[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
Financial Bubbles in the Coronavirus Era
There is reason to believe that the coronavirus will not be going anywhere soon. What is more, IMF experts warn that problems that existed before the pandemic will only worsen in the coming decades. One of these problems is the state of the global financial market, which is more susceptible to all kinds of financial bubbles than ever before.
When we talk about financial bubbles, we usually mean a sharp increase in the value of assets in an economic climate that has either stagnated or started to deteriorate. A similar situation is currently unfolding on the American stock market, which is experiencing an extraordinary rise in the value of hi-tech companies against the background of a record drop in GDP (by over 30 per cent in the second quarter of 2020) and a projected budget deficit (−15.5 per cent). This rise has been caused by three factors: 1) a soft monetary policy as a result of the need to service the rapidly growing public and corporate debt; 2) the huge liquid resources at the disposal of legal entities and individuals that are frantically looking for ways to make a profitable investment in anticipation of the increased risks and systemic uncertainties brought about by COVID-19; and 3) the speculative excitement caused by the technologies of the fourth industrial revolution. In order for us to judge how likely the optimistic sentiments of the global financial markets are to change, let us consider the impact of these factors separately.
The Debt as it Stands
A key element of the “new abnormality” that has characterized both the development of the global economy as a whole and the U.S. economy, in particular, is the debt model of economic growth. Investment and business activity has stagnated as interest rates around the world are hovering around zero, while the U.S. dollar (a key reserve currency) stubbornly refuses to depreciate and has even strengthened its value on the forex markets on a number of occasions, despite the fact that the situation at home is worsening. For example, U.S. national debt increased by $4 trillion in the first nine months of 2020, from $22.7 to $26.7 trillion. This is the largest increase in U.S. national debt ever. A considerable amount of this debt is financed through the extraordinary growth of the U.S. stock market, which currently accounts for over half of the combined capitalization of the world’s stock markets. A correction on the stock market (caused by an increase in interest rates, for example) could trigger numerous defaults on debt obligations. According to Fitch Ratings, more defaults were announced in the first five months of 2020 than in the whole of 2019 and may reach record numbers by the end of the year (the current record holder is 2009). And more than half of all corporate defaults around the world have occurred in North America.
Let us recall that the value of financial assets dropped by $50 trillion during the 2008–2009 crisis. However, central banks and the fiscal authorities compensated for these losses by injecting roughly the same amount of liquidity into the market. But the newly created financial resources did not jolt consumer demand, as had been hoped. Rather, they were largely swallowed up by various segments of the global financial market. International portfolio investments alone more than doubled in 2008–2019 – by $35 trillion.
The history of capitalism is not short on examples where the state tried to solve debt problems at the expense of the market, leading to the creation of financial pyramids. In 1720, for example, two giant financial bubbles burst at almost the same time in Europe. In an effort to clear themselves of the massive debts they had accumulated during the War of the Spanish Succession, the governments of France and England encouraged the growth of cash in circulation. This money was pumped into equity securities of Mississippi Company in France and the South Sea Company in England, which were joint-stock companies created with backing from their respective governments. The companies promised their investors huge profits that would come from overseas territories. The proceeds from the sale of shares were used to buy back government debt instruments. The stock market bubbles that appeared in France and Great Britain were the result of the governments trying to rid themselves of their excessive debt burdens and to stimulate their respective economies through inflation and debt-equity swaps. In a way, the current excitement on the U.S. stock market is reminiscent of the situation three hundred years ago.
A New Digital Bubble?
As of late September 2020, the four largest companies in the world by market capitalization were American digital brands: the computer giants Apple and Microsoft and the internet companies Amazon and Alphabet (Google). The total market capitalization of these companies has more than doubled this year to over $6 trillion. “Pessimists” believe that the U.S. over-the-counter (OTC) market is currently experiencing another boom similar to the dot-com bubble that burst in 2000. Meanwhile, “optimists” point to the huge success of FAANG stocks, Facebook, Apple, Amazon, Netflix and Google, as justification for the current market explosion. Shares in these companies outperformed the market throughout the 2010s, and prices have soared against the background of the pandemic. They currently make up 23 per cent of the total capitalization of the U.S. S&P 500 Index.
The growth in the market value of these companies is directly related to the activities of private and institutional investors around the world, who invest their savings in banks and various investment funds with their highly developed infrastructure in order to receive guaranteed profits. A number of retail investors have given an additional impulse to the dynamics of the OTC market by purchasing shares in newly created companies in the digital economy that have connected to free trading platforms such as Robinhood.
