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Economy

The Reckoning: Debt, Democracy and the Future of American Power- Book Review

Junaid R. Soomro

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Authors: Junaid R.Soomro and Nadia Shaheen

The chapter is written by Michael Moran in which he discussed about the relations between the economic institutions with the other institutions of the state. A state is a combination of many institutions that work together as a single body to make the state run accordingly. Political and economic institutions are two major components of the state. Politics and economy somehow depend on each other from a very long time. The both concepts are old and influenced by each other. The major changes occurred after the industrial revolution that gave birth to new tactics and opportunities to the economy. Earliest, before the French Revolution the economy was controlled by the elites that were the political identities. This is the example that how those bourgeois controlled the economic structure of the state and how they shape or influence the economical aspect of the society. These involvements of both disciplines gave birth to a new subject that is known as the political economy of the states, that how political and economic policies influence each other because it is not possible for any institution to work separately. The economic institutions shape the economic structure of the state and it is controlled by many aspects, including the political institutions, the economic regulations, the political structure of the state that somehow effects the economic institution of the state.

Summary

The chapter tells us that how economic institution and other institutions are interconnected.

Firstly, the focus is on the political institutions. The recognitions of an economic institution as a political act. The “politics” and “market” are somehow interconnected.   It’s not because the political institutions shape the fate of economy, but the economy shapes it as well. From the start of the history these two aspects are there and depend on each other. We can see it through the examination of the history that how the political elites dominated the society because they were also superior financially. The political institutions somehow legitimize the economic institutions. According  to  “Godin”  different  preoccupations  drive  inquiry  in  different  disciplines:  for instance, choice in economy and the power in the politics.

Secondly the focus is the connection between institutionalism and the economic institutions.

The institutions are constructs of human mind, we cannot see or feel them. The regulations and the market grew up together. The current world politics is an example that how the regulations affect the economy and shape it as different stats can be taken as a model who are following the regulations. The institutions determine the opportunities of the society and in result the organizations are made in order or take benefit of those opportunities. There are several parallels that shape the behavior of the institutions that later affects the other institutions including the economic institution.

Thirdly, the connection between the economic institutions and the regulations.

The regulations are made to control the behavior of the institutions. This faced major change after the industrial revolution when many regulations were made that were supposed to control the outcomes of the institutions. We cannot run from globalization, this is the reason that the concept is not the same as it was in the past, but it came up with the new characteristics. Mainly the  evolution  in  the  middle  of  the  twentieth  century  created  a  paradigmatic  shift  in  the relationship of economic and political institutions. There are agencies with in the states that regulates the working on an institution and on the international level there are multinational corporations. This gives us two basic concepts. The first is uncertainty about the boundaries between the politics and economy, and the second is the importance of the agencies that fills the space and regulates the institutions.

Fourthly, the connection between the economic institutions and the capitalism.

Capitalism  and  the  economy are  directly  connected  with  each  other  because  the  industrial revolution triggered the economy. Industries were made after the revolution and the world faced a new era of progress and economic change.  The modern organizations are the basics that can be taken as the source of understanding the modern political economy. Industries were made after the industrial revolution that mainly works on the productivity, the more the productions are the more it will benefit. This era was a game changer for the economic aspect of the society and later it the economic institutions modified themselves.

Fifthly, the economic institutions and the democratic government.

The  connection  between  democratic  political  institutions  and  the  economic  institution  is complex. It depends that how far democratic government can try to constrain the operations of the economic institutions or how far the economic institutions can try the constrain the operation of the democratic government. the basic aspect of the relation is the relationship between the democracy and the market order. The control of the trade union and the control of the business. There  are  several  problems  such  as  the  tussle  between  the  capitalist  institution  and  the democratic institution. There are several measures that can make both sides work together. The democratic governments usually believe on large economic interests and they also shape it according to their interests. There come the institutional regulations that regulates the behavior of these institutions in the particular manner.

