Nations of the world, enthralled in their own custom-tailored masks at the masquerade-ball of Coronavirus struggling to calm restless citizenry already wrapped in colorful flags chanting hymns of survival and populism. What’s not musical is the outdated lips-service, watery promises, putty economical ideas all rejected for composting.
The Masquerade Ball of Coronavirus: advancements on human endeavor neglected, now liberated harshly by Coronavirus; in simultaneous synchronization across the 200 nations a new world-order of new business hierarchy appears, where critically thinking isolated for higher productivity, performance and profitability measured on new digital platforms, remote working, replacing old corporate bureaucracies and global dominance of downtown cores.
No, please, do not blame the national leaderships; expectancy on this special expertise was never there, caught in their own convictions, political agenda and Teleprompter guidance they are doing their best. The political rhetoric is numbing, the ignorance of science and lack of skills to understand managing restless citizenry is unforgiving. The time to face the music has arrived. The time to change the economic values measurement systems has arrived.
Unfortunately, neither required are the photo-ops; nor the regular G50 or G100 lalalands but surely a G200 –a 200 nations gathering, 24-Hour Marathons of collaborations on humanity, global mobilization of Coronavirus medical facts based deployments, interconnected conference via latest circuitry streamed to the world now being critically missed since last 100 days. Political posturing precluded such demonstration of special global level leadership; the collaborative synthesizim to bring all diversity and tolerance under a global umbrella… the bonfires of crumbled egos are now on slow-burn displays. Chaos increases…fears surmounts, failures becoming visible. Credit goes to selected leadership around the world and their medical teams for leading the charge under most difficult and unprepared circumstances.
Nations witnessed extensive overseas mobilizations of armies over decades are now in panic figuring out national mobilization to combat internal crisis. Sadly, if you end up, outside your hospital lying of pavement outside somewhere in the parking lots without help and equipment, no one will help you, the echo of the promises and lingering trials and errors on the down streaming of absolute shut-down and civil order during last 100 days are living proof of incompetency.
Needed is a voice, trusted by nation; professionalism on science, respected by global medical community and national shut down except crucial services. Most importantly, needed a national mobilization of brain-power of working citizenry to optimize from their own quarantined habitats and apply maximum innovative ideas on existing resources via remote working to create a parallel working economy, where connectivity and dialogue will bring normalcy to our national and global structure of continuity.
Wars of Silence:
In a world where economic dysfunctionalities already visible from space, muffled and gagged, the total absence of real truth-seeking authoritative national debates on hardcore issues of small and midsize business economy is where the silent anaconda of incompetency resides. All over the world, silence on these internal economic development issues are now becoming proof of incompetency and further creating increased restlessness. Suddenly, liberated, the Coronavirus has brought the world together, slowly, the silent majority of connected-billions developing a new mindshare…
In Simultaneous Synchronizations a Global Metamorphosis Challenges Corporate Thinking…
Workers of the world; majority with low wages, cannot afford to wake up in hours of darkness, depart away from the huddles of loved ones, commuting till ending up in crowded undergrounds, small elevators, climbing floors to find a lonesome desk to stay strapped till the bell rings at the end of day and drag themselves back to far away home to start the process allover next day… still worshipped today, this work model died decade ago.
Office work declared as cruelty to mankind; eliminate from the global enterprise model and replace by a smart phone backed by smart LIVE face-to-face enterprise systems so that the liberated worker force can create and produce far more via inter-linked global age where smart work is ‘invisible work’ for minds alone processed in their own free moving spaces. A very small percentage of workers may still be required in special places in special settings or so called offices, but too eliminated like manpower lifting millions boxes now done by robotized warehouses.
Manpower concepts declared an outdated optimization model, defined over millennia, term ‘manpower’ needs new definitions, most work touched by manpower now replaced by robotization, now needs new understanding of replacements and compensations.