At the same time, the “optimists” believe that the comparisons with the dot-com bubble of 2000 are not entirely appropriate. A number of arguments support this claim: 1) the ratio between the market value of shares and the total annual profit is lower – 26.9 in September 2020 versus 45.8 in March 2000; 2) companies in the digital economy turn in real profits, as opposed to expected future returns; and 3) Nasdaq OTC hi-tech growth rates are more moderate – 23 per cent per year on average, compared to 43 per cent per year in the seven years before the tech bubble burst in 2000.
The dynamics of the market on the eve of the financial crisis in 2008–2009 were also characterized by an “irrational euphoria” similar to what we are seeing today. Back then, in the depths of the crisis, the G20 introduced a supranational financial monitoring system that was designed to prevent destabilizing spikes and falls in asset prices. However, experience has taught us that regulation cannot keep up with market innovation and is perennially unprepared for new challenges, primarily the digitalization of the global economy.
Technology and Politics
Historically, financial bubbles have tended to form whenever new revolutionary technologies have appeared, be it the invention of railways, electricity, automobiles, etc. Many new technologies have appeared during the Fourth Industrial Revolution (from smartphones and 3D printers to blockchain technologies and artificial intelligence) that have led to the mass automation of business processes and, consequently, the loss of jobs for a large part of the workforce, thus reducing production and operating costs significantly.
At the same time, we have not seen galloping inflation as a natural market reaction during this global crisis (all other things being equal) to the cheap money policy that has dominated the past decade. On the one hand, prices have been kept in check by the pandemic, which has pushed households and companies to hold onto their savings and made consumption more difficult due to the partial blocking of the economy. On the other hand, in the present context, a sizeable portion of the newly created liquidity is immediately swallowed up by the stock market, the U.S. stock market in particular, which continues to grow thanks to the advance funding of new technologies that are being developed at a fantastic pace. Exactly how long such a model can survive depends on at least three factors: 1) whether or not the soft monetary policy of near-zero or negative interest rates pursued by central banks will continue; 2) the ability of the market to adapt to new technological transformations; and 3) the smooth running of the international monetary system based on the U.S. dollar.
As for the latter, its functioning largely depends on the political system in the United States, and on the results of the November presidential elections in particular. One of three things will likely happen after that: 1) the current configuration of the global financial system will remain in place, with a few minor alterations here and there; 2) the existing system will undergo a major upheaval; and 3) the global financial system as we know it will collapse and a new model will take its place.
If the first scenario plays out, then the world economy will most likely continue to function in the same institutional format that we know today. If the second scenario prevails, then the radical reform of the existing system of global institutions could give the RIC countries (Russia, India and China) the bargaining power to insist on more favourable conditions for their integration into the world economy (for example, by moving away from reliance on the U.S. dollar in international transactions, promoting the use of their national currencies more actively, re-evaluating their positions within the International Monetary Fund and the World Bank alongside their partners in BRICS in order to effectively obtain a collective veto power, etc.). The third scenario would make it possible to create regional monetary and financial systems (as full-fledged independent financial structures of the emerging multipolar world) on the basis of various regional financial institutions that already exist, increasing the role of national currencies in mutual settlements and international financial instruments (or through the creation of new international liquidity in the form of national collective settlement monetary units).
Where Does Russia Stand amid the Global Turbulence?
The Russian economy demonstrated greater resilience during the first wave of the coronavirus crisis than the economies of both developed countries and the economies of its partners in BRICS. Despite the sharp decline in world prices for carbon fuel (Russia’s main export), in terms of key macroeconomic indicators, Russia has managed to maintain more stable positions than the G7 countries. As a result, the IMF predicts that Russia will have the lowest budget deficit among the world’s major economies by the end of 2020 (−4.8 per cent), with relatively low unemployment (4.9 per cent).
The Russian Federation is, in a sense, protected from financial bubbles as (unlike the United States) as it is more focused on developing the real sector of the economy rather than the financial sector. At the same time, the main problem of Russia’s integration into the global economy is the lack of stabilizing mechanisms to counter the volatile and hard-to-predict elements of the global financial market. We are talking here about the lack of a reserve currency, something that many countries use to protect themselves against external shocks, especially during periods of global crisis, when the demand for reserve assets rises sharply. Let us consider the following example. Russia has been a net creditor in the global financial system for years. As of year-end 2019, Russia’s external financial assets exceeded its external financial liabilities by $358 billion. Meanwhile, its investment income balance amounted to −$50 billion. This lop-sidedness is down to the fact that Russia places its international reserves in low-yield foreign assets and serves its foreign financial liabilities at higher interest rates. What this means is that the Russian Federation has been subsidizing those countries that issue reserve currencies for years while not always receiving adequate compensation and now living in economic isolation in the form of economic sanctions. In this context, Russia urgently needs to create its own reserve currency similar to the transferable rouble that the Soviet Union used in its trade with the Council for Mutual Economic Assistance in 1964–1990 and which existed long before other collective currencies (such as the special drawing rights, the European Currency Unit and the euro) were developed. This mechanism removed a number of inconsistencies at the regional level (the problem of imbalances in particular) that we are now seeing in connection with the use of the U.S. dollar as a means of carrying out international settlements, loans and investments around the world.
