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Trust

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It’s all a matter of trust, and, frankly, the people don’t trust you. “You” refers to the government, big business and the media. The lack of trust applies to a huge assortment of entities.

It starts with the present federal government administration, including the President and his vast assortment of gurus. It continues with congress and the judiciary, state and local governments. It extends to big business concerns such as the defunct Enron company, some auto and oil industry firms, numerous banks, several Wall Street investment brokerages, behemoths including AIG, and specific claim-dodging insurance companies. The list goes on ad infinitum.

Government officials of all stripes, Chief Executive Officers (CEOs), their business executives and media moguls better wake up and change their ways. Past history has caught up with them. It’s a history reeking from failures, lack of oversight, corruption, fraud, greed, lies, shams, gimmicks and outright incompetence. The people grow weary of it all and are becoming angry. A restive populace indicates a desire for change, but this time people want the right kind of change.

Things folks would like to change run the gamut from the simple through the complex to the sublime. Let’s consider a few examples starting with a simple one like a typical ad offering a product on sale for $19.95. Why not say it like it is? The people know that the item is not really on sale in the first place, and that it is actually rounded off at an out-of-pocket cost of $20.00. They are not impressed with the ploys and gimmickry employed with slick sales tactics. In fact, they find these rather tedious and disgusting. Again, a newspaper subscription promotion offering the Sunday paper for $1.00 a copy per month for a full year sounds good, right? The catch is that one must pay for the subscription by allowing the newspaper to debit your credit card for payment. Otherwise the price increases from $4.00 to $6.25 per month. Of course, the promoter does not divulge this information until the potential customer is asked for their credit card information. Then the subterfuge becomes clear, and the client exhibits a degree of irritability at having been temporarily duped. It all ends in a waste of time, effort and no sale. Now some people would call these shrewd business tactics, gimmicks or ploys; others would label them as they are – deceit or outright lies.

There are other simple business gimmicks (let’s call them little lies) that people would like to change as well. The favorite deceptions of the business community are the rebate versus a straightforward, simple discount; the “plus postage and handling” ploy; and the usurious interest rates and excessive overdraft fees on credit cards by banks. We have all encountered these odious practices and have acquired a built-in aversion to them. The business community should reconsider these gimmicks and eliminate them. The majority of their potential customers have already done so in their own minds.

Some of the more complex things that folks would like to change might be exemplified in   the many pork barrel projects inserted into numerous hand bills passed by our politicians at the various levels of government. As any past president or governor can testify, the line item veto is needed here in order to defeat the pork barrel riders attached to valid legislation without vetoing the entire hand bill. Does the “bridge to nowhere in Alaska” or the “$600 toilet housing with seat” for U.S. Air Force aircraft ring a bell with anyone? Of course, our elected politicians would never consider allowing the line item veto to become law. That would ruin their pork barrel tactics; it would take the cover off their deceit and wholesale hypocrisy. Ah, but there is always the next election at which the electorate can level the playing field by eliminating those politicians deserving of censure and rebuke for their misdeeds. The hypocrites involved in such shenanigans seem to forget that they will ultimately pay the price. Admittedly, however, too many of them get away with their deceptions for too long a time before justice catches up with them, if it ever does.

Government is not the only culprit. What of the oil industry’s artificially inflated gasoline and oil prices, especially as a prelude to seasonal climate changes, long weekends and traditional holidays – are these prices possibly manipulated by oil company executives just as they are by the oil producing nations? This manufactured price inflation is only superseded by the outright greed exhibited at annual bonus or retirement times by industry CEOs.  

One of the things people would like to change that has been getting a lot of attention lately is the health care program. This issue and attempts to resolve it border on the sublime. Yes, all agree that health care reform is needed and that no one solution will satisfy all of the people. Yet we must ensure that in trying to correct the ills of the past, we don’t incur even greater flaws in the future program. Formerly, the insurance companies controlled too much; at present they still do; in future they better not. Additionally, hospital and doctor fees have been outrageously high and must be tempered and moderated. The people, too, must be educated to impose self-discipline so as not to abuse the new system that will eventually be established. And most important of all is that oversight must be established and enforced to keep everyone relatively honest.