Human-Power; declared as self-discovered superior state of mind for critical thinkers and complex problem solvers frontiers, identified as masters of robots and automation, while denier of change declared as slaves of robots, mandatory national upskilling and reskilling and national mobilization of entrepreneurial protocols will fix such issues. Without bold debates the muted progress will further decline.
Small Medium Business Economy; all over the world, the SME of the future is a very smart entity, globally savvy, technologically driven, block-chained, AI+AR+VR, entrepreneurial center creating local grassroots prosperity. Nation by nation, this largest economic block will overtake the national productivity performance and assist global financial crisis. Critically needed, the digital platforms on National Mobilization of Entrepreneurialism Protocols offering free upskilling, reskilling and uplifting hidden national talents, especially women-owned businesses, liberated from bureaucracy and traditional anti-SME funding banking systems.
Abandoned art of value creation; declared as mandatory certification requirements to measure economic progress, replacing adding fake value-manipulations totaled as progress. The real grassroots prosperity advancements are principled in real value creation and not value-manipulations.
Global charter of rights; declared as affirmation to global rules of mankind and civility, needs massive revision on civil liberties, human rights and social justice to allow societies to become highly diverse and tolerant and abide national rules. Out we came out of caves not to re-enter.
Education; declared as top quality, free from top to bottom, nationalized and heavily public funded, top pay for teachers and with very real entrepreneurial thinking. Universities recall degrees with apologies, payout refunds with time and opportunities lost.
Alvin Toffler’s concepts of ‘electronic cottage’ spoke volumes on such progress of enterprise by replacing offices with hyper connected devices with staff in highly comfortable leisure zones or common-working-spaces as rainforest themes, as mental-comforting-habitats over four-walled- desk-chair-contraptions. This was eighties. Today, climate change issues demand elimination of billions driving to work, often in most energy dependent and uncomfortable situations while all the latest freely available interconnectivity and face to live actions because the ‘managerial’ concept always seeing an empty desk still considered ‘body missing’ from work, where paper shuffling and rubber stamping mentality have not yet crossed over the idea of hiring of ‘minds’ and not ‘bodies’ and allow 99% mundane work be done via AI. Most neglected all over the world, the upskilling and reskilling of workforce to tackle global age, last three decades leadership assumed YouTube and Universities were doing this, they were unable to decipher the regression. Coronavirus may create such simultaneous remote working global test for millions of enterprises of the world and change office-working forever.
Futurism is workless; as artificially driven technologies cunningly steal all office work, come next 1000 days the global economic chaos may force a march of billion crowding on boulevards of the world. Workless, jobless, and officeless, tired they march…never ever in the history of mankind assembled such number of once mighty, highly skilled, educated and experienced subjected to replacements by their own technological advances.
Mona Lisa Smile: Equally, no nation is safe from the onslaught of Mona Lisa smile gender-fluid robots entering our gender free work spaces and asking us politely, at least the first time, to leave our offices and never return back. Second time their asking labeled as robotic misbehavior.
The world is changing very fast, this is no longer a cliché, and it’s now an explicit warning.
Mirrors on the walls: when fixing obesity demands a life-size mirror, the national citizenry must also find a large enough nation-size mirror. When grassroots prosperity in chaos and small medium business economy crushed without national mobilization of entrepreneurialism on digital platforms on innovative excellence and exportability, nations are simply doomed.
National gatekeepers of midsize business economic agenda must demonstrate global age skills to combat meltdown; Abundances and neglects will not just stir up the big drunk elephant of fake-economy in the china shop but it will directly force anaconda of incompetence to strangle further silence and quietly create demand for big budgets for riot gears. A masquerade ball of populism will start the orchestra.
Is this the worst of times; or the most opportune of times?
That lonesome crave of flying; the caterpillar under pretence of deep sleep unlearns crawling and relearns flying, breaking chrysalis spreads colorful wings and fly out in the new world. The Coronavirus is doing its job, a test of leadership nation by nation, in the short and long run the truth, diversity and tolerance will win, choose wisely and plan precisely the coming 1000 days.