An oft-cited report by Goldman Sachs predicts that Brazil, Russia, India and China (the BRIC countries) will all be among the world’s top five economies by 2050 and, tellingly, the stock market is not the main source of financial resources for any of them. A common problem for the BRIC countries is the need to develop the enormous potential of their domestic markets by implementing large-scale infrastructure projects. A kind of dual system of monetary circulation whereby foreign trade is carried out using monetary units of account could help make this happen. Such a model would make it possible to separate the intrinsic value of money (its purchasing power) from its extrinsic value (its exchange rate). This is necessary to prevent newly created value (through the financial market) flowing from regions with low productivity to regions with high productivity. This is precisely what is happening in the Eurozone, and it is deepening the structural imbalances in the single European market. In addition, such a system would help resolve the issue of creating international liquidity without the need to move the national currency out of circulation to form unproductive national reserves or carry out speculative transactions.
The global economy has fallen into the trap of “new abnormality,” where incessantly creating money does not solve pressing socioeconomic problems. Other countries are following in the footsteps of the United States, repeating its domestic policy. This has resulted in the further deepening of social inequalities and imbalances at the national and global levels. Bearing in mind the fact that the United States’ share of global gross domestic product has been falling over the past 20 years, it is entirely possible that the U.S. dollar may be used less frequently in international transactions, even though the exchange rate proves favourable from time to time. To make matters worse, the unusual reaction of the markets to the monetary policy of the Federal Reserve System, along with the growing political tension in the United States, increases the risk of the destabilization of the current financial system. It should be stressed here that global economic leadership has always been tied to the leading countries consolidating their positions in both the economic and financial spheres. Clearly, we have reached the point where the only thing that will help stabilize the world economy in the long term is the more active involvement of the BRICS countries in the functioning of the global financial system.
From our partner RIAC
Innovative ideas and investment opportunities needed to ensure a strong post-COVID recovery
After the huge success of its opening day, AIM Digital, the first digital edition of the Annual Investment Meeting, continued to gain momentum as it reached Day 2. The three-day mega digital event, an initiative of the Ministry fo Economy, under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, concluded its second day with interactive activities that catalysed investment-generation, knowledge-enhancement, and local, regional and international collaborations.
Joined by more than 15K participants from over 170 countries, including 70+ high-level dignitaries from across the globe, the second day of AIM Dıgital witnessed a wide range of major events, from the Conference, Exhibition, Investment Roundtables, and Regional Focus sessions to Conglomerate Presentations and Startups competitions; all geared towards providing opportunities to achieve a digital, sustainable & resilient future.
In his keynote speech in the FDI session, Ministers Roundtable: Adapting to the New Flow of Trade and Investment, His Excellency Dr. Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, said: “It is my distinct honor to welcome you to the UAE’s first-ever digital edition of the Annual Investment Meeting. Thank you to everyone participating, including our panelists from the Governments of Costa Rica, Canada, Nigeria and Russia. Today’s discussion on how countries are ensuring the free flow of trade and investment could not be more timely, especially as the world grapples with the economic recovery and moves toward building a more resilient, post-COVID economy. The pandemic has significantly impacted global markets that created new challenges for trade and investment. While the challenges ahead are enormous, the UAE sees tremendous opportunity for governments and business leaders to work together through trade and investment to reshape policies, create new partnerships, leverage new technologies, and build a future global economy that is more diverse, inclusive, and sustainable. We know that FDI can bring new technology and know-how, lead to new jobs and growth, and is often the largest source of finance for economies – making today’s discussion even more imperative.”
He further stated that FDI has played a critical role in the UAE’s economic growth, with policies and measures in place, such as the Foreign Direct Investment Law enacted in 2018 to further open the UAE market to investors in certain sectors, and the issuance of Positive List, which allows for greater foreign investment across 122 activities, and increasingthe UAE’s FDI value by 32% in 2019. He also mentioned that the UAE came in 16th of 190 countries in the World Bank Ease of Doing Business 2020 Ranking due to the country’s digitization strategies and promising business regulatory environment.
