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How to Succeed an Economic Revolution?

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What defines success? Firstly, there is no victory without a solid understanding of the entrepreneurial nature of the tactical battlefields versus the landscapes of hardships under thinly spread economic topography of numerical densities. Secondly, an economic revolution is neither a number-crunching marathon nor a black-tie dinner of economic theorists. It is in reality a war, where job creation and enterprise development forces meet at multiple crossroads to fight out red tape and create productivity to face the global age of competitiveness. Big and small maneuvers are planned to dive into tactical battlefields each with well-trained entrepreneurial soldiers armed with new ideas, innovation, technologies, and enterprise creation experiences poised for high-quality productivity of goods and services. Victory is in growth and job creation. Defeat is just the opposite. Simple, now witness the winners and losers. How to succeed an economic revolution?

Is there something wrong? Currently, economic theorists, out of options, are overly comfortable in surrendering to unlimited printing of currency focused on data manipulation only creating value manipulations. Is there something wrong is global chaos coming? Global indices are already pointing to collapse, while global populace is calling for a big change.

Who creates an airline? Creating a global airline is purely an entrepreneurial task; study the creation of the last 100 airlines. Although, ‘aviation’ and ‘aero dynamics’ are tediously acquired high-value engineering skills but categorically are still not enough to give birth to any global airline. If there are already a million entrepreneurs each one creating a million jobs, so why shouldn’t we identify some Nobel Prize Winners in Economics and check out if they ever created one such single enterprise? Henceforth, the war is about job creator mindsets and job seeker mindsets; it is as normal as identifying real and well-trained soldiers with well-trained librarians. Like the goldfish and the monkey, both are very talented but doing their own thing, precisely.

Why shock therapy is not required? Economic intelligentsia is best at studying numbers and creating ultra sophisticated invisibly abstract models currently openly used to manipulate finances for selected agendas but not for the general public. Hungry populaces already marching toward political rotundas to change the lingering incompetency and with over 100 nations under such threats, major global changes are forthcoming. On the fine divide of job seeker and the job creator mindsets the global economic intelligentsia is allowed breaking furniture on this issue but the term ‘development’ must be pulled out of their economic development titles while leaving ‘theories’ untouched. Why should there be a shock at this discovery?

The “mindset hypotheses” at play: Nevertheless, failing to understand the ‘mindset hypothesis’ and 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. Hidden problems are visible to entrepreneurs with personal and direct experiences in small and medium business creations and therefore in any meeting of any size on any SME topic anywhere across the world the absence of entrepreneurialism is no different when planning an Everest expedition without any previously experienced mountain climbers but promptly attended by local librarians as the designated mountaineering team to claim the summit. More on Google

Open challenge to current economic development models; which nation can articulate on planning methodology of any national mobilization of SMEs entrepreneurialism? Which nation can present any qualified frontline teams with enough SME creation experiences and proven entrepreneurialism to decipher all of the above-mentioned? Which nation can claim a national agenda designed and delivered to recognize and identify 25% to 50% of their small and medium enterprises and place them on some digital platform for increased global exposure and inactive global trading? Which nation can prove to have a system to uplift its SME sectors with courage and skills to face the global age of competitiveness? Which nation is at least open and smart enough to recognize such deficiencies and ready to up-skill their frontline teams to correctly aim and design national agenda? Who are the new masters of new big global economy? No matter what the status, unless such issues are well understood, especially when such issues are not necessarily new funding dependent rather they are mostly mobilization-hungry and execution-starved.

Silence will only bring darkness and darkness will only demand fires to light up the sky

What fabricates a national revolution? First off, a clear message is required for the masses; something easily understood, easy to repeat, and easy to join. This also means open participation for all: anywhere, anytime. However, the most important factor is having a cause that unites participants, making them adopt it as their own. This cause must sum up their life’s sufferings. When repressed citizen itemizes their suffering for decades, the inner urge for change becomes the cause’s forefront driver and aids them in achieving success. This mixture grows volatile and social media fuels protests to become high-octane. However, for incumbent leadership, it is received as a powerful laxative, and within the institutionalized corrupt corridors, it appears like a war. While politicians run to washrooms, establishments run to war rooms. It is then when unarmed masses prepare to march and voice their grief, while the establishment tests their riot gear. This is how real revolutions start; this is why billions of people are restless already. How to succeed in creating economic revolution?