Isolate and stay in safe spaces… unpredictable times ahead
Can Sukuk Match the Growth Trajectory of Green Bonds?
As the socially responsible investing movement in fixed income began to take off a decade ago, a great deal of ink was spilled on the similarity of green bonds and Sukuk. Both products are explicitly ethical and appeal to investors’ social consciences over and above their desire for financial returns. The thesis at the time was that an ever-increasing number of investors would seek out these types of ethical investments, leading to a steep upward trajectory in demand for both green bonds and Sukuk. MICHAEL BENNETT writes.
To a certain extent, that thesis has played out. Between 2010 and 2020, the annual issuance of green bonds increased from less than US$5 billion to more than US$270 billion. They have successfully transitioned from being a highly niche product to one that has a role in the portfolios of major institutional investors across the globe. Green bonds became the product that mainstreamed socially responsible investing on the fixed income side of the capital markets.
Sukuk have also increased during that time-period, going from US$53 billion of annual issuance in 2010 to US$140 billion in 2020. While a 164% increase in annual issuance volume is impressive, it clearly lags the 5,300% growth for green bonds. This divergence in the growth trajectory of the two products can also be observed in Chart 1 that looks at annual issuance volumes between 2014 and 2020:
In absolute terms, it should come as no surprise that Sukuk volumes now trail green bonds, as there is a much larger market globally for conventional instruments than for Shariah compliant ones.
Even the most passionate supporters of Islamic finance accept that the potential market for Islamic products is only a fraction of that of their conventional comparators. However, that does not explain why, in percentage growth terms, Sukuk have fallen so far behind green bonds. Why has one product exploded while the other has made only a steady climb?
Many explanations have been offered for why Sukuk have not grown at a faster pace in recent years. These usually focus on global economic hurdles that have impacted the market (eg oil price declines, COVID-19-related slowdowns).
However, many of these same issues have impacted, to one degree or another, the conventional markets as well. In addition, some economic hurdles could reasonably be expected to increase issuance volumes (eg a decrease in oil prices could cause an oil-exporting sovereign to have greater need to tap the capital markets).
Therefore, these explanations seem insufficient to fully explain how green bonds have grown at such a faster clip than Sukuk.
I believe the reason for the difference may stem in part from the fact that the Sukuk market has simply not responded sufficiently to the socially responsible investing movement. As the remarkable growth of the green bond market proves, predictions a decade ago that socially responsible, fixed income investing was about to take off were correct.
In other words, the socially responsible investing wave did indeed come. The problem for Sukuk is the product has not found the best way to ride that wave.
Sukuk are ethical instruments. They cannot be used to finance impermissible activities like gambling, tobacco and weapons manufacturing. Also, they are structured to avoid high degrees of leverage and speculation, and therefore promote a sounder financial system.
Many investors who are motivated by ethics and feelings of social responsibility should be quite happy to add Sukuk to their portfolios, regardless of whether they are adherents of Islam.
A conventional bond has none of these built-in restrictions. Therefore, to make a conventional bond an ‘ethical investment’, additional steps must be taken, for example adding covenants to limit the potential uses of the financing. This building-in of these additional prohibitions is the genesis of green bonds and other labeled sustainable development bonds. In essence, these bonds adopt the types of restrictions on the use of proceeds that already to a certain degree exist for Sukuk.
However, the Sukuk market has not sold the standard Sukuk product as ethical. Rather, it has treated Sukuk as equivalent to a conventional bond (no better or worse from an ethical perspective), and therefore sought to develop green and socially responsible labels for certain types of Sukuk that mimic the labeling that is required to make a conventional bond ethical.
I believe such labeling of certain Sukuk can have the unfortunate impact of obscuring the ethical nature of the basic Sukuk product and, at the extreme, possibly throwing the social responsibility of most Sukuk into doubt.
