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I have recently returned from Cape Town in South Africa as a speaker at Exporta’s Africa Trade & Export Conference. The event was an excellent opportunity to share thoughts and opinions on regional issues with respect to liquidity management, payments, receivables and other relevant topics. As well as local bankers and corporates, organisations represented at the event included Afreximbank and Dutch foreign investment organisation FMO.

One striking feature in this region is the disparity between South Africa and its neighbours with respect to advanced solutions for supply chain finance. According to Standard Bank, some 95% of b2b payments in South Africa are electronic, putting the republic amongst the top tier of advanced economies in terms of IT sophistication in both the corporate and banking spheres. Yet this obviously strong positioning is not matched by South Africa’s neighbours, the very regional hinterland where South Africa’s major corporates are primarily looking to expand.

Certainly, local and regional southern African banks beyond the RSA require electronic solutions for payments and receivables management that will be expensive for them to develop themselves, given the required level of investment. Yet to fully benefit for the positive ripple-effect of South Africa’s growth, such technological leaps are required, meaning many are turning towards outsourcing solutions.

Rather that return directly to London, I flew to Mauritius. This is an intriguing country, not simply due to its exotic charms or heady mix of African, Asian and various European cultures. Mauritius is rapidly reinventing itself as a southern hemisphere hub for outsourcing payments, trade services and banking. Such a claim has been reinforced by the government’s development of Cyber City, a state-of-the-art communications facility. Cyber City means that Mauritius now has world-class telecommunications through both satellite and the fibre-optic cables linking Europe, Asia and Africa. Indeed, I came away with a sense that Mauritius is more business-oriented, more international and more dynamic than I had ever imaged from its holiday brochure image.

Dominic Broom
Managing Director
The Bank of New York Mellon

Are you on Facebook yet? I for sure am. And by looking at the statistics it is quite likely that you are too or that you will become a user of Facebook within a not to far future. I am quite sure about this since there are today more then 400 million people registered on Facebook and the growth rate is very, very impressive. US members increased with 140% in 2009 and there are now 101 million US citizens using Facebook. In my home country (Sweden) 1/3 of the population are members on Facebook and for Iceland the same figure is 50%. So the chances are that you too is on Facebook or at least are thinking about it.

I guess there are a lot of reasons for being on Facebook, but for me it has become an important tool to keep the contact with all of the people I met during my four years in China. It is not contact in the sense of a personal mail or a telephone call, but it is still very much better than it would have been without Facebook.

It also seems as if mail is getting a competitor in Facebook. When confronting my daughter why she has not answered the mails I sent to her she looks at me with sad eyes and explains to "old" daddy that "no one is using mail anymore, if you want to send me something you have to use Facebook".

According to a consultant I met recently, Facebook will to some extent replace a CV in the future. Employers will start to ask to become friends on Facebook with the applicant, because you can not hide who you are on Facebook. I am not sure about this, but it would not surprise me if.

The Benche really wants to be in the forefront, so of course you can find the Benche on Facebook. There are in total 131 fans of the Benche on Facebook right now, but considering that there are 2,800 members on the Benche, we could be very many more than 131. And what are the benefits? Well, by being a fan you will be notified on your Facebook wall page whenever there is an update made on the Benche. Not all of the posts made, but at least you will get a heads up whenever there are some news posted by the Benche team. And now and then there will also be a request to the fans to step in to a post or two if an answer is missing.

Head over here and have a look at the Benche fan page and why not click the button "Become a fan"!

This year’s conference saw some 180 to 190 delegates, more than half of them from banks, the insurance industry or other financing intermediaries. Last year the community discussed to which extent trade finance suffered from the turmoil, this year the focus was clearly on economic outlook, supply chain

financing, Islamic banking and the trade finance programmes of multilateral organisations.

Economic Outlook
Before the outlook is presented I think it is worth to see how some economists interpret the great crisis of today.

Through the graph you could start to think: what the hell are we talking about? Of course, if you look at the total amounts the picture looks a bit different: Japan with losses of approx. USD 800 bn, the US sub-prime crisis with approx USD 1,400 bn in the US and USD 4,000 bn worldwide.

Anyway, economists believe that economy will recover and that the shape of this recovery will be comparable to a “U” or a “W”, but in no way to a “V”. After a year of recession in NAFTA, Western Europe, Japan and Europe all expect a recovery in GDP growth during 2011 and 2012 as well. The argument is that China and the EM’s outside Europe are the major drivers. We can only hope that those guys are right, as we also have to consider that

• consumer spending will be effected by rising unemployment

• house markets will not recover soon

• banks are likely to consider their RWA appetite

The argument I like to follow most is: our clients state that order income is significantly recovering. So, let us be optimistic.

Supply Chain Financing
For years now banks and service providers have been talking about it. What we see in most cases is not that overwhelming. Some banks simply use this label when their product range (for example “Receivables Financing” or “Order Financing”) is linked to a client’s physical supply chain of order, purchasing, production, etc. calling it “Financial Supply Chain Management”. For me having worked more than 25 years in this industry this is really nothing new. So, what has been really achieved? E-invoicing and buyer’s electronic confirmation to their bank enables them to provide a discounting offer for receivables. Supply chain financing is so far only possible if the buyer accepts that his financial strength is used. To compare the bank’s offers for SCF means to compare the different e-platforms.

