The world has been fighting for three years to reduce the impact of Covid-19. The fight against pandemics, which has been a major turning point for humanity and civilization continues today as it has in the past. Although we have reduced the spread of the virus and the likelihood of death, the difficulty of the economic recovery process and future uncertainties push us to re-evaluate the situation we are in.
The weakening of the impact of the pandemic and the vaccination process at the beginning of 2022 proved to be a catalyst for global resumption of work and the economy. In the three years since the pandemic began, the global economy in 2021 alone has experienced the strongest recovery in 80 years. The World Bank’s analysis showed that global economic growth in 2021 alone was 5.6% due to large economic powers such as the United States and China.
However, despite all this recovery process, GDP growth in 2021 has declined by 3.2% compared to the pre-pandemic period and the recovery process in many areas, including the service sector, has not been as rapid as expected. According to estimates, the global service sector growth in 2021 alone has been 10% lower than the pre-pandemic period.
The global economy faced a new wave of recession before even being able to reduce the impact of the pandemic. In January 2022, the UN issued a warning about a slowdown in global economic growth. According to the World Bank’s Global Economic Prospects report, global economic growth will decline from 5.5% in 2021 to 4.1% in 2022 and to 3.2% in 2023. Although it is noted that by 2023 all developed economies will achieve a full recovery in production, these figures are predicted to be 4% lower than the pre-pandemic period. This slowdown in development indicators is expected to continue over the next few years. While, especially in 2021, serious efforts were made to overcome the impact of the pandemic, the delay is expected to have long-term effects in some areas. Job losses, reduced quality in education and investment areas, high debts are just some of those effects.
The economic growth of some countries will continue to decline in the coming years, while the growth rate in the countries with a developing economy is expected to plummet from 6.3% in 2021 to 4.6% in 2022 and to 4.4% in 2023. As the economic recovery slows, global inflation is expected to rise further and continue to rise for the rest of the year. Government assistance to weakened economies as a result of the pandemic is contributing to a more fragile economic model.
Currently, vulnerable economies are the systems most affected by the pandemic. Weak economic government assistance and delays in implementing vaccination strategies are the major obstacles for the recovery process. Per capita income growth in these countries is not expected to return to levels seen at least a decade ago, and manufacturing capacity is expected to be 8.5% below pre-pandemic levels. As a result, around 100 million people are expected to fall into poverty by the end of 2022. These negative impacts will affect the most vulnerable groups – women, children, unqualified and informal workers.
A key factor in the recovery of the global economy is the ability of states to escape from the growing debt that resulted from the pandemic and to ensure economic development. However, the existing capabilities of very few countries in the world allow both processes to be carried out simultaneously. While strong economies are expected to rely on global supply chains and financial flows, countries with relatively fragile economies will focus on the domestic market. However, any result suggests that new fluctuations will occur in the national economies in the coming years.
There is no doubt that the pandemic, which we have gradually put behind us, will arise new trends in the coming years. In an article published by the “Forbes” magazine, it’s predicted that new trends in the global economy and business will become relevant in 2022. The magazine predicts that by 2022, companies will be more focused on sustainable operations, more artificial intelligence and robot technologies will be involved in the manufacturing process, distant work activity will increase, global collaboration and integration will accelerate. At the same time, given the negative experience of the past, the use of decentralized financial resources by companies to ensure economic sustainability is likely to become more relevant. Goal-oriented entrepreneurial activity and the production of reliable products will be among the trends that will become most relevant in 2022.
The recovery of the economy and new business trends will in turn lead to some innovations in the field of vocational training. This is directly related to the radical changes of the education system in the post-pandemic period. As the pandemic period has made distant education more relevant, the hybrid methods have proven to be more effective. Auxiliary learning platforms will encourage teachers and students to focus on free and open-source technologies and will help in the cause of decentralization of education.
The business environment shows that in the near future there will be a growing demand for more mobile and versatile staff instead of traditional skilled staff. The training of such personnel will make new approaches to the education system necessary.