The Obama Administration and Congressional Health Care Proposals all claim that their respective plans will be paid for out of savings from the current health care program, primarily MEDICARE. This is indeed a wild assumption, and there is no reason to believe that it will be so. Fraud, waste and abuse have not been stopped over all the past years of the currently existing program and won’t be stopped by implementing any new health plan. Why is this the case? Corruption, waste and abuse will continue because of human nature. Even if strict oversight is established, people in government, business and citizens-at-large will find ways to defeat the system and continue their wasteful, abusive and corrupt ways. Wherever people and money are involved, fraud, waste and abuse will follow. The best we can hope for is to keep some modicum of discipline and preventive control.

Equally sublime are unsubstantiated assertions of racial discrimination, liberal claims of conservative obstructionism, and conservative claims of democratic socialism regarding the health care issue. These are all balderdash. The liberal and conservative entities are simply pursuing their separate agendas rather than searching for ways to compromise and come to agreement. The liberals promote their relative agenda of universal health care for everyone and include a public option, complete coverage for abortion, contraception, sterilization, human embryonic stem cell therapy, euthanasia and assisted suicide. The conservatives want universal coverage as well but oppose the public option for economic reasons and all of the other dubious and controversial coverages on moral grounds. They do not want tax dollars used to promote those efforts which they consider to be morally wrong and intrinsically evil. The quest for compromise and agreement continues on the health care issue, as does polarization of liberal and conservative political and business positions. Sooner or later a solution will be reached through compromise. Hopefully, the compromise will overcome all the sublime arguments and will result in an improved, economical and morally acceptable health care plan for all with adequate oversight to prevent, or at least subdue, fraud, waste and abuse.

Now let’s get back to the primary issue of trust. It is not so much the President and CEOs that cause our disbelief, although they are not exempt. It is, rather, all the President’s men and corporate business executives in general that contribute to the public’s mistrust. It is the President’s corps of operatives and gurus with their past extremely liberal or even radical histories and their present hidden agendas that contribute to the public’s suspicions as to the administration’s true motives and goals. As a consequence, those same suspicions apply to President Obama himself, since he appointed his cabinet and collection of gurus. As for business in general, we the people have always been wary of its hypocrisy and sleazy, deceptive practices. Where else did the warnings “buyer beware” and “get it in writing and signed” originate? “By their works you shall know them.” Therein lies a clue to the people’s mistrust. A greater degree of transparency by all concerned would help to reduce or eliminate that mistrust.

In an effort to be transparent, the President tries to explain and clarify his position on each important issue facing the nation with frequent media events and public speeches. Yet these are unconvincing; they amount to overexposure and information overload. He is trying too hard. If his positions on the issues are so good for the people and the country, why aren’t they obviously so? Why does he feel that he must convince us of their worth? Why is it that half of this nation’s people don’t believe him?

They don’t believe him because it is a matter of trust. The people are suspicious and lacking in trust of President Obama’s administration, and he who leads it, because the final results of the administration’s initiated actions on the important issues are still pending. President Barack Obama talks a good story, but words are cheap. Shakespeare expresses it best: “. . . truth hath better deeds than words to grace it.” Earning the people’s trust depends on achieving positive results on critical problems such as health care, the economy, jobs, trade, the housing and credit markets, the deficit, and successful handling of the Afghan and Iraqi Wars, for example. These issues and their outcome will determine whether the people’s trust will be bestowed or withheld. All of these matters, and more, are currently unresolved. We shall have to wait and see how things work out regarding the critical issues of the day. Meanwhile, doubt and mistrust prevail.

Despite all the suspicion, fear and anxiety, the President and his administration, congress and the judiciary, CEOs, their corporate executives and the media must be given the benefit of a doubt – at least temporarily. They must be given time to prove that they are worthy of trust, once again. After all of the debacles and misfires of the past several years, this will be a monumental task. We wish them well in pursuit of their goals and the people’s trust, all the while keeping in mind the biblical admonition – “By their actions you shall know them.”

Amidst all the turmoil and doubt, one might be prompted to consider two possible prophecies – that of a young man pursuing his liberal vision, or one of an old man dreaming his conservative dream. Whichever prophecy is realized, we must not sell our souls to the devil, yet all must take a stand and abide by it. We, the people, must choose wisely. We must caution our government, big business, and the media to take heed lest past and present foul deeds incur the people’s wrath and lead to anarchy. The powers that be must beware of what changes they institute lest they reap the whirlwind. And reap it they will if they do not regain the people’s trust. They must remember the prophet Jonah’s warning to Nineveh to repent. Armageddon draws near.

