Connect with us

Economy

Pakistan’s appeal for national-debt write-off

Published

on

In an interview with Associated Press, our prime minister called upon world community to write off debt burden of poor countries so as to help them cope with COVID19 epidemic (Dawn March 17, 2010).

The total debt liabilities of the country amount to Rs19, 299.2 billion (as of March 2015). Every Pakistani now owes a debt of about Rs101, 338 as compared with Rs.90, 772 in 2013, Rs80, 894 in 2012 and Rs37, 170 in early 2008.The debt-to-gross domestic product ratio stands at 66.4 percent, in which foreign debt is Rs. 6.4 trillion and domestic debt is Rs.12 trillion.

In dollar terms, Pakistan’s external debt soared to 95097 USD Million in the second quarter of 2018 from  91761 USD Million in the first quarter of 2018.That’s an all-time high, and well above the average of 54065.23 USD Million for the period 2002-2018. Pakistan recorded a Current Account deficit of 8.20% of its Gross Domestic Product in 2018. That’s an all-time high and well above the -2.60% average for the period  1980-2018.

Pakistan’s debt burden has a political tinge. For joining anti-Soviet-Union alliances (South-East Asian Treaty Organisation and Central Treaty Organisation), the USA rewarded Pakistan by showering grants on Pakistan. The grants evaporated into streams of low-interest loan which ballooned as Pakistan complied with forced devaluations or adopted floating exchange rate.

Soon, the donors forgot Pakistan’s contribution to break-up of the `Soviet Union’. They used coalition support funds and our debt-servicing liability as `do more’ mantra levers.

Successive Pakistan governments treated loans as freebies. They never abided by revised Fiscal Responsibility and Debt Limitation Act. Nor did our State Bank warn them about the dangerous situation.

No formal application for write-off: What a pity! Whenever International Monetary Fund’s  delegations visit, Pakistan’s representatives keep mum about politically-motivated odious nature of our debt burden. They lack nerve to tell them point-blank Pakistan’s non-liability to service politically-stringed debts. They government’s dilemma in Pakistan is that defence and anti-terrorism outlays plus debt-service charges leave little in national kitty for welfare. Solution lies in debt forgiveness by donors (James K. Boyce and Madakene O’Donnell (eds.), Peace and the Public Purse.2008. New Delhi. Viva Books, p. 251).

Benefits of Write-Off: Debt forgiveness (or relief) helps stabilise weak democracies, though corrupt, despotic and incompetent.  Research shows that debt relief promotes economic growth and boosts foreign investment. Sachs (1989) inferred that debt service costs discourage domestic and foreign investment.  Kanbur (2000), also, concluded that debt is a drag on private investment.

In fact, economists have questioned justification of paying debts given to prop up a client regime congenial to a `master’ country.  They hold that a nation is not obliged to pay such `odious debts’ (a personal liability) showered upon a praetorian individual (p. 252 ibid.). Legally also, any liability financial or quasi-nonfinancial, contracted under duress, is null and void.

Apparently, all Pakistani debts are odious as they were thrust upon praetorian regimes to bring them within anti-Communist (SEATO, SEATO) or anti-`terrorist’ fold.  To avoid embarrassing unilateral refusal of a country to repay odious debts, UN should declare which portion of debts is `odious’ (Jayachandaran and Kremer, 2004). Alternatively, the USA should itself write off our `bad’ debts.

Sovereignty compromised: People barter away some of their naturally-derived freedom with sovereign ruler to get security and welfare (Thomas Hobbes, John Locke et. al.).  When a despot fails to deliver the goods, the contract stands broken, and the people have a right to overthrow him. Thomas Jefferson (North American colonies) enshrined this social contract in the 1776 Declaration of Independence: ` when a long train of Abuses and usurpations pursuing invariably the same Object evinces a Design  to reduce them under absolute Despotism it is their Right, it is their Duty to throw off such Government and to provide new Guards for their Security’.

But, Pakistani people are too passive to overthrow their despotic unpopular governments.

