban on using the swift payment system. Interest on loans can no longer be paid by the Russian state so they can no longer fulfill contractual obligations. In addition, Russian companies can still trade with the rest of the world through detours such as China and India. What kind of constructions are set up for this, and is this a realistic option? Since we do not know how long the crisis surrounding Russia will last, we think it would be interesting to look at the possibilities and consequences of excluding a superpower in general. How does this affect our payment system? And how should we deal with this? What are the chances that this will happen in the future?
Tax evasion or tax avoidance, where to draw the line?Almost all multinationals have set up a multi-country structure to take advantage of tax regulations. Several obscure business structures are used to exploit legal loopholes. Many times, even before the loophole has been closed, another construction has already been set up. What are the current constructions and how are they discovered? What can governments do about this and is it worthwhile for them to act? The question of whether harsh measures should be taken is also important to consider. Is it possible that multinationals may seek out other countries with more favorable tax regulations? What role do accountancy firms play in setting up and/or auditing this? Where is the line between tax avoidance and evasion?
Inflation on the stock market: a nightmare or a fairy tale?We will address in what way the stock market is affected by inflation. What will the price increase expectation do to the stock market? A higher inflation rate means higher energy, transport, and raw material costs for many companies. The prospects of the stock market are also worth considering. Is this reflected in the stock price? Additionally, investors are becoming increasingly aware of the concept of ‘value’. Investor preferences are changing. Investor preferences also change as a result of higher interest rates due to rising inflation. For example, a value stock (shares of companies that are relatively low- valued, have been around for a while and do not grow very fast), often outperforms a growth stock when interest rates rise and the economy grows less rapidly.