Connect with us

Economy

Trade wars, currency wars and geopolitical clashes

Published

on

The Chinese yuan has already plummeted to the historic lows of the last seven months as against the dollar and nothing prevents us from thinking that the Chinese government is organizing a real devaluation of the yuan-renmimbi.

In fact, on June 27 last, the Chinese central bank set the parity as against the dollar at 6.596, by also cutting additional 391 points compared to the levels of the previous day.

A move that could largely expand the already significant size of China’s foreign trade, as well as avoid further tension with the USA on trade tariffs, and finally increase and differentiate Chinese exports.

This does not necessarily mean, however, that China really wants to significantly and clearly devalue the yuan. We rather fear that this threat is a sword of Damocles to be placed right on President Trump’s head.

The problem is, above all, of a geopolitical rather than of a financial nature.

As early as the 1990s, the US ruling classeshave ridden  their project of globalization, which has inevitably been matched by universal financialization.

On the one hand, this has created a new power – that of the major international regulators (the World Bank, the Basel Bank for International Settlements, the Monetary Fund, etc.), which have largely changed the course of US geo-financial interests since the USSR collapse – while, in the meantime, the advanced technologies have migrated to Asia and partly to the European Union.

Asia is currently a US global competitor, while Europe is now perceived by the United States as a useless buffer vis-à-vis the pan-Russian region and, above all, the pleasant geopolitical region that believes it has a currency, namely the euro,  preventing the dollar from fully developing.

By all accounts, on July 15 next, Trump and Putin could just decide to stop the escalation between Russia and the USA, thus together weakening the European region.

The region that has so far followed the new American Cold War blindly and even against its own clear interests.

Hence currently China wants to direct the whole globalization and financialization process of the world economies.

According to China’s decision-makers, the United States can no longer afford it, considering that -based on 2017 data – its trade deficit amounts to 567 billion dollars and its public debt is equal to 21.5 trillion dollars.

It should be recalled that this is the real bone of contention.

Moreover, despite President Trump’s tax reforms, the US companies still have 2.7 billion dollars held in tax havens.

All global tax havens hold 21-35 billion US dollars of private funds. Resolving this tension means becoming global leaders, both financially and industrially.

This holds true also for corruption.

For example, the African nations alone lost at least 1 billion US dollars in 2017 due to the capital flight, while the sum of these African countries’ foreign debt is currently only 200 million dollars.

This year Switzerland ranks first in the list of tax havens, but followed by the United States and the notorious Cayman Islands.

Hence while the capital market is grey and inelastic, as shown by most tax havens, when the public revenue stemming from corporate income decreases, personal income taxes can only increase. This is certainly not a formula for economic development, neither driven by exports nor by other operations.

Not surprisingly, over the last ten years the US public debt has grown at the rate of 1.23 billion dollars, but it has recently doubled, rising from 8.9 trillion dollars in 2007 to 20.1 trillion dollars in December 2017.

Hence, while currently the US globalization trick mainly favours China, military pressure and protectionism are the main and inevitable models of behaviourand protection of the US interests in the world.

Furthermore, protectionism is worth as much as manufacturing, considering that finance is already globalized everywhere: nowadays the US industry, including the energy system, produces only 21% of GDP, while the rest is produced by the service sector.

President Trump’s new proposals, however, i.e. the mix of FED’s “moderate” monetary policy, of trade deficit reduction and of tariff protection through the buy American policy, are worth approximately 1 billion dollars of increase in federal spending, with support to some new infrastructure, but with additional 4.4 trillion dollars relatingto tax reform.

The reduction of personal income and corporate income taxes from 35 to 20% – the focus of President Trump’s new tax policy – as well as the reduction of taxes on repatriated capital and the other corporate tax cuts, are all operations leading to a depreciation of capital income and hence, according to neoclassical models – to a corresponding investment increase which, however, never really materialize.

Therefore President Trump’s tax reform could certainly stimulate domestic demand and hence the GDP growth rate, thus resulting in greater household spending, but above all enabling companies to deduct new investment from taxes until 2022.

