– Yesterday, the World Bank approved a new Development Policy Loan for Ukraine with a significant sum, $1.5 billion. How fast these money will come to Ukraine and what are the priorities of this loan?
– The loan approved on 7 June – the Public Expenditures for Administrative Capacity Endurance in Ukraine (or PEACE in Ukraine) – is not a Development Policy Loan, but one that finances core government expenditures so that the government can continue to operate and provide services to the people of Ukraine. In its current version, the World Bank undertakes to reimburse the government for all salaries of core civil servants as well as salaries of educators every month (beginning in March, after the war began, until at least the end of the year), so long as the salaries are actually paid in full. So, after an initial big reimbursement for the March-May period, the remaining amount will be paid month-by-month on the basis of proof of actual expenditures. All of this will help Ukraine preserve and protect the capacity of the government and help in ensuring that this strong government capacity is preserved for economic recovery.
– What types of financial assistance can Ukraine expect from the World Bank Group in 2022 and 2023? What additional amount can be received through the Bank’s Trust Fund? Could the Bank participate in covering Ukraine’s sectoral deficits, for example, in the electricity and gas sectors?
– Given the acute financing needs for the central budget, The World Bank is now concentrating on helping provide fast and immediate assistance – which in turn can help the population, especially the most vulnerable. First, very soon we will disburse a further $100 mln to help internally displaced people. We are continuing, within our existing projects, to help in the health sector, infrastructure and energy. We are also exploring with other bilateral development partners (such as Italy, Japan and the United States), who are very interested in adding to the PEACE loan and financing other types of verifiable budget expenditures; the specific items are not yet agreed, but will certainly include additional payments to internally displaced persons and other vulnerable groups in Ukraine. Our sister organization, IFC, who works with the private sector, is helping with guarantees to promote trade and agriculture.
– On what conditions, in your opinion, should financial assistance be provided to Ukraine during the war and after it, for the reconstruction of the country? How strict should they be? How to avoid the formation of Ukraine’s debt overhang, because according to the World Bank forecast only this year its debt will increase from 50.7% of GDP to 90.7% of GDP?
– Ukraine right now needs enormous resources every month to keep the economy functioning during the war – the government’s estimate, which we broadly endorse, is around $5 billion a month (or $35 bn from now until the end of 2022). Clearly, getting sufficient resources is the most important challenge – but the cost of these resources also matters, exactly because Ukraine will need to service these increasing debts in the future.
So the best way for partners to support Ukraine is through grants – which is most prominently being done by the US. Since grants of sufficient magnitude are not easily available, the next best option are loans that are quite concessional, with low interest rates and longer maturities – such as from the World Bank and other IFIs. Some countries, such as the UK, Netherlands, Sweden, Lithuania, Latvia and Denmark, have innovatively helped increase the volume of such cheap loans to Ukraine, by issuing guarantees to the World Bank and other IFIs.
– In early April, the WB forecasted a decline in Ukraine’s economy this year by 45,1% with inflation of 15% and its recovery in 2023 year by only 2,1%. How much has this forecast changed as of now?
– Our 2022 GDP projection is still unchanged (authorities currently have 44 percent GDP decline in 2022). But our estimate of the medium-term recovery is now at risk due to the prolonged war, with active combat still continuing in parts of Ukraine. So the impact on the GDP is coming from the relatively large area with active war, while the remaining part of Ukraine is suffering from shelling with corresponding damage to infrastructure, assets and thus livelihoods and jobs. And unfortunately, the probability that the war can last beyond 2022 is now higher.
There is another risk to the broader economy. Inflation pressures are growing – due to the need to cover some part of fiscal needs during March- May via Central Bank monetization and financing from domestic banks and depreciation expectations, together with decreased supply of essential goods. Thus, inflation is now expected to increase further – and can reach 20 percent in December (vs 15 percent in our April projections).
International partners have recognized the fiscal challenges and have already committed around $20 bn of financing to help Ukraine. Despite these significant commitments, the timing of its disbursement will remain critical in order to address Ukraine’s ongoing needs.
– What is the current World Bank’s assessment of Ukraine’s losses from the war? How fast can the economy of Ukraine and the level of poverty of its population return to the pre-war level? Under what conditions?