Islamic Banking
The discussion around this topic was helpful to see the most important difference to standard banking and the consequences for the clients. One example I like to mention to give you an idea: You request your bank to finance the purchase of a house. To be in line with sharia law the bank will buy the house for let’s say USD 100,000 and as you request a financing for 30 years the bank will sell it to you for USD 300,000 (30 x 12 equal instalments – no interest). So far so good. A year later you need to leave the country and you would like to sell the house? Well, as per contract you still owe the bank: USD 290,000. What a pity that the value of the house is approx USD 120.000.

Of course a lot more things could be told from this year’s Trade Finance Conference in Dubai, but do any of you have the time to read more? If you’d like to chat a bit on this topic, please feel free to do so.
Br, Hans

It was my daughter’s birthday the other day. I went to Toysrus on the Pudong side of Shanghai to buy her a present. It took me 20 minutes to find that glittering, pinkish rocking musical set with a piano key board and a microphone. That was it. It was Saturday and I was early. The store was half empty. No stress at all. At the cashier, it struck me that the glittering pinkish instrument was battery run. I glanced quickly through the box to see whether any battery was included. No immediate hit. So I posed naturally the question to the cashier. “By the way, do you know whether there was any battery in the box?” I did not expect really that he would know. But you never know. Just in case. May be the same question has been posed by someone else, I thought. Well, here is the answer I got
“But Miss, I am only a cashier!”

That is the answer right to the point. In fact, I still do not know whether he knew or not. But that was not what mattered. What mattered was that he was not in the position or supposed to answer this type of question, no matter how plain or simple that was and no matter whether he had the answer or not. It was a matter of principal and of definition.

I thought about it for a while on my way back. In fact, I have made similar observations on a number of occasions during my 6 months here. People work gladly within the boxes and spend time defining them, dividing them and defending them. To think and step outside of the boxes, no matter how easy and natural, is just a too big step.

Yesterday as I sat down with a glass of wine to watch the snow fall outside the window I thought back to how my love affair with Japan began. I looked up at the piece of calligraphy on my wall which wisely states in the Zen tradition that “Everything is But a Game” and remembered one of my encounters with the business world in the land of the rising sun.

A fellow exchange student had been invited to a meeting to discuss participation in a project that the university wished to set up and had asked me to come along to translate if required. The project group was a mixture of faculty and students with one professor leading it. As we entered the room everyone exchanged cards, some official university cards on stiff cardstock, and others from Students taking part who had printed their own at the machines that were available on most street corners in town.

The exchange of cards itself was a ritual. The steps were decided, the rules were fixed, but as so much of the Japanese culture the rules were handed down from person to person and remained hidden to the uninitiated. Don’t touch the front of the card. Hold it with two hands at any time. Ask confirmation as to how the name is read. Imagine the card is at least a kilo in weight –this last one avoids you waving it freely or using it to point at things out of the window of the meeting room.

My colleague was sadly only partially initiated. He knew he had to bring cards with him, but as he pulled the duly warmed and slightly curved cards from the back pocket of his trousers it was obvious that the meeting would bring little fruit.

People took their places, senior away from the door, junior towards the door. The direction of seniority in the room was important and is a system which can be traced back to the construction of a traditional Japanese room. My colleague sat with a small collection of cards on the table in front of him. In an ideal world he would have placed them in order of seniority, but there is no point in being too picky…
The guy next to the guy in charge began to talk to us, asking us questions. It seemed to annoy my colleague that the head guy had slowly closed his eyes and his head had started to sag a little…he couldn’t possibly be sleeping…could he? My colleague began to fake a cough, in an effort to try and bring the guy he wanted to be talking to back to consciousness. He sadly received little recognition for his efforts –but he did get a very refreshing cup of tea as one of the junior members pro-actively interpreted the hint.

The deal-breaker was, however, his faux-pas with the pen. One of the members of the opposite team told us something interesting about his past experience. Of course, the only place my colleague could think of make a note of this was directly on the guy’s business card. As his pen headed for the card, the eyes of the junior members widened a little, as the tip hit the surface of the card a small bead of sweat started to run down the forehead of one of our counterparts and as he underlined his own text on the card the most junior member took in a sharp breath. In the Japanese culture, the written word represents the person. In tea ceremonies a scroll written by a Zen priest is displayed in the room, and it represents the person who wrote it. The same is with business cards. My colleague might as well have reached over the table and written his notes on the face of his counterpart!

The meeting came to an end and we once again had the chance to practice the delicate art of bowing and shaking hands at the same time without causing concussion in any of the participants. Surprisingly a phone call a few days later showed that my colleague had been successful in the meeting. They were impressed by the freshness which he brought and thought that he would be able to give input to the project that would differ from input from a Japanese perspective. The faux-pas had become the deal maker!