Without my friend Bernard Esambert there would not certainly be the current concept of “economic warfare”.
Having studied at the Ėcole Polytechnicque, he is a natural heir to the best Colbertian, Saint-Simonian, positivist – and later Gaullist – tradition – which pervades the background and education of the modern and post-revolutionary French elites, with governments that pass and ruling classes that remain, as it must always be.
It is no coincidence that, at the beginning of a book he wrote in 1971, Le Trosième Conflict Mondial, Esambert mentioned an old Saint-Simonian song, written by Rouget de Lisle, which glorified science and technology, as the new leaders of peoples after the so-called âge de l’obscurité. Rouget de Lisle, a French army officer, was the poet who wrote the words and music of La Marseillaise.
Two facts that, symbolically, are certainly not by chance.
After having been a mining engineer (and the engineering sector is traditionally a great area of recruitment for the intelligence Services and the French senior management) Esambert became a great commis d’Ėtat. Une vie d’influence, just to recall the title of one of his recent books, Une vie d’influence – dans les coulisses de la Ve République.
Finally, Esambert became a point of reference for Georges Pompidou, who later called him to collaborate with him – as a man of influence – at the Presidency of the Republic.
As Benedetto Croce – a too much forgotten philosopher – used to say, you can always and only implement “the possible liberalism”, well knowing that the real economy is made up of an agreement between private enterprise and State management, which is the one that always really counts.
It has always been and it will always be so. This is the first criterion for setting the scene of an economic warfare which – as Bernard Esambert himself noted for the first time – applies always and everywhere, and is never forgotten, unless severely defeated, even by the modern States that want to win a challenge that always lasts and has never one single face – a warfare, financial, technological, political, cultural and organizational one.
The economic warfare worked well also in ancient Greece: the overpopulation in Athens; the need for commercial outlets in Central Asia; the expansion of Greeks to Southern Italy, where the Bruttians, after having taken their idols with them, hid in the mountains without ever seeing the sea again.
The faces of economic warfare are always manifold and all of them always work. Whoever forgets some of them is always bound to lose.
Certainly there are the current young and brilliant French analysts operating in the intelligence Services and the training sector, who belong to the Ėcole de Guerre Ėconomique (ĖGE) founded precisely by Esambert, based on an old idea developed by Christian Harbulot. There are also the new Italian initiatives in the academic world, all designed more to showing up and flattering the Heads of the intelligence Agencies, for whatever small favours – the usual and often imaginary “small powers” of the Italian academic world, always a bit stingy, after the long season of the roadshow organized by the Intelligence Department (DIS), at the time of the Interior Minister, Marco Minniti, as “Authority responsible for the Intelligence Services”, from 2013 to the end of Renzi’s Government.
In this regard, we should also recall Ambassador Giampiero Massolo, who was the first supporter of the Italian intelligence services’ roadshow in the Italian academic world – now very badly damaged – more to improve the Agencies’ image than to really seek new recruits for the intelligence Services, which have always well selected their people inside and outside the universities, without any need for chattering or showing off.
Moreover, as we all know, the young people who were recruited by means of the website sicurezzanazionale.gov.it were quickly dismissed from the Agencies and now vegetate in other sectors of the Public Administration.
It is not a matter of “young” and “old” people or of creating some fashionable opportunities for declining universities, but rather of ensuring that the whole Italian ruling class endeavours for a well-designed and, above all, stable economic warfare.
As far as I know, for the time being there exists only one specific Master in Economic Intelligence in Italy, organized by the Institute of High Strategic and Political Studies (IASSP) in Milan. I have been told that also Harbulot participated in it.
But once again, this has nothing to do with the decades-long tradition of intelligence and economic ruling class in France, Great Britain and even the United States, not to mention also the small countries that walked out from the Warsaw Pact, with great intelligence and efforts.
It was Esambert himself, already present in an old but already usual and obvious Davos Conference – a now well-known fashionable meeting of those who believe they are authoritative people but, indeed, are nothing – who told about the exit of the old General Jaruzelsky, the strong man of the Polish counter-coup to avoid the occupation by a weak Warsaw Pact, when the old Polish General, whose right-hand man was a NATO spy, openly said he wanted Western investment in Poland and was also ready to progressively liberalize the zloty, as well as finally accept the Western business rules and Western capital coming to Poland.
