Connect with us

Economy

The Yuan versus the Dollar: Showdown in the Global Financial Arena

Published

on

At the 1944 Bretton Woods Conference, the United States laid the foundation for the U.S.-centric international monetary system, thus ensuring the dollar’s status as the key reserve currency for the next 75 years. The fact that other countries accepted the dollar as the main currency of international payments, loans and investments allowed U.S. transnational corporations to dominate global markets in the post-war period quickly. However, if we are to proceed from the development patterns of the international monetary and financial system, then it follows that the dollar will eventually be replaced by the yuan, the currency of the new global economic and financial leader (China). Will Beijing manage to build its own system of global institutions, one that is capable of internationalizing the yuan and competing against the U.S. currency when it comes to servicing global flows of commodities and finance? In order to answer this question, we need to look at the trends of the global financial architecture as it stands today and identify the strengths and weaknesses of the U.S. and Chinese financial systems.

The Global Financial Architecture

The global financial architecture (GFA) is the combination of institutions involved in the regulation of global finance. It consists of a model for organizing international financial relations, institutional mechanisms for managing these relations, and the principles underlying the participation of countries in decision-making processes. The GFA model is based on the competitiveness and openness of global financial markets. The institutional mechanisms include fiat (intrinsically valueless) money, the free trans-border movement of capital and a system of floating exchange rates. The influence of individual countries on the development of the GFA depends on the size of their quotas and votes within the Bretton Woods institutions of the IMF and the World Bank.

One feature of the current transformational processes as applied to the GFA is the concentration, in individual countries, of financial assets that exceed the size of their economies by tens, hundreds and even thousands of times. For example, the financial assets controlled by Luxembourg exceed its GDP by 248 times, and those of the Cayman Islands exceed its GDP by 1861 times. These imbalances are caused by the fact that the modern GFA is formed not along the lines of the formal Bretton Woods institutions, but rather informally, via the offshore financial system.

It is in offshore jurisdictions, i.e. outside the national borders of the countries that issue international currencies, that the bulk of global monetary liquidity is generated. For example, in 2007–2008, the Federal Reserve Bank of New York opened temporary dollar swap lines for the central banks of 14 countries worth over $10 trillion to refinance the dollar liabilities of lending institutions operating out of those jurisdictions. The swap lines were discontinued in February 2010, but were reinstated three months later in a different format between the Federal Reserve System (FRS) and five key central banks that are closely linked to the United States: the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Japan and the Bank of Canada. These C6 swap lines were made permanent and unlimited in October 2013. It is thanks to these currency swap operations that the U.S. FRS can create euros, pounds and yen in offshore jurisdictions. The other countries involved can participate in the creation of offshore U.S. dollars. The massive swap agreements involving the most significant central banks undermine the importance of the Bretton Woods institutions as the providers of global liquidity and make it difficult to record and control global capital flows at the intergovernmental level.

The U.S. Financial System

The main strength of the U.S. economy is that it issues the key global currency, as well as the fact that it has created the world’s biggest stock market, in which more than half of all U.S. households participate. The United States has the most liquid bond market, which means that the dollar is the international benchmark for value and the main reserve asset for the rest of the world (its share in the international reserve portfolios of central banks exceeds 60 per cent). Over 50 per cent of all international deposits, loans and promissory notes are nominated in U.S. dollars. Washington is home to the headquarters of the Bretton Woods institutions, which are responsible for macroeconomic oversight and addressing structural imbalances in the 189 member nations. Three U.S. rating agencies account for 96 per cent of all credit ratings assigned in the world, U.S. investment holdings manage more than 50 per cent of global corporate assets. These and other factors explain the dominant role of the United States in the formation and development of the GFA.

The main weakness of the U.S. financial system is that the country’s economy is based on debt and is extremely dependent on bank lending terms and the dynamics of stock market operations. A sharp increase in interest rates or a decline in demand as a result of economic overheating leads to a nosedive in share prices, which, in turn, leads to a depression, as was the case in 1929 and 2008. One other vulnerability of the U.S. financial system is its dependence on external financing, which is due to the status of the dollar as the key reserve currency. Should the international demand for dollars decline, U.S. funding from external sources may also decrease.

