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Economic competition and competitive practices

Gagliano Giuseppe

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Since enterprises are at the frontlines of geo-economic competition, they must learn how to deal with state influence in this field. They need to acquire a global understanding of the business environment and to develop new strategies to tackle stiff competition. In order to bend market rules and beat competition, economic actors developed new aggressive strategies on the model of military knowledge and underground operations.

The new competitive practices are no more aimed at adjusting to or anticipating other enterprises. Their goal is transforming the operating context and subverting the balance of power through imposing a given enterprise’s rules on its competitors. The final objective is eliminating competitors or at least preventing them from entering the marketplace.

These practices are based on the systematic acquisition of information and on its use for hostile purposes. In order to pursue innovation, export or acquire more market quotas, it is necessary to understand the business environment and to put in place effective operations. The new economic practices are therefore featured with harsh competition to dominate information platforms. The United States offers many examples of the use of offensive operations to reach commercial purposes.

In this context, companies go beyond the mere search of information. They aim at manipulating the facts through new offensive techniques of economic warfare targeting new markets and destabilizing competitors. Here are some examples of competitive strategies used for hostile purposes: offensive benchmarking (attacking a product through counterfeiting), lobbying, social learning, stretch marketing, (acquiring control through regulation, humanitarian intervention, civil and military operations and economic warfare). These practices date back to the end of the Cold War, when economic and cultural clashes replaced military and ideological conflicts.

Benchmarking consists in a comparative evaluation of services or procedures of the most successful enterprises, studying their strengths and weaknesses and identifying possible actions to match or surpass them. Benchmarking can be used for offensive purposes in order to destabilize competition through reaction tests: an alleged client evaluates all the aspects of the service provided and the weaknesses of the system; in some cases, this person purposely provokes accidents in order to have more time to study the situation. Repeated accidents clearly compromise the image of the competitor and obstruct its activities.

As far as counterfeit is concerned, it is true that copying existing products and improve them is the foundation for progress. However, some companies can decide to copy some products while decreasing their functionality, therefore realizing low quality artifacts that acquire some of the market quotas of the original product. The problem emerges when these counterfeit goods do not respect safety norms and became dangerous for the market, with a negative impact on the company producing the original goods.

Lobbying indicates all practices aimed at influencing – directly or indirectly – political, legislative, regulating actors in order to assert a given economic interest. More and more companies are adopting lobbying strategies to defend and promote their interests. Lobbying itself not only is a reprehensible activity, but its systematic use can turn it into a dangerous weapon for economic and cultural competition.

Social learning is another technique to conquer new markets that consists in an accurate psychological action setting up opinion trends to influence decision-making. Through providing what seem to be purely education services – often addressed to the future leadership of a given country – social learning techniques influence public opinion and installs a dependency relationship with the country providing social learnings services.

Stretch marketing originally consisted in coordinating Chinese family networks for business development in any field. Nowadays, this term indicates a careful observation of 1) a given socio-economic market and 2) the information exchange within a given group of partner enterprises, through which a given enterprise can better exploit its business opportunities. Therefore, on the one hand stretch marketing allows anticipating the client needs through controlling information; on the other hand, stretch marketing prevents competitors from enter the market through the sharing of both offensive and defensive techniques within a given group of partner enterprises.

Lobbying and social learning practices contribute to increasing international regulations that lead to the indirect acquisition of new market quotas. These rules represent a competitive weapon to perform technical-economic dominance practices because they prevent the other actors of the system from operating freely. This can be easily observed on the military level with the imposition of the inter-operability: pursuing a maximized standardization of military materials within NATO countries leads to the imposition of a given product or industry on the others.

Another aspect to take into account is humanitarian intelligence. In recent years, several economic domination strategies to conquer the market of developing countries have disguised as humanitarian and development missions.  It is true that development markets have impressive growth potential and can count on natural resources that the West is interested in. As a result, Western countries continuously engage in humanitarian operations and development project in order to obtain long and medium term economic advantages. Besides NGOs, there are a number of governmental organizations that combine their humanitarian mission with strategies pursuing political and economic goals.