Obviously subject to the control of the old-but-new-regime.
Here is the real success of an excellent economic warfare – not the many small stories that the globalized rich people usually tell to their useless and always gauchistes children, since it is fashionable.
Incidentally, it should be recalled that even Adam Smith, the inventor of “political economy” according to the basic rules of the British global interests of his time, was a free trade theorist in the markets where Great Britain had to settle, but supported the strictest protectionism, just when it came to closing the national or colonial British markets to the attack of the cheap goods of European competitors and, later, of the 13 colonies that were to become independent on the East Coast of North America.
Here, once again, the problem is scarcity, which just today – as always said by Esambert – seems far away, at least from what Mao Zedong called “the world’s metropolises”.
However, there is instead the natural and induced scarcity. Nowadays we live in induced scarcity, which does not need wars “for raw materials” – as the German geopolitics of the 1930s theorized – but it is the induced scarcity of modern consumption, which needs technology, expert management and States capable of expanding strategically, as well as modern factories. Here it is the new and inevitable economic warfare.
Either we win or lose, but always continuously. In contemporary economic warfare, there is no “declaration of peace”. Quite the reverse.
This is the real core of the issue. If we can no longer build monopolies by managing scarcity – as always happened when modern capitalism was established, according to Adam Smith – how can we today favour the national companies and the typical products of our region, if there are no longer real trade wars, such as the penetration of the East India Company in the Far East and in China, or the British oil trade closures in the Middle East, to take Kurdish oil in Haifa when Churchill, as First Lord of the Admiralty, turned the British military navigation from coal into oil navigation, or the operations of the Belgian royal family alone in Congo, or the French possessions in Algeria, Morocco and Tunisia?
The choice of Habib Bourghiba – Mussolini’s guest in Rome – to secretly deal with De Gaulle’s France Libre, when he realized that Rommel and his Afrika Korps were in disarray, can be considered a technique of economic and commercial warfare. He sold his Destour covert network, previously operating with the Axis, in exchange for independence, after the victory of the Western liberal democracies which Habib, indeed, did not like so much.
Lacking a real effective and modern colonial experience, Italy still does not know how to export its productive potential, which is what really counts.
From Giolitti’s to Mussolini’s time, Italy treated its colonies as simple ways out for the rural overpopulation, especially when the exit routes to the United States or South America were blocked.
Italy made the only mistake it should not make.
It even lost the Libyan oil, which was taken back only with the coup of Gaddafi, a creature of Italy’s intelligence Services.
The Italian politicians currently in power support the idea of going abroad to transfer our potential for economic warfare either as door-to-door sellers of the all too famous Made in Italy – which, indeed, almost sells itself – or in search of external and distant areas where to make our agonizing small and medium-sized enterprises survive as long as possible, so as to squeeze every last drop of the labour cost differential.
Either fashion, the brand – now in foreign hands – or begging to prolong the agony of some SMEs which are interesting for political, electoral and financial reasons.
Two attitudes which are deeply wrong – precisely in substance. As Esambert used to say, every country goes to sell abroad certainly not to repeat the plot of the beautiful 1959 movie by Francesco Rosi, The Magliari, set – not by chance – in Germany, but to win and wipe out its competitors.
This movie could teach much to the Italian politicians currently bleating for German “help”. They should watch it again and think about the behaviour of the two main characters -masterfully interpreted by Renato Salvatori and Alberto Sordi – who are defeated when trying to antagonize their Polish rivals, the previous “magliari”.
You never go abroad to propose a factory or a business, but you always go – willingly or unwillingly – to propose a way of doing business, a success story, a lifestyle, a product that must therefore be ipso facto protected, supported, advertised – for which imitations must be stopped, on site and elsewhere, and for which it is necessary to create a stable dependence of the target country and a powerful image in the foreign market of reference.
Nothing to do with the ramshackle, slow, inefficient, impolitic style – all aimed at simply making a deal, at striking a “bargain” – often characterizing our foreign policy, even in countries that Italy should tread very carefully and in which it should proceed with extreme caution.
Foreign countries must be conquered with trade, exactly as they could be conquered with a real battled war, if this were possible today.
In fact, every trade treaty is a peace treaty which, however, must clearly show the will of those who have won, i.e. – in Italy’s specific case – the productive system of those who have come from outside.
