Connect with us

Economy

Uplifting Sustainable Development: The integrative improvement institutes project

Published

on

[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he word “sustainable” has acquired many meanings in recent years. However, in essence, the word means “able to keep going” and it is with this meaning which it is here applied to organisations and individuals as well as to their physical, social and cultural environments.

The challenges we face in our economies and societies in our divided unsustainable world are perhaps greater than at any other time. These challenges have arisen because of how we have been trained to think, plan and act as individuals and how we have applied this training to the way we organise and govern ourselves. We have thought, planned, organised, governed and acted as though our world is comprised of parts which can be separately exploited by humans and managed by us from one stable state to another. We have forgotten we are just one species in a complex natural world. We have tended to act without a sense of wholeness – without integrity. Meeting these challenges will require new approaches to how we are trained to think, plan and act as individuals and how we are trained to organise and govern. These new approaches will need to be based on our current scientific understanding of our world and the human mind.

How we think is not how we are trained to think!

Broadly, we tend to be trained in critical thinking. In educational institutions, at work and even at home we train what may be called our Critical Mind. We train people to reason in a disembodied way as though our minds were symbol manipulators like computers, unconnected with the remainder of our bodies and our physical, social and cultural environment. We train them to break problems down into parts, to put these parts into rigid categories with shared properties and to manipulate symbols representing these categories. We train them to hypothesise using these rigid categories ( thereby excluding all other possibilities) and look for a grain of the “truth” about these categories which is imagined to be “out there” in the “real” world and to justify that “truth” with propositions expressed in words or mathematical symbols joined together in accordance with the rules of logic. We train them to think in a straight line towards a conclusion. We train them as though the way we justify our thoughts – in logical statements – is the way we think. In short, we train people to think “inside the box”. We dehumanise reasoning.

The effects of this on our lives and work include:-

• People who are predisposed to be less comfortable with manipulating symbols tend to become alienated from the better justifiers.

• As justifications become more specialised the difficulty of communicating increases and trust decreases.

• We tend to become locked into our justifications.

• We make a habit of being critical first and thinking constructively second or not at all.

• We continue doing what has worked in the past even when circumstances change.

• Critical thinking based on different, crude and rigid categorisations often leads to unresolved conflict in groups and organisations. This unresolved conflict can surface later and undermine the group or organisation as may be seen in organisations in which management does not consult meaningfully with staff.

• Similarly, as individuals we can be left with unresolved internal conflict. This can damage the individual and others and lead to poor relationships and unhappiness.

• All this unresolved conflict leads to cruelty, unhappiness and inefficiency and hinders our creativity and performance as individuals, in groups and in organisations.

• Overall, this “parts” thinking is not compatible with the thinking necessary to achieve sustainable development, as explained by Paul Weaver in “The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21st Century” (pp.246-253).

For instance, he states:- “In the process of breaking down real world systems into parts, most of the links and relationships that are the central concerns of sustainable development – the links between the natural and social systems or between levels in hierarchical structures or between time periods – are severed and are not studied by the specialized disciplines. Relatively new academic fields such as resilience and complex systems theory seek to address these issues by integrating the social and natural sciences.” (p.250).

Critical thinking has produced and will continue to produce much knowledge of parts of the world around us but it is inconsistent with the integrative way in which nature, our bodies, brains and minds function. There is mounting evidence in our increasingly interdependent world that in addition we need to be trained specifically in something like NEW Integrative Thinking (NEW IT) which is consistent with the integrative way nature, our bodies, brains and minds function. While continuing to train in and employ critical thinking we need also to train what may be called our Integrative Mind of which our Critical Mind is a part.

NEW Integrative Thinking (NEW IT)

NEW IT is based on extensive research in Mind Science in recent years. Mind Science draws on work from the brain sciences (which include neuroscience, immunology and endocrinology); biology; ethology; computer science; social, evolutionary and cognitive psychology; physics; anthropology; neurophilosophy (a new science established with a view to building a unified science of the mind and brain); linguistics; systems theory; complexity science including self-organisation, chaos, uncertainty, and emergence; the philosophy of mind; the philosophy of science and evolutionary epistemology (a branch of philosophy concerned with the origin, nature, methods and limits of human knowledge). Based on this work the human mind may be defined as the process of the living human brain interacting with the rest of the human body, which is interacting with its physical, social and cultural environment.

