Today, under the umbrella of pandemic recovery, all over the world the top item on the economic agenda is now about SME and their upskilling, reskilling manufacturers and uplifting midsize business economies for sustainability. The national consensus has climbed and global opinion has peaked. Here are some immediately workable strategies that are surprisingly not new funding dependent rather execution hungry and mobilization starved.
Any initiative to uplift SME productivity and exports must start with an entrepreneurial mindset and therefore centralize common national goals and one identity. One – select high value small medium size businesses eager to quadruple their productivity and exports, uplift national/global presence and dramatically increase their innovative excellence. Two- organize all such businesses on a master blueprint of digitization, highlighting their profiles and goods and services produced, so the talents and quality becomes available and visible to the world. Three -create vertical sectors profiles with bold and clear narratives amongst the local leaderships of trade groups, chambers and trade associations on harmonious trajectory, so critical forces of ‘value creation’ emerge. Four -establish a launch date to commence the upskilling to boost exportability and equally start building digitized economies, so that a timelines helps national mobilization. Five – seek out hidden warriors to lead, layout precise details on how to arrive at such results while any outside authoritative help to carve a national program geared to frame a global opportunity
Any national or regional program must create a qualifying phase, any absence of the above steps the ‘critical path’ to success remains disconnected. A well-articulated national mobilization within a nation starts at 1,000 to 10,000 small-midsize businesses already doing from a minimum lower range of USD$1-5 million or from USD$10-50 million in annual turnover. Now depending on a nation such numbers can play a key role in economic modeling. However, even if a 10% to 20% combined growth over 1-2 years to businesses represents a massive uplift of the local economy.
No program across the world can be successful without a deeper understanding of the four key pillars of small midsize business founders, their groups and sense of business directions. Here are the four players of the small business economy.One: Founders are the true entrepreneurial risk-takers, job-creators and grassroots prosperity fertilizers; therefore, they require special entrepreneurial mindset handling. Two: National trade groups and chambers are the umbrella where such founders gather to improve trade-flows; they are often century old procedural and conflict-resolution-mindset-players and need special skills on digitalization and global age commerce. Three: National governments collecting taxes from founders are policy makers to improve the trades as they are too far away from the tactical battlefields and need deep immersion on entrepreneurial challenges, hardcore reasons and permanence of serious divides with government thinking. Four: Lastly, the customers as they are the buyers only prove the validity of the existence for that small medium enterprise.
Understanding needed to articulate a positive narrative to bring all parties under a progressive umbrella is an art and creating national mobilization on digital platforms of upskilling for innovative excellence and exportability is a new science. Smart national leadership can place such untapped talented forces against the optimal global landscapes, these four sectors once mutually coordinated and balanced on digital platforms of exportability and innovative excellence, only create economic uplift.
Shift of our mindsets is the biggest gift from pandemic; Review how“Soft Power Assets Management v/s Hard Assets Centricity” is forcing new creativity and explore how ‘entrepreneurial mindset’ is sweeping the world as displaced workers like liberated cubicle slaves going independent. This is a very positive change for all nations. Search Expothon on Google and study various blueprints on national mobilization of entrepreneurialism.
The search for fearless warriors, identify the frontline teams on national economic developments and differentiate on the lack of understanding on national mobilization of entrepreneurialism, any absence of such now a liability to national economic survival. No nation without upskilling will stay in the race, no leadership without meritocracy and mobilization skills will survive. Such revolutions are decipherable by global logistic chain mindsets, visible via digitized economies of entrepreneurial mindsets, and actionable only via entrepreneurial initiatives.
New highways of new commerce: there are new trade winds, new belts and new roads surrounded by new global shifts of power. With some 500 million SME in the world, a billion new big and small, young and old entrepreneurs on the march have created great opportunities to table tactical combative blueprints to advance the challenges of local grassroots prosperity. The new vision calls for collaborative multi lateral thinking. Observe the shifts of powers.
The Population-Rich vs. Knowledge-Rich Nations: “Decades ago, large populations in any country considered an economic curse; sheer burden of visible poverty, scenes of survival and struggle of feeding millions of hungry mouths provided the blatant proof. Today considered a blessing; when citizens armed with mobile online transactional centers, digital humming and trading with billions of devices with trade activity are now new proofs of economic vibrancy for such overly populated nations. How to maximize economic growth during such major recovery shifts?”
Referenced from “15 Monster Trends- by Naseem Javed” Dec 2014 Bizcommunity”
Observe the rate of behavioral change. Understanding the Last Seven Societies: What brought us here; not an accident but systematic build up of good and bad ideas? During the Print Society in 1900, when the printed word was power, literacy was perquisite and only the privileged had access to knowledge. Why is a similar scenario 120 years later occurring today, futurism demands futuristic literacy? Why is such an understanding a special key for upskilling and reskilling enterprises?
