The Public Sector Banks (PSBs) holds about 70% of Indian banking industry and its profitability has been shrinking from last few years. The paper intends to provide the insights on the impacts of PSBs mergers on the Indian economy amid global coronavirus outbreak.
The worldwide economic slowdown due to Covid-19 crisis hasn’t left the Indian economy untouched with India’s GDP fall to lowest 5% in the last six years. With Indian economy at stake, the mergers of major public sector banks (PSBs) in India on 1st April, 2020 has set alarm bells ringing for the Indian government. The Punjab National Bank has been merged with Oriental Bank of Commerce and United Bank of India; Indian Bank with Allahabad Bank; Union Bank of India with Andhra Bank and Corporation Bank; while Canara Bank has amalgamated with Syndicate Bank. It has reduced total PSBs from 27 (in 2017) to 12 only. The Indian government is the majority shareholder in the PSBs so it becomes its responsibility to resuscitate the weak PSBs through infusion of capital in times of need to financially strengthen the PSBs.
Rationale Behind The Mergers
The financially-stricken PSBs in India have shown lessened credit-creation growth with waning lending capabilities in recent years. The huge pile of Non-Performing Assets (NPAs) and low asset qualities have hit badly their capital ratios with increased provisions for NPAs due to high risk weighted bad loans eroding their profitability. Rising bad debts has shrieked their exposure to big corporate lending like real-estate, steel and infrastructure with limited access to capital market.
The capital adequacy ratio is the ratio between bank’s capital and risk weighted assets and requires huge capital to meet it. The capital requirements under Basel III norms by Reserve Bank in India require minimum capital adequacy ratio to be 8% for banks to eliminate default risks. Expanding credit need in the economy also requires more capital for PSBs for lending purposes.
The Reserve Bank of India’s Prompt Corrective Action (PCA) plan for weaker PSBs to prevent default risks has constrained their lending capacities and requires more growth capital for them. The Insolvency and Bankruptcy Code,2016 also forces public sector banks in India to accept default payments lesser than the lending amounts. All these causes have forced the government to resort to mergers as the only viable option.
Government’s Vision Regarding PSBs Mergers
The Indian government is aiming to achieve USD five trillion economy in the coming years and considers amalgamation of PSBs as favorable move. It has proposed the mergers with the idea to improve operational efficiency of PSBs as the mergers will provide regulatory as well as growth capital.The mergers has been projected to create banks with stronger national presence and international reach. It will also improve their abilities to raise market resources with next generation banking technologies.
The move will help in reduction in lending cost and will help smaller and weaker banks to fulfill the Basel III capital requirements and will bring the merging weak PSBs out from the PCA framework. The Indian government has based its decision upon recommendations of Narasimham committee and PJ Nayak committee which suggested that India only requires few major banks than fragmented PSBs. The central bank, Reserve Bank of India has also proposed that the merger banks will become lenders of global scale through cutting edge technology and state of the art payment systems.
The Indian government is planning to increase the leverage ratio of public sector banks by augmenting their money creation powers. It aims to fulfill the objective to have multiplier effect on the Indian economy.It will result into manifold gains when loans by these banks will result into continuous cycle of consumption, production and income. But the repercussions of this move can’t be ignored and need proper assessment.
Impacts On The Indian Economy
The merging public sector banks in India exhibit varying financial strengths. The most profitable Indian bank among 10 PSBs with NPA of 3.2% has been merged with Allahabad bank with NPA of 5.2%. It will adversely affect the health of Indian bank’s profitability and efficiency. The share prices of Indian bank had also fallen down after the announcement of proposed mergers and the future efficacy of mergers is very plutonian in current economic conditions. By diluting the management of stronger banks, the forced mergers will be deteriorating for the whole banking industry in India.
The Indian government has claimed that no jobs of employees will be lost after the merger. Given this, it is very unlikely that efficiency of banks will improve by getting rid of redundant and underutilized labour as the government also fears severe strikes and protests by the bank unions’ employees. The claim is duping as closedown of many branches will result in retrenchment of many employees and will increase the cyclical unemployment rate in India.
