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December 4, 2001

Commercial Barter Industry Grows By Double Digits For Record Third Year

Industry Trade Sector Poised To Grow By More Than 20% in 2002

The International Reciprocal Trade Association (IRTA), a trade group representing the worldwide barter industry, announced that the total value of products and services traded by businesses through barter companies is anticipated to reach $7.87 billion during 2001.

This is an increase from approximately $6.92 billion in 1999, and the third consecutive year the industry has seen over 12% growth. The increase marks the barter industry's growing appeal among business owners and professional firms looking to generate higher volumes of business, conserve cash for essential expenditures, exchange unproductive assets for valuable products or services, reduce unit costs, plus open new outlets for excess inventory and unused capacity.

"Faced with the new economic realities of worldwide excess capacity coupled with the economic downturn, barter is building momentum as a dynamic and powerful competitive tool that companies can use to gain new customers, save cash, and improve profits," declared Krista Vardabash, executive director of IRTA.

According to IRTA, the aggregate growth in barter activity is expected to swell 20% or more in 2002 as companies increasingly incorporate barter solutions to reach new outlets, ensure against unsold stocks, and finance larger advertising campaigns.

(Information provided by IRTA.)


50-Year Cold War Adversary Becomes Ally

Russia has become a major ally in America's war on terrorism, and as the world's third-largest oil producer they'll provide the global economy with a diversity of energy supplies.

Under President Vladimir Putin, Russia is moving forward on its own. The revival started this year when Putin's government cut personal income taxes to a flat rate of 13%, and then passed a privatization reform that will allow the beginning of a normal market in non-agricultural land.

Putin wants his country to join the World Trade Organization, as China recently did after a 15-year effort, but Russian policies are a long way from qualifying. The country has no functional banking system, no dependable rule of law, and a legacy of default that left private creditors caught in the 1998 crash lucky to get 50-cents on the dollar.


Here And There. . .

  • For the first time in 30 years, payroll taxes will be assessed on incentive stock options and employee stock-purchase plans. The IRS has issued regulations that now require companies and employees to pay the 15.3% payroll tax on the exercise of incentive stock options and proceeds from employee stock-purchase plans.
  • With the recent China success in joining the WTO, after 15 years of negotiations, the U.S. is eyeing a doubling of the $16 billion in goods and services it sells a year to China. However, it's anticipated it will take 12 years to dismantle China's trade barriers...so doing business there isn't going to be a cake-walk.
  • Staggered by near-empty hotels and casinos, top resorts on Caribbean islands and the Bahamas are trying to lure back visitors with an $18 million marketing campaign. Motivation runs high as tourism accounts for 50% or more of many of the islands' entire income.

    Puerto Rico's government has purchased 10,000 airline tickets that hotels are giving away free, in combination with their own packages. Other government supports include an increase in the credit advanced to hotels for their electrical use, permanent subsidies for staff wages to lessen hotel layoffs, a 50% reduction in room taxes for hotels, and a similar reduction in gas taxes for airlines.

  • Less than a year after government officials projected budget surpluses as far as the eye could see, President Bush's budget chief now claims the federal government will likely be in deficit until 2005. The reason? A slumping economy that's slowing revenue growth amid stimulus bills and security- and war-related spending.

  • Never seen a copy of BarterNews? Go to our home page, www.barternews.com, and click through to the form for your free sample copy. (Due to shipping costs, offer available in U.S. only.)

  • FastChannel Network, a Boston-based company, has acquired Chicago-based eCreativeSearch...creating the world's largest online advertising delivery and commercial production network with a database of nearly 17,000 commercials.

    This year, FastChannel signed multi-year agreements with Westwood One and Interep's Radio Exchange. Westwood One is the nation's most sizable radio network, and a prominent producer and distributor of radio programming in the U.S.; Interep is the country's largest independent radio sales and marketing company.

  • According to Graham Parry, economist with Lehman Brothers in Tokyo, Asia will remain a source of deflation for the rest of the world, as China pushes hard to boost exports.

    Less expensive Chinese apparel is expected to rise to 47% of the world's export market by 2005, up from today's 18% without WTO membership. (The World Bank forecasts China's current share of the world export market will nearly double to 6.8%--from today's 4.8%-- by 2005 as well.)

  • PricewaterhouseCoopers Money Tree Survey reports that early-stage venture investments have dropped a substantial 78% in the first nine months of this year, down to $15.7 billion.

    Several concerned states are retooling business-development policies to help build capital pools, namely in the form of tax breaks to guarantee investors a rate of return.

  • Trade exchange owners looking for an easy way to motivate their client base and stimulate more trade activity among their clients can obtain a copy of the 15-year-old, proven, informational marketing tool--The Competitive Edge newsletter. E-mail bmeyer@barternews.com for a sample copy and details. (Be sure to include your complete mailing address in your e-mail...this is not an e-mail newsletter.)

 

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Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.