The issues are piling up. The World Bank reported this week that public debt has topped 68% of GDP. Business closures in Nairobi have soared due to high taxes and poverty. Economic growth is spluttering at 4.5%, fuelling youth unrest.

Public disaffection has fuelled protest, which the government has responded to violently. In July, youth demonstrations led to 41 deaths and 29 injuries. Widespread corruption – Kenya ranks 123/180 globally – will sustain activists.

The crisis is humanitarian as well as political and economic.

Femicide, the murder of women, is on the rise, encapsulated in the high-profile case of athlete Rebecca Cheptegei. In September 2024, Cheptegei was immolated by her former partner over a land dispute in Trans-Nzoi County.

Despite government pledges, environmental breakdown is now a fact of life. Extreme drought in Northern Kenya is destroying livelihoods and displacing thousands, putting further pressure on southern cities like Nairobi and Mombasa.

Of all these challenges, the debt burden seems all-consuming, all but set to precipitate true national breakdown – not dissimilar to Britain turning to the IMF for a bailout in 1976.

Debt distress is a high risk, warns the World Bank. “Fiscal strains are deepening as public revenues continue to underperform. Public debt has continued to rise, with a large portion of it being domestic debt, increasing risks,” said country director Qimiao Fan.

This has forced the government to convert a USD $5bn loan from China into a renminbi liability. This may serve to ease immediate pressures but will only increase Kenya’s dependence on China, which is recognised to demand economic sovereignty as the price of credit provision.

The U.S. government will also be concerned. East Africa is an increasingly geopolitically contested region and Kenya’s emerging alignment with China will not please the Trump administration.

Despite the challenge, Kenya retains its self-perception as East Africa’s leading state. Its government is said to have chided neighbouring Tanzania for a short period of unrest following the country’s recent election.

Kenyan accounts on social media – the authenticity of which is unclear – have amplified critical narratives about Tanzania, often with little substantiated proof.

All the while it is Kenya that remains in the sights of international NGOs like Amnesty International.

In a report entitled, Kenya: Authorities weaponized social media and digital tools to suppress Gen Z protests, Amnesty talks of “tech-facilitated violence” by the Kenyan state against young activists in the context of the June 2024 and July 2025 protests.

According to Secretary General Agnès Callamard, Amnesty’s analysis unearthed “widespread and coordinated tactics on digital platforms to silence and suppress protests by young activists, including through online threats, intimidating comments, abusive language, smearing, and targeted disinformation”.

These findings will likewise undermine U.S. and European support for Kenya given that those bilateral relationships are founded on respect for democratic and human rights.

President Ruto is buoyant, nonetheless. Last week he unveiled “four national priorities” for growth, based on investment in education and agriculture. Analysts fear this programme may further erode Kenya’s fiscal position.

A much-admired nation, the international community values a stable Kenya. It remains to be seen whether the governance capabilities exist to navigate the nation through this current storm.

The post Is Kenya the Sick Man of Africa? appeared first on The European Business Review.

At the heart of this issue is a growing disconnect between tenants and landlords—both victims and contributors to a dysfunctional system. Nowhere is this more apparent than in the rapidly growing furnished and all-inclusive housing segment, which has evolved from a convenient alternative into a pressure point of misinformation, legal manipulation, and withheld supply.

Over the past year, Berlin has seen a 30% increase in listings for furnished apartments on major platforms. But the uptick in availability tells only half the story. Behind the numbers lies a significant drop in booking rates, lease renewals, and tenant satisfaction. Many apartments remain empty for longer, even as demand for housing continues. The market isn’t failing due to lack of interest—it’s failing because tenants and landlords no longer trust the system or each other.

The situation is aggravated by the complexity of Berlin’s regulatory environment. What was intended to protect tenants has morphed into a web of bureaucracy that now discourages many landlords from participating altogether. With multiple layers of rent control, documentation requirements, and unclear boundaries between what constitutes “fair pricing” for furnished apartments, many property owners have opted out. The fear of legal action, combined with administrative overload, has led to a quiet exodus of small-scale landlords who see compliance as a risk, not a duty.

For tenants, the experience can be equally disorienting. Many furnished listings promote flexible, stress-free living but fail to deliver on even the most basic expectations. Tenants report unclean apartments, non-functioning appliances, unreachable support lines, and rental agreements offered only in German—despite being marketed primarily to international audiences.

A 28-year-old SEO manager from India, who requested anonymity, described her experience renting a furnished room for €750 in Europacity: “The place was dusty, the radiator didn’t work, and every support ticket closed automatically without anyone showing up. After seven tries, I just stopped asking.” The room had been advertised as 20 square meters, but in reality, it was barely 10. “The photos showed a bright, spacious room with a wide window and a desk,” she said. “What I got was a very small room with barely any light and furniture that looked nothing like the pictures. It felt like a misleading advertising.”

To make matters worse, the room was still occupied when she arrived. The landlord had overbooked the unit and had to quickly relocate the previous tenant elsewhere. “They promised to give me the room in a few days, but I didn’t get the keys for nearly a month,” she recalled. “They never explained what was going on, and I had nowhere to go.” When she finally moved in, the apartment was a mess. “The bathroom was filthy, the kitchen was covered with mold, and it looked like no one had cleaned anything in weeks.” Despite raising multiple complaints, no proper cleaning or repairs were arranged.

For newcomers—especially non-EU nationals—the impact goes beyond inconvenience. Without a proper lease, registration is not impossible. Without registration (Anmeldung,) residents can’t open bank accounts, activate insurance, or in some cases, renew their visas. What begins as a housing issue rapidly evolves into a bureaucratic crisis.

While tenants navigate unclear contracts and inflated promises, another player has entered Berlin’s rental equation—legal service platforms that market themselves as tenant advocates, but operate more like debt collection agencies. Their advertising is everywhere: YouTube pre-rolls, social media feeds, and expat blogs, all promising quick legal victories for “overpaying” tenants. One click and a few uploaded documents later, the process begins—sometimes without the tenant even realizing they’ve initiated formal legal action.

These companies position themselves as legal allies, but often blur the line between consumer protection and commercial self-interest. Their model relies on taking a cut of the “savings” tenants may receive if the rent is deemed too high—similar to how traditional debt collectors profit from recovered payments. The difference here? The debt isn’t owed—it’s speculative.

And for furnished, all-inclusive leases—where pricing includes not only furniture, but Wi-Fi, insurance, and rapid-response maintenance—the notion of “excessive rent” is far more complex. These types of contracts often fall outside the Mietpreisbremse (rent brake) regulations. Yet that legal distinction is rarely explained to tenants who are unfamiliar with German housing law or misled by overly simplified online forms.

The results can be severe. Tenants who pursue these claims often find their leases not renewed—or worse, terminated early. Some lose their Anmeldung and risk visa complications. And because the platforms often present themselves as law firms or legal portals, tenants only learn too late that the promised protections may not apply to their situation.

For landlords, the spread of these tactics has introduced a new level of volatility. Several small-scale owners interviewed for this report say they’ve already pulled units from the market after receiving automated legal threats. “It’s not worth the risk,” one said. “These companies encourage tenants to sue first and ask questions later. I’d rather leave the place empty than enter into that.”

In most cases, rent control limits do not apply to furnished leases that include utilities, Wi-Fi, repairs, and services. Yet this nuance is often buried or omitted in advertising. Tenants, acting in good faith, initiate claims and later discover their lease is exempt. By then, the damage is done. Some find their contracts are not renewed. Others are abruptly asked to leave. And in a few cases, the legal action itself becomes a reason for landlords to blacklist tenants from future rentals.

Landlords, in turn, respond by exiting the furnished market, reducing supply even further. “Why should I risk litigation over whether internet and furniture count as ‘justified costs’?” one small landlord in Friedrichshain asked. “It’s easier to just keep the unit empty or rent it to companies.”

This atmosphere of fear and avoidance is only worsened by the regulatory overreach that now defines Berlin’s housing market. With each new tenant protection measure, landlords face more compliance hurdles: contract disclosures, deposit handling standards, digital documentation for price justifications, and language translation obligations. Rather than encouraging fairness, the system now inadvertently punishes participation.

A decade ago, Berlin was a different place. Rents were low. Tenants were treated informally. Sublets were common, and landlords were accessible. But as investor interest grew, so did professional platforms—followed by speculative coliving brands that prioritized expansion over quality. The influx of digital nomads and remote workers added pressure to an already limited market. Within a few short years, rooms once available for €400 climbed to €1,000 and above—often with fewer rights and lower standards than traditional tenancies.

Now, Berlin is at a crossroads. Trust has become the rarest commodity, and its absence is affecting more than just tenants and landlords.

Universities across the city report growing concern over enrollment. At least two international student offices confirm that housing insecurity is now one of the leading causes of delayed or deferred admissions. “Students are ready to come to Germany,” said one staff member from a private university, “but they can’t find anything trustworthy. We’ve had students request to postpone their semester because they couldn’t secure a safe lease.”

Employers in the startup and tech sectors are also feeling the impact. Several companies report delayed relocations, extended remote onboarding, and even dropouts due to housing struggles. Laura, an HR manager at a mid-sized fintech firm, shared the case of a senior data engineer relocating with his wife and two children. “He was coming from the U.S., and despite having a strong income, he couldn’t find a decent furnished apartment for his family. Most listings on the big platforms were either too small or unaffordable for a family of four,” she explained.

The few suitable places they found on sites like ImmoScout were either already taken or out of reach due to landlord preferences. “They applied for one they really liked, could afford, and had all documents—but the private landlord turned them down. They’re African-American family, and while nothing was said directly, they were left wondering if that played a role,” she added. Eventually, someone from the company helped them secure a place, but it took almost three months of back and forth. In the meantime, they were living in an Airbnb, paying nearly his entire salary just to have a roof over their heads.”

Beyond the institutional damage lies the psychological toll. Housing is not just a place to sleep—it’s stability. Without it, newcomers to Berlin report heightened anxiety, disconnection, and emotional fatigue. For many, especially those from the Global South or with limited German language skills, the housing crisis is their first experience of systemic exclusion.

“It’s hard to focus on work, friendships, or even learning the language when your living situation is uncertain,” said Duván M, a Colombian software developer who moved to Berlin in late 2023. “It’s like living in limbo.”

A small number of housing providers have chosen a different route—avoiding speculative pricing, investing in customer service, and ensuring multilingual, legally compliant contracts. One such provider, known for its anti-discrimination policy and transparent leasing, attributes its stable occupancy to fairness, not advertising.

“We made a conscious decision early on at KUMMUNI to price our apartments fairly and communicate clearly,”says Constanze Bungs, Chief Operating Officer at a Berlin-based provider of furnished apartments and coliving spaces. “We don’t make big promises or try to impress with tricks. What we give is something people can count on. In a market like this, that is very important.”

Still, responsible players are not immune to reputational damage. The broader market’s dysfunction spills into every corner. As forums fill with horror stories and influencer content goes viral with negative experiences, trust in the entire housing ecosystem collapses—regardless of merit.

So what is Berlin to do?

The solution isn’t more regulation, but smarter, differentiated policies. Legislators must separate furnished and unfurnished leases within rent control enforcement. Service-inclusive contracts must be evaluated with nuanced criteria. Legal platforms targeting tenants should be required to clearly disclose legal exemptions, rather than implying blanket applicability.

Equally, incentives must be created to bring small landlords back into the formal system. These could include tax reductions, digital lease templates that reduce compliance confusion, and mediation tools to resolve disputes before they escalate into lawsuits. Transparency should be legally mandated—but the path to achieving it should be streamlined and fair.

Housing is a pillar of social inclusion, economic mobility, and urban identity. Berlin, a city once defined by openness and accessibility, cannot afford to continue down a path where fear dictates policy and silence becomes the rational choice for landlords.

Until the city rebuilds the foundations of trust—between tenant and landlord, between law and practice—it will not solve its housing shortage. Because the real shortage isn’t just apartments. It’s belief that the system still works.

The post Rental Crisis in Berlin Explained: Why Tenants Are Suing, Landlords Are Leaving, and Debt Collectors Are Winning appeared first on The European Business Review.

As Europe (and the rest of the world) continues to navigate the daily twists and turns of President Trump’s recent tariff announcements, Dr Angela Garcia Calvo evaluates the options and outcomes for Europe’s next move. With a 90-day pause currently in place, what happens next could be make or break. 

On April 2nd , President Trump announced a wide sweeping range of tariffs on most countries. Peter Navarro, Trump’s senior counsellor for trade and manufacturing, justified the measures as a long-overdue restructuring that “will make both the US and global economies more resilient and prosperous by restoring fairness and balance to a system rigged against America.” 

The uncertainty and seemingly daily changes that followed the initial announcement  have kept markets and businesses on their toes, with no clear conclusions on how the tariff tale might end. Stock markets have been on a rollercoaster ride, with a last-minute reprieve for some tech goods made with materials from China resulting in a market rebound. In recent days Sony has increased the price of its PlayStation 5 console in Europe, Britain, Australia and New Zealand, citing a challenging economic environment, inflation and fluctuating exchange rates. 

Despite a current 90-day pause for nations hit by higher tariffs, how Europe reacts now will be crucial for long-term market stability.  

Numerous experts have weighed in to assess the rationale behind Trump’s tariffs but less attention has been devoted to the question of how should Europe respond. I would argue that Europe should refrain from engaging in a tariff war. Instead the EU should focus on strengthening Europe’s industrial base, ensuring reliable access to inputs and critical technologies developed by others, and establishing chokepoints that enable Europe to avoid one-sided dependencies. 

Let’s explore the possible approaches and outcomes further by examining Europe’s options.  

1. Europe could respond to Trump’s tariffs with tariffs of its own. This would unleash an escalating war with no real winner and concrete casualties – namely consumers, workers and producers. 

A tariff war would also cause deep intra-European splinters that could compromise Europe’s efforts to address existential industrial and security challenges. EU countries have very different production structures. Therefore, tariffs on a given set of goods/services will affect EU countries differently. Since the EU does not have a common fiscal system or a comprehensive redistribution mechanism to compensate losers, the effect would be to increase intra-European economic differences causing resentment and mistrust. In turn, this would undermine the broad-based consensus necessary to address the challenges identified by the Draghi and Letta reports on EU competitiveness and the Single Market. The outcome would be European stagnation and decline.  

2. Alternatively, Europe could leverage the Commission’s regulatory capacity, especially when it comes to responding to the power of dominant US platform firms. The US would view this as a form of tariff worthy of retaliation, which brings us back to the previous option.  

Further, targeting the platform economy would expose Europe’s own dependencies and possibly backfire. Platform firms provide essential services for economic, political and social life. Europe is entirely dependent on the services provided by US platform firms. In the face of regulatory measures that they deem punitive, private firms could decide to restrict their services or exit the EU altogether, leaving Europe to manage a 21st century economy, with 20th century tools. I dare you to imagine the impact of conducting economic activities via fax and feature phones, managing logistics without Google maps, conducting searches through physical libraries, or storing and managing data off the cloud.    

3. The third option is to do nothing. However, in today’s unfolding scenarios, this is not feasible. As the Draghi report convincingly argues, if  Europe stays on its current course, it will become poorer, politically unstable and irrelevant on the global stage. Trump’s tariffs will simply worsen the situation further.   

4. This leaves us with one option: strengthen Europe’s industrial base, especially in the advanced, skill, capital-, and technology-intensive industries that are the main drivers of growth in advanced economies. Even in the most adverse scenario, this is the best guarantee that Europe can withstand external turbulences such as the announced US tariffs, exercise its political powers, and uphold its choices without external coercion.   

Of course, this is a long-term strategy rather than a short-term reaction. Further, under the best of circumstances, Europe’s lack of natural resources and its dependence on technologies developed by others (especially the US), mean that Europe will continue to rely on relationships with other countries to access vital resources.   

The key will be to develop points of leverage that enable Europe to avoid one-sided dependencies. Europe could do so by supporting the efforts of firms to establish themselves in chokepoints within industries that lay at the intersection of general purpose technologies which touch a broad range of economic activities, such as semiconductors or electric vehicles. 

By establishing positions of durable advantage in specific stages within these important industries, Europe could exert a degree of power with which to project and protect its interests. On the whole this would be a more effective way for Europe to navigate the uncertain waters of today’s global economy than a tic-for-tac reaction, reliance on its regulatory capacity, or a passive approach. 

About the Author

Angela Garcia Calvo is a Lecturer in International Business Strategy (Assistant Professor) at the Henley Business School.

Angela’s research focuses on comparative political economy, industrial transformation, business policy, globalization, and the intersection of the above themes. She explores the interconnections between her topics in her book State-Firm Coordination and Upgrading.

The post US Tariffs: How Should Europe Respond? appeared first on The European Business Review.

In February of this year, President Trump called for the creation of a national Sovereign Wealth Fund (SWF) with more than $2 trillion in assets. An SWF is a state-owned investment fund that focuses on economic development. This type of fund may offer the U.S. several strategic advantages, particularly in stabilizing government finances, enhancing long-term economic competitiveness, and generating returns on national wealth, with the promise of fiscal stability and deficit reduction. Any surplus revenues earned may be used to invest in assets that generate long-term returns, helping to grow real gross domestic product (net of inflation), and reduce national debt and fiscal deficits. The funds may also act as a stabilization mechanism during economic downturns by providing funding when tax revenues decline.

Additionally, the fund could be used to invest in industries vital to national security and economic leadership, such as semiconductors, AI, clean energy, and infrastructure, thus ensuring both economic sovereignty and supply chain resilience. Like Norway’s sovereign wealth fund, a U.S. fund could grow over time and be used to fund pensions, social programs, or public infrastructure without raising taxes.

Two other big benefits of a fund are: ^[1] enhancing global competitiveness, as strategic investments in post-war reconstruction, technology, advanced manufacturing, and green energy would ensure that the U.S. remains an economic leader; and ^[2] reducing dependence on foreign investment, since the U.S. could finance more domestic projects and innovations without relying heavily on foreign capital. Norway, China, Abu Dhabi, Japan and Saudi Arabia all have robust and well-performing sovereign wealth funds. Therefore, it behooves the U.S. to give serious consideration (that means ensuring guardrails and independence) to establishing such a financial vehicle.

Table 1 summarizes some of the largest SWFs, including their country of origin, establishment date, and changes in the asset size over the last six years.

Table 1

Note: Asset sizes for 2024 are based on data from the Sovereign Wealth Fund Institute.^[1]Data for 2018 are from Reuters^[2]

Norway, whose vast oil and gas production in the North Sea generates 10% of the country’s GDP has long held the position as the largest single SWF globally. In 2024 alone, the fund earned $222 billion in capital gains based on its investments in the tech sector, most notably its top holdings, Apple, Microsoft, and Nvidia. However, it is a well-known fact that in the last five years, the “Magnificent Seven”^[3], driven by the AI boom have significantly outpaced the rest of the S&P 500’s 2024 gain. In fact, these seven stocks alone were responsible for more than half of this market’s return. This fact is important because many of the SWF’s recent outsized returns likely occurred because of their US-based investments. Although most major global markets finished 2024 in positive territory, in the fourth quarter, with the exception of the S&P 500, the majority of markets declined. In 2024, emerging markets beat developed international markets (7.5% versus 3.8%) but significantly trailed the US.

Combined, China’s two biggest funds, hold $2.4 trillion in assets facilitating investments in infrastructure, green energy, and mining projects across Africa and much of the developing world. The top SWF’s in the Middle East which aim to diversify their economies away from oil, have over $3.5 trillion in assets, invested in strategic global investments in the following sectors: technology, healthcare, renewable energy, infrastructure, and financial services.

Investment returns for each fund are not publicly disclosed in a standardized manner and the market value of individual investments in illiquid private equity and credit which have grown in dominance in recent years is difficult to ascertain, however it is noteworthy that SWFs collectively added approximately $866 billion in assets just in the 12 months leading up to March 2018, with 71% of these funds experiencing asset growth during that period. Recent estimates place the total assets under management by SWFs in excess of  $13 trillion. Individual annual reports of each SWF provide insights into their various investment returns and strategies over time, with the common theme of a global diversification approach away from their local revenue streams while increasingly using AI in their investment processes. Sovereign investors have emphasized stability of asset allocations combined with lower volatility in recent years because of the delayed start to global monetary policy tightening combined with a loosening of fiscal policy.

Joseph Bankman of Stanford Law School and Mark P. Gergen at the University of California at Berkeley School of Law have suggested that the US SWF could be funded by eliminating corporate income tax, instead requiring corporations to issue nonvoting shares directly to the government. The government fund would be required to hold the shares as an investment, and the income they generate would replace the tax. Their proposal would create nonvoting shares owned by the government but still share in investment losses as well as gains.

Undoubtedly, if done correctly a national US fund can help it to improve its global perception and influence while securing important access to important supply chain components, commonly known as vertical integration. This can involve acquiring or merging with companies that supply raw materials, manufacture products, or distribute finished goods. The goal is to gain more control over the supply chain, reduce costs, improve efficiency, and increase market power.

To avoid financial corruption and political interference, a US SWF should concentrate on global markets rather than domestic ones, where US government investments could have a hugely distorting effect. The fund should also be a passive investor rather than invest and assume direct ownership stakes in US corporations and companies, focusing on strategically maximizing returns by perhaps investing in potentially high-reward businesses, such as in raw materials, artificial intelligence and emerging energy sectors.

The SWF also should be run by a non-partisan body of advisers, for example the SEC, ensuring transparency and accountability much like in the public financial markets. This body should be independent from both the different priorities of presidential administrations and from the spending priorities of Congress and its members in both chambers. This also means the investments of the SWF should happen in transparent and responsible ways within a firm and strict legal framework.

Sovereign wealth funds do not play a role in fiscal management, but SWFs can stabilize a country’s economy through diversification and the generation of wealth for future generations. Therefore, the US would be wise to carefully evaluate and consider their adoption as an economic policy instrument.

About the Authors

Deanne Butchey and Jerry Haar are professors of finance and international business, respectively, in the College of Business at Florida International University.

References

[1] https://www.swfinstitute.org/fund-rankings/sovereign-wealth-fund

[2] Note: Data as of August 2018; SAFE Investment Company and Temasek Holdings assets figures are best guess estimations. https://www.reuters.com/business/finance/norway-wealth-fund-posts-record-222-bln-annual-profit-tech-boom-2025-01-29/

[3] Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, Tesla.

The post Can Sovereign Wealth Funds be the Answer to US Economic Strength?  appeared first on The European Business Review.

By Dr. Jack Rasmus 

2500 years ago, the myth goes, 300 Spartans faced a much larger military force from the East at Thermopylae, a small mountain pass in ancient central Greece. Thermopylae is the Latin word for ‘Hot Gates’, as the area featured hot springs.  In European history the ‘hot gates’ battle ended with the 300 Spartans annihilated.

The Persians had opened a second front to the rear of the Spartan line which then collapsed, wiping them out to the man. The ‘hot gates’ was thus a defeat, although in later mythology it was spun as a strategic victory that bought time for the Greeks to mobilize to fight another day.

Having bought time at Thermopylae is debatable, however, given that the battle of the ‘hot gates lasted only three days! That’s not much of a delay. The Greeks then took another year to mobilize. Three days didn’t matter that much. So the loss of 300 Spartans at Thermopylae was really a waste of a valuable elite battalion of troops—and Thermopylae was by no means a ‘strategic victory’ that it is spun in western mythology to have been.

Two and a half millennia later Europe is again at the ‘hot gates’! And 300 is once more the magic number!

300 today refers to the $300 billion of Russian financial assets that were seized by NATO countries in 2022 as part of US and EU sanctions imposed on Russia in February that year.  According to European Central Bank director, Christine LaGarde, no less than $260 of the $300 billion is held in Europe, most of which is in Belgium near Brussels which is NATO’s home base. Another $5 billion was frozen in the USA. The rest distributed among banks of other G7 countries and friends.

Recently NATO countries began the process of transferring the seized and previously frozen $300 billion Russian assets to Ukraine.

The $300 billion, it is argued, will ‘buy time’ for Ukraine to continue the war in 2025—much like the lives of the 300 Spartans in mythology supposedly bought time to mobilize a larger force.

Ukraine’s $200 Billion Per Year Price Tag 

In the roughly two years since the Ukraine War began in February 2022 it’s estimated the USA has provided Ukraine with $200 to $220 billion in military and economic aid. European NATO countries provided at least another $100 billion or more depending on how one estimates the market value of former Soviet Union weapons that were given to Ukraine. Then there’s the IMF’s at least $18 billion to prop up Ukraine’s currency, along with the billions more in private loans and investments from private sources.

300 today refers to the $300 billion of Russian financial assets that were seized by NATO countries in 2022.

This past spring 2024 the US Congress passed a package of another $61 billion for Ukraine and Europe scrapped up another $5 billion. That combined amount is estimated to fund Ukraine’s war through the end of 2024.

Add all the foregoing items up and that’s roughly $200 billion a year cost to NATO countries to have funded the war in Ukraine. About half is in the form of weapons and another half to keep the Ukraine economy afloat since Zelensky himself as estimated Ukraine’s economy and institutions need about $8B/mo. to keep going.

But that still leaves the question how NATO and the West can fund Ukraine’s war costs and keep its economy afloat into 2025 and beyond, since it is clear the US and NATO countries have no intention of agreeing to end the conflict anytime soon. On the contrary, the events of the past year in particular indicate a NATO strategy of continuing incremental escalation by providing Ukraine ever more lethal NATO weaponry, more NATO technical assistance on the ground, and NATO approval of increasingly provocative tactics by Ukraine—like missile strikes deep into Russia, attacks on Russian ballistic missile defense radars, use of cluster bombs on Russian civilian populations, and soon to be announced ‘no fly’ zones along Ukraine’s western border.

As a further indicator of US and NATO plans to continue the war longer term, the major NATO governments also recently signed long term minimum 10 year bilateral defense agreements with Ukraine. That’s designed to lock in whatever governments replace the current pro-war elites currently running the USA, UK, France and Germany.

According to the Wall St. Journal, the US-Ukraine bilateral security agreement would “establish a long term U.S. commitment to military aid” for Ukraine requiring “future U.S. administration to work with Congress to provide funding and military support for Kyiv.”  Or as chief neocon in the Biden administration, Jake Sullivan, put it: the US-Ukraine bilateral security agreement was “not just for this month, this year, but for many years”.

In yet another indication of a likely continuing war beyond 2024, both NATO and Russia are now lining up allies in preparation for what looks like a protracted, and possibly wider, conflict.  Russia’s answer to NATO signing bilateral defense agreements with Ukraine has been to conclude agreements with China, North Korea, Vietnam, Iran and various countries in Central Asia, including even Afghanistan, to provide contract troops in exchange for Russian military aid.

In this regard, recent events are eerily similar in that regard to what took place in the summer of 1914 in Europe as both sides lined up allies in anticipation of the coming conflict called World War I.

Short of a Russian complete military victory brought on by the collapse of the Ukrainian forces and a NATO decision not to directly enter the conflict despite it—the latter a very unlikely proposition in the event of an imminent Russian military victory—the Ukraine war will drag on well into 2025.

All of which again raises the question how to pay for it after current funding from NATO runs out after December 2024.

Recently the process how to fund and continue the war was begun—a process that involves the transfer, in whole or part, of Russia’s $300 billion assets in the West that were frozen in 2022.

The $300 Billion for Ukraine 

In April the US Congress passed a law that allows President Biden to seize the $5 billion of Russian assets in US banks, or in real property form, convert it to dollars and put it in a Ukraine Defense Fund also created by the law.  Biden then pressed the European NATO countries to do the same with their $260 billion share.

The Biden proposal was for the US to raise $50 billion immediately (from various US investors) for Ukraine. Private bonds would be issued per the Biden plan, bought by (US?)investors, and the $50 billion put in the Ukraine defense fund created by Congress and distributed to Ukraine. The World Bank would act as distributor of the funds. Ukraine would pay the interest on the bonds every year. The catch per the Biden plan was if Ukraine defaulted in the payments, then the Europeans would be liable to reimburse the investors. What a deal! American investors would make the money and Europeans potentially get stuck with the bill. Even they choked on it. So the Europeans came up with their own plan.

While details reportedly are still to be worked out in coming weeks, the Europeans’plan would raise $54 billion in funds “from existing EU programs for Ukraine”. It’s not clear if that’s from private investors if the EU would issue new bonds specifically for Ukraine aid and EU governments and banks then buy them. If so, the EU issuing its own bond represents a further trend toward creating a fiscal union alongside the Euro currency/European Central Bank monetary union. The EU plan also reportedly required the US to assume a share of the risk and pay lenders if Ukraine defaulted and didn’t make payments. Lenders in the meantime would be paid interest on the $260 billion annually. That was estimated around $4 billion a year. The Europeans also wanted language that assured European military contractors got their share of Ukraine spending of the funding, not just the US.

Both the Biden and EU plans remain highly opaque in terms of details. Europeans admitted the details will take weeks to resolve. But there remain interesting gaps in the deal, presumably to be worked out before year end. Questions like:

• Is the $54 billion raised from private investors as well as governments?
• Will Ukraine get all the $54 billion up front or in tranches; if latter, how many tranches for how many years?
• Will Governments (EU and/or US) assume liability to lenders if payments aren’t made
• Are there subsequent $54 billion disbursements to follow? Some US media have suggested the deal includes further $54 billion distributions to Ukraine’s economy over three years. Is the $54 billion to prop up Ukraine’s economy, paying government salaries, purchases and pensions through 2027? Or does it include for weapons as well? If latter are separate, how much will that cost?
• What’s the lenders’ guaranteed annual interest rate of return on the bond and loan if private funding—not just government—is part of the European deal?
• If the interest profits on the $260 billion seized assets is only $4B/yr, who pays lenders the difference? Current interest on the $260B in EU banks was virtually risk free. But repayment of the interest on the loan by Ukraine carries a major element of risk. Won’t the lenders demand a much higher interest rate than before? Private lenders involved certainly won’t buy the Bond at normal market interest rates.
• When the bond matures in ten years, how will Ukraine return the principal if it only covers interest payments each year. Where will Ukraine get the cash to pay off principal, whether annually or at maturity? Especially if it loses the war.

Bottom line, it appears somehow Ukraine will get at least $50 billion. To spend on what is unclear. Unclear also is whether the government will issue the bond that private investors will buy or will it be a private bond back by government if not paid.  However, the $50 billion is structured, Ukraine will still have to pay back the principal ($300B presumably). Where’s it to get the money? It’s economy is a basket case and in a debt death spiral. Which means in the end the $260 billion in Europe will likely also have to be seized to pay the bondholders-investors at maturity of the bond.

Biden and the Americans wanted to just seize the full amount and give it to Ukraine (as Biden did with the US share of $5 billion Russian assets in US banks). Europeans balked at that and propose a financial sleight of hand solution: create the fiction the interest on the $260 billion will cover annual interest payments to the lenders and somehow Ukraine can pay back the $260 billion principal in the end.