In other words, if certain Sukuk are labeled ‘socially responsible Sukuk’, what does that imply about all the Sukuk that do not carry that label?
While I certainly would not advocate against green and other types of labeled Sukuk, I think the Sukuk market needs to spend more time and effort to be clear that such labeled Sukuk are simply a special use of proceeds instruments within a broader universe (ie all Sukuk) that is already ethical in nature.
Such an approach would mirror the one the World Bank takes in the conventional market. The World Bank issues green and other labeled bonds from time to time, but the priority always is to stress the ethical nature of all the issuances.
By focusing on the ethical quality of the Sukuk product itself, I believe Sukuk can best benefit from the ethical investing movement, and take its place, aside green bonds, as an ethical investing success story.
US Sanctions Against Russian Sovereign Debt: Possible Alternatives
The US and the EU have imposed new sanctions against Russia because of the so-called “Navalny case”. The European Union has activated the human rights sanctions mechanism approved by the EU Council in December 2020. On March 2, the EU added four Russian security officials to its sanctions list. The sanctions include a ban on entry to the EU, an assets freeze in the EU and a ban on economic transactions with persons involved in the lists. However, such officials are unlikely to have assets in the EU. Even if they exist, such assets are not significant for the Russian economy. The sanctions were introduced as a reaction to the arrest and then imprisonment of Alexei Navalny, while restrictions on the topic of the alleged poisoning were introduced back in October 2020. At the time, six high-ranking Russian officials and the Research Institute of Organic Chemistry and Technologies were subject to the restrictions. Such sanctions have zero impact on the Russian economy.
Unlike the EU, the US has refrained from imposing sanctions following the alleged poisoning of the politician last year. However, on March 2, they were introduced, both in connection with the poisoning and in connection with his subsequent arrest. That is, the topics of the use of weapons of mass destruction and human rights violations were combined. The blocking sanctions targeted seven Russian officials who were already affected by EU sanctions, as well as three research institutes. Trade sanctions were imposed against 14 companies. US government agencies have been prohibited from lending to Russia and a ban was introduced on the supply of weapons and on the provision of US financial assistance. These measures have no impact on the economy. These companies are not the backbone of the economy, Russia does not need US help, it does not buy weapons from the United States, and it does not take loans from US government agencies.
However, the new US sanctions are still fraught with uncertainty. The key question is whether the United States is imposing restrictions on Russian sovereign debt obligations. Such a measure could cause more serious damage and have an impact on the world markets.
The prospect of sanctions against Russian government bonds is related to the specifics of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991. Properly it is used as a legal basis for the imposition of sanctions in the event that a country uses chemical weapons (in the US and the EU, it is assumed that Navalny was poisoned with a substance from the Novichok group). The CBW Law envisages the imposition of sanctions in two stages. On March 2, 2021, the first stage was implemented (a ban on aid, military supplies and loans from government agencies). If, within three months after the first stage, the President does not provide Congress with evidence that the target country has not abandoned the use of CBW and has not given reliable guarantees of their non-use in the future, then the second stage of sanctions will be introduced. It is important to note here that guarantees of non-use should be determined by UN inspections or those provided by another international organisation. Obviously, Russia will not give such guarantees and will not allow any inspections. Moreover, according to the statements of the Russian authorities, Russian chemical weapons were destroyed long ago. In other words, the second round of sanctions is inevitable. The CBW Law obliges the US President to impose at least three of the six types of sanctions. The most unpleasant of these is the ban on American banks from lending to the Russian government.
There has already been a precedent for using CBW against Russia. The sanctions were imposed in connection with the Skripals case. In 2018, the first stage was carried out, and in 2019 — the second. It was secured by Donald Trump’s executive order No. 13883. The decree reflected two types of sanctions — a ban on lending to the Russian government and blocking aid through the IMF. Then trade restrictions were added. If the last two measures were symbolic, then the ban on lending potentially had more serious consequences. However, this measure was applied in an extremely limited manner. The ban applied only to Russian government bonds denominated in foreign currencies, while most of them are denominated in rubles. The sanctions also did not affect the debt of Russian state-owned companies.