Since developing countries often experience the devastating consequences of war, civil-military co-operations (COCIM) aim at leading the country out of the crisis situation and take care of the needs of the population. However, COCIM operations are often used to conquer the infrastructure market and acquire contracts to provide services and materials for the reconstruction of the country, while profiting from public funding. It is possible to observe that as soon as a conflict ends, companies from all over the world compete to get their share in the reconstruction of the country and they rush there in order to quickly identify its needs and to influence the terms of contracts. In order for this strategy to work, military personnel should be accompanied by experts like doctors, engineers, businessmen, teachers, sociologists, ethnologists etc., that provide a better understanding of the region together with its religious, cultural, and linguistic features.

Lastly, manipulation is also an offensive strategy and it relies on the key role played by the media. Information war can easily build or destroy the image of a given company or country through the planned and targeted use of information and telecommunication channels. Information war is based on using false information both to control and protect information sources, and to prevent the opponent from reacting. These subversive disinformation or propaganda techniques can be easily performed in every communication channel, especially the Internet. In this situation it is important to rapidly react with counter information practices and occupy media space with dominant strategies.

At the present moment in which we witness a real war of knowledge, no company is immune from this kind of competition attacks.

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Economy

WEF 2020: A Blank Check on Climate Change Costs

Naseem Javed

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At the WEF Davos 2020, is there already a blank check issued from stakeholder capitalists to Greta Thunberg to go and fix global climate damages? If not, too bad…just relax full payment may be coming.

First some facts; big and small governments have no money, big businesses have no money, what disappears in heavenly bushes of the paradise-accounting always stays there. The world is basically broke to fix this monumental problem; broke it’s mentally and crushed morally, broke is also the global populace, exhausted and restless, unless their survival on sustenance, equality and social justice not addressed at much faster rate over populism mobs may appear.

The Blank Check: Enters the five million small medium businesses of the world; a super economic force to reckon with on platform economy.

In broader strokes, as a simple example, The United States Business Administration, the SBA has some 13 million small medium size enterprises as members. Now imagine, if five million of such enterprises, already doing USD$2-5 million in annual turnover were placed on national mobilization of entrepreneurialism to boost special skills on innovative excellence to produce exportable quality. Now imagine if each one added only one-million in additional revenue to their current operations what will happen, basic math. Five million small enterprises times one million new revenue each equals 5,000,000 x 1,000,000 = 1,000,000,000,000 or one trillion.

Now imagine, if there were 25 million such enterprises scattered across the world, each adding two million dollars as a base per year that will be 50 trillion dollars… or 10 five times the revenue of the world’s five largest and most powerful technology companies. This is a wake-up call to exhausted economies. These operations are less new funding dependant they are execution hungry and deployment starved.

There are some 100 million SME in such mix around the world; if mobilized on national entrepreneurial platforms would have enough strength to help and fix local community issues, as entrepreneurs by their DNA are cause centric and will take care of such global climate issues, unlike short term shareholders on money schemes. The lack of discussion on SME revival are main reason, such silence proves lack of vision and global-age knowledge on entrepreneurial transformation and most importantly about global consumption and how to create real value creation. The spotlight on hedge funded value manipulations take all the attention and systematically the entrepreneurial talent of SME suppressed for not being glamorous enough on talk shows over earth shattering robotic technologies.

Fact: The world can easily absorb unlimited exportable ideas in unlimited vertical markets. Fact: The well-designed innovative ideas are worthy of such quadrupled volumes. Fact: The entrepreneurial and dormant talents of a nation are capable of such tasks. Fact: The new global age skills, knowledge and execution are now the missing links

The world is changing fast; this is no longer a cliché, now a serious warning: You can always tryout a change and start with some 500 small and medium enterprises in your own local region on national mobilization of entrepreneurialism protocols and measure the impact of innovative excellence on the local grassroots prosperity. Currently there are already 11,000 Chamber of Commerce in the world with combined membership of 45 million, somewhere here in lack of digital platforms are 25 million enterprises eager and ready to boost their revenues by million each. The art and science of global showcasing of its members with global bounce is a solid start on export strategy. Bold and open debates will streamline the fears of missing skills at the top to tackle such large scale deployments.