Certainly, today even economic wars are no longer made – at least in principle – to support a market that can absorb our surplus.
Marx’s old criterion of surplus value, which is certainly useful today as a way to analyse the evolution of modern capitalism.
As Esambert always says, economic wars are made to create room – outside and inside the old national perimeter – for counteracting and fighting against everybody’s adverse actions – both friends and foes – in our productive system.
Whoever loses faces – without time limits – the disasters of globalization (uncontrolled immigration, pollution, the classic combination of unemployment and inflation), while whoever wins offloads the problems on his global competitors.
And again there is no time limit.
When Spain was still under Franco’s regime, the State of Madrid created an instrument of economic warfare just with SEAT, in 1950, thanks to a small contribution of FIAT capital.
Later in 1985, SEAT became part of the German group Wolkswagen Aktiengesellschaft – created on the basis of an old project by the Führer.
The huge Catalan factory was inaugurated in Martorell by King Juan Carlos in 1993.
FIAT left and VW came in powerfully, with no local or European competitors.
Was it not an economic warfare operation? Of course it was.
At that time, Italy was numbed with the Clean Hands judiciary probe and no one noticed that Germany was taking over Spain’s basic industries after the end of the Caudillo’s regime.
This happened also in other parts of the world.
Starting from the imprisonment and the related suicide of the old ENI President, Cagliari, until the never resolved issues of Gardini’s death, in the connection between the takeover of Montedison and the fanciful creation of Enimont, the whole Clean Hands judicial investigation was, however, an accelerated operation to sell off Italy’s primary industrial system, pending the fall of the Berlin Wall and the truly endogenous crisis of the Italian political system.
There was, at first, the sale of primary assets, ranging from the motorway company Società Autostrade to the food holding SME – of which I had a first-hand experience – and later the redesign of the system of bribes from companies to the political system, which began with ENI’s disruption following Cagliari’s imprisonment, until the creation of a new network of funding to a “new” political system, where all parties were renamed – according to a potentially two-party system – “progressive” and “conservative” or even “liberal”.
Was it not an economic warfare operation? Of course it was. Many large and small companies became attractive to large foreign investors that were favoured, while the Italian State-owned and private companies faded away, struck by the new moralists’ blows.
What happened, at that time, in Mitterrand’s France or in the Great Britain led by Margaret Thatcher who, however, was ousted from Downing Street by a clique of Tories, involved in a large helicopter business affair?
We can also recall Liu Tenan, the Chinese Head of the “Development Commission”, expelled from the CPC; Rouhani himself in Iran that saw the 1979 Revolution in danger because of corruption, or Ana Mato, the Health Minister who resigned because of the scandal that in 2014 sullied the reputation of the entire Partido Pupular in Spain – not to mention the fact at least 2.3% of the world GDP fuels global corruption.
Can we believe that all this came only from what had happened in Italy?
Once again the usual moralistic parochialism sets in, a short-lived legacy of the snobbery of Italy’s old Action Party, whose liberal Socialism – taunted by Croce – led Italy to be a pale imitation of Great Britain, the eternal myth of all poor politicians and managers wearing grisaille suits.
Hence the final formula: the mix of legal and non-legal, advertising, political, military, strategic and monetary protection and support for the local ruling classes, as well as the fair and rational relations with the target country, are called exactly “economic warfare”.
There is no other way to make foreign policy and establish international relations, even non-economic ones. There is only and always economic warfare.
Hence, after this explicit and direct phase of the inevitable economic clash for survival between nations, there is the phase in which “companies are used as armies and management and business schools are used as schools for officers”, and entrepreneurs and business leaders are seen as new generals. In fact Akira Kurosawa, the director of the movie Seven Samurai and a descendant from a Samurai family, wanted – in a later movie of 1980, Kagemusha (Shadow Warrior) – to describe Japanese business leaders as new Samurai.
Every economic action is a “covert” act of war. Every act of war can also be turned into an economic action, which instead of being a cost – unsustainable in the long run – is a real bargain or can even become so.
Economic warfare shifts the cost of operations onto the victim.
Attractiveness and competitiveness are now complementary, while Italy is the 7th world exporter of goods, but it only ranks 18th in terms of Foreign Direct Investment (FDI) in the territory.
The current FDI is an instrument of external hegemony, not a system of national power or of projection of our economic and non-economic power onto the countries that receive our goods or that – in any case – should consume them, instead of our competitors’ products.