– At the end of March, we estimated damages to infrastructure and structures to be around $60 bn, which was close to the estimates being provided on a continuing basis by the Kyiv School of Economics, which is using World Bank methodology. By now, the direct physical damages are well over $100 bn. If you additionally account for the economic losses that companies and individuals have undergone because of the war, the damages rise to two or three times that amount. Together with the government of Ukraine and the European Union, the World Bank will come up with a broader “Damage and Needs Assessment” by late summer.
Catching up to pre-war levels of the economy will not, unfortunately, be quick or easy. Ukraine will need rapid economic growth – far higher than the average of 3 percent a year that we saw in the pre-war era. A simple way to think about this is the “rule of 70” – the number of years it takes a country to double its GDP is 70 divided by the rate of growth. So at 3% growth, Ukraine would take 22 years to double its economy. But if Ukraine can achieve a consistent 7% growth, it will need just 10 years.
– In your opinion, what economic steps would help Ukraine better adapt to the war-caused situation? For example, should the state increase or decrease its expenditures? Should tariffs be fixed or subsidies increased?
– To achieve the sort of growth rate needed for recovery, Ukraine will need to reinvent its economy to one that is led by a dynamic, competitive private sector and an EU orientation. It will need to take measures – on investment climate, rule of law, justice and logistics infrastructure – to attract large amounts of foreign private capital and technical expertise. The model here is what Western Europe was able to do after World War II with the help of the Marshall Plan – where modernizing their economies was as or more important than the large grants from the US.
So the state expenditures will play a big part – for essential infrastructure, for essential services, for education and health, for social protection, and of course for defense and security. Because of this, the state will also need to collect sufficient revenues to do all this. But public spending by itself will not be enough for recovery and growth – a major role for the state will be to set the conditions (that go much beyond tax rebates or special subsidies) to help all Ukraine’s competitive private sector flourish.
– What are your suggestions for the current Ukraine’s social safety nets sector? Does it worth for Ukraine to establish Universal Basic Income system? How should the government build its financial relations with refugees, who left the country?
– Ukraine’s social safety net system, including pensions and the Guaranteed Minimum Income program – as well as the new benefit program to support internally displaced persons (IDPs) – provides important financial protection to the population during the economic disruption caused by the war. The system will soon come under pressure, though – a pressure that will worsen the longer the war endures. Our own estimates show that the household losses from the income shock and higher cost-of-living will be around 25 percent of the household budget. Poverty, under the worst-case scenario, may reach as high as 58 percent in 2023. This will push millions more people onto social assistance.
Although the government budget is under fiscal strain, sweeping social expenditure cuts should be avoided since they would have catastrophic consequences for beneficiaries of these social safety net programs. This is why the Bank has been supporting, and will continue to support, the Guaranteed Minimum Income program (including through a new $50 million disbursement). As I mentioned earlier, the World Bank will also provide nearly $100 million in reallocated lending to support the IDP program during the period of martial law. The government is also to be commended for its impressive leveraging of the existing digital Diya platform to allow new cash transfers to be paid to IDPs within just eight days, reaching 3.5 million beneficiaries within a month.
– What wartime solutions for the medical sector, education and science does the World Bank offer?
– The war is having a devastating impact on health and education in Ukraine and is expected to affect generations to come.The most obvious effects on health are immediate, in the form of thousands of conflict-related deaths and injuries. Less visible is the illness caused, and worsened, by people not being able to access care for acute and chronic conditions. In education, due to the combination of COVID-related and war-related school closures, Ukrainian children have been out of school for more than a year. This will imply huge learning losses, whose consequences will impact future employment and income, with estimated future earnings losses of more than 10 percent per year per student.
While the war still rages, the health system will need to focus on meeting emergency medical needs related to war-related injuries, but also ensure continuation of other essential health services, including for COVID, and for chronic conditions (like hypertension and diabetes), so that long-term population health is not jeopardized. This is why World Bank projects are continuing to support both the procurement of emergency medical equipment and also the financing of the Program of Medical Guarantees. Expansion of services to address the mental health impact of the war is also needed. While providing education during war is difficult, a very promising approach it to use on-line, phone-based, or in-person tutoring can happen anywhere and is both effective and cost-effective. Tutoring could be an important complementary to the classes provided by the All-Ukrainian Online School platform. Through payments through the PEACE project to cover a share of teachers’ salaries, the World Bank is helping to ensure continuity of education for all Ukrainian students, no matter where they are located.