The rest is easy

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Economy

UNDP: Reshaping the Global Development Agenda

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The establishment of United Nations Development Programme (UNDP) ushered a new era during the course of United Nations (UNs) exemplary journey.   In September 2000 at the Millennium Summit the world leaders pledged to reduce poverty by 2015 focusing on the eight Millennium Development Goals (MDGs) . After all, the UNDP has been able to take the lead in accomplishing global impact on humanitarian priorities.  As  a result  of this  effort the UNDP played a pivotal role in taking a billion people out of extreme poverty by  reducing global poverty by half over the last 30 years.  This was closely related to the UNDP’s visionary leadership reshaped the future of the global sustainable development agenda in the shortest possible time. Over the years UNDP projects have had measurable success in protecting the environment. For example the UNDP allocated over US$ 5600 million supporting   nearly 4600 new projects worldwide  (UNDP, 2019).  Of this the largest recipients in 2019 were Afghanistan, with an estimated total of  US$ 530 million.  The recent initiatives implemented by the UN development agency will begin to impact systematically and begin to grow in magnitude touching all aspects of human life over the coming decades.

One of the  most  important  components of the UNDP  journey   was the  Human Development Report (HDR) that  paved the  way  to  discuss  the meanings and measurements of human development that  can  enlarge  people’s choices.  Speaking at the launch of 2019 Human Development Report on 11 December 2019 the current   Administrator of the United Nations Development Programme Achim Steiner  said, “In terms of productivity, the report shows that the growing market power of employers is linked to a declining income share for workers. It argues that anti-trust and other policies are key to address the imbalances of market power”. It is noteworthy to mention after more than five decades of global outreach the UN development agency seeks to adopt a strategy addressing inequality and social exclusion, preventing and mitigating conflicts and disasters, economic recovery, development planning and inclusive sustainable growth.

Globally climate change has been a concern in the recent years. Renewable energy is considered to be one of the alternatives that can combat global warming and stabilise the climate. Roughly US$2.5 billion has been provided to 140 countries for climate change initiatives and the   UNDP was the largest implementer in combating climate change globally.

Another major area of worldwide concern was the displacement of people due to armed conflicts.  The United Nations High Commissioner for Refugees (UNHCR), Global Trends report findings shows conflict and violence have forcibly displaced 65.3 million people globally. The adoption of conflict and development analysis (CDA) tools designed by the UNDP   for building practitioners aims to strengthen peace and security in war and in post-war countries. However the UNDP remains committed to successfully strengthen democracy and good governance through transparent institutionalizing process in developing nations.. Infrastructures for Peace can be an important tool to prevent conflicts.  By laying a  solid foundation for Peace initiative designed by UNDP to strengthen the capacity and to manage conflict is one such successful programme. Today the United Nations Development Programme (UNDP) plays a fundamental responsibility with worldwide communities to address global, regional and national challenges. Since its inception the United Nations development agency has made significant solutions to world’s most pressing problems.

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Economy

China-Pakistan Economic Corridor: Promoting Perspectives from Pakistan

Abbad Farooq

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China-Pakistan Economic Corridor (CPEC) is defined by the Government of Pakistan as “the growth axis and development belt featuring complementary advantage, collaboration, mutual benefits and common prosperity.” The mega-project is one of the largest bilateral investment (US$52 billion) underway anywhere in the world. Despite all the advantages, international media has shown weariness on CPEC on grounds of ‘debt trap and transparency,’ largely swayed by great power states who fear geopolitical repercussions. For a grandeur development program such as CPEC, it is natural to have opposition from states having vested interests of power. Therefore, in order to strengthen CPEC and make it inclusive, there is a need to strategically market CPEC at international platforms to address the apprehensions of regional and international partners. 