The successive governments did nothing by way of welfare for the people. They could not even evolve a universal healthcare system akin to Thailand’s (2002).

The government’s dilemma in Pakistan is that defence and anti-terrorism outlays (26 per cent) plus debt-service charges leave little in national kitty for welfare.

A discussion was held at a seminar jointly organised by the Institute for Social and Economic Justice (ISEJ) and the Islamic Relief Pakistan under the campaign ‘Breaking the Chains of Debt’, at Forman Christian College. The crux of discussion was 47 per cent of whatever the government generates in revenue goes to pay off debt against 44 per cent in the previous year. Ideally, this ratio should be less than 30% to allocate more resources to social and poverty-related expenditures.

Speaking on the occasion, ISEJ Executive Director Abdul Khaliq said the debt situation was alarming and the government must review its reckless borrowing behaviour. We must demand an audit of the public debt,” he said. “All new loan contracts should be subjected to a debate in parliament and its approval.”

The government must stop reckless international borrowing and minimise reliance on foreign debt in the future and take measures to get the illegitimate loans cancelled, he said.

Khaliq emphasised the need for synergising efforts for a debt-free Pakistan and making the people of Pakistan the real drivers of the economy.

Three time prime minister Nawaz Sharif during his election campaign made tall claims that on assuming power he will get rid of the ‘cancer of debts’ and promised to break the ‘begging bowl’, however, there is little evidence of measures towards freedom from debt, said political economist Dr Qais Aslam.

The present Pakistan Tehrik-e-Insaf government proved no different from its predecessors and started knocking on the doors of international lenders even more vigorously, he added.

In a country where 60% of the population lives below the poverty line and 58% faces food insecurity, this additional burden means more miseries for the generations to come.

Speakers further said the impact of mounting debt burden on the people is horrific. Fiscal space for social spending has drastically squeezed. Pakistan spends just 2 to 2.6% of its Gross Domestic Product on education and health respectively, making it the lowest in South Asia.

International Monetary Fund’s assessment (Express TribuneMarch 16, 2018):

In its post-programme monitoring report, the IMF assessed risks to Pakistan’s economic outlook had increased. Despite changing goalposts twice, Pakistan’s public debt remained higher than the limit prescribed in the revised Fiscal Responsibility and Debt Limitation Act.

The policy of building foreign currency reserves through expensive loans and ignoring the export performance haunted the policymakers.

The IMF said the elevated current account deficit and rising external debt servicing, in part driven by China-Pakistan Economic Corridor (CPEC)-related outflows, were expected to lead to higher external financing needs.

External financing would surge to around $27 billion by the end of fiscal year 2018-19 (FY19) and would go up to $45 billion by FY23.

At that time, Pakistan’s external financing needs will be equal to 10% of the national output, which is a dangerous level. “Risks to public debt sustainability have increased since the completion of the EFF (Extended Fund Facility) programme. Public and publicly-guaranteed debt is expected to remain elevated at 68% of GDP by FY23.” Gross fiscal financing needs will likely exceed 30% of GDP from 2018-19 onwards, in part reflecting increased debt service obligations.

However, the more alarming part is the growing challenges to arranging foreign loans. It said Pakistan had so far remained successful in contracting external borrowing that softened the impact of rising external imbalances on foreign exchange reserves.

The IMF’s projections showed a bleak path for the next five years. Public and publicly-guaranteed debt is projected to remain close to 70% of GDP by 2023 under the baseline scenario.

In the absence of strong consolidation measures, the fiscal deficit is expected to remain close to 6% of GDP in the medium term, resulting in elevated debt levels.

Adverse shocks, notably to economic growth and the primary balance, could lead to public debt ratios rising well above 70%, said the IMF.

Contingent liabilities from restructuring of loss-making public sector enterprises represent additional fiscal risks. High gross financing needs may also pose potential rollover risks.

The IMF said high levels of public debt and gross financing needs presented significant fiscal risks and needed to be addressed in a timely fashion through fiscal tightening to improve debt sustainability.