– The concept of “RebuildUkraine” was recently presented. It stipulates that while the reconstruction plan must be framed by Ukraine itself, its implementation should be led through the “Ukraine Reconstruction Platform”. In Ukraine, there is a discussion about the effectiveness of this format: they say that a significant part of the funds will go to the bureaucracy instead of financing real projects. Could the “RebuildUkraine” concept be effective? How centralized should the funding process be? What role will the World Bank play?
– Ukraine’s reconstruction, as mentioned earlier, will need efforts from everyone – Ukrainian authorities (and yes, the bureaucracy), Ukrainian farmers, entrepreneurs, those in digital tech industry, heavy industry, banking, retail …
Key to this process is for the state to provide the essential expenditures and framework for recovery – in terms of basic services, protection of the population, proper regulation and competition policy (that is not too onerous and not too light), security and justice. Improving services and rebuilding institutions not cheap, and it will require significant resources for the state. A lot of that will come from abroad – especially if Ukraine commits itself to build institutions as good as those in the EU to prepare for accession. However, the state also has to enable the private sector to be able to flourish – and that means not just the big industrialists, but also the average Ukrainian farmer or small businessperson. And for this, what will be needed is not just money, but expertise, regulations that are fair and easy to navigate, and attention to ensuring that everyone has equal opportunity to succeed.
The World Bank will play a strong role in helping the Ukrainian authorities in achieving this vision –through our own finances, but also through coordinating with other development partners so that we can all complement each other to get the most resources to the best uses in Ukraine (as we are already doing today for the period of wartime relief). But as important will be our global expertise across all economic sectors, which we hope to share with and work hand-in-hand with Ukrainian authorities to help rebuild the Ukraine of the future.
– The World Bank has repeatedly claimed the risks of deepening poverty and hunger in many low-income countries due to the war in Ukraine. What is the World Bank Group doing to unblock food exports from Ukraine?
– The cheapest and fastest way to get grain and oilseeds out of Ukraine is through the Black Sea. This needs work in the diplomatic and political areas to unblock these routes. While these are not our area of expertise, we encourage and support these efforts. Meanwhile, we are working to enhance the overland exports of grain, by working with Ukrainian railways and the European Union on how to increase the flow of grain exports through EU countries. Since this will not be able to get all the grain out, IFC and we are also working to see whether we can help farmers obtain better forms of temporary storage for the grain so that it does not spoil before it can get exported or consumed.
First published in Interfax-Ukraine- World Bank
Global Formulations to Create Entrepreneurial Nations
Prolonged economic struggles of the new emerging world are now showing visible gaps in competency levels. Small numbers of countries are trying their best to apply global formulation and become entrepreneurial nations. The vibrancy of “National Mobilization of Entrepreneurialism” can create new economic survival solutions and help the national citizenry create grassroots prosperity.
In search of economic warriors and widely open to global debates and challenges, this is not an academic study but an entrepreneurial response to an entrepreneurial challenge. Henceforth, why is this bold, profoundly constructive narrative inviting collaborative interactions with immediately deployable pragmatic large-scale solutions? Race car drivers need different tracks, tires, and types of cars; let us distinguish between taxi stands and Uber lineups. The entrepreneurial economy is another economy. Allow the entrepreneurial narrative to be decipherable.
The global landscapes: The facts remain that economic development without entrepreneurialism is economic destruction. Political power without economic power is just another circus act. The economic power without balanced mindsets is just another crypto scheme. The dreams of victory without any real value-creation productivity are only election nightmares. Increasing the debt ceiling is not an economic success but a grand economic failure. Abandoning citizenry unable to face global age competitiveness is a mega political disaster. Inabilities to categorize and digitize high-potential SMEs are gigantic economic development failures.