The post-pandemic period has shown its effects in both the economic life of Azerbaijan and in the global scale. However, with the help of the necessary restrictions imposed during the pandemic, as well as the economic support policy, Azerbaijan managed to prevent the devastating impact of the pandemic. Azerbaijan is striving to maintain its economic growth potential in the new period, and the country’s economic performance has already returned to the pre-pandemic levels. The new strategic goals of the economy are to form a more sustainable economic system in the event of a recurrence of similar situations.
Looking at Indonesia’s Nickel Downstream Efforts from The Perspective of Resource Curse
Republic of Indonesia under the government of President Joko Widodo is intensively pursuing downstream industries, mainly in the natural resource products sector. One of which is Nickel. Indonesia’s abundant natural resource wealth is certainly a field for increasing the economic level of state revenue. Moreover, if the Government is able to ‘prosperate’ the community through the results obtained from the wealth of the country’s natural resources.
In this opinion article, the author tries to look at the perspective of the natural resource curse which is prone to be experienced by countries/regions that are rich in natural resources but the level of community welfare is far from expectations, then the author tries to provide an opinion regarding the linkage of resource curse in the midst of government efforts. increasing the downstreaming of Indonesia’s natural resource industry.
Downstreaming Nickel: A Way Out of the Term Natural Resource Curse?
President Joko Widodo and his staff’s steps to increase state revenues through the downstreaming of natural resource industry, one of which is Nickel. It should be appreciated because it is this step a way for the government to provide a way out of from natural resource curse.
The ‘resource curse’ in the theory introduced by Richard Auty (1993) was followed by further research from Jeffrey Sachs and Andrew Warner (1995) find that there is a strong connection between countries with an abundance of natural resources and poor economic growth. This becomes interesting, not about the wealth of natural resources of a country. But about how the state can properly and appropriately manage the results of the abundance of nature with the economic standard of living of its people. In the perspective of resource curse, especially in terms of yield management, there are differences in each resource-rich country. Countries with abundant resource wealth sometimes succeed in development, but on the other hand they don’t. How could this happen?
One of the things countries that are rich in natural resources has a low level of economy and people’s welfare, can be due to the management of natural resources governance by weak institutions. Weak in the sense that there is no transparency, accountability and oversight by the surrounding community.
Indonesia, through government policies to downstream the nickel commodity industry, is expected to strengthen national economic competitiveness amid global uncertainty and can become a global key player in the nickel commodity extractive industry. The government’s step in advancing industrialization and downstreaming the natural resource industry with nickel as a commodity that has the largest reserve value in Indonesia. According to the author opinion, it is a way to avoid resource curse in the future. Construction of a nickel smelter by President Jokowi’s administration, in Morowali Regency, Central Sulawesi which adopts a green smelter in mid-2023, is a concrete step by the government in accommodating nickel natural resource products for later downstreaming.
As a society, the authors in this opinion hope that the implications of downstream nickel industry governance for the welfare of the Indonesian people in general, and the Morowali community in particular can be well maintained through the construction of a nickel green smelter. Control, supervision and community participation accompanied by transparent institutions are certainly needed in the development process, so that the process of accountability and transparency of future results can avoid the curse of natural resources and be able to increase the country’s economic level.
Impact of Multinational companies on Pakistan
Multinational companies (MNCs) have had a significant impact on Pakistan’s economy since the country’s liberalization and opening up to foreign investment in the 1990s. Overall, the impact of MNCs on Pakistan can be seen as mixed, with both positive and negative effects on the economy and society.
Multinational companies (MNCs) are firms that operate in multiple countries, including Pakistan, and are usually headquartered in developed countries. They have the capability to invest large amounts of capital, technology, and expertise, which can significantly impact the host country’s economy. MNCs, bring foreign direct investment (FDI) to Pakistan, which is essential for economic growth.
The presence of MNCs in Pakistan has had a positive impact on the economy in various ways. They have contributed to the development of infrastructure, which has helped to improve the country’s business environment. MNCs have also helped to increase exports, which has led to an increase in foreign exchange reserves. Additionally, they have introduced modern technologies and practices, which have enhanced productivity and efficiency in the local industries.