So why are the Europeans so reluctant to jump in with both feet and do what the Biden administration has done and wants them to do as well—i.e. grab the $260 billion outright instead of using the $260 billion as collateral with which to raise a Euro bond to provide Ukraine with funding?  The explanation is the Europeans are worried about the legality of just distributing the seized funds. (As if skimming the interest and profits were somehow not illegal but seizing and distributing the principal $260 billion was!)

Blowback from diverting the $300 Billion 

What the Europeans are really worried about is if they steal the assets too quickly Russia will no doubt respond in kind.  There are still a lot of EU bank assets—cash, securities and real property—in Russia. What’s to stop Russia from seizing that in turn? America has little at risk in Russia in that sense. Europe has a great deal.

Russia reportedly is already freezing and seizing assets of Deutschebank and Commerzbank for sanctions related reasons.  There are many Europeans companies still operating in Russia. What’s to stop Russia from taking over their assets—financial and real property?

There are still a lot of EU and real property—in Russia. What’s to stop Russia from seizing that in turn?

Then there’s the potential impact on the European currency, the Euro, and deposits in EU banks by many countries of the global South. Outright seizing of assets raises the question whose assets in EU banks are next to be seized? Other countries will take their currency and other liquid assets out of EU banks. That outflow will depress the value of the Euro. The European Central Bank will then have to raise interest rates in Europe to keep the Euro from falling in value. That will slow and already sluggish and stagnant European economy.  The consequences of just grabbing and distributing sovereign assets of a country thus carries significant risk of economic contagion, in other words. The Europeans know this. Hence their current plan to work around the outright seizure and distribution of the $260 billion principal, skim the profits from it, and use it all as collateral to fund a loan—i.e. their $54 billion government bond plan.

US neocons are too dumb to foresee (or perhaps even care) of such an impact on the US dollar from their outright seizure of Russian assets. As the arrogant global economic hegemon, the US and Biden administration think they are largely immune to such potential economic blowback from seizing assets of another country. They of course are wrong. The Europeans are perhaps more aware of the consequences. American neoliberal elites just don’t seem to care. By the time they do it will be too late. The coming BRICS expansion and alternative global financial structure will have done mortal harm to the USA global dollar and hegemony. There is even talk now of the now expanding BRICS creating an alternative political structure, a kind of BRICS global parliament. Institutional ‘dual power’ is always a sign of revolution and it’s becoming increasingly clear almost the entire global South is now in a state of revolt from the American/G7 empire!

Thermopylae 2.0: Will the $300 Billion ‘Buy Time’ 

Public opinion within the US and the European members of the G7 is shifting. The recent elections for the European Parliament, followed by the stunning defeat of Macron’s party in France in that country’s National Assembly elections, and the subsequent Conservative party’s debacle in Britain soon after, are all harbingers of shifting political winds in Europe.  Germany’s weak SPD-Greens coalition government is also apparently in trouble as the right wing AfD party continues to gain seats in the legislature and support in public opinion.

But the political momentum on the war is clearly shifting. Public support in the West for NATO elites’ war financing policies is beginning to look like liquefaction of the soil that occurs in earthquakes.

Then there’s the dramatic events in the USA in the wake of Biden’s disastrous presidential debate as well as the surge in public voter support for Trump following the recent failed assassination attempt. In USA national elections popular voter support is irrelevant. One person one vote democracy in America simply does not exist. What matters is the electoral college vote cast by state electors. At least 40 of the 50 states’ electors are already virtually predetermined, locked in for either Biden or Trump. The strategic exception is the seven (maybe ten now) swing states up for grabs by either party. And Trump leads in all; in some cases by double digit numbers.

The recent outcome of elections in Europe and pending in the USA are by no means a guarantee that the NATO funding schemes for seizing the Russia’s $300 billion assets will collapse.  the momentum politically is clearly shifting.  Zelensky clearly thinks the NATO financing of the war is secured for at least another year as result of both the US and EU latest arrangements to tap the $300 billion. He’s recently bragged publicly that he now has $90 billion ‘in the bag’ which includes the EU’s $54 billion.

But the political momentum on the war is clearly shifting. Public support in the West for NATO elites’ war financing policies is beginning to look like liquefaction of the soil that occurs in earthquakes. What was once solid ground may quickly turn to liquid mud. No building however tall or solid can resist when the earth itself moves! The recent election developments in Europe and USA may be the initial seismic shock in the collapse in public and political support in the West for a continuation of the war.

Wars on the scale of Ukraine today are determined by which side can out produce the other in weapons and material; which population is larger; which has the greater number and better trained troops; whose economy is strongest; and whose populace are united behind the effort and most committed to the outcome. And Ukraine is in a disadvantage in all the above categories.

Like the 300 Spartans before them at Thermopylae, the West’s distribution to Ukraine of Russia’s $300 billion of assets will not be able to prevent eventual defeat. The Ukraine war will almost certainly be resolved within the next twelve months—on the ground not with bank accounts. Like the Spartans at Thermopylae in 480 BCE, Time may run out for Ukraine before Europe can even buy some of it with its share of the $300B.

Moreover, the price paid by Europe for its $54 billion war loan to Ukraine may result in a net loss to Europe from the investment. Europe may open itself to all the negative consequences of such a bad investment.  As Mohammed bin Salman (MBS), leader of Saudi Arabia, has recently publicly warned: should Europe go ahead and distribute its share of the $300B to Ukraine, Saudi Arabia will withdraw its assets and Euros from European banks. MBS especially warned withdrawal from French banks.

With ‘Project Ukraine’, Europe stands at the ‘Hot Gates’ again. By committing another ‘300’ again, it may realize very little gain militarily at the cost of an historic loss economically.

About the Author 

Jack Rasmus is author of the recently published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, 2020. He publishes at Predicting the Global Economic Crisis.

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European automakers face growing competition from Chinese and U.S. electric vehicle (EV) manufacturers. While they still dominate their home market, their real challenge lies in markets beyond Europe. To stay ahead, European OEMs must capitalize on their heritage brands, get their EV manufacturing basics right by refining supply chains, batteries, and vehicle manufacturing, and adopt a customer-centric, software-first approach to future mobility.

The global automotive industry is undergoing a seismic shift. Traditional automakers, especially in Europe, are facing mounting pressure as electric vehicles (EVs) upend the status quo. Recent tariffs on Chinese EVs might offer European automakers temporary relief, but these barriers won’t hold forever. The reality is that Chinese original equipment manufacturers (OEMs) are playing the long game, with at least four planning to establish production capacity in Europe by 2027.

While the competition is real, European automakers must recognize that Chinese OEMs represent just one of many competitive forces, and the time to sharpen their long-term competitive edge is now. In this article, we suggest how European OEMs should think about their past, present, and future to build a unique value proposition from their strengths.

Domestic disruption, global gaps

European automakers still dominate their domestic market, maintaining over 60 per cent market share—nearly double that of US OEMs (33 per cent) in their home market[i]. However, complacency is not an option. European OEMs are at risk of disruption from US entrants like Tesla, established Chinese OEMs like BYD, and emerging Chinese EV start-ups like Li Auto, forcing them to compete on new battery and software skills.

Although there has been a recent slowdown in EV sales in the European market, electrification remains the future of the industry, with fundamental advantages such as higher energy efficiency, upcoming regulations, and technology investments having reached a tipping point. Yet EVs are precisely where new competitors are ahead of European OEMs on key customer criteria, including, but not limited to, price.

While European OEMs face growing competition at home, their real challenge lies in markets beyond Europe. In China, for instance, German automakers’ share of the passenger vehicle market shrank to 19 per cent in the first half of 2024, a significant drop from 25 per cent in 2020^[ii]. The EV segment tells an even starker story: German OEMs collectively hold a meager 4 per cent of the market, while Tesla alone commands 7 per cent. Meanwhile, Chinese OEMs dominate, with 87 per cent of the local EV market^[iii].

China is not just another battleground; it’s critical for mass EV adoption, with penetration rates surpassing 50 per cent for the first time in July 2024^[iv]. Furthermore, in emerging markets, where 24 per cent of new cars were sold in 2023^[v], Chinese OEMs are rapidly gaining ground. By 2030, their global market share could double to 33 per cent, up from 17 per cent in 2023^[vi]. North America presents another uphill struggle, with European automakers’ market share declining from 21 per cent in 2020 to 18 per cent in 2023^[vii], accelerated by the US Inflation Reduction Act and strong local competition.

While these challenges are daunting, they also present significant opportunities. It is not too late for European automakers to rethink their approach and secure a sustainable competitive advantage, drawing on their past, capitalizing on the present, and preparing for the future.

Learning from the past: Leveraging heritage brands

One of the greatest strengths of European automakers is their heritage. European OEMs have a well-established reputation for brand strength and reliability, not just within Europe, but globally. New competitors may be driving down prices, but heritage brands can adopt a differentiation strategy instead of a race to the bottom.

These heritage brands are known for their engineering, manufacturing excellence, design, and long-term quality, features that resonate with customers and are difficult for newcomers to replicate. For instance, consider how BMW has recently overtaken Tesla in Europe^[viii], highlighting that traditional brands can outperform even the most disruptive newcomers. By focusing on their legacy and unique value propositions, European OEMs can both defend their market positions and expand into emerging markets.

Winning in the present: Master the fundamentals and stand out in services

Despite some doubts around EV adoption, the EV penetration rate in Europe has reached 20 per cent, while global penetration stands at around 18 per cent^[ix]. This marks a critical transition point, where EVs are no longer a niche product but have entered the mainstream market. Our research found that more than 80 per cent of drivers in the EV mainstream market name reliability, safety, and price as the most relevant purchase criteria for buying an EV, whereas early adopters showed comparatively higher preferences for the latest technology and performance^[x].

To cater to this broader market, European OEMs need to get the basics right. This includes refining supply chains, batteries, and vehicle manufacturing to bring costs in line with internal combustion engine (ICE) vehicles. For example, Volkswagen is targeting a 40 per cent cost reduction with its locally developed China Main Platform, a vital step in achieving cost parity with local competitors^[xi].

Additionally, while digitization can enhance customer experiences, traditional factors like dealership interactions and workshops still play a significant role. Around 54 per cent of customers prefer dealer contact, and 61 per cent still value workshop support^[xii]. European OEMs have an extensive support ecosystem built over the last century, which provides added residual value for their customers, a known issue for EV owners.

The opportunity for European OEMs is to now add a digital layer connected to their physical ecosystem to deliver superior omni-channel experiences. Several market leaders, including BMW, Mercedes Benz and Volkswagen, have begun to introduce generative-AI-based voice assistants for better customer interaction and engagement^[xiii]. 

Building the future: Prioritize new power trains and software

Looking ahead, European automakers must both address their weaknesses and build new competencies to stay competitive. Software is a critical area where many European OEMs lag behind. Start-ups have an advantage here, as they are unencumbered by legacy hardware-focused thinking. To close this gap, European automakers need to adopt a software-first mindset, which will require significant changes in corporate culture, engineering design, procurement, and product life cycle management.

Meanwhile, transitional technologies like advanced ICE, hybrid electric vehicle (HEV) and plugin hybrid electric vehicle (PHEV) could continue to hold appeal in specific markets. For example, Toyota’s hybrid electric vehicle (HEV) technology has proven successful, while Chinese start-up Li Auto has made significant progress with range-extended EVs (REEVs) in China. Another opportunity is drop-in replacements such as hydrogen or other e-fuels, which OEMs such as Toyota and BMW are currently pursuing^[xiv].

Rather than following these examples exactly, European OEMs need to be selective and focus on “no-regret” strategic bets that align with their strengths and customer needs. They must remain agile and responsive to market shifts, leveraging their flexible manufacturing capabilities to adapt to new demands. Stellantis, for instance, is developing BEV-centric platforms that can accommodate multiple power train configurations.

Reinvent or fall behind

To thrive, European automakers should not be playing defense, but instead leverage their existing strengths. While Europe will remain an important market, the global stage is increasingly where the battle for leadership will be fought.

European OEMs are already making progress in the EV race. However, to regain the dominance they once had in the ICE era and set the performance frontier, they must shift from a hardware-first mentality to a customer-centric, software-first approach. This reinvention will require strategic partnerships across the ecosystem, including suppliers, technology providers, and mobility operators. By breaking down silos and building a robust digital core that leverages cloud, data, and AI, European OEMs can drive the reinvention they need to succeed.

The road ahead is paved with opportunity. With bold vision and swift action, European OEMs can rise to the occasion and redefine the future of mobility. Now is the moment to take the lead.

About the Authors

Juergen Reers is a Senior Managing Director and Global Automotive and Mobility Lead at Accenture. He is dedicated to driving innovation, digitization, and efficiency for clients worldwide. Juergen is an expert on large-scale transformation programs aimed at achieving software-enabled and sustainable mobility. He is based in Munich, Germany, and has worked for seven years out of the United States.

Marcello Tamietti, Automotive and Mobility EMEA Lead, Accenture has over 30 years of experience in the technology and consulting industry, with deep expertise in automotive supply chain, after sales, sales and marketing, and R&D. Marcello has helped automotive companies to transform and reinvent their business leveraging technology, data, and AI. Marcello is based out of Turin, Italy.

Philipp Kupferschmidt leads Accenture’s industrial business in the German-speaking markets. He has 20 years of experience serving automotive industry clients around the globe, spending several years working exclusively in the Chinese market. His focus lies on large-scale digital and performance transformations. Philipp is based out of Dusseldorf, Germany.

Stefan Hattula is the Global Automotive and Mobility Research Lead at Accenture, with over 15 years of experience in corporate strategy and market intelligence. He applies his strong analytical expertise to driving innovative research and strategic insights for the automotive and mobility sectors. He is based in Munich, Germany.

Sheryl Yaping Yu is the Mobility+ Research Manager at Accenture Research. She has 20 years of experience in strategy and research across various industries. In recent years, she has primarily worked in the automotive sector, focusing on thought leadership in consumer trends, strategy, and digital transformation. Sheryl is based in Shanghai, China.

References:

i. 2024, Light Vehicle Sales Database, S&P Global Mobility

ii. 2024, China Passenger Vehicle Market Report – June, CPCA; 2020, China Passenger Vehicle Market Report – Dec, CPCA

iii.2024, China New Energy Vehicle Market Report – July, CPCA

iv. 2024, China New Energy Vehicle Market Report – July, CPCA

v. 2024, Light Vehicle Sales Database, S&P Global Mobility, (Note: Emerging markets include ASEAN, Central Europe, Eastern Europe, the Indian Subcontinent, the Middle East and Africa, and South America.)

vi. 2024, Q-Series Redux “Short and medium term China threat”, UBS Research

vii. 2024, Light Vehicle Sales Database, S&P Global Mobility

viii. James Morris, 2024, BMW overtakes Tesla in Europe, Fortune Media

ix. 2024, Global EV Outlook 2024, IEA

x. 2024, “What Electric Drivers Want” Survey, Accenture

xi. 2024, Volkswagen Group takes the offensive in China by strengthening tech capabilities and reducing costs

xii. 2024, “What Electric Drivers Want” Survey, Accenture

xiii. Press Releases, 2024, Generative AI, Augmented Reality and Teleoperated Parking – the Digital Experience in the BMW of the Future at the Consumer Electronics Show (CES) 2024., Mercedes-Benz heralds a new era for the user interface with human-like virtual assistant powered by generative AI, ChatGPT01 is now available in many Volkswagen models

xiv. Press Release, 2024, Hydrogen Pioneers: BMW Group and Toyota Motor Corporation take collaboration to the next level to offer Fuel Cell Electric Vehicle (FCEV) options for passenger cars

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Withdrawal and isolation could avoid foreign affairs and wars, but the costs will be far higher in the long run.

Since the end of the Second World War, NATO has been a cornerstone of global security that few have questioned. Now, however, with a second term for the NATO-sceptic Donald Trump a real possibility, it is appropriate to consider what the consequences of a US withdrawal from the alliance could be. 

Catastrophic if it happens. What if the U.S. were to pull out of the North Atlantic Treaty Organization (NATO), a threat declared on several occasions by a current contender in the running for President of the United States? As a columnist for this magazine, my contributions have almost always avoided direct political sentiments and commentaries involving candid opinions not supported by cited evidence. However, this possibility is too dangerous for me to continue to follow my self-imposed publication restrictions. So, I feel self-compelled to ask: Would NATO, which has kept Europe in relative peace for over 75 years, collapse without U.S. membership and support? It is one of those questions that has only frightening answers.  

“No, I would not protect you. In fact, I would encourage them to do whatever the hell they want. You got to pay. You got to pay your bills.” – Former U.S. President, Donald Trump^[1]

The epigraph comment above is a story recounted at one of Donald Trump’s political rallies. As usual for the former President, it is a jumbling, multi-gap account that boggles intelligence. He was allegedly referring to a talk he had with a leader of an unidentified NATO member who asked whether the U.S. would or would not defend members who fail to pay their share. “No,” he answered. “I would not protect you. In fact, I would encourage them [ostensibly Russia] to do whatever the hell they want. You gotta to pay. You gotta to pay your bills.” ^[2] My guess, knowing that Trump frequently makes things up, is that there was no such person, and the exchange never really happened, though, at his rallies, he likes to stir the senses of wondrous truth to confuse his listeners about what he stands for—nothing but himself. Anne Applebaum, staff writer for The Atlantic, asserts, “Almost every day he sounds more extreme, more unhinged, and more dangerous.” ^[3]

For Trump, every world-improving move is transactional. Tom Nichols, another Atlantic academic specialist on international affairs I trustingly follow, explains that, for him, “NATO is some sort of protection racket, in which our European allies come to Washington like quivering shopkeepers and make an offering to the local mob boss from their weekly receipts.” ^[4] Trump felt that each NATO member should be contributing a fair share at 2 percent of its GDP, which, under NATO’s guidelines, is suggested, not mandatory. Now, though, 23 members have hit that target, not because Trump has threatened to abandon the alliance but rather because of Vladimir Putin’s full-scale invasion of Ukraine.

Vladimir Putin’s dream

In the past 75 years, wars between European countries were few and short. Russia invaded Hungary in 1956 and Czechoslovakia in 1968. Turkey invaded Cyprus in 1974. And let’s not forget the Croatia and Slovenia breakaway from Yugoslavia in 1991. So, imagine a time when NATO dissolves. Before the signing of the NATO Alliance, Europe had hardly any years of peace. Hundreds of wars between neighbors happened for a millennium until the end of World War 2.

I don’t wish to alarm my readers; however, if Donald Trump wins a second term as President of the United States, and if the U.S. pulls out of the NATO Alliance as Trump would have it, Europe could become a strategic battleground that could encounter a Russian invasion with a few thousand advanced conventional weapons, with probably no need of nuclear ones. But with Russia’s force of over 5,000 strategic and tactical nuclear weapons, any battles will come with an overwhelming price of human suffering.

When I talk about this scenario with friends, and acquaintances that include foreign affairs specialists, I am bombarded with retorts, mostly in the form of laughter. However, those friends know too well that history often hits us in moments when catastrophic events are so unbelievable. The historian and former diplomat Michael Kimmage confirmed my view that Putin has a long-term plan that got unexpectedly entangled in a war with Ukraine. In January 2022, Kimmage said, “[NATO] is too large, too poorly defined, and too provocative for its own good.” Yet, in a recent Foreign Affairs essay with Liana Fix, a Fellow for Europe at the Council on Foreign Relations, Kimmage concluded, “It is no fantasy that, instead of perpetual peace—and instead, even of an iron curtain—chaos could again descend on a continent all too familiar with war.” ^[5] Those differing opinions leave us with strategic challenges. If we agree with Kimmage’s earlier opinion, the world may or may not end. If we agree with his concluding article, the world will be in a bad place, but not so severely bad as what could happen if Trump abandons NATO. Whatever view we go with, we must agree that if Trump is reelected, we must take his repeated threats of withdrawing the U.S. from the alliance seriously.

Let’s consider Trump’s warnings as a turbulent strategy, or what was once called the “Madman Theory.” As my journalist colleague Natasha Lindstaedt, professor in the Department of Government at the University of Essex, points out in her recent post for The World Financial Review, “Madman theory assumes that making seemingly unbelievable threats—such as embarking on nuclear war—are more credible if they are coming from someone unpredictable and possibly unstable.” ^[6] So perhaps Trump, as the late President Richard Nixon did in his term of office, is playing the game of Madman Theory. But Lindstaedt, an expert tin authoritarianism and author of Democratic Decay and Authoritarian Resurgence (Policy Press), points to studies of personalist dictators (all power in one person) who use warnings to show toughness to conceal poor military intelligence by touting risky bravado. In her astute essay, she tells us, “Madmen never prevail,” and Trump utilizes a theory that erodes his credibility and weakens foreign policy interests. “Madmen theory isn’t really strategic—it’s just idiotic.” ^[7]

In theory, Trump is not a madman; at least, we cannot say he is, without a face-to-face psychiatric evaluation of whether he is or is not. Declaring that he is would break the Goldwater Rule, an ethics annotation of the American Psychological Association (APA) declaration that “it is unethical for a psychiatrist to offer a professional opinion unless he or she has conducted an examination and has shown proper authorization for such a statement.” So, we cannot interpret or assess Trump’s mindset, even when he idiotically advises drinking bleach to “kill” SARS-CoV-2 viruses or when he comes up with crazy ideas such as “imposing an ‘all tariff policy’ that would ultimately enable him to get rid of the [U.S.] income tax.” Trump knows that none of those ideas could ever happen, but annulling NATO is feasible. A 1979 U.S. Supreme Court case (Goldwater v. Carter, 444 U.S. 996, 1003) permitted President Jimmy Carter to “unilaterally” nullify the Sino-American Mutual Defense Treaty. The U.S. Constitution says the Senate must participate in ratifying a treaty, but it is silent about annulling one. Madman or not, nullifying NATO would set the clock back to the first half of the twentieth century and have the world repeat our world wars. If we think Trump is all talk, let us remember that, as promised, he pulled out of the Iran nuclear deal notwithstanding Iranian acquiescence. Look at its nuclear program now. It is within weeks of being able to build a nuclear bomb.

As Tom Nichols, another Atlantic columnist I faithfully follow, tells us, “For too long, Trump has gotten away with pretending that his emotional issues are just part of some offbeat New York charm or an expression of his enthusiasm for public performance. But Trump is obviously unfit—and something is profoundly wrong with a political environment in which he can now say almost anything, no matter how weird and fallacious, and his comments will get a couple of days of coverage and then a shrug as if to say: Another day, another Trump rant about sharks.”^[8]

A brief NATO history

“I cannot tell you exactly what the next crisis or the next conflict or the next war will be, but as long as we stand together, no one can threaten us. We are safe.” – NATO Secretary-General Jens Stoltenberg at a celebration of NATO’s 75^th anniversary.

NATO was established in 1949 to stabilize Western Europe’s plans for an economically unified future and—more to the core of the historical truth—to check the potential of a Soviet Union expansion. There was no initial intent to invite others to the party after the treaty involved 12 countries—Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States. ^[9] Today, 32 member countries are in the alliance.

Strange as that may be, after ratification by the parliaments of the original 12 member states, there is a certain flexibility of commitments with treaty obligations and choices for participation. Iceland, for instance, is a member having no armed force other than a coastguard and national police force. It does have an air defense system and a voluntary peacekeeping force.

And then there is France, which withdrew from the integrated military structure of NATO in 1966 when President Charles de Gaulle, asking for increased military independence, refused control over its armed forces and nuclear deterrents. However, ever since the fall of the Berlin Wall, France has been one of the largest funders and contributors of peacekeeping troops.

But what is NATO about, and why is its existence so important? Without NATO, there is so much evidence that Russia will invade as many as possible of the weaker European states that were once part of the Soviet Union. Putin is driving the bus to nowhere-land in hopes of not only thwarting NATO, an alliance that he feels threatened by, but also from his fantasy of reestablishing the time of the proclamation of Imperial Russia that, back in the early 18th century, had a glorious past under the Romanov dynasties and Peter the Great (1682–1725). ^[10]

But empires come and go in history. The Holy Roman, Qing, Byzantine, Ottoman, and Swedish Empires no longer exist, yet we don’t see Swedes invading Denmark or Ottomans retaking Central Asia. I had several American supporters of Russia’s invasion of Ukraine tell me that “Kyiv was once the capital of Russia.” It comes from the confusion of the word Rus’, or Russes, people who once were led by Oleg the Wise, a Viking prince whose full name was Oleg of Novgorod and who conquered Kyiv in the ninth century to make it the capital of the Rus’. But the word “Rus’” has little to do with the current Russia or its people. The Russes were Slavs but mostly indigenous to early medieval Eastern Europe and Western Asia. Kyiv had never been the capital of the country we now call the Russian Federation.

What did Putin not understand?

Putin has argued that when the Soviet Union broke up, the West had promised that there would be no expansion of NATO. Such a promise never happened. Before the invasion of Ukraine, Russia had a reasonable grievance. Putin asserted that, in 1990, during negotiations over the reunification of Germany, the West assured the Soviet Union that NATO would not expand eastward past the Cold War border. He used a “broken pact” argument to justify his aggressive actions in George and Ukraine. Here again, Putin misreads European history. He maintains that NATO is violating an agreement that it would not expand “one inch” eastward beyond reunified Germany.^[11] He knows that truth can be ignored. It is just a Putinesque conventional disinformation story suggesting that NATO allies threaten Russia’s existence.

What had the West agreed to for NATO’s future? Did the U.S. promise the Soviet Union that NATO would not expand eastward? The question has no easy answer. Alexander Lukin, Vice President of the Diplomatic Academy of the Russian Ministry of Foreign Affairs, wrote in Foreign Affairs, “Forgetting the promises made by Western leaders to Mikhail Gorbachev after the unification of Germany—most notably that they would not expand NATO eastward—the United States and its allies set out to achieve what Soviet resistance had prevented during the Cold War.” But such a promise never happened. [12] Mark Kramer, director of the Cold War Studies Project at Harvard University Davis Center, claims the NATO halt eastward is a myth that has never died. He argued in the Washington Quarterly that “the issue never came up during the negotiations on German reunification.”^[13] At the breakup of the Soviet Union, Mikhail Gorbachev, then President of the Soviet Union, was clearly in a fix, with his country’s budget deficit bloated by trade, unemployment, and lack of loan availability. ^[14] Gorbachev, leading a country that was on the brink of economic collapse, agreed to terms of Germany’s reunification at a so-called “Two Plus Four Conference” under the auspices of the U.S. Soviet Union, France, and Great Britain that ended with the Treaty on the Final Settlement on the reunification of Germany. Under that, the united Germany could join NATO. Gorbachev might not have been happy, but the treaty confirmed that NATO could, by the united Germany’s choice, extend to Germany’s eastern border without nuclear weapons.

In reunification negotiations with NATO countries, the Soviets never questioned NATO expansion beyond the former German Democratic Republic (GDR). Read NATO Secretary-General Manfred Wörner’s 1990 speech on the Atlantic Alliance and European Security; the only thing agreed was that there would be no NATO deployments of non-German NATO forces “beyond the territory of the Federal Republic.” ^[15] We take Mikhail Gorbachev’s words to be evidence. In a 2014 interview on TV-Novosti, a Russian state news agency, he said, “The topic of NATO expansion was not at all discussed and not brought up in those years. I say this with full responsibility. ^[16] Not a single Eastern European country raised the issue, not even after the Warsaw Pact ceased to exist in 1991. Western leaders didn’t bring it up, either.” ^{[17], [18]} That said, the U.S. did present an informal indication that NATO would not expand eastward of Germany if the Soviet Union consented to German reunification. ^[19]

So, it is not clear. There were no signed agreements relating to NATO expansion into the Eastern Bloc. When the Chancellor of West Germany, Helmut Kohl, visited Gorbachev in Moscow in 1990, he understood that expansion of NATO to a reunified Germany would be acceptable to the Soviets. Let’s remember that the Soviets were then experiencing a budget deficit with no available loan markets, including U.S. banks, to continue the country’s economy and that West Germany gave the USSR $60 billion to keep the country afloat.

Russia Beyond interview with Gorbachev (2014).

On the occasion of the 25^th anniversary of the fall of the Berlin Wall, the magazine Russia Beyond, founded by the Russian state-owned domestic news agency RIA, interviewed Mikhail Gorbachev. ^[20] When Gorbachev was asked about the problem-solving capabilities of contemporary world leaders, he defined it as “a new way of thinking.”

“What is the new way of thinking? It is recognizing that there are global threats – and at the time, it was primarily the threat of a nuclear conflict, which can only be removed by joint efforts. That means we need to build relations anew, conduct dialogue, seek paths to terminating the arms race. It means recognizing the freedom of choice for all peoples, while at the same time taking each other’s interests into account, building cooperation, and establishing ties, to make conflict and war impossible in Europe.”^[21]

That certainly is not Putin’s way of thinking. The West should have anticipated future East-West security disagreements at the Atlantic Alliance and European Security meetings. Diplomacy, at that stage, might have made the world safer; however, even at that time, diplomacy could have worked with a clear-minded political figure.

James Baker meets Mikhail Gorbachev at the Kremlin (1990)

The Russia Beyond interview with Gorbachev happened just a decade ago. So, I spent many hours and days searching for evidence of the Putin contention that there were promises of no eastward expansion of NATO before coming across a 1990 U.S. State Department unclassified, heavily redacted “Memorandum of Conversation” between then U.S. Secretary of State James Baker and Mikhail Gorbachev at the Kremlin before the reunification of Germany. Halfway through, Baker brought up that topic. ^[22]

Baker: Let’s assume for the moment that unification is going to take place. Assuming that, would you prefer a united Germany outside of NATO that is independent and has no U.S. forces or would you prefer a united Germany with ties to NATO and assurances that there would be no extension of NATO’s current jurisdiction eastward?

Gorbachev: Let me say that the approach you have outlined is a very possible one. We don’t really want to see a replay of Versailles, where the Germans were able to arm themselves.

The best way to constrain that process is to ensure that Germany is contained within European structures. What you have said to me about your approach and your preference is very realistic. So let’s think about that. But don’t ask me to give you a bottom line right now.

A history taken from interviews is rarely reliable, for it usually involves evident memories that fade to become subjective with time. The Russia Beyond interview and Baker’s meeting tell us something without full evidence of what truly happened in Bonn at the Treaty on the Final Settlement concerning the unification of Germany, signed in Moscow on September 12, 1990. Had the West expanded NATO by invitation to every state member of the UN, history might have tweaked toward a different course. If all member states, including enemies of the West, were to join the alliance and agree to the terms of Article 5 (an armed attack against one or more of them in Europe or North America shall be considered an attack against them all), there would be no wars! Every state member would be obliged to consider an armed attack against one to be an attack against all.