However, the amount of recently-issued US debt securities can raise interest rates significantly.

Hence short-term investment expands in the USA, while the market is well aware that, as from 2025, the public deficit and hence interest rates will fall significantly.

There could therefore be the corporations’ temptation to postpone investments for a few years. Nevertheless, in the short term, the tax rebate policy is a drain on public revenues, which are expected to decrease by 11 trillion dollars until 2027.

Corporations can stand it.

Currently the US debt-to-GDP ratio is equal to 105%, but in 2027 it is expected to reach 110% with a foreseen 3-3.5% yearly annual growth rate.

The US Congress calculates that the tax losses caused by President Trump’s reform should be 414 trillion dollars staggered over ten years.

Over the same period, the reduction in revenues is expected to be 1,633 trillion dollars.

Moreover, the increase in direct household income is supposed to be 8%, with a clear increase in taxable income.

Nevertheless, this obviously does not offset the primary decrease in revenues – otherwise we would have discovered the perpetual motion.

Hence US corporations could save 1.2-1.3 trillion dollars, which previously went on taxeswhile, if all goes well, President Trump’s reform could stimulate a further 9% GDP growth in the medium to long-term.

However, the US domestic market’s dependence on foreign markets is very high, even with a population of 320 million inhabitants and a high average consumption rate.

Hence if a policy is implemented to substitute imports from abroad to the USA, where the labour cost and taxes are comparatively higher, this will imply an obvious increase in inflation.

It should be recalled that currently the Russian Federation has already put in place as many as 780 projects of import substitution, while last March Chinese imports rose by 14.4% – a higher rate than expected – but with a corresponding 2.7% yearly fall in Chinese exports denominated in dollars.

For the time being, China aims mainly at import diversion, not so much at import substitution.

As we all know, another piece of President Trump’s tax and economic domino is the dismantling of Obamacare.

A substantial cut would be a dangerous political mistake on such an important issue from an electoral viewpoint.

Probably President Trump’s cuts will be mainly focused on education and research, considering that under President Obama’s Administration the social spending for income support had reached 66% compared to 15% of the previous Presidencies, including the Democratic ones.

The United States is not good at implementing Socialism- this is a specialty of the best Europe, as is also the case with social Catholicism.

The welfare Catholicismwas certainly not born only to take away votes from the Left, but also resulted from a long and  elaborate analysis that the Catholic Church made on capitalism, from the French Revolution until the Encyclical Rerum Novarum, with the refined philosophy of Mounier’spersonalism and, in Italy, with the extraordinary season of the Code of Camaldoli.

Within the framework of US typical capitalism, however, high social spending is a danger to the economic system and to domestic financial markets.

The US friends can afford neither democratic Socialism nor the social Catholicism of the Code of Camaldoli.

Furthermore, President Trump’s idea to repeal the Dodd-Frank Act – which, after the 2007-2008 crisis, redesigned the clear separation between investment banks and savings banks, invented by the Fascist legislation on the State holding IRI and later revivedby President Roosevelt in the Glass-Steagall Act of 1933, repealed in 1999 – is not entirely wrong.

If anything, President Trump wants to revive the 1933 Act, with an eye to the new “21st century” Glass-Steagall Act proposed by John McCain and Senator Elizabeth Warren – a new Act specifically banning the current dual role played by banks, both as institutional investors on behalf of corporate clients and as classic collectors of savings from small clients.

President Trump probably agreeswith the lines of a new Glass-Steagall Act that, according to the US President’s economic advisors, should favour the control and management of bank credit and the mass of credit liquidity.

Theringfencecurrently required of US banks is certainly not enough to regulate the cycle, but nowadays it is hard to well define the different types of financial investment.

Moreover, duration is not the only index to assess its dangerousness or not. We will talk about it at a later stage.

It is also worth recalling, however, that private consumption in the USA amounts to 70% of GDP, while the US citizens’ private debts are currently worth as many as 18.94 trillion dollars, equivalent to 96% of current GDP.