China’s Place in the GFA

China leads the world in terms of monetary aggregates (in the dollar equivalent), purchasing power parity GDP, production and exports, and the labour force size. However, China’s economic growth continues to be largely dependent on imports of foreign investments and technologies.

China’s leading positions on a number of economic indicators still has a negligible effect on the country’s ability to influence international financial relations. As before, the head of the IMF is a European citizen and the head of the World Bank is an American. Unlike other international organizations within the UN system, which make decisions based on the “one vote per country” principle, the IMF and the World Bank are stock companies whose capital is owned by the member nations. Decisions on the most critical issues on the agenda of the Bretton Woods institutions are made by a qualified majority of 85 per cent. Following the reform of the IMF quota and voting system in 2010–2016, the BRICS countries failed to gain the minimum number of votes (15 per cent) to obtain veto power and assert the multipolar principle within the organization. Just like before the reform, the United States continues to be the only IMF member nation that has the power veto.

China certainly owes much of its global economic achievements to its membership of international financial and economic organizations that the United States was instrumental in founding and running. That said, in order for China to protect its economic interests in an effective manner and exert tangible influence on decision-making processes in the global economy, Beijing needs to participate in those international institutions in which its vote has a decisive role. In this sense, China has high hopes for its recent initiatives to create pan-Asian institutions for monetary policy, finance and economics, such as the BRICS Contingent Reserve Arrangement, the Chiang Mai Initiative Multilateralisation, the BRICS New Development Bank and the Asian Infrastructure Investment Bank.

The opening of the Shanghai International Energy Exchange (where transactions are carried out in Chinese yuan) on March 26, 2018, was a particularly significant event. This was China’s first step towards the formation of a “petroyuan” pricing system on the global energy resources market. The Shanghai Futures Exchange has begun trading in new oil futures, known as INE, which are expected to compete against British Brent and U.S. WTI contracts. The pricing of oil in yuan is an important component of the drive to internationalize the Chinese currency and lessen the global economy’s dependence on the dollar.

By late 2017, the People’s Bank of China had signed 37 swap agreements with different countries worth more than 3 trillion yuan. The agreements were aimed at facilitating the use of the yuan in doing business with foreign banks and companies, so that the central banks receiving liquidity in yuan can act as lenders of last resort after the activation of currency swap lines. However, the agreements have not resulted in a significant increase in the global use of the yuan, which is what was originally expected. Since the 2008 initiation of the swap agreements, the share of the Chinese currency in the denomination of international promissory notes has stood at roughly 0.3 per cent, whereas the share of the U.S. dollar has grown from 47 per cent to 63 per cent.

In addition, currency transactions involving the yuan are mostly done via London, not Beijing. The United Kingdom accounts for 33.79 per cent of all global currency operations involving the yuan. Hong Kong remains the largest clearing centre for international transactions in yuan, serving 76.36 per cent of all such global operations (the United Kingdom is second with 6.18 per cent). Thus, most international transactions involving the yuan are performed outside continental China.

One more obstacle to the faster internationalization of the yuan is China’s preoccupation with domestic problems stemming from the rapid growth of debts (especially in the property market), the growth of the shadow banking system and the disproportionate allocation of loans to large and small businesses. In its attempts to conduct a softer monetary policy, the Chinese government is facing a difficult choice between supporting short-term growth and countering unfavourable external shocks. A monetary easing could increase the vulnerability of the Chinese economy, because continued lending growth is capable of slowing down or complicating the restoration of banks’ balance sheets and aggravating the existing imbalances in the allocation of loans.

University of California professor Barry Eichengreen, who is one of the most respected experts on the development of the international monetary system, says the yuan does not qualify as an international currency for three reasons: 1) the high costs of financial transactions involving the acquisition and distribution of information; 2) China’s great dependence on Hong Kong as a regional offshore centre; 3) China’s inability to exert political pressure on the other global economic centres, primarily the United States and the European Union. At the same time, according to Eichengreen, there are four factors indicating the growing status of the yuan as a regional currency: 1) the potential growth of incomes in Asian countries, which results in increased demand for Chinese commodities; 2) the implementation of multilateral projects as part of the Belt and Road initiative, which results in the growing use of the yuan in Central and Southeast Asia; 3) the development of the Asian bond market, which leads to the standardization of international promissory notes nominated in yuan; 4) the growing demand for yuan on the part of commercial banks and companies in swap transactions between central banks as part of the Chiang Mai Initiative.