PSBs mergers will not per se decrease the amount of their bad loans. It can improve only if banks improve their recovery processes or if loans are written off against balance sheets. Mergers do not address these significant structural problems as bad debts’ recovery process is slow due to inefficient judicial system in India and banks are unwilling to show them in balance sheets due to mounting losses.
The move also doesn’t deal with the problem of political interference in the management of PSBs – a major cause for increasing bad loans. The banks are forced to extend loans to big businesses without securing any payment guarantee.It will impede the goal of financial inclusion by the government to reach the unbanked poor. Minority shareholders will be more affected than dominant shareholders i.e. the government as it has also other revenue sources.
The credit growth has deteriorated drastically in India and post- mergers, the banks will face severe challenges related to staff integration, synchronizing accounting, bad loans’ recognition policies, rationalization of branches and culture compatibility. For instance, the Punjab National Bank (PNB) who is grappling with 16% NPA can’t be expected to revive the weaker Oriental Bank of Commerce and United bank in India,.
The government has initiated the idea that through recapitalization of PSBs through mergers, credit deployment would increase but the credit flow also depends upon economic environment and bankers’ propensity to take risk. So the increased financial health may be necessary but not the only sufficient step for reviving the credit crunch in the economy.
The government fiscal deficit gap is already increasing and recapitalization funds for mergers will further aggravate the problem. Instead of multiplier effect, the deficit will compel government to more borrowings and this will lead to crowding out of private investments. The Indian government debt will rise up and it would only be intergenerational transfer of funds without yielding optimistic results.
The sole criterion used for classifying banks into recent mergers was selecting banks operating on common banking technology solutions. This would ease integration but it can’t be the only rationale for merging banks. The infusion can temporarily solve the problem but will not address deep structural woes faced by the PSBs.
Through mergers, instead of the strong banks lifting the weak PSBs, the weak ones may sink the strong. Past mergers of weak banks with strong ones have not shown riveting results in India. The merger of Punjab National Bank with the New Bank in 1993 failed to create any significant cost synergies. The State Bank of India‘s merger with its associate banks also affected the SBI’s credit growth after the merger with depressed operating performance and reduced share prices. Last year, the strong Bank of Baroda was merged with the weaker Vijaya Bank and Dena Bank, but post-merger performance showed little improvements and its share prices has also collapsed from Rs 150 a year ago to Rs 92. The weaker banks also suffer as Dena bank’s share swap ratio was much lower than expected by their shareholders.
The government has based its whole justification upon the success of the State Bank of India (SBI)’s merger. But the same effect can’t be expected from recent mergers as the SBI merger was only internal reorganization exercise as associate banks enjoyed common identity with SBI for long and SBI also had operational control over them from inception. The banks were operating under the same information technology platform so the merger had more positive impacts. While SBI had more trained employees’ pool and larger capital resources, managing 2-3 banks would be nightmare for other current PSBs as economy is already facing recessionary problems.
In previous PSBs mergers, anchor banks had better asset qualities and strong capital stocks but major banks under recent amalgamation plan are themselves not in good health. Like, both gross bad loans and net bad loans for PNB and Union Bank of India are at over 15% and 7% of assets. So, further strain from weaker banks would prove detrimental for the major banks.
The PSBs in India have also previously shown lending bias to big corporate businesses and venturesome customers only. The mergers will add fuel to this problem rather than healing it out. It is more likely that consolidated bigger entities would use their pricing power to push for greater credit to big businesses than needy small customers. The Marginal Costs of Lending rate (MCLR) of merged bank is decided by the anchor banks only and the inclusion of weak banks in operations becomes minimal. The consolidation of banks may lead to the monopolistic pricing behavior of large banks and will left out the regional banks.
The current Indian economy requires instant remedy solution but the new mergers will have more long run impacts than near-term growth. The meaningful cost synergies from banks are unlikely in the short run as they would focus more on integration and restructuring of their banks rather than lending more funds.
This merger will be a short-term reprieve and only structural change will prevent public sector banks from sliding downhill again.