Hence either private debts are rescued or also the GDP is jeopardized, with ripple effects which are hard to foresee.

In our opinion, the policy line supported by President Trump, who wants a federal law regulating current and future financial markets, goes in the right direction.

This means that, as already happens, President Trump will do everything to provide stable employment to the Americans (158 million employees) by curbing the foreign manpower whocarries out direct wage dumping against US citizens, thus competing with them at a minimum wage level.

Domestic wage dumping will no longer be allowed in President’s Trump era and investment in manufacturing will be aimed at turning temporary jobs for Americans into stable jobs.

The President wants to do exactly the opposite of what the European Union is doing – and he will succeed.

During President Obama’s Administration, legal and illegal migrants totalled 27 million people.

Hence the three goals of what has been defined as Trumponomics are essentially the expansion of national production; the increase of the US  labour market in terms of size and income, as well as the repatriation of the huge amount of US capital held abroad.

Nevertheless, with specific reference to trade regulations,  rebalancing the US market is a complex process: in the USA there is no VAT for imported goods, except for a sales tax which, however, is applied only in some States of the Federation.

The solution would be to manipulate taxation on imports in such a way as to remove the difference between the external taxation levels of the various countries exporting to the USA and hence abolish the comparative advantages of the various countries selling in the US market.

Let us now analyse, however, the overall policy line and, above all, the energy tax policy that President Trump wants to implement.

The USA is still the first energy consumer in the world since it uses as much as 25% of all energy produced globally, with a share that is more or less equivalent to the US share of global economy.

The United States currently uses 19.7 million oil barrels a day.

Nowadays, based on March 2018 data, the North American autonomous oil production amounts to 10.4 million barrels a day- a share which, however, is worth only 52% of US consumption.

Nevertheless, it should be recalled that 68% of oil imports into the USA are duty-free.

It is also worth recalling that, based on the most reliable  predictions on shale oil and gas, by the end of 2022 the Americans expect to produce two-thirds of their own energy needs autonomously -hence it is extremely probable that NAFTA exporters to the USA, especially Mexico, shall accept an unexpected share of taxation on oil barrels exported to the United States.

This, however, could lead to a price war between NAFTA producers and competitors in the Gulf or other areas.

Obviously the taxes and duties on energy imports would mainly favour the US domestic production, thus allowing the massive internal consumption of US oil and gas and the re-exporting of thetaxed ones coming from the NAFTA regions.

With specific reference to natural gas, the US situation is equally rosy. Since 2009 the United States has gradually become the world’s largest producer of natural gas, with proven reserves in North America equal to Saudi Arabia’s, but 5.5 times less than Russia’s and 3.7 times less than Iran’s.

This will explain many things in the future.

In 2017, the USA produced 73.6 billion cubic feet of natural gas per day, especially in the Appalachian regions, while the North American government agencies expect that gas – as long as it lasts – will not only saturate all domestic consumption, but will also enable the USA to become a net exporter of liquefied petroleum gas (LPG), with facilities in Louisiana and Maryland, which are now on the point of being completed.

This new US presence in the energy sector will be a powerful lever to deal with the new tariff balances from a strong bargaining position.

With specific reference to infrastructure, there is a “Roosevelt-style” plan that, not surprisingly, President Trump is putting in place, by using a bill – originally submitted by the Congress – which provides for investment to the tune of 1.5 trillion dollars to stimulate private individuals and entities to further invest in this sector that is usually unattractive for US capitalists.

Only 200 billion dollars would be direct federal funds, while the remaining 1.3 billion dollars would, in fact, come from private individuals or entities or from States of the Union.

The goal is to modernize the railway network, motorways, airports and sea ports, as well as waterworks and hydroelectric dams.

Additional 50 billion dollars will be allocated to agricultural infrastructure and irrigation.

The States of the Federation will be responsible for the entire infrastructural operation, but we do not see how the necessary external investment can come to the USA  – an investment that will be unavoidable, considering the amounts at stake.

