Transport ministers from across Asia and the Pacific are meeting this week to consider a potentially transformational agenda for how people and goods are moved around the region and across the globe.
Pre-COVID-19 transport connectivity weaknesses in the Asia-Pacific region became even more apparent during the pandemic: landlocked developing countries, least developed countries and small island developing States were particularly affected. Therefore, it is imperative that we accelerate meaningful change in transport systems as countries seek to put their development agendas back on track.
It is against this backdrop that officials meeting at the Economic and Social Commission for Asia and the Pacific for the fourth Ministerial Conference on Transport are debating a Regional Action Programme for 2022-2026: a new roadmap for a transport system needed to attain the 2030 Agenda for Sustainable Development and the Sustainable Development Goals.
The new RAP would address such issues as increasing freight and passenger volumes, reflecting rising demand for freight transport and mobility. Indeed, two-thirds of global seaborne trade is concentrated in the Asia-Pacific region, which also is home to nine of the world’s busiest container ports. The region is currently responsible for more than 40 per cent of the global surface freight transport flows and by 2050 the continent’s demand for freight transport is projected to triple. Asia and the Pacific is expected to face greater trade exchanges, further substantial demographic growth and rapid urbanization coupled with high motorization rates in coming years.
To cope with such changes and demands, the RAP would encourage greater digitalization and innovation for transport; as the pandemic unfolded, we saw that accelerated adoption of digital technologies helped governments and private enterprises keep activities going amid border closures and other containment measures. Further deployment of smart transport systems to improve efficiency, resilience as well as social and environmental sustainability is undoubtedly a key priorities for building back better.
Other key provisions of the RAP include speeding up transitions to low-carbon transport systems. The transport sector is one of the highest contributors to climate change and Asia and the Pacific remains among the highest CO2 emitting regions in the world. There is a strong need for rapid decarbonization of the regional transport networks and related operations, including urban and public transport. Shifting to railways would also greatly boost sustainability of international freight transport and move to a more sustainable post-COVID-19 world. An abundance of renewable energy in some countries is an opportunity to switch to electric mobility in public transport. To support these efforts, ESCAP last month unveiled at the climate change conference in Glasgow plans for an Asia-Pacific Initiative on Electric Mobility.
In this vein, the outbreak of COVID-19 also had a profound impact on urban transport, accessibility and mobility. These challenges provide new momentum to transport and city planners to rethink forms of mobility as a service that is affordable, accessible, reliable and safe. Furthermore, gender gaps and inequalities in terms of access to transport and related opportunities persist, further inhibiting the capacity of the sector to equally address the social dimensions of sustainable development.
In the context of sustainable development, we cannot disregard the fact that 60 per cent of global road crash fatalities occur in the Asia and Pacific region. The General Assembly has proclaimed 2021 to 2030 as the Second Decade of Action for Road Safety, with a goal of cutting by half road traffic deaths and injuries; in response, ESCAP is preparing an Asia-Pacific Regional Plan of Action.
International freight transport remained largely operational throughout the pandemic, as countries took policy measures to preserve freight transport connectivity to support supply chains. The Asian Highway, Trans-Asian Railway and dry port networks established under ESCAP auspices serve as the backbone for land transport infrastructure connectivity and logistics in the region. They are also increasingly integrated with inter-regional transport corridors and port and shipping networks. In 2020 and 2021, these links brought countries together to capture and analyze their responses to the pandemic and the impacts of those actions on regional connectivity. Moving forward, they can be further leveraged to promote infrastructure and operational connectivity reforms in support of a seamless integrated web of intermodal transport connections underpinning the regional and global economy.
The COVID-19 pandemic disrupted progress in Asia and the Pacific towards many of the Sustainable Development Goals and, in some cases, reversed years of achievement. The transport sector, which is instrumental to attaining the SDGs, took a significant hit during the pandemic, but countries demonstrated an ability to move swiftly towards automation and innovation to maintain functionality and resilience, and support access to social inclusion. This also points to the capacity of the sector to take bold new steps towards low-carbon development. A new Regional Action Programme can prove to be pivotal in addressing the region’s lagging performance and enhancing resilience to future crises by reducing deep-rooted social, economic and environmental challenges.
Tech layoffs and Indian IT Professionals
According to a report in the Washington Post, nearly 30%-40% of the 200000 workers laid off by IT companies like Google, Microsoft etc, since November 2022 are Indians. Several of these workers are on non-immigrant visas — H1B and L1 Visas. H1B is a non-immigrant work visa which enables US companies to employ individuals with specialised skills. If those on H1B visas do not find a new job within 60 days, they will have to leave the US. This would result in numerous logistical problems – for instance children of many of these individuals are enrolled in schools, and these individuals would also have to sell their properties. One suggestion which had been made is that these companies can extend the termination date for IT professionals on H1B visas by a few months.