As PSBs are foundational for growth of Indian economy, the analysis of this government move becomes necessary. The researcher opines that based on previous merger repercussions and current state of Indian economy, the mergers will not be healing but detrimental to Indian banking industry. It is only short term relief measure intended to distract the attention of people from the slumping economy. For achieving expected merger benefits, the corporate governance through Banks Board Bureau needs to be emphasized. The government should develop more infrastructure development banks to relieve existing PSBs from infrastructural bad loans. The PCA framework also needs to be administered efficiently.
Carbon Market Could Drive Climate Action
Authors: Martin Raiser, Sebastian Eckardt, Giovanni Ruta*
Trading commenced on China’s national emissions trading system (ETS) on Friday. With a trading volume of about 4 billion tons of carbon dioxide or roughly 12 percent of the total global CO2 emissions, the ETS is now the world’s largest carbon market.
While the traded emission volume is large, the first trading day opened, as expected, with a relatively modest price of 48 yuan ($7.4) per ton of CO2. Though this is higher than the global average, which is about $2 per ton, it is much lower than carbon prices in the European Union market where the cost per ton of CO2 recently exceeded $50.
Large volume but low price
The ETS has the potential to play an important role in achieving, and accelerating China’s long-term climate goals — of peaking emissions before 2030 and achieving carbon neutrality before 2060. Under the plan, about 2,200 of China’s largest coal and gas-fired power plants have been allocated free emission rights based on their historical emissions, power output and carbon intensity.
Facilities that cut emissions quickly will be able to sell excess allowances for a profit, while those that exceed their initial allowance will have to pay to purchase additional emission rights or pay a fine. Putting a price tag on CO2 emissions will promote investment in low-carbon technologies and equipment, while carbon trading will ensure emissions are first cut where it is least costly, minimizing abatement costs. This sounds plain and simple, but it will take time for the market to develop and meaningfully contribute to emission reductions.
The initial phase of market development is focused on building credible emissions disclosure and verification systems — the basic infrastructure of any functioning carbon market — encouraging facilities to accurately monitor and report their emissions rather than constraining them. Consequently, allocations given to power companies have been relatively generous, and are tied to power output rather than being set at absolute levels.
Also, the requirements of each individual facility to obtain additional emission rights are capped at 20 percent above the initial allowance and fines for non-compliance are relatively low. This means carbon prices initially are likely to remain relatively low, mitigating the immediate financial impact on power producers and giving them time to adjust.
For carbon trading to develop into a significant policy tool, total emissions and individual allowances will need to tighten over time. Estimates by Tsinghua University suggest that carbon prices will need to be raised to $300-$350 per ton by 2060 to achieve carbon neutrality. And our research at the World Bank suggest a broadly applied carbon price of $50 could help reduce China’s CO2 emissions by almost 25 percent compared with business as usual over the coming decade, while also significantly contributing to reduced air pollution.
Communicating a predictable path for annual emission cap reductions will allow power producers to factor future carbon price increases into their investment decisions today. In addition, experience from the longest-established EU market shows that there are benefits to smoothing out cyclical fluctuations in demand.
For example, carbon emissions naturally decline during periods of lower economic activity. In order to prevent this from affecting carbon prices, the EU introduced a stability reserve mechanism in 2019 to reduce the surplus of allowances and stabilize prices in the market.
Besides, to facilitate the energy transition away from coal, allowances would eventually need to be set at an absolute, mass-based level, which is applied uniformly to all types of power plants — as is done in the EU and other carbon markets.
The current carbon-intensity based allocation mechanism encourages improving efficiency in existing coal power plants and is intended to safeguard reliable energy supply, but it creates few incentives for power producers to divest away from coal.
The effectiveness of the ETS in creating appropriate price incentives would be further enhanced if combined with deeper structural reforms in power markets to allow competitive renewable energy to gain market share.
As the market develops, carbon pricing should become an economy-wide instrument. The power sector accounts for about 30 percent of carbon emissions, but to meet China’s climate goals, mitigation actions are needed in all sectors of the economy. Indeed, the authorities plan to expand the ETS to petro-chemicals, steel and other heavy industries over time.
In other carbon intensive sectors, such as transport, agriculture and construction, emissions trading will be technically challenging because monitoring and verification of emissions is difficult. Faced with similar challenges, several EU member states have introduced complementary carbon taxes applied to sectors not covered by an ETS. Such carbon excise taxes are a relatively simple and efficient instrument, charged in proportion to the carbon content of fuel and a set carbon price.