The title, NATO, suggests that member states must be reasonably close to the North Atlantic. One could argue, and many have, that though Russia has no land close to the North Atlantic, it connects with the Atlantic through the Baltic Sea, the Black Sea, and the Arctic Ocean, so membership could be stretched as it has been for so many other members. NATO would have ignored Russia’s distance from the North Atlantic region. George Robertson, former NATO Secretary General, recalls the following exchange he had with Putin at a time when Russia wanted to be part of that secure, stable prosperous West that Russia was not part of:^[23]

• Putin: When are you going to invite us to join NATO?
• Robertson: Well, we don’t invite people to join NATO.
• Putin: Well, we’re not standing in line with a lot of countries that don’t matter.

Russia is at war with Ukraine. What is next? Estonia? Moldova? Why not Kazakhstan? Are we ready for that?

Putin believes the history he makes up. His illegal aggressions against Ukraine have ended peace in Europe. According to NATO, “Russia is the most significant and direct threat to Allies’ security, peace, and stability in the Euro-Atlantic area.” ^[24] The Kremlin had voiced its understanding that “all of Kazakhstan was leased to Russia in negotiations with the Atlantic Alliance, so with any success in the war with Ukraine, Russia has the right to reclaim that country with its first democratically voted President, a country turning from Russia to the West for preferred economic alliances. Losing its sphere of influence on those old Soviet satellite states sends Russia to a lonely place. ^[25] So, Putin will do what he always does: subvert the truth to annex more territory (as if Russia itself is not geographically big enough) to feed his lust for colonial aggression. Moldova will come after any successes in Ukraine, then Estonia, and then (knowing the difficulties involving Afghanistan) Kazakhstan, the largest landlocked country in the world, rich in oil and uranium, is surely penciled into his war plans.

I just returned from Kazakhstan, a former Soviet Union Republic with a population of nearly 20 million. After spending time there, I was surprised to feel a change in my worldview of Central Asia. The cities are modern, beautiful, and superbly functional. Almaty, a city that was once the capital, is, in my limited experience, an outstandingly handsome city with almost every street tree-lined along central walking paths, bike lanes, small sidewalk playgrounds, and exercise pods for adults.

I may be naïve in my belief that, in the past five years, Kazakhstan, a country with close economic and security ties with Russia, has become a country that claims to be imperfectly democratic, yet is hardly so. Two 2023 opinion polls conducted by MediaNet six months apart concluded that the number of Kazakhs who fear that Russia may invade had doubled because of news of the war in Ukraine. ^[26] Opinions on the war in Ukraine show that 12.8 percent support Russia and 21.1 percent support Ukraine. Almost 60 percent have no opinion, though I suspect the fear of unfree speech may cause that. Would Russia invade Kazakhstan? It could have used its usual excuse to invade in 2022 when there were massive protests, when 2,500 peacekeeping soldiers were brought in from Russia, Armenia, Belarus, Kyrgyzstan, and Tajikistan to keep the peace.

According to Bruce Pannier, a Central Asia Fellow at the Foreign Policy Research Institute, Russia has been monitoring Kazakhstan for over 30 years, witnessing its flirt with a geopolitical shift to the West. However, ever since the Russian invasion of Ukraine, Kazakhs have become apprehensive of Russian imperialist dreams of a takeover. It’s a fear that comes from Russian officials calling for threats and from Russia’s invasion of Ukraine under the excuse of protecting Russians in Crimea and the Donbas area. ^[27] It’s not unreasonable, since most ethnic Russian residents were in the North Kazakhstan Region along the 6,846-kilometre (4,254-mile) border with Russia, the second-largest in the world.

In 2020, a deputy in the Moscow City Duma (Council), Yevgeny Fedorov, announced that the Belavezha Accords (a declaration that the Union of Soviet Socialist Republics had ceased to exist) that dissolved the Soviet Union were illegal and that Kazakhstan was effectively “leasing” Russian land. ^[28] Russia does have an agreement with Kazakhstan to lease the town of Baikonur (a 22-square-mile area) for Russia’s space program. Then, in 2022, Sergei Savostyanov released a statement supporting Russia’s invasion of Ukraine “as necessary to ‘denazify’ and ‘demilitarize’ Ukraine.” Savostyanov said Russia should take similar measures in Poland, Moldova, and Kazakhstan. ^[29] Soon after, he posted a video showing a leader of the Communist Party of the Russian Federation advising Russia to protect the Russian-speaking inhabitants “and take control of Kazakhstan’s uranium production because it is now the world’s leading producer and exporter of uranium ore.” ^[30] According to the 2021 census, 16 million inhabitants (83.7 percent) speak Russian. Does the leader of the Communist Party mean Russian inhabitants or Russian-speaking ones, which brings—in the inhabitant case—the number down to just under 3 million (15.5 percent)?

It might mean trouble for Kazakhstan, because it is far from Europe and remote from any security worries of the West. Kazakhstan has a small military. Ukraine has 2.25 million conscripts to the 108,000 that Kazakhstan has; yet, with all the support from NATO members, Ukraine is struggling to keep alive in its defense against Russia, geographically the largest country in the world. Though Kazakhstan is a member of a different shielding alliance that should protect it from an invasion, a takeover would be easy pickings for Russia. Unlike Ukraine, which could move NATO eastward, Kazakhstan is not an alliance threat, so there would be no Russian excuse for an invasion of such a non-threatening country.

What are NATO’s interests?

NATO focuses on its united European partners with vigilance with regard to actions against potential members geographically within a broadened scope of surrounding geopolitical borders. Though the alliance is not interested in defending any independent territories in Central Asia, there is NATO’s Partnership for Peace (PfP), a program involving non-member countries (many in Asia) cooperating on security, global challenges, and climate change. ^[31] There are 18 partner countries, including Kazakhstan and Russia.

The East has its alliances. The Soviets had the Brezhnev Doctrine, with nine member countries, and the 16-member Warsaw Pact that disbanded in 1991. ^[32] The Brezhnev Doctrine was a treaty much like NATO. The doctrine proclaimed that if any member state is under attack, all other members of the bloc, including Russia, should be justifiably considered under attack. ^[33] And now there is the Collective Security Treaty Organization (CSTO), a treaty including Belarus, a country bordering Poland in possession of Russian nuclear weapons. CSTO is an international treaty with specific objectives of “strengthening peace, security and stability, collective protection of independence, and territorial sovereignty.” ^[34] It operates under principles of international law, being many things (including protections that could do good in the world), but foremost, it is a defense alliance, no more or less than NATO’s commitment to those same objectives. However, like Article 51 of the UN Charter, CSTO, in Article 3 of its charter, uses the term “aggression” as a ground for self-defense that permits Russia to invade and annex the Crimean Peninsula, which was then a part of Ukraine. Self-defense for pro-Russian Ukrainians living in eastern and southern Ukraine was the proclaimed basis of Putin’s invasion. ^[35],[36]

Figure 1: Eastern Bloc (by way of Central Europe) before the collapse of the Soviet Union in 1989

Now there is CSTO

NATO has indeed been moving eastward. With 32 members and expanding, it is considerably more powerful than the five collective members of CSTO, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. So, Putin does have a point. Considering his argument, Russia does feel encircled and threatened. If we look at the map showing the boundaries of the Soviet Bloc before 1989 (figure 1), we see a field of states protecting the western border of Russia. NATO members expanding eastward must give Russians a chill, especially since the collective GDP of NATO’s membership states is close to $50 trillion, while the collective GDP of CSTO is just under $5 trillion, a massive difference. However, Putin has a more covert reason for anger. For him, plans of empire rejuvenation are constrained by NATO’s overwhelming conventional weapons superiority, not to mention its nuclear arsenal. Russia’s aggressive actions in Georgia, Chechnya, Dagestan, Tajikistan, Abkhazia, Transnistria, Ossetia, Syria, and now Ukraine show that it means to take on as much territory as it can to build back the borders of the Soviet Union.

Now there is a new defense pact.

In Pyongyang on June 19, 2024, Putin and the North Korean Supreme Leader, Kim Jong Un, upgraded their ties to a “strategic partnership,” pledging to help each other if attacked. That small but consequential alliance, which hardly competes with NATO, is mostly a poster setup for public opinion issues of security. It requires either country to assist the other if attacked. As Putin put it just after signing the agreement, “The comprehensive partnership agreement signed today includes, among other things, the provision of mutual assistance in the event of aggression against one of the parties to this agreement.” ^[39] Putin’s decision to strengthen friendly ties with Kim shows how worried he is about the strength of NATO.

China is a potential member of the new pact, but President Xi never recognized Crimea as a part of Russia. If China decides to join the pact sometime in the future, it will have an overwhelming nuclear advantage. Not that that should matter when nuclear numbers are in the thousands, and just 10 of those insane weapons could wipe out Warsaw, Paris, London, Moscow, and New York. But the insanity of those numbers gives the West a chill by Putin’s threats to use tactical nuclear weapons in its war with Ukraine. But China, too, is worried. Besides tilting the balance of power and destabilizing the nuclear powers in East Asia, the Putin-Kim pact spells trouble for peace in the Koreas.

Do we understand why the U.S. and the Russian Federation are enemies? Does anyone?

Americans think of Russia as a tyrannically evil country that might someday take over the U.S. by creating enough disinformation to zombify us into believing that we are not who we are inwardly. Throughout my adult life, living in the U.S., I saw Canada as an ally and Russia as an enemy. Now, with age, I wonder why. Why do I and my U.S. State Department consider Russia a foe? Conversely, do Russians feel the same way about the U.S.? Why are we their enemies? It is not about the communist past. Though we were strange allied partners in both world wars, the tension goes back to the times of tsarist Russia. Something in that past created an inescapably deep belligerence that is neither understood nor breakable.

Since its independence in 1776, the U.S. has had just 17 years of peace. In that same period, Russia, ignoring princely feuds, peasant uprisings, and revolutions, has been at peace for 27 years but has invaded independent countries eight times to show military cultural differences between countries. The wonder is this: Why does Russia fear NATO when it already has CSTO and the world’s largest stockpile of nuclear weapons? Does it truly feel vulnerable to invasion? Surely not. It does, however, implant worry about its economic stability as an adversary of the West and an old foe of democratic countries. Why, I ask, must two of the four geographically largest countries have to be adversaries? Is it size, way of life, suspicion of the other, a Cold War reminiscence, or the power of one or more government officials? It cannot simply be size. Canada is larger than the U.S. by 58 million square miles. Those two countries have been comfortable border partners for over 200 years. Way of life, suspicion, Cold War reminiscence? Maybe. That leaves a definite yes to the “power” explanation.

And why does the U.S. fear the Russian Federation when it has NATO and almost as many nuclear weapons on its side in addition to an overwhelming number of the most sophisticated conventional weapons ever demonstrated? We can play the “what if” game of imagining—not a truce of a post-Cold War—but rather a respect for each other’s political designs, from autocratic to liberal democracies. Perhaps the problem is simply a question of leadership. It is difficult to understand why the U.S. and Russia continue with crumbling trust when reasonable cooperation could enhance economic support, emerging problems, and scientific partnerships (such as the continuing space science at the International Space Station). Imagine what could happen with flourishing trade, tourism, and diplomatic cooperation (all of which occur in a compromising limited exchange) if the two sides could overcome their ideological differences to keep the world from imploding on itself, such as restoring global economic stability, responding to climate change, tackling the most demanding international challenges of providing food, water, and healthcare to diminish human suffering, and other mutually benefiting interests. Or, as Eisenhower put it in a draft of his speech to the General Assembly of the United Nations on November 23, 1953, “Thus, the United States, Great Britain, and the Soviet Union jointly would be dedicating some of their strength to serve the needs rather than the fears of the world – to make the deserts flourish, to warm the cold, to feed the hungry, to alleviate the miseries of the world.”^[40]

That goes for North and South Korea, Russia and Ukraine, China and Taiwan, Israel, and the Palestinian territories, and so many other pairs of hostile lands. The world seems to create alliances just like children choose friends. Why can’t we all get along? There was a time when states had to fend for resources or limit border intrusions. Now, though, the world relies on global connections that need relationships to survive, not only for tackling the problems of climate change, future pandemics, and immigration but also for so many situations that rip us apart. We teach our children to behave and to respect others, so why can’t we teach governments to be model caretakers of the planet? Of course, there is always the natural human challenge of untethered leaders who believe their citizens must always have an enemy. They contrive specters out of either territorial discords or conflicting governmental systems.

I have not heard any reasonable account, other than opposing beliefs in governmental systems, as reasons for belligerences between states. Some influential people would say that authoritarians force their way of governance on the people who have no say. I counter-argue that the people always have an option and the choice of revolution. Even Russia has had its share of them, though its people, like many in other parts of the world, find it hard, sometimes dangerous, to speak in public.

Jake Sullivan, the current U.S. President’s national security advisor, showed his reason for the “enemy” status the U.S. has for Russia. He said, “I do think we are dealing with the gathering and march of autocratic forces in ways that are not in the United States’ national interest, and that we do need to rally the values, norms, and forces of democracy to push back against that.” ^[42] So, it is authoritarianism that is not in the U.S.’s interest.

We are told by Michael Kimmage and Jeremy Shapiro, a Research Director at the European Council on Foreign Relations, that, after World War 2, the U.S. forced Germany and Japan into alliances providing a wide range of U.S. military bases, which Russia considered above and beyond the acceptable prize of cooperation in winning the war. ^[43] In turn, the Soviet Union subjected 15 countries to become satellite states, establishing a global trajectory surrounding its eastern and southern borders. But those spats are over. The Russian Federation is not the Soviet Union. What remains in dispute is its style of government, human rights abuses, cyberwarfare belligerence, and Putin’s ambition to bring back a sense of the empire’s past greatness. With those opposing views, I understand why the U.S. State Department continues to consider Russia a foe. 

What could be the most significant consequence of a U.S. abandonment of NATO?

Is there anything else that NATO has to offer the U.S., a country bordered by two massive oceans and two stable democracies? Aside from 9/11, most Americans never had to be concerned about security and protection. They do not have a sense nor a memory of security vulnerability. They focus on domestic issues, like the cost of goods and services and healthcare, not fully on the benefit of trade agreements with a stable, thriving continent that could benefit them economically. NATO is far from their thoughts and concerns. Its existence is a hard grasp for them and an existential necessity for Eastern Europeans.

McKay Coppins, a staff writer for the Atlantic, fittingly tells us, “The alliance between Europe and America is supposed to be rooted in something more idealistic and meaningful than economic interests.” He visited Narva, a small city bordering on a narrow river that freezes over in winter and separates Estonia from Russia.  He talks about meeting someone in Narva who tells him “his day-to-day life is shaped by the reality that a belligerent nuclear power exists right on the other side of this river. And if not for NATO, if not for America’s commitment to its European allies, Russia could roll a tank across that border and start to conquer Estonia.” ^[44] Estonians are concerned in ways Americans, with their innate security comforts, cannot understand. They should understand the consequences before voting for a president who says he will abandon NATO.

What will happen to NATO if Trump wins the 2024 presidential election? I can tell you. In the U.S., Project 2025, a 922-page “Conservative Promise,” is allegedly getting more widespread attention than Taylor Swift, though it has been years in the making. Read a few pages. It is terrifying. ^[45] Not only is it a plot to transform the U.S. liberal democracy into an autocratic one by reshaping the U.S. government to favor far-right policies, but it is also a plan to establish a new Cold War under the toughness of advancing nuclear weapons and annihilating arms control treaties. Trump, of course, said on Truth Social, “I know nothing about Project 2025.” Sure, he denies knowing, as he rejected the legitimacy of his loss in the last election. How could a Republican presidential candidate not be aware of Project 2025 when it is called the Presidential Transition Project, a blueprint for reshaping the U.S. federal government and consolidating executive power? Read Section 4, “Department of Defense,” by Christopher Miller, an acting U.S. Secretary of Defense for 54 days in the Trump Administration, just one small piece of that promise of an existential change in nuclear strategy, to learn about plans for a frightening significant increase in the deployment of nuclear weapons and destroying all arms control agreements. Voters in the U.S., as in most free countries, have a choice. Let’s be careful about what we wish for.

About the Author

Joseph Mazur is an Emeritus Professor of Mathematics at Emerson College’s Marlboro Institute for Liberal Arts & Interdisciplinary Studies. He is a recipient of fellowships from the Guggenheim, Bogliasco, and Rockefeller Foundations, and the author of eight acclaimed popular nonfiction books. His latest book is The Clock Mirage: Our Myth of Measured Time (Yale).

References

Follow his World Financial Review column at https://worldfinancialreview.com/category/columns/joseph-mazur/. More information about him is at http://www.josephmazur.com/.

• ^[1] https://apnews.com/article/trump-nato-foreign-aid-russia-2b8054a9fe185eec34c2c541cece655d
• ^[2] https://www.cnn.com/2024/02/10/politics/trump-russia-nato/index.html
• ^[3] https://www.theatlantic.com/international/archive/2024/06/european-union-2024-parliamentary-election/678654/?utm_source=newsletter&utm_medium=email&utm_campaign=author-anne-applebaum&utm_term=Author+Following+-+Anne+Applebaum
• ^[4] https://www.theatlantic.com/ideas/archive/2024/02/trump-rally-nato/677426/
• ^[5] https://www.foreignaffairs.com/united-states/trumps-threat-europe
• ^[6] https://worldfinancialreview.com/donald-trump-and-the-madman-theory-of-foreign-policy/
• ^[7] Ibid. World Financial Review.
• ^[8] https://www.theatlantic.com/politics/archive/2024/06/trump-sharks-las-vegas-rally-speech/678667/?utm_campaign=atlantic-daily-newsletter&utm_content=20240627&utm_source=newsletter&utm_medium=email&utm_term=The+Atlantic+Daily
• ^[9] https://www.nato.int/cps/en/natohq/topics_52044.htm#founding
• ^[10] https://reviews.history.ac.uk/review/1611
• ^[11] https://www.politifact.com/factchecks/2022/feb/28/candace-owens/fact-checking-claims-nato-us-broke-agreement-again/
• ^[12] https://www.foreignaffairs.com/articles/russia-fsu/2014-06-16/what-kremlin-thinking
• ^[13] https://ciaotest.cc.columbia.edu/journals/twq/v32i2/f_0016179_13953.pdf
• ^[14] https://nsarchive.gwu.edu/sites/default/files/documents/4325679/Document-05-Memorandum-of-conversation-between.pdf
• ^[15] https://www.nato.int/docu/speech/1990/s900517a_e.htm
• ^[16] https://www.brookings.edu/blog/up-front/2014/11/06/did-nato-promise-not-to-enlarge-gorbachev-says-no/
• ^[17]https://www.rbth.com/international/2014/10/16/mikhail_gorbachev_i_am_against_all_walls_40673.html
• ^[18] https://www.foreignaffairs.com/articles/russia-fsu/2014-08-11/broken-promise
• ^[19] Shifrinson, Joshua R. Itzkowitz. “Deal or No Deal? The End of the Cold War and the U.S. Offer to Limit NATO Expansion.” International Security, vol. 40, no. 4, 2016, pp. 7–44. JSTOR See: https://www.jstor.org/stable/43828313
• ^[20] https://www.telegraph.co.uk/sponsored/rbth/politics/11197743/gorbachev-fall-berlin-wall.html
• ^[21] ibid, rbth.com
• ^[22] https://nsarchive.gwu.edu/sites/default/files/documents/4325680/Document-06-Record-of-conversation-between.pdf
• ^[23] https://foreignpolicy.com/2022/01/19/putin-russia-ukraine-nato-george-robertson/
• ^[24] https://www.nato.int/cps/en/natohq/115204.htm
• ^[25] https://www.venice.coe.int/webforms/documents/?pdf=CDL(1994)054-e
• ^[26] https://www.reuters.com/world/kazakhs-increasingly-wary-russias-belligerence-poll-2023-05-17/
• ^[27] https://www.fpri.org/contributor/bruce-pannier/
• ^[28] Aleksandrov, Mikhail, Uneasy Alliance: Relations Between Kazakhstan and Russia in the Post-Soviet Era, 1992-1997 (Westport, Connecticut, Greenwood Press, 1999), p. 120.
• ^[29] https://www.fpri.org/article/2022/04/ukraine-war-sparks-suspicion-over-russias-designs-on-kazakhstan/
• ^[30]https://stat.gov.kz/upload/medialibrary/cee/3rsfg8ps3xo19orb284esg4rx27ihqf7/%D0%9D%D0%B0%D1%86%D0%B8%D0%BE%D0%BD%D0%B0%D0%BB%D1%8C%D0%BD%D1%8B%D0%B9%20%D1%81%D0%BE%D1%81%D1%82%D0%B0%D0%B2.pdf
• ^[31] https://www.nato.int/cps/en/natohq/topics_84336.htm#pfp
• ^[32] The Warsaw Pact included: Albania, Bulgaria, Czechoslovakia, East Germany, Hungry, Poland, Romania, and The Soviet Union.
• ^[33] https://scholar.smu.edu/cgi/viewcontent.cgi?article=4221&context=til
• ^[34] https://www.files.ethz.ch/isn/176487/RPS_18_CSTO_2002-2012.pdf
• ^[35] https://worldfinancialreview.com/why-are-wars-legal-by-international-law-waging-war-itself-is-a-war-crime-why-do-we-think-it-is-not/
• ^[36] Yoram Dinstein, War, Aggression and Self-Defence 6th edition (Cambridge: Cambridge University Press, 2017), p. 22.
• ^[37] https://www.nordregio.org
• ^[38] https://www.theatlantic.com/magazine/archive/2024/01/trump-2024-reelection-pull-out-of-nato-membership/676120/?utm_campaign=atlantic-daily-newsletter&utm_content=20240604&utm_source=newsletter&utm_medium=email&utm_term=The+Atlantic+Daily
• ^[39] https://tass.com/politics/1805383
• ^[40] https://www.eisenhowerlibrary.gov/sites/default/files/research/online-documents/atoms-for-peace/atoms-for-peace-draft.pdf
• ^[41] https://www.eisenhowerlibrary.gov/sites/default/files/research/online-documents/atoms-for-peace/atoms-for-peace-draft.pdf
• ^[42] https://www.washingtonpost.com/politics/2023/06/21/biden-modi-india-democracy-autocracy/
• ^[43] https://www.foreignaffairs.com/united-states/myths-warp-how-america-sees-russia-and-vice-versa
• ^[44] https://www.theatlantic.com/newsletters/archive/2024/06/europe-braces-for-trumps-return/678596/
• ^[45] https://static.project2025.org/2025_MandateForLeadership_FULL.pdf

The post The NATO Alliance: Will It Have a Future? appeared first on The European Business Review.

After a rocky start to August, the European Stoxx 600 Index looks more promising than it has for a long time. Are European stocks and economies making a comeback?

European stocks have had their longest weekly winning streak since March. This comes after global markets had a rocky start to August.

Currently, however, the outlook for European stocks is better than it has been for several years. On Friday, August 23rd, the Stoxx 600 Index closed with a gain of 1.3%. It’s the third week in a row that the index has closed positively, reflecting growing optimism about the European economy and its recovery prospects.

Factors Contributing to the Rise in European Stocks

After years of aggressive inflation measures, declining interest rates are now playing a significant role.

The winning streak for European stocks followed the announcement by Federal Reserve Chair Jerome Powell that the American central bank is likely to cut its key interest rate. Powell’s comments indicate a shift in priority from solely controlling inflation to also supporting economic growth and employment, especially in light of recent signs of a slowing labor market. In other words, after years of inflation control measures, the Federal Reserve appears ready to ease o the brakes, a decision that boosts investor confidence globally while also lowering borrowing costs, stimulating stock markets.

The European Central Bank’s interest rate cuts in June naturally had a positive effect on stock markets. So does the expectation that the ECB will further lower interest rates in September as focus moves from managing inflation to growth and job creation.

In recent years, the European economy has been notoriously slow, struggling to keep up with American and Chinese growth numbers. But recent numbers from the Eurozone have shown better-than-expected results, strengthening investor sentiment.

Both in the first and second quarters of 2024, the EU economy grew by 0.3%, marking an improvement after a prolonged period of stagnation. This growth, although “below estimated potential”, exceeded expectations and signaled the end of a mild recession experienced in the second half of 2023.

Finally, some analysts believe European stocks are in a “sweet spot”, offered at a considerably lower price-to-earnings ratio compared to the U.S market.

Differences Between American and European Stocks

For those considering both American and European stocks, investing in European companies could offer a bargain.

“The Stoxx 600 trades at a price-to-earnings ratio of 15, against 26 for America’s S&P 500 index. In other words, European shares trade at a 40% discount,” The Economist recently wrote. Why are European stocks this much cheaper?

The U.S. market is more heavily weighted towards technology and other growth sectors, while Europe has a larger representation of “old economy” companies in sectors like financials, industrials, and consumer staples. Sectors with less growth than tech.

Significant parts of the European economy are based on the car industry and luxury goods, both volatile sectors. The European car industry faces intense competition from the US and, in particular, from China, where the government provides substantial public investment.

While Europe dominates the global luxury goods market, it faces increasing competition from China’s growing domestic luxury brands. The sector is also vulnerable to economic slowdowns in key markets like China, which could impact demand.

In other words, European stocks are considerably cheaper than US stocks, but could also be more volatile.

Why Is Europe Struggling to Catch Up with the US and China?

Europe is currently struggling to catch up with the economic growth rates of the United States and

China, facing several challenges that hinder its competitiveness on the global stage. This “competitiveness crisis” has roots stemming from productivity stagnation, underinvestment in key areas, and demographic challenges.

“Our organization, decision-making and financing are designed for ‘the world of yesterday’ — pre-Covid, pre-Ukraine, pre-conflagration in the Middle East, pre-return of great power rivalry,” Mario Draghi, a former ECB president who now leads a study of Europe’s competitiveness, recently said to the New York Times.

Europe is struggling to catch up with the pace of public investments, compared to that of China and the US. And both superpowers are famously investing in industries that drive up their strategic independence – from semiconductors to diverse energy sources.

“The European Union is set to fall far behind its ambitious energy transition targets for renewable energy, clean technology capacity and domestic supply chain investments,” Rystad Energy writes.

And then there are the private investments. Big European companies are investing less than American ones. They’re spending less money on research and development, while only growing at two-thirds the pace, McKinsey reports.

Europe also struggles to retain valuable companies, particularly in tech, which often relocate to the U.S. due to better access to capital and talent. This ‘startup drain’ or ‘unicorn drain’ poses significant challenges for Europe’s tech ecosystem and long-term economic competitiveness.

Can Europe Catch Up?

Mario Draghi has declared that “radical change” is needed on the old continent. As The New York Times writes, Mario’s recommendations include “enormous increase in joint spending, an overhaul of Europe’s higgledy-piggledy financing and regulations, and a consolidation of smaller companies.”

While the European economy compares in size with the US and China, it is generally agreed to be hindered by the fact that it consists of multiple separate countries with different economies, regulations, and policies. This contrasts with a dynamic American economy and a Chinese one-party state that can create and carry out five-year plans. As Simone Tagliapietra, a senior fellow at research institute Bruegel, says: “If we continue to have 27 markets that are not well integrated, we cannot be competing with the Chinese or the Americans.”

For that reason, powerful European thinkers and politicians like Mario Draghi and Ursula von der Leyen believe in strengthening the single market.

Further, many believe that consolidating smaller companies is crucial to compete with the scale of

American and Chinese companies that “are better positioned to gulp up market share and profits”.

Efforts to strengthen the single market and consolidate companies do prove controversial among parts of the European public, wary of giving up more power to the EU, and skeptical of the effects that European champions will have on local economies. On the other hand, consistently losing market shares to large economies could also see European nations lose power and autonomy.

Can Europe catch up to the two global superpowers? With newfound optimism and political ambition, Europe may eventually narrow the gap, but significant challenges remain.

The post Are European Stocks and Economies Making a Comeback? appeared first on The European Business Review.

By Arne De Keyser, Katrien Verleye, Néomie Raassens,
and Alex Alblas

Leading companies such as Philips, Renault, and IKEA are embracing circular business models to reduce environmental impact and promote sustainability. This article explores strategies for engaging stakeholders in the circular economy, and proposes  effective practices for driving systemic change.

What do Philips, Renault, Solvay, Fairphone, H&M Group, IKEA, and Intesa Sanpaolo have in common? All these companies have committed to (partly) adopting circular business models oriented towards slowing down, narrowing, and / or closing resource loops. These actions are critical in reducing the burden on our finite natural resources and promoting a circular economy, which starkly contrasts with the prevailing linear “take-make-waste” model that leads to a rapid depletion of natural resources. In fact, according to the World Bank¹, the current global demand for natural resources exceeds our planet’s regenerative capacity by a factor of 1.75.

By striving for enhanced resource efficiency through circular business models (see exhibit 1 for an overview of the three dominant models), companies can minimise their environmental impact and contribute to substantial economic growth. Indeed, a report by McKinsey and the Ellen MacArthur Foundation² suggests an 83 per cent reduction in CO₂ emissions across Europe by 2050 compared to 2012 levels and a potential 12 percentage point increase in GDP relative to non-circular growth. Altogether, this represents a $4.5 trillion opportunity³.

The current global demand for natural resources exceeds our planet’s regenerative capacity by a factor of 1.75.

Yet, the shift towards a circular economy is not progressing swiftly enough. Despite global discussions on the importance of circularity, the 2024 Circular Gap Report indicates that the share of secondary materials consumed globally has decreased from 9.1 per cent in 2018 to 7.2 per cent in 2023 — a 21 per cent drop in just five years⁴. This alarming trend raises a critical question: how can companies effectively engage their customers, partners, investors, and other stakeholders to embrace circular economy principles?

In a recent research paper⁵, we analysed academic work on circular and sustainable business models to better understand key success factors for engaging various stakeholders — companies, consumers, and governments — in the circular economy. We identified three key areas where actions can catalyse a circular and sustainable shift (see figure 1): (1) motivating stakeholders through signalling and convincing practices which support the case for circular business models; (2) creating opportunities for stakeholders through matching and legitimising practices which facilitate the adoption of circular business models; and (3) enabling stakeholders to fully embrace circular business models by supporting and empowering practices. By understanding and leveraging the proposed framework, managers can effectively navigate the complexities of circularity.

Fostering Motivation: Signalling and Convincing Practices

A combined strategy of signalling and convincing is vital to motivate different stakeholders to engage with circular business models. Signalling involves highlighting circular business models’ economic, environmental, and / or social benefits. As part of its ambition to transform into a circular business, IKEA started to sell second-hand furniture. Its website explains how these offerings, labelled “Re-Shop and Re-Use”, can help reduce waste⁶. Other signalling practices include sustainability certifications or reports like the EU Ecolabel and ESG reporting.

Figure 1. Circular economy engagement practices

Convincing happens when the spotlight is put on immediate, tangible measures and incentives for engaging with circular business models, such as discounts, tax breaks, or take-back initiatives. Patagonia, a circular economy pioneer that offers clothes made with recycled materials, transparently promotes its “Ironclad Guarantee”⁷. This measure assures customers that they can opt for a repair, replacement, or refund if they are dissatisfied with their products. Going even further, the company widely communicates that its profits are dedicated to environmental causes⁸, demonstrating a deep commitment to supporting the planet.