Among other things this research has shown:-

• Our mind and reasoning are inherently embodied, that is, shaped by our bodily interaction within itself and with its physical, social and cultural environment.

• Most thought is unconscious and much of our reasoning is done when we are not conscious of its being done.

• Over a lifetime of experiences we develop a number of prototypes in our minds which are reflected in patterns in our brains.

• It is difficult to change these prototypes so solving novel and complex problems in a creative way usually involves redeploying prototypes from another domain to the novel or complex domain.

• The more prototypes we have (the broader and deeper our knowledge) and the greater our ability to trigger those prototypes, the easier it is for us to creatively address novel and complex problems.

• We tend to be simplifiers because we can keep only about four items, plus or minus one, in our short-term memory while we are working on other information.

(For a concise introduction to the Mind Science which underpins my work please see the interview with leading cognitive scientist George Lakoff about his and philosopher Mark Johnson’s book “Philosophy in the Flesh” at http://www.edge.org/discourse/lakoff.html. For an annotated bibliography relating to Applied Mind Science in the field of Integrative Thinking please see NEW IT Module 1 at http:www.integrative-thinking.com.)

While encouraging and applying critical thinking when appropriate, NEW IT is a process of habitually and almost automatically making connections to create a whole new picture rather than habitually and almost automatically breaking down an old picture into its parts. NEW IT may be thought of as a more comprehensive successor to lateral thinking and using multiple intelligences but, not surprisingly, is fully integrated, not an add-on extra. It is a practical application of Mind Science so is a form of technology but it is human-based rather than machine-based technology. It is a NEW way of thinking which helps us think “outside and inside the box” and integrate the two as we plan and act.

The process of NEW IT may be thought of as our wondering (W) about a situation, creating a narrative (N) connecting our wonderings and managing our experiences (E) in acting out our narrative. It is distinctive in that it helps integrate intuition, reason and imagination. It involves understanding and learning what our basic human needs and aspects of our human will are, what guides us in balancing those needs and will, clarifying what we have and what we want to set our goal, exploring possible connections when relaxed, arriving at a strategy to negotiate the change from what we have to what we want, devising tactics to advance the strategy, taking bold, assertive and timely action to achieve our goal, reviewing and evaluating our performance.

Becoming an Effective NEW Integrative Thinker (NEW IT) Is Not Difficult

For example, the SOARA (Satisfying, Optimum, Achievable Results Ahead) Process of Integrative Thinking in NEW IT includes a comprehensive set of aids to memory to help trigger connections in our minds, help us see analogies in unrelated fields and provide a way of self monitoring our thinking and acting. All these aids to memory are joined together in a meaningful sentence so the Process as a whole can be learned in about the time it takes to learn to drive a car (about twelve hours) and is easily remembered. With practice its application can become almost automatic. At all stages of the Process provision is made for learners to record their reflections and possible actions based on those reflections. People can be introduced to the basic concepts of the Process at almost any age. The Process is culturally neutral because it accepts the uniqueness of each human being.

With practice, applying the SOARA Process of Integrative Thinking becomes a habit which empowers people and makes easier our struggle to achieve successful outcomes on a life-long journey among possibilities. It helps us refine our perceptions, expand our horizons, sense and respond successfully to emerging trends and events. By helping us to make analogies from other domains it brings out and enhances our creativity. By helping us to always consider a comprehensive range of variables it ensures we always take others into account including our “customers” and stakeholders. NEW IT helps us and our enterprises thrive.

By helping improve our creativity and performance NEW IT helps us gain a sense of meaning, a sense of belonging and a sense of personal power. This is because NEW IT helps us reconcile our needs and wants and balance and integrate our thoughts, feelings and actions in harmony with our physical, social and cultural environment. In this way NEW IT helps us to a self-reliant state of mind from which we can work towards uplifting sustainable development and the better linking of life and work.