Economy

St. Petersburg Forum Offers Unlimited Business Opportunities

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The 24th St. Petersburg International Economic Forum (SPIEF’21), unique business forum that is highly expected to bring together politicians, corporate business directors and investors from different parts of the world, is set to take place June 2-5 as the epidemiological situation begins to stabilize in Russia.

That however, the Russian Federal Service for the Oversight of Consumer Protection and Welfare (Rospotrebnadzor) with organizers promise everything in its power to ensure that the event is held with all the necessary measures in place to prevent the spread of coronavirus, and strictly in compliance with the recommendations given by the World Health Organization (WHO).

Roscongress Foundation, the organizer, says on its website that it has decided to create new infrastructure for comfort and safety of participants in view of the coronavirus pandemic. For instance, PCR test conducted at access to the venues, catering, sanitizing the premises, and providing participants and staff with personal protective equipment.

Thermal imaging control will be provided. Medical stations at the venue provided with the necessary equipment and medicines. There will be ambulances and resuscitation vehicles, including teams of English-speaking doctors. All spaces of the site equipped with air recirculation units and decontamination devices, among other measures for all participants visiting the events in St. Petersburg city.

Hans Kluge, Director of the World Health Organization (WHO) Regional Office for Europe, together with Anna Popova, Head of Federal Service for the Oversight of Consumer Protection and Welfare (Rospotrebnadzor), will hold a special briefing for participants on pandemic situation and its control in Russia and around the world.

Kremlin Spokesman Dmitry Peskov told the Russian local media that President Vladimir Putin plans to take part in the plenary session of the St. Petersburg International Economic Forum (SPIEF). “But Putin will be there in person,” Peskov reaffirmed his earlier statement, and further informed that in-person forum will be held in strict accordance with health and safety measures, the president received the first vaccination shot on March 23 and the second on April 14.

Over the years, this forum has strengthened multifaceted business ties, facilitated broadening relations and the development of cultural dialogue between Russia and many foreign countries. According to Roscongress Foundation, a number of foreign countries, keen on making solid business presentations and equally seek partnership opportunities for mutually beneficial cooperation, have already registered their participation.

Traditional inter-country business dialogues are planned as part of SPIEF featuring representatives of business communities of Italy, Germany, France, the United States, India, Africa, Finland, Japan, Latin America, Middle East, as well as the EAEU-ASEAN business dialogue. Under the umbrella of SPIEF, international meetings in business room format will be held with the participation of representatives of Roscongress Foundation’s international partners and businesses in the corresponding world regions.

Apart from the main business programme, SPIEF will also host the SME Forum, Youth Economic Forum, SCO, BRICS and ASEAN events, B20 Regional Consultation Forum, Creative Business Forum and Drug Safety and Security Forum, as well as events on Arctic and African agenda.

The central theme of the Forum is A Collective Reckoning of the New Global Economic Reality. The business programme includes more than a hundred events divided into four tracks touching upon the issues of global and Russian economy, as well as social and technological agenda.

Joining Forces to Advance Development is the key track of the business programme. It includes sessions on economic recovery and international cooperation, discussions on Eurasian integration, transformation of global trade, effectiveness of business during the pandemic, global energy market, recovery of food market, and sustainability of national healthcare systems.

The second theme block of the business programme focuses on national development targets, the anti-crisis agenda for strengthening long-term potential of the economy, investment climate in Russian regions, shaping of Russian research and technology space, development of the financial market, creation of circular economy, and functioning of strategically important industries.

Discussions under the New Technology Frontiers track will feature the topics of international cooperation in science, digital sovereignty and information security, healthcare digitalization, tech ethics and others.

The Human Factor in Responding to Global Challenges theme block will talk about cultural codes of the new reality, collaboration in international education projects, and new skills and employment models in a post-COVID world. Moreover, there are sessions on the development of creative industries, sport and education.

The Russian Small and Medium-sized Business Forum is an annual event held as part of SPIEF to discuss the current state of small and medium-sized businesses and measures to enhance their role in the Russian economy. It is, however planned that the focused sessions encompass the key aspects of support and development for small and medium-sized enterprises.

“Small and medium-sized business is the foundation of the economy and a key indicator of the current status of socioeconomic development. As we are looking towards the future, it is essential to develop and implement long-term programmes that will give a new impetus to the development of SMEs,” said Anton Kobyakov, Adviser to the Russian President and Executive Secretary of the SPIEF Organizing Committee.