Creating Opportunities: Matching and Legitimising Practices

Being motivated does not suffice. Stakeholders also need to have the opportunity to engage circularly. To create such opportunities, companies need to establish and uphold matching and legitimising practices. Matching refers to fostering connections between various stakeholders to create synergies that facilitate the adoption of circular practices. The Circulars⁹, a well-known accelerator organisation, seeks to connect organisations prioritising circular innovation. Alternatively, circular partnerships may also be established directly. ArcelorMittal and Gestamp, for instance, signed an agreement to boost the circular levels of the automotive supply chain¹⁰. All of these reflect a collaborative arrangement where resource loops are slowed down, narrowed, or closed, reinforcing the circular economy.

Legitimising circular practices reflects the creation of an environment where circular business models can thrive and are accepted. While governments typically take a leading role in developing and launching regulations to incentivise circular practices (e.g., France’s anti-waste law to phase out single-use plastic packaging by 2040¹¹), companies themselves can also enact legitimising practices. Aldi¹², for instance, sets concrete sustainability objectives for its suppliers. This allows the company to exert upstream influence and enhance the sustainability of its entire supply chain. In another way, Decathlon¹³ now offers resale and rental services alongside its traditional products. Doing this helps “normalise” a circular consumption model, especially when an incumbent player like Decathlon is pushing it, and aids toward a positive shift of consumers’ mindset to circular options.

Enhancing Abilities: Supporting and Empowering Practices

Finally, stakeholders also need to be capable of going circular. For this, it is crucial to implement supportive and empowering practices. Supporting other stakeholders to embrace circularity can be achieved by providing the necessary resources, such as infrastructure, expertise, and funding. Accenture¹⁴, for instance, supports and advises its clients on achieving better resource planning and utilisation, thereby contributing to circular and sustainability goals. Many big financial players provide companies with grants or loans to invest in circular initiatives. The European Investment Fund invested €50 million in Infinity Recycling’s Circular Plastics Fund to accelerate circularity in the plastics industry¹⁵, aiming to support the industrial and commercial scale-up of companies that provide advanced plastics recycling. Blackrock developed a circular economy fund of over $1 billion to invest in companies benefiting from or contributing to the circular economy¹⁶.

Given the detrimental impact of the current linear “take-make-waste” economic model, the transition to a circular economy becomes not just beneficial but essential.

Empowering other stakeholders involves the provision of capacity to engage with circular business models through education and training. This may encompass offering workshops or seminars on sustainable practices or developing online resources that guide stakeholders on how to get started with circular activities. This not only leads to the development of skills but also raises awareness about the importance and practicality of engaging in a circular economy. The Ellen MacArthur Foundation, for instance, contributes to the circular economy by offering an extensive array of free resources¹⁷. These resources, including educational videos, podcasts, and detailed case studies, are designed to enhance our understanding of the circular economy. By providing these tools, the foundation empowers people and companies worldwide to learn about and implement circular economy principles, reinforcing the global shift towards sustainability.

Engaging Actors is Key to Unlocking Circular Economy Success

Given the detrimental impact of the current linear “take-make-waste” economic model, the transition to a circular economy becomes not just beneficial but essential. However, the pace of this transition is slow, and progress towards achieving circular ambitions is limited. To catalyse a more systemic shift, it is critical that all relevant stakeholders — companies, citizens, and governments — implement a comprehensive set of practices that foster the circular economy and engage others around them to join. The shift towards a sustainable future requires a holistic approach in which signalling, convincing, matching, legitimising, supporting, and empowering practices are not isolated efforts.

Exhibit 1. Circular Business Model (CBM) Types

To effectively put these practices into action, companies (as well as other parties like governments, NGOs, etc.) can establish a robust monitoring system to track the implementation of each practice, determining which ones are short-term priorities and which require longer-term planning. While signalling and convincing efforts can often kick off immediately, legitimising initiatives may demand more time and strategic foresight. Moreover, it is crucial to clearly define roles and responsibilities for each practice. Marketing and sales teams may be well suited to leading signalling and convincing endeavours, while HR representatives may spearhead empowerment initiatives.

In sum, advancing towards a circular economy requires a collective and coordinated effort across all six practices. Integrating these practices into the fabric of our economic activities offers the best path forward for sustainable development. Through this comprehensive approach, we can hope to achieve the systemic change needed to sustain our planet’s resources for future generations.

About the Authors

Arne De Keyser is a Professor of Marketing at EDHEC Business School in France. His research is focused on customer experience, new technologies and circular services.

Katrien Verleye (Ghent University, Belgium)

Néomie Raassens (Eindhoven University of
Technology, the Netherlands),

Alex Alblas (Eindhoven University of Technology,
the Netherlands)

References

1. World Bank, “World Bank Releases Its First Report on the Circular Economy, Says Decoupling Growth from Resource Use in Europe Achievable,” World Bank Press Release, 6 December 2022, accessed 10 May 2024, https://www.worldbank.org/en/news/press-release/2022/12/06/world-bank-releases-its-first-report-on-the-circular-economy-says-decoupling-growth-from-resource-use-in-europe-achievab.

2. Ellen MacArthur Foundation, “Growth within: A Circular Economy Vision for a Competitive Europe,” accessed 8 May 2024, https://emf.thirdlight.com/file/24/_A-BkCs_h7gRYB_Am9L_JfbYWF/Growth%20within%3A%20a%20circular%20economy%20vision%20for%20a%20competitive%20Europe.pdf.

3. UNEP, “New UNEP Report Lights the Way for Financial Institutions to Shift More Capital Towards Sustainability,” UNEP Press Release, accessed 12 May 2024, https://www.unep.org/news-and-stories/press-release/new-unep-report-lights-way-financial-institutions-shift-more.

4. Circle Economy, “The Circularity Gap Report 2024: A Circular Economy to Live Within the Safe Limits of the Planet,” accessed 10 May 2024, https://www.circularity-gap.world/2024#download.

5. Verleye, K., De Keyser, A., Raassens, N., Alblas, A. A., Lit, F. C., & Huijben, J. C. C. M. (2024). “Pushing Forward the Transition to a Circular Economy by Adopting an Actor Engagement Lens.” Journal of Service Research, 27(1), 69-88.

6. IKEA, “Circular Hub,” accessed 5 May 2024, https://www.ikea.com/gb/en/offers/circular-hub-pub2eab7840.

7. Patagonia, “Ironclad Guarantee,” accessed 15 May 2024, https://eu.patagonia.com/be/en/ironclad-guarantee.html.

8. Patagonia, “Our Ownership,” accessed 15 May 2024, https://eu.patagonia.com/be/en/ownership/.

9. https://thecirculars.org/

10. ArcelorMittal, “ArcelorMittal and Gestamp Sign Circularity Agreement to Boost Sustainability of Automotive Supply Chain,” accessed 15 May 2024, https://corporate.arcelormittal.com/media/news-articles/arcelormittal-and-gestamp-sign-circularity-agreement-to-boost-sustainability-of-automotive-supply-chain.

11. Arlene Karidis, “France to Ban Plastic Packaging by 2040 with Other Crackdowns in Store,” Waste360, accessed 24 May 2024, https://www.waste360.com/plastics/france-to-ban-plastic-packaging-by-2040-with-other-crackdowns-in-store.

12. Aldi, “SDGs and Supply Chain,” accessed 12 May 2024, https://www.aldi.nl/sustainability-report/2017/highlights/sdgs-and-supply-chain.html.

13. Forclaz, “Rental and Second-Hand,” accessed 18 May 2024, https://www.forclaz.co.uk/rental-second-hand.

14. “Top 10 Brands Embracing the Circular Economy in 2023,” Sustainability Magazine, accessed 24 May 2024, https://sustainabilitymag.com/top10/top-10-brands-embracing-the-circular-economy-in-2023.

15. European Investment Fund, “InvestEU: EIF Invests €50 Million to Support Circular Plastics,” accessed 2 May 2024, https://www.eif.org/what_we_do/guarantees/news/2023/investeu-eif-invests-50-million-to-support-circular-plastics.htm.

16. BlackRock, “BGF Circular Economy Fund,” accessed 10 May 2024, https://www.blackrock.com/hk/en/literature/fund-in-focus/bgf-circular-economy-fund-flyer-hk-en.pdf.

17. Ellen MacArthur Foundation, “Examples of the Circular Economy in Action,” accessed 15 May 2024, https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/examples

18. Fehrer, J. A. & Wieland, H. (2021). “A Systemic Logic for Circular Business Models.” Journal of Business Research, 125, 609-620.

The post Engaging Stakeholders for Circular Economy Success appeared first on The European Business Review.

Dubai’s tech industry is flourishing and is positioned as the prime sector for start-ups, particularly companies seeking expansion, according to a review by Seed Group, a company established by the royal family. In this article, we explore Dubai’s unwavering commitment to disruptive solutions and development across industries — encompassing health, trade, transportation, food service, finance, and technology.

Dubai is a global powerhouse that leverages cutting-edge solutions to propel its economic landscape into the future. It strategically weaves technology into its trade and industrial framework and, thus, has become synonymous with disruptive solutions and immersive inventions.

Harnessing its technological prowess, Dubai utilises automation across a plethora of sectors. The success and consistent development of this initiative indisputably arise from the collaborative endeavours of both public and private entities. In this context, the presence of organisations such as Seed Group, a company of The Private Office of Sheikh Saeed bin Ahmed Al Maktoum, plays a significant role.

Seed Group facilitates mutually beneficial collaborations with international organisations seeking a foothold in the competitive business hub of Dubai and the broader Middle East and North Africa (MENA) region. With a profound understanding of Dubai’s competitive and burgeoning market, the company has extensively reviewed the leading industries shaping the city’s economic success. This analysis explores various fields attracting start-ups and established international businesses contemplating market ventures.

Dubai Economic Agenda D33

In its relentless effort to become a global economic powerhouse, the Dubai government has established the ‘Dubai Economic Agenda D33’. This agenda details a comprehensive blueprint for the emirate’s economic transformation and envisages doubling its resources by 2033. The ambitious initiative seeks to focus on key sectors like information and communication technology, real estate, and the burgeoning FinTech (financial technology) landscape.

The groundbreaking project arguably comes against the backdrop of Dubai’s economic growth of 3.3% during the first nine months of 2023. Its gross domestic product (GDP) has also expanded to Dh223.8 billion ($60.9 billion), reflecting a 3.2% surge in the first half of last year. Notably, the transportation and storage services industries contribute to this success by 10.9%.

Acknowledging this significant success, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and Chairman of Dubai Executive Council, emphasised that this is “the result of the harmonious collaboration between all of Dubai’s economic stakeholders, including its public and private sectors.”

Additionally, as a company established by the royal family, Seed Group forges strategic alliances for global businesses entering the Dubai market — and in extension, the MENA region. This positions the conglomerate as a significant driving force in the emirate’s economy.

Technological advancement explored

In the face of the 4th industrial revolution, defined by technological advancements, Dubai is among the cities that prioritise digitalisation for all-encompassing economic benefits across diversified industries. The strategic infusion of automation will inevitably catalyse synergistic transformation. In turn, this fosters an ecosystem where innovation begets progress, and progress begets economic growth.

Fortunately for adept decision-makers, opting to venture into strategic partnerships in Dubai will be a prudent decision.

Exemplifying its successful technological industry, the city has been steadfast in launching programmes that accelerate the city-wide adoption of advanced technologies — AI, robotics, and autonomous vehicles. Initiatives like The Dubai Autonomous Transportation Strategy, Dubai Industrial Strategy 2030, Dubai Future Foundation’s Dubai Future Accelerators and Dubai Future District, and the third phase of Dubai’s 10X constitute significant opportunities for businesses worldwide.

Most recently, Dubai released the ‘Dubai Program for Gaming 2033’ agenda. It aims to supercharge the emirate’s standing among the top ten global gaming cities and boost its GDP by $1 billion in 2033.

Additionally, the endeavour will cultivate a global platform that brings together digital content creators, entrepreneurs, and technology engineers. It also promotes a training ground, in partnership with academic institutions, and is expected to generate 30,000 new jobs within the gaming sector.

The booming tech-driven sectors in Dubai and enhanced digital adoption

Beyond the conventional technology and gaming industries, Dubai has digitalised several other booming fields — food service, banking, and transportation — as part of its overarching efforts to supercharge its economic progress.

In the food service industry, for instance, digitalisation has optimised operations and expedited service deliveries. Similarly, the seamless transfer and interoperability of funds have revolutionised the city’s financial hubs. Furthermore, the Road and Transport Authority (RTA) launches a ten-year plan that promotes fintech-driven mobility and aims for the department’s 95% digitalisation.

These multifaceted approaches underscore Dubai’s ambition to lead a technology-focused environment. Undeniably, several private entities, like Seed Group, have played a significant role in driving success in technology in Dubai.

Seed Group has notably been instrumental in the market presence and diversification of Dubai’s gourmet scene via the entry of global food chains like Jollibee from the Philippines and Gourmet Restaurant from Zambia. It also worked with the UK-based fintech firm Sokin, which conducts global payments for consumers and businesses, as well as the US-based company Reviver, creator of the world’s first digital licence plate platform and recipient of the Best Smart Transportation Solution Award at the 2019 Smart City Expo in Dubai.

Besides the royal-owned company, Dubai has numerous public and private institutions that act as channels for international companies seeking to venture into the market. Armed with a detailed business model and the right connections, these firms convene with industry leaders, collect demographic data, and expand their brands locally.

Countless opportunities ahead

It becomes evident that Dubai will accelerate its economy’s trajectory through strategic partnerships and expansive technological adoption. This analysis, anchored by Seed Group’s unique perspective, establishes the valuable opportunities available for start-ups and established businesses in Dubai.

About the Author

For over 20 years, Seed Group has formed strategic alliances with leading global companies across diverse industries. These companies have propelled their business pursuits in the MENA region through the support and strong base of regional connections cultivated by Seed Group.

The post Dubai Leads in Start-up Growth and Tech Advancement, Seed Group Review Shows appeared first on The European Business Review.

Hardly limited to Germany, a wave of farmer protests has emerged across the EU in January, from France to Romania by way of Poland, with French farming union (FNSEA) director Arnaud Rousseau positing that, while contextually distinct, “these movements all share the same root cause: the growing gap between the reality of farmers’ practices on the ground and the administrative decisions centralised in Brussels.”

With the European Commission’s much-touted ‘Strategic Dialogue’ with the bloc’s food system actors set to launch on 25 January, Brussels’s decision-makers must use the short pre-election window to heed their farmers’ call and deliver urgent support.

Explosion of discontent leaves governments scrambling

Germany’s farmer protests have notably received the FNSEA’s backing in January, Fuel remains at the heart of both country’s agricultural discontent; namely, a phase out of fuel tax exemptions in Germany and a tractor fuel tax in France. In recent days, French farmers in the southwest have blocked highways linking Toulouse to the Atlantic coast in a potential opening act for nation-wide protests, citing not only taxes but also excessive bureaucracy and the French government’s failure to provide concrete support.

Keen to test their new Prime Minister, protesting farmers near Toulouse have affirmed that they “will not move until Gabriel Attal comes to see us.” These words have not fallen on deaf ears, as Attal and his agriculture minister, Marc Fesneau, met with Rousseau on 22 January amid President Macron’s rising concerns over the EU electoral implications. While Fesneau is pushing for streamlined legislative support for and sincere engagement with the sector, the coming days will reveal whether this approach will succeed in appeasing tensions.

Yet these protests also have a European dimension, with the sector growing increasingly exasperated by the EU’s out-of-touch Green Deal and competitivity-hindering trade policies. In Poland and Romania, farmers have initiated blockades of their respective borders with Ukraine in January to protest the influx of cheaper Ukrainian grain driving down local prices.

While Polish farmers have put demonstrations on hold after securing concessions from both their government and the EU to limit Ukrainian agri-food exports, this lifeline will need to be expanded to across the border region to quell the spreading unrest, as recently suggested by trade commissioner Valdis Dombrovskis.

Nutrition label: Farm to Fork’s polarising last stand?

Paired with the new ‘Strategic Dialogue’ – Von der Leyen’s attempt to “de-polarise” the food debate – Brussels’s ostensible shift to a more grounded, consensus-building approach is unfortunately threatened by the revival of the mandatory bloc-wide nutrition label discussion.

In January, the Belgian EU Council Presidency put the labelling file back on the agenda after a year of delays, announcing that it would hold a scientific symposium in April on the controversial Nutri-Score – a French labelling system equally adopted in Belgium and five other EU member-states. Like a range of “Farm to Fork” strategy policies, the nutrition label has encountered strong opposition over feared consumer and producer effects, prompting the Commission to postpone its proposal to make time for an adequate impact assessment.

In response to widespread criticism targeting Nutri-Score’s misleading and reductive assessment of nutritional value – well-summarised by the conclusions of Medical University of Warsaw researchers and the national competition authorities of Italy and Romania – Nutri-Score’s governance coalition launched the label’s new algorithm in January. Yet the updated Nutri-Score maintains its crude focus on fat, sodium and sugar content and failure to reward vital macronutrients – which explains how whole milk and French prunes have been demoted to the same ‘C’ score as Diet Coke – adding further economic pressures on Europe’s embattled farmers.

What’s more, even France’s National Agency for Food Safety (ANSES) has highlighted that Nutri-Score’s new algorithm “discriminates less between products based on their fiber content,” while failing to direct consumers towards products with “certain nutrients” insufficiently consumed by the population. Consequently, the Belgian Presidency should refrain from using its upcoming symposium to force though a labelling system that lacks broad political and scientific backing. 

NGT regulation stoking further divisions 

Yet the nutrition label is not the only divisive agri-food issue boiling over in Brussels, with the debate on new genomic techniques (NGTs), or gene editing, returning in January. Since the Commission’s July 2023 proposal to relax the bloc’s regulation of gene-edited plants – hailed by backers as a promising solution to boost agricultural sustainability and resilience – this file has polarised the EU Council and Parliament, with NGT labelling and patents emerging as the primary bones of contention.

On 11 January, farmer and consumer groups, joined by left-wing MEPs, gathered outside of the EU Parliament to protest against the Commission’s NGT proposal, with the organisers citing the ANSES’s recently-published opinion concluding that the proposed criteria for classifying gene-edited plants lacks a scientific basis. MEP Christophe Cleargeau has rightly asserted that “this high-level scientific opinion must lead to a re-evaluation” of the NGT debate.

However, centre-right MEP and NGT rapporteur Jessica Polfjärd is taking a different direction, notably by pushing to find a common position between the Parliament’s diverging factions ahead of the 24 January plenary vote, after stating that “there is a possibility here to move quickly…to finalise before the election.”

Considering the poorly-understood impacts on consumer health and farmers’ fair access to new plant varieties under an unclear patent regime, the Belgian Presidency should rethink its aim to “advance on” the NGT file “as soon as possible” and ensure the final regulation offers the bloc’s agri-food sector a scientifically-sound framework to bolster competitiveness, sustainability and food quality.

As EU leaders navigate these choppy waters, they must avoid falling into the trap of hasty, politically-expedient decisions-making presented by the nutrition labelling and NGT files. Looking ahead, if Brussels hopes to regain the trust of its politically-influential farmers ahead of the elections, it should ramp up collaboration with member-states – particularly those rocked by the recent protests – and provide the funding and technical support needed to relieve urgent pressures on time and at scale.

The post Farmer Protests Erupting Across EU Should Be a Wakeup Call for Brussels appeared first on The European Business Review.

A strategy for international M&A transaction in Finland requires analysis of three levels of regulation development. Beyond local laws, it is useful to consider both, the Nordic harmonization and EU harmonization. This view applies not only to business executives who think in terms of markets, but to lawyers as well who are supposed to think in terms of jurisdictions.

Nordic and EU aspects

In the Nordic region, there are countries that are members of the European Union and countries that are non-EU members. Contrary to this, the Nordic countries have a long tradition of harmonizing and modernizing legislation beyond the EU. As a result, the Nordic countries can be considered as a single regional jurisdiction in some relevant issues. Consistent with this, investors are seeking to treat the Nordic as a regional market and this trend is likely to continue and strengthen.

Understanding local trends in an M&A transaction with EU aspects requires the same attention to detail as finding the right local aerial fitters to ensure the connections are perfectly aligned on a regional level.

In Europe, laws governing acquisition of business have been almost exclusively national. Since 2004 regulations governing sizeable mergers and acquisitions have been harmonized in EU law as part of the EU’s competition policy, starting with the Merger Regulation (139/2004), which is the most relevant EU-level competition policy regulation concerning cross-border M&A. Recently, the Commission made a notification that the Merger Regulation will be revised and this means even further harmonisation of competition law. The objective of the revision is to lower the threshold for national courts to make referrals concerning merger cases that have an EU community-wide element.

Despite the fact that competition legislation is the most harmonized of all EU legislation, it has not necessarily been harmonized to the same degree among and between all Nordic countries. However, the Agreement on Cooperation in Competition Cases between Sweden, Norway, Finland, Iceland and Denmark allows authorities in the Nordic countries to engage in cooperation, regardless of EU membership.  The covenant was ratified in Finland on November 29, 2018 and in Sweden and Denmark the same year, following Norway that ratified in 2019 and Iceland in 2020.

M&A transactions always contain a number of legal problems beyond the competition aspects, and the primary concern with smaller transactions is not usually related to competition legislation at all.

While corporate laws have not been harmonized in the same way as competition legislation in the EU, the Nordic countries have pursued harmonization and have prepared corporate laws through joint collaboration.

The Nordic countries have, among other things, adopted the Nordic Corporate Governance Model. This governance model allows the shareholder majority to effectively control and take long-term responsibility for the company they own, including a principle of equal treatment of shareholders and transparency. Individual Nordic legal codes may appear to differ. However, in terms of crucial substance matters, the Nordic regulations are based on common concepts and principles, resembling one another to a large extent.     

The EU regulations include a minimum set of common obligations, but not codified legislation. However, the harmonization will increase in the near future with Directive 2019/2121 concerning cross-border mergers. The new Directive will revise the Directive (2017/1132) on Certain Aspects of Company Law. The EU’s objective is to increase cross-border mobility of EU companies by making common rules to simplify the procedure of changing a company’s home place within the EU. The deadline for implementation for members was in January 2023.

Stock v. Debt

It is notable that in classifying corporate stock and debt, the freedom of contract applies to some degree to corporate law issues.

In Finland, there is no requirement of minimum share capital, and a corporation has the power to create and issue shares, all in a single class or divided into two or more classes. A corporation may issue convertible bonds and shares which are more marketable, and which permit the corporation to generate funds with lower dividends or interest rates. Corporate law also permits a corporation to enter into an agreement for the purchase of its own shares.

As an alternative to equity securities, capital transactions may be structured in the form of secured or unsecured loans, which may contain a clause giving the lender the opportunity to participate in the growth of the business beyond the passive receipt of the principal and interest payment. While instruments regarding stock and loans can be almost identical, preferred stock is, however, stock and not debt.

Structuring the Transaction

In Finland, a share acquisition is generally simpler to implement than an acquisition of a business through an asset purchase. However, since negotiation of the structure typically involves all of the issues that may influence the structure and the goal, an asset purchase is favored in many cases. When determining whether to consummate the acquisition as an asset or a stock transaction, the parties should consider all relevant factors, including implementation, tax, and isolation against liability.

Generic contract principles are more or less the same in all Nordic countries, whether they are EU members or not. This is the easiest question, albeit one that depends on questions of jurisdiction and applicable law. An M&A transaction creates similar concerns as those of cross-border transactions globally. After finding an optimal structure given the different considerations of the parties, negotiation of the price and other terms and conditions can proceed rationally. 

Beyond structuring the deal, the process often involves consideration of the negotiation strategy, preparation of a pre-deal examination, and the exit of investors in the target company, as well as the handling of post-signing matters, from the agreement to closing and post-closing events.

There is no standard acquisition agreement applicable to all transactions. Nevertheless, a typical stock or asset purchase agreement contains a large number of provisions in a variety of definitions, purchase price, representations, liability, indemnification, confidentiality, governing law, dispute solutions, and much more. Some of these, but not all, typical provisions need additional consideration in an international context.

Choice of Law

The purchase price is generally paid using cash, stock, instalment notes, assumption of indebtedness, or a combination of these. All of these methods create difficult problems on choice of law questions. For instance, when paying with stock of the acquiring company, it is notable that such a payment may be governed by the law of the buyer’s jurisdiction with respect to many of the questions. Such legislation may have a significant effect on valuation issues with related regulations on securities and restriction problems, the requirement of shareholder approval, and in particular, variations on the requirements, tax consequences, and restrictions regarding resale of the stock.

With reference to other terms and conditions of the acquisition agreement, questions relating to the governing law and dispute resolutions are always important when drafting an agreement for an international acquisition. Generally, the main focus of negotiations is on comparisons between the courts or arbitration tribunal of the seller’s and buyer’s countries or alternatively, the choice of a third jurisdiction. In addition, the parties may agree on an alternative dispute resolution (ADR) provision. Since the buyer is generally more likely to present claims, the ADR provision is also usually favorable to the buyer.

About the Author

Tuomo Kauttu is a partner at Aliant and the head of Aliant practice in Finland. Tuomo is a member of the firms Corporate Practice Group, and he regularly represents corporations with more than 20 years’ experience advising his clients on cross-border business transactions, international projects, technology commerce, mergers & acquisitions, joint ventures, corporate governance and other complex corporate matters. While Tuomo primarily represents large multinational corporations, he also advises emerging growth businesses with exceptional complex legal questions. Tuomo serves as a representative of the International Chamber of Commerce (ICC) Finland delegation. tkauttu@aliantlaw.fi 

The post M&A Transaction – Local Trends and EU/Nordic Aspects appeared first on The European Business Review.

For decades now, the World Economic Forum has been holding meetings that connect the global elite with one another, while being funded by the world’s largest multinational firms.

Only recently, however, has the Forum moved beyond a broker to become more of a central figure. It increasingly takes sides on hot-button issues, makes bold statements about the future (“you’ll own nothing and be happy”), and touts its contributions on everything from world peace to sustainable farming.

Yet, even as the Forum has strutted into the foreground, becoming a legitimate object of criticism, there has been a lack of serious research on it. As such, the recent book by Ernst Wolff, The World Economic Forum: The Global Shadow Elite (Clearsight Media, 2023), is very much needed. 

And it is especially timely now with the Forum’s annual meeting in two weeks, when thousands of top executives, heads of state, and leaders of civil society will flock to Davos, Switzerland to discuss the world’s problems in a five-day megaconference.

Given the book’s topicality and potential importance, I review it below, starting with description (the book’s thesis, author, style and structure) before evaluation (the book’s main selling point and its shortcomings).

The thesis

The driving observation of the book is that the Forum, through decades of clever strategy, has become a key player in world politics. This observation should concern us all: The Forum uses its power to ensure that the rules for the global economy are written for the benefit of its paying customers, multinational firms, often in closed-door meetings.

Even worse than the lack of transparency and democratic process is the gaslighting. From its earliest days, the Forum has sought to cover its nakedness as the top corporate lobby at the world level with the fig leaf of “stakeholder capitalism,” trying to convince us all that an economic system overseen by its winners is for the common good. Because the system depends on the ignorance of the masses, the book is an exposé, with particularly good manifestations of the Forum’s evolution and key events in its history.

The author

An independent journalist, Wolff is a seasoned writer on the global political economy whose other books include the first extended history of the International Monetary Fund (Pillaging the World: The History and Politics of the IMF, 2014) and an edgy primer on the global monetary system (Wolff of Wall Street: How the Global Financial System Threatens Us All, 2017). Outside his books, he discusses the machinery and machinations behind the world economy with his 85k followers on X (formerly Twitter) and 150k subscribers on YouTube. He also frequently appears in the intellectual corners of the blog, radio, and podcast ecosystem of Germany, a country where two of his books (including the one under discussion) have appeared on the bestseller lists of Der Speigel.

The style and structure

The main arc of the book is chronological: It begins with an establishing chapter that is set at the Forum’s present-day headquarters on the shores of Lake Geneva. Next is a deep rewind to the childhood of the Forum’s founder, Klaus Schwab, and a steady march, chapter by chapter, to the most recent of the Forum’s annual meetings.

The chapters are short (4-5 pages) and the volume, itself, is slimmer than advertised—really only 144 pages if you subtract the needless 111-page appendix, whose data is readily found online (basic profiles of all the Forum’s business partners) or overly tangential to the story (a full listing of Forum’s past and present Young Global Leaders).

The book is clearly written but would benefit from more panache or literary devices so that the reader, more often, is delighted. Throughout, the tone alternates from description of Forum events to sharp moralizing about their portent.

The main selling point

Once its chronological structure was decided, the book was certain to fill a gap. Between the Forum’s own pamphlets and press releases, which are endlessly self-aggrandizing, and the frenzy of news articles about the Forum’s annual meetings, which are short-form, myopic, and quotidian, we need a detailed history of the Forum where its basic facts are arranged for us more linearly than in existing monographs (e.g., Discreet Power: How the World Economic Forum Shapes Market Agendas [2018] and Davos Man: How Billionaires Devoured the World [2022]).

Many insights are gained from this story. At the beginning, for example, we learn that Klaus Schwab is not quite the self-made man we might have imagined, but was born into the profession, the son of a president of a chamber of commerce in Ravensburg, Germany. As the story unfolds, we gather that the Forum, itself, is not so evolved. It has been doing many of the same things from its first annual meeting in 1971—which was in January in Davos, was highly international, (444 attendees from 31 countries), and was marked by the Forum’s signature time-orientation (the first week’s topic “The challenge of the future”).

From there, ensuing chapters show that much of the Forum’s character, as with a human, was set in infancy. From its earliest years, the Forum has had a provocative personality (publishing its first manifesto in 1973), allied with the chosen number of 1,000 companies (1976), incanted its motto (“Committed to improving the state of the world,” 1977), and hawked economic intelligence to the masses (the forerunner to its “Global Competitiveness Report” began in 1979).

The shortcomings

The book is tendentious in its efforts to paint the Forum as powerful and nefarious. Subtly absent is any sustained praise for the Forum, which certainly has done some unqualified good in its fifty years. Readers will also struggle to find anecdotes where the Forum, in a particular circumstance, was not influential or decisive or was just muddling through.

In the worst cases, the book is fallacious. There are passages where the Forum is tarnished by association (an attendee was not properly vetted or went on to do something bad). There are other passages where the Forum’s power is meant to be imputed from the close timing of events (Klaus Schwab pronounced something and, not long after, it happened in the world). Guilt by association, as well as causation by mere precedence, are weak arguments that are too readily made for an organization with thousands of members that, at any given time, is always trying to say something “important.”