“The Radio Society made its impact after a quarter century. It brought information freely available to the air and music to tap dance on assembly line floors. The ‘voice’ created radio-personalities with opinions and opinion leadership became noticeable. There were five other major societies. TV Society brought live action dramas, and started colorful consumerism. Telecom Society shorthanded distance and created standardization. The Computer Society created miniaturization and a sense of accuracy. The Cyber Society brought the world to the desk and started the diffusion between work and other lifestyles. We just left the Click Society, which brought the world into our pockets and seriously disrupted the traditional work model.” Excerpted Source: Naseem Javed, Sunrise, Day One, Year 2000, Published, IABC Communications World, Dec. 1995, Volume 12 Issue 11, Article, ‘Chronology Charts’
The facts are out there, Unlimited, global markets can absorb unlimited innovative ideas, goods and services. Unlimited, SME Founders with entrepreneurial talent and energy are always anxious for global age expansion. Unlimited, well-designed, innovative ideas and global age skills can quadruple enterprise performance. Therefore, what is stopping all this, why are new skills the critically missing links? The calls of the nations on upskilling SME, reskilling manufacturers and uplifting midsize business economies to winning elections are increasing on global stage. Plan strategically and think entrepreneurialism.
The rest is easy.
The suffocating economy of Iran
Iran’s economy is on a roller coaster. The past year saw a dramatic rise in inflation rates and a historic fall in the value of the rial. The protests which followed the death of a 22-yar old Kurdish woman Mahsa Amini have magnified the creaks in the country’s economy.
On January 22, The Iranian rial was selling at an exchange rate of 450,000 against the greenback, an all-time low. The rial has lost 29% of its value since the time the protest started. Iran’s statistical agency reported an inflation rate of 48.5% in December 2022, the highest level since 1995. November data recorded food inflation of above 70% in 12 provinces of the country.
Reports from the country suggest that more than half of the population is living below the poverty line due to spiraling prices. As per the latest forecast, the World Bank predicts a GDP growth of 2.9% for Iran in 2022 which will slow down to 2.2% in 2023 and 1.9% in 2024 owing to “slower growth in key trading partners and new export competition from discounted Russian oil”. However, the government’s response to the bleak economic indicators so far had been subtle and unperturbed.
The unilateral withdrawal of the US from the nuclear deal in 2018 and the sanctions that followed on oil exports and international banking has put heavy stress on the country’s economy.
The country’s government debt-to-GDP ratio rose to 45% in 2020. According to World Bank, Iran’s unemployment rate reached 12.2% in 2020 before narrowly dipping to 11.5% in 2021. Iranian daily Etemad had reported that at least 23 workers have committed suicide since March 2022 in the country due to reasons like dismissal, punishment, or threats.
The government lifted import subsidies for essential goods in April 2022, to ease the pressure off the strained government budget, which subsequently triggered rapid spikes in food prices during May-June.
The Federal Reserve in November tightened its control over Iraqi commercial banks to restrict the illegal siphoning of dollars to Iran and other Middle-East countries. The new regulations blocked a huge chunk of daily dollar wire transfers to Iran. The Taliban takeover in 2021 had previously blocked access to hard currency to Iran via the Afghan route.
Amid the uprising, European Parliament approved a resolution designating the Iranian militia, Islamic Revolutionary Guard Corps (IRGC) a ‘terrorist’ organization. It also called for sanctions on Supreme Leader Ayatollah Ali Khamenei, President Ebrahim Raisi, and others. The US and UK too imposed fresh sanctions on Iran.
Iran retaliated on January 25th by imposing sanctions on 34 British and European individuals and entities.
Former Central Bank of Iran governor Ali Salehabai had been sacked in December due to failure to control the rapid depreciation of the rial. According to analysts in the region, the Central Bank is injecting dollars into the market to thwart further depreciation.
In late January, the Central Bank decided to raise the maximum amount of currency that can be sold to individuals annually from 2000 euros to 5000 euros, to instill confidence and ward off fears about the availability of currency. The cap was initially introduced to stabilize the currency after the US pull-out of the nuclear deal in 2018.
Iran has not resorted to austerity to tide over the crisis. Instead, President Ebrahim Raisi presented a noticeably enlarged national budget in January to boost growth. Valuing 21,640 trillion rials, the budget is 40% larger than the previous one. The Islamic Revolutionary Guards Corps (IRGC) was allocated $3 billion registering a 28% rise over the last year, in a taunting message to the west.