One of the significant impacts of MNCs on the Pakistani economy is their contribution to employment generation. MNCs have created jobs for the local population, which has helped to reduce unemployment and poverty. According to the State Bank of Pakistan, the number of people employed in the manufacturing sector, where most MNCs operate, has increased by 2.8% in the fiscal year 2020-21. This growth can be attributed to the expansion of MNCs in the country.
The presence of MNCs in Pakistan has also led to the transfer of skills and knowledge to the local workforce. MNCs employ highly skilled professionals who share their knowledge and expertise with local employees. This transfer of skills and knowledge helps to enhance the human capital of the country, which is essential for economic growth.
Furthermore, MNCs have a significant impact on the tax revenue of Pakistan. MNCs pay corporate taxes, which contribute to the government’s revenue. According to the Federal Board of Revenue, the contribution of MNCs to the country’s tax revenue has increased by 19.9% in the fiscal year 2020-21. This increased tax revenue can be attributed to the expansion of MNCs in the country.
MNCs have negative impacts on the environment and may exploit natural resources. The entry of MNCs into the Pakistani market has increased competition for local firms, making it difficult for them to compete with well-established global brands
MNCs have been accused of exploiting labor and natural resources in Pakistan. There have been reports of low wages, poor working conditions, and environmental damage associated with MNC operations in the country.
The current situation of multinational companies (MNCs) in Pakistan is mixed. On one hand, Pakistan has been successful in attracting foreign investment in recent years, with MNCs investing in various sectors of the economy such as telecommunications, energy, and infrastructure. On the other hand, Pakistan still faces a number of challenges that can impact the operations and growth of MNCs.
One of the major challenges faced by MNCs in Pakistan is the weak and uncertain regulatory environment. The country’s legal and regulatory framework is often viewed as complex and difficult to navigate, which can make it difficult for MNCs to operate and make long-term investments. In addition, corruption and lack of transparency in the regulatory environment can increase the cost of doing business and reduce investor confidence.
Another challenge is the inadequate infrastructure in Pakistan, which can make it difficult for MNCs to operate efficiently.
Furthermore, Pakistan has faced security challenges that can impact the operations and growth of MNCs. Terrorism, political instability, and sectarian violence can increase the risk of doing business in the country and deter foreign investment.
Despite these challenges, there are opportunities for MNCs in Pakistan, particularly in sectors such as agriculture, healthcare, and tourism. The country has a large and growing population, a strategic location, and abundant natural resources, which can make it an attractive destination for foreign investment.
The impact of multinational companies (MNCs) on the thinking of people in Pakistan can be both positive and negative, depending on various factors such as the nature of the company’s operations, its business practices, and the local cultural and social context.
On the positive side, MNCs can bring new ideas and practices to Pakistan and can help to expose people to different ways of thinking and doing business. They can also bring job opportunities and skills development to local communities, which can have a positive impact on the local economy and people’s quality of life.
Moreover, MNCs can help to promote cultural exchange and understanding between Pakistan and other countries. For instance, MNCs may bring in employees from different parts of the world, exposing local employees to different cultures and perspectives. This can lead to increased tolerance and diversity in society.
On the negative side, MNCs may lead to negative consequences for local communities and the environment. MNCs may contribute to the marginalization of local businesses and industries, leading to the loss of local cultural and economic practices. This can have a negative impact on people’s sense of identity and belonging.
The impact of MNCs on the thinking of people in Pakistan is complex and multifaceted. While they can bring new ideas and opportunities, they can also have negative consequences for local culture and values. It is important for MNCs to be aware of these potential impacts and to operate in a socially responsible and culturally sensitive manner, in order to promote positive outcomes for both the company and the local community.
In conclusion, the current situation of MNCs in Pakistan is mixed. While there are challenges such as a weak regulatory environment, inadequate infrastructure, and security concerns, there are also opportunities for foreign investment in various sectors of the economy. It is important for Pakistan to continue to address these challenges and create a more investor-friendly environment to attract further foreign investment and promote economic growth.
How Saudiconomy, is an economic-transformational miracle?