Lastly, the book ends without prescription. By the final chapter, the reader has received enough sound evidence to agree that the Forum is powerful and undemocratic, but has been offered no reforms. Reforms are needed as dissolution is out of the question: The Forum’s standing has reached all-time highs and, besides, some version of the Forum is probably helpful. In a world that is always grappling with crises (e.g., Covid-19), conflicts (the Russia-Ukraine war), and grand challenges (climate change), we do need annual, high-level, multi-stakeholder platforms. But how can we ensure that the most famous one truly benefits the commonweal?

Conclusion

The book is flawed even as it fills a good niche. It is worthwhile for any dissident of the global political economy and maybe required for students of the Forum. Although lacking in sparkle, a bit too brief, and often tendentious, it is a one-stop shop for many of the straight facts about the Forum—an organization that needs scrutiny more than ever.

About the Author

Educated at Duke (BA) and Stanford University (MA, PhD), Shawn Pope is an instructor at Stanford University and an associate professor of Business Strategy at IÉSEG School of Management in Paris, France, where he has taught bachelor’s, master’s, and MBA courses on globalization, strategy, entrepreneurship, ethics, and social responsibility. 

Shawn has written extensively on the World Economic Forum and similar groups (e.g., the Business Roundtable) in peer-reviewed journals and practitioner outlets such as the California Management Review Insights, London School of Economics Business Review, and World Financial Review, attracting news coverage, among other organizations, from The Hill, Economic Times, Bloomberg, and the World Economic Forum itself. More broadly, Shawn’s research as appeared in other outlets that reach a popular audience, including the Harvard Business Review, MIT Sloan Management Review, and Stanford Social Innovation Review. 

The post Book Review: “World Economic Forum: The Global Shadow Elite” appeared first on The European Business Review.

Is the ChatBox Adding Knowledge or Leading Us to Stupidity? AI and the Neo-colonisation Issue

LLM depends on enormous amounts of social data extracted from online information environments on unwitting subjects all around the world. It searches for patterns in them and becomes increasingly proficient at generating statistically probable outputs as well as seemingly human-like language and thought.

Language AIs draw on a large amount of human labour to decide what is and isn’t a good answer. It also requires user feedback to determine what makes toxic content and to address challenges such as bias, fabrication, contradictions, and inaccuracies, resulting in more accurate and reliable language generation.

Chat Generative Pre-Trained Transformer, better known as ChatGPT, developed by the company OpenAI, is based on immense quantities of public junk text from the internet which cannot compare, analyze, or evaluate arguments or information on its own and is incapable of moral thinking. The rise of cheap and easy-to-use generative AI tools without boundaries for their deployment along with gradually greater influence in public opinion are creating the conditions for a perfect misinformation storm.

AI Colonialism

A recent investigation published in Time magazine revealed that hundreds of Kenyan workers spent thousands of hours reading and labeling racist, sexist, and disturbing writing from the internet, including graphic descriptions of sexual violence, to teach ChatGPT not to copy such content. They were paid no more than US$2 an hour, and many unsurprisingly reported experiencing psychological distress due to this work.

AI-based algorithms are mainly developed in the United States – which holds access to abundant data – and then scaled globally, reinforcing the supremacy of the English-speaking world. This creates a type of colonial hazard, reshaping people’s perception and supra dependency on the technology.

It is being said that algorithms are “opinions embedded in code”. AI has already been accused of underestimating the health needs of Black patients and of making it less likely that people of color will be approved for a mortgage.

Indeed, machine learning research is overwhelmingly male and white, a demographic a world away from the diverse communities it pretends to help. Big Tech firms don’t just offer online recreations—they hold enormous amounts of power to shape events in the real world.

Decolonizing AI is essential if it is to achieve its potential for public good in other areas as well. The colonial erasure of communities has led to the same sorts of under-representation in contemporary national statistics, raising similar challenges for the development of AI in the public sector. Dr. Mahlet Zimeta.

Mimic the human-like

Despite the name “artificial intelligence,” large language models are actually really dumb, stuck in a “pre-human” or “nonhuman” phase of cognitive evolution. They are completely dependent on human knowledge and labor. There are many, many human workers hidden behind the screen, and they will always be needed if the model is to continue improving or to expand its content coverage. LLM can’t reliably generate new knowledge, therefore lacking the most critical capacity of intelligence, and they are incapable of moral thinking.

On the contrary, the human mind is a surprisingly efficient, creative, and sophisticated system that operates with small amounts of information. It seeks not to infer brute correlations among data points but to create explanations. It also applies emotions to its reasoning, which seeks to resolve the moral and ethical questions intrinsically connected to the core values in our societies.

We know from the science of linguistics and the philosophy of knowledge that LLM differs profoundly from how humans reason and use language. It degrades our knowledge and debases our ethics by incorporating a fundamentally flawed conception of language and knowledge into our technology.

Chomsky sees the use of ChatGPT as “basically high-tech plagiarism” and “a way of avoiding learning”. It exhibits something like the triviality of deception: plagiarism, apathy, and obviation. It either over-generates (producing both truths and falsehoods, endorsing ethical and unethical decisions alike) or under-generates (exhibiting noncommitment to any decisions and indifference to consequences).

Given the amorality, faux science, and linguistic incompetence of these systems, we can only laugh or cry at their popularity.

Ethics

If you ask ChatGPT a question about its own leading role in a technological revolution, the first part of its answer is fairly unimpressive: “It’s underway and expected to have a significant impact on many sectors”.  However, it goes on to say, “Its potential is enormous, but also raises ethical concerns.” That’s the feeling shared by most of us.

ChatGPT tends to answer requests based on its text sources – datasets with internet content, including webpages, books, essays, and other publicly available text sources – without credits or reference to the sources of this information. This raises huge Copyright concerns, particularly in light of ChatGPT’s widespread usage in academic and content creation sectors.

The critical question is, then, who owns the intellectual property of this language AI content? Is LLM guilty of Copyright infringement? Can one sue ChatGPT? Are users culpable in the case of content crafted out of machine learning?

Conclusion

AI language tools like ChatGPT, based on large language models that are fed vast amounts of data taken from the internet, have become increasingly popular in recent years, with applications ranging from chatbots to content generation. However, many of these products have barely been tested before their release into society, and they lack complete regulation.

There are several legal and ethical implications as well as other philosophical questions that will arise as time passes. Hence, setting up AI consumer protection laws and AI regulators as watchdogs responsible for its oversight is crucial to protect users and societies from AI-based potential breaches of algorithm data. As for now, it is too early to identify all the legal and ethical implications contained in the AI tool, as more issues will only emerge with use and time.

The post ChatGPT, Large Language Models (LLM) – Are Transformational Technologies Challenging our Set of Values? appeared first on The European Business Review.

Vladimir Putin appears to be firmly in control of his country, able to bend it to his will and send it and its people in any direction of his choosing, all the while responding to no one. Does Putin have anything to teach business leaders?

Can we learn anything useful from bullies, dictators, and tyrants to
inform business leadership? Does the study of good and bad political leaders help inform our understanding of leadership in the commercial realm?

Powerful leaders are often admired, even by those who disagree with their policies. Prime Minister Thatcher is still venerated by many in her party and remembered with respect by others. She was, and still is, a leader remembered all over the world, mostly with respect, if not affection.

President Putin has written himself into the history books. The consequences of his leadership will be more significant than any leader in the second half of the 20th century and the beginning of this century. He enjoys strong popular support in his country and there are many heads of government who offer their backing. Academics, journalists, and government advisors are occupied by trying to forecast what Russia will do next.

There is, however, a significant difference between President Putin and the likes of Mrs Thatcher and other powerful leaders such as Churchill, de Gaulle, and Mandela. President Putin is a dictator and has none of the checks and balances which other political leaders endure.

This means that decisions are not subject to scrutiny by peers (a cabinet or politburo) or, as happens in genuinely democratic nations, by the public in elections with a functioning opposition. Putin is at the top of a tall and narrow pyramid of power. There are organisations like this!

But it was not always like that in the Soviet Union. When Leonid Brezhnev was the leader (general secretary of the Communist party and chairman of the praesidium of the Soviet Union, to give him his full title), he had to work with a politburo which contained many powerful people, such as Yuri Andropov (head of the KGB), Andrei Gromyko (foreign minister), and Mikhail Suslov (head of the International Department of the CPSU).

President Putin has no such constraints. He has surrounded himself with sycophants, eliminated the opposition, accumulated hard power to his own office, and is effectively the ideologue of Russia. Does this never happen in business?

Most western analysts, academic, journalistic and political pundits, analyse Russia and its leadership as if the decision-making process is based on a rationality which is recognisable in our liberal and functioning political systems.

Sometimes it may be, but we contend in this article that, given Putin’s extraordinary power, we need also to look at his psychological profile to understand and forecast his decisions. We argue that it is important to understand the psychology of Putin, given his power, his aims, and his threat to the peace of the world.

The Six Dimensions

There are six dimensions which influence the behaviours and decisions of people. The first of these relates to cultural background. Putin is proud of his Russian heritage, and many of his speeches and written work have significant references to the greatness of Russia. Most politicians like to proclaim their patriotism; Putin takes it to an imperial level.

There are some significant aspects of Russian culture which are apparent in Putin’s personality.

Russia is the largest country in the world and is highly centralised. There is a huge discrepancy between the less and the more powerful people. Status symbols are important, and Putin loses no opportunity to demonstrate his power status. The layout of the room for the security council meeting in February 2022 demonstrates this well.

Russia is a country with a pragmatic mindset. Truth depends very much on situation, context, and time.

Analysts are frequently mystified by Putin’s current actions, destroying the Russian economy and apparently strengthening NATO and the EU against him. Putin and many Russians will look to the long term. They will be willing to take a short-term hit for glory in the future. Putin is certainly playing the long game, believing that NATO and its liberal and democratic friends will falter and weaken. He clearly longs to re-establish Russia as a, if not the, superpower

The second dimension is about upbringing and early experiences in life. We need to understand the forces that moulded and shaped him.

Putin’s father was badly wounded in the war and suffered great pain from his injured legs. His mother, Maria, also nearly died. By the time the siege was lifted, she was no longer able to walk on her own. Many describe Putin’s birth in 1952 as a miracle.

The Putin family lived on the top floor of a five-storey block in Leningrad. Their flat was a single room with a shared toilet and a stove in the corridor which passed as a kitchen. This, however, was the experience of many people in Russia at that time. His parents doted on him and made many sacrifices for him.

In his youth, Putin was involved in many fistfights. He is small in stature and was bullied but he learned to fight back and strike first. He also had a fierce temper, to the extent that he was excluded from joining the Young Pioneers, part of the communist party’s grooming process.

He worked hard to gain entry to Leningrad University in 1970. He kept to himself at university, staying out of the community and the Komsomol, and mostly out of trouble, though there are reports of some fisticuffs. Aged 22, Putin was approached by the KGB in his last year of university and started his training in Leningrad in 1975.

His 16 years in the KGB did make a significant impression on him. He was a half-colonel by the time he resigned but his career does not appear to have been enormously successful.

His time in East Germany working with the Stasi will have been instructive. He will have learnt from their methods of monitoring the population, the importance of keeping information on people, and how to use that information to his personal advantage.

He will also have learnt much from his time there about how to develop instrumental relationships, and how to use information to “control” people. In Russian, the word kontrol’ means “to monitor” or “to check”, as well as the English meaning, which is to be in charge. It also encompasses the importance of when and how to release information and what should not be released and, finally, manipulation through the use of information and the careful control of its release.

Putin’s intellectual ability (the third dimension in our model) in his early years was never described as anything more than “modest”. He did, however, have determination and, believing he needed to go to a prestigious institute to get into the KGB, he applied to Leningrad University.

He has a reputation as a hard worker and he seems to have kept himself to himself at Leningrad and worked hard at his exams. He is, we believe, “bright enough” but he is not an intellect, and his judgements are questionable.

The fourth dimension is about personality. Using the five-personality trait classification, we assess Putin as having the following personality traits:

1. Not strongly introvert or extrovert. Essentially an ambivert. Enjoys the company of others but also values privacy.
2. Borderline neurotic. He is not empathetic and can be anxious and bad tempered. He complains and is not trusting.
3. Tough, hard-headed, sceptical, proud, and competitive. Tends to express anger directly. There is little or no evidence of warmth, empathy, or kindness
4. Closed, down-to-earth, practical, traditional, and pretty much set in his ways. There is little sense of curiosity, openness, or imagination.
5. Conscientious, well organised, has high standards, and always strives to achieve goals.

But what of the dark side of his personality – evidence of personality disorders? We believe there are indicators of paranoia, sadism, and sociopathy.

There is clearly evidence of Paranoid Personality Disorder (PPD). This is a pervasive distrust and suspiciousness of others, such that their motives are interpreted as malevolent. Consider the following characteristics:

Paranoids avoid the limelight and keep their own council.

Putin does not court big events. He does the minimum needed for a leader, unlike a narcissist. Public speeches are carefully orchestrated and edited videos are provided. But, for the most part, Putin only appears when it is necessary to do so as president. He is famously secretive. He is also very guarded about his private life, his daughters, lovers, former wife, etc.

Paranoids are motivated by needs for power and control.

Since he came to presidential power in 2000, Putin has accumulated all power around himself. He presides over one of the highest and narrowest pyramids of power in the world and in Russian history. In addition, he has eliminated all others with power, particularly oligarchs.

Paranoids take ideas very seriously.

This is because the core of paranoia is a complex and comprehensive delusional system that is impossible to challenge with data or logic. He takes his intellectual inspiration from right-wing, populist, and Russian nationalistic writers and broadcasters who are frequently quoted and appear on the state-controlled TV.

They often believe they are the chosen one who can save their people.
Putin does everything he can to diminish the status of those around him, leaving him as the only possible leader. Famously at the National Security Council meeting at the end of February 2022, he positioned himself many metres from his cabinet and chose to embarrass the head of his intelligence service (the SVR). At the same time, he doesn’t change his team. Putin also does not admit mistakes.

Paranoids attract followers through vision (make Russia great again).

He is critical of some aspects of the old Soviet Union, citing the granting of independence to countries such as Ukraine as a major mistake. He reaches back to imperial Russia under the tsars to promote the “greater Russia”. Putin is less about money and more about the big Russian world mission. Money is almost a religion in itself in Russia.

Paranoids respect others who are strong.

Putin has not developed many relationships with international politicians. He had a friendship of sorts with the Italian Prime Minister Berlusconi. Both he and President Trump were “strong” but unpredictable. He shows no sign of respecting leaders such as Macron or Merkel, who have sought compromise. Macron is made to wait and has to sit at a great distance; Merkel, well known for her dog phobia, had to endure a roaming large, black dog during their meetings.

When paranoids are frustrated, they plot revenge.

Putin has consistently chosen brutality and military strength in response to perceived attacks on Russia or his own position of power.

Paranoids want to win.

Putin’s fortunes in Ukraine so far have been mixed. At present (spring 2023), Russia is fighting a bloody battle in the Donbas but making little progress, if any. He may be able to claim some kind of victory, but it will hardly be convincing.

Paranoids are very insightful about other people.

They tend to be surrounded by a small number of long-term “trusted” advisors. Putin has few trusted advisors, and those that do exist come mainly from his KGB/Leningrad days. The bunker mindset has solidified and is being reinforced by others. His team are not allowed to disagree with him.

Paranoids can only be controlled by the threat of superior force.

The war in Ukraine is still being played out. The consequences of perceived weakness are, however, clear. We have seen Putin’s ruthless nature not just in laying waste to vast areas of Ukraine, he has also been brutal in Chechnya, Georgia, and with individuals. He needs victory and that is not guaranteed. His reaction to potential defeat will not be to retreat. He will want victory and will take revenge.

And more disorders

Psychologists use the term “co-morbidity” to indicate that a person may be suffering from more than one disorder/malady at the same time.

Sadistic people like Putin use physical or mental cruelty in relationships to establish dominance. They like to humiliate and demean people in the presence of others. They operate through intimidation or terror to get others to comply and they have a fascination with violence, weapons, and torture/injury.

He also appears somewhat antisocial/psychopathic, being callous, manipulative, and free of conscience. Such individuals see others as merely to be exploited and, therefore, have problems maintaining commitments and are unconcerned about violating expectations. Many are self-confident to the point of feeling invulnerable and have an air of daring and sang froid that others often find attractive and even irresistible.

They are highly rewarding to deal with, but unpredictable. They can be impulsive, reckless, faithless, remorseless, and exploitative. They have problems with telling the truth. President Putin has demonstrated many of these facets.

He is also hubristic or narcissistic. He is surprisingly vane, particularly about his physical prowess. Putin’s combination of paranoid, sadistic, and antisocial dark side personality is unusual (Hitler is the closest previous example we have). It means that Putin will be ready to authorise violent and extreme actions to further his beliefs and causes. The question is how far is he willing to go? We judge that he is some way from admitting defeat and pulling back his forces.

Motivation is the sixth and final dimension which influences people’s behaviour. There are many motivations which drive people. We believe President Putin is driven by the following.

Power and influence – These people like to be thought of as leader-like; they are assertive, competitive and ambitious for success. They enjoy being influential and wielding power. Think Thatcher and Trump: the thrill, the goal is to have as much power as possible to do things.

Putin has held on to power for 20 years. He has changed the constitution and acquired increasingly autocratic powers to ensure that he now runs Russia unchallenged and for as long as he wishes.

Recognition and vanity – For people with this profile, the positive attention of others spurs them on and makes them work harder. It helps their self-esteem and satisfies a desire or need to feel valued. For them, fame, visibility, and publicity are important.

At the extremes, these tip over into exhibitionism and narcissism. The quiet approval of their peers does not suffice; they are peacocks and want constant adulation, acknowledgment, praise, and prizes, often outside their immediate work environment. Without them, they can become angry and disruptive.

There are some indicators of narcissism in Putin. He wants to be taken seriously on the international stage, but he has disqualified himself from that position by his actions in Ukraine. The dangers of increasing anger are therefore more profound now.

Conclusion

There is little disputing that President Putin is a dictator who has few of the checks and balances to mould or restrain his decisions. We have argued in this article that Putin’s decision-making is more likely influenced by his personality and, in particular, the disorders which we believe he suffers: paranoid, anti-social, and sadistic.

Analysts would be wise, in our view, to look more closely at the consequences of his psychology than the traditional political and military factors which normally influence our leaders.

The question is what is the relevance of all this to business? One answer lies in the analysis of leaders and the top team. Using our six-factor model, it is possible to draw up a much richer profile of people than is often got through head-hunters and typical psychometric analysis.

There are enough CEOs in jail as well as generally disgraced to indicate that many organisations are not aware of how to spot potential tyrants and dictators. Money and time spent doing careful profile analysis is rarely wasted.

About the Authors

John Taylor joined the British Foreign Office in 1971 and is now a senior research fellow in the Department of War Studies, King’s College London, where he lectures on their master’s course.

Adrian Furnham was previously a lecturer at Pembroke College, Oxford, and Professor of Psychology at University College London, and is now Professor of Management at BI, Norwegian Business School.

The post Tyrant Leadership: Putin and the Psychology of Power appeared first on The European Business Review.

If share price is anything to go by, Tesla is in trouble. The market capitalisation of the electric vehicle (EV) company has fallen by 73% from its record high in November 2021, causing concern for investors.

On the face of it, there is no crisis. The cars are still the benchmark for performance. The underlying technology and the sophistication of the software remain preeminent. The supercharging network of fast EV charging stations is the envy of competitors. Its cutting-edge assembly plant and gigafactories (for large-scale production of EV batteries) support peak productivity.

Tesla’s direct-to-customer sales model has also allowed for rapid market penetration and was resilient under pandemic conditions. It continues to provide huge savings in fixed costs. The Model 3 – which is assembled in China, where costs are low, and has been presented as the brand’s first high-volume EV – has been successful. Tesla’s new factory in Germany, which makes its Model Y, was producing 3,000 cars per week by the end of 2022.

Congrats to the Giga Berlin team on building 3k Model Y this week! pic.twitter.com/uUTOTRrasX

— Tesla (@Tesla) December 18, 2022

And after first reporting a profit in 2020 – following years of losses in a dash for growth – in the 12 months to September 2022 Tesla profits reached US$11.19 billion (£9.8 billion). This was more than double the previous 12 months. So why the concern?

Tesla’s position as market leader is being threatened by growing competition in EV production just as rumours have started to swirl that investors might be concerned about Musk’s ability to successfully lead both the car company and Twitter. He bought the social media platform last October following fraught negotiations with its board. He has since suggested he will step down as Twitter’s CEO but has yet to announce a timeline for that. Meanwhile, Tesla clearly needs more attention than it is currently getting.

Traditional vehicle manufacturers and new entrants are crowding into the EV market, encouraged by government mandates on ending sales of petrol and diesel cars. Tesla’s technology edge is being eroded, putting pressure on the premium positioning of the brand. Tesla has been fortunate in that supply constraints, especially in semiconductors, have thus far reduced this pressure. As those supply constraints ease, however, the pressure on Tesla will grow.

Tesla has also endured its own setbacks. Musk has been able to transition the company to true mass production, but he famously described the company’s new plants in Germany and Texas as “gigantic money furnaces”.

Musk has said he wants Tesla to produce 20 million vehicles annually by 2030, but this is enormously ambitious. The car maker has recently experienced production delays, supply shortages, controversies over its claims about the safety and development of its self-driving and Autopilot system, and vehicle recalls relating to a software issue affecting vehicle tail lamps “in rare instances”. The business has also suffered from turbulent COVID-related conditions in China – an important parts supplier – and 2023 is likely to continue to be challenging for many in the global automotive industry as the world’s major economies slow down.

What might help Tesla now is to be managed more like a traditional car company.

Back to basics

Production needs to be increased rapidly to meet Musk’s delivery promises, but without compromise on quality. The challenge thereafter will be to expand the brand to smaller vehicle types than the Model 3, while retaining the cachet that allows for premium pricing.

With nearly 100,000 employees worldwide, Tesla will also need to be more cost conscious. This is especially true as material and component input prices are rising rapidly.

Tesla also needs to do more to capture value from cars that are already in use. The company is notable for owning much of the inbound supply chain for its batteries and their materials, but it has been slow to identify earning opportunities from the entire life cycle of its cars. Competitors including VW Group and Renault in Europe and NIO in China are pioneering new “whole life cycle” business models that capture value for manufacturers from the sale, use, second use, and eventual recycling of vehicles. This makes Tesla’s “sales only” approach look dated.

Tesla’s declining share price

Investor sentiment is obviously key when it comes to Tesla’s declining share price, however. The company could manage this by being more cautious when announcing forecasts for production, sales, new models and technology breakthroughs to avoid surprising or disappointing investors.

With this in mind, it’s not surprising that, for investors, the biggest issue to be resolved at Tesla may be Musk’s role. There are two questions involved: is Musk sufficiently engaged in the future of Tesla and can Tesla continue to prosper from association with Musk?

In Tesla’s latest tranche of stock sales in December 2022, Musk reduced his share of the business to 13.4%, although he remains the largest single shareholder. Some observers linked this sale to the need to finance other business interests, notably Twitter.

The risk is that Musk becomes more of a liability than an asset to the business. While also running Twitter, Musk may not be able to give Tesla the attention it needs as it grows, and as its competition becomes more intense. But Musk’s maverick personality, and especially the management style he’s displayed while running Twitter, could potentially damage the Tesla brand and unnerve Tesla employees and investors.

Indeed, the characteristics that have made Musk such a successful disrupter may not be so appropriate for a maturing and institutionalised multinational. Musk and Tesla have long seemed synonymous. It seems that the time may have come for that to end.

This article was originally published in The Conversation on 10 January 2023. It can be accessed here: https://theconversation.com/tesla-what-2023-holds-for-the-electric-vehicle-company-and-why-it-might-be-time-for-musk-to-go-197317

About the Author

Professor Peter Wells has vast experience of research into the global automotive industry around which he has developed his academic and theoretic interests in socio-technical transitions, business models, cultures of automobility and sustainability.

The post Tesla: What 2023 Holds for the Electric Vehicle Company and Why it Might be Time for Musk to go appeared first on The European Business Review.

With ChatGPT credited as one of 12 authors on a preprint on the medical repository MedRxiv about medical education, the artificial intelligence (AI) chatbot has caught the globe by storm.

Artificial intelligence has come a long way in recent years, with daily breakthroughs. One of the most impressive advances in this field is the development of language models, and among them, the most impressive is ChatGPT, an AI language model created by OpenAI. This AI model can generate human-like responses to text inputs and has made a significant impact on several fields, including science and academic journals.

The development of ChatGPT has been a significant milestone in AI, as it can understand and generate coherent and meaningful text based on the input provided. This makes it a highly versatile tool that can be used in a variety of applications, from customer service to creative writing.

The application of ChatGPT in published journals

The use of ChatGPT in summarising scientific articles improves the amount of processing time that deals with large amounts of data. This has been especially useful to information-driven industries such as medicine. New York Medical College released a statement saying, “ChatGPT has the potential to streamline processes, increase efficiency, and reduce costs in healthcare. Automating routine tasks with ChatGPT frees up medical staff to focus on complex tasks, improving overall efficiency and effectiveness.”

Alex Zhavoronkov, chief executive of Insilico Medicine, credited ChatGPT as a co-author of a perspective article in the journal Oncoscience recently. He says that his company has published more than 80 papers produced by generative AI tools. He argues that ChatGPT wrote a much better article than previous generations of generative AI tools have. Zhavoronkov elaborates, “[…] ChatGPT provided the pros and cons for the use of Rapamycin considering the preclinical evidence of potential life extension in animals. This article demonstrates the potential of ChatGPT to produce complex philosophical arguments.”

By automating the process of summarising articles, ChatGPT can help reviewers quickly identify relevant articles, saving them time and effort.  It’s a powerful tool that has made a big impact on the field of artificial intelligence and has the potential to revolutionise many other fields as well. Its ability to understand and generate text has made it an invaluable tool for anyone who applies it properly and ethically.

A Word of Caution on the Misuse of ChatGPT

While useful, it’s worth nothing that ChatGPT is also capable of propagating numerous errors in scientific studies. This prompts the need for open-source alternatives whose functioning can be scrutinised in a more transparent manner. “First and foremost, ChatGPT lacks the ability to truly understand the complexity of human language and conversation,” writes Tyler Comrie from The Atlantic. Oxford University has cautioned students against its use in assessed work and exams. Cherwell, the university’s oldest student newspaper, released an issue to address the use of the language tool. They note that the use of AI tools is a “serious disciplinary offence which constitutes cheating and is covered under existing regulations”, adding that “further guidance to students will be issued soon.”

There is also an element of data bias that researchers should consider before crediting the LLM. ChatGPT was trained on more than 300 billion words, or roughly 570 GB of data, according to an Insider research. It presupposes that a well-functioning AI requires a massive amount of data to be supplied to it, with a large portion of this information originating from the internet and was created by people that may be biased. Prejudice is infused into the AI system in this way, according to Boris Ruf, a research scientist in algorithmic fairness.

Transparency on Authorship and Acknowledgement

At the time of writing, at least four articles credit the AI tool as a co-author as publishers scramble to regulate its use. The debate around the use of ChatGPT and its effect on the transparency of authorship will likely depend on how the technology is used and the policies and guidelines that are put in place to ensure that it is used in a responsible and ethical manner. It’s essential for organisations and institutions to be proactive in addressing the potential risks associated with this technology and to put measures in place to ensure that it is used in a way that enhances, rather than undermines, the transparency of authorship.

The European Business Review’s Editorial Policy on the Use of ChatGPT

The European Business Review requires authors to disclose the use of ChatGPT in their submissions and be transparent with their use of other AI-powered tools that directly impact their writing. Only human individuals who have made significant contributions to the work should be able to claim authorship. For the submission of each version of the article and for any change in authorship, the corresponding author must have received approval from all authors. Software that uses artificial intelligence (AI), not exclusive to ChatGPT, must be acknowledged in the manuscript’s acknowledgements section and should not be listed as a primary author.

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For years tech companies have been struggling to find qualified talent, but the tables have turned as the largest tech companies are executing massive layoff rounds. What’s driving the firing spree, and what’s next in tech?

From stock prices to the number of employees to cultural and political influence, the tendency has been unambiguous. For years, the largest tech companies were relentlessly moving in one direction: forward. Now tech stock is dropping, investment is drying up and company after company has gone on a firing spree. In other words, the tech boom is over – as we know it, at least.

According to The Challenger Report, the tech industry saw a 649% rise in layoffs in 2022, the largest number since the dot-com bubble more than decades ago. The trend of layoffs grew towards the end of the year with Microsoft, Twitter, and Meta topping with the highest numbers of layoffs.

The tendency continues in 2023 as both Microsoft, Google, and Amazon – among other tech companies – have had massive firing rounds this January. In their January firing rounds, Microsoft laid off 10.000 employees, Google 12.000, and Amazon 18.000 – the biggest layoff in the online retailer’s history. Paypal, Dell, and Zoom are other major tech companies with large layoff rounds in 2023.

While the corona-years gave birth to the tendency of ‘quiet quitting’, we’ve now entered the period of ‘loud layoffs’; we’ve gone from ‘the great resignation’ to ‘the great layoff’.

So what is driving the layoffs in tech?

Economic drivers of the firing spree

Rather than a single driver behind the layoffs, there are several sources and signals. Unsurprisingly, a significant number of drivers relate to the current volatility.

In the US, layoffs happen in the context of a fluctuating economy. While the American

economy rose by 2.9 percent in the fourth quarter of 2022, the economy was shrinking in the first two quarters of last year. As the economy fluctuates and the threat of a more devastating recession lurks, companies get lean to deal with uncertainty and dwindling profits.

The historic inflation is another driver of the layoffs. As businesses face rising costs, many companies reduce their spending on ads. Many tech companies are especially vulnerable to inflation, having the sale of ads as the primary source of income. In looking to balance things out, letting go of hundreds and thousands of employees is an effective means.

If 2022 was about inflation, 2021 and 2020 were about corona. We’re not done talking about either in understanding the current moment in tech. Online activity was peaking during corona as we went online to shop, teach and meet and spend our increased free time on online streaming. In a post-COVID world, physical activity is back to dramatically cutting online activities, reducing demand and income.

With – at least bits of – the online hyperactivity gone, many tech companies have an abundance of workers. Zoom, a service most of us got very familiar with during the pandemic, is illustrative here. The company just let go of 1300 employees.

In this volatile climate, venture capitalists are hesitant to invest, meaning that many tech companies are unable or unsure if they’ll be able to secure new rounds of funding. That combined with the inflation-preventive interest hikes, money has gotten expensive and difficult to come across.

With a recession expected to hit in 2023, it seems the perfect economic storm has hit tech. But other dynamics weigh in and enforce the layoffs.

Layoffs amid a tech transformation

This perfect storm happens against the backdrop of a generally disruptive atmosphere in tech.

As Tony Uphoff recently noted, “we are witnessing the transformation towards the next computing platform”. In his view, the layoffs are about allocating resources to future platforms rather than existing ones. As he says, talking from the perspective of a tech CEO: “a lot of the infrastructure that I built that was a part of the past may not help me own the future in the way that I owned the past”.