Financial sovereignty threatened:  Some people question is Pakistan really a sovereign state? The question is based on premise that government has ceded control of the economy to foreign entities. Both the finance minister and the governor of the State Bank of Pakistan are career officers of respectively the World Bank and the International Monetary Fund. Is the primary loyalty of these officers to their Washington-based institutions or to their country of origin? And, should we be outsourcing existential financial decisions to people with possibly divided loyalty?

IMF’s changed role: The IMF and the World Bank are products of the Bretton Woods conference of 1944. Both organizations made good sense in the tattered world economy of the post-War period. The World Bank set about financing the rebuilding of Europe; while the primary purpose of the IMF was to promote international trade, which had collapsed during the war. The IMF’s role was to assist member nations to maintain stable exchange rates by providing short-term credit to support their currencies.

However, the `dinosaurs’ changed their roles. Over time fixed exchange rates gave way to floating rates, multiplying debt burden of recipients manifold.  Markets replaced governments as the primary arbiters of the value of national currencies.

The arrangement works as follows: A poor country, due generally to mismanagement and corruption, finds itself in dire need of hard currency. Commercial lenders are unwilling to commit their funds without adequate safeguards. Enter the IMF. It offers to lend some of its own money, provided that the host government agrees to a set of economic ‘reforms’. These understandably seek to enhance the borrower’s ability to repay the money loaned. When a deal is struck, the IMF disburses its own funds. At the same time commercial lenders, now reassured that the borrower can repay, step in with additional funds.

Typically, the IMF’s own funds constitute only a small proportion of the borrower’s total debt. Commercial lenders provide the rest. Yet the IMF’s participation is crucial. If it does not ‘certify’ a country by its participation then that country effectively gets cut off from all other sources of credit.

The question which recipients need to brood over is: Does the IMF serve their national interests? The IMF has a single overriding objective. This is to enhance the borrower’s ability to service its debts. It does not care a fig for recipients’ policies about poverty alleviation, price stability, employment, universal access to health care and education, and affordable rates for basic services.

Hypothetical example of debt black hole: Our external debt is $100 billion. Let’s assume that the average applicable yearly interest rate is five percent and that we decide to pay it back in equal annual installments over a period of 20 years. We would need to pay annual installments of $8 billion per year for a total payback over the 20 year period of $160 billion. Of which $60 billion would be interest and the balance repayment of principal.

We run a trade deficit of $20 billion a year. If we had a trade surplus we could theoretically have had the ability to pay back some of our debt. But, with shattered industry, teetered infrastructure, and COVID19 hangover, we can’t. So the only way to find the $8 billion per year to pay back our existing loans is to take new loans. We thus fall in the financial equivalent of a black hole.

Light at end of the `Hole’: While light cannot escape a black hole, we can extricate ourselves from this crisis. Pakistan needs to make the most of its strategic advantages. If we did not get out loans written off as quid pro quo for Soviet collapse in Afghanistan, we should better negotiate US exit now. We should have an answer if the US asks, by way of quid pro quo, for putting permissive action links on our nuclear bombs. If Pakistanis to be denuclearized than its binary India too should be.

Pakistan government should take prime minister lead further. It should hold negotiations with lenders that are commercial banks and the international finance agencies. We should aim at repudiation of about 50 percent of debt. This should be in addition to interest rate waivers, revisions and extended terms.

Simultaneously, Pakistan should dust off burden of debt models in textbooks. Debts should be so utilised as to be able to pay off interest and principal over agreed time span.

Bad debts: Pakistani debts qualify for write-off as bad debts. Why should poor Pakistanis, lacking basic needs, pay them?

World Bank President David Malpass (Express Tribune February 12, 2020) portrayed a bleak situation of loaning policies worldwide. Like a pot calling kettle black, he chided other development banks for lending too quickly to heavily indebted countries, saying some were helping worsen already-challenging debt situations. Addressing a World Bank-International Monetary Fund (IMF) debt forum, he said Asian Development Bank, the African Development Bank and the European Bank for Reconstruction and Development were contributing to debt problems.