Hence, with Trump’s Presidency, the United States will basically tend to become an economic organization virtually impervious to external shocks. It will make all the companies which are essential for both military or economic national security go back into the Federation’s perimeter. It will finally expand the manufacturing sector to the detriment of the service and financial sectors.

Along with these geo-economic prospects, Trump’s Presidency will try to foster peripheral and marginal tensions in the world arena, above all to sell arms and later create the flow of high-tech investments which, as usual,   starts from the military sector and then affects also the civilian sector.

Trumponomics has so far worked well and has reached some good results.

In 2017 domestic demand rose by 4.6%, the fastest growth in the last three years.

Consumer spending, which is worth two-thirds of all US domestic trade, grew by 3.8% in late 2017, but families also benefited from the steady increase in stock market indices, as well as from the increase in property and real estate prices and in wages- which is certainly not a negligible fact.

Most of the growth in consumption, however, was directed to imports, which grew by 13.8% in the last quarter of 2017. In terms of balance of payments, this offsets the increase in US exports deriving from the relative weakness of the dollar.

The diversification of the North American economy has increased by 19% and the USA are collectively less dependent on the results of the various productive sectors.

Unemployment is falling also for the “Latinos” and the black people, with the lowest unemployment rate of the last 40 years, as well as the return of Chrysler-FIAT to the USA, for example, through a new factory for 2,500 workers in Michigan, while the opinion polls show that 70% of the US population believe that the economy is “excellent” or good”.

In 35% of cases,temporary jobs are turned into stable jobs -without particular racial differentiation.

According to Moody’s, since 2014 the US economy has produced over 2 million new jobs a year, while the unemployment rate is currently lower than 4%.

Nevertheless, imports obviously continue to be the Achilles’ heel of President Trump’s project.

The more the US economy grows, the more the share of imports increases.

In 2017 the USA imported 2.79 billion dollars of goods and services with a related export share of 2.32 billion dollars alone, resulting in a trade deficit equal to 566 billion dollars.

The imbalance between imports and exports, however, always leads to a 1.13% decrease of GDP.

The sectors that contribute most to this imbalance are the automotive and consumer goods sectors.

In 2017 the USA imported drugs, cars, clothes and other goods to the tune of 602 billion dollars, while it exported 198 billion dollars of consumer goods only.

The United States imported 359 billion cars, but exported only 158 billion ones.

In this sector the real US competitor is still China. In late 2017, however, the USA recorded a 375 billion dollar balance of payments deficit vis-à-vis China; a 71 billion dollar deficit with Mexico and a 69 billion dollar one with Japan, as well as a 65 billion dollardeficit with Germany.

Nevertheless the trade wars – which, as President Trump maintains, are “easy to win” – are not so much so.

The introduction of a single tariff on goods imported from China, as well as a 45% duty – 35% for Mexican goods –  would increase the cost of all imports, from any country, by 15%, with a 3% average price increase resulting in a 85 billion fall of US exports compared to the initial data.

Furthermore, the EU could easily increase its duties within two months.

Finally, China could respond by increasing customs rights and duties on as many as 128 types of imports from the USA, in addition to imposing a further 25% duty on cars, aircraft, oil and food from the USA.

In short, for a President very focused on the economy like Donald J. Trump, the prospect of protectionism will be less likely than we can currently anticipate and, however, the slow reconstruction of the US manufacturing and internal market – which are President Trump’s electoral and geopolitical goals – will continue.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Continue Reading
Comments

Economy

What are Market Anticipations and Policy Expectations as Shares Tumble?

Published

on

On April 21st, the three major A-shares indices saw a severe drop due to a combination of local and global causes. The Shanghai Composite Index dropped 2.26%, the Shenzhen Component Index dropped 2.7%, the ChiNext Index dropped 2.17%, and the CSI 300 Index dropped 1.84%. More than 4,400 stocks fell in both cities, while industrial categories led by tourism, fertilizer, agriculture, and photovoltaics almost across the board.