In all contexts NEW IT provides an essential ingredient for sustainable successful connections, relationships and interactions – a common basis for communication between individuals.

Against this background, the Integrative Improvement Institutes Project directly addresses our challenges in a novel way. It is designed to improve the well-being of people and their physical, social and cultural environments through low-cost adaptive diffusion, refinement and implementation of a unique bottom-up Integrative Improvement (II) approach for uplifting sustainable development.

II emphasises dynamic connections, relationships and interactions in line with our current scientific understanding of the world as tending to be self-organising with human beings whose minds are naturally integrative. II improves in a balanced, integrative and sustainable way the lives people already have. II involves training individuals in NEW Integrative Thinking and encouraging and facilitating Integrative Governance enabled by technology in all government, business and civil society organisations. II progress is measured by a Genuine Progress Indicator (GPI).

The project is at the stage of seeking people and institutions which would like to advance Integrative Improvement in the world. In line with the adaptive tendency inherent in the Integrative Improvement approach, the current draft plan is designed to adapt as other catalysts join as one of a maximum of seven founding members of the Federation Integrators Team of the first Integrative Federation (IF) or in other roles as the project evolves. Alternatively, start-up or existing business, government and civil society organisations may like to apply the Integrative Improvement approach in their own organisations now.

The current draft project plan is as follows:-

Aim:- Improve the well-being of people and their environments through low-cost diffusion, refinement and implementation of the Integrative Improvement (II) approach for uplifting sustainable development.

Strategy:- Establish an adaptive networked Integrative Federation (IF) of largely virtual Integrative Improvement Institutes (IIIs)) in a number of countries using the training modules and templates at http://www.integrative-thinking.com and complementary tools for uplifting sustainable development.

Outline plan:- Have one IF website for teaching, research and consulting in Integrative Improvement with a page for each Institute, for each tool and for research related to NEW Integrative Thinking, Integrative Governance, Integrative Improvement, Integrative Capitalism and Integrative Democracy. A catalyst in each of 7 countries would attract and train 7 people to be the IIIs Integrators Team (IIIsIT) in their country. Each Institute would attract, train and license 7 people with experience in 7 industries to provide personal contact in 7 local areas to further diffuse Integrative Improvement and, for a fee, train successive groups of 7 people from government, business and civil society organisations based on material on the IF website. These trained people would implement Integrative Improvement in start-up and existing organisations and help in the further diffusion, refinement and implementation of Integrative Improvement in line with the model outlined here.

Tactics:- Sense and respond adaptively to other catalysts and end-users/citizens as the Integrative Improvement Institutes “virus” spreads.

Other relevant project information is as follows:-

Catalysts:- A provisional list (this and the whole project is designed to adapt as catalysts join) of the sort of catalysts needed is: a) people from a range of countries and practical settings; b) people committed enough to obtain all the modules and learn about the processes; (Money raised goes to advance the Project.) c) people with institutional bases which would lift credibility and lower overheads; d) web builder and webmaster to provide and maintain the virtual presence of the Federation and its Institutes as per the outline plan; e) facilitator for meetings – mostly virtual; f) executive secretary; g) people to seek content for and coordinate the pages on the website under the headings “Institutes”, “Tools” and “Research”. Overall, fields, interests and skills will need to cover Planning; People; Market; Product; Money; Physical, Social and Cultural Environment.

Affordability:- The basic modules offered at www.integrative-thinking.com may be purchased and learned one at a time so they should be affordable by even the smallest and poorest organisation.

However, if even the existing low prices are not affordable one copy of each module and template can be provided at whatever price an organisation certifies it can afford. Special arrangements can be made if multiple copies are required so all involved in the organisation can learn the processes and thereby acquire a common basis for communication – essential for success in any relationship or organisation. Each organisation is invited to suggest the financial arrangement that would suit it best.

Time:- The material is in easily digested small “bites” with a page at the end of each group of “bites” on which the learner records reflections and possible actions. In this way busy people can keep track of their learning. Moreover they can retain what they have learned because there are aids to memory and revision sections built-in.