He said the ADB was “pushing billions of dollars” into a fiscally challenging situation in Pakistan.   African Development Bank was doing the same in Nigeria and South

Africa. Pakistan was unlikely to meet debt reduction targets. The Manila-based development lender in December approved $1.3 billion in loans for Pakistan, including $1 billion for immediate budget support to shore up the countries

Public finances and $300 million to help reform the country’s energy sector.

The loans came as the country is struggling with billions of dollars in debt to China

from the Belt and Road infrastructure projects, which pushed Pakistan to turn to the IMF for a $6-billion loan programme in 2019.

Malpass said there needed to be more coordination among international financial institutions to coordinate lending and maintain high standards of transparency. “And so we have a very real problem of the IFIs themselves adding to the debt burden and there’s pressure then I think on the IMF to sort through it and look at the best interest for the country,” he stated.

Inference: If Pakistan wants to get its loans written off, it should do more than indulge in rhetoric. `Negotiation’ is a subject taught in all universities as a business course. Pakistan should learn to argue its case and decipher donors’ BATNA (best alternative to negotiated agreement    

Mr. Amjed Jaaved has been contributing free-lance for over five decades. His contributions stand published in the leading dailies at home and abroad (Nepal. Bangladesh, et. al.). He is author of seven e-books including Terrorism, Jihad, Nukes and other Issues in Focus (ISBN: 9781301505944). He holds degrees in economics, business administration, and law.

Continue Reading
Comments

Economy

The US-China Trade War

Published

on

USA China Trade War

Trade deficit with China became a major issue in 2016 American election. Touching the sensibilities of American working class, Donald Trump accused China of protectionist trade policies such as export duties and quotas, state subsidies, restrictions on market access and intellectual properties rights theft.  After assuming presidential office, Donald Trump imposed tariffs on Chinese goods. It intended to encourage consumers to buy American goods. By estimation, the US has imposed tariffs on more than $ 360 billion of Chinese goods and China has retaliated with tariffs on more than $ 110 billion of US products.

President Trump exploited the growing domestic concerns by making Sino-US trade a key part of his foreign policy. In Dec 2017, US released the new US national security strategy. It says that China is a revisionist power with goals “antithetical to the interests and values of US”.

President Trump also ordered to specially investigate China’s policies on intellectual property, technology transfer and innovation. Shortly thereafter, United States Trade Representative (USTR) investigation concluded that the abundance of cheap steel and aluminum import compromises the domestic production of US.

Notwithstanding the strained relations, president Trump and Xi took steps towards rapprochement in the first month of 2017, agreeing to establish a 100 days plan to resolve disagreement over trade. However, the underlying trade issue remained. Trump instructed the USTR to investigate whether cheap steel imports posed a threat to US national security.

As of Jan 2020, tensions have finally eased as the two sides have signed a partial ‘Phase One Deal’. The document agreed to roll back tariffs and trade purchase. China agreed to buy additional $ 200 billion of American goods over the following the two years. The rapid spread of the coronavirus outbreak starting in January 2020 effectively postponed negotiations indefinitely. Trump deal halted the trade war but it did not put an end to economic hostilities. US tariffs on Chinese exports jumped sixfold between 2018 to 2020, but tariffs failed to decouple the two economies. The Trump policy has failed to change Chinese trade practices.

Contrary to the growing demands of US business community, the new US president Joe Biden so far has amplified his predecessor’s policies and implementing additional sanctions. Biden’s words describe his policy, “a battle between the utility of democracies in the 21th century and autocracies”. Yale University’s Stephen Roach questioned President Joe Biden’s China policy, “why has he singled out China trump policy as one that is worth sustaining, when he has literally tried to wipe the slate clean of every other potential Trump policy that he inherited”.

To relieve trade war tension with new American administration, China has pushed the US to cancel tariffs in a virtual meeting between vice premier Lin He and US-trade representative Katherine Tai. Tai said in a speech that the White House would restart a process to exempt certain goods from Trump era tariffs.