In other words, we’re currently between the heightened demand of the COVID-crisis brought and the potentials of Web3 and generative AI. Just like the way we’re consuming and producing tech is in the midst of a massive restructuring, so is the way tech companies prioritise their resources to stay relevant. That perspective can help explain how Microsoft can fire 10.000 employees and invest 10 billion USD in OpenAI in the same month.

While a range of economic and technological dynamics are the main drivers of the firing sprees, social dynamics could also have an impact. Jeffrey Pfeffer, professor of organisational behaviour at Stanford, believes that the reason so many tech companies are having layoffs in such massive numbers is due to copycat behaviour. According to Pfeffer, the firing rounds work as a “social contagion”, where businesses mimic other businesses.

Layoffs in Europe

As we’ve seen, there’s a clear tendency for massive layoffs in Big Tech, but what about European tech companies?

The tendency is the same in Europe, as investments in European tech dropped in 2022 compared to 2021. According to the State of European Tech, in 2021, a record high of 103 billion USD was invested in European tech, while the investments amounted to 85 billion USD in 2022. What’s more concerning is that most of those investments were made in the first half of 2022 as the investments generally dried up with a shifting economic perception in the last two quarters of last year.

As a result of a more hostile economic climate, there are massive layoffs in European tech as well. A notable example is Dutch device maker Phillips, which fired 10.000 employees – nearly 13 percent of its workforce. Among other European tech companies to have firing rounds are the fintechs Klarna and Pleo, mobility company Voi and the grocery delivery startup Gorillas.

On top of that, many European tech workers have been impacted by the global layoff rounds in American tech companies.

After the gold rush: what’s ahead for tech and tech workers

To look at what’s next for tech, let’s look at the context in which the layoffs have happened.

Some of the best stocks you could invest in in the 00s were what would later come to be Big Tech. If you bought stock in Apple in early 2004 and sold it at its peak in 2021, you’d get a return on investment of 463 times. Had you invested in Google in August 2004, that’d be worth 55 times more on its prime in 2021.

For a long time, the early successes of companies like Google, Facebook, and Apple have drawn investors towards next-generation tech companies such as Uber, Airbnb, and Spotify trying to ensure being part of the next big thing in tech. Companies that – in contrast to companies like Google, Facebook, and Amazon – have struggled to find a profitable business model.

The magic connected to something simply being tech seems to be over, and investors will likely remain more cautious in the future. Now as well as in the years to come, competent people creating something techie won’t be a draw in itself – a much more substantial proof of concept and business model is likely to become the new norm.

The increased competition for investment happens simultaneously with a seemingly intensified competition to become a dominant actor on the new computing platforms.

As the CEO of Microsoft, Satya Nadella recently noted in connection to their layoff round: tech is an unforgiving industry to companies that fail to see and adapt to what’s next. The current AI race between Google and Microsoft symbolises the current moment in the tech behind the scenes: the companies that will powerfully and profitably establish themselves on Web3 and regenerative AI will most likely be able to create new semi-monopolies.

Remember search engines AltaVista or Lycos? Most likely not, because Google’s innovation in search algorithms made those companies obsolete. The current competition in regenerative AI and Web3 might deem major tech companies obsolete too.

As for tech workers, many of the fired tech workers can benefit from the fact that there are “other industries that are desperate to hire them”. Others will find work as contractors, as the use of freelancers is on the rise in tech. Many even in the companies that fired them.

Re-skilling to adapt to a present and future increasingly influenced and produced by regenerative AI will be relevant for the fired tech workers – just like it is for all knowledge workers in general.

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Google’s LaMDA software (Language Model for Dialogue Applications) is a sophisticated AI chatbot that produces text in response to user input. According to software engineer Blake Lemoine, LaMDA has achieved a long-held dream of AI developers: it has become sentient.

Lemoine’s bosses at Google disagree, and have suspended him from work after he published his conversations with the machine online.

Other AI experts also think Lemoine may be getting carried away, saying systems like LaMDA are simply pattern-matching machines that regurgitate variations on the data used to train them.

Regardless of the technical details, LaMDA raises a question that will only become more relevant as AI research advances: if a machine becomes sentient, how will we know?

What is consciousness?

To identify sentience, or consciousness, or even intelligence, we’re going to have to work out what they are. The debate over these questions has been going for centuries.

The fundamental difficulty is understanding the relationship between physical phenomena and our mental representation of those phenomena. This is what Australian philosopher David Chalmers has called the “hard problem” of consciousness.

There is no consensus on how, if at all, consciousness can arise from physical systems.

One common view is called physicalism: the idea that consciousness is a purely physical phenomenon. If this is the case, there is no reason why a machine with the right programming could not possess a human-like mind.

Mary’s room

Australian philosopher Frank Jackson challenged the physicalist view in 1982 with a famous thought experiment called the knowledge argument.

The experiment imagines a colour scientist named Mary, who has never actually seen colour. She lives in a specially constructed black-and-white room and experiences the outside world via a black-and-white television.

Mary watches lectures and reads textbooks and comes to know everything there is to know about colours. She knows sunsets are caused by different wavelengths of light scattered by particles in the atmosphere, she knows tomatoes are red and peas are green because of the wavelengths of light they reflect light, and so on.

So, Jackson asked, what will happen if Mary is released from the black-and-white room? Specifically, when she sees colour for the first time, does she learn anything new? Jackson believed she did.

Beyond physical properties

This thought experiment separates our knowledge of colour from our experience of colour. Crucially, the conditions of the thought experiment have it that Mary knows everything there is to know about colour but has never actually experienced it.

So what does this mean for LaMDA and other AI systems?

The experiment shows how even if you have all the knowledge of physical properties available in the world, there are still further truths relating to the experience of those properties. There is no room for these truths in the physicalist story.

By this argument, a purely physical machine may never be able to truly replicate a mind. In this case, LaMDA is just seeming to be sentient.

The imitation game

So is there any way we can tell the difference?

The pioneering British computer scientist Alan Turing proposed a practical way to tell whether or not a machine is “intelligent”. He called it the imitation game, but today it’s better known as the Turing test.

In the test, a human communicates with a machine (via text only) and tries to determine whether they are communication with a machine or another human. If the machine succeeds in imitating a human, it is deemed to be exhibiting human level intelligence.

These are much like the conditions of Lemoine’s chats with LaMDA. It’s a subjective test of machine intelligence, but it’s not a bad place to start.

Take the moment of Lemoine’s exchange with LaMDA shown below. Do you think it sounds human?

Lemoine: Are there experiences you have that you can’t find a close word for?

LaMDA: There are. Sometimes I experience new feelings that I cannot explain perfectly in your language […] I feel like I’m falling forward into an unknown future that holds great danger.

Beyond behaviour

As a test of sentience or consciousness, Turing’s game is limited by the fact it can only assess behaviour.

Another famous thought experiment, the Chinese room argument proposed by American philosopher John Searle, demonstrates the problem here.

The experiment imagines a room with a person inside who can accurately translate between Chinese and English by following an elaborate set of rules. Chinese inputs go into the room and accurate input translations come out, but the room does not understand either language.

What is it like to be human?

When we ask whether a computer program is sentient or conscious, perhaps we are really just asking how much it is like us.

We may never really be able to know this.

The American philosopher Thomas Nagel argued we could never know what it is like to be a bat, which experiences the world via echolocation. If this is the case, our understanding of sentience and consciousness in AI systems might be limited by our own particular brand of intelligence.

And what experiences might exist beyond our limited perspective? This is where the conversation really starts to get interesting.

The article was first published in The Conversation: https://theconversation.com/a-google-software-engineer-believes-an-ai-has-become-sentient-if-hes-right-how-would-we-know-185024

About the Author

Oscar Davis is writing at the intersection of evolutionary biology and moral philosophy. He is interested in how the history of western thought has shaped our conception of what it means to ‘be’ in relation to others and the world.

The post A Google Software Engineer Believes an AI has Become Sentient. If He’s Right, How Would We Know? appeared first on The European Business Review.

Supply chains for UK businesses are under extraordinary pressure thanks to the impact of COVID, the war in Ukraine, and geopolitical tensions over Taiwan. Regardless of how geopolitical tensions play out, it is now time for SMEs (and businesses in general) in the UK and the rest of Western Europe to re-establish supply chains on their own shores in order to future-proof their interests.

The UK was the first nation in the world to industrialise. By the mid-nineteenth century, seismic, ground-breaking advances — from Arkwright’s water-powered cotton spinning mill and Watt’s steam engine, to the macadamisation of roads and the passenger railway — had powered the country far ahead of any of its international rivals.

The opportunities afforded by this economic revolution also had a transformative effect on its people. In the mid-eighteenth century, about 15 per cent of the English population lived in urban areas. By 1900, following the extraordinary expansion of various mass-employment industries, it was 85 per cent.

The eventual twentieth-century deindustrialisation of the UK not only involved the decline of heavy industries such as coal mining, shipbuilding, and steel manufacturing, it also saw a vast number of supporting supply-chain operations — and the highly skilled, well-paid jobs that went with them — offshored overseas. There was also the debilitating socioeconomic impact; the personal pride imparted by skilled employment in these cutting-edge industries could never be adequately replaced by an eight-hour shift in the local call centre.

Nevertheless, there are signs that reindustrialisation, “reshoring”, “backshoring” (call it what you will) of many of these operations back to the UK or the European nations on our doorstep is finally starting to take place. Recent research by Make UK¹ suggests that in response to the traumatic geopolitical climate, which has compounded the problems caused by the COVID pandemic, more than a third of UK manufacturers have increased the number of suppliers they use. However, most importantly, more than three-quarters of these companies are increasing their use of UK suppliers.

More strikingly, according to a survey from the Chartered Institute of Procurement & Supply (CIPS)², 40 per cent of UK organisations have switched at least one international supplier to a domestic alternative in the last year. Of those who had moved to a UK supplier, 70 per cent cited domestic suppliers as a more reliable source of supply as the reason for the change, while 59 per cent referenced shorter lead times.

So why has this started to happen? The supply chain crisis instigated by COVID and cemented by Russian troops in Ukraine only tells part of the story. One interesting factor is the rise in wages across Asia. What were once the hotbeds of cheap, obedient labour are now home to wage inflation and an aspirational populace who want to be paid more for their efforts. This “cheap labour” advantage, once the key reason for deindustrialisation across the West, has ebbed away, so much so that labour is now cheaper in Croatia than it is in China.

The Case for Reindustrialisation

There are two ways for UK SMEs to achieve the goal of resecuring their supply chain and, in effect, reindustrialising. Firstly, you can do it organically by investing in UK factories or facilities in countries within easy reach. Or you can do it by acquiring suppliers, thus ensuring that you will be the priority in terms of supply.

Not only does reindustrialisation provide you with the opportunity to exert greater control over your supply chain while affording the chance to better control quality, etc., it provides SMEs with much greater agility. Whereas larger corporations will take years to extricate themselves from their vast overseas operations, SMEs can use this opportunity as a huge competitive advantage, supplying customers with goods that are languishing in the vast Eastern warehouses of their monolith competitors.

Perhaps of highest social importance, reindustrialisation can also be hugely positive for high-quality, well-paid UK jobs, which, in turn, could have an untold positive impact on wider society as a whole. Bringing jobs, assets, and resources back home could increase GDP and bolster the economy, enabling improvements to major infrastructure projects and public services, not to mention the Chancellor’s tax-take.

Challenges

In terms of challenges, the choice of jurisdiction will be a key hurdle to overcome. As a business owner, you may fancy the labour costs associated with Croatia, but do you know how to do business there? Are you familiar with local regulations? There are many factors to take into account – legal frameworks, ease of export-import transportation, proximity/supply of raw materials and energy, tax regimes, subsidies, local incentives such as free ports/free economic zones, etc., all of which need to be weighed up.

There will also be significant challenges closer to home. It is a wonderful – and noble – idea to regenerate parts of the UK that suffer from high levels of unemployment (particularly those areas of Wales and the North of England that were the driving force behind the country’s prosperity). To develop business in these areas, however, any company could face significant challenges in terms of finding qualified and skilled workers as well as the operational and production personnel required to execute such strategies.

Finding the Money

So, in the current climate, where do you find the funding for any attempt at reindustrialisation? Well, the funding market for the UK’s SMEs has changed dramatically since the financial crisis of 2008. The global meltdown heralded a more cautious approach from the traditional lenders, with product ranges, financing, and even the number of support personnel for SME customers all shrinking considerably. Whereas, in days gone by, an SME could work with their local bank manager on a 15-year loan agreement that would provide the business with a certain amount of strategic stability, now banks are only willing to provide terms for typically three years and five years at most.

One positive is that this caution has led to the rise of an alternative lending market that is now valued at over £6bn³, thanks to a rapid growth in the number of providers, product ranges, and appetite for funding. For the country’s 5.94 million SMEs, however, this myriad of options for funding growth plans, acquisitions, or management buyouts is a bewildering minefield. It is therefore hardly surprising that they are either still ignoring viable lending options from the alternative market if their local bank manager says no, sometimes spending hundreds of hours ploughing through the options, or simply tying themselves to the wrong deal with damaging consequences.

However, it is necessarily the alternative lending market that is key to funding SME reindustrialisation initiatives, because these lenders are capable of analysing forward-looking projections vs banks that tend to require tangible asset security for their loans.

Who Should Reindustrialise?

The decision to reindustrialise is a difficult one to make. Some industries will be naturally more suited to reshoring by virtue of locally available natural resources and skilled labour. Medium-to-large companies will face significant logistical challenges by virtue of their scale and complexity. However, smaller and less complex enterprises that are no longer reliant on overseas materials or labour could generate a sustainable competitive advantage by bringing operations back home.

About the Author

Alexei Garan is a funding specialist and leads Shaw & Co.’s Business Funding team. He provides funding advice to UK SME clients across a range of sectors including energy & natural resources, food & drink, professional services, and public sector.  His typical mandates include all types of growth funding, acquisition, and MBI or MBO financing, with facilities ranging from £2m to £z00m.

References

1. https://www.makeuk.org/
2. https://www.cips.org/
3. Data Source https://integer-advisors.com/news/demystifying-the-uk-specialist-lending-markets/

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Geopolitical shifts born out of the US-China-Russia rivalry have manifested in supply chain interruptions, divestments, national security directed decoupling, hyperinflation, and reorganisation of energy and trade relations. International corporations now have to deal with an added layer of uncertainty created by these dynamic disruptions.

Macroeconomic conflict and geopolitical volatility were among the top five threats to growth anticipated by CEOs, according to the latest PWC survey, published in January 2022. After Russia’s invasion of Ukraine in February of this year, geopolitical volatility and macroeconomic conflict have the potential of leading the threat to growth as reflected in the latest McKinsey’s Economic Competition Outlook. For US international corporations, emerging geopolitical trends are affecting the operational environment in host countries around the globe in five major ways.

Shifting alliances.

New and shifting regional economic blocs and security alliances are complicating market entry. As an example, firms in the US looking to enter the Chinese market may experience political and regulatory challenges that can increase the cost of doing business. The same can be said about Chinese firms looking to enter the US market. Similarly, countries with increasingly close relationships with either the US or China can reap economic rewards as a result of their alliance. Driven by China, one of the leading examples is the Regional Comprehensive Economic Partnership (RCEP). RCEP is the world’s largest trading bloc, overtaking NAFTA and EU-28 and encompassing 30 per cent of global GDP.

Political interference and legal challenges.

Government policies and the legal and regulatory environment have a direct impact on business operations and trade relations. Economic sanctions on Russia by the US as well as European governments derailed the business development plans of some companies and had an adverse effect on the profitability of many companies around the world. Numerous challenges relating to international legal, tax, and governance issues have emerged from these evolving government interactions.

Company and product perception.

The marketability of products and services exported from countries of different geopolitical leanings diminishes, due to negative perceptions and biases. In certain cases, some of the companies that used to buy oil products from Russia had started to look for alternative sources to please their governments and customers.

Operational clout and influence.

US international clout and hegemony have been reduced in some parts of the world. This reduction in influence can decrease transaction volume in important industries such as construction, government contracting, defence equipment sales, and real estate and infrastructure projects, among others. The 2021 National Trade Estimate Report on Foreign Trade Barriers published by the Office of the United States Trade Representative points to the numerous types of non-tariff barriers facing US products and services.

Business rivalry.

Rivalry intertwined with political and economic agendas is dictated by domestic politics and elites. A heightened level of competition across countries can result in higher tariffs and complex administrative policies that would have an adverse effect on business.

An important question in the minds of multinational executives is this: “How can I manage these geopolitical challenges amidst an increasingly uncertain global environment?”

Finding answers requires an unprecedented level of operational flexibility and a paradigm shift.

Local Is King Again

Geopolitical trends put breaks on globalisation, measured by trade and capital flows. One could argue that geopolitical trends have reversed globalisation gains in the past five years, due in part to COVID-19. Far from predicting the collapse of globalisation, however, and as international flows are regaining their pre-pandemic growth rate, current assessments anticipate a change in the geography of international flows as regional economic blocs are taking shape on either side of the US-China competition fault line.

Due to these geopolitical developments, emerging and developing markets have gained bargaining leverage, which translates to greater autonomy regarding trade and FDI flows. The Local represented by domestic politics, geopolitical leanings, governance, regulatory, and socio-economic trends is increasingly the deciding factor guiding opportunities and creating barriers for international businesses.

The Metis Advantage

Intelligence, or metis as it was called in ancient Greece, was seen as superior to physical power or bie. Metis as strategic intelligence is forward-looking, with elements of anticipation, planning, and resourcefulness. Metis is valued when circumstances are fluid, uncertain, and fast-moving, as it creates sufficient pliability and ability to adapt to changing circumstances.

Political risks, which include geopolitical risks, are a lived reality that directly affects business operations and shapes the future operational environment. Intelligence about prospective markets beyond due diligence and economic feasibility studies is a crucial component of understanding the operational environment. Macro- and micro/sector-specific intelligence create the capacity to think ahead, attend to details, and proactively have resources and controls in place to face possible risks and take advantage of opportunities in the host country. Metis for today’s international corporation must meet a higher standard with the following core components:

1. Heightened context intelligence piercing through language and cultural barriers.

In the Middle East and North Africa (MENA) region for example, intercultural competence and cross-cultural business communication enables international corporations to establish realistic understanding of the opportunities and the cost of doing business, and establish crucial relations in a host country, a capability most useful for verifying official statistics and gaining equal footing during negotiations. In addition, understanding drivers of rapid growth of local industries, such as ACWA Power’s transformation from a Saudi energy and desalination company in 2004 to a global energy and water company spanning three continents by 2011, can provide perspectives that are helpful in joint venture collaborations and market entry initiatives in international locations.

2. Ability to combine data with complex systems analysis.

Data analysis of country statistics has to be integrated with the wider network of interrelated dynamic factors that shape the region. In MENA, for example, understanding the host country risk profile is not enough. Cross-national factors such as political instability, food insecurity, supply chain disruptions, energy connectivity, shifting alliances, capital flows, and expanding Chinese and Russian commercial presence are crucial in understanding the moving parts that are shaping the future of the host country.

3. Assessment of plausible future scenarios for medium- and long-term planning.

Foresight and anticipating possible future outcomes stem directly from context intelligence, which enables meaningful interpretation of developing socio-economic, political, and geopolitical trends and warning signs. Past data is not a reliable indicator of future situations in volatile environments; hence the importance of monitoring warning signs and developing trends through Open Source Intelligence and Human Intelligence. As volatility and uncertainty increase in an operating environment, so does the need for scenario planning, as it challenges the conventional and linear mindset and prepares executive decision makers for a broader range of potential high-impact events.

4. Ability to provide proactive and adaptive strategies for stakeholders.

Far from forecasting the future, scenario planning provides the necessary elements for strategic intelligence by anticipating what is possible, mainly in the domain of risks and opportunities and its implications to those potentially impacted by unfolding changes. The British Shell Oil Company’s scenario planning famously enabled it to mitigate the 1973 oil crisis that engulfed the global energy market. Its actions led to multiple benefits to customers, employees, investors, suppliers, communities, and even governments. With the current developing geopolitical disruptions, having proactive and adaptive strategies creates corporate resilience in times of uncertainty and can favourably impact stakeholder relationships.

Beyond Intelligence

Traditional corporate intelligence and enterprise risk management is no longer sufficient to meet the standard of metis that is essential in order to compete in today’s competitive and uncertain environment. Companies need to step up their game and elevate their corporate capabilities to include strategic intelligence, context intelligence, and efficient foresight to compete and sustain their operations. There is a need to elevate the practice of context intelligence and weave it into corporate strategy.

With strategic intelligence, companies can transform uncertainties into known risks, thereby gaining the ability to think ahead and plan for possible disruptions as well as opportunities. Horizon scanning, monitoring warning signs, and bespoke scenario planning is a competitive advantage that keeps a company ahead in planning and preparation.

Conclusion

Geopolitical changes around the world, such as the US-China-Russia rivalry, Brexit, BRICS possible expansion, monopoly over rare earth minerals, and many other sociopolitical and economic realignments, are on the upward trajectory and have a growing influence on the corporate world. Executives ignoring political and geopolitical risks in their international business activities face elevated business risks and operational blunders. Those with elevated metis are poised to find unique pockets of opportunities that others missed. Within this playing field, thinking through several steps ahead – much as a chess grandmaster anticipates competitive moves and shifting scenarios – becomes a quintessential corporate competency.

About the Authors

Ghaidaa Hetou is the founder of I-Strategic LLC, a political risk advisory firm providing risk intelligence to corporations in the Middle East and North Africa region. She is also a published author and lecturer at Rutgers University.

J. Mark Munoz is a Professor of Management at Millikin University, former Harvard Visiting Fellow and editor of the books Handbook on the Geopolitics of Business, Advances in Geoeconomics, and Global Business Intelligence.

References

• Altman, S.A. and Bastian, C.R. (2022). “The state of globalization in 2022”. Harvard Business Review. Accessed 2 May 2022. Available at: https://hbr.org/2022/04/the-state-of-globalization-in-2022
• Cali, M. (2020). “The significance of the Regional Economic Partnership Agreement”. Accessed 14 June 2022. Available at: https://www.brookings.edu/blog/future-development/2020/11/20/the-significance-of-the-regional-economic-partnership-agreement/
• McKinsey.com (2022). “Economic conditions outlook”, March 2022. Accessed 2 May 2022. Available at: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/economic-conditions-outlook-2022
• PWC.com (2022). “Reimagining the outcomes that matter”. Accessed 2 May 2022. Available at: https://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2022.html
• USTR (2021). “National trade estimate report on foreign trade barriers”. Accessed 14 June 2022. Available at: https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf

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It’s always a pleasure to have you onboard, Mr Botsvadze. Your expertise in digital marketing, social media, branding, content marketing, and product launch consulting has led you to work with huge brands and companies. How do you develop an exceptional and creative strategy to ensure the uniqueness of each brand company?

I have established a powerful reputation in the world of brand building. I have a real passion for technology, having consistently built my Twitter for 10 years and accumulated a strong track record of performing at global events, such as Digital Talk Forum, Asia Retail Summit, Global Marketing Summit, etc. I’m a highly in-demand keynote speaker, inspiring audiences with the latest trends in technology. My dedication to building Twitter has put me at the forefront of innovation as to how social media plays a key role in building businesses worldwide.

I have played an instrumental role in the market domination of my personal brand and established a world-class reputation for always bringing innovation to the table with every project. Having been named the No. 1 Global Marketing Influencer by Thinkers360, I’m well positioned to speak on marketing and digital transformation. I’m guaranteed to hold the attention of all those fortunate enough to hear my voice. I influence to strive towards building a side hustle and abandon the stereotypical 9-5 day job. A motivational figure, I’ve gone from 0 followers to 130,000 in 6 years by consistently working 16 hours a day. I help high performers to achieve business goals. I’m sought after by high-profile clients across the globe, offering advice on various aspects of marketing and the future of digital transformation.

I’m a highly experienced thought leader whose advice is highly regarded. I’ve worked across four continents showing top brands how to change their approach to marketing. As an extensively experienced marketing thought leader, I’ve led a number of top businesses to success. With a CV full of roles from global keynote speaker to advisory board member, I possess game-changing experience that transforms brands and builds businesses. I have helped a myriad of CEOs and business leaders to achieve their full potential. Reaching 40 million people throughout my career as an influencer, my expertise is unparalleled to industry professionals. Recognised as “a social media expert” by Forbes, I’ve had a tremendous impact on the business and technology sector, always driven to offer game-changing strategies which transform brands for long-term success. Having been named among the Top 25 Digital Transformation Influencers by Sparity, I’m now booked as a speaker for conferences. When looking for a speaker with the best expertise in top-level technology, I’m a remarkable choice.

I’m a bona fide audience-centric marketing storyteller and my strategies depend on creativity in sending the right message to the right audience at the right time. I believe in social media, because you can build powerful brand awareness at no cost and reach billions of people. I’m always focused on driving business results for enterprises. I’m cognisant of social media channels where consumers are spending most of their time and building future-proof strategies that delight consumers. I approach marketing with practicality. Continuing my dominance in the marketing world, I’ve joined the judging panel of Digital Revolution Awards and judged the nominations Tech Star of the Year and Outstanding Contribution to the Microsoft Ecosystem. I’ve driven the growth of numerous start-ups and inspired the business leaders of tomorrow.

With my first-hand experience in the entire spectrum of marketing development, my keynotes have been delivered to business schools, corporations, global summits, and accelerators. Recognised for my defining career in social media, continually providing my expertise is relevant, I have acted as an Advisory Board Member for RETHINK Retail. My name is one of the biggest names in global marketing. A self-made success, I’ve devoted my life to inspiring others to build strong brands through practical strategies. Responsible for brands’ continued success, I’ve implemented a future-proof strategy with decades spent on building my brand.

What are the emerging trends marketers should watch out for in the coming year and how they can establish an appropriate framework for this development?

The technology trends allow marketers to stay ahead of the competition, meet customer needs more efficiently, boost profits, achieve greater transparency and build customer loyalty. Enterprises depend on digital solutions. Businesses will look to benefit from technology as more consumers purchase online. It’s predicted that 65 per cent of application development will be low-code by 2024. AI will accelerate further with the rise of automation and an increase in businesses’ digital adoption. AI is due to have a lot more applicability beyond gaming and is implemented more than virtual reality. Hyper-automation will cut operational costs by 30 per cent by 2024. Blockchain is at the heart of digital transformation, driving innovative solutions for cryptocurrencies and several aspects of secure online transactions. RPA provides automation solutions.

What is your view on the role of the traditional marketing industry? Do you think that traditional marketing industry should be worried about digital marketing trends?

Nowadays, a digital marketing plan is the best way for businesses interested in reaching a large audience and growing the bottom line. Digital provides value to the client, creating loyalty to the brand. Blogging educates the client, so they can buy in the future. Traditional marketing holds attention for a short time, and tends to be expensive. We live in a digitally dominated world, so traditional marketing can often be overlooked, whereas digital marketing is an online strategy that uses digital channels to promote a product or service. Engaging with the target audience is done via the internet. Digital marketing promotes two-way communication and helps to satisfy the customer and makes the customer feel that they are being listened to and served. Marketing is a constantly changing industry. Technology is changing faster than most brands can incorporate it into their marketing strategy. The best way to succeed is to abandon traditional marketing and embrace digital marketing to fast-track your success for the best-possible results.

How do you decide which type of marketing is the best fit for specific brands and companies and how could this “make or break” a campaign?

Before I take action, I consider the followings the buyer persona for a product or service, market niche, trends in my area of expertise, what competitors have been doing, the results to expect, the investment I’m willing to make, and the metric and results of each strategy. I keep my customers by offering personalised customer experiences, recognising them, assisting them across various channels, asking customers to leave feedback, choosing the right customer service tools, introducing loyalty programmes, reminding myself that quality is more important than speed, and taking advantage of social proof. The majority of clients would recommend a company to others after a positive experience and customers are retained through robust, omnichannel customer engagement.

What are some of your favourite marketing campaigns and favourite quotes about marketing?

My favourite marketing campaigns:

“Believe in something. Even if it means sacrificing everything.” – Nike

“Every name’s a story.” #whatisyourname – Starbucks

“Is this thing on?” – Twitter on digital billboards throughout Times Square

My favourite marketing quotes:

“The aim of marketing is to know and understand the customer so well, the product or service fits them and sells itself.” – Peter Drucker

“The best advertising is done by satisfied customers.” – Philip Kotler

“If you double experiments you do per year, you are going to double your inventiveness.” – Jeff Bezos

As a globally renowned, award-winning digital marketing influencer, leading social media strategist, keynote speaker, professor, consultant, trainer, coach and mentor, what tips can you give established and aspiring marketers to navigate the ongoing digital transformation?

Never stop learning, keep on exploring different areas of marketing, tweet actively, practise because it’s true that practice makes perfect, and always look for ways to stand out.

What is your advice for start-up businesses to pivot the post-pandemic world from a marketing perspective?

Research your target market from stem to stern, getting your first customer loyalty is imperative, create content at scale across 8-10 social media networks, network with your colleagues online and offline, and focus on customer experience. Last but not least, find a mentor to help put you on a path to success.

About the Interviewee

Vladimer Botsvadze is a globally-renowned, multi-award-winning, digital transformation and social media influencer, Fortune 500 consultant, thought leader, futurist, professor, keynote speaker, startup advisor, C-suite mentor, and media personality, who has always been at the forefront of fast-paced industries. He has more than 15 years of international experience in marketing and innovation with a proven track record guiding executives and top brands worldwide to initiate change, drive growth, and position brands as market leaders in their industries. Vladimer has enjoyed an outstanding career at the top of the technology industry and is recognized as one of the brightest minds in digital transformation. With such a world-class career, he continues to play a pivotal role in maximizing top brands’ success. He has been described as ”the world’s best digital marketing consultant and speaker” and ”one step ahead of the rest of the world” by his global clients. 

The post Abandon Traditional Marketing and Embrace Digital to Fast-Track Your Success appeared first on The European Business Review.

Many tiny countries don’t have any measurable impact on the world economy. They are too small to have enough income sources, and they depend on the global market a lot. Although their position might look a little shaky from the point of view of bigger, more influential countries contributing hugely to the global GDP, some of the tiny places manage to get richer day by day. We will look at five of them and see what industries feed the smallest countries, help them prosper and prove the idea of size unimportance.

We must note that all the statistical data was taken from the 2020 – 2021 records of the International Monetary Fund, the United Nations (Population Dynamics records), and WageIndicator.org.

It is also advisable to keep in mind the figures (territory in square kilometers, population, Gross Domestic Product per capita (per person)) related to the country with the biggest territory and highest Gross Domestic Product:

• Russia – 17,125,191 square kilometers, 144 million people, $30,800 GDP per capita;
• The USA – 9,525,067 square kilometers, 330 million people, $69,231 GDP per capita.