As April started, the Shanghai Composite Index has fallen 7.5%, down 10.5% from the beginning of March. The CSI 300 Index has dropped 13.40% from 4,614 in early March to the current 3,995.83, which tumbled 21.31% from 5,078 in mid-December last year. Because incremental funds were not injected into the market anymore, only stock funds were up for grab. Since the middle of March, A-shares stock trading has been declining, indicating a lack of investor trust.

Researchers at ANBOUND believe that this demonstrates the market’s pessimism about the future economic situation. With the downward pressure on the economy increasing, market confidence restoration and expectations stabilization are critical to helping in the healthy development of the capital market, as well as important in maintaining growth and averting risks.

Figure 1: The Shenzhen Component Index plunging more than 4,200 in the past 4 months

Source: Sina Finance

Market institutions have generally accepted the several factors that have caused the recent severe falls in the stock market. First, the worldwide geopolitical risk of distorting the supply chain and affecting company earnings is rather high. Second, since the Federal Reserve has escalated monetary tightening, the quick reduction of the interest rate gap between China and the U.S., as well as the inversion of the RMB exchange rate, is driving the RMB exchange rate to alter, raising concerns about capital flows. Next, the resurgence of the domestic pandemic has a substantial negative influence on China’s economy, particularly in consumption and real estate as indicated in the first-quarter economic statistics, which has heightened concerns about the country’s macroeconomy. Finally, the pessimism has been accentuated by a substantial disparity between recent central bank macro policy actions and market policy expectations. As a result, as long as present internal and external concerns persist, the A-shares market is unlikely to improve much in the immediate term.

Figure 2: The Shanghai Composite Index shedding more than 600 in the past 4 months

Source: Sina Finance

Historically, the fluctuations and transformation of China’s stock market couldn’t fully reflect China’s overall economic situation. However, in terms of expectations, the shifting trend of the A-share market, by acting as a barometer of the economy, continues to illustrate the genuine expectations of capital market investors on future business and overall economic developments. As observed in the March market trend, changes in external variables have been absorbed, but recent stock market volatility is more likely to be aggravated by changes in internal elements. As a result, changes in China’s economic circumstances and policy expectations are undoubtedly the cause of the stock market’s dramatic volatility. Investors are increasingly concerned about the negative economic impact of the COVID-19 outbreaks, as well as a lack of trust in the stability of present economic strength and the rhythm of macroeconomic measures that sustain the economy. As things stand, despite the continued implementation of measures and policies aimed at stabilizing the capital market, these policies are insufficient to boost market confidence.

The pandemic and policy declarations are not only harming the capital market but are also major variables influencing China’s economic future. Notably, the recurrence of COVID-19 is concentrated in those economically developed regions such as the Yangtze River Delta and the Pearl River Delta. The scope and depth of its economic impact may surpass that of the outbreak in Wuhan in 2020. In such a case, we believe that there is a demand to put dedicated unconventional policies into place. In this regard, it is necessary to implement targeted measures to stabilize economic fundamentals based on strengthening prevention and control. On the other hand, it is also essential to promote systematic easing among macro policies to avoid the catastrophic consequences caused by shrinking demand.

Since the beginning of the year, in the framework of the Chinese central bank’s monetary policy implementation process, it has taken a cautious approach to progressively easing, which is far from the policy expectation. Although the central bank has maintained “reasonably ample liquidity” as a whole, the reality of the domestic economy indicates the private economy and a large number of small and medium-sized enterprises are unable to obtain sufficient credit support from those “accurate liquidity provisions”. Such economic structural difference requires not only targeted structural reforms, but also overall easing to achieve the dredging effect from “loose money” to “loose credit”, which would reverse the passive situation. Zhang Jun of Morgan Stanley Securities also pointed out that the policy-level “fueling tactics” will cause a waste of policy space and may also deepen the risk to diminish the expectations.