The Biden administration said it would not immediately remove the Trump administrations’ tariffs and would require that Beijing upholds its trade commitments. It gives a clear look at how the Biden administration plans to deal with a rising economic and security threat for China.

President Biden campaigned against Trump tariffs on Chinese imports as hurting US consumers, farmers and manufacturers. But more than eight months into his presidency, Mr. Biden has announced few policies that differentiate his approach, beyond warmer appeals to American allies. In addition to the tariffs on Chinese goods, the president has maintained restrictions on Chinese companies, access to US technology and expand the list of Chinese officials under sanctions by the US for their role in undermining Hong Kong’s democratic institutions.

President Biden’s era also accelerates the geopolitical rivalry between China and US. Nuclear powered submarine to Australia and the Quad meeting it shows harmony on how to deal with China’s influence. On 14 June, 2021, at their annual summit in Brussels, NATO leaders declared that China presents a global security risk, The traditionally Russia focused military alliance for the first time shifted its focus to China. Craig Allen, president of US-China Business Council, said, “Joe Biden has done what he said he would do—he has collected the allies and got them aligned in a similar manner on similar issue in a way that greatly strengthen America’s position vis a vis China”.

The Biden administration desires to work with China on climate change. “China has made it very clearer if you want cooperation on climate change, we want you to lift the tariffs or we want more cooperation on tariffs”. During the G 7 summit, Biden pushed his European counterparts to adopt a tougher stance with China and singled out Beijing for its “non-market economic practices”.

Fewer than three months after it was agreed upon, progress on the EU-China comprehensive agreement on investments has come to a halt as a result of tit for tat sanctions due to alleged human rights and forced labor issue in Xinjiang. EU is moving closer to a hardline US stance. On March 22, EU sanctioned four Chinese individuals, including a top security director, for alleged human rights abuses in Xinjiang. While symbolic in nature, this is the first time in three decades that the EU has imposed sanctions against China. Similar steps were followed by US, UK and Canada by the same day.

Pew Research Center finds that more than three quarters of America have an unfavorable view of China. The US senate in a rare moment of bipartisanship passed a bill ‘the US innovation and Competition Act 2021’, that would invest $ 250 billion in science and technology aimed at boosting US competition with China. “I do not think that politically it will be very difficult for the Biden administration to remove tariffs without meaningful concessions from China. The CIA announced it is establishing a new China mission center, in yet another sign of the Biden heavy focus on countering Beijing and its expanding influence across the globe.

According to Chad P Bown, a senior fellow at the Peterson institute for international economics, who tracks the purchases. He said, “so far, China is on a pace to fall short of its 2021 purchasing commitments by more than 30% after falling short by more than 40% last year”. According to Mr. Brown, China still maintains tariffs on 58.3% of its import from the US. The US imposes tariffs on 66.4% of the products it brings in from China. The US economy has mainly been hit on the consumer side by the trade dispute where as in China, the export has suffered the biggest losses.

President Xi says that the dependence of the international industrial chain on our country has formed a power countermeasure and deterred capability for foreign parties to artificially cut off supply.

Hillary Hoffower writes, “America’s automakers do not have enough semiconductor chips to make as many cars as people want to buy. Every other product from toys to computers that heads a chip will be in short supply too”. It is estimated that the US accounts for just 12% of global chips production and Asia accounts for a whopping 75%.

How to protect American workers and businesses from predatory trade practices without hurting the parts of US economy that rely on Chinese goods. Kelly Ann Shaw, the former deputy director of the National Economic Council said it is easy to criticize tariffs but difficult to come up with a better option. Tariffs hurt US consumer and manufacturers. More than 30 business associations sent a letter to the administration complaining the tariffs are “costly and burdensome”.

The irony is that three years after Trump tariffs were initiated to fix the US trade deficit, bilateral trade between the US and China has now rebounded to all-time highs, China’s trade surplus has increase, and the US deficit has gotten worse. US-China trade war tensions and their effects on global value chain will impact industry structures, investment, innovation and consumer welfare across the world.