Practicality:- The material is designed to be learned by each learner applying it to a problem of their own so each needs a copy of all the material to retain and refer to in future. It is designed to be accessible to people whose frontal lobes are more or less developed (mid-teens onwards) but the concepts could be taught to young children too.

Applicability:- To meet the many challenges we all face as individuals and in groups we all need integrative problem solving skills. This is what learning NEW Integrative Thinking teaches quickly, economically and permanently. Moreover, every organisation needs good governance policies. Douglas Integrative Governance 247 templates help organisations produce them quickly, economically and permanently. The potential market for a licensee would be huge as the material is applicable outside formal education channels and to people in the existing economy.

Joint venture basis:- Joint venture agreements are used to record contractual arrangements between all parties.

Uplifting sustainable development

Implementing the Integrative Improvement Institutes Project would be uplifting and sustainable for individuals because it would provide them with integrative problem solving skills to enable them to be self-reliant, innovative and reach with more confidence their full potential in the face the realities of life in general and the labour market in particular. It would be uplifting and sustainable for organisations because it would help them be adaptive in rapidly changing market conditions and assist their employees to contribute most to the organisation. It would be uplifting and sustainable for economies because all people would have an understanding of the need for and means of achieving sustainable development and economic activity would be generated by more people. It would be uplifting and sustainable for the global community as all could have a common basis for communication and problem solving.

Do you want to be involved in this uplifting project? Please contact Graham Douglas at integrative[at]optusnet.com.au

Continue Reading
Comments

Economy

Finding Fulcrum to Move the World Economics

Published

on

Domenico Fetti / Wikimedia Commons

Where hidden is the fulcrum to bring about new global-age thinking and escape current mysterious economic models that primarily support super elitism, super-richness, super tax-free heavens and super crypto nirvanas; global populace only drifts today as disconnected wanderers at the bottom carrying flags of ‘hate-media’ only creating tribal herds slowly pushed towards populism. Suppose, if we accept the current indices already labeled as success as the best of show of hands, the game is already lost where winners already left the table. Finding a new fulcrum to move the world economies on a better trajectory where human productivity measured for grassroots prosperity is a critically important but a deeply silent global challenge. Here are some bold suggestions

ONE- Global Measurement: World connectivity is invisible, grossly misunderstood, miscalculated and underestimated of its hidden powers; spreading silently like an invisible net, a “new math” becomes the possible fulcrum for the new business world economy; behold the ocean of emerging global talents from new economies, mobilizing new levels of productivity, performance and forcing global shifts of economic powers. Observe the future of borderless skills, boundary less commerce and trans-global public opinion, triangulation of such will simply crush old thinking.

Archimedes yelled, “…give me a lever long enough and a fulcrum on which to place it, and I shall move the world…”

After all, half of the world during the last decade, missed the entrepreneurial mindset, understoodonly as underdog players of the economy, the founders, job-creators and risk-taker entrepreneurs of small medium businesses of the world, pushed aside while kneeling to big business staged as institutionalized ritual. Although big businesses are always very big, nevertheless, small businesses and now globally accepted, as many times larger. Study deeply, why suddenly now the small medium business economy, during the last budgetary cycles across the world, has now become the lone solution to save dwindling economies. Big business as usual will take care of itself, but national economies already on brink left alone now need small business bases and hard-core raw entrepreneurialism as post-pandemic recovery agendas.

TWO – Ground Realities:  National leadership is now economic leadership, understanding, creating and managing, super-hyper-digital-platform-economies a new political art and mobilization of small midsize business a new science: The prerequisites to understand the “new math” is the study of “population-rich-nations and knowledge rich nations” on Google and figure out how and why can a national economy apply such new math. 

Today a USD $1000 investment in technology buys digital solutions, which were million dollars, a decade ago.Today,a $1000 investment buys on global-age upskilling on export expansion that were million dollars a decade ago.  Today, a $1000 investment on virtual-events buys what took a year and cost a million dollars a decade ago. Today, any micro-small-medium-enterprise capable of remote working models can save 80% of office and bureaucratic costs and suddenly operate like a mini-multi-national with little or no additional costs.