Recently, Iran introduced gold coin certificates in the stock market to raise cash and mitigate inflation. The government is desperate to raise cash as the government budget is posting a deficit of $9.75 billion. Critics point out unrealistic revenue estimates riding on oil sales and over-optimistic tax collection figures.
To raise revenue, Iran has increased its oil exports to China to more than 1.2 million barrels per day over the past three months. The sanctions have in effect caused Iran to warm up to western rivals like China and Russia. Iran and Russia are reportedly in talks over the introduction of a stablecoin, backed by gold, to bypass western sanctions in cross-border transactions.
Iran’s response to the looming economic crisis was devoid of any extreme desperation. The government took all necessary steps to keep the dread within bounds. The present security situation in the country could go haywire if the economy collapses.
It remains to be seen how fast the government can ensure reliable alternate arrangements in place to sustain the economy. If not immediately, chances are high that the country may drift to panic mode.
Prospects of Vietnam’s Economic Growth in 2023
The ongoing war in Ukraine and increasing commodity prices across the world have impacted the developing countries. Countries in Asia which were recovering from the COVID-19 impact on their economies have to rework their recovery process by looking for alternate supply chains and reducing their financial responsibilities towards social sector through budgetary management. Among the developing economies in Asia , Vietnam showed an economic growth of nearly 3 per cent even when many of the countries were witnessing recession and reduced production because of adverse impact of COVID-19 .The stimulus packages that the governments across the world have to give to the manufacturing sector to accelerate production and meet the demands of the people. In a report released by World Bank in August last year it was stated that the Vietnamese economy is likely to grow by nearly 7.2 per cent in 2023 and it is going to sustain itself in 2024 with a likely growth projection of 6.7 per cent. These are encouraging signs .Few of the sectors which might be accelerating the growth process would be in the field of footwear and electronics. Vietnam itself has been undertaking strong anti corruption measures so as to facilitate stronger economic fundamentals and recovery from the COVID-19 impact.
The economic growth of Vietnam has been accelerating and the agricultural sector has been productive in ensuring food security for Vietnamese citizens. As per one of the estimates this sector contributed more than 14 per cent in national gross domestic product and has engaged more than 35 per cent of youth in the year 2020. This sector also earned valuable foreign exchange of more than U.S. dollar 48 billion. One of the interesting achievements of Vietnam has been increasing life expectancy, and its universal health coverage which covers more than 87 per cent of the population.
As per the plan of action which has been envisaged for Vietnamese economy by its leadership it aspires to become a high income country by the year 2045. It is expected that with the sound economic fundamentals and more than 5.5 annual average per capita growth for the next 2 and a half decades it can reach that milestone. Vietnamese population is also young and is adapting itself for digital economy and building core fundamentals for its membership in different regional economic organisations such as RCEP and CPTPP.The bilateral free trade agreement with EU is also facilitating its growth in several sectors.
There have been significant structural improvements ushered through policy documents in terms of improving financial architecture, accepting global norms related to climate and environment, comprehensive security for population against poverty , and extensive investment in infrastructure development both in rural and urban areas.
In one of the articles written in Bloomberg it has acknowledged that Vietnam is now is one of the Asia’s fastest growing economies which has grown to 8.02% last year and it even surpassed government assessment of 6 to 6.5 per cent growth. The article also acknowledged the fact that manufacturing has been growing to near 10 per cent mark in comparison to last year and there is strong development in the services sector as well. Among the economies Vietnam’s inward foreign direct investment has also been doing quite well and it has received nearly US $27.72 billion last year .Asian Development Bank has forecasted that Vietnam is going to grow at the rate of 6.3% in the year 2023. Also the unemployment rate has reduced and with inflation clearly under 5 per cent , showcases that the long term decisions which we have taken with the initiation of Doi Moi(economic liberalisation process ) in 1986 has been bearing fruits.
In terms of sectoral assessment, the real estate as well as construction sector ,the growth was about 7.78 per cent last year and the services sector growth was closer to 10 per cent. There have been increase in exports last year as well and an increase of 10.6% was noticed. One of the core arguments which have been given with regard to Vietnam’s impressive growth has been related to trade liberalization, increased deregulation and improvement in the ease of doing business, investment in human resources and stable government were seen as critical attributes for this impressive growth in Vietnamese economy.
Major companies in footwear, electronics, and mobile production have invested in Vietnamese economy and few of the companies have shifted base from China to Vietnam. Improved congenial economic environment has been appreciated by companies such as Adidas, Nike and Samsung to list few.