All global economic developments are globally exposed: Mindset imbalances are visible on LinkedIn across Western and emerging economies. The Mindset Hypothesis balances the skilled and educated job seeker mindsets and entrepreneurial risk-taking job creator mindsets. Job seekers build organizations, and job creators start such organizations in the first place. Both mindset balances is a victory; otherwise, what is already visible is a big defeat.
Nevertheless, failing to understand the ‘mindset hypothesis,’ the difference between the job seeker and job creator mindsets is the first step to getting eliminated from any serious dialogue on the subject of SME economic recovery. Failing to articulate the ‘national mobilization of entrepreneurialism’ is the second step to getting eliminated from any economic development activity as a whole—more on Google.
This is already a proven fact and a fundamental failure of banking and governments with their compulsory irrelevant forms and pre-determined measurement of just “small’ as a pre-declared one-size-fits-all answer to all SME issues. Study the greatest global error of economic thinking.
Morticians are happily burying identical coffins in rows; Gardners are perplexed by how many different buds can make how many interestingly different blossoms. SME growth demands strict eliminations of the mortician mindsets but the Gardner. Application of the Mindset Hypothesis is a mandatory procedure.
Is there any financial wisdom left regarding SME culture? Like an aviary surrounded by its mystery, the SME sectors struggle very hard only to blossom further not by ‘special rules binders’ but by mysterious DNA ways. There is no single master rule, reference, guideline, business plan, formula, blueprint, or book explaining why one of them suddenly could become the largest-ever project for the nation. Entrepreneurialism resides in gravity-defying, breaking-all rules, super high-speed turns, and by chance of decisions unfolding while juggling risk management, and this is where the economic models meet real value creation growth. The last 1000 entrepreneurs who created the life-altering global game-changing economic behaviorism that already has brought our civilization where we stand today, and what we must prove to show how much we understand their ‘entrepreneurial mysticism.’ Study the brief history of SMEs
No further proof is required if over a million entrepreneurs have already created over a million original small and medium businesses, and each has grown into creating over a million jobs. Why the lingering fear of identifying at least one Nobel Prize Winner in Economics, whoever built one such creation?
Like a broom, the economy sweeps and collects the dust and debris from the tactical entrepreneurial battlefields. Sometimes, when brilliant, risky notions are being tested, ideas tossed like bone-china porcelain flying around get smashed and create debris; later, they are swept by economic brooms and carefully labeled and jarred as relics for latter-day prophesies. It is an open challenge to economic thinking to come out and define ‘entrepreneurialism’ and why it is such a forbidden land for academia and their economic numbering games.
Was America controlled by economists of the day, or did the national citizenry go wild on business ideas, deploy available natural resources, and apply national mobilization of entrepreneurialism? Study how America, in the absence of economists, became the first and biggest entrepreneurial nation by creating an ocean of SMEs 100 years ago. What a miracle China performed three decades ago, with seas of SMEs now leading globally on all industrial fronts. Observe how India is advancing with the SME revolution, and Indonesia is progressing in the entrepreneurial race.
The entrepreneurial expansions: There are some 50 nations and many powerful trading blocks, all figuring out how to harness the “Entrepreneurial Mysticism” no university in the world could ever fathom and create a magic pill or produce a series of binders to replicate an original entrepreneurial idea. How fast are the ‘population-rich-nations overtaking the knowledge-rich-nations’? Study how, with 500 million new entrepreneurs in China and India alone, plus a billion SMEs in Asia, this global advancement of such economic forces may suck the oxygen of the Western economies in one single afternoon. Where is the ‘preparedness’?
In search of global formulas to create entrepreneurial nations: Beware; all this requires intense work for many years and decades. Just like spelling a long word like entrepreneurialism does not make one instantly an entrepreneur, a crash course in university on ‘small and medium enterprises’ does not make one suddenly a master of the craft. To play in the big leagues as a significant authority in the national economy, mastery of ‘national mobilization of entrepreneurialism’ is mandatory. These are not economic numbering games but real economic development wars in progress. At ease Soldier
Creating new enterprises: If access to finance may be considered a ‘nest,’ it is always the ‘egg’ and hatchery, where all the powers of “Entrepreneurial Mysticism” are hidden. The financial world suited and armed with degrees and over-joyed with creating access to finance but with little or no skills to measure the hatching of the free-range eggs, the sudden emergence of SMEs of our times, in the wild, urban-suburban, close and far, and further away, mini, micro, small enterprise ideas, all by unknown folks, all over the world. How Can Entrepreneurialism Save The World? Special Report – Listen to Audio…
Nevertheless, they must know deeply why and where these eggs come from, where and when and why they are laid, by whom and for what specific motivation at what sacrifice, and what will happen when they are finally hatched. Why does each such egg always start with a unique song and a new tempo, all in different colors and conditions? How the chick grows into a big bird, from cock to ostrich or giant roc.