“We plan to discuss all the proposals in details at the SME Forum because they determine how small and medium-sized businesses will thrive in the future. Small and medium business is the largest employer and a guarantor of socioeconomic stability and the dynamic development of society. The development of entrepreneurial education, cooperation among small and big businesses, and the development of youth entrepreneurship, among other issues,” he said.

With a similar view and position, SME Corporation CEO Alexander Isayevich said “Entrepreneurs need to understand how to work in the new economic realities and what support measures the state will continue to provide. In addition, it is crucial for entrepreneurs to have high-quality non-financial services. The sessions, attended by a wide range of experts, will help to find optimal solutions not only for the SME sector, but also for the entire economy. We always advocate an open dialogue with business, as this is the principle that underlies our new development strategy.”

As part of Youth Day programme, the most promising undergraduate and postgraduate students, as well as young scientists from Russia’s leading universities and scientific organizations will participate in the St. Petersburg Forum.

“It has become a good tradition for talented young scientists and students to take part in SPIEF, it is a leading business event that brings together unique experts from all areas of the economy. Participation opens up limitless opportunities for young people to exchange experience and gain new knowledge,” said Andrey Fursenko, Aide to the President of the Russian Federation.

There will also be large-scale different cultural events. For instance, Qatar plans an exhibition – “Qatar between Land and Sea, Art and Legacy” – this exhibition is a great opportunity for people from around the world to explore the very precious elements of the Qatari and Middle Eastern tradition and lifestyle, such as handmade carpets and artifacts, pearls, and antique jewelry, which makes it a magical journey through history.

St. Petersburg forum is highly-considered as an important step forward in developing and strengthening investment‑related collaboration. As one of the biggest economic forums in Russia, it yearly gathers several thousands of participants, including representatives of ministries and government bodies, financial and investment organizations, startups, and tech and innovation companies, and representatives of the media.

Despite the adjustments made due to the pandemic, there are for all participants interesting and useful initiatives for comprehensive interaction as the key objective is to create opportunities and friendly conditions to consolidate links between Russia and the world.

About the SPIEF’21 Organizer: Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of international conventions and exhibitions; and business, public, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

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Economy

On the Role of Sovereign Wealth Funds (SWFs) in Supporting a Green Recovery

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Perhaps one of the few areas where a consensus is crystallizing across the major powers of the global economy is on the urgency of advancing the green environmental agendas and reducing the carbon emissions. Global institutions such as the IMF are emphasizing the need for a green recovery to take hold in the world economy as the global community emerges from one of the starkest crises in the past century. The world’s sovereign wealth funds as a powerful force in international financial markets could play a vital role in advancing green projects as well as green finance. This is particularly relevant for Russia, where the National Wellbeing Fund could be partly invested into green financial instruments.

At this stage there is a number of global networks and initiatives that bring together the world’s largest institutional investors, including sovereign wealth funds, to drive the green investment agenda. These include European Long Term Investors, the Institutional Group on Climate Change and the Network on Climate Risk. Some of the wealth funds from the Middle East, including the Abu Dhabi Investment Authority, the Kuwait Investment Authority, the Qatar Investment Authority and the Public Investment Fund of Saudi Arabia, are signatories to the One Planet SWF Framework. The meeting held by the International Forum of Sovereign Wealth Funds in 2016 “participants highlighted that SWFs are particularly well-positioned to become trailblazers in green investment”.

Recent data and surveys reveal a growing integration of the green agenda into the decision-making and strategies of the world’s sovereign wealth funds. These were the findings of an inaugural survey of 34 sovereign wealth funds, representing 43% of the world’s sovereign funds, conducted in September by the International Forum of Sovereign Wealth Funds and the One Planet Sovereign Wealth Funds .

The survey reveals that climate-related strategies represent more than 10% of portfolios for 30% of responding wealth funds. The survey also found that these funds made 18 investments in agriculture technology, forestry and renewables opportunities in 2020 at a total value of $2 billion, up from eight investments valued at $324 million in 2015. Overall, according to the survey “sovereign wealth funds have invested more than $5 billion in agritech, forestry and renewables opportunities over the past five years as part of an increased push toward climate change-aware investing”.

Just over a third of responding funds (36%) have a formal climate-change strategy in place, with 55% of these funds adopting the policies since 2015 and 30% since 2018.

The survey came up with the following recommendations to wealth funds based on the survey findings:

· to adopt and implement climate-related strategies;

· to seek appropriate talent and expertise;

· to explore board member and executive education;

· to use metrics to show not only climate impact but also comparable returns and risk reduction;

· to communicate to all stakeholders the strategic importance of climate change;

· to partner with peers and international initiatives to share experience and generate greater leadership from within the wealth fund network.

