Based on a vision formed not only through the attentive study and analysis of global socio-political and financial dynamics, but his in-depth, direct familiarity with many relevant situations and geographical areas as well, Dante Roscini, Professor of Business, Government and International Economy at Harvard Business School, gives a broad overview of current – and not only economic and financial – world dynamics.
Beginning with the extremely current theme of emerging markets and explaining why the BRICs have in recent months gone from being the promised land of capital and gains to “fragile” regions, Roscini notes that although we use friendly acronyms and definitions to simplify complex situations, we still need to understand what opportunities actually remain on these markets. “Certain countries undoubtedly present many risks, including those arising from governance issues and the difficulties of doing real business in the muddle caused by bureaucracy or the local social situation. Many of them,” argues Roscini, “still need to rely on significant financial requirements, so much so that there was been another significant surge in bank lending recently. It is no coincidence that these are economies to which European banks are highly exposed,” he remarked.
Roscini discusses China and Japan in depth: two sides of the Asian coin, economies and societies that are so close and yet so very different. “China’s economic growth is slowing, in part due to the fact that consumption, although stimulated, is still far below figures in Western countries. There are many investors in the country with vast capital, but the efficiency of these investments is down. The need for change is clear. This will all be dealt with through structural reforms. “Nevertheless,” the Professor adds, “we are still talking about a country that was able to create an immense middle class and that is the first or second most important business partner to 78 nations.”
This means we will be hearing about China a lot and for a long time, while the breaking news is the return of another name that used to make worldwide business headlines: Japan. The country’s comeback is mostly the merit of Prime Minister Shinzo Abe and his Abenomics, which can be summarized in three main steps: “Tax stimulus equal to 2% of GDP, the depreciation of the Yen and the implementation of a series of structural changes that aim to make the Land of the Rising Sun competitive once again.” And the colossal Japanese public debt, against which even Italy’s pales in comparison? “It is mostly held by the Japanese themselves,” Roscini notes.
And last but not least, the inescapable USA. Roscini – who trained as a nuclear engineer but boasts ten years of experience in the field of finance, expertise in capital markets and a host of published articles – explains how the country that created the crisis that sent chills around the world has, in the meantime, made a substantial adjustment and brought the situation back under control. “Housing prices are rising, mortgages cost a lot less and banks have resumed lending to businesses. There is a lot of liquidity and we are seeing a surge in M&As. The feeling is that we are going through an expansion stage and, for this very reason, our interest lies in understanding how much space is left for recovery and how far we are from potential GDP.”
Dante Roscini earned his MBA from Harvard Business School and holds a summa cum laude degree in Nuclear Engineering from La Sapienza University in Rome. He was European Manager of Goldman Sachs’ Equity Capital Markets Division, then Global Manager of the same division at Merrill Lynch. He later he served as CEO and Country Head for Italy at Morgan Stanley. Roscini has extensive business management experience in the fields of strategy, finance, planning and budgeting, risk management and human resources. His specific area of expertise is global capital markets, as he has personally managed several privatization processes and international stock offerings – many of which were pioneers for their kind – contributing to the creation of new financial instruments and modus operandi on capital markets.