Finally, while free allowances are still given to some sectors in the EU and other more mature national carbon markets, the majority of initial annual emission rights are auctioned off. This not only ensures consistent market-based price signals, but generates public revenue that can be recycled back into the economy to subsidize abatement costs, offset negative social impacts or rebalance the tax mix by cutting taxes on labor, general consumption or profits.
So far, China’s carbon reduction efforts have relied largely on regulations and administrative targets. Friday’s launch of the national ETS has laid the foundation for a more market-based policy approach. If deployed effectively, China’s carbon market will create powerful incentives to stimulate investment and innovation, accelerate the retirement of less-efficient coal-fired plants, drive down the cost of emission reduction, while generating resources to finance the transition to a low-carbon economy.
(Martin Raiser is the World Bank country director for China, Sebastian Eckardt is the World Bank’s lead economist for China, and Giovanni Ruta is a lead environmental economist of the World Bank.)
(first published on China Daily via World Bank)
The EU wants to cut emissions, Bulgaria and Eastern Europe will bear the price
In the last few years, the European Union has been going above and beyond in dealing with climate change. Clearly, this is far from being a case of disinterested endeavour to safeguard the planet and the environment. On the contrary, the EU’s efforts aim at reinforcing its “normative power”. In effect, the EU has gained some clout on the international stage, even vis-à-vis faraway countries like Vietnam and China. Yet, in doing so the Union embroiled in the apparent rush for more and more ambitious climate standards and targets. Therefore, Brussels needs to start acting and deliver on its promises to keep staying ahead of the pack. Even more so given US President Biden’s strengthened engagement with friends and foes alike on the climate and human rights.
Last week, the European Commission manifested its acknowledgment of this need by unveiling the Fit for 55 (FF55) growth strategy. Overall, this new, beefed-up Green Deal should reduce greenhouse gas emissions to 55% of their 1990 level by 2030. In some analysts’ view, the FF55 plan is a game changer in the long-term race towards climate neutrality alas. In fact, it could “both deepen and broaden the decarbonisation of Europe’s economy to achieve climate neutrality by 2050.” Moreover, they expect the FF55’s 13 measures to generate a number of positive ripple effects across EU economies.
True, wanting to reduce greenhouse gases significantly by 2030 and reaching net-zero-emission by 2050 goal is commendable under many regards. Still, the FF55 includes a number of measures that could impact ordinary people’s life massively across Europe. Nevertheless, the 27 Member States of the EU are responsible for as little as 8% of global emissions. As such, it is necessary to take a deeper look at how the FF55 will affect different countries and demographics.
The transition’s social cost
The realisation that reduction of capitalism’s dependence on fossil fuels will have serious socio-economic consequences is not at all new. Contrariwise, scholars and politicians have been outspoken about an indisputable “conflict between jobs and the environment”, since the early 1990s. Together, the pandemic-induced recession and the signing of the Paris Accord have brought the notion back on the centre stage.
Factually, pushing the energy transition entails facing mass lay-offs, generalised workforce retraining and taxes hikes on ordinary consumers. For instance, these hardships’ seriousness is evident in the progressive abandonment of coal mining for energy generation in the US. Moreover, the energy transition requires strong popular backing in order to be effective. Yet, measures pursued to achieve environmentally friendly growth tend to generate strong, grassroot opposition. Most recently, France’s gilets jaunes protests shows that environmental policies generate social discontent by disfavouring middle and lower classes disproportionately.
The poorest families and countries will bear the costs
One of the FF55’s main policy innovation regards the creation of a carbon trading market for previously exempt sectors. Namely, companies working int the transport and buildings sectors, be they public or private, will have to follow new rules. As it happened in the energy industry before, each company will have to respect a “carbon allowance”. Basically, it is an ‘authorisation to pollute’ which companies can buy from each other — but the total cannot increase. Despite all claims of just transition, this and other measures will have a gigantic, re-distributional effect within and between countries. And it will be of markedly regressive character, meaning that poorer families and countries will pay more.
