Thomas Faranda, CEO, Faranda & Associates

The European Union will fail within the next 10 years, according to keynote speaker Thomas Faranda, who addressed the IAMC Spring Professional Forum on Monday, March 5, on Amelia Island. This was just one of several "global realities" Faranda encouraged attendees to consider as they think about their organizations and industries in the future. More specifically, as corporate real estate executives consider global project locations, they should entertain his thoughts on what lies ahead, because they could alter current thinking about where future projects might be sited.

As for the EU, Faranda predicts Germany will bolt first, followed by France.

"GDP growth is very slow in those markets compared to the rest of Europe," Faranda noted. "There is a tremendous amount of unrest."

Don’t look for big surprises out of Latin America in the next 10 years, said Faranda, and forget about the notion of a United States of Latin America. With the exception of Mexico, Brazil’s industrial base (aerospace and automotive, to name two standout sectors) and Central America’s success in certain sectors, the region is not seeing foreign direct investment flows at the rate of other global regions. This may have to do with the region as a whole "not taking of advantage of its young people," he posits. But it also has to do with investors’ patience wearing thin.

IAMC Spring Professional Forum on Monday, March 5, on Amelia Island

"[Latin markets] borrow all the time and can never pay it back," he pointed out, referring to multilateral agency investors. "Everyone is mad." Still, plenty of corporate investors in facilities, such as Intel in Costa Rica, are satisfied or more so with their investments, and IPAs throughout the region are fixing much of what ails their areas.

In Canada, look for Alberta to secede from the federal union of provinces before Quebec ever gets around to doing so, Faranda offered. Revenues from the western provinces’ energy and natural resource sectors are heading east, little comes back, "and they’re getting tired of it," he explained.

The Middle East is due for "a meltdown" according to Faranda, which is somehow easier to swallow than other of his observations. In a nutshell, it’s a case of "camels to conglomerates and back to camels," he says of the region’s high growth rate in some parts and strife in others. As for oil, which Faranda says is keeping the region together for the time being, look for $100 to $150 per barrel prices by 2015 — and a dwindling supply.

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"The Pan-Asian marketplace will surpass the EU within 10 years," said Faranda. "The GDPs of key markets are close to surpassing that of the EU. China’s growth rate is about 10.7 percent, and the government is trying to slow it down. The government knows that if it cannot control growth, it could face revolution." But not before the 2008 Summer Olympics in Beijing.

Japan will continue to benefit from China’s economic growth. "They don’t like each other, but they both want to get rich," noted Faranda. And be careful in the financial arena in Japan, he added, noting that 30 to 40 percent of the banks are insolvent. "China and Japan are very into saving face. To admit to banking problems and the need for a fix is a nonpolitical possibility."