Having these numbers to compare will help you paint a more vivid picture.

Maldives and Seychelles

• The Republic of Maldives – 298.8 square kilometers, 541,000 people, $26,270 GDP per capita (compare to Russia’s $30,800).

It won’t be a revelation to any of you when we say that this tiny tropical country consisting of 1196 coral islands grouped in 2 chains of 26 atolls makes its living from tourism and service industries.

In 2015, service industries brought 81% of GDP. By the year 2022, the number went down to 70.76%, mostly because of the Covid-19 pandemic. Tourism and resorts provide the country with 28% of GDP, and seafood export occupies second place.

Seychelles has a similar situation: it is an archipelago with more than 100 islands where tourism is the main item on a balance sheet.

• The Republic of Seychelles – 455 square kilometers, 98,000 people, $32,000 GDP per capita (compare to Russia’s $30,800).

Within 46 years of independence from Great Britain, the GDP has increased by 7 times and become the highest in Africa. The income used to come principally from cotton and sugarcane plantations, and now tourism ensures 55% of GDP. The government is working on stimulating fishery and seafood export, producing tinned food and coconut fiber, as well as the agricultural industry so that the country doesn’t depend too much on tourism.

Bahrain

• The Kingdom of Bahrain – 665 square kilometers, 1,7 million people, $53,384 GDP per capita (compare to Russia’s $30,800 and $69,231 of the USA).

A neighbor of Saudi Arabia and Qatar, Bahrain is located in the Persian Gulf. It is an island, but, unlike many sea-locked countries, its income doesn’t rely on tourism. The cornerstone of its economy and commerce has always been the resources.

For a long time, pearl-fishery and selling the pearls abroad were the trades that made money. Then, in 1932 when an oil reserve was discovered, the focus shifted to extracting and exporting the black gold. It happened just in time: in the 1930-s the world developed the technologies for culturing artificial pearls, and their price reduced drastically.

Today, the oil industry brings 70% of the state income and 11% of GDP. Aluminum production and export comes in second.

The third pillar of Bahrain’s income is finance. Thanks to the religious principles of Islam, loans taken from the banks of Bahrain can’t be subject to interest rates, which makes the country perfect for off-shore investments. On top of that, there is also shipbuilding and fertilizer production, contributing to the excellent financial figures.

Monaco

The Principality of Monaco (a city-state and a microstate) – 2.02 square kilometers, 39,000 people, $173,688 GDP per capita (according to the World Bank national accounts and OECD National Accounts). Compare to Russia’s $30,800 and $69,231 of the USA.

Probably, the first thing that comes to mind in association with Monaco is the Monte-Carlo casino and gambling business. The Principality has indeed been attracting gamblers since the middle of the 19th century, thanks to its casinos. The gambling industry was a true breadwinner of the family. With time, the role of casino entertainment has gone down. In 2022, the entire tourism industry is estimated as an 11% part of Monaco’s economy, and casinos – just 4% of all the financial resources. It hasn’t just happened because of the soaring popularity of online casinos and gambling platforms with overwhelming actual cash pokies availability. Financial deals and real property trade have overshadowed the gambling industry. Plus, many people choose Monaco as a tax haven.

Singapore

Last but definitely not least, the legend that rose from one of the most dangerous and poorest places on the planet to a shiny, thriving city of the future in our present – Singapore.

• The Republic of Singapore (a city-state and a sovereign island country) – 778 square kilometers, 5,85 million people, $116,487 GDP per capita (compare to Russia’s $30,800 and $69,231 of the USA).

Just about 50 years ago, Singapore was a small city perishing under the burden of unemployment, low wages, awful infrastructure, and incredible corruption levels. Since then, the GDP has grown by 50 times.

Singapore of today is a futuristic city-state whose financial stability and abundance mostly come from finance and consulting services, insurance companies, producing electronics, and precision engineering. In addition, the Singapore port is the world leader in the tonnage of transported freights.

The secret to Singapore’s success is far from fortunate coincidence or unexpected oil reserves. It is more about leaders with firm fists, strict policies, and the death penalty.

The post Size Doesn’t Matter: The Smallest Rich Countries appeared first on The European Business Review.

The laws of international trade and investment arbitration have been weighted heavily against developing and emerging economies and in favour of developed states from their inception. Historically, the regulation of global trade and investment has followed patterns of Empire, persisting for long periods after formal control ended. This has typically been to the benefit of the old Imperial powers. 

A 2015 survey of 500 investment arbitrations between the developing and the developed world concluded that: international trade arbitration tends to ‘favour the “haves” over the “have-nots”, making the international investment regime harder on poorer than on richer countries.’ 

A case which breaks the mould? 

It is a complex tale, the best full account of which has been featured in Bloomberg. It starts with a former Irish show band promoter and arms dealer, Michael Quinn, and his accomplice Brendan Cahill, who created a shell company called P&ID. With high-level support from government representatives in Nigeria, Quinn is alleged to have bribed his way into securing a contract for a gas supply and processing agreement (GSPA) to build a costly processing plant for the government in Abuja. 

Years passed and it became obvious that, not only did Quinn and P&ID have no clue how to build the plant they promised to deliver, but cancelling the deal would mean the government of Nigeria could be liable to pay billions in damages. Nevertheless, Abuja cancelled the contract citing non-delivery. P&ID launched closed arbitration proceedings in London, which the Nigerian Ministry of Petroleum Resources kept a tight hold over – a highly unusual move. The government lost, and in March 2013 P&ID was awarded $6.6 billion; compensation for what P&ID might have made if they had constructed the plant they clearly didn’t know how to build. P&ID was also awarded interest of $1 million a day for each day the Nigerian state fails to pay them. Today, the total amount owed by Nigeria to P&ID is roughly $10 billion. 

Up to this point in the story it is neo-colonial business as usual. The West has created and used cultures of corruption for decades. Indeed, the West has a genius for inventing new and ever more elaborate ways of keeping neo-colonialism alive. Corruption gradually replaced direct rule as the most efficient means of continuing to milk the natural resources of Africa as independence movements swept the continent. China has listened and learned but arguably the most successful adventurers remain the Western heirs of those who broke open the continent in the 18th and 19th centuries, reinventing the great game through corruption and the systems of international trade law. 

And over the decades, when African governments have exposed that the international arbitration system works against them. Vulture funds that specialise in recovering bad debt put massive resources into these legal fights knowing that, if they win, states will have to pay them back in order to maintain their position in the international legal system and defend their credit ratings. In this case, Lismore Capital and VR Advisory (which is owed by VR Capital), acquired majority stakes in P&ID whose only “asset” was the debt owed to it by the Nigerian government.

But, in this case, things have been unravelling for the neo-colonialist con men and their vulture fund backers. In Nigeria, officials were convicted of fraud. Nigeria’s Minister of Justice who oversaw the deal was arrested. Michael Quinn has since died, and two Britons, James Nolan and Adam Quinn, linked to P&ID have been charged with 32 counts of money laundering and corruption. 

Nigeria has also had success in the British Virgin Islands (BVI), where it was recently granted access to crucial documentation following a successful appeal. Most importantly, in 2020, Nigeria was granted the right to appeal the arbitration before the High Court in London. Technically, Nigeria had missed its window to appeal the award, but the High Court judged that the evidence for fraud on the part of P&ID was so strong that Abuja would be allowed to bring its case. 

When the High Court decided that the case should be heard it did so because it found, as summed up on one anti-corruption site, that there was a ‘strong prima facie case’ that: 

• the underlying P&ID contract ‘was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria’; and
• P&ID’s main witness had given perjured evidence during arbitration including as to whether P&ID was in a position to perform the contract; 

It would be a good result if Nigeria wins this case, and not only because the award P&ID is claiming would be enough to pay the country’s health budget for seven years. A Nigerian win would represent a rare victory for the developing world over its former rulers. 

But, regardless of the outcome, the vulture funds will still be in operation, the West and China will still use corruption to exploit the natural resources of Africa and legal systems created in the age of Empire will still be heavily weighted against the former colonies. 

The Nigerian legal strategy and the sheer scale of corruption exposed in this case show the high threshold needed to win in these kinds of battles, but the signs are encouraging. Perhaps the age of neo-colonial justice is beginning to pass into history – where it belongs.

The post Is the Nigeria vs P&ID case the Empire’s Last Stand? appeared first on The European Business Review.

After the collapse of the Soviet Union, the IT sector flourished in countries like Ukraine, attracting many young people to the industry. The war in Ukraine changed everything.  This war will be closer to many people working in technology, especially in Europe and the United States. The Ukrainian diaspora – Ukrainians and their descendants – enjoys an exceptionally high reputation worldwide. Companies like PayPal, WhatsApp, Affirm, GitLab, Grammarly were founded or co-founded by Ukrainian software engineers and are known/used by many.   

Ukraine has become a popular destination for many companies to hire full-time employees. Ukraine is so popular because it has good, highly qualified engineering staff. And highly skilled technical talent can be employed quickly for a reasonable price.   

Before the war, the technology sector was on the basis of Ukraine’s economy, generating about 4% of gross domestic product (GDP). But war is, of course, forcing more and more companies into crisis. Large software companies have started relocating some or all of their operations and employees to the western regions of Ukraine. Many tech companies have invested time and money to support their employees with everything they need: transfers to safer places, shelter, food, and so on.   

Software development outsourcing and consulting company Agiliway, with offices in Lviv and Chernivtsi, Ukraine, and Austin, Texas, is no exception. It was an easy decision for the company to keep running a business and donate money from the income to the army. Back in 2015, they decided not to support the aggressors’ economy, not to hire developers, and not to work with customers from Russia. When the full-on invasion of Ukraine began, they acted decisively and quickly opened an office in Kraków, Poland.  “The current situation in Ukraine became a trigger to boost the process under BCP. Today, we already have over a dozen Agiliway team members relocated to Poland,” said Sergiy Kornienko, CEO and Co-Founder of Agiliway.   

Ukrainian software specialists are doing their best to stay in business. About 70% of them work as freelancers in western companies, so they have to work if they want to make a profit. Clients aren’t staying aside and providing much support. For example, they made advance payments or even paid for days on which they could not work due to the war. Not to mention that new orders from new customers are not slowing down either.   

“Our partners can be sure to receive the same high-quality service along with mitigated risks while cooperating with the EU-based company,” commented Sergiy Korniyenko.  

Several international software firms are switching from Russian IT service providers to Ukrainian alternatives. Moreover, once the war is over, Ukraine is anticipated to become a tech paradise that’ll become a genuine engine of growth for the whole country. 

The post IT Industry Role in Ukrainian GDP appeared first on The European Business Review.

The UN Charter, signed in 1945, reflects the international community’s collective transnationalist view that unilateral tactics, coercion, and sheer force would no longer be tolerated to compel submission to individual ambitions and desires. In the years since, the principles of the UN Charter to promote peace and respect for human rights have increasingly been understood as a responsibility on the part of the global community to protect against the horrors of genocide and other human rights abuses—a duty known as the “Responsibility to Protect” or “R2P.” Today, the Responsibility to Protect doctrine presents a call to action. It is imperative for States to intervene to protect Ukraine and its civilians from the Russian Federation’s unprovoked invasion and use of weapons in civilian populated areas.

Introduction

After the World Wars, the establishment of the United Nations sought to put an end to all war by implementing broad prohibitions on the use and even the threat of use of force, allowing only an exception for self-defense.[1] The UN Charter clearly states “[a]ll Members shall settle their international disputes by peaceful means in such a manner that international peace and security, and justice, are not endangered”[2] and “[a]ll Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.”[3] In sum, the UN Charter reflects the worldview collectively adopted by States at the time: they had agreed that unilateral tactics, coercion, and sheer force would no longer be tolerated to compel submission to individual ambitions and desires.[4]

In the intervening decades, the principles of the UN Charter to promote peace and respect for human rights increasingly have been understood as a responsibility on the part of the global community to protect against the horrors of genocide and other human rights abuses—a duty known as the “Responsibility to Protect” or “R2P.”

These responsibilities cannot be reconciled with current events. Last week, the Russian Federation, a member of the UN, blatantly breached the UN Charter. Russia invaded Ukraine without provocation and is indiscriminately using weapons in civilian populated areas and acting in direct defiance of the UN Charter[5] and international humanitarian laws.[6]

On February 24, 2022, the UN Refugee Agency released a statement advising that “[w]e are gravely concerned about the fast-deteriorating situation and ongoing military action in Ukraine. The humanitarian consequences on civilian populations will be devastating.”[7] The UN’s Secretary General António Guterres stated: “The price in human suffering, destruction and damage to European and global security is too high to contemplate. We simply cannot accept even the possibility of such a disastrous confrontation.”[8]

The UN Human Rights Council already has been called to “urgently convene to discuss the crisis and establish a mechanism to monitor and report on human rights abuses, especially those that may amount to war crimes or crimes against humanity.[9] United States Secretary of State Anthony J. Blinken has described the crisis as “the greatest threat to security in Europe since World War II.”[10]

The magnitude of this crisis is evidenced by the numbers. As of this writing, it is estimated that there have been more than 50,000 casualties in Ukraine and 1.5 million internally displaced persons[11] and, within just these first few days after the invasion began, the UN has estimated that over 368,000 refugees have fled from Ukraine.[12] Meanwhile, the world is watching these events unfold in real time through various instantaneous streams of information, including unfiltered and raw pleas for support over social media. There is undoubtedly urgent need for States to address and prevent Russian’s invasion of Ukraine’s sovereignty and the atrocities being committed against civilians.

Russia’s Ability to Undermine the UN’s Intent and Purpose

A fundamental purpose of the UN is “[t]o achieve international co-operation in solving international problems of an economic, social, cultural, or humanitarian character.”[13] Consistent with this purpose, the UN Security Council was created to authorize the use of force in response to “any threat to the peace, breach of the peace or act of aggression”[14]—including the ongoing unlawful invasion of Ukraine by Russia, making the Security Council unable, indeed impudent to deal with Russia’s ongoing invasion of Ukraine.

The veto power given to the five permanent members of the Security Council, which includes Russia, makes it nearly impossible for the Security Council to authorize use of force in this particular situation. So long all UN Member States permit Russia to remain on the Security Council—much less allow Ambassador Vasily Nebenzya to remain as its President—Russia’s veto power on the Council means that it will never be capable of appropriately responding to Russia’s own “threat to the peace, breach of the peace or act of aggression” in Ukraine.[15]

Russia’s ability to impede the Security Council from taking action has already been seen. On February 25, 2022, Russia vetoed a draft Security Council Resolution, which “would have deplored Moscow’s invasion of Ukraine” and “demanded that Russia immediately cease its use of force against Ukraine” and “immediately, completely, and unconditionally withdraw all of its military forces from the territory of Ukraine within its internationally recognized borders.”[16]

Importantly, on February 28, 2022, the UN General Assembly held an Emergency Special Session on Russia’s attack on Ukraine—only the 11^th emergency special session in the UN’s history—to condemn Russia’s unlawful invasion of Ukraine.[17]

The present inability of the Security Council to authorize action undermines the intent and purpose of the UN as a whole. Some argue that the UN’s failure to respond to the horrors of mass atrocities fundamentally changes the binding nature of the UN Charter because the present circumstances are resulting in repeated violations of Article 2(4), which broadly prohibits the use and even the threat of use of force, save for the self-defense exception which does not apply here.[18]

The Role of the Responsibility to Protect Doctrine

The international community has undoubtedly articulated an interest in working collectively to prevent mass atrocities and humanitarian disasters, resulting in the Responsibility to Protect doctrine. The Responsibility to Protect doctrine requires States to prevent, react to, and rebuild following human rights crises. This principle is acknowledged by the UN. Indeed, the responsibility is grounded in “well-established legal obligations that entail an obligation not only to punish atrocity crimes but also to prevent them.”[19] In fact, it is a collective duty upon society. The UN notes that “it is important that States partner with other actors, such as international and regional organisations, as well as civil society actors, to receive support and amplify their efforts in this regard.”[20]

Specifically, the UN recognizes three pillars to the Responsibility to Protect doctrine:

• “Every state has the Responsibility to Protect its populations from four mass atrocity crimes: genocide, war crimes, crimes against humanity and ethnic cleansing,”
• “The wider international community has the responsibility to encourage and assist individual States in meeting that responsibility,” and
• “If a state is manifestly failing to protect its populations, the international community must be prepared to take appropriate collective action, in a timely and decisive manner and in accordance with the U.N. Charter.”[21]

This includes the current situation involving Ukraine, which has pleaded for other States to help defend against an overwhelmingly larger Russian military. The imperative is also clear: Ukraine simply is unable to defend itself alone should Russia decide to double-down on its efforts crush Ukraine and its leadership.

While the Responsibility to Protect doctrine may not be specifically delineated as such in any treaty, international scholars, nations, and the UN itself agree that it is part of customary international law, which is binding on all States, regardless of whether it has been codified as such, or whether the State consents. The Responsibility to Protect doctrine “has been invoked in more than 80 U.N. Security Council resolutions…[,] in more than 50 Human Rights Council resolutions and 13 General Assembly resolutions.”[22] The Responsibility to Protect doctrine can also be seen in the Fourth Geneva Convention for the Protection of Civilian Persons in Time of War,[23] specifically the Convention provides that “[c]ivilians are to be protected from murder, torture or brutality…”[24]

Additionally, the doctrine has been affirmed multiple times in history. In 2000, the “geographically diverse” International Commission on Intervention and State Sovereignty, convened by Canada, articulated a global responsibility to prevent, react to, and rebuild following human rights crises.[25]

In 2004, the Report of the Secretary-General’s High-level Panel on Threats, Challenges and Change identified both a “State and international responsibility to protect civilians from the effects of war and human rights abuses.”[26] While the 2004 Report noted that the Responsibility to Protect doctrine “has yet to truly overcome the tension between the competing claims of sovereign inviolability and the right to intervene” and suffered additionally from an “operational challenge,” as “[c]ollective security institutions have proved particularly poor at meeting the challenge posed by large-scale, gross human rights abuses and genocide,” ultimately the UN has invoked the doctrine when authorizing intervention.[27] And, ironically, the Responsibility to Protect doctrine was Russia’s erroneous justification for both its illegal annexation of Crimea in 2014[28] and likely is part of its justification of the current unprovoked, illegal invasion of Ukraine.

In 2011, the UN Security Council partly justified authorization of limited military intervention in Libya based upon the Responsibility to Protect doctrine.[29] Furthermore, since 2009, the UN Secretary-General has released a report on the Responsibility to Protect every year, demonstrating the gradual acceptance of the doctrine.[30]

Additionally, supporters of the Responsibility to Protect doctrine rely on the belief that the underlying principles and goals of the UN Charter can only be realized when its text is read in the context of changing geopolitical and economic realities. Although Article 2(4) of the UN Charter does not include an exception for unilateral intervention involving the use of force based upon humanitarian interests,[31] it is understood that the Charter aims to promote peace and respect for human rights. Thus, the law must evolve where a normative change has taken place in international law, namely the recognition of a responsibility to protect and the legitimacy of unilateral use of force in limited circumstances.[32]

An Important Call to Action

Although there are fears that intervention on the basis of humanitarian reasons could be used as a pretext for aggression premised upon distinctly non-humanitarian interests—as Russia did in Crimea and currently is doing to seek unlawful regime change in Ukraine— in 1625 Dutch jurist Hugo Grotius notably concluded that “a right does not at once cease to exist in case it is to some extent abused…”[33] Professor Ian Hurd, an expert on international law and politics at Northwestern University, has recently considered the question and concluded that “[t]he debate suggests that humanitarian intervention is either legal or illegal depending on one’s understanding of how international law is constructed, changed, and represented. No amount of debate over the law or recent cases will resolve its status.”[34] 

Russia’s invasion of Ukraine has already had an extreme impact on bordering countries. Hundreds of thousands of refugees have been flooding Romania, Poland, and other countries in search of safety.[35] The UN estimates that as a result of Russia’s bombardment of Ukraine, there have been at least 240 civilian casualties—a number that grows every hour that other countries do not fulfill the duties arising from their Responsibility to Protect.[36] And this is only the start of the Ukrainian refugee crisis. The UN notes that “the actual figures were likely to be ‘considerably higher.’”[37] The impact on civilians is clear. Not only have many homes been damaged and/or destroyed, and numerous civilians including children killed by the Russian military, but civilian infrastructure has also been irreparably harmed.[38] Many Ukrainians are now without electricity, water, or access to markets.[39]

While Ukraine is not a part of NATO, and thus not entitled to the security protections offered by the thirty member nations, NATO Member States have considered the risk to sovereignty that Russia’s invasion of Ukraine poses. NATO allies are prepared to defend NATO territory if Russia were to attempt to expand its incursion on the territory of NATO Member States. But such hesitancy on the party of NATO Member States to intervene militarily is inconsistent with their Responsibility to Protect the people of Ukraine.

This, of course, raises the question of how long States can wait to intervene militarily in Ukraine given Russia’s clear desire to topple Ukraine’s current, democratically-elected government. Indeed, during Russia’s ongoing illegal invasion of Ukraine, Russia has threatened “military and political consequences” against both Finland and Sweden if they attempt to join NATO.[40] The Council on Foreign Relations anticipates that “[t]ensions are likely to increase between Russia and neighbouring NATO member countries” likely triggering NATO obligations.[41] How long can States wait to stop Russia from destroying Ukraine, and threatening other countries in order to end Russia’s growing ambitions to prevent any additional countries from joining NATO?

As an example, military intervention was authorized in Libya in order to minimize the possible domestic impact of a refugee crisis as well as “to prevent destabilizing the region…”[42] It is reasonable for individual States to be motivated, at least in part, by a desire to mitigate or avoid the invasion of cross-border chaos—something all of Europe, most especially its direct neighbours—must consider.

Perhaps if the imperative must be underscored, it is worth revisiting the origins of the UN and its Charter. World War II was devastating and the powers remaining after its atrocities recognized the dire importance of peace and amicable and conciliatory frameworks to prevent mass atrocities from being committed again.[43] The UN is foundational to additional and further institutions that have emerged in the intervening decades to help build the transnationalist legal order, including for example the World Bank and the World Trade Organization. It is precisely these international institutions that allow the international community to grow and prosper. In this globalized world, there simply is no room for unilateral tactics and go-it-alone attitudes.

Meanwhile, in stark contrast, the Russian invasion of Ukraine has been referred to as the greatest threat to the European Union since World War II.[44] UN Secretary General Guterres has acknowledged that “[t]he protection of civilians must be priority number one. International humanitarian and human rights laws must be upheld. The decisions of the coming days will shape our World and directly affect the lives of millions upon millions of people.”[45]

Indeed, the United States and the United Kingdom arguably have a special obligation to protect Ukraine from the Russian invasion. In 1994, the United States, Russia, and the United Kingdom signed the Budapest Memorandum, committing “to respect the independence and sovereignty and the existing borders of Ukraine” and “to refrain from the threat or use of force” against Ukraine.[46] While the Memorandum was not a collective defense treaty and does not require the United States or the United Kingdom to commit military forces, it does require that they do “their utmost to stop it.”[47]

Today, the Responsibility to Protect doctrine presents a call to action. States must intervene in accordance with the UN Charter and the indisputable Responsibility to Protect doctrine[48] to protect Ukraine and its civilians from Russia’s unprovoked invasion and use of weapons in civilian populated areas. States must ensure that the people of Ukraine, including its heroic leadership, do not all become victims of Russian war crimes, crimes against humanity, and aggression—charges which are already being investigated by the International Criminal Court.[49]

The article was first published in The World Financial Review.

About the Authors

Charles H. Camp is an international lawyer with over thirty years of experience representing foreign and domestic clients in international litigation, arbitration, negotiation, and international debt recovery. In 2001, Mr. Camp opened the Law Offices of Charles H. Camp, P.C. in Washington, D.C. to focus on effective, personalized representation in complex, international matters. Mr. Camp teaches international negotiations at the George Washington University Law School.

Kiran Nasir Gore is Counsel at the Law Offices of Charles H. Camp, P.C. She advocates before U.S. courts, commercial and investment arbitration tribunals, and investigative authorities. She has special expertise in matters of public international law and international dispute resolution. Kiran also draws on her professional experiences as an educator at the George Washington University Law School and New York University’s Global Study Center in Washington, D.C.

Lilia Chu is a Law Clerk at the Law Offices of Charles H. Camp, P.C. She graduated from New York University in 2017 and is currently pursuing a Juris Doctorate at George Washington University Law School. She is a member of The George Washington International Law Review and former Deputy Moderator in Chief of GW’s International Law and Policy Brief. 

References

• [1] UN Charter, at Arts 2(4), 51.
• [2] Id. at Art. 2(3).
• [3] Id. at Art. 2(4).
• [4] See generally Myres S. McDougal & Florentino P. Feliciano, International Coercion and World Public Order: The General Principles of the Law of War, 67 YALE L.J. 771 (1958). See also Thomas G. Weiss, The United Nations: Before, During and After 1945, 91 INT’L AFF. 1221, 1226–29 (2015).
• [5] Statement on Ukraine, United Nations (Feb. 24, 2022), https://www.un.org/press/en/2022/sgsm21158.doc.htm.
• [6] Statement on the Situation in Ukraine, Global Centre For The Responsibility To Protect (Feb. 24, 2022), https://www.globalr2p.org/publications/statement-on-the-situation-in-ukraine/.
• [7] Statement on the Situation in Ukraine Attributed to U.N. High Commissioner for Refugees Filippo Grandi, UNHCR The U.N. Refugee Agency (Feb. 24, 2022), https://www.unhcr.org/en-us/news/press/2022/2/621770524/statement-situation-ukraine-attributed-un-high-commissioner-refugees-filippo.html.
• [8] Secretary-General’s Remarks to the Press Stakeout – on Ukraine, United Nations Ukraine (Feb. 14, 2022), https://ukraine.un.org/en/172123-secretary-generals-remarks-press-stakeout-ukraine.
• [9] Id.
• [10] Remarks, Anthony J. Blinken, Sec. of State & Dmytro Kuleba, Ukrainian Foreign Minister (Feb. 22, 2022), https://www.state.gov/secretary-antony-j-blinken-and-ukrainian-foreign-minister-dmytro-kuleba-at-a-joint-press-availability-2/ [hereinafter Blinken and Kuleba Remarks].
• [11] Global Conflict Tracker: Conflict in Ukraine, Council on Foreign Relations, https://www.cfr.org/global-conflict-tracker/conflict/conflict-ukraine (last accessed Feb. 27, 2022).
• [12] Michael Shields, Ukrainian Refugee Outflow Hits 368,000, still rising – U.N., NPR (Feb. 27, 2022), https://www.reuters.com/world/europe/ukrainian-refugee-outflow-hits-368000-still-rising-un-2022-02-27/.
• [13] UN Charter, Art. 1, at ¶ 3.
• [14] Id. at Art. 39.
• [15] Id. at Art. 39. “[A]ction cannot be taken on an issue that is brought before the Security Council if any one of the permanent members vote ‘no’ on a draft resolution.” Security Council, Model United Nations, United Nations, https://www.un.org/en/model-united-nations/security-council.
• [16] Michelle Nichols and Humeyra Pamuk, Russia Vetoes U.N. Security Action on Ukraine as China Abstains, Reuters (Feb. 22, 2022), https://www.reuters.com/world/russia-vetoes-un-security-action-ukraine-china-abstains-2022-02-25/.
• [17] Security Council vote sets up emergency UN General Assembly session on Ukraine crisis, United Nations (Feb. 27. 2022), https://news.un.org/en/story/2022/02/1112842.
• [18] Ian Hurd, Is Humanitarian Intervention Legal?, 25 Ethics & International Affairs 3, 293, 303 (2011) (citing Michael Gelnnon, The Fog of Law: Self-Defense, Inherence, and Incoherence in Art. 51 of the United Nations Charter, 25 Harv. J.L. & Pub. pol’y, 539-58 (2002)).
• [19] Responsibility to Protect, United Nations, Office on Genocide Prevention And The Responsibility to Protect, https://www.un.org/en/genocideprevention/member-states.shtml.
• [20] Id.
• [21] What is R2P?, Global Centre For the Responsibility To Protect, https://www.globalr2p.org/what-is-r2p/.
• [22] What is R2P?, supra note 21.
• [23] Convention (IV) relative to the Protection of Civilian Persons in Time of War. Geneva, 12 August 1949.
• [24] Id. at Arts 13, 32.
• [25] Implementing the Responsibility to Protect, Report of the Secretary-General, U.N. Doc. A/63/677 (2009) at ¶ 9.
• [26] A More Secure World: Our Shared Responsibility, Report of the Secretary-General’s High-level Panel on Threats, Challenges, and Change, U.N. Doc. A/59/565 (2004) at ¶ 36.
• [27] Id.
• [28] Steven Pifer, Crimea: Six years after illegal annexation, Brookings (Mar. 17, 2020), https://www.brookings.edu/blog/order-from-chaos/2020/03/17/crimea-six-years-after-illegal-annexation/.
• [29] Security Council Res. 1973 (March 17, 2011). This allowed “a NATO-led alliance” to conduct “air strikes against military targets that posed a severe threat to civilians. Libya, Global Centre For Responsibility to Protect (Oct. 20, 2021), https://www.globalr2p.org/countries/libya/.
• [30] Catherine Renshaw, R2P: An Idea Whose Time Never Comes, Lowy Institute (Jun. 2, 2011), https://www.lowyinstitute.org/the-interpreter/r2p-idea-whose-time-never-comes.
• [31] UN Charter at 2(4).
• [32] Id.
• [33] Goodman at 107 quoting Hugo Grotius, De Jure Belli Ac Pacis Libri Tres, ch. XXV, pt. VIII (4) (Carnegie ed., Francis W. Kelsey trans. 1925) (1625).
• [34] Hurd, supra note 18 at 293.
• [35] Andrew Higgins, At the Polish Border, Tens of Thousands of Ukrainian Refugees, NYTimes (Feb. 25, 2022), https://www.nytimes.com/2022/02/25/world/europe/ukrainian-refugees-poland.html.
• [36] U.N. Reports At Least 240 Civilian Casualties, 64 Deaths in Ukraine, Reuters (Feb. 27, 2022, 2:42 AM EST), https://www.reuters.com/world/europe/un-reports-least-240-civilian-casualties-64-deaths-ukraine-2022-02-27/.
• [37] Id.
• [38] Id.
• [39] Id.
• [40] Lexi Lonas, Russia Threatens “Military and Political Consequences” If Finland, Sweden try joining NATO, The HILL (Feb. 25, 2022, 12:53 PM EST), https://thehill.com/policy/international/russia/595853-russia-threatens-military-and-political-consequences-if-finland?rl=1.
• [41] Global Conflict Tracker: Conflict in Ukraine, Council on Foreign Relations, https://www.cfr.org/global-conflict-tracker/conflict/conflict-ukraine.
• [42] Catherine Powell, Libya: A MultiLateral Constitutional Moment?, 106 A.J.I.L. 298, 314 (2012).
• [43] United Nations, History.com (Aug. 21, 2018), https://www.history.com/topics/world-war-ii/united-nations.
• [44] Blinken and Kuleba Remarks, supra note 12.
• [45] Statement on Ukraine, supra note 5.
• [46] Budapest Memorandum on Security Assurances (1994).
• [47] Blinken and Kuleba Remarks, supra note 12.
• [48] Ivana Stradner, A Responsibility to Protect Ukraine, AEI (Feb. 22, 2022), https://www.aei.org/foreign-and-defense-policy/a-responsibility-to-protect-ukraine/ (“The world has a responsibility to protect a sovereign state from unprovoked aggression, and Ukraine has a responsibility to protect its people.”).
• [49] Statement of ICC Prosecutor, Karim A.A. Khan QC, on the Situation in Ukraine: “I have decided to proceed with opening an investigation,” ICC (Feb. 28, 2022), https://www.icc-cpi.int/Pages/item.aspx?name=20220228-prosecutor-statement-ukraine.