Apply this math to population rich nations and their current creation of some 500 million new entrepreneurial businesses across Asia will bring chills across the world to the thousands of government departments, chambers of commerce and trade associations as they compare their own progress. Now relate this to the economic positioning of ‘knowledge rich nations’ and explore how they not only crushed their own SME bases, destroyed the middle class but also their expensive business education system only produced armies of resumes promoting job-seekers but not the mighty job-creators. Study why entrepreneurialism is neither academic-born nor academic centric, it is after all most successful legendary founders that created earth shattering organizations were only dropouts.  Now shaking all these ingredients well in the economic test tube wait and let all this ferment to see what really happens.

Now picking up any nation, selecting any region and any high potential vertical market; searching any meaningful economic development agenda and status of special skills required to serve such challenges, paint new challenges. Interconnect the dots on skills, limits on national/global exposure and required expertise on vertical sectors, digitization and global-age market reach. Measuring the time and cost to bring them at par, measuring the opportunity loss over decades for any neglect. Combining all to squeeze out a positive transformative dialogue and assemble all vested parties under one umbrella.

Not to be confused with academic courses on fixing Paper-Mache economies and broken paper work trails, chambers primarily focused on conflict resolutions, compliance regulations, and trade groups on policy matters.  Mobilization of small medium business economy is a tactical battlefield of advancements of an enterprise, as meritocracy is the nightmarish challenges for over 100 plus nations where majority high potential sectors are at standstill on such affairs. Surprisingly, such advancements are mostly not new funding hungry but mobilization starved. Economic leadership teams of today, unless skilled on intertwining super-hyper-digital-platform-economic agendas with local midsize businesses and creating innovative excellence to stand up to global competitiveness becomes only a burden to growth.

The magnifying glass of mind will find the fulcrum: High potential vertical sectors and special regions are primarily wide-open lands full of resources and full of talented peoples; mobilization of such combinations offering extraordinary power play, now catapulted due to technologies. However, to enter such arenas calls for regimented exploring of the limits of digitization, as Digital-Divides are Mental Divides, only deeper understanding and skills on how to boost entrepreneurialism and attract hidden talents of local citizenry will add power. Of course, knowing in advance, what has already failed so many times before will only avoid using a rubber hose as a lever, again.  

The new world economic order: There is no such thing as big and small as it is only strong and weak, there is no such thing as rich and poor it is only smart and stupid. There is no such thing as past and future is only what is in front now and what is there to act but if and or when. How do you translate this in a post pandemic recovery mode? Observe how strong, smart moving now are advancing and leaving weak, stupid dreaming of if and when in the dust behind.

The conclusion: At the risk of never getting a Nobel Prize on Economics, here is this stark claim; any economy not driven solely based on measuring “real value creation” but primarily based on “real value manipulation” is nothing but a public fraud. This mathematically proven, possibly a new Fulcrum to move the world economy, in need of truth

The rest is easy  

Continue Reading

Economy

Evergrande Crisis and the Global Economy

Published

on

China’s crackdown on the tech giants was not much of a surprise. Sure, the communist regime allowed the colossus entities like Alibaba Group to innovate and prosper for years. Yet, the government control over the markets was never concealed. In fact, China’s active intervention in the forex market to deliberately devalue Yuan was frequently contested around the world. Ironically, now the world awaits government intervention as a global liquidity crisis seems impending. The Evergrande Group, China’s largest property developer, is on the brink of collapse. Mounding debt, unfinished properties, and subsequent public pressure eventually pushed the group to openly admit its financial turmoil last week. Subsequently, Evergrande’s shares plunged as much as 19% to more than 11-year lows. While many anticipate a thorough financial restructuring in the forthcoming months, the global debt markets face a broader financial contagion – as long as China deliberates on its plan of action.

