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Time to Sound Alarm Bells on Climate Change: An Economic Perspective

Jyotika

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The year 2020 marks the beginning of a new decade. The world as we see today has risen from the ashes of Global Financial Crisis of late 2000s and the hegemony of a few developed countries. The global economic and political landscape has endured a number of changes over the past decade- Fukushima Daiichi nuclear disaster, the Arab Spring of 2011, the rise and fall of ISIS, Refugee crisis sparked by people fleeing war persecution and poverty, the Ebola pandemic, European Sovereign Debt Crisis of 2012, BREXIT, discovery and commercialization of Shale in the USA, trade rivalry between the two behemoths- USA and China, China’s debt diplomacy through One Belt One Road (OBOR), Paris Climate Agreement of 2015 and the American fall out. 

Of all the themes that gripped the world in the recent memory, none deserves more attention than the spectre of a world ravaged by excesses of human greed and neglect of environment. The burning of Amazon rainforests and vast swathes of forests turning to ashes in Australia once again reminded the world of the pertinent need to focus on the challenge of climate change. More recently, the threat of a giant locust storm from the Horn of Africa to the farmlands in India is gripping the Eastern hemisphere. Studies have linked higher temperatures and higher than usual rainfall with more damaging locust swarms. According to Food and Agriculture Organisation, a square km sized swarm contains about 40 million locusts which eat as much food in one day as about 35,000 people. This threat to food security due to climate effect should send the alarm bells ringing in the high and mighty corridors of world powers. This article is an attempt to trace out the contribution and preparedness of comity of nations to deal with the challenges of climate change in terms of policy and the economic cost of not acting while we still have a chance at saving the humanity from the ferocity of nature.

The Earth’s temperature is maintained by an envelope of gases that traps the heat from the sun. However, when the concentration of these greenhouse gases increase in the atmosphere, the heat budget goes hay-wire and the temperature starts to rise. The heightened temperatures can lead to melting of ice caps, rise in sea levels, flooding of coastal cities (some of the world’s dense metropolitan areas are located on coasts), decline in soil productivity, fall in food production, increased pest attacks, increase in pathogen-related diseases, extreme weather events, desertification, famines, epidemics and the list goes on.  As the world is under the biggest ever lockdown due to COVID-19, the global community is struggling with crippling economies, and the writing on the wall is clear- the world is not prepared for such pandemics. An apposite question to ask here is, are we ready for the forthcoming challenges posed by climate change? Do we really have a feasible action plan in place to address the current and future challenges awaiting us?

In the 20th century, climate was neither the priority of developed nor the developing nations. Focus was on turning the wheels of economic growth as fast as possible. Climate change first made its entry in the global parlance as late as the 1970s. The UN Conference on Human Environment 1972, popularly known as the First Earth Summit, laid out the principles concerning environment and development and raised the issue of climate change for the first time. The First Scientific World Climate Conference was held in 1979 which eventually led to the creation of Intergovernmental Panel on Climate Change (IPCC) in 1988. The Second Scientific World Climate Conference 1990 considered the IPCC first assessment report highlighting the risk of climate change which paved the way for the United Nations Framework Convention on Climate Change (UNFCCC) at the Second Earth Summit in Rio de Janeiro in 1992. Enforcement of UNFCCC in 1994 formalised the climate change negotiations at the world level and from here began the string of Conference of Parties meetings with the latest being held in Madrid, Spain in 2019. Alongside the climate change negotiations, need for sustainable development has also caught the attention of the world leaders with the Rio Earth Summit of 1992, World Summit on Sustainable Development 2002, Rio+20 summit in 2012. The Brundtland Commission’s conception of sustainable development in 1987 marked a comprehensive shift in viewing development and environment as complements to one another. 