What is happening in the Global economy? The outlook seems entirely iffy, in the state of flux and bewildered with negative outlooks. The answer is, “Disturbance”. If we analyze the global-environment with respect to economy, we find it clouded with discussions pertaining to hawkish vs. dovish trends of central-banks, rising inflation, hyper-inflation, tanking GDP growth, Russian-Ukraine conflict, energy-crises, broken supply-chains, unemployment, recession-fears, supply-shocks, lower demands, inverted yield-curves, liquidity crises, banking debacles and many other ensuing economic-ramifications etc. all have become talk of corridors and towns.
In my opinion, the global economy seems in shambles, extrapolated perceptions assumed by analysts out of Jackson Hole meetings and other developed-countries’ central-banks are creating disturbances in financial-markets. Simply, the world is devoid of any solid vision, which could steer it towards betterment and prosperity. Major financial newspapers are dreading with inflation impacts. Ask any banker across the globe about his or her medium-term economic-outlook & you’ll get an ugly picture painted.
Welcome to Saudi Arabia, the year 2022 the country surpassed a mark of a trillion-dollar economy according to both IMF and Oxford Economics coupled with GDP which grew at 8.7% in 2022. The annual CPI in Saudi Arabia increased by 2.5% and inflation averaged at 2.47% in 2022 which is “absolutely nothing” against double-digits’ inflation worldwide.
So paradoxically asking, what is happening in Saudi Economy? The answer is, “Growth”. If we analyze Saudi economic ecosystem, we find it filled with positive economic-vibes where the discussion is all about hike in industrial-production, foreign-investment-inflows especially huge industrial-investments, mining-investments which aim to unleash the potential of natural-resources, infrastructure-investments, giga-projects, achievement of economic & financial targets on time, flourishing private-sector, multiplying Non-Oil GDP etc.
Taking global-view, H1+H2 of 2022 were clouded with immense geo-political tensions, with ultimate economic-ramifications. But KSA has remained insulated of all global economic-vagaries, which attests the resilience & robustness of Saudi economic framework which is strengthened by Saudi leadership. The fiscal-year 2022 attracted significant foreign capital-inflows, which proves that Saudi Arabia has successfully positioned itself as a desired-destination of global financial-capital amid the ongoing global-turbulence. Saudi Arabia has successfully averted economic-effects of current geo-political turmoil, in terms of utilities, food-security and inflation-containment etc.
The question arises, how did KSA achieve this economic excellence & resilience in really a short time-span? The answer is, a Vision is being implemented and realized by Saudi leadership with sheer commitment and enabled by Saudi youth. This trifecta is indeed a global successful case-study of how major economic-transformations can happen in a short-period of time.
Delving into more details, the fundamental reason is, in 2016 Saudi Arabia had devised a brilliant Vision 2030 under the leadership of H.R.H King Salman and this was a road-map drawn by H.R.H Crown Prince Mohammad Bin Salman, as a forward strategic-economic framework. Under this brilliant vision, uniquely-crafted “Vision Realization Programs” (VRP) were designed, each tasked with a particular niche to smoothen the regulatory-processes, incentivize deployment of local-resources and ultimately attract private-sector & foreign-investments. All these VRPs are showing satisfactory-progress and many of these VRPs have over-achieved brilliantly.
Another driver of this economic-success is a significant-emphasis on optimizing potential of “Non-Oil GDP”. It is the Non-Oil GDP, which ultimately provided an impetus and incentivized Saudi Private-sector to act proactively. The fuel for sky-rocketing “Non-Oil GDP” is actually the giant private-sector of KSA, whose potential is being unleashed by Saudi government via launching a partnership-program namely “Shareek” which aims to intensify the potential of SAR 5 trillion of domestic private sector investments by 2030. The aim is to maximize the private-sector contribution up to 65% in Saudi GDP by 2030.