Concerning the present external limitations that limit China’s domestic measures, ANBOUND has previously stated that variables such as interest rate spreads produced by economic and policy disparities are only one of the external factors impacting China’s economy, but not the most important one. Further concern should now be given to the fundamental factors that drive economic growth and structural improvement. In terms of policy, it is imperative to enhance the ‘autonomy’ of macro policies. We should occupy this window, fundamentally reverse the economic trend, and assist the capital market to construct stable market expectations and policy expectations before the international situation undergoes further evolution, hence coping with a better response to the changes in external factors.

It would be difficult to reverse the situation after market expectations have shifted. When combined with a self-reinforcing impact, it frequently leads to a downward spiral vicious cycle in the capital market and the actual economy. Hence, it is hard to reverse market expectations without stable policy expectations. Judging from the economic data of the first quarter, the overall economy is still resilient and possesses a stable foundation. However, to achieve the economic growth target of the current year, it is still necessary to strengthen the implementation of macro policies. This is not only conducive to the stability of the capital market but for the overall economy as well.

Continue Reading

Economy

Education Must Come First in our Global Economic Agenda

Published

on

A 13-year-old girl solves a maths sum at a school in Gujarat, India. © UNICEF/Mithila Jariwala

With leaders gathering at this year’s World Economic Forum, it’s time to prioritize the impact investments in education bring to businesses, economies and beyond.

As all eyes turn to this week’s World Economic Forum in Davos, we call on world leaders and world-leading businesses to put education at the heart our global social and economic agenda.

Education is our investment in the future, our investment in sustainable economic growth and global security, our investment in the vast potential of our collective humanity.

To realize our goals of delivering equitable, quality education to every girl and boy on the planet – especially those caught in armed conflicts, forced displacement and other protracted crises –  we must activate a global conscience and commitment, and create a value proposition that shows businesses, politicians and the general public just what an investment in quality education means for our world.

This means pre-schoolers can learn to read and write in safe environments. It means girls can become entrepreneurs and doctors – not child brides. It means boys can be teachers and lawyers – not soldiers.

It means refugee children and adolescents displaced by conflict, climate change and other crises in hot spots like Bangladesh, Colombia, the Sahel and Ukraine can go on to complete 12 years of education and become leaders of a peaceful and healthy society.

It means college and beyond, a smarter workforce, and greater socio-economic stability. It means an end to poverty and hunger, establishing gender-equality, and advancing human rights for all.  

Unravelling the challenge

This is one of the most complex problems ever to face humanity. When Education Cannot Wait (ECW) – the UN’s global fund for education in emergencies and protracted crises – was established in 2016, an estimated 75 million crisis-impacted children and youth did not have access to the safety, protection, hope and opportunity of a quality education. That number has risen to an estimated 200 million in recent years as we see a rise in conflicts, displacement, climate disasters and a deadly pandemic that has upended our progress to achieve the Sustainable Development Goals by 2030.

While a minority of people on the planet are enjoying all the comforts of modern life – and football teams sell for more than $5 billion – over 617 million children and adolescents worldwide cannot read or do basic math. That’s more than the total population of ECW’s three largest donors – Germany, the United Kingdom and the United States – combined. 

Nevertheless, to date, less than 3% of government stimulus packages have been allocated to education, and in low- and lower-middle-income countries, the share is less than 1%. We can and must increase this government funding three-fold, following the example of the European Union, which announced in 2019 that it would increase education spending to 10% of humanitarian aid.

Government aid alone isn’t enough

The private sector, businesses and philanthropic foundations like The LEGO Foundation, Dubai Cares, Verizon and Porticus are already activating significant investments into the space.

We need to bring in more funding from industries closely connected with education – like Google, CISCO and Microsoft – and from those which have a vested interest in ensuring global economic stability and resilience, like the Jacobs Foundation, Western Union and Hilton Foundations of this world.

As we embrace the spirit of Davos – “to demonstrate entrepreneurship in the global public interest while upholding the highest standards of governance” – it is clear that this is a global issue that won’t just impact the rights and life trajectories of the world’s most vulnerable children, it will impact the bottom line for businesses, disrupt global socio-economic stability, and affect us all if we don’t act immediately with decisive action and collective humanity at the forefront. 