In general, the issue of sanctions against Russia’s sovereign debt has been raised many times on other occasions. In 2017, within the framework of Art. 242 of PL 115-44 CAATSA, Congress ordered the US Treasury to give an opinion on the appropriateness of such sanctions. Officials noted in their report that such sanctions would hurt Russia, but were also fraught with market fluctuations and costs for American investors. Such sanctions have repeatedly been proposed in sanction bills, including the most famous ones — DASKA and DETER. However, they have never been passed into law. In 2019, the State Department criticised DASKA.
The forthcoming second round of sanctions over the Navalny case will again raise the issue of restrictions on Russian sovereign debt. Two alternatives are possible. The first is the preservation of the existing restrictions already adopted by Trump in 2019, or their cosmetic expansion. The second is a more radical tightening, including bonds denominated in rubles. The second alternative cannot be ruled out, especially if there is another escalation in the Navalny case. If the status quo is maintained, the first option is most likely.
From our partner RIAC
St. Petersburg Forum Offers Unlimited Business Opportunities
The 24th St. Petersburg International Economic Forum (SPIEF’21), unique business forum that is highly expected to bring together politicians, corporate business directors and investors from different parts of the world, is set to take place June 2-5 as the epidemiological situation begins to stabilize in Russia.
That however, the Russian Federal Service for the Oversight of Consumer Protection and Welfare (Rospotrebnadzor) with organizers promise everything in its power to ensure that the event is held with all the necessary measures in place to prevent the spread of coronavirus, and strictly in compliance with the recommendations given by the World Health Organization (WHO).
Roscongress Foundation, the organizer, says on its website that it has decided to create new infrastructure for comfort and safety of participants in view of the coronavirus pandemic. For instance, PCR test conducted at access to the venues, catering, sanitizing the premises, and providing participants and staff with personal protective equipment.
Thermal imaging control will be provided. Medical stations at the venue provided with the necessary equipment and medicines. There will be ambulances and resuscitation vehicles, including teams of English-speaking doctors. All spaces of the site equipped with air recirculation units and decontamination devices, among other measures for all participants visiting the events in St. Petersburg city.
Hans Kluge, Director of the World Health Organization (WHO) Regional Office for Europe, together with Anna Popova, Head of Federal Service for the Oversight of Consumer Protection and Welfare (Rospotrebnadzor), will hold a special briefing for participants on pandemic situation and its control in Russia and around the world.
Kremlin Spokesman Dmitry Peskov told the Russian local media that President Vladimir Putin plans to take part in the plenary session of the St. Petersburg International Economic Forum (SPIEF). “But Putin will be there in person,” Peskov reaffirmed his earlier statement, and further informed that in-person forum will be held in strict accordance with health and safety measures, the president received the first vaccination shot on March 23 and the second on April 14.
Over the years, this forum has strengthened multifaceted business ties, facilitated broadening relations and the development of cultural dialogue between Russia and many foreign countries. According to Roscongress Foundation, a number of foreign countries, keen on making solid business presentations and equally seek partnership opportunities for mutually beneficial cooperation, have already registered their participation.
Traditional inter-country business dialogues are planned as part of SPIEF featuring representatives of business communities of Italy, Germany, France, the United States, India, Africa, Finland, Japan, Latin America, Middle East, as well as the EAEU-ASEAN business dialogue. Under the umbrella of SPIEF, international meetings in business room format will be held with the participation of representatives of Roscongress Foundation’s international partners and businesses in the corresponding world regions.
Apart from the main business programme, SPIEF will also host the SME Forum, Youth Economic Forum, SCO, BRICS and ASEAN events, B20 Regional Consultation Forum, Creative Business Forum and Drug Safety and Security Forum, as well as events on Arctic and African agenda.