Is your economy in some trouble? It only takes a day on LinkedIn to check all the top-to-down economic development teams already mandated to foster growth; their detailed profiles speak volumes about mindsets and their direct and indirect experiences on the development of entrepreneurial economies, and if, for some reason, or why, they simply cannot. Most importantly, why are countries still stuck exactly where they started decades ago despite all the available options?
Well, there is a reason why ballerinas do not train Sumo wrestlers, or frequent flyers are never found in the cockpit flying jumbo planes crossing the Atlantic. When architects draw skyscrapers, they are outstanding renderings, as it takes a team of experts on skyscraper building to deliver a new city skyline. If we allow only architects to play around with construction, 50% of skyscrapers will collapse. Jumbos will fall off the sky if they are in the hands of frequent flyers. Sumo wrestlers will be doing Swan Lake if trained by ballerinas. Balancing acts of economics is a highly urgent and very specialized area. The sooner you learn, the sooner you save economies.
Critical analysis: When did your departments last debate such narratives because of the popular annual repeated SME Weeks and plastic award nights or training a busload of SMEs brought us a decade behind? At this rate, it will only take a century to reach a national mobilization stage. Missing grand economic opportunities, for this reason alone, the identification, classification, and digitization of high-potential SME sectors are still not completed after a decade except for only a few nations.
THE 4B FACTOR: Globally, a billion displaced, a billion replaced, a billion misplaced, a billion on hunger watch. If you hear the distant drumming of your restless citizenry marching, an urgent call for solutions is needed. How to create a high-wage & low-tax economy with a real value-creation economy based on real productivity, performance, and profitability
So, how do you advance to the next stage? Here is the formula, openly share it
JOB-SEEKER MINDSET + JOB-CREATOR MINDSET =
ENTREPRENEURIAL ECONOMIC DEVELOPMENT =
The Worldwide Narrative of Expothon: Mastery of new entrepreneurial economic thinking is a new revolution in SME Mobilization. Expothon has been sharing information weekly with some 2000 senior officials at the Cabinet level in around 100 countries for the last 50 to 100 weeks. Soon, a global high-level virtual event series will further advance the agenda; in planning are debates to clarify and table turnkey mobilization options in the coming months. We are constantly adding new talents. Study more on Google.
Open challenge to current economic development models: If it takes ten days to firm up policies to start an SME sector digitization program. It takes 100 days to mobilize and place 1,000 to 50,000 SMEs on digital platforms. It takes 1000 days to bounce in national economic development and global export activities. So, at what speed are the current SME uplifts moving?
Test your imagination: If 10% to 50% of your high-potential SMEs were identified, classified, and digitized for up-skilling exporters and re-skilling manufacturers. Imagine if 10% to 50% could add 10% to 50% growth. Imagine what would happen when you only started with 10,000 SMEs; now imagine if you had 100,000 SMEs on National Mobilization of Entrepreneurialism. This will be the largest group creating economic progress, causing global shock waves. The answer is hidden, why it was never explored, and why it was never executed. Expothon repeatedly communicated with the top economic leadership of over 100 countries during the last many years.
What are the immediate critically missing links in your departments? What levels of rapid-fire training should be included amongst the economic frontline teams, and what national agenda needs streaming to create national mobilization of SME entrepreneurialism? What will your regions do to make new armies of entrepreneurs and nationally mobilize SMEs? Where and when is your next national debate on these hot topics, and most importantly, when will the deep planning start? Study more on Google; the rest is easy.