Taxing transport emission is regressive
Historically, these sectors were trailing behind most others when it comes to decarbonisation for a variety of reasons. First of all, the previous emission trading system did not include them. Moreover, these are far from being well-functioning markets. As a result, even if the cost of emissions was to rise, enterprises and consumer will not react as expected.
Thus, even as they face higher costs, companies will keep utilising older, traditional vehicle and construction technologies. With taunting reverberations on those poorer consumers, who cannot afford to buy an electric car or stop using public transport. Hence, they “will face a higher carbon price while locked into fossil-fuel-based systems with limited alternatives.” Moreover, the EU could worsen these effects by trying to reduce the emission fees on truck-transported goods. Indeed, the commission is proposing a weight-based emission standard that would collaterally favour SUVs over smaller combustion-engine car and motorbikes.
In a nutshell, higher taxes and fee will strike lower-class consumers, who spend more of their incomes for transportation. Even assuming these households would like to switch to low-emission cars and buildings, current market prices will make it impossible. In fact, all these technologies ten to have low usage costs, but very high costs of acquisition. For instance, the cheapest Tesla sells at over €95,000, whereas a Dacia Sandero “starts at just under €7,000.”
Eastern Europe may not be willing to pay
At this point, it is clear that the FF55 plan will deal a blow to ongoing efforts to reduce inequalities. In addition, one should not forget that EU Member States are as different amongst them as they are within themselves. Yet, the EU is not simply going to tax carbon in sectors that inevitably expose poorer consumers the most. But in doing so it would impose a single price on 27 very diverse societies and economies. Thus, the paradox of having the poorest countries in the EU (i.e., Central- and South-Eastern Europe) pay the FF55’s bill.
To substantiate this claim, one needs to look no further than at a few publicly available data. First, as Figure 2 shows, there is an inverse relation between a country’s wealth and consumers’ expenditures on transport services. Thus, not only do poorer people across the EU spend more on transport, poorer countries do as well. Hence, under the FF55, Bulgarians, Croatians, Romanians and Poles will pay most of the fees and taxes on carbon emission.
Additionally, one should consider that there is also a strict inverse relation between carbon emissions and the minimum national wage. In fact, looking at Figure 3 one sees that countries with lower minimum wages tend to emit more carbon dioxide. On average, countries with a minimum salary of €1 lower emit almost 4.5mln tonnes of carbon dioxide more. But differences in statutory national wages explain almost 32% of the cross-country variation in emissions. So, 1.5 of those extra tonnes are somehow related to lower minimum salaries and, therefore, lower living standards.
The EU’s quest for a just transition: Redistribution or trickle down?
Hence, the pursual of a ‘just’ transitionhas come to mean ensuring quality jobs emerge from these economic changes. However, many of the FF55’s 13 initiatives may worsen disparities both within countries and, more importantly, between them. Thus, the EU has been trying to pre-empt the social losses that would inevitably come about.
From the Just Transition Fund to the Climate Social Fund
In this regard, the European Union went a step forward most countries by creating the Just Transition Fund in May. That is, the EU decided to finance a mix of grants and public-sector loans which aims to provide support to territories facing serious socio-economic challenges arising from the transition towards climate neutrality [… and] facilitate the implementation of the European Green Deal, which aims to make the EU climate-neutral by 2050.
Along these lines, the FF55 introduces a Climate Social Fund (CSF) that will provide “funding […] to support vulnerable European citizens.” The fund will provide over €70bln to support energy investments, and provide direct income support for vulnerable households. The revenues from the selling of carbon allowances to the transport and building sectors should fund most of the CSF. If necessary, the Member States will provide the missing portion.
The EU Commission may give the impression of having design the CSF to favour poorer households and countries. However, it may actually be a false impression. In fact, it is clear that the entire carbon pricing initiative will impact poorer household and countries more strongly. However, only a fourth of the carbon pricing system’s revenues will go to fund the CSF. The remaining portion will finance other FF55 programmes, most of which have a negative impact on poorer communities. Thus, despite the CSF, the final effect of the entire FF55 will be a net redistribution upwards.