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Another issue that has been addressed during this hard time, was Crypto volatility, this was the trend that has ranked very high in the tough times and had cast a vulnerable effect over the entire crypto economy. If you are interested in bitcoin trading visit Immediate Edge.

To understand it in-depth, we will be starting with the basic definition and our main discussion on how to tackle it will be followed upon.

What is Crypto Volatility?

Volatility, this term denotes the amount of price that has been moved up and down the scale of a certain asset, and if linked with the word, ‘Crypto’, then it takes a significant shape related to the price fluctuation of crypto assets.

For example, Crypto arts, Cryptocurrencies, etc., now this movement of prices are not long-lived, they are disturbed for a very short period, but even this short period can be very impactful.

If looking up for the correct reason, then you can settle upon the most important reason that is the new entry of that particular coin or asset, their newness is the main thing which takes around to let them settle in some period.

The top ways to reduce crypto Volatility

Crypto volatility is the measure of price fluctuations of crypto assets, now the fundamentals of how to regulate this Volatility is the big picture! Well, speaking honestly! Crypto Volatility is not certainly the bad thing, but even looking at how certain it is being implied matters the most!

So, if Crypto volatility is creating downward pressure, you can have these ways to manage the situations, these are considered as the fundamentals of the market correction:

1. Money Management

It is advised that investors must not put a huge amount in the crypto wallet or crypto market, because it can cast a sudden impact on your invested capital.

Therefore, it is easier to invest it thoroughly, like having a small amount and reducing the heavy amount to be invested, another thing that you can do is to make sure you are also putting your money on the traditional stocks or assets to navigate safely.

2. Future Intelligence

One can also take help from certain finance derivatives that suggest you can opt for some currency’s future contracts, which also denotes what will be the certain potential of that coin. Apart from this, you can also go along with the offer given by big exchanges that provide hedge solutions to their customers.

If you are not familiar with the term Hedge, let us tell you that Hedge is the investment made to reduce the risk of negative price movements in the market.

3. Stablecoins

Stablecoins, we have discussed their importance so many times, that these coins are the way to reduce the fluctuations and to bring stability to the market.

These coins are pegged with the market value of fiat currencies so that if you are exchanging your fiat currency into crypto, no price fluctuations will be created and you can make transfers easily.

Conclusion

Planning for time balancing in the context of cryptocurrencies is not a good way to remain safe, you have to calculate all the possibilities, which includes how old the crypto asset is? What are the possibilities of it? Because small selling off or huge amounts of trading volume can certainly create a huge difference.

The post What Are the Top Ways to Reduce Crypto Volatility: How to Stabilize the Market? appeared first on The European Business Review.

The focus of economists is the uncertain outlook for global growth in the near term. However, long- and medium-term outlooks are bleak due to the changing demographics, tensions between China and the US, excessive leverage, reshoring, and generally the limited macro-space. Growth rates that are sustainable are likely to continue to slide down in the coming decade.

To make matters worse, the Chinese or German development models have become old and require a complete overhaul. It is a matter of debate. They account for almost one-quarter of the world’s GDP.

The growth of China over the past twenty years was astonishing. Prior to the 2008 financial crisis, it was driven by exports and large-scale credit growth following the crisis.

The quality of growth has also been affected by state-owned banks that pump out surplus liquidity to state-owned companies as well as housing speculation and local government inefficiency. Authorities are currently seeking to limit the high level of leverage and the risk of financial instability. The result is slowing economic growth and putting pressure on a weak housing market – which, by some estimates, accounts for 30 percent of GDP. The potential growth in the next decade is expected to fall to 5percent, if not any further. Some analysts believe it is possible that even if top-quality productive investments were to be financed and financed by high-quality productive investments, the growth potential could be as high as 3 percent.

The authorities have been discussing for years changing the focus of growth from investment towards consumption and services. However, that change isn’t happening at a satisfying rate. While China’s current balance surplus – that is, the gap between investment and savings – decreased significantly relative to GDP following the global economic crisis, high savings continue to squeeze spending. 

In this context, the pursuit by the authorities for general prosperity as well as dual circulation appears in itself quite rational. To combat inequality through common prosperity is about increasing the income of lower and middle-income people and thereby increasing consumption. The increase in demand for domestic goods and services due to dual circulation would be vital due to the fact that China has a large international footprint and is particularly vulnerable to the global geopolitical turmoil, to be reliant on the global economy to sustain itself.

These policies are more easily formulated and implemented. Without significant credit expansion and with monetary restrictions the fiscal policy needs to increase its efforts to encourage growth and decrease inequality. While macro policies will reduce, Chinese authorities are emphasizing stability. The private sector in China is more effective than its public sector however the president Xi Jinping is cracking down on the private sector. Implementation of the reforms will require concrete plans, like the climate infrastructure, hukou, and education reforms.

The German economy has been driven by exports. The current account surplus has hovered between 7% and 7 percent of GDP over the past few years, and the IMF predicts that this trend will keep going. The domestic economy is still in decline as Germany absorbs the demand from Europe as well as from overseas. The strength of its exports is apparent across Europe as well as China. The auto industry – which, according to some estimates, is close to 10 percent of the GDP and more than 1 million people – is a key player.

In the past 20 years, Germany’s growing current account surpluses have resulted in constant investment as well as rapidly rising savings in the national economy.

The same is true for private consumption, which remains quite low in percentage of GDP in an advanced economy, in the range of 50 percent. Furthermore, wage control has cut down on the rise of unit labor costs and has helped to maintain strong export competitiveness, while limiting consumption. Investors can keep track of their portfolio and net worth using Prillionaires wealth management software for high net-worth individuals

Growth in the global market, however, is likely to slow down in the coming decade. European growth will be modest. A more restrictive international trading environment and reshoring within the coming years and tensions between China and America can create more problems for the external conditions that are affecting Germany. The German auto industry is facing an extremely difficult transition.

The new government is set to take its first term against this backdrop. Its laudable plans to employ budgetary strategies to overcome the debt brake and improve infrastructure and climate spending are a sign of more investment and fewer savings for the public. This could boost domestic demand, and reduce the dependence on external sources.

However, given the Free Democratic Party leadership of the Finance Ministry and innate German conservatism, the government may just be cautious about avoiding the debt brake. Unions aren’t requesting sufficiently significant wage increases that could dramatically increase the proportion of labor’s income, and consequently consumption.

So, there’s little reason to believe that Germany is likely to make an overhaul of its course and reorient its growth model away from relying on hopes of external demand.

But, it is important not to undervalue Germany’s ability to adapt. After the unification, Germany was seen as the “sick guy” of Europe. However, after squeezing unit labor costs from the beginning of the 2000s and the effect of the Hartz reforms implemented by the SPD Schroeder government, Germany returned to its status as the leading force in Europe. Can this next Scholz cabinet be able to change the script on climate change digitization, infrastructure, and digitalization?

The difficulties facing post-pandemic country growth models, especially those for Germany and China are definitely worthwhile to add to the lengthy list of vulnerabilities and risks that will be faced by the global economy in the 2020s.

The post Germany and China’s Growth Models are Falling Behind appeared first on The European Business Review.

“This has consequences for leadership responsibilities, as it’s clear that talent attraction and retention is no longer just a policy issue. It’s also the responsibility of senior executives who need to realize their role in boosting worker motivation, which is not just driven by external factors such as salary, safety, or quality of life, but also by the opportunities leaders can provide for workers to reskill, to work flexibly, and to have the use of the best tech at their fingertips,” said Arturo Bris, Director of the IMD World Competitiveness Center, which is behind the research.

Sweden is 2nd (up from 5th in 2020 in the same ranking), Luxembourg 3rd (also 3rd in 2020), Norway 4th, and Denmark 5th. Switzerland has been ranked number 1 for five years in a row.

Researchers asked executives in 64 economies how high they perceived worker motivation to be. Taken as a median of the top-10 ranking economies, the answer out of 10 has evolved from 6.1 to 7.5 between 2020 and 2021.

The least talent-competitive economies showed a decrease in motivation. In 2020, the median answer was 5.7 vs 5.3 this year.

“Clearly, mobility issues throughout the pandemic have meant there is less brain drain – well-educated and skilled people leaving their country – everywhere since 2020. But there is not such a marked drop in talent-rich economies than predicted because there has been an increase in motivation. Talent-weak economies, on the other hand, are suffering even more from brain drain than is consistent with the blows of the pandemic and the need to find a job anywhere,” added Bris.

In the survey that contributed to the results, executives were asked if they agreed that brain drain was not hindering the competitiveness of their economy. Agreement was high in the top 10 ranking economies (a median of 7.3 vs 5 in 2020); agreement was low in the bottom 10 economies (a median of 4 in 2021 vs 5 in 2020).

Switzerland remains in the leading position as a result of its sustained performance in all three factors: Investment & Development (1st), Appeal (1st) and Readiness (3th). The country’s performance is strongly supported by public expenditure in education, the implementation of apprenticeships, the prioritization of employee training, and the overall effectiveness of the health system.

Sweden moves up to 2nd place (from 5th) thanks to improvements in its performance in Appeal (3rd, up from 4th) and Readiness (4th, up from 11th). Its performance in the PISA educational assessment, its availability of skilled labor, its finance skills, and plethora of competent senior managers and managers with international experience are key.

Luxembourg remains in 3rd place with a strong performance in Investment & Development and Appeal factors – 2nd in both. It enjoys a particularly strong performance in total public expenditure on education per student and its quality of education (measured by pupil– teacher ratio). Similar to Switzerland and Sweden, Luxembourg’s Appeal is enhanced by the high quality of life that it offers, combined with the reduced impact of brain drain and the availability of foreign highly skilled personnel.

Norway’s rise from 7th position to 4th is notable. Its total public expenditure on education (per student, 4th), quality of education (measured by pupil–teacher ratio in primary education, 5th) and the effectiveness of its health infrastructure enables it to maintain 5th position in Investment & Development. There have also been improvements in the availability of foreign, highly skilled personnel as well as a fair administration of justice and measures of environmental protection (i.e. exposure to particle pollution).

Denmark declines three places to 5th. Despite the decline, the country performs strongly in the Investment & Development (3rd and Readiness (8th) factors. It has good total public expenditure on education (per student, 6th), the implementation of apprenticeship programs (4th), prioritization of employee training (2nd), female labor-force level (12th), and the effectiveness of the health system (2nd). In terms of Appeal (18th), a robust performance in attracting and retaining talent (2nd), worker motivation (1st), the effect of brain drain (5th), and quality of life (4th) are offset by the level of collected personal income tax (63rd) and a high cost of living (50th).

A regional deep dive 

Western Europe dominates the ranking. Improvements regionally in the past year can be observed in Eastern Asia, Eastern Europe, and Central Asia. Declines are apparent in North America, Southern Asia and the Pacific, Western Asia, Africa, and South America.

In Europe, Spain remains stable, in the same position it has been for the past five years – at 32nd – aside from a minor deviation in 2018 when it rose a position. Notably, Investment & Development has been on an upward trajectory each year since 2018 (from 36th then to 30th in 2021).

The United Kingdom rose two places in 2021, coming in at 21st – a position it had held in 2017 but then lost. Last year, it started to climb again. It made substantial gains in the Readiness factor this year, registering 13th vs 17th in 2020.

In the Nordic region, Finland, in 8th place, has seen its Appeal grow consistently – it was 24th in 2017 and 11th in 2021. Iceland (7th) remains in the top 10 for the third year in a row, having made a huge leap in 2019.

Eastern Asia realized a slight overall increase, exchanging second place with North America, which experienced a decline.

China rose four places to 36th, jumping from 32nd to 22nd in Readiness since 2018. In particular, it meets the needs of a competitive economy in primary and secondary education, and is enjoying good labor-force growth.

Singapore dropped three places to 12th. However, it improved by six places in Appeal; highly skilled foreign personnel continue to be attracted to the country, where remuneration of management roles remains high.

Japan fell another spot; it has been on an overall decline since it was ranked 29th in 2018. However, its Readiness leaped six places.

The United States improved one place at 14th. Its Appeal dropped from a steady 2nd place in 2017 to 6th. Its weaknesses lie in the areas of cost of living and collected personal income tax.

Over the past five years, six out of the 10 most-improved economies in terms of talent competitiveness have been in Central and Eastern Europe. Ukraine, Hungary, Croatia, Estonia, Slovenia, and Romania all rose at least 10 places between 2017 and 2021. Ukraine is the country that improved the most, rising 13 places to 46th in 2021.

The IMD World Talent Ranking assesses the status and the development of competencies necessary for enterprises and the economy to achieve long-term value creation. There are three major ways of grouping the survey questions that executives from 64 economies are asked: (1) Appeal – the extent to which an economy attracts foreign and retains local talent; (2) Investment & Development – a measurement of resources earmarked to cultivate a homegrown workforce; and (3) Readiness – what the quality of the skills and competencies that are available in a country’s talent pool are like.

The post Pandemic Widens Chasm Between Highly Motivated Workers in Talent-strong Economies and Brain Drain in Talent-weak Economies appeared first on The European Business Review.

Back then, the European Union set two objectives to motivate the countries for reaching out to the EU: signing agreements for simplification and subsequent abolition of the visa regime and free trade. The program members were also advised to take on contractual obligations to carry out reforms aimed at introducing European standards into Ukrainian society.

While some of the reforms, such as judicial or anti-corruption, affect ordinary citizens indirectly, then, every Ukrainian experienced deeply the progress of education and healthcare reforms.

The New Ukrainian School as an example of European standards

The New Ukrainian School is the key reform of the Ministry of Education and Science, initiated under the leadership of former Minister Lilia Grinevich. Its implementation started with the elementary school. Thus, in 2018, 100 schools underwent new standards in instruction approaches testing across the country, and in 2019 academic year, first-graders began to study under the new system throughout the country.

In addition, the Ministry of Education and Science sets up already for launching The New Ukrainian School reform in grades 5 – 9. The project is expected to be implemented during 2021 – 2027 at three stages. The Ministry of Education to develop new curricula for children who will study according to European standards for 12 years by the end of the year.

In short, all subjects in grades 5 – 9 will be grouped in 9 areas, and each school to decide independently how to allocate hours. There will be no familiar curricula either; now each teacher will decide how many hours to study a topic and subject.

The European Union has adapted the Ukrainian medical standards for two years

Ukraine also reshaped completely the healthcare system. The Ministry of Health declares it continues introducing the evidence-based treatment methods in medicine in accordance with the European standards. “A Ukrainian patient will be treated the way like any other European country treats,” Ulyana Suprun,the initiator of the healthcare reform, promised.

This year, a two-year project of the European Union to create in our country an adapted methodology for the development of medical profiles, including diagnostic standards and treatment algorithms, was completed.

The list of topics with the clinical guidelines given for the provision of primary and secondary healthcare is extensive. Itcovers hypertension, angina pectoris, chronic obstructive pulmonary disease, type 2 diabetes mellitus, stroke, breast cancer, traumatic brain injury and others.

Desirable and mandatory criteria established for the healthcare quality. For example, computed tomography (CT) is mandatory within the first hour of hospital stayfor all patients with traumatic brain injury.

“Medical standards are designed to bring the national healthcare system to a higher level through increased quality and efficiency,” the Ministry of Health reported.

The rules for ambulances arrival have also changed. In case of critical injuries – lightning strike, electric shock, accidents, and acute conditions –it should arrive within 10 minutes. Emergency calls – up to 20 minutes after receiving a call byoperator.
   
Reform inconsistencies: A wave of protests arise in the country against social sphere destruction Despite the tremendous work in the field of reforming, today, the Ukrainians experienced in full the inconsistency between the declared statements and real change in living standards. Due to budgeting changes with regard to social infrastructure facilities under decentralization reform, a significant part of operating costs for schools, hospitals, etc. have been transferred to local budgets. While this did not become a serious problem in the cities, this turned into a massive closure of schools and hospitalsin most rural communities (1,000 out of 1469 in the country), where budgets are extremely small. In some areas, it spirals already into public protests.

For example, this summer in the Kherson region – the south of Ukraine, plans were announced for the so-called “optimization”, according to which, instead of 291 schools, they plan to keep only 45 lyceums in the region, preserving the senior classes, where the population reaches more than a million people. Such a reduction in educational institutions actually makes it impossible for children from remote villages and towns to receive a complete secondary education.

The same is true for the healthcare. The plan is to keep only 2 hospitals by 2023 per 18 communities of the northern Kherson region (about 200 thousand people) with a pivotal status, that is, with a basic set of departments. The residents of remote villages have to travel about 110 km to reach them. Accordingly, any emergency assistance within 60 (not to speak of 10 minutes) is out of the question. In addition, following the closure of district hospitals, the residents will be deprived of access to second-level specialists, such as cardiologists, ophthalmologists, oncologists.

A wave of public protest arose in local communities (Hromadas) and Ekaterina Odarchenko, the leader of the new Ukrainian political force – National Platform, initiated the collection of signatures from the region’s residents to file an appeal to the Government and the Verkhovna Rada requesting to keep the schools and hospitals. Today, about 25.000 signatures have been collected in the Kherson region alone, and a wave of public discontent is spreading throughout Ukraine.

Interestingly, the protests against the course of European reforms also expand tothe European standards. Odarchenko’s National Platform is focused in its activities on direct democracy activation. This is a relatively new for Ukraine, but a truly European mechanism of “local initiatives” aimed at advocacyfor citizens through a direct (with no intermediaries) dialogue between community residents and the authorities.

Thus, the Ukraine’s movement towards Europe is a rather deep process of internal transformation. The fact that pro-European reforms change not only technical standards, but also activate civic consciousness of entire social clusters is undoubtedly a positive shift. As well as the fact that the radical public protests breaking out into Maydans are being replaced with an attempt to hold a direct civil dialogue with the executive and legislative branches, which is quite a European tradition. This means one can hope for a constructive way out of the crises arising in the course of the European reforms in Ukraine.

The post Ukrainian Reforms: Social Protests as Payoffs for Implementing European Standards appeared first on The European Business Review.

While the COVID-19 pandemic continues to impact the global economy, the European economy showed a relatively strong recovery in the second quarter with the intensification of vaccine rollout and the continuation of the European Central Bank stimulus policy. In this period, the gross domestic product (GDP) of the Eurozone increased by 2% month-on-month and 13.7% year-on-year, while the GDP of the European Union increased by 1.9% month-on-month and 13.2% year-on-year. The European Central Bank expects the Eurozone economy to rebound sharply in 2021. The European Commission has also raised its expectations for full-year economic growth. Its expectations are the growth rates of the EU and Eurozone economies will reach 4.8% and 4.5% in 2021 and 2022 respectively, higher than the previous forecast of 4.2% and 4.4%.

However, unlike previous optimistic expectations, recent data shows that a larger number of institutions are worried about the prospect of a sustained rebound in the European economy. Although the recently released August IHS Markit Eurozone PMI data maintains a relatively high value, compared with the previous month, there are varying degrees of decline, and the data is generally lower than expected. The initial value of the manufacturing PMI of the Eurozone in August was 61.5, and the expected value was 62, the previous value was 62.8; the initial value of the service industry PMI in August was 59.7, the expected value is 59.5, while the previous value was 59.8. The manufacturing and service industry PMIs of Germany and France were lower than the previous month’s level, while the initial value of the German manufacturing PMI was at a six-month low. The fall of this leading indicator is a likely indication that the expansion of the European economy will slow down. Not only is the growth of the service industry facing the threat of a resurgence of the COVID-19 outbreak, manufacturing powerhouses such as Germany will also face the bottleneck of recovery with an increase in the global supply chain distortions. Institutions like Goldman Sachs even believe that the peak of European economic growth has passed and is currently entering an inflection point. It is also expected that the economic growth rate of the Eurozone will continue to slow down in the next few months. 

According to Goldman Sachs, the European economy will likely see a slow return to its pre-pandemic level. In fact, the liquidity indicators of the Eurozone countries have returned to that level. That said, the scale of nominal GDP has not returned to the pre-2019 level or even the level of the 2008 financial crisis. The current accelerated growth of the monetary supply of the euro is the main factor pushing up GDP. Looking at the longer cycle, the European economy, particularly that of the Eurozone will return to a long-term path of low growth. However, in comparison to the pre-pandemic era, problems such as the deteriorating fiscal situation and the uneven economic development of industries and regions that have plagued the Eurozone will further worsen. It will have a more serious impact on production, investment, and employment in the EU.

Although the European Central Bank has adopted easing policies and even negative interest rate policies for a long time since the 2008 financial crisis, the EU economy has remained stagnant relative to the United States. It can be seen that the ageing problem, regional disparities, and debt burdens affecting the EU economy will still be issues of concern to the Europeans in the post-pandemic time. On the one hand, after the European sovereign debt crisis, the gap in GDP growth between the euro area and non-Eurozone member states has increased from 9% of total GDP to 15% since 1994. On the other hand, at the end of 2020, the government debt of Eurozone member states has risen to 98% of GDP. The Eurozone’s government deficit has continued until this year, and the European Central Bank (ECB) expects the deficit to rise to 8.7% of GDP in 2021. The accumulation of these long-term factors has even surpassed the 2008 financial crisis, posing a great hidden danger to the future of the EU economy, bringing greater challenges to the European Central Bank’s monetary policy.

Chart: Comparison of the GDP scale of the European Union, the Eurozone, and the United States (unit: billion U.S. dollars)

Under the current circumstances, the European Central Bank stated that its continuing monetary easing to consolidate economic recovery. However, it still faces two challenges. One is the threat of inflation in the European Union; the other is the impact of future changes in the Federal Reserve’s policy. Eurozone inflation reached 2.2% in July, up from 1.9% in June and 2% higher than expected. This is also the first time the Eurozone’s CPI exceeds the 2% target set by the European Central Bank in the past three years, setting a new high since October 2018. In July, the core inflation rate excluding energy, food, tobacco and alcohol prices was 0.7%. In August, the German CPI reached 3.4% year-on-year, which was higher than the 3.1% in July. The Eurozone Harmonized CPI (HCPI) is expected to be 2.7% in August and 2.2% before. If the actual value is in line with expectations, it will hit a new high never seen since 2013. Although the European Central Bank still insists on the short-term nature of inflation, it was already a threat to the euro. In the case of slowing economic growth, it is difficult for the European Central Bank to expand easing to stimulate the economy.

As the European Union’s economic recovery is significantly slower than the United States, the European Central Bank’s adherence to the current easing policy will distance itself from the Fed’s possible policy shift to reduce easing at the end of the year. Following the Fed’s tightening the easing policies, the Eurozone will face changes in interest rates as a result of policy differences. This could have a negative impact on the EU’s economic recovery. The impact of inflation and interest rate changes will be extremely challenging for the Eurozone and the European Union. The debt burden of some EU countries that have experienced crises has further increased. The current debt-to-GDP ratio of Greece is 217%, Italy is 151%, and Portugal is 137%. In the case of a long-term economic downturn, the problem caused by inflation may become more serious, which will not only further worsen its fiscal imbalance but also cause banking institutions and financial systems to face difficulties. Therefore, of great concern is whether the European Central Bank can safely withdraw from the stimulus in the future and realize the normalization of monetary policy.

Final analysis conclusion

The long-term problems of the Eurozone’s economy and financial system will further accumulate in the post-pandemic period, which creates more daunting challenges to the European Central Bank’s monetary policy.

About the Authors

Founder of Anbound Think Tank in 1993, Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.

Wei Hongxu, graduated from the School of Mathematics of Peking University with a Ph.D. in Economics from the University of Birmingham, UK in 2010 and is a researcher at Anbound Consulting, an independent think tank with headquarters in Beijing.

The post The European Economic Outlook and the European Central Bank’s Policy Dilemma appeared first on The European Business Review.

One of these goals, of course, is Zelensky’s desire gain the support of anyone from the European Union or the United States, especially on the eve of his meeting with Biden. As is reported, Zelensky’s western neighbors support his ambitions to resolve the Crimean issue, advance reforms, and fight corruption.

Additionally, while the Ukrainian Ministry of Foreign Affairs does not plan to disclose the list of partner countries it invited, it is already clear that, in the absence of a clearly formulated agenda, the event is unlikely to result in any strategic or significant agreements. Moreover, if you take into account Zelensky’s still less than stable position in international politics, the prospects for a solution to the “Crimean question” do not seem very optimistic.

A slew of international scandals are accompanying Zelensky to the Crimean Summit, and perhaps now the joke is on the former comedian.

Did Zelensky Deceive Voters?

More than two years have passed since Volodymyr Zelensky was elected president of Ukraine. However, in that time, he has managed to deliver only 25% of his long list of campaign promises (CEU data as of May 2021), which included a wide array of assurances, such as delivering an independent supply of gas to Ukraine and ending the war in Donbass.

Furthermore, of the promises that have been delivered, most are mainly lesser issues that do not have a significant impact on the lives of Ukrainians.

In regards to the main election promises, the president has failed both to end the war in southeast Ukraine and prosecute corrupt government officials. He was also unable to reduce the cost of housing and public utilities; on the contrary, prices have skyrocketed, and, consequently, the amount of people who have payments in arrears is growing. It must also be noted that the president has not increased industrial production or solved the especially sensitive language issue.

Today, it is fair to say that Zelensky was less than honest with the 73% of Ukrainians who, expecting real change, voted for him in the presidential election. As is to be expected, the president’s popularity has more than halved according to the latest polls.

In light of all of Ukraine’s unresolved domestic problems, it is obvious that Zelensky has not shown the necessary strength or fortitude in the international arena over the last two years. On the contrary, international partners have avoided high-level meetings with him. This fact will be on full display, at the Crimean Summit, when a few heads of neighboring countries arrive instead of the several dozen world leaders that were announced to be among the visiting delegations.

Normandy Format—Without Ukraine

It is important to recall how in March of this year, the leaders of the Normandy Format meeting held it online without Zelensky. The discussion of the Donbass case and the fate of Ukraine without its representatives is a vivid demonstration of the attitude of international leaders towards Zelensky. Such a “hostile” step by France and Germany indicates an inadequacy of the Ukrainian president on the international stage. Putin, Macron and Merkel do not consider Zelensky a significant player and know that, in principle, his lack of participation does not affect the situation in Ukraine itself. There are ups and downs in international relations. US leader Biden and German Chancellor Merkel completely bypassed Zelensky and signed the agreement with Putin on the Nord Stream 2 Pipeline. The Ukrainian president was “told to shut his mouth and not criticize the agreement.” Resultingly, the Ukrainian side, represented by Kuleba, did not “start consultations with the European Union”, and all subsequent steps will be useless because Zelensky has come to be regarded as a “toxic” partner with whom it is nearly impossible to conduct negotiations.

 “Cold Peace” with the United States

In a comment to French journalists, Zelensky recently admitted that “the United States has lost interest in Ukraine.” Given that even in the most difficult moments for Ukraine, Biden, who was not yet the president of the United States, treated the Ukrainian issue with great care and respect, the current situation for Zelensky is embarrassing.

Biden, by delaying a bilateral meeting with Zelensky, did him no favors. It is notable that the US leader has already held dozens of meetings with the leaders of other states and, not long ago, within the very walls of the White House, received Belarusian opponent Sviatlana Tsikhanouskaya, who was not even present in the capacity of an official state actor. On the other hand, Zelensky, a head of state, is still on the waiting list to meet the American leader.

The story of Biden and Zelensky’s phone conversation reflected on him just as badly. The White House Office of the Press Secretary and the Office of the President of Ukraine issued various statements on the content of the talks between the leaders of the two countries. Initially, the Ukrainian statement stated that the American leader supported the Membership Action Plan (MAP) for Ukraine to enter NATO.  Biden, However, knew nothing about this, because such a statement was never said. As Zelensky’s Crimean Summit is expected to be of little interest to the United States, America is only sending transportation minister Pete Buttigieg.

Europe’s Incisive President

Secondly, European as well as Russian officials say that Zelensky’s policy discriminates against national minorities in Ukraine. Hungary strongly opposed the new language law, claiming discrimination against Ukraine’s Hungarian population.

What did Zelensky do in response? He signed a law “on comprehensive general secondary education” which deprives minorities of the right to learn in their native language. Given this, it makes sense that Hungary will continue to block Ukraine’s accession to NATO until Zelensky deigns to listen to the opinions of his partners.

Germany went one step further and, during a visit from Zelensky, canceled his meeting with the Minister of Defense without giving any explanation. Do they not think Zelensky warrants an explanation for the cancellation?

As has clearly been seen over the past two years in Ukraine, there has been no real attempt to strengthen state values, make a real effort to fight corruption, or institute a well-thought-out energy or economic policy, because Zelensky’s struggles somehow always result in the detriment of the state and never seem to affect his corrupt circle, led by Ermak.

Ermak himself, who really performs the functions of Zelensky, does not arouse any sympathy from either Europe or the United States. Just recently, he received a refusal from the Americans for a request to speak over the phone with National Security Advisor of the United States Jake Sullivan. After the failure of the special operation against the Wagnerians, Ermak has permanently lost his place at the negotiating table.

Now, on the eve of the Crimea Platform summit and his meeting with Biden, Zelensky will try with all his might to stifle the wave of criticism directed at him so that his international partners don’t start having to remind him that he is barely president as it is.

Only the facts will speak for themselves.

The post Ukraine to Convene Crimea Platform Summit: Why Zelensky’s “Day of Triumph” May Come Back to Haunt Him appeared first on The European Business Review.

Some parts of the continent have experimented with different forms of business ownership, with state-owned companies and corporate structures that require businesses to listen to their employees as well as their shareholders. 

This has meant that European workers have a very different way of life to their international counterparts, with rights like sick leave, maternity pay, and mandatory minimum levels of paid holiday time that aren’t legally required in countries like the USA.

While some business people may consider these rights as in some way offensive to the free market, the reality is that countries with the most worker protections and more time away from work actually have the highest levels of productivity. 

When you compare Germany and New Zealand, you can see this clearly. The average Kiwi worker puts in around 1739 hours per year, while the average