Uniqlo vs. Indonesia: A Battle of Bargaining Power Position
In negotiations, bargaining power is the capacity to exert influence or negotiate. A country or multinational corporation (MNC) has a stronger position than others in certain circumstances. The ability of a country to control market access and provide additional incentives to encourage market participation are just two of the many factors that influence a country’s strong bargaining position. A country’s position in the value chain, economic development, labor, and ties to major corporations are just a few factors that can affect its bargaining power in the context of global production networks. Doz & Prahalad (1980), note that product differentiation, economies of scale, and technology influence the bargaining leverage of multinational corporations.
The parent company of Uniqlo fashion retail, Fast Retailing Co., Ltd., is headquartered in Yamaguchi Prefecture, Japan. In another study by Coe & Yeung (2015) on global production networks, they see that a fashion retail company controls a global production system by collaborating with partners who supply finalized products according to product specifications requested by export-oriented nations. In addition, the finished products are distributed and marketed with strong trademarks and access to large consumer markets, such as shopping center outlets and online retail. Uniqlo is taking measures to establish partnerships with countries in various regions of the globe, including the Asian region. Uniqlo’s expansion in the Asian region is a manifestation of the company’s economic interest in broadening the scope of product marketing, increasing competitiveness by prioritizing innovation, and establishing a variety of facilities that cater to the requirements of consumers. Under PT Fast Retailing Indonesia, Uniqlo continues to expand in Indonesia.
Merit comparison between Indonesia and Uniqlo
With a population of 278 million, Indonesia has a large and expanding labor force that can encourage the acceleration of production in the Indonesian garment or apparel industry. In addition to its large and productive workforce, one of Uniqlo’s primary advantages is its low labor costs. It is not surprising to see that the Uniqlo brand has collaborated with 17 apparel supplier partners and retail center outlets in Indonesia. The domestic market in Indonesia can also be advantageous for Uniqlo, as the country’s high population will continue to generate demand for clothing.
Considering product differentiation, economies of scale, and technology, Uniqlo has a superior bargaining position. Based on Yuan (2023) research, by cultivating a strong “comfort and simplicity” brand image and actively collaborating with other brands, Uniqlo is able to increase its bargaining power. These strategies have helped Uniqlo achieve success in the fashion industry, increase its capacity to attract and retain customers, and distinguish its products from those of its competitors. According to Bisnis.com (2023), Uniqlo has also achieved economic success in the fashion industry, with a total net profit of IDR 83,2 trillion. By signing an agreement with the International Labor Organization (ILO), Uniqlo enhances its relationship of trust with its production partners and promotes the well-being of workers. Furthermore, Alexandra Santiago (2021), through YCP Soliadiance, reveals that Uniqlo also owns software for supply chain management called Global One (G1) SCM System, which it requires all of its suppliers to implement, and that this digitalization can enhance production planning and reduce production lead times.
Uniqlo’s bargaining position is strengthened in the negotiation process because the company has a great deal to offer Indonesia. For instance, PT Fast Retailing, the parent company of Uniqlo, signed a cooperation agreement with the International Labour Organization (ILO) to promote employment and social protection in Indonesia, funding the program with $1.8 million. One of the goals of this program is to ensure the minimum wage, assist workers in this industry in regaining employment, and enhance their abilities and skills. Uniqlo also collaborates with BUMN to support the development of Indonesia’s renewable energy sector by procuring Renewable Energy Certificates (RECs). In 2019, Uniqlo became the first fashion retailer in Indonesia to use renewable energy from the Geothermal Power Plant (PLTP) in Kamojang, West Java, by signing a Renewable Energy Certificate Sale and Purchase Cooperation agreement with PLN. Based on Antaranews.com (2023), Uniqlo facilitates Indonesian small and medium enterprises (SMEs) by providing SME training and marketing curated products through the “Neighborhood Collaboration” program, so that local Indonesian products are better known.