The financial trouble of the conglomerate became apparent when President Xi Jinping stressed upon controlled corporate debt levels in his ongoing drive to reign China’s corporate behemoths. It is estimated that the Evergrande Group currently owes $305 billion in outstanding debt; payments on its offshore bonds due this week. With new channels of debt ceased throughout the Mainland, repayment seems doubtful despite reassurances from the company officials. The broader cause of worry, however, is the impact of a default; which seems highly likely under current circumstances.

The residential property market and the real estate market control roughly 20% and 30% of China’s nominal GDP respectively. A default could destabilize the already slowing Chinese economy. Yet that’s half the truth. In reality, the failure of a ‘too big to fail’ company could bleed into other sectors as well. And while China could let the company fail to set a precedent, the spillover could devastate the financial stability hard-earned after a strenuous battle against the pandemic. Recent data shows that with the outbreak of the delta variant, the demand pressure in China has significantly cooled down while the energy prices are through the roof. Coupled with the regulatory crackdown rapidly pervading uncertainty, a debt crisis could further push the economy into a recession: a detrimental end to China’s aspirations to attract global investors.

The real question, therefore, is not about China’s willingness to bail out the company. Too much is at stake. The primal question is regarding the modus operandi which could be adopted by China to upend instability.

Naturally, the influence of China’s woes parallels its effect on the global economy. A possible liquidity crisis and the opaque measures of the government combined are already affecting the global markets: particularly the United States. The Dow Jones Industrial Average (DJIA) posted a dismal end to Monday’s trading session: declining by more than 600 points. The 10-year Treasury yields slipped down 6.4 basis points to 1.297% as investors sought safety amid uncertainty. The concern is regarding China’s route to solve the issue and the timeline it would adopt. While the markets across Europe and Asia are optimistic about a partial settlement of debt payments, a take over from state-owned enterprises could further drive uncertainty; majorly regarding the pay schedule of western bondholders amid political hostility.

Economists believe that, while a financial crisis doesn’t seem like a plausible threat, a delayed response or a clumsy reaction could permeate volatility in the capital markets globally. Furthermore, a default or a takeover would almost certainly pull down China’s economy. While the US has already turned stringent over Chinese IPOs recently, a debt default could puncture the economic viability of a wide array of Chinese companies around the world. And thus, while the global banking system is not at an immediate threat of a Lehman catastrophe, Evergrande’s bankruptcy would, nonetheless, erode both the domestic and the global housing market. Moreover, it would further dent Chinese imports (and seriously damage regional exchequers), and would ultimately put a damper on global economic recovery from the pandemic.

Continue Reading

Economy

Economy Contradicts Democracy: Russian Markets Boom Amid Political Sabotage

Published

on

The political game plan laid by the Russian premier Vladimir Putin has proven effective for the past two decades. Apart from the systemic opposition, the core critics of the Kremlin are absent from the ballot. And while a competitive pretense is skilfully maintained, frontrunners like Alexei Navalny have either been incarcerated, exiled, or pushed against the metaphorical wall. All in all, United Russia is ahead in the parliamentary polls and almost certain to gain a veto-proof majority in State Duma – the Russian parliament. Surprisingly, however, the Russian economy seems unperturbed by the active political manipulation of the Kremlin. On the contrary, the Russian markets have already established their dominance in the developing world as Putin is all set to hold his reign indefinitely.

The Russian economy is forecasted to grow by 3.9% in 2021. The pandemic seems like a pained tale of history as the markets have strongly rebounded from the slump of 2020. The rising commodity prices – despite worrisome – have edged the productivity of the Russian raw material giants. The gains in ruble have gradually inched higher since January, while the current account surplus has grown by 3.9%. Clearly, the manufacturing mechanism of Moscow has turned more robust. Primarily because the industrial sector has felt little to no jitters of both domestic and international defiance. The aftermath of the arrest of Alexei Navalny wrapped up dramatically while the international community couldn’t muster any resistance beyond a handful of sanctions. The Putin regime managed to harness criticism and allegations while deftly sketching a blueprint to extend its dominance.