Stopping a redistribution to the top
Nevertheless, there is a way to fix the FF55 so that it can work for poorer households and lower-income countries. Given that the CSF is too small for the challenge it should overcome, its total amount should be increased. In fact, the purpose of higher carbon pricing is in any event not to raise revenue but to direct market behaviour towards low-carbon technologies—there is thus a strong argument for redistributing fully the additional revenues.
Hence, the largest, politically sustainable share of carbon-pricing revenues from transportation and housing should ideally go to the CSF. In addition, the Commission should remove all the proposed provision that divert CSF money away from social compensation scheme. In fact, poorer families will not gain enough from subsidies to electric car, charging stations and the decarbonisation of housing. One contrary, “using the fund to support electric vehicles would disproportionally favour rich households.”
Finally, the allocation of CSF money to various member states should follow rather different criteria from the current ones. In fact, the Commission already intends to consider a number of important such as: total population and its non-urban share; per capita, gross, national income; share of vulnerable households; and emissions due to fuel combustion per household. But these efforts to look out for the weakest strata in each country could backfire. In fact, according to some calculations, a Member State with lower average wealth and lower “within-country inequality could end up benefiting less than a rich member state with high inequality.”
A number of well-known, respected economist have been arguing that environmental policies should account for social fallouts attentively. Goals such as emission reduction and net-zero economies require strong popular support in order for the transformation to succeed. Or at least, the acquiescence of a majority of the public. Otherwise, the plans of well-intentioned and opportunistic governments alike will derail. After all, this is the main lesson of the currently widespread protest against the mandating of ‘Covid passes’ and vaccines.
If the FF55 will deal poorer households a devastating blow, social unrest may worsen — fast. But as long as it will also hurt Eastern European countries as a whole, there is a chance. Hopefully, European parliamentarians from riotous Hungary or Poland will oppose the FF55 in its current shape. Perhaps, in a few years everyone will be thankful for these two countries strenuous resistance to EU bureaucracy. Or else, richer countries may force Central- and South-Eastern Europe to swallow a bitter medicine. Even though, whatever happens, Europe alone cannot and will not save the planet.
Entrepreneurialism & Digitalization: Recovery of Midsize Business Economies
Observe nations around the world, especially those with the largest numbers of IT professionals, rich and well-groomed government departments and their related agencies, with matured bureaucracies and unlimited numbers of computers but still no signs of thriving digital economies buzzing on global platforms. What is so mysterious about digitization of small medium businesses, smoothly leading to ‘virtualization of economies’ creating global bounce of trade? Well, it is surrendering to the realization that entrepreneurialism is the main driving engine of such challenges and not the herds of IT teams, deluxe bureaucracies and accountancy-mindsets.
What is a digital economy? It is definitely not when all businesses have websites and are all doing social media postings, at the outset understanding digitalization of a single enterprise is already a fine art, and to make it fly on global trade platforms is a science. Unless economic development teams can articulate, what is and how ‘virtualization of economies’ work, uplift and upskill vertical trade sectors and create an entrepreneurial bounce of trades’, the entire exercise of digitization might as well leave to early video game players or early grader IT personnel. Observe how The Silicon Valley and e-Commerce revolutions of the world never created by large IT teams, but categorically by “techie-entrepreneurs” of the day that in turn occupied millions of IT professionals and created hundreds of millions IT experts driving e-commerce of today. Of course, IT teams needed but in very reverse order.
Why is the digital economy an entrepreneurial economy? Digitization of the economy is simply not an IT exercise rather a strategic entrepreneurial maneuver of placing a midsize business economy on wheels using easily available digital platforms with abundance of software to choose from to make right entrepreneurial-based decisions to create creative bounce. The survival strategies for the post pandemic economies have less to do with accountancy-mindsets and bureaucratic attitudes, as it is all about entrepreneurial global age execution with superior digital performances.
Calling Entrepreneurial Business Mindsets: The new horizons beyond pandemic call for “simultaneous synchronization” a need to merge ‘mental-blocks’ the lingering ‘productivity-silos’ ‘digital-divides’ ‘mental-divides’ all such negative forces balanced with positive forces of ‘innovative excellence’ and ‘superior-performance’ thrown all in an entrepreneurial-blender to make a great progressive multi-flavored shakes. To mix and match with our realty checks of today and the blended calamites; Economy + SME + MFG + AI + VR + AR + Officeless + Remote + Occupationalism + Globalization + Exports + Upskilling, all in one single sandbox need progressive advancements with entrepreneurial guts and clarity of vision for any serious stable economic balance. If such were a monopoly game, printing of currency would be the norm.