PT Fast Retailing Indonesia has a greater bargaining position than Indonesia. Indonesia’s bargaining position is quite weak due to the fact that it offers only a ready-to-work population and personnel resources, with no other bolstering factors. The garment industry in Indonesia still faces a number of issues, ranging from the need to import raw materials, which drives up production costs, to labor demonstrations demanding wage increases. This has caused many businesses to relocate to inexpensive nations, such as Vietnam. Indonesia must address its deficiencies create a more business-friendly regulatory environment because a nation’s bargaining position will be enhanced if it meets the requirements of the Global Production Network’s major corporations. If Indonesia has everything required by multinational corporations, it is not inconceivable that many companies from diverse industrial sectors will build facilities in Indonesia.
Overall, both Indonesia and Uniqlo benefit from their respective bargaining positions. Uniqlo provides a variety of benefits to Indonesia, including the protection of labor in production partner companies, the use of Indonesian renewable energy in its production to support the sector, and the promotion of small and medium-sized enterprises (SMEs) through training and the marketing of its products through the Neighborhood Collaboration program. By assisting the SME sector and promoting the use of renewable energy in its partner countries, Indonesia also benefits Uniqlo in terms of human resources that support accelerated production and a positive corporate image. Indonesia can make improvements to increase its competitiveness and attract multinational corporations to produce there.
There are a number of advantages to the presence of multinational corporations in a country, including the following: the presence of multinational corporations in a country can facilitate the creation of new jobs and reduce unemployment rates in the country; there is an increase in expertise for the workforce in a country as a result of the transfer of new technology and management systems, which are unquestionably more effective; and the presence of multinational corporations in a country can i) improve the quality of life in the country; ii) promote economic development.
International Forum for China’s Belt and Road and the Six Economic Corridors Projects
China will hold the third edition of the Belt and Road Initiative Global Forum in October 2023. The Chinese Belt and Road Initiative aims primarily to stimulate and encourage global trade infrastructure. China began its Belt and Road Initiative more than 10 years ago, and it is a global strategic initiative to develop infrastructure, to connect with Asia, Africa, and Europe by land and sea. The “Belt and Road” project, or “One Belt – One Road”, is an international initiative previously presented by China with the aim of developing currently operating commercial transport corridors and establishing new corridors linking more than 60 countries around the world in the regions of Central Asia, Europe and Africa, and it is designed to enhance the development of the trade relations between them, and this in turn leads to the development of trade relations between them and China.
The idea of forming a “Silk Road Economic Belt” was proposed by Chinese President Xi Jinping, and was announced for the first time during his speech in the city of Astana, the capital of Kazakhstan, in September 2013. The first forum was held in 2017, while the second one was held in 2019.
The third Belt and Road Forum for International Cooperation will be held in Beijing in October 2023, and it is expected that three high-level forums will be held on connectivity, green development and digital economy, and six other forums on trade connectivity, people-to-people connectivity, think tank exchange, the Clean Silk Road, and Sub-national cooperation, that is, with other economic blocs such as BRICS and others, and maritime cooperation, in addition to holding a conference for CEOs of major companies and projects around the world. With China officially confirming that the tenth anniversary of the Belt and Road Initiative is an important platform for all parties to research and develop high-level cooperation within the framework of the initiative.
The Belt and Road Initiative is of great importance to Egypt and the countries of the region, given its economic benefits and the investments and various economic benefits it brings. Relations between Egypt and the countries of the region and China have witnessed great development and an important shift in recent years, within the framework of the Belt and Road Initiative as an entry point for developing these relations and establishing more diversified relations between China and the countries of the region. The initiative also provides a great opportunity for cooperation between Egypt and China in the maritime field, because the Suez Canal is part of the maritime component of the Chinese Belt and Road Initiative, and Egypt has extensions with the Indian Ocean and the Mediterranean Sea that facilitate the opening and establishment of new projects between China and Egypt. The Chinese presence in the (Suez Canal Economic Zone) also contributed to transforming it into an industrial zone, with the Egyptian side planning, based on China’s role in transferring technology and expertise to the Egyptian side. The Belt and Road Initiative also gave great importance to the issue of interaction between peoples, especially in the tourism sector, with Egypt expecting an increase in the volume of Chinese tourism during the coming period.