Though the scientific community highlighted the challenge of climate change late with the passage of more than a century since the industrial revolution, the world economies and leaders haven’t yet woken up from their slumber, notwithstanding an entire gamut of conferences and meetings mentioned above. The world has been pumping in greenhouse gases in the atmosphere ignoring the climate cost of growth.

The Kyoto Protocol was considered to be the ‘star’ agreement of the negotiations imposing binding emission reduction target of 5 percent below the 1990 levels over the 5-year period of 2008-12 on three-six industralised countries and the European Union. The Doha amendment of 2012 extended the commitment period to 2020. However, the year 2020 is here and only 137 parties have ratified against the requirement of 144 for the amendment to come into existence. This highlights the lax attitude of the world leaders to the challenge of climate change.

The climate scientists heaved a sigh of relief with the signing of Paris Climate Agreement in 2015, with both the North and the South coming together to contribute towards emissions reduction according to their ability laid out in Nationally Determined Contributions (NDC). However, the NDCs fall way short of achieving the target of limiting the global temperature rise to below 2 degree Celsius (preferably below 1.5 degree Celsius) above the pre-industrial levels by 2100. With the withdrawal of USA, the second largest carbon dioxide emitter in the world, the resolve of Paris Agreement has come under serious doubt.

The Earth is already 1.1 degree Celsius warmer compared to preindustrial times. As per the data of World Meteorological Organisation, 2019 was the second hottest year after 2016, and every decade since 1980s has become warmer than the previous one. Average temperatures for 2014-19 were the highest on record. According to WMO Secretary-General Petteri Taalas, we are well on our path to a 3-5 degree Celsius rise in temperatures by end of century with the current rate of emissions.

The economic cost of climate change has been hard to grasp for the world at large. According to a Working paper published by National Bureau of Economic Research in 2019, a continued increase in average global temperatures by 0.04 degree Celsius per year under “business as usual” approach can reduce global GDP per capita by as much as 7.22% by 2100. The hardest hit would be the least developed countries of tropics and no country would gain economically from global warming. As per World Bank, an additional 100 million people worldwide are at the risk of being pushed into poverty by 2030 due to climate change. Climate disasters also extract a cost in terms of damage to infrastructure such as road transportation and power generation to the tune of $18 billion annually in low and middle-income countries, with wider disruptions to households and firms costing atleast $390 billion a year. According to a WHO Report on Health in 2018, health complications due to air pollution in 15 countries that emit the most greenhouse gases are estimated to cost more than 4% of their GDP. Air pollution causes 7 million deaths globally annually, costing $5.1 trillion in welfare losses.

The Covid-19 pandemic has thrown at us first-of-many challenges of this century, wherein it has become pertinent for us to introspect the question “growth at the cost of what?”. As we continue to expand and encroach into fragile ecological regions of the planet in quest for growth, we are increasingly putting the health of our ecosystem in jeopardy. While Covid-19 has caught the world unawares and severely crippled its health infrastructure with more than 2 lakh deaths and counting, climate change is a hidden enemy lurking behind these ever often pandemics- earlier it was Ebola and now Covid-19. Failure to address climate change will threaten human lives, livelihood, and ecosystem in an unprecedented manner.

As countries plan to restart their economies post the Covid-19 pandemic, it’s time to channelize our resources to ‘building back better’. While rebuilding lives and creating livelihoods, the economic stimulus needs to focus on supporting sustainable business and personal practices. Air pollution levels have fallen across the major industrial cities of the world in the wake of the pandemic and subsequent lockdowns, there is a need to sustain this in the post-pandemic world. The nature is rebounding when the humans have retreated from the streets. Therefore, there is a need to devise sustainable strategies- be it work-from-home for the majority or giving up plastics or commuting on public transport. Every individual effort counts.

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

MD Staff

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After the huge success of its opening day, AIM Digital, the first digital edition of the Annual Investment Meeting, continued to gain momentum as it reached Day 2. The three-day mega digital event, an initiative of the Ministry fo Economy, under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, concluded its second day with interactive activities that catalysed investment-generation, knowledge-enhancement, and local, regional and international collaborations.