The economic warfare also stems from the fact that all the great Western countries produce more or less the same goods.
Nevertheless, in Italy 43% of the companies currently listed on the Stock Exchange are owned by foreign businesses. Obviously, there is no direct correlation between the quality of management of the various industries and their ownership. However, do you believe that if a French bank manager has to organize a strategy for his own company, he will pay heed to the large multifarious group of his small investors – as currently happens in Italy – or will he rather consider the ideas coming from some State think tanks in Paris, or possibly from one of his Ministers, or even from a colleague in Lyon or Grenoble?
According to the 2018 data, in Italy the foreign investors’ shareholdings of listed companies currently amount to 196.4 billion euro, i.e. 43% of the total.
The shareholdings of listed joint stock companies owned by Italian businesses are worth 25.8%, with the State holding 2.7% of the total portfolio. Hence it is certainly not difficult to imagine that, in this framework of international economic equilibria, Italy would have an extreme need for a policy of economic warfare.
This also applies to cultural or humanitarian operations.
Goodness knows what the organization Mèdecins sans Frontières was for France, or the management of the U.S. or Canadian grain overproduction was for the U.S. power projection policy in third countries or in those suffering humanitarian crises.
Whoever eats your wheat becomes your friend, whoever is saved by your doctors will never make war on you but, above all, will gladly buy your products, when the crisis is over and France or the United States will present local governments with the bill for its humanitarian operations.
Moreover, in 2011 the Italian multinationals were as many as 6,500 Italian, while currently they are decidedly fewer and often smaller.
Not to mention Italy’s cultural and hegemonic penetration – virtually nothing, apart from a few old-style and ramshackle elite operations for socialites.
We need more than beautiful girls, superstar chefs or art exhibitions. It takes guts to penetrate and hegemonize a distant market. It is an operation in which companies and the intelligence Services shall participate simultaneously, and shall be ever less tied to the cliques of revolving-door government and also less parochial in their actions. Even humanitarian organizations, some universities – less familist than usual – as well as the fashion world, newspapers, TV networks, cinema and all the many other instruments of attraction and seduction shall take part in this operation.
An operation which, however, must be stable and well-designed, otherwise we risk repeating what happened when an Italian President of the Republic, while visiting the Chinese Great Wall, learnt that the German Prime Minister was coming for a flying visit to Beijing so as to sign an agreement between the German and Chinese large car manufacturers.
A dinner, some greetings and a quick return to Berlin.
Unless the full criterion of the “economic warfare” is followed – as must be done according to Bernard Esambert’s guidelines – Italy will always be relegated to the sidelines of the great global economic development and it will not reap the fruits but only the damage of globalization – as is already currently happening.
A New Strategy for Ukraine
Authors: Anna Bjerde and Novoye Vremia
Four years ago, the World Bank prepared a multi-year strategy to support Ukraine’s development goals. This was a period of recovery from the economic crisis of 2014-2015, when GDP declined by a cumulative 16 percentage points, the banking sector collapsed, and poverty and other measures of insecurity spiked. Indeed, we noted at the time that Ukraine was at a turning point.
Four years later, despite daunting internal and external challenges, including an ongoing pandemic, Ukraine is a stronger country. It has proved more resilient to unpredictable challenges and is better positioned to achieve its long-term development vision. This increased capacity is first and foremost the result of the determination of the Ukrainian people.
The World Bank is proud to have joined the international community in supporting Ukraine during this period. I am here in Kyiv this week to launch a new program of assistance. In doing this, we look back to what worked and how to apply those lessons going forward. In Ukraine—as in many countries—the chief lesson is that development assistance is most effective when it supports policies and projects which the government and citizens really want.
This doesn’t mean only easy or even non-controversial measures; rather, it means we engage closely with government authorities, business, local leaders, and civil society to understand where policy reforms may be most effective in removing obstacles to growth and human development and where specific projects can be most successful in delivering social services, particularly to the poorest.
Looking back over the past four years in Ukraine, a few examples stand out. First, agricultural land reform. For the past two decades, Ukraine was one of the few countries in the world where farmers were not free to sell their land.
The prohibition on allowing farmers to leverage their most valuable asset contributed to underinvestment in one of Ukraine’s most important sources of growth, hurt individual landowners, led to high levels of rural unemployment and poverty, and undermined the country’s long-term competitiveness.