Points of Conflict between the United States and China

Unlike the Cold War era, which was characterized by the polar confrontation between two systems, today the United States and China are members of the same international financial organizations, they both interact in the uniform global capitalist market and follow the same principles of competition, effectiveness and profit maximization. For this reason, the main point of conflict between the United States and China concerns mutual restrictions when it comes to allowing the other country’s finished products and services onto their national markets.

Nobel Memorial Prize in Economic Sciences recipient Joseph Stiglitz believes that the United States stands to lose more from its trade war with China than China does, as the Chinese authorities have far greater opportunities to restrict the operations of U.S. corporations working in China than the U.S. authorities do when it comes to Chinese goods imported into the United States as part of international trade. In addition, raising the prices of Chinese commodities on the U.S. market may cause dissatisfaction among end customers.

Another point of conflict between the two countries is connected to China’s limited ability to influence major international organizations. Despite the IMF reform, China did not secure a tangible increase in its influence within the organization, with its quota only growing from 4.0 per cent to 6.41% per cent. We should note here that when the IMF began operating in 1947, China’s quota was bigger than it is now, at 6.56 per cent (even though the country was the world’s fifth-largest economy at the time, not the second largest as it is today). The formal inclusion of the yuan in the special drawing rights (SDR) basket (the IMF’s cashless reserve asset) in 2016 was largely symbolic, because the use of SDRs has no effect on the actual balance of forces in the GFA. The value of the SDRs in circulation stands at $204.1 billion, or under 4 per cent of the international currency reserves calculated in dollars. The share of the yuan in the structure of international currency reserves and international transactions stands at approximately 2 per cent, which does not reflect China’s global role as the largest manufacturer and exporter.

One more potential point of conflict is the development of artificial intelligence (AI) technologies. In accordance with the Made in China 2025 plan to develop strategic technologies, the country expects to have assumed global dominance in the world in the field of AI by 2030. The financial sector has high hopes for AI in terms of its potential to increase effectiveness and profitability, much like the effect that the introduction of information technologies had on financial services. China has already outstripped Europe in the number of AI-related startups and is gaining ground on the global leader in AI, the United States.

Conclusions

Experts view pan-Asian financial institutions as an instrument used by China to establish its status as the leading Eurasian and global power. Chinese officials repeatedly stress that the newly established institutions aim to compete with the Bretton Woods institutions, not replace them. In other words, at the current stage in the development of the GFA, China has no intention of changing the neo-liberal principles of its functioning.

Despite the significant increase in China’s influence on the global economy and the addition of the yuan to the SDR basket, the dollar continues to play the key role in the global financial market and in servicing international trade in commodities and services. China’s growing influence on the GFA thus depends on strengthening the global role of Sino-centric financial institutions and on the broader use of the yuan in international payment systems and in transactions on the global financial market. At the same time, the active creation of offshore dollars that are not controlled by the U.S. regulators increases the risk of the dollar-centric currency system collapsing.

It is obvious that the current GFA configuration is not likely to undergo any significant changes in the foreseeable future (unless another global financial crisis breaks out) because the United States has a significant number of institutional instruments and mechanisms for influencing the global economy at its disposal. In the long run, however, any growth in China’s actual role in the international financial system will depend on the successful promotion of a conceptual alternative to the current GFA model for the purpose of overcoming global imbalances between the financial sector and real economy.

From our partner RIAC

Doctor of Economics, Senior Research Fellow and Professor in the Department of World Economy and World Finance of the Financial University under the Government of the Russian Federation, RIAC expert

Continue Reading
Comments

Economy

Innovative ideas and investment opportunities needed to ensure a strong post-COVID recovery

MD Staff

Published

on

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.

Continue Reading

Economy

H.E. Dr. Thani Al Zeyoudi: Our aim is to become the #1 country for foreign investment

MD Staff

Published

on

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.