National Mobilization of Entrepreneurialism: Needed are deep studies of the prolonged trajectory of entrepreneurial intellectualism spanning a millennia… the word ‘entrepreneurialism’ was only invented over a century ago… but our civilization was built on similar principles, driven and strong people. Declare an economic revolution as a critical cure to desolate periods and call the nation but will they listen? With credibility of institution and political promises tanked, audible to the populace now is the grind of mobilizations, thundering deployments of action packed strategies, but how do you fund them? National mobilization of entrepreneurialism is the hidden pulse of the nation, often not new funding dependent rather execution hungry and leadership starved, so what makes it spin? Entrepreneurial warriors
As if a silent revolution mobilized, the nouveau entrepreneurialism in post pandemic economy in action, where talents on wings of digitalization, flying on trading platforms, visible in smart data and shining amongst upskilled midsize economies. Lack of upskilling, lack of global-age expertise, and most importantly lack of entrepreneurialism is what keeps digitization of economies lost in the past. How naïve is it to believe post-pandemic economic issues some PR singsong election campaigns? Only deployment, execution, mobilization will be the message now acceptable by the billions displaced, replaced and misplaced workers, but what is stopping nations, their Ministries and trade groups to have all out discussions and table immediate action plans? Ouch, do not forget the entrepreneurial blood in the economic streams, exciting the bureaucracies and accountancy-mindsets. The next 100 elections over the coming 500 days will be full of surprises, but serious transformation for survival is inevitable, with or without upskilled ministries of commerce. Which nations and regions are ready to engage in this tactical battlefield of global-age skills? Study how Expothon Africa is in deployments with selected countries.
The deciding factors: Never ever before in the history of humankind,the economic behaviorism across the world suddenly surrendered to a single calamity, affecting the majority of the global populace suffering in prolonged continuity. The side effect of such complexity juxtaposed with technological access can bring sweeping changes to our assumed complacency. All traditional problem solving and conventional thinking styles now considered too dangerous to economic growth and social balances.
Recommendation and Survival Strategies: Discover and establish authoritative command on digitization and virtualization of economies, study more on Google.Allow micro-small-medium enterprises a tax-free window on the first USD$5-10 million revenues in exports, this will create local jobs and bring foreign exchange. Allow micro-small-medium enterprises free access to all dormant Intellectual Property, Patents rolled up due to lack of commercialization. Allow Academic Experts on innovative technologies and related skills on free voucher programs to the SME base to uplift ideas and special expertise. Optimization of telecommunication and internet structures worth trillions of dollars with global access at times completely ignored and wasted by wrong mindsets deprived of entrepreneurial undertakings. Allow micro-small-medium enterprises free full time MBA as 12 months interns so MBA graduates can acquire some entrepreneurialism while enterprises can uplift their ideas in practice.
“Allow Million qualified foreign entrepreneurs to park within your nation for 5-10 years under a special full tax-free visa and stay program. Which nations have qualified dialogue on such affairs? Bring in, land million entrepreneurs in your nation, and create 10 million plus jobs and new wealth in following years. Let your own institutions and frontline management learn how such economic developments created. Be bold, as the time to strategize passed now time to revolutionize has arrived”. “Excerpted from keynote lecture by Naseem Javed, Global Citizen Forum, Dubai, 2013.”
Allow National Mobilization of Entrepreneurialism Protocols mandated to engage trade and exports bodies. Allow National Scoring of entrepreneurialism to measure, identify and differentiate required talents. Digitize from top to bottom and sideways, futurism fully digitized and without real transformation, it is like a nation without any internet. Act wisely. Digitalization of economies without entrepreneurial minds is more like pre-pandemic archives of mostly failures. Needed are the economic revolutions, based on entrepreneurial meritocracy and national mobilization of midsize economy.
The rest is easy
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