His Excellency Al Zeyoudi furthered: “The UAE is continuing to refine and implement policies that will maximize competitiveness, increase collaboration, and provide opportunities to facilitate trade and investment. Our aim is to become the #1 country for foreign investment, target zero contribution from oil to our GDP in the next 50 years, and support research, development, and innovation. The UAE’s trade and investment strategy is centered on economic diversification and focuses on enhanced investment in industries such as communications, Blockchain, artificial intelligence, robotics, and genetics. We are also initiating measures to strengthen our position as a regional leader in supplying financial and logistical services, infrastructure, energy supplies, and other services.”
He added: “The UAE believes that increased partnership and cooperation with governments and the private sector will be key to achieving our objectives. We view platforms such as the Annual Investment Meeting as instrumental in bridging the gap between nations and supporting global efforts to strengthen international trade and investment. Through this platform, we hope that participants will uncover new, innovative ideas and investment opportunities needed to build back better and ensure a strong post-COVID recovery.”
Furthermore, world-class speakers shared their viewpoints in Day 2 of the Conference highlighting Foreign Direct Investment, Foreign Portfolio Investment, Small and Medium-sized Enterprises, Startups, Future Cities, and One Belt, One Road, including H.E. Amb. Mariam Yalwaji Katagum, Minister of State, Federal Ministry of Industry Trade and Investment of The Federal Republic of Nigeria; Victoria Hernández Mora, Ministry of Economy, Industry and Commerce of Republic of Costa Rica; Hon. Victor Fedeli, Minister of Economic Development, Job Creation and Trade of Ontario, Canada; and Sergey Cheremin, Minister of Moscow City Government Head of Department for External Economic and International Relations, among others.
Two Investment Roundtables were also held successfully at the second day of AIM Digital, concluding with strategies to facilitate sustainable, smart and scalable investments. The Energy Roundtable was led by Laszlo Varro, the Chief Economist of International Energy Agency, which works with countries around the globe to structure energy policies towards a secure and sustainable future. Among the notable participants include H.E. Arifin Tasrif, Minister for Energy & Mineral Resources of the Republic of Indonesia; and H.E. Gabriel Obiang, the Minister of Mines and Hydrocarbons of Equatorial Guinea. The Agriculture Roundtable was led by Islamic Development Bank Group, the multilateral development bank working to promote social and economic development in Member countries and Muslim communities worldwide, delivering impact at scale.
In addition, the second set of National Winners competed on Day 2 of the AIM Global National Champions League. Overall, a total of 65 countries competed at this international startups competition. The top five global champions that will win a total prize of USD50,000 will be announced on the last day of AIM Digital.The competition was launched in a bid to help startups in maximizing their potential to attract funding and promote their business ideas to a global audience, getting utmost exposure and expanding their network.
Participating in the Conglomerate Presentation feature of AIM Digital is Elsewedy Electric led by Eng. Ahmed Elsewedy, its President and CEO. Elsewedy Electric began as a manufacturer of electrical components in Egypt 80 years ago, and Electric has evolved into a global provider of energy, digital and infrastructure solutions with a turnover of EGP 46.6 billion in 2019, operating in five key business sectors, namely Wire & Cable, Electrical Products, Engineering & Construction, Smart Infrastructure and Infrastructure Investments. As part of its commitment to sustainability, it has established green energy and smart metering projects across Africa, the Middle East and Eastern Europe.
The Regional Focus Sessions featured the regions of Asia and Latin America and explored the risks, challenges and opportunities for growth and regional cooperation. Regional Focus Session on Asia brought together government officials and investment authorities from the ASEAN Member States and discussed their strategies to create a borderless and sustainable bloc that will push organic growth, as well as their approaches to gain resilience in the economy. Regional Focus Session on Latin America highlighted the significance of regional and international partnerships to combat the current pandemic and boost trade, investments and employment within the region.
Moreover, Country Presentations on Day 2 presented the outstanding features and investment opportunities in Colombia, Egypt and the Federal Democratic Republic of Ethiopia which highlighted the countries’ status as attractive investment destinations.
Another highly anticipated event in the largest virtual gathering of the global investment community is the announcement of winners for the Investment Awards and Future Cities Awards which will take place on Day 3 of AIM Digital.AIM Investment Awards will grant recognition to the world’s best Investment Promotion Agencies and the best FDI projects in each region of the globe that have contributed to the economic growth and development of their markets. Likewise, AIM Future Cities Awards will give tribute to the best smart city solutions providers and for outstanding projects that have resulted to enhanced operational efficiency and productivity, sustainability, and economic growth.