The determination by the President and the actions by the government to open the market on July 1 required courage. This was not an easy decision. Powerful and well-connected interests benefited from the status quo; but it was the right one for Ukrainian citizens.
A second area where we have been closely involved is governance, both with respect to public institutions and the rule of law, as well as the corporate governance of state-owned banks and enterprises. Poll after poll in Ukraine going back more than a decade revealed that strengthening public institutions and creating a level playing field for business was a top priority.
World Bank technical assistance and policy financing have supported measures to restore liability for illicit enrichment of public officials, to strengthen existing anticorruption agencies such as NABU and NACP, and to create new institutions, including the independent High-Anticorruption Court.
We are also working with government to ensure the integrity of state-owned enterprises. Our support to the government’s unbundling of Naftogaz is a good example; assistance in establishing supervisory boards in state-owned banks is another. We hope our early dialogue on modernizing the operations of Ukrzaliznytsia will be equally beneficial.
As we begin preparation of a new strategy, the issues which have guided our ongoing work—strengthening markets, stabilizing Ukraine’s fiscal and financial accounts; and providing inclusive social services more efficiently—remain as pressing today as they were in 2017. Indeed, the progress which has been achieved needs to continue to be supported as they frequently come under assault from powerful interests.
At the same time, recent years have highlighted emerging challenges where we hope to deepen and expand our engagement. First, COVID-19 has underscored the importance of our long partnership in health reform and strengthening social protection programs.
The changes to the provision of health care in Ukraine over recent years has helped mitigate the effects of COVID-19 and will continue to make Ukrainians healthier. Government efforts to better target social spending to the poor has also made a difference. We look forward to continuing our support in both areas, including over the near term through further support to purchase COVID-19 vaccines.
Looking ahead, the challenge confronting us all is climate change. Here again, our dialogue with the government has positioned us to help, including to achieve Ukraine’s ambitious commitment to reduce carbon emissions. During President Zelenskyy’s visit to Washington in early September we discussed operations to strengthen the electricity sector; a program to transition from coal power to renewables; municipal energy efficiency investments; and how to tap into Ukraine’s unique capacity to produce and store hydrogen energy. This is a bold agenda, but one that can be realized.
I have been gratified by my visit to Kyiv to see first-hand what has been achieved in recent years. I look forward to our partnership with Ukraine to help realize this courageous vision of the future.
Originally published in Ukrainian language in Novoye Vremia, via World Bank
Russia, China and EU are pushing towards de-dollarization: Will India follow?
Authors: Divyanshu Jindal and Mahek Bhanu Marwaha*
The USD (United States Dollar) has been the world’s dominant currency since the conclusion of the second world war. Dollar has also been the most sought reserve currency for decades, which means it is held by central banks across the globe in significant quantities. Dollar is also primarily used in cross-border transactions by nations and businesses. Without a doubt, US dollar’s dominance is a major reason for the US’ influence over public and private entities operating around the world. This unique position not only makes US the leader in the financial and monetary system, but also provides incomparable leverage when it comes to coercive ability to shape decisions taken by governments, businesses, and institutions.
However, this dynamic is undergoing gradual and visible changes with the emergence of China, slowdown in the US economy, European Union’s independent policy assertion, Russia-US detachment, and increasing voices from across the world to create a polycentric world and financial system in which hegemonic capacities can be muted. The world is witnessing de-dollarisation attempts and ambitions, as well as the rise of digital or cryptocurrencies at an increasing pace today.
With Russia, China and EU leading the way in the process of de-dollarisation, it needs to be argued whether India, currently among the most dollarized countries (in invoicing), will take cue from the global trends and push towards de-dollarisation as well.
The dominant role of dollar in the global economy provides US disproportionate amount of influence over other economies. As international trade needs a payment and financial system to take place, any nation in position to dictate the terms and policies over these systems can create disturbances in trade between other players in the system. This is how imposition of sanctions work in theory.
The US has for long used imposition of sanctions as a tool to achieve foreign policy and goals, which entails restricting access to US-led services in payment and financial transaction processing domains.