It would be pertinent to point out, that several organisations are trying to help Information Technology (IT) professionals in their job search and also in influencing US policy makers of US Citizenship and Immigration Services (USCIS). While some of these individuals may be fortunate enough to find opportunities within the US, and a few would also be willing to relocate to India, if they are economically sound, others need to look at possible alternatives. While one possible alternative is Canada, which in recent years has been going all out to attract skilled tech professionals. After the inward immigration policies of the Trump administration, several professionals shifted to Canada (in 2019 the number of Indians who received permanent residency of Canada was over 80,000 while in 2016 less than 40,000 Indians received Canadian residency). Under the Global Skills Strategy program – the Canadian equivalent of the H1B – the processing time of immigration process for skilled workers to two weeks this has also resulted in Canada being a preferred destination for Indian IT professionals in recent years.
These professionals can also explore the possibility of options like UAE. UAE has been making a special effort to attract skilled professionals through its Golden Visa Program – a 10 year residency visa. Earlier, one of the reasons why the west was a preferred destination for Indian professionals vis-à-vis the UAE was that the latter did not provide long term visas. The introduction of the golden visa could make the UAE as a favoured destination for IT professionals given its proximity to India as well as the high living standards. Apart from this, the Golden Visa does not impose restrictions regarding dependents and family members can be sponsored regardless of their ages.
It is not just the UAE, even Japan is trying to attract professionals and has recently announced that individuals who have graduated from top universities can stay back for a period of two years (currently they can only stay for 90 days). Singapore which in recent years has emerged as preferred destination for Indian professionals has also emerged as an attractive destination for IT professionals. Between 2005 and 2020, the proportion of Indian professionals in Singapore has doubled and this has been driven to a large degree by the demand for tech professionals.
Many of the individuals who have been laid off by US companies can also take advantage of the increasing opportunities in India in the start-up sector and the recent thrust on digitalisation in India. Both the central and state governments should try to woo some of these individuals. A number of state governments, such as Kerala, have devised policies aimed at assisting expats who have returned from overseas to start business ventures.
Seeing the changes which are taking place in the IT Sector globally as well as some of the increasingly insular immigration policies of western countries, it is important that Indian students as well as professionals think innovatively and look at alternative avenues. Western companies as well as companies also need to bear in mind, that if other countries like UAE, Singapore, Japan and possibly countries like Vietnam and Taiwan, with strong research eco-systems and infrastructure, begin to open their doors to skilled IT professionals, then the west is unlikely to remain the primary choice for IT professionals in the longer run.
Free-Market Capitalism and Climate Crisis
Free market capitalism is an economic system that has brought about tremendous economic growth and prosperity in many countries around the world. However, it has also spawned a number of problems, one of which is the climate crisis. The climate crisis is a global problem caused by the emission of greenhouse gases, primarily carbon dioxide, into the atmosphere. These externalities are chiefly a consequence of day to day human activities, such as the burning of fossil fuels, deforestation, and conventional agriculture. The climate crisis is leading to rise in temperatures, sea levels, and more erratic weather patterns-The floods in Pakistan and depleting cedars of Lebanon are vivid instances for these phenomena, which are having a devastating impact on the planet.
One of the main reasons that free market capitalism has contributed to the climate crisis is that it prioritizes short-term economic growth over long-term environmental sustainability. Under capitalism, companies are primarily motivated by profit and are not required to internalize the costs of their pollution. This means that they are able to pollute without having to pay for the damage that they are causing. Additionally, the capitalist system is based on the idea of unlimited growth, which is not sustainable in the long-term. As long as there is an infinite demand for goods and services, companies will continue to produce them, leading to ever-increasing levels of pollution and resource depletion.
Another pressing issue that free market capitalism is recently going through is that it does not take into account the externalities of economic activities. Externalities are the unintended consequences of economic activities, such as pollution and climate change. Under capitalism, companies are not required to pay for the externalities of their activities, which means that they are able to continue polluting without having to pay for the damage that they are causing. In her book “This Changes Everything: Capitalism vs Climate” Naomi Klein argues that the current system of capitalism is inherently incompatible with the urgent action needed to address the Climate crisis.
To address the climate crisis, it is necessary to put checks and balances over the free market capitalism and/or make a way towards a more sustainable economic system. This can be done through a number of different effective policies, such as:
Carbon pricing: This can be done through a carbon tax or a cap-and-trade system, which would make companies pay for the carbon emissions that they are producing. In the article “The Conservative Case for Carbon Dividends” authors suggest that revenue-neutral carbon tax is the most efficient and effective way to reduce the carbon emissions.
Increasing renewable energy investments: an increment in the investments in clean energy technologies, such as solar and wind power, can result in the reduction in the use of fossil fuels.
Regulating pollution: Governments can regulate pollution to limit the amount of greenhouse gases that are emitted into the atmosphere.
Encouraging sustainable practices: Governments can encourage sustainable practices, such as recycling and conservation, to reduce the use of resources.
It is remarkable that evolving Capitalism can be harnessed to address the climate change. The private sector has the resources and innovation to develop and implement new technologies and sustainable practices, but they need the right incentives and regulations to do so. Finding the balance between economic growth and environmental protection must be a priority for capitalists.