The latter recommendation dovetails the recent Valdai Club initiative to enhance cooperation among the largest sovereign wealth funds against the backdrop of the Covid pandemic. In particular, in 2020 the Valdai Club together with Shafi Aldamer and Curran Flynn from King Fahd University of Oil and Minerals advanced the proposal to create a platform for the sovereign wealth funds (SWFs) of G20 countries to boost long-term cooperation, direct investments, and the formation of bilateral/trilateral/multilateral investment accords. The findings of this policy brief were included in the T20 communiqué, which encourages the G20 to promote “the creation of a platform that would bring together the sovereign wealth funds of its members, possibly in coordination with the International Forum of Sovereign Wealth Funds.”

Such a platform would encourage the G20 states to strengthen their economic cooperation, bolster mutual interests, improve multilateralism, and develop opportunities for their SWFs. Additionally, it would act as an emergency tool in easing the impact of a global crisis, such as the current COVID-19 pandemic, as it can be employed as an anti-crisis measure via the investments of the G20 states’ SWFs. One important venue of cooperation for such a platform for sovereign wealth funds could be the elaboration of green investing principles and benchmarks for the major sovereign wealth funds, which in turn would support the advancement of a green recovery in the global economy in the aftermath of the Covid pandemic.

As regards Russia’s sovereign wealth funds, most notably the National Wellbeing Fund (NWF), which by Q1 2021 has accumulated more than USD 180 bn in overall resources there may be a case for investing part of the liquid reserve into green instruments, including sovereign green bonds. In particular, the investment guidelines for the NWF may involve a formal target on the share of green assets in the Fund’s portfolio. These in turn may include corporate and sovereign green bonds from advanced economies as well as an allocation reserved for Russia’s corporate and sovereign green bonds. The latter would potentially deliver a significant boost to the development of Russia’s green bond market. Currently green bonds account for just 1.5% of total corporate bonds outstanding in Russia and the emergence of sizeable demand from Russia’s sovereign wealth fund would raise the potential growth for this very important market segment.

From our partner RIAC

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Economy

5 things you should know about the state of the global economy

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Is this the year we overcome the global economic crisis caused by the pandemic? Are our jobs in danger? Who has lost the most in the crisis and what can be done to recover? As the UN Department of Social and Economic Affairs (DESA) prepares to launch the mid-year update of the 2021 World Economic Situation and Prospects (WESP) report, here are five things you need to know about the state of the global economy.

1) US and China bounce back, but a slow recovery for developing countries 

While economic output in the United States and China is expected to grow robustly and lift global growth, many developing economies are not expected to return to pre-pandemic output levels anytime soon. The pandemic is far from over for most developing countries where vaccination is advancing slowly, and fiscal pressures have intensified.

2) The situation of the most vulnerable has become even more precarious

Lockdowns and social distancing measures resulted in large job losses in contact-intensive and labour-intensive service sectors, which predominantly employ women. The pandemic has also exposed the vulnerability of informal employment, which is the main source of jobs in many countries and which offers less job security, social protection and access to healthcare.

3) Global trade recovery is strong, particularly in Asia

Merchandise trade has already surpassed pre-pandemic levels, buoyed by strong demand for electrical and electronic equipment, personal protective equipment (PPE) and other manufactured goods. Trade in services remains constrained by restrictions on international travel. While exports from Asian economies have soared, exports from Africa, Western Asia, and the Commonwealth of Independent States has stalled.

4) The COVID-19 crisis has inflicted more harm on women and girls

This crisis disproportionately affected women, who suffered significant job and income losses, contributing to the worsening of gender poverty gaps. Burdened by increased home care duties, many girls and women gave up on schools, and the workforce altogether. Returning to school and work might take longer or may not happen at all for many of them, further widening gender gaps in education, income and wealth.

5) Countries need to do more to address the uneven impact of the COVID-19 crisis

There is an urgent need for countries to formulate better targeted and gender-sensitive policies to drive a more resilient and inclusive recovery from the crisis. Though on the frontlines of the pandemic, women have been under-represented in pandemic related decision-making and economic policy responses. The severe and disproportionate impact of the pandemic on women and girls call for more targeted policy and support measures for women and girls, not only to accelerate the recovery but also to ensure that the recovery is inclusive and resilient.

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