In recent years, several nations have started opposing the unilateral decisions taken by the US, a trend which accelerated under the former president Donald Trump’s tenure. He withdrew US from the JCPOA deal between Iran and US, aimed at Iran’s compliance with nuclear discipline and non-proliferation. Albeit US withdrawal, other signatories like EU, Russia, and China expressed discontent towards the unilateral stance by the US and stayed committed towards the deal and have desired for continued engagements with Iran in trade and aid.
Similarly, the sanctions imposed on Russia in the aftermath of the Crimean conflict in 2014 did not find the reverberations among allies to the extent that US had wanted. While EU members had switched to INSTEX (Instrument in Support of Trade Exchanges) which acts as a special-purpose vehicle to facilitate non-USD trade with Iran to avoid US sanctions, EU nations like Germany continue to have deep trade ties with Russia, and EU remains the largest investor as well the biggest trade partner for Russia, with trade taking place in euros, instead of dollars.
Further, despite the close US-EU relations, EU has started its own de-dollarization push. This became more explicit when earlier this year, EU announced plans to prioritize the euro as an international and reserved currency, in direct competition with dollar.
Trajectories of Russia, China, and EU’s de-dollarisation push
Russia has emerged as the nation with the most vigorous policies oriented towards de-dollarization. In 2019, the then Russian Prime Minister Dmitry Medvedev had invited Russia’s partners to cooperate towards a mechanism for switching to use of national currencies when it comes to transactions between the countries of the Shanghai Cooperation Organization (SCO). It must be noted that in Eurasian Economic Union (EAEU), which functions as a Russian-led trade bloc, more than 70 percent of the settlements are happening in national currencies. Further, in recent years, Russia has also switched to settlements in national currencies with India (for arms contracts) and the two traditionally strong defence partners are aiming at exploring technology as means for payment in national currencies.
Russia’s push to detach itself from the US currency can also be seen in the transforming nature of Russia’s foreign exchange reserves where Russia for the first time had more gold reserves than dollars according to the 2018 data (22 percent dollars, 23 percent gold, 33 percent Euros, 12 percent Yuan). As per the statement by Russian Finance Minister in 2021, Russia aims to hold 40 percent euro, 30 percent yuan, 20 percent gold and 5 percent each of Japanese yen and British pound. In comparison, China holds a significant amount of dollar denominated assets as forex reserves (50 to 60 percent) and has the US as its top export market with which trade takes place mostly in US dollars. Moreover, Russia has also led the push by creating its own financial messaging system- SPFS (The System for Transfer of Financial Messages) and a new national electronic payment system – Mir, which has witnessed an exponential rise in its use.
While China-Russia trade significantly depends on euros instead of their own national currencies (even though use of national currencies is slowly rising), instead of pushing the Chinese national currency Renminbi (RMB), Beijing is aiming towards establishing itself as the first nation to issue a sovereign digital currency, which would help China to engage in cross border payments without depending on the US financial systems. Thus, for China, digital currency seems to be the route towards countering the dollar dominance as well as to increase its own clout by leading the way for an alternate global financial system operating in digital currencies. It needs to be noted here that EU has succeeded in internationalizing the euro and this can be seen in the fact that EU-Russia trade as well as Russia-China trade occurs predominately in euros now.
Will India follow suit?
Indian economy’s dynamic with dollar is different than other major economies in the world today. Unlike China or Russia (or EU and Japan), which hold dollars in significant amounts, India’s reserve is not resulted by an export surplus. While others accumulate dollars from their earnings of trade surplus, India maintains a large forex reserve even though India imports less than it exports. In India’s case, the dollar reserves come through infusion of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI), which reflects the confidence of foreign investors in India’s growth prospects. However, accumulation of dollar reserves through this route (which helps in offsetting the current deficit faced in trade), India remains vulnerable to policy changes by other nations’ monetary policies which are beyond India’s own control. For instance, it has been often highlighted that a tightening of the US monetary policy leads to capital outflows (capital flight) from India, thus impacting India adversely.
New Dehi has resisted a de-dollarization push for long. Back in 2009, when Russia and China had started the push via BRIC mechanism (Brazil, Russia, India, China grouping), it was argued that New Delhi would not like to upset Washington, especially after the historic US-India civil nuclear agreement was signed just a year before in 2008 -for full civil nuclear cooperation between the two nations.
Further, currency convertibility is an important part of global commerce as it opens trade with other countries and allows a government to pay for goods and services in a currency that may not be the buyer’s own. Non-convertible currency creates difficulties for participating in international market as the transactions take longer routes for processing (which in case of dollar transactions, is controlled by US systems).