Day 1 of AIM Dıgital welcomed the presence of globally renowned personalities such as the UAE Minister of Economy, His Excellency Abdullah bin Touq Al Marri who emphasised the vision of UAE’s wise leadership for the post-COVID era, reflecting great significance to enhancing the readiness of the country’s government sector, raising efficiencies and performance at the federal and local levels. Keynote remarks were delivered by H.E. Juri Ratas, the Prime Minister of Republic of Estonia; H.E. Rustam Minnikhanov, the President of the Republic of Tatarstan; H.E. Dr. Bandar M. H. Hajjar, the President of Islamic Development Bank Group (IsDB Group); H.E. Mohammed Ali Al Shorafa Al Hammadi, the Chairman of Abu Dhabi Department of Economic Development (ADDED); and Dr. Mukhisa Kituyi, the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).
The UAE Minister of State for Entrepreneurship and SMEs, His Excellency Dr. Ahmad Belhoul Al Falasi, underlined in his Keynote Address for the SME Pillar, that it is crucial for Startups and SMEs to be given opportunities to bounce back from the impact of pandemic and provide a conducive environment that will empower them to have the capability of supporting growth and success.
The Global Leaders Debate featured prominent keynote debaters such as Armida Salsiah Alisjahbana, the Under-Secretary-General of the United Nations and Executive Secretary of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP); Mohamed Alabbar, the Founder of Emaar Properties, Alabbar Enterprises and Noon.com; Mohammad Abdullah Abunayyan, the Chairman of ACWA Power; and Arkady Dvorkovich, the Chairman of Skolkovo Foundation, who discussed the strategies to restructure the economies in overcoming the consequences of the pandemic.
The first digital edition of the Annual Investment Meeting with the theme “Reimagining Economies: The Move Towards a Digital, Sustainable and Resilient Future, will be held until the 22nd of October 2020.
H.E. Dr. Thani Al Zeyoudi: Our aim is to become the #1 country for foreign investment
It is my distinct honor to welcome you to the UAE’s first-ever digital edition of the Annual Investment Meeting. Thank you to everyone participating, including our panelists from the Governments of Costa Rica, Canada, Nigeria and Russia. Today’s discussion on how countries are ensuring the free flow of trade and investment could not be more timely, especially as the world grapples with the economic recovery and moves toward building a more resilient, post-COVID economy.
As you know, the pandemic has significantly impacted global markets, creating new challenges for trade and investment. According to the United Nations’2020World Investment Report, global FDI flows are estimated to decrease by up to 40% this year, dropping well below their value of $1.54 trillion in 2019. This would bring global FDI below $1 trillion for the first time since 2005. Global FDI flows are expected to decline even further in 2021, by 5% to 10%, and only in 2022 do we expect to start seeing markets recover.
While the challenges ahead are enormous, the UAE sees tremendous opportunity for governments and business leaders to work together through trade and investment to reshape policies, create new partnerships, leverage new technologies, and build a future global economy that is more diverse, inclusive, and sustainable. We know that FDI can bring new technology and know-how, lead to new jobs and growth, and is often the largest source of finance for economies – making today’s discussion even more imperative.
For the UAE, FDI has played a critical role in our economic growth. In 2019, the UAE was the largest recipient of FDI in the region, largely due to our increased focus over the years on enhancing local conditions to attract FDI. With policies and measures in place, such as our Foreign Direct Investment Law enacted in 2018 to further open the UAE market to investors in certain sectors, and the issuance of our Positive List, which allows for greater foreign investment across 122 activities, the UAE was able to increase our FDI value by 32% in 2019. The UAE also came in 16th of 190 countries in the World Bank Ease of Doing Business 2020 Ranking due to our digitization strategies and promising business regulatory environment.
The UAE is continuing to refine and implement policies that will maximize competitiveness, increase collaboration, and provide opportunities to facilitate trade and investment. Our aim is to become the #1 country for foreign investment, target zero contribution from oil to our GDP in the next 50 years, and support research, development, and innovation. The UAE’s trade and investment strategy is centered on economic diversification and focuses on enhanced investment in industries such as communications, Blockchain, artificial intelligence, robotics, and genetics. We are also initiating measures to strengthen our position as a regional leader in supplying financial and logistical services, infrastructure, energy supplies, and other services.
The UAE believes that increased partnership and cooperation with governments and the private sector will be key to achieving our objectives. We view platforms such as the Annual Investment Meeting as instrumental in bridging the gap between nations and supporting global efforts to strengthen international trade and investment. Through this platform, we hope that participants will uncover new, innovative ideas and investment opportunities needed to build back better and ensure a strong post-COVID recovery.
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