One of the attributable reasons of this economic-miracle of Saudi Arabia has been a constant emphasis on Higher Education & Research. For instance, scholarship programs for Saudi students proved to be a stellar success. Today we see countless highly-qualified Saudis, possessing valuable global-experience are now steering many organizations in both the public and private sector of country. Their competence coupled with determination, passion & loyalty for their leadership and the country paved the way for Saudi Arabia to result such an economic-success. Nature Index which tracks scientific & intellectual contributions globally has ranked Saudi Arabia, 1st in Arab World & 30th globally in 2022, which manifests emergence of high quality scientific-output by Higher education ecosystem.
Saudi Arabia was one of the countries, which made headlines across global-media due to smart Covid-management, leaving behind many developed economies. For instance, King Abdullah Port has bragged the 1st-position leaving behind 370 global-ports in a globally-renowned index, Container Port Performance Index – 2021 by World Bank and S&P Market Intelligence, which analyzed performances of 370 ports in post-Covid broken supply-chain scenario. Similarly, Jeddah Islamic port and King Abdul Aziz port have bragged 8th and 14th position respectively.
Saudi Arabia’s Sovereign Wealth Fund, Public Investment Fund has emerged as one of the smartest-SWF leaving behind many decades-old SWFs with stellar investments. The PIF (AuM = 620 USD billion) with its in-built strong potential has taken lead in investing locally in Saudi Arabia. In any country, a monetary-system always carries immense importance in proper functioning of an economy & solidifies its robustness. This important task is being carried out diligently by Saudi Central Bank, SAMA, which is brilliantly regulating Saudi financial-sector.
Saudi Arabia is taking a lead in developing state-of-the-art infrastructure. Each of the giga-project is adding gross-value of billions of SAR directly to economy and is providing thousands of jobs. I call them; “Super-infrastructure” because they are being developed with a super-vision, led by super-teams, giving super-results and yield a super-future. Recently Knight Frank which is a top-notch and a century-old UK-based real-estate consultancy firm has evaluated the 15 giga-projects up to 1.1 trillion dollars.
Indeed, Saudi success story of economic-transformation and diversification embodies sheer brilliance, commitment and determination, which has manifested wonders in less than a decade as appreciated by the Managing Director of IMF in the recent WEF sessions, in these words, “They (Saudis) are using the increase in revenue very effectively to create the investment environment for future growth for diversifying the economy,”
Geopolitical Changes and the Significance of Russia’s New Foreign Policy Concept
Russian President Vladimir Putin has signed an order to endorse Russia’s updated foreign policy concept which was complied and presented...
Looking at Indonesia’s Nickel Downstream Efforts from The Perspective of Resource Curse
Republic of Indonesia under the government of President Joko Widodo is intensively pursuing downstream industries, mainly in the natural resource...
Ways to Overcome Afghanistan Crisis in Post-Republic Collapse
On August 15, 2021, the Afghan Republic government collapsed and the Taliban took over the Afghan capital city of Kabul....
Foreign Affairs: What sanctions on Russia can and cannot achieve
“U.S. policymakers began planning major sanctions on Russia in late 2021” (before the beginning of Ukrainian conflict!), recognizes ‘Foreign Affairs’....
Elsie Initiative Fund: call for proposals to continue investing in women’s meaningful participation in peacekeeping
At an event that brought together more than 350 representatives from Member States, UN organizations, academia and civil society, the Elsie...
What Beijing’s Iran-Saudi deal means
The agreement to reestablish diplomatic relations between Tehran and Riyadh was no “peace deal,” but the rivals did decide to...
De-dollarization is gaining momentum
Brazil and China have reportedly struck a deal to ditch the U.S. dollar in favor of their own currencies in...
Finance4 days ago
U.S. bank trouble heralds The End of dollar Reserve system
Americas3 days ago
Bulletproof Panama: An Isthmus of Stability Becomes a Magnet for Migration
Economy4 days ago
How Saudiconomy, is an economic-transformational miracle?
International Law4 days ago
Putin, Xi, the ICC, and the Demise of Global Judiciary
Middle East4 days ago
The New Middle East: The Winners and Losers
South Asia4 days ago
Pakistan’s Priority Ranking of SDGs
Economy3 days ago
Impact of Multinational companies on Pakistan
Science & Technology3 days ago
Communication as a realm of human enigmatic growth