Just like Chinese renminbi, Indian rupee is also not yet fully convertible at the exchange markets. While this means that India can control its burden of foreign debt, and inflow of capital for investment purposes in its economy, it also means an uneasy access to capital, less liquidity in financial market, and less business opportunities.
It can be argued that just like the case of China and Russia, India can also look towards having a digital currency in the near future, and some signs for this are already visible. India can also look towards having an increased share of euros and gold in its foreign exchange reserves, a method currently being used by both China and Russia.
An increasing number of voices are today pointing towards the arrival of the Asian age (or century). With China now being the leading economic power in the world, US economy on a slowdown, and emergence of an increasing polycentric structure in world economy, the dominance of dollar is bound to witness a shake-up. In order for global systems to remain in sync with the transforming economic order, structural changes like control over leading economic organisations (like IMF and World Bank) will become increasingly desirable.
With an increasing number of nations now looking towards digital currencies and considering a change in the mix of their foreign exchange reserves, a general trend is now visible even if it would not mean an end to dollar’s dominance in the immediate future. As the oil and gas trade in international markets also start shifting from dollar, geopolitical balance of power is expected to witness a shift after decades of US dominance.
Major geopolitical players like China, Russia and EU have already started their journey to counter the dominance of dollar, and the strings of US influence on political decisions that come with it. According to Chinese media, Afghanistan’s reconstruction after US-withdrawal can also accelerate the global de-dollarization push as nations like Saudi Arabia might look for establishing funds for assisting Afghanistan in non-dollar currencies. So, conflict areas highlight another avenue where de-dollarization push will find a testing arena in coming times.
India has several options for initiating its de-dollarization process. Starting from Russia-India transactions, trade with Iran, EAEU, BRICS and SCO members in national or digital currencies can also become a reality in near future. Considering India’s present dollar dependence, whether US sees India’s move towards de-dollarisation as a direct challenge to US-India relations, or accepts it as a shift in the global realities, has to be seen.
*Mahek Bhanu Marwaha is a master’s student in Diplomacy, Law and Business program at the OP Jindal Global University, India. Her research interests revolve around Indian and Chinese foreign policies and trade relations.
Today’s World Demands Sustainability
In the Brundtland Report, the United Nations defined sustainable development as development that satisfies current demands without jeopardising future generations’ ability to meet their own. It is based on the assumption that resources are finite and should be used sparingly and wisely to guarantee that there is enough for future generations without lowering current living standards. A socially responsible society must prioritise environmental conservation and dynamic equilibrium in human and natural systems.
Pillars of Sustainability
Environmental, social, and economic pillars make up the concept of sustainability, which is sometimes known as profits, planet, and people informally. These are especially important in terms of corporate sustainability and company activities.
The most frequently discussed aspect is environmental protection. As part of a supply chain, it is concerned with reducing carbon footprints, water usage, non-decomposable packaging, and wasteful operations. These procedures can be both cost-effective and beneficial to the bottom line, as well as crucial for environmental sustainability.
Social development entails treating people fairly and ensuring that employees, stakeholders, and the society in which a business operates are treated responsibly, ethically, and sustainably. More responsive benefits, such as greater maternity and paternity benefits, flexible scheduling, and learning and development opportunities, could help achieve this. Businesses should, for example, utilise sustainable labour, which entails adequately compensated, mature employees who can work in a safe atmosphere.
Economic development is probably the most straightforward type of long-term sustainability. A firm must be successful and generate enough money to be economically sustainable in the long run. The difficulty with this type of sustainability is finding a balance. Rather than producing money at any cost, businesses should try to make money in a way that is consistent with other aspects of sustainability.
What can be done to quantify it?
The performance of the three basic principles as a whole, in particular a balanced treatment of all three, is used to assess sustainability. Although the Triple Bottom Line’s three core concepts do not provide a measurement methodology in and of themselves, subsequent approaches of assessing sustainability have attempted to do so. Despite the fact that there is no official universal assessment of sustainability, several organisations are developing industry-specific methods and techniques to assess how social, environmental, and economic principles operate within a corporation.
What Impact Does Sustainability Have on Business?