Continue Reading

Economy

Regulatory Noose Tightens Around the Federal Reserve: Powell Reaffirmed a Second Term

Published

on

Image source: flickr/ Federalreserve

The Federal Reserve has been under a sharp gaze since the twilight years of former president Donald J. Trump. Whether it was tinkering with the Dodd-Frank Act or the Volcker Rule specifics, controversies turned up more frequently than ever. If it was not for Powell’s centrist play, the partisan clash was all but inevitable. However, the fed chair managed to persuade either side to survive at the helm of the Federal Reserve. Now, as the critics are relentlessly scouring to inhibit his path to reappointment, scandals are bound to exacerbate. The recent controversy around the suspicious trades by the fed officials during the periods of ‘heightened market stress’ has spurred a debate around the reliability of the officials at the precipice: officials responsible for sketching the national economic policy. Thus, while Mr. Powell has deftly guided the US economy through the chaotic period of covid uncertainty, it appears as if the savior has a tough road ahead towards renomination: a path embellished with censure rather than approbation.

The current term of Mr. Jerome Powell ends in February 2022. While he vies for renomination as per the fed’s tradition (besides his predecessor: Ms. Janet Yellen), a group of vocal critics is determined to block his path. However, Powell’s term, despite being one of the most tumultuous incumbencies, has impressively very little to admonish. Coupled with his timely decisions throughout the covid crisis, he definitely stands an assured chance of renomination, given the President is inclined to overlook the partisan divide in favor of an inured chairman to steer the economy completely across rather than risk a shift in an already incendiary economic environment. That being the case, a barrage of ethics scandals disclosed by the New York Times has raised enough eyebrows to disrupt a smooth sail for Mr. Powell.

Recently, regional fed presidents: Mr. Eric S. Rosengren of Boston and Mr. Robert S. Kaplan of Dallas featured in reports alleging their suspicious engagement in trading securities in 2020. The timeline of the trades ties up with the early days of the pandemic when the fed had purchased more than $4 trillion worth of Treasury and Corporate bonds to bolster the economy through surfeit liquidity and near-zero yields. The disclosures further revealed that even Mr. Powell was involved in a trade on 1st October 2020 – selling between $1 million and $5 million in a broad-based stock fund through his vanguard fund.

Senator Elizabeth Warren, one of the core critics of Mr. Powell, immediately raised arguments around the plausibility of Insider Trading: exacting the President to launch an investigation into these trades. Both regional presidents resigned shortly after the disclosures while Powell assured an inquiry. Mr. Powell, however, was sheltered from broader criticism for apt reasons. Mainly because his transaction involved a market-based stock index fund; practically dispersed throughout the market. In simpler terms, assuming he had insider knowledge of particular stocks, it still would not have helped him profit since his transaction was diversified, that is, not limited to specific securities. Moreover, given that he had already made his speech at the Jackson Hole Symposium in August; and had already expressed his explicit ‘dovish’ intentions during the fed’s regular meeting in September, the policy was very much public weeks before his transaction. Summing up, not only was his portfolio in the most passive territory, but his trade lost him money: a contradiction to the very notion of insider trading.

Nonetheless, Mr. Powell turned the tables to solidify his spot for another term. On Thursday, the Federal Reserve further tightened the rules and guidelines apropos of investing practices of the Fed policymakers. The new framework disallows the fed officials, including the policymakers comprising the Federal Open Market Committee (FOMC), from owning individual stocks and bonds. Instead, the future investments would have to be restricted to diversified streams like Mutual funds. Moreover, the officials would have to divest certain assets, including individual bonds, corporate portfolios, agency securities, derivative contracts, before being appointed to the office. The officials would be required to provide a 45 days notice before buying or selling permitted securities. Additionally, they would also be required to hold their positions for at least a year: avoiding any activity during periods of economic distress. A tighter stipulation requires the 12 regional fed presidents to publicly disclose their financial transactions within 30 days rather than annually.