A flagship project of the Belt and Road Initiative (BRI), CPEC is in tandem with President Xi Jinping’s vision of ‘Chinese dream’, which avows to commercially link China to Africa, Europe and the Persian Gulf by ways of land and maritime routes. CPEC infrastructure projects, similarly in recognition of the vision comprises of mega-network of highways, railways, and energy pipelines to link Western China to the Arabian Ocean via the Gwadar Port. Pakistan and China have an efficacious history of economic cooperation; developments as diverse as the Karakoram Highway, Thar Coal Power Project, Karachi-Gwadar Coastal Highway, Chashma Nuclear Power Plant, and a number of hydro-power projects was achieved as a result of the bilateral partnership.

Pakistan’s business environment has considerably improved in recent years, as result of CPEC investment and projects. It is now ranked by World Bank Ease of Doing Business as 108 among 190, a considerable improvement by 28 places. Moody’s International has also upgraded Pakistan rating outlook to ‘stable’ from ‘negative’. Foreign companies, such as Hong Kong based Hutchinson Port Holdings have invested $240 million for the up gradation of container terminal at Karachi Port, which recently made history by welcoming largest ever container vessel in the country. According to the Parliamentary Secretary for Planning Development and Reform, Pakistan has completed 13 projects worth around 11 billion dollars, while 13 projects worth 18 billion dollars are under underway, and another 21 billion dollar projects are in the pipeline. According to estimates by financial pundits, the success of CPEC can provide a growth rate of 10 to 15 percent by 2030 to Pakistan’s economy.

A number of initiatives have been taken by the public and private sector institutes in Pakistan, to raise awareness regarding CPEC prospects and opportunities. International CPEC Workshop (ICPECW), Obortunity, a 2.5 weeks international learning and networking platform is annually organized by National Defence University (NDU), Islamabad. The workshops is based on lecture-discussions from leading experts on CPEC and BRI, comprising of networking dinners, seminars and meeting with leaders of state institutions in China and Pakistan. The 1st ICPECW was held from 17th April to 3rd May 2019 at Gwadar, Beijing and Islamabad. The 2nd International CPEC Workshop (ICPECW) will similarly be held from 2nd March to 19th March 2020, as a dedicated CPEC platform to bridge the gap between private and government circles. An initiative was also taken by Higher Education Commission (HEC), which established CPEC Consortium of Universities in Islamabad to promote business-to-business linkages between China and Pakistan. The scope of the Consortium has recently been enhanced by adding 56 universities from the two countries, to cover all major areas of higher education.

Nevertheless, Pakistan needs to take similar initiatives at international level. Foreign Office along with various international trade missions maybe tasked to hold seminars, workshops and conferences to raise awareness regarding CPEC. Regional organizations including the Shanghai Cooperation Organization (SCO), South Asian Association for Regional Cooperation (SAARC) and the Organization Islamic Cooperation (OIC) maybe taken into the loop for raising awareness regarding investment and growth opportunities of CPEC. It maybe added that strong economic ties has the prospective of pacifying antagonistic rivalry and lead to cooperation in other strategic areas. 

The turn in global events have aggravated the Western anxieties regarding the BRI as consisting of ‘predatory initiatives’ and CPEC has unfortunately become part of the spectra. The fact nevertheless is that 90 percent of developing country’s debt, including that of Pakistan is outstanding to Western institutions and countries. It is also striking to note that China as a result of indigenous reforms was successfully able to pull over 800 million people out of poverty, whereas according to analysts Pakistan continues to be meshed in cycles of stagnated growth and debt trap, despite the assistance of IMF. A diplomatic effort to promote Pakistan’s discourse on CPEC in the long-run would help enhance the scope of the project and gain the confidence of global investors.

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