Owing to the development of new kind of digital technologies and better consumer awareness Vietnam is preparing itself for a major impetus in the E- commerce sector and therefore has been making extensive changes in digital based economy and more stress on science and technology development. Vietnam has acknowledged the fact that with the changes in sectoral composition of the economy, it is pertinent to develop necessary skill power and human resources which can seamlessly integrate Vietnam into global value chains and also help the services sector in exploring new markets.
The Crippled Economy
Lack of money is the root of all evils. Facts do not seize to exist because they’re ignored.
Lack of money is what Pakistan is experiencing and dealing with every now and then for the major part, since it came into existence either due to incompetence of our political leaders, their corruption, fighting wars of someone else or due to lack of long-term vision. Pakistan is currently in the middle of a turmoil trying to recover from devastating floods of 2022, facing the after effects of the withdrawal of USA from Afghanistan in the form of resurgence of terrorism, dealing with the political chaos created by the politicians who claim to be leaders of the state. Another yet most important, severe and devastating challenge that Pakistan is facing is its economic downfall. In one sense the lack of money is the root cause of all the problems mentioned above except the political chaos.
The economy of Pakistan, like a battle-hardened warrior has built resilience battling several challenges over the course of seventy years and is trained to survive but the recent political turmoil and the difficulty caused by nature (Floods), the burden of debts repayment, the threat of resurgence of terrorism and international indicators pointing towards an economic recession in 2023 has almost crushed the backbone of Pakistan’s economy.
World bank has recently released its latest report forecasting Pakistan’s Gross domestic product (GDP) to grow at only 1.7% for the fiscal year (FY) 2023 that is less than the half of what it predicted to during last June (4%). It has also predicted a near to recession economic situation of the world economy characterized with high inflation, increasing interest rates and the circumstances caused by the Russian Invasion of Ukraine.
Pakistan must reportedly payback 73$ Billion in the next three years till the end of FY2025 and central bank of the country also known as State Bank of Pakistan currently has Foreign exchange reserves of about only 5.6$ billion. This debt repayment is the key challenge for Pakistan’s economic survival and other challenges such as ever-increasing inflation, high interest rate, the growing unemployment, the decrease in imports are all byproducts of the main challenge. The threat of a possible default is becoming evident and is looming over fiscal horizon.
Monsoon on Steroids, a phenomenon directly linked with climate change played havoc with Pakistan. These floods added a profound risk to the country’s economic outlook. The country lost infrastructure worth of billions of dollars and floods effected 33$ million people and 1700 people lost their lives. According to Ministry of Planning and development of Pakistan, Pakistan has faed the loses of more than an estimation of 10$ billion. The catastrophe of floods also played with agroeconomics as crops were destroyed causing destruction of agriculture sector which makes up to 24% of country’s GDP. A comprehensive recovery policy is needed and with the helped promised by international community at Geneva, government has passed one hurdle but to make the sustainable recovery abundance of resources, capacity and transparency is needed.
The policy uncertainty has been a major cause in creating a mistrust among investors and has almost ceased foreign direct investment in Pakistan. This policy uncertainty is due to lack of will of national leaders to take tough decisions. For Example, former prime minister of Pakistan rolled out of International Monetary Fund’s (IMF) program fearing his ousting and to gain public support he reduced prices of commodities such as Petrol & Gas and took country almost on the verge of default.
The policy uncertainty is caused by Political uncertainty which in turn lead towards economic uncertainty. Economic stability can only be achieved by political stability and there’s no other way around. Political stability can be achieved through free and fair elections and elimination of the role of establishment in political process of Pakistan. And if a government takes long-term policy goals into account while formulating a policy rather than short-term goals to gain public support and trying to keep hold on the reins of Government. The selfish politicians have to play selfless and put Pakistan’s benefit before their own benefit to get Pakistan out of this political and economic turmoil.
The only solution in sight for Pakistan is to carry on with the 6$ billion IMF program and to try for rescheduling of depts repayment as it owes more than 70$ billion to be paid by the end of 2025 that is currently not possible. Another step from international community can also help Pakistan that is if a country makes an investment of 10-20$ billion directly rather than in the form of loans as happened in CPEC. Moreover, help from rich friendly Muslim countries can also provide an array of hope for Pakistan.
But these steps won’t address the clear underlying malaise of the economy and the fact that something fundamentally will need to change, in terms of how much the economy produces versus how much it spends, to avoid default down the road. But none of Pakistan’s political parties seem to have the political will or ability to bring about such change. Priorities needs to be shifted from personal interest of political elite to national interest. They must be ready to sacrifice their political image and interest for the greater good and to save the country from default down the road.
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