Creating the armies of thinkers and builders: Where are the best productive and innovative minds in governments; why are they forced into hiding in silence, lingering in corporate corridors, ambitious and ready to charge, yet inhibited for lack of dancing floors to show their new steps, absence of platforms to skate around the world on digital trading and often lack of special skills that can easily be filled with team effort and collaborations. Check out any floor of any Ministry anywhere across the free world, and observe the boredom and anxieties for the lack of brisk job creation programs and open lack of entrepreneurialism. What are the blueprints to magnetize and attract in-house talents across the ministries and deploy national mobilization tasks? How to eliminate hidden fear, how build confidence and manage unspoken problems, and how rebuild the national agenda at a dramatic pace?

The bigger opportunities: Bureaucracies at the top are only hollow spaces, mostly in a vacuum and dried out, void of global-age combative intelligence due to the decades-long absence of corporate and business wisdom. Nevertheless, harmless and timid they only await a non-threatening helping hand. At the top they cannot go further, as they already arrived decades ago, they have already optimized and expired their top talents many steps below, now lost in abstract silence, cutting and pasting old dried-up rhetoric to appear valuable and trendy. Listen to the last 100 top keynote speeches during this month alone and witness the similarity of decade-old rhetoric constantly repeated.  The common proof of the lingering old thinking repeatedly expressed like damage to the country, the absence of wisdom displayed like the destruction to the citizenry.  Observe, how fast is the world advancing and how fast the powers of knowledge shrinking? Ask a billion hungry people planning to survive just on bread, if they can find it or have affordability.

Experimentation allowed with an economic revolution:  Every Ministry across the free world has hundreds of smart teams already underutilized, eager to apply talent in the right direction but need directions. Once, such talents are clearly identified and systematically organized a lot can change very quickly. Start an intense high-speed global age orientation program to decipher the local SME sectors, and select, identify and group high-potential SME sectors across the nation of selected regions. Create parallel teams to identify key issues and rezone strategies and place them all on a large-scale digital platform to bring at least 25% to 50% of all high-potential SMEs under one umbrella. Study Expothon for guidance and help create a national agenda where all trade groups and Chambers are all on the same page and collaborate to help all local small and medium businesses start to shine on global digital platforms for better exportability. What a difference a 100-day program can make, and how to capture national attention on fast track basis? 

What are the priorities? To start ‘what’ is not working must be listed in one column, ‘why’ it is not working in another column, ‘what’ needs fixing, and ‘where’ are the hidden talents and solutions in additional columns. Now, if it can be boldly discussed and clarity is achieved it is a great start. All this is only possible when mindsets are balanced. Asking patients in the ward of the hospital to choose a menu of their choice is not the answer. Doctors and specialists are needed to decide the diets. Outside a simple walk in the park, everything in economic development is super complex; especially facing global age competitiveness requires balanced and trained mindsets with combative readiness.

Entrepreneurialism needs mobilization, like a tsunami to sweep over the nation. Bureaucracies are frightened by such issues all due to a lack of understanding and trepidations of facing new technological thinking, opening to the world coping and dealing and fertilizing diversity, global interactions, and henceforth Trade and exportability. This is like preparedness for going to war. Stand up straight and face the wind, soldier.

Is this the right time? To start a new economic revolution in your Ministry and to nationally mobilize your hidden talents of the local citizenry and deploy 1k to 1000k SME entrepreneurialism and quadruple exportability? It is time for your senior and middle management to require some fast-track up-skilling to enable articulation on the national mobilization of entrepreneurialism as a subject of familiarity and with some mastery. Such discussions and subject matters should not appear as shock therapy but rather as tools of modern economic warfare especially if economic survival is an issue in your national economy. Over 100 nations dreaming about mega changes, but only those trained for the tactical battlefields of economic understanding have a chance, as the world has advanced, now economic thinking must prove its existence.

This very moment, when half of the free economic world is getting ready for large scale real bloody wars and total nuclear destructions over some silly geo-political misunderstandings, the above economic development wars are exercises for real grassroots prosperity challenges, the economy grows and where citizens laugh, children play in parks and world advances. Choose wisely. The rest is easy.  

Naseem Javed is a corporate philosopher, Chairman of Expothon Worldwide; a Canadian Think tank focused on National Mobilization of Entrepreneurialism Protocols on Platform Economy and exportability solutions now gaining global attention. His latest book; Alpha Dreamers; the five billions connected who will change the world.

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Economy

The suffocating economy of Iran

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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.

Causes

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.

Response

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.

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Prospects of Vietnam’s Economic Growth in 2023

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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.

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The Crippled Economy

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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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