Sustainability is becoming increasingly crucial for all businesses, regardless of industry. A sustainability strategy is considered necessary by 62 percent of executives today, and another 22 percent believe it will be in the future.
Simply expressed, sustainability is a business strategy for generating long-term value by considering how a company works in its environmental, social, and economic contexts. The concept behind sustainability is that establishing such measures promotes firm lifespan. Companies are realising the need to act on sustainability as expectations for corporate responsibility rise and transparency becomes more widespread.
Executives today face a complex and unprecedented confluence of social, environmental, market, and technology forces. This necessitates comprehensive, long-term management. Executives, on the other hand, are frequently hesitant to make sustainability a priority in their company’s business plan, mistakenly believing that the costs exceed the advantages. Academic research and corporate experience, on the other hand, suggest the exact reverse.
Traditional business strategies prioritise shareholder value creation at the expense of other stakeholders. Sustainable companies are changing the corporate ecosystem by creating models that benefit all stakeholders, including employees, shareholders, supplier chains, civil society, and the environment. The concept of “creating shared value” was pioneered by Michel Porter and Mark Kramer, who argued that firms might generate economic value by recognising and addressing social issues that connect with their business. Much of the strategic value of sustainability stems from the requirement to communicate with and learn from important stakeholders on a regular basis. A corporation with a sustainability agenda is better positioned to foresee and react to economic, social, environmental, and regulatory changes as they happen through regular discussion with stakeholders and continuous iteration.
Moreover, Businesses can benefit from the Triple Bottom Line approach to running a firm in a variety of ways. Meeting UN environmental sustainability requirements is not only ethical and necessary, but it is also cost-effective and enables for a better business model. Furthermore, sustainability allows a company to recruit employees, owners, and consumers who are invested in and share the same values as the company’s sustainability aims. As a result, the impact of sustainability on a company’s reputation and income can be favourable
Why is Sustainability Important for Students
Sustainability is a comprehensive field that provides students and graduates with knowledge of almost every element of human life, from business to technology to the environment and social sciences. The essential skills with which a graduate leaves college or university are in high demand, especially in a modern society seeking to substantially reduce carbon emissions while also discovering and developing future technologies. Politics, economics, philosophy, and other social sciences, as well as the hard sciences, are all used to support sustainability.
As firms seek to comply with new legislation, many corporate occupations at the graduate level and above prioritise sustainability skills and environmental awareness. As a result, sustainability graduates will work in a variety of sectors, including civic planning, environmental consulting (both built and natural environments), agribusiness, non-profit management, corporate strategy, health evaluation and planning, and even law and decision-making. Entry-level occupations are on the rise, and bachelor’s grads may expect more options and opportunities in the future years. Sustainability is one of the newest degree programmes, attempting to combine social science, civic engineering, and environmental science with future technology. When we hear the phrase “sustainability,” we usually think of renewable energy sources, carbon reduction, environmental protection, and a strategy to keep our planet’s delicate ecosystems in check. In a nutshell, sustainability aims to safeguard our natural environment, human and ecological health, while also encouraging innovation and ensuring that our way of life is not jeopardised
Even if you aren’t studying environmental science, sustainability is an important topic to learn about. Sustainability is important for business majors to understand since it helps with customer appeal and Corporate Social Responsibility. Students studying agriculture, nutrition, and public health should concentrate on sustainability to understand how to feed a growing population nutritious and high-quality food. Majors in education pass on their knowledge of sustainability to the next generation, preparing them to lead change. Every major has a link to the environment
The Long Run
As people continue to live more sustainable lives as a result of the climate problem, there is a current drive towards sustainability as a more desirable focus for businesses. Positive climate impact across the entire value chain, improved influence on the environment, people, and atmosphere, and useful contribution into society will most likely be expected of businesses in the future. Companies will be held responsible for all parts of the industry, and any environmental damage or harmful emissions from production operations should be controlled or eliminated. In what is known as a ‘circular economy,’ it is also predicted that resources will be reused to accommodate the global growth in population. This transformation would allow one person’s garbage to become another’s resource, resulting in significant waste reduction and a more efficient supply chain.
As we approach the start of a new year, we’re acutely aware of the growing urgency in the climate movement, as well as the need for action to catch up to ambition. Not only for researchers and policymakers, but for everyone—business executives, negotiators, and communicators—there is still much work to be done. We have a better chance of constructing a sustainable future if we can share what is working.
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