Joined by more than 15K participants from over 170 countries, including 70+ high-level dignitaries from across the globe, the second day of AIM Dıgital witnessed a wide range of major events, from the Conference, Exhibition, Investment Roundtables, and Regional Focus sessions to Conglomerate Presentations and Startups competitions; all geared towards providing opportunities to achieve a digital, sustainable & resilient future.

In his keynote speech in the FDI session, Ministers Roundtable: Adapting to the New Flow of Trade and Investment, His Excellency Dr. Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, said: “It is my distinct honor to welcome you to the UAE’s first-ever digital edition of the Annual Investment Meeting. Thank you to everyone participating, including our panelists from the Governments of Costa Rica, Canada, Nigeria and Russia. Today’s discussion on how countries are ensuring the free flow of trade and investment could not be more timely, especially as the world grapples with the economic recovery and moves toward building a more resilient, post-COVID economy. The pandemic has significantly impacted global markets that created new challenges for trade and investment. While the challenges ahead are enormous, the UAE sees tremendous opportunity for governments and business leaders to work together through trade and investment to reshape policies, create new partnerships, leverage new technologies, and build a future global economy that is more diverse, inclusive, and sustainable. We know that FDI can bring new technology and know-how, lead to new jobs and growth, and is often the largest source of finance for economies – making today’s discussion even more imperative.”

He further stated that FDI has played a critical role in the UAE’s economic growth, with policies and measures in place, such as the Foreign Direct Investment Law enacted in 2018 to further open the UAE market to investors in certain sectors, and the issuance of Positive List, which allows for greater foreign investment across 122 activities, and increasingthe UAE’s FDI value by 32% in 2019.  He also mentioned that the UAE came in 16th of 190 countries in the World Bank Ease of Doing Business 2020 Ranking due to the country’s digitization strategies and promising business regulatory environment.

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

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

Furthermore, world-class speakers shared their viewpoints in Day 2 of the Conference highlighting Foreign Direct Investment, Foreign Portfolio Investment, Small and Medium-sized Enterprises, Startups, Future Cities, and One Belt, One Road, including H.E. Amb. Mariam Yalwaji Katagum, Minister of State, Federal Ministry of Industry Trade and Investment of The Federal Republic of Nigeria; Victoria Hernández Mora, Ministry of Economy, Industry and Commerce of Republic of Costa Rica; Hon. Victor Fedeli,  Minister of Economic Development, Job Creation and Trade of Ontario, Canada; and Sergey Cheremin, Minister of Moscow City Government Head of Department for External Economic and International Relations, among others.

Two Investment Roundtables were also held successfully at the second day of AIM Digital, concluding  with strategies to facilitate sustainable, smart and scalable investments. The Energy Roundtable was led by Laszlo Varro, the Chief Economist of International Energy Agency, which works with countries around the globe to structure energy policies towards a secure and sustainable future. Among the notable participants include H.E. Arifin Tasrif,  Minister for Energy & Mineral Resources of the Republic of Indonesia; and H.E. Gabriel Obiang, the Minister of Mines and Hydrocarbons of Equatorial Guinea. The Agriculture Roundtable was led by Islamic Development Bank Group, the multilateral development bank working to promote social and economic development in Member countries and Muslim communities worldwide, delivering impact at scale.

In addition, the second set of National Winners competed on Day 2 of the AIM Global National Champions League. Overall,  a total of 65 countries competed at this international startups competition. The top five global champions that will win a total prize of USD50,000 will be announced on the last day of AIM Digital.The competition was launched in a bid to help startups in maximizing their potential to attract funding and promote their business ideas to a global audience, getting utmost exposure and expanding their network.