Building together

Education Cannot Wait has already mobilized over US$1 billion over a few short years and reached approximately 5 million children, but it is simply not enough.  

In the next three years, with the support of donors, the private sector, philanthropic foundations and individuals, we need to mobilize at least an additional $1.5 billion. This needs to happen with the leadership of the G7, the resources and know-how of the private sector partners featured at this year’s World Economic Forum, and the enhanced commitments that will make headlines at this year’s Transforming Education Summit, convened by the UN Secretary-General.

This will enable ECW and our strategic partners to respond immediately and effectively to the education needs of at least 10 million children and adolescents – including 6 million girls.

Think about the ROI. This works out to just $150 per child. If each of the world’s Fortune 500 companies made just a US$15 million contribution, we could surpass our goals and reach 100,000 children per donation! That’s 50 million more children with an education, 50 million more children breaking the hunger and poverty barriers, 50 million more opportunities to provide certainty in the face of very uncertain economic times.

Think about the future. If you could future-proof your business for the next 30 years with such a simple investment, wouldn’t you do it? Investment in education is good for the bottom line. With increased security and economic opportunity in the Global South, we are opening new markets, increasing economic resilience and building a more prosperous world.

Think about the legacy. For every $1 spent on girls’ education, we generate approximately $2.80 in return. Making sure girls finish secondary education could boost the GDP of developing countries by 10% over the next decade.

Think about scale. For every dollar raised, ECW and our strategic partners are leveraging about a dollar. This grows impact exponentially.

Think about our place in history. This is our moment to transform education for those left furthest behind. Please join us in ensuring every girl and boy – no matter who or where they are – has the opportunity to go school, to learn, to grow and to achieve their potentials not just for a day, but for a lifetime.

Continue Reading

Economy

The Politics of New Global Borderless-Class

Published

on

No, they are not the immigrants; they are citizens of a country in their own habitats, but active in yours. Slow circumnavigation of our earth will only prove that at the bottom of the population of each nation now there exists a new borderless-class slowly rising. Firstly, they are effortlessly, technology supported, secondly, squeezed out of imbalances, injustices and inhuman entrapments, thirdly, engaged in ‘nouveau occupationalism’ with virtual hopping from nation-to-nation all in the same typical routines of a normal day.

Fourthly, they are screaming silently, they see the global problems in desperate need of global solutions. Nevertheless, still inaudible in the political rotundas slowly they now become the force challenging old models of governments.

Study Pakistan, Sri Lanka and dozens of population-rich nations of the free world, notice the restless citizenry and their social media centric mobilization of dissent and protest narratives. As in coming months, peak temperatures will further fry the incompetence of the lingering economic bureaucracies. The sizzle is awakening, the awareness of incompetency on the rise. Unless grassroots prosperity issues are boldly addressed the economic fakery clearly visible on trillion blinking devices. Such blinks do not prove neither fame nor popularity but points to a silent ocean ready to drown them. What are the most important and dramatic roles that these borderless-classes will play in our behavioral economies and future demographics? Observe the goals, vision and narrative of Imran Khan of Pakistan.  Notice the silent Australians and polls in dustbins… 25 more national elections ahead.

Why elitism was multinational: Observe, in contrast, for centuries, only elites allowed global games; multinational organization with multinational rules of engagements. Today common folks are on the same platforms. They, born in a country but grew up in another country, work in some other continent and eventually settle in another new country. Exposed to massive digitization, access and internalization of rules of engagement in a massive global society with residency in multiple jurisdictions they are different.

Now Face-to-Face around the world: Compared to previous generations, the new borderless-classes are extremely well informed, this significant feature makes them locally, regionally, nationally and globally interconnected and creates a game changer. Most dramatic economic behaviorism of this borderless dynamic is face-to-face engagement around the world, while remote. Previous elite borderless-class was jet- set dependent.  It will take some deep yoga exercises to figure out mathematical variations to measure the power of their productivity of these hush-hush global whisperers.