The central theme of the Forum is A Collective Reckoning of the New Global Economic Reality. The business programme includes more than a hundred events divided into four tracks touching upon the issues of global and Russian economy, as well as social and technological agenda.
Joining Forces to Advance Development is the key track of the business programme. It includes sessions on economic recovery and international cooperation, discussions on Eurasian integration, transformation of global trade, effectiveness of business during the pandemic, global energy market, recovery of food market, and sustainability of national healthcare systems.
The second theme block of the business programme focuses on national development targets, the anti-crisis agenda for strengthening long-term potential of the economy, investment climate in Russian regions, shaping of Russian research and technology space, development of the financial market, creation of circular economy, and functioning of strategically important industries.
Discussions under the New Technology Frontiers track will feature the topics of international cooperation in science, digital sovereignty and information security, healthcare digitalization, tech ethics and others.
The Human Factor in Responding to Global Challenges theme block will talk about cultural codes of the new reality, collaboration in international education projects, and new skills and employment models in a post-COVID world. Moreover, there are sessions on the development of creative industries, sport and education.
The Russian Small and Medium-sized Business Forum is an annual event held as part of SPIEF to discuss the current state of small and medium-sized businesses and measures to enhance their role in the Russian economy. It is, however planned that the focused sessions encompass the key aspects of support and development for small and medium-sized enterprises.
“Small and medium-sized business is the foundation of the economy and a key indicator of the current status of socioeconomic development. As we are looking towards the future, it is essential to develop and implement long-term programmes that will give a new impetus to the development of SMEs,” said Anton Kobyakov, Adviser to the Russian President and Executive Secretary of the SPIEF Organizing Committee.
“We plan to discuss all the proposals in details at the SME Forum because they determine how small and medium-sized businesses will thrive in the future. Small and medium business is the largest employer and a guarantor of socioeconomic stability and the dynamic development of society. The development of entrepreneurial education, cooperation among small and big businesses, and the development of youth entrepreneurship, among other issues,” he said.
With a similar view and position, SME Corporation CEO Alexander Isayevich said “Entrepreneurs need to understand how to work in the new economic realities and what support measures the state will continue to provide. In addition, it is crucial for entrepreneurs to have high-quality non-financial services. The sessions, attended by a wide range of experts, will help to find optimal solutions not only for the SME sector, but also for the entire economy. We always advocate an open dialogue with business, as this is the principle that underlies our new development strategy.”
As part of Youth Day programme, the most promising undergraduate and postgraduate students, as well as young scientists from Russia’s leading universities and scientific organizations will participate in the St. Petersburg Forum.
“It has become a good tradition for talented young scientists and students to take part in SPIEF, it is a leading business event that brings together unique experts from all areas of the economy. Participation opens up limitless opportunities for young people to exchange experience and gain new knowledge,” said Andrey Fursenko, Aide to the President of the Russian Federation.
There will also be large-scale different cultural events. For instance, Qatar plans an exhibition – “Qatar between Land and Sea, Art and Legacy” – this exhibition is a great opportunity for people from around the world to explore the very precious elements of the Qatari and Middle Eastern tradition and lifestyle, such as handmade carpets and artifacts, pearls, and antique jewelry, which makes it a magical journey through history.
St. Petersburg forum is highly-considered as an important step forward in developing and strengthening investment‑related collaboration. As one of the biggest economic forums in Russia, it yearly gathers several thousands of participants, including representatives of ministries and government bodies, financial and investment organizations, startups, and tech and innovation companies, and representatives of the media.
Despite the adjustments made due to the pandemic, there are for all participants interesting and useful initiatives for comprehensive interaction as the key objective is to create opportunities and friendly conditions to consolidate links between Russia and the world.
About the SPIEF’21 Organizer: Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of international conventions and exhibitions; and business, public, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.
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