Participating in the Conglomerate Presentation feature of AIM Digital is Elsewedy Electric led by Eng. Ahmed Elsewedy, its President and CEO. Elsewedy Electric began as a manufacturer of electrical components in Egypt 80 years ago, and Electric has evolved into a global provider of energy, digital and infrastructure solutions with a turnover of EGP 46.6 billion in 2019, operating in five key business sectors, namely Wire & Cable, Electrical Products, Engineering & Construction, Smart Infrastructure and Infrastructure Investments. As part of its commitment to sustainability, it has established green energy and smart metering projects across Africa, the Middle East and Eastern Europe.

The Regional Focus Sessions featured the regions of Asia and Latin America and explored the risks, challenges and opportunities for growth and regional cooperation.  Regional Focus Session on Asia brought together government officials and investment authorities from the ASEAN Member States and discussed their strategies to create a borderless and sustainable bloc that will push organic growth, as well as their approaches to gain resilience in the economy. Regional Focus Session on Latin America highlighted the significance of regional and international partnerships to combat the current pandemic and boost trade, investments and employment within the region.

Moreover, Country Presentations on Day 2 presented the outstanding features and investment opportunities in Colombia, Egypt and the Federal Democratic Republic of Ethiopia which highlighted the countries’ status as attractive investment destinations.

Another highly anticipated event in the largest virtual gathering of the global investment community is the announcement of winners for the Investment Awards and Future Cities Awards which will take place on Day 3 of AIM Digital.AIM Investment Awards will grant recognition to the world’s best Investment Promotion Agencies and the best FDI projects in each region of the globe that have contributed to the economic growth and development of their markets.   Likewise, AIM Future Cities Awards will give tribute to the best smart city solutions providers and for outstanding projects that have resulted to enhanced operational efficiency and productivity, sustainability, and economic growth.

Day 1 of AIM Dıgital welcomed the presence of globally renowned personalities such as the UAE Minister of Economy, His Excellency Abdullah bin Touq Al Marri who emphasised the vision of UAE’s wise leadership for the post-COVID era, reflecting great significance to enhancing the readiness of the country’s government sector, raising efficiencies and performance at the federal and local levels. Keynote remarks were delivered by H.E. Juri Ratas, the Prime Minister of Republic of Estonia; H.E. Rustam Minnikhanov, the President of the Republic of Tatarstan; H.E. Dr. Bandar M. H. Hajjar, the President of Islamic Development Bank Group (IsDB Group); H.E. Mohammed Ali Al Shorafa Al Hammadi, the Chairman of Abu Dhabi Department of Economic Development (ADDED); and Dr. Mukhisa Kituyi, the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).

The UAE Minister of State for Entrepreneurship and SMEs, His Excellency Dr. Ahmad Belhoul Al Falasi, underlined in his Keynote Address for the SME Pillar, that it is crucial for Startups and SMEs to be given opportunities to bounce back from the impact of pandemic and provide a conducive environment that will empower them to have the capability of supporting growth and success.

The Global Leaders Debate featured prominent keynote debaters such as Armida Salsiah Alisjahbana, the Under-Secretary-General of the United Nations and Executive Secretary of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP); Mohamed Alabbar, the Founder of Emaar Properties, Alabbar Enterprises and Noon.com; Mohammad Abdullah Abunayyan, the Chairman of ACWA Power; and Arkady Dvorkovich, the Chairman of Skolkovo Foundation, who discussed the strategies to restructure the economies in overcoming the consequences of the pandemic.

The first digital edition of the Annual Investment Meeting with the theme “Reimagining Economies: The Move Towards a Digital, Sustainable and Resilient Future, will be held until the 22nd of October 2020.

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

MD Staff

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

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

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

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

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

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

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Future Economy: Upskilling Exporters & Reskilling Manufacturers

Naseem Javed

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Pandemic recovery is now openly calling global thought leaderships to speak up and enter their bold debates on national/global economic development issues to foster grassroots prosperity to avoid a billion displaced magnetized to populism. Seriously missed during the last decade, collaborative synthesizing with diversity and tolerance and wrongly replaced by seek and destroy economics creating trade wars… now is the time to cooperate, upskilling, and reskill working citizens of all nations.  