The action of the Federal Reserve is one of the most notable responses yet to widespread allegations. On Thursday, Mr. Powell reiterated: “These tough rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve.” He further asked the fed general inspector to access the trading of certain senior officials. It is safe to aver that while the staunch fed critics are determined to hamper Powell’s path to renomination, in my opinion, there is not much of an impetus to deny him another term. While I admit that there are competent candidates for the job in the echelons of the Democrats, the job itself is not the same as before the pandemic. And while the allegations and scandals are nothing new for a prospective fed chairman, Powell’s prompt action to tighten the rules even before the launch of a federal investigation could actually prove to be a final nail in the coffin for his critics.

Continue Reading

Economy

United World of Job Seekers and Job Creators Will Boost Recovery

Published

on

painting by Byron Anway

Why is there so much disconnect between entrepreneurial thinking and bureaucratic thinking? Has the world of education, certification, occupation divided us, have the organizational structures slotted us so wrongly, have the populace fragmented us and now our combined talents and productive mindsets are all going astray.  Why is technology confronting us on mindset issues, forcing us to stand up together to face post-pandemic recovery to deliver real productivity results? Can we review factors and try to come together towards rapid progress, fix and advance?

As an overview, across the world, people always struggle hard to acquire special skills and qualifications to pursue their desired goals, some end up as job seekers and some as job creators, but both types equally work hard, build economies, and create prosperity. However, it is extremely important to face this fact; “Job-Seekers” help build an organization while “Job-Creators” develop the real cause to create that organization in the first place. Study what the last 100 earth shattering entrepreneurs across the world did or observe some 100 small and medium businesses right in your own backyards, on exactly what they are doing.

As the post-pandemic recovery world morphs towards entrepreneurialism, this critical difference of mindsets now demands deeper understanding amongst the economic development leadership of nations and their multi-layered complexities of their management teams. After all bureaucracies and economic growth agencies are primarily highly-qualified job seekers themselves, but now facing establishing a “job-creator” economic thinking, therefore facing a new national agenda as if a chess game, where moving pieces randomly is not the game, strategic command on movement of each piece is victory. The brutality of the message is now exposed as wide-open global debate because post pandemic recovery will take no prisoners.

To create an army of job-creators, academia is not the solution; academic mindset on tackling entrepreneurialism is like scratching and sniffing from old case studies on famous job-creators, telling those stories as if their own, throwing in their own analysis to claim some belonging and highlighting the entrepreneurial errors and mistakes as their own special victories.  Always, never admitting the facts that it took special temperaments, zeal for venture, out of box thinking and guts to make those crazy moves while everyone else laughed, however, universities always tabling their own new improved strategies as the real correct and right way. Therefore, how many armies of Steve Jobs alike if they ever created, you decide. Business education is unnecessarily far too expensive and too disconnected. Know the fine differences in order to reshape economic progress.

Entrepreneurialism is neither academia born nor academic centric. However, observe how entrepreneurs always attract other mindsets and academia to join to carry out specials tasks, in comparisons where other mindsets will apply extreme reluctance to allow inviting entrepreneurial mindset in fear to exposure of their own business knowledge limits or facing any criticism by someone without any institutionalized certification center staging as a solo free thinker. Imagine how much laughter persisted what opposition created for entrepreneurs on their earth shattering ideas, from razor blade to treadmill or from bulb to mobile phone. 

This time around, on the line are the entire global business models of economic productivity, performance and profitability, juxtaposed with climate change and sustainability where ‘worklessness’ of the future and digitization will place the world upside down. Get ready for a war of mindsets. Critical thinking and lifelong learning will save occupationalism. The absence of the long awaited fourth industrial revolution is proof that unless mindsets are aligned we are going backwards.

Today, economies trapped, digitization stalled, small business crushed and middle class destroyed is the new post pandemic world. Unless such mindset differences are understood, the tug of war of creating powerful economies with entrepreneurial flavor will fail. Provided there is open mindedness, alliances with job-creator mindset will assist jobseeker centric bureaucracies currently surrounded by monstrous challenges allow immediate implementation of deployment ready solutions for national mobilization of entrepreneurialism to uplift midsize business economies.