What is the world waiting for? What does all this mean to the institutionalized bureaucracies, nestled in governances of the nations of the so-called free world, awaiting a nuke-flash? Perhaps nothing, or shocking realization that masses are discovering by the day how artificially created pre planned economic dramas are hurting local grassroots prosperity. Most importantly, they are equipped and capable to see the root causes and equally to recognize the available workable options. This is the difference.  Unlike some generations fooled sometimes or some all the times but this global-generation cannot fool all the time.

Is this brain drain or invasions of skilled minds?
The coin-operated competency of the Gig-economy now takes notice…

Most difficult questions; almost numbing most bureaucracies of the free world; when billions are already displaced due to pandemic, a billion replaced due to automation and a billion in wrong mismatched mandates how such masses are handled before they move towards populists viewpoints. Such shifts measured as unemployed now occupy remote work for overseas assignments and equally when local workers pushed over by higher skilled workers at half prices but working as foreign workers without paying taxes or contributing to the local societies. Is this brain drain or invasions of skilled minds?  The answers now buried in the several decade long abundance of higher quality upskilling and reskilling in hands of the leading nations of the free world points to massive breakdown of skilled citizenry. Study Expothon on Google on such issues, notice what is changing the thinking…

Only fake economies fail, as only houses built without builders and architectural rules collapse.  Observe the root causes of the last few financial crises. How such collapses systematically occurred, how the whole world of finance, quietly went so wrong, no punishments or lessons, just silence? Now all wait for the repeat performances.

Unfortunately, the jobless cannot create green economies and jobseeker mindsets cannot build new economies, therefore, bold, authoritative narrative on entrepreneurialism needed to bring the job creator mindsets in collaboration as the new art and science and combine both mindsets are going forward strategy. Is climate change a global politics or an entrepreneurial challenge, find the answers.

Study why capitalism is not the one failing: It is actually economic development. Winners of the future not necessarily are the visible rich and power of today. Notice the rising power of the bottom societies. Value creation economies when they become beneficiaries of primarily institutionalized value manipulation economies they become open public frauds. Nations without clear and decipherable narratives on economic fronts with national mobilization of entrepreneurialism will not create a distinct advantage.  Learn fast, fail fast, but move

Nations must demonstrate superior skills to build economies and not wars, creation of armies of entrepreneurs and new valleys of new enterprises.  Only in-depth discussion and nationally televised debates about such economical mysteries will highlight the answers. The silent new borderless-classes of the free economic world are now learning how to fix their government, how to bring change and how to create grassroots prosperity. The rest is easy. 

Continue Reading

Publications

Latest

Finance35 mins ago

Post-COVID, Latin American Leaders Say their Countries Are Open for Business

Rising food and energy prices and a migration crisis are posing significant economic and social challenges in Latin America, according...

Americas3 hours ago

The WW III that Biden and All Other Neocons Are Leading U.S. Toward

The intensely neoconservative U.S. President Joe Biden is leading the world into a World War III against both Russia and...

Health & Wellness5 hours ago

Health Leaders Stress Need for Coordinated Global Response to Tackle Pandemics

Improved global coordination and regional capacity building will help ensure the world is better prepared for the next pandemic, said...

World News5 hours ago

‘New dawn’ for Europe as War in Ukraine Strengthens EU and Support for Enlargement

The European Union surprised the world, and even itself, with the speed, scale and unity of its response to Russia’s...

Health & Wellness6 hours ago

New Accord to Improve Health and Vaccine Equity for 1.2 Billion People in Lower-Income Countries

A groundbreaking initiative launched today at the World Economic Forum Annual Meeting in Davos 2022 aims to greatly reduce the...

Tech News7 hours ago

New Initiative to Build An Equitable, Interoperable and Safe Metaverse

The World Economic Forum announced today a new initiative, Defining and Building the Metaverse. The initiative brings together key stakeholders...

World News9 hours ago

Geopolitical Crises Forcing Leaders to Face up to Difficult New Realities

Poland’s President Andrzej Duda delivered a harsh rebuke to Russia over its invasion of Ukraine, pledging “100% support” for President...

Trending