The ideal ‘No Uncertainty’ situation has worked wonders for the Russian Bourse and the bond market. The benchmark MOEX index (Moscow Exchange) has rallied by 23% in 2021 – the strongest performance in the emerging markets. Moreover, the fixed income premiums have dropped to record lows; Russian treasury bonds offering the best price-to-earning ratio in the emerging markets. The main reason behind such a bustling market response could be narrowed down to one factor: growing investor confidence.

According to Bloomberg’s data, the Russian Foreign Exchange reserves are at their record high of $621 billion. And while the government bonds’ returns hover at a mere 1.48%, the foreign ownership of treasury bonds has inflated above 20% for the second time this year. The investors are confident that a significant political shuffle is not on cards as Putin maintains a tight hold over Kremlin. Furthermore, investors do not perceive the United States as an active deterrent to Russia – at least in the near term. The notion was further exacerbated when the Biden administration unilaterally dropped sanctions from the Nord Stream 2 pipeline project. And while Europe and the US remain sympathetic with the Kremlin critics, large economies like Germany have clarified their economic position by striking lucrative deals amid political pressure. It is apparent that while Europe is conflicted after Brexit, even the US faces much more pressing issues in the guise of China and Afghanistan. Thus, no active international defiance has all but bolstered the Kremlin in its drive to gain foreign investments.

Another factor at work is the overly hawkish Russian Central Bank (RCB). To tame inflation – currency raging at an annual rate of 6.7% – the RCB hiked its policy rate to 6.75% from the all-time low of 4.25%. The RCB has raised its policy rate by a cumulative 250 basis points in four consecutive hikes since January which has all but attracted the investors to jump on the bandwagon. However, inflation is proving to be sturdy in the face of intermittent rate hikes. And while Russian productivity is enjoying a smooth run, failure of monetary policy tools could just as easily backfire.

While political dissent or international sanctions remain futile, inflation is the prime enemy which could detract the Russian economy. For years Russia has faced a sharp decline in living standards, and despite commendable fiscal management of the Kremlin, such a steep rise in prices is an omen of a financial crisis. Moreover, the unemployment rates have dropped to record low levels. However, the labor shortage is emerging as another facet that could plausibly ignite the wage-price spiral. Further exacerbating the threat of inflation are the $9.6 billion pre-election giveaways orchestrated by President Putin to garner more support for his United Russia party. Such a tremendous demand pressure could presumably neutralize the aggressive tightening of the monetary policy by the RCB. Thus, while President Putin sure is on a definitive path of immortality on the throne of the Kremlin, surging inflation could mark a return of uncertainty, chip away investors’ confidence: eventually putting a brake on the economic streak.

Continue Reading

Publications

Latest

Southeast Asia2 hours ago

The Indo-Pacific Conundrum: Why U.S. Plans Are Destined to Fail

That U.S. Vice President Kamala Harris paid an official visit to Singapore and Vietnam in late August 2021 signifies clear...

Middle East4 hours ago

The Battle for the Soul of Islam: Will the real reformer of the faith stand up?

Saudi and Emirati efforts to define ‘moderate’ Islam as socially more liberal while being subservient to an autocratic ruler is...

Reports6 hours ago

Financing Options Key to Africa’s Transition to Sustainable Energy

A new whitepaper outlining the key considerations in setting the course for Africa’s energy future was released today at the...

Defense8 hours ago

Eastern seas after Afghanistan: UK and Australia come to the rescue of the U.S. in a clumsy way

In March 2021 the People’s Republic of China emerged as the world’s largest naval fleet, surpassing the US Navy. An...

Southeast Asia10 hours ago

AUKUS: A Sequela of World War II and US Withdrawal from Afghanistan

Deemed as a historic security pact, AUKUS was unveiled by the leaders of the US, the UK and Australia –...

Americas14 hours ago

Interpreting the Biden Doctrine: The View From Moscow

It is the success or failure of remaking America, not Afghanistan, that will determine not just the legacy of the...

Urban Development18 hours ago

WEF Launches Toolbox of Solutions to Accelerate Decarbonization in Cities

With the percentage of people living in cities projected to rise to 68% by 2050, resulting in high energy consumption,...

Trending