Today, the majority of nations would like to save by shrinking their highly paid public service staff with hopes to transform them into an entrepreneurial mindset to become producers of goods and services and add to the local economic landscapes. However, despites funds available in some nations still no success as such narratives strangled by job seeker bureaucracies already closed the doors.

Just look around, nation-by-nation, why are their problems so similar, solutions so identical? Is this because the differences hidden between leadership styles committed as nation-builders or as nation-sellers?  Is it because jobseekers have already peaked on the pyramids of power, now at the top of the heap, their respective levels of incompetence make them unfunctional to grasp the new challenges and missing greatest market opportunities. The fact is with so many new and repeated elections, so many New Cabinet Changes and appointments, unless root cause issues brought into open, the local-global fiscal propositions keep sinking. 

Out there, somehow there is a global rise on mobilization of entrepreneurialism, the fact that world is starving at local grassroots prosperity levels, hungry at midsize economy level but gluttonized and partying in vomitoriums at the very untouchable top levels, nevertheless, the new awareness is cross-fertilizing at rapid speed. The whispers, murmurs, the trembling of the messages are still inaudible to the top leaders but a good positive change in the air. 

Recommendations: What will it take for the national economic development leadership along with all affiliated trade groups and agencies to open up to critical analysis of policies and development programs evaluated from new perspectives of entrepreneurial mindsets? What would it take such agencies to have some permanent authoritative and proven entrepreneurial representation of continuous dialogue to improve and adjust? What would it take to create high-level selective immersions of jobseekers’ mindsets to come closer to job-creator mindsets to combine talents and achieve extraordinary results in the marketplace? What will it take to have some closed, open, or national level debates to bring talents and ideas together as a national agenda? What will it take to apply the similar approach of Truth and Reconciliation, after all the damage to grassroots prosperity now visible from space. Time has come to bring our minds closer and not disperse them as conflicting enemies.

The day has arrived to face the change.  All mindsets are good but appreciating the difference and their respective strengths for special outcomes are critical. Working all like a team of various experts in a mutual goal is a huge victory. If during the last two years, such topics during pandemic recovery were never on your boardroom table, and mindset selection criteria never applied to determine the outcomes, you may be in a job-seekers centric enclave. Possibly, in deep silence already slotted in a wrong organization, should you now hastily leave the building? Should you help them? In any case, no further proof required. The future of pandemic economic recovery now demands a job-creator mindset. Select your mindset of your choice, acquire and add mastery as a prerequisite, and advance to newer heights.

The rest is easy  

Continue Reading

Publications

Latest

people art people art
Reports2 hours ago

Global Wealth Has Grown, But at the Expense of Future Prosperity

Global wealth has grown overall—but at the expense of future prosperity and by exacerbating inequalities, according to the World Bank’s...

Africa Today7 hours ago

Climate Change Could Further Impact Africa’s Recovery

The World Bank’s new Groundswell Africa reports, released today ahead of the 26th session of the Conference of the Parties...

African Renaissance10 hours ago

The Cemetery Of The Mind

This is me. The voices are inside my head. Calling me. Speaking in ancient tongues. They talk and talk and...

USA China Trade War USA China Trade War
Economy14 hours ago

The US-China Trade War

Trade deficit with China became a major issue in 2016 American election. Touching the sensibilities of American working class, Donald...

Defense16 hours ago

ASEAN has the ability to counteract AUKUS’ Cold War strategies

Authors: Raihan Ronodipuro & Hafizha Dwi Ulfa* The United States’ new tripartite defense alliance with the United Kingdom and Australia,...

Intelligence18 hours ago

Chaos Maker: Bernard-Henry Levy video in Panjshir and the chaos making in the Middle East

First: The Israeli-French intelligence maneuver deliberately displaying the video of the French-Israeli Jewish chaos maker “Bernard-Henry Levy” globally to form...

Southeast Asia20 hours ago

The 38th ASEAN Summit Meeting: Agenda and Outcomes

The 38th ASEAN summit meeting is held from October 26-28th and the list of areas to concentrate for the ASEAN would be far too many which includes...

Trending