The United Nations should lead with a global mandate…

Upskilling Exporters: When exporters in any country suffer lack of market share and their lower prices bringing in lower profits because of lack of quality upskilling and reskilling becomes mandatory. When innovative excellence is parked under the umbrella of entrepreneurialism national mobilization becomes number one priority. The pandemic recoveries across the world coping with a billion displaced all have now critical needs of both upskilling and reskilling. Upskilling is the process of learning new skills to achieve new thinking. Reskilling is the process of learning new skills to achieve new performances. Today, in super advanced and globally competitive markets raw hard work will not achieve global competitiveness only upskilling and reskilling will create a sharp edge.

Reskilling Manufacturers: When factories start having larger warehouses to hold unsold inventories and when production commoditized and price becomes the only deciding factor, reskilling on “real value creation” becomes mandatory. Advanced Manufacturing Clusters in various nations will greatly help, but understanding of global-age expansion of value offerings with fine production is a new art and commercialization to 200 nations a new science.

Now under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, The Annual Investment Meeting, organized by the UAE Ministry of Economy, scheduled to be held from 20th to 22nd October 2020.. The AIM under the theme “Reimagining Economies: The Move towards a Digital, Sustainable and Resilient Future.” This is a gathering of the global investment community with participants attending from more than 170 countries. The conference addresses multiple issues on FDI, national digitization and uplifting SME and midsize business economies with great speakers from around the world.

The future of economies, exports, Chambers of Commerce, Trade Associations and SME and midsize economic developments all called for bold and open regular debates. The zoomerang impact of global thought leadership now forcing institutions to become armchair Keynote speakers and Panelists to deliberate wisdom from the comfort of their homes round the clock events… study how Pentiana and Expothon Project tabled advanced thinking on such trends during the last decade. For fast track results, follow the trail of silence and help thought leadership to engage in bold and open debates and help show them guidance to overcome their fears of transformation. The arrival of Virtual leadership and Zoomerang culture is a gift from pandemic recovery, acquiring mastery.

The Difficult Questions: Nation-by-nation,when 50% of frontline teams need ‘upskilling’ while 50% of the back-up teams need ‘reskilling’ how do you open discussions leading to workable and productive programs? Each stage challenges competency levels and each stage offers options to up skill for better performances. Talent gaps need fast track closing and global-age skills need widening. New flat hierarchical models provide wide-open career paths and higher performance rewards in post pandemic recovery phases. When executed properly such exercises match new skills and talents with the right targeted challenges of the business models and market conditions. The ultimate objective of “extreme value creation” in any enterprise must eliminate the practices of ‘extreme value manipulations”. Study of the last top 10 highly exposed global scale corporate scandals on ‘value manipulation’ spanning years and decades and recognize their fake reign of legitimacy during such traps as lessons. Economies around the world solely based on ‘value manipulations’ are not economies, they are schemes. The billion displaced need optimization and upskilling to contribute to real value creation.

The upskilled and reskilled in platform economies are agile builders of the future workforce.  Study the major cycles of the last century, how in the 70s and 80s billions trained on desktop computers for the world to enter the “Digital Age”. Best career paths now based on digital trajectory matched with critical thinking and complex problem solving when all combined will boost the enterprise to newer heights. The economies of the future must declare upskilling of national citizens as prime mandate.

All transformations must start from the very top; nation-by-nationtrue upskilling and reskilling cascading with new vision and with pragmatic solutions to precisely enhance skills to match the digital age and our smart world. The culture must embrace upskilling and reskilling as a daily open routine of lifelong learning and future planning to carve a distinct position in the marketplace. Study ‘national mobilization of entrepreneurialism’ on Google. A very bright future awaits. The rest is easy. 

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