Egypt and all countries of the region also interacted with the Chinese Belt and Road Initiative in a very large way, whether by attending Belt and Road forums or opening the way for Chinese investments in our countries. In addition to the role of the Suez Canal in establishing major partnerships with the Chinese side regarding international navigation and trade through the maritime component of the initiative. The interaction of Egypt and the countries of the region with the Belt and Road Initiative has been positive, and Egypt has benefited greatly from financing institutions within the framework of the Chinese Belt and Road Initiative, such as the Asian Infrastructure Investment Bank, which contributes to financing important projects in Egypt, including: the huge Benban project in Aswan to generate electricity and the solar energy.
China has already announced the participation of 110 countries in the Third Belt and Road Forum in October 2023, in addition to the invitation of the Chinese side to many international economic forums and gatherings. The most important thing for me is the official Chinese media’s confirmation that China did not invite the heads of some Western countries to attend the Belt and Road Forum, given their interference in China’s affairs and obstruction of the growth of its interests. This is precisely what was confirmed by the Chinese newspaper “Global Times”, which is close to the ruling Communist Party in China, by confirming that the vast majority of invitations to attend the forum were sent to leaders of developing countries, while the heads of some developed countries were not included to attend the Belt and Road Forum in 2023. With the Global Times confirming that this was done, because the main goal of the forum is development cooperation between countries, so a number of Western countries in particular were excluded. Knowing that Russian President Putin intends to visit China, and this coincides with the holding of the Belt and Road Initiative Forum in October 2023.
Some Western pressure also came on Italy in particular, despite its previous strong enthusiasm for the Chinese Belt and Road Initiative, with the Italian Foreign Minister Antonio Tajani’s assertion that cooperation within the framework of the Belt and Road “did not achieve the results that the Italian side expected, and his confirmation that many Italian parties It opposes Italy’s participation in the Belt and Road Forum in China in October 2023. Here came the Chinese response to the Italian Foreign Minister, through Chinese Foreign Minister Wang Yi, stressing that the “Belt and Road” plan is a huge infrastructure program similar to the ancient Silk Road of roads. Eurasian trade, and this initiative has borne fruit for Italy, which is the only economy in the “G7” that has signed a memorandum of understanding regarding the agreement to implement a number of Chinese projects in Italy in relation to the Belt and Road Initiative, to end in March 2024.
I believe that the Belt and Road Forum, in its third edition scheduled to be held in October 2023, will be different from previous years, especially with China’s introduction of the economic corridors project, in light of American and Western pressure on it. Before the Belt and Road Forum began in October 2023, China officially announced the signing of cooperation documents related to the Belt and Road Initiative with more than 150 countries and more than 30 international organizations. With Belt and Road cooperation achieving economically fruitful results, such as implementing 3,000 cooperation projects and stimulating investments worth a trillion dollars. Also, since the proposal of the Belt and Road Initiative, the project to build China’s economic corridors has achieved great results, which serve the direction of development for the countries participating with China in those six economic corridors, the most prominent of which are:
The New Economic Corridor for the Eurasian Continental Bridge, which relies on high-speed railways between China and Europe.
The China-Pakistan Economic Corridor, which has entered the second phase of implementing its projects, after the completion of the first phase of the Pakistani Gwadar Port Free Zone project to attract investment, and the cross-border optical cable project between China and Pakistan was completed and opened.
The economic corridor between China, Mongolia and Russia
Indochina Peninsula Economic Corridor
The economic corridor between China, Central Asia and West Asia
The Economic Corridor between Bangladesh, China, India and Myanmar, which is making slow progress
We find that the strongest projects of these six economic corridors are the China-Pakistan Economic Corridor and the China-Mongolia-Russia Economic Corridor, which has achieved many international cooperation plans for its parties. The China-Pakistan Economic Corridor has established a bilateral joint committee as a mechanism for international cooperation for coordination.
On the other hand, the American pressure on China, especially since the beginning of the Biden administration period, has considered China its biggest competitor. Not only did the United States of America pursue a policy of containment against China, but it also attracted allies to Washington to launch the Supply Chain Alliance and the Technological Alliance, which faces major objections from the Chinese, because it imposes many checks and balances in the form of huge challenges facing China. These measures taken by the United States of America, as well as the period of global embargo during the outbreak of the Corona epidemic, exacerbated many geopolitical contradictions along the Belt and Road, due to American pressure on China’s projects in those six economic corridors.
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