Continue Reading

Economy

Future Economy: Upskilling Exporters & Reskilling Manufacturers

Naseem Javed

Published

on

Pandemic recovery is now openly calling global thought leaderships to speak up and enter their bold debates on national/global economic development issues to foster grassroots prosperity to avoid a billion displaced magnetized to populism. Seriously missed during the last decade, collaborative synthesizing with diversity and tolerance and wrongly replaced by seek and destroy economics creating trade wars… now is the time to cooperate, upskilling, and reskill working citizens of all nations.  

The United Nations should lead with a global mandate…

Upskilling Exporters: When exporters in any country suffer lack of market share and their lower prices bringing in lower profits because of lack of quality upskilling and reskilling becomes mandatory. When innovative excellence is parked under the umbrella of entrepreneurialism national mobilization becomes number one priority. The pandemic recoveries across the world coping with a billion displaced all have now critical needs of both upskilling and reskilling. Upskilling is the process of learning new skills to achieve new thinking. Reskilling is the process of learning new skills to achieve new performances. Today, in super advanced and globally competitive markets raw hard work will not achieve global competitiveness only upskilling and reskilling will create a sharp edge.

Reskilling Manufacturers: When factories start having larger warehouses to hold unsold inventories and when production commoditized and price becomes the only deciding factor, reskilling on “real value creation” becomes mandatory. Advanced Manufacturing Clusters in various nations will greatly help, but understanding of global-age expansion of value offerings with fine production is a new art and commercialization to 200 nations a new science.

Now under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, The Annual Investment Meeting, organized by the UAE Ministry of Economy, scheduled to be held from 20th to 22nd October 2020.. The AIM under the theme “Reimagining Economies: The Move towards a Digital, Sustainable and Resilient Future.” This is a gathering of the global investment community with participants attending from more than 170 countries. The conference addresses multiple issues on FDI, national digitization and uplifting SME and midsize business economies with great speakers from around the world.

The future of economies, exports, Chambers of Commerce, Trade Associations and SME and midsize economic developments all called for bold and open regular debates. The zoomerang impact of global thought leadership now forcing institutions to become armchair Keynote speakers and Panelists to deliberate wisdom from the comfort of their homes round the clock events… study how Pentiana and Expothon Project tabled advanced thinking on such trends during the last decade. For fast track results, follow the trail of silence and help thought leadership to engage in bold and open debates and help show them guidance to overcome their fears of transformation. The arrival of Virtual leadership and Zoomerang culture is a gift from pandemic recovery, acquiring mastery.

The Difficult Questions: Nation-by-nation,when 50% of frontline teams need ‘upskilling’ while 50% of the back-up teams need ‘reskilling’ how do you open discussions leading to workable and productive programs? Each stage challenges competency levels and each stage offers options to up skill for better performances. Talent gaps need fast track closing and global-age skills need widening. New flat hierarchical models provide wide-open career paths and higher performance rewards in post pandemic recovery phases. When executed properly such exercises match new skills and talents with the right targeted challenges of the business models and market conditions. The ultimate objective of “extreme value creation” in any enterprise must eliminate the practices of ‘extreme value manipulations”. Study of the last top 10 highly exposed global scale corporate scandals on ‘value manipulation’ spanning years and decades and recognize their fake reign of legitimacy during such traps as lessons. Economies around the world solely based on ‘value manipulations’ are not economies, they are schemes. The billion displaced need optimization and upskilling to contribute to real value creation.

The upskilled and reskilled in platform economies are agile builders of the future workforce.  Study the major cycles of the last century, how in the 70s and 80s billions trained on desktop computers for the world to enter the “Digital Age”. Best career paths now based on digital trajectory matched with critical thinking and complex problem solving when all combined will boost the enterprise to newer heights. The economies of the future must declare upskilling of national citizens as prime mandate.

All transformations must start from the very top; nation-by-nationtrue upskilling and reskilling cascading with new vision and with pragmatic solutions to precisely enhance skills to match the digital age and our smart world. The culture must embrace upskilling and reskilling as a daily open routine of lifelong learning and future planning to carve a distinct position in the marketplace. Study ‘national mobilization of entrepreneurialism’ on Google. A very bright future awaits. The rest is easy. 

Continue Reading

Publications

Latest

Trending