Personal analysis

State is made of many institutions. All the institutions work together this is the reason they depend on each other to work properly. The economic institution is the important institution of the state that makes it stand on its own. Today the examples are in front of us, those states th at has the best economic structures are now ruling the world. USA is the major power but with the passage of time new economic powers are competing with each other. The institutions regulate the behaviors but there are negative aspects when people use the institutions for their benefits. After the industrial revolutions there were merits and demerits. It depends on how one regulates the authority. If the institutions work properly the whole structure can be run perfectly but the interference that affects the institutions negatively can damage the structure. Today in the world where the concept of politics and economy is so dominant it is very important to regulate the bodies properly.

About the Author

Michael E. Moran (born May 1962 in  Kearny, New Jersey) is an American author and analyst of international affairs he is also a digital documentarian who has held senior positions at a host of media, financial services, and consulting organizations. A foreign policy journalist and former partner at the global consultancy Control Risks, he is author of The Reckoning: Debt, Democracy and the Future of American Power, published in 2012 by Palgrave Macmillan. He is co-author of ‘The Fastest Billion: The Story Behind Africa’s Economic Revolution’. Moran served as Editor – in-Chief at the investment bank Renaissance Capital and has been a collaborator of renowned economist Nouriel Roubini as well commentator for  Slate, the BBC and NBC News. He is also an adjunct professor of journalism at  Bard College, a Visiting Fellow in Peace and Security at the Carnegie Corporation of New York, and conceived of and served as executive producer of the award-winning Crisis Guides documentary series for the  Council on Foreign Relations.

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Economy

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

MD Staff

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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.

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Economy

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

MD Staff

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It is my distinct honor to welcome you to the UAE’s first-ever digital edition of the Annual Investment Meeting. Thank you to everyone participating, including our panelists from the Governments of Costa Rica, Canada, Nigeria and Russia. Today’s discussion on how countries are ensuring the free flow of trade and investment could not be more timely, especially as the world grapples with the economic recovery and moves toward building a more resilient, post-COVID economy.

As you know, the pandemic has significantly impacted global markets, creating new challenges for trade and investment. According to the United Nations’2020World Investment Report, global FDI flows are estimated to decrease by up to 40% this year, dropping well below their value of $1.54 trillion in 2019. This would bring global FDI below $1 trillion for the first time since 2005. Global FDI flows are expected to decline even further in 2021, by 5% to 10%, and only in 2022 do we expect to start seeing markets recover.

While the challenges ahead are enormous, the UAE sees tremendous opportunity for governments and business leaders to work together through trade and investment to reshape policies, create new partnerships, leverage new technologies, and build a future global economy that is more diverse, inclusive, and sustainable. We know that FDI can bring new technology and know-how, lead to new jobs and growth, and is often the largest source of finance for economies – making today’s discussion even more imperative.

For the UAE, FDI has played a critical role in our economic growth. In 2019, the UAE was the largest recipient of FDI in the region, largely due to our increased focus over the years on enhancing local conditions to attract FDI. With policies and measures in place, such as our Foreign Direct Investment Law enacted in 2018 to further open the UAE market to investors in certain sectors, and the issuance of our Positive List, which allows for greater foreign investment across 122 activities, the UAE was able to increase our FDI value by 32% in 2019. The UAE also came in 16th of 190 countries in the World Bank Ease of Doing Business 2020 Ranking due to our digitization strategies and promising business regulatory environment.

The UAE is continuing to refine and implement policies that will maximize competitiveness, increase collaboration, and provide opportunities to facilitate trade and investment. Our aim is to become the #1 country for foreign investment, target zero contribution from oil to our GDP in the next 50 years, and support research, development, and innovation. The UAE’s trade and investment strategy is centered on economic diversification and focuses on enhanced investment in industries such as communications, Blockchain, artificial intelligence, robotics, and genetics. We are also initiating measures to strengthen our position as a regional leader in supplying financial and logistical services, infrastructure, energy supplies, and other services.

The UAE believes that increased partnership and cooperation with governments and the private sector will be key to achieving our objectives. We view platforms such as the Annual Investment Meeting as instrumental in bridging the gap between nations and supporting global efforts to strengthen international trade and investment. Through this platform, we hope that participants will uncover new, innovative ideas and investment opportunities needed to build back better and ensure a strong post-COVID recovery.

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Economy

Future Economy: Upskilling Exporters & Reskilling Manufacturers

Naseem Javed

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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. 

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