The free market capitalism has been the driving force behind global economic growth, but at the same time, it has contributed to the ongoing climate crisis. The solution to this problem is not to reject capitalism, but rather to reform it to the societies’ suitable demands. Government should consider providing a level playing field so as to make the probable transition from fossil-based energy systems to Green energy technologies possible. The capitalists should not consider short-termism over long term environmental sustainability. Government intervention to put a price on carbon emissions, invest in renewable energy, regulate pollution, and encourage sustainable practices is necessary to avoid the worst impacts of the climate crisis and build a sustainable future for all. However, here is the catch: Is achieving net-zero-carbon emissions by mid-century a probable target? The answer is quite uncertain, however it is critical point to strive for in the face of escalating Climate Crisis.
Egypt’s “Too Big to Fail” Theory Once Again at Test
Authors: Reem Mansour & Mohamed A. Fouad
In the wake of 2022 FED’s hawkish monetary policy, the Arab world’s most populous nation, Egypt, saw an exodus of about USD20bn of foreign capital. A feat that exerted pressure on the value of its pound against the dollar slashing it by almost half. This led to USD12bn trade backlog accumulating in Egypt’s ports by December 2022.
Meanwhile, amidst foreign debt nearing USD170bn, inflation soaring to double digits, and a chronic balance of payment deficit, Egypt became structurally unfit to sustain global shocks; the country saw its foreign debt mounting to 35% of GDP, causing the financing gap to hover at USD20billion.
While it may seem all gloom and doom, friends from the GCC rushed to inject funds in the “too big to fail” country, sparing it, an arguably, ill-fate that was well reflected in its Eurobond yields spreads and credit default swaps, a measure that assesses a sovereign default risk.
For the same reason in early 2023, the IMF sealed a deal worth of USD3bn, with the government, which unlocked an extra USD14bn sources of financing from multilateral institutions, and GCC sovereign funds, to fill in a hefty portion of the annual foreign exchange gap, albeit a considerable amount averaging USD6bn per annum is yet to be sourced from portfolio investments.
With the IMF stepping in, the Egyptian government agreed on a structural reform program that requires a flexible exchange rate regime, where the Egyptian pound is set to trade within daily boundaries against the US dollar, rationalize government spending, especially in projects that require foreign currency; and most importantly the program entails stake-sales in publicly owned assets, paving the way for the private sector to play a bigger role in the economy.
In due course, through its sovereign fund, Egypt planned initial offerings for shares in companies worth about USD5-USD6bn, and expanded the sale of its shares in local banks and government holdings to Gulf investment funds.
Through the limited period of execution of these reforms, the EGP hit a high of 32 against the greenback, and an inflow of portfolio investments amounting to USD1bn took place, according to the Central Bank of Egypt.
Simultaneously, Citibank International, cited a possible near end of the devaluation of the Egyptian pound against the US dollar. Also, in a report to investors, Standard Chartered recommended to buy Egyptian treasury bills, and pointed to the return of portfolio flows to the local debt market in the early days of January, 2023. Likewise, Fitch indicated the ability of the Egyptian banking sector to face the repercussions of the depreciation of the pound, and that the compulsory reserve ratios within Egyptian banks are able to withstand any declines in the value of the pound because they are supported by healthy internal flows of capital.
While things seem to be poised for a recovery, the long term prospects may lack sustainability. The Egyptian government needs to accelerate its plans to shift gears towards a real operational economy capable of withstanding shocks and dealing with any global challenges. Egypt, however has implicitly held the narrative that the country is ‘too big to fail”. This is largely true to the country’s geopolitical relevance, but even this has its limitations when the price to bail far outweighs the price to fail.
Former President George W. Bush’s administration popularized the “too big to fail” (TBTF) doctrine notably during the 2008 financial crisis. The Bush administration often used the term to describe why it stepped in to bail out some financial companies to avert worldwide economic collapse.
In his book “The Myth of Too Big To Fail” Imad Moosa presented arguments against using public fund to bail out failing financial institutions. He ultimately argued that a failing financial institution should be allowed to fail without fearing an apocalyptic outcome. For countries, the TBTF theory comes under considerable challenge.
In August 1982, Mexico was not able to service its external debt obligations, marking the start of the debt crisis. After years of accumulating external debt, rising world interest rates, the worldwide recession and sudden devaluations of the peso caused the external debt bill to rise sharply, which ultimately caused a default.
After six years of economic reform in Russia, privatization and macroeconomic stabilization had experienced some limited success. Yet in August 1998, after recording its first year of positive economic growth since the fall of the Soviet Union, Russia was forced to default on its sovereign debt, devalue the ruble, and declare a suspension of payments by commercial banks to foreign creditors.
In Egypt, although the country remains to face a number of challenges, signs remain relatively less worrying than 2022, as global sentiment suggests that leverage will be provided in the short-term at least. Egypt’s diversified economy, size and relative regional clout may very well spare the country the fate of Lebanon. However, if reforms do not happen fast enough, the TBTF shield may become completely depleted.
Hence, in order to avoid an economic fallout scenario a full fledged support to the private sector’s local manufacturing activity and tourism is a must. Effective policies geared towards competitiveness are mandatory, and tax & export oriented concessions are required to unleash the private sector’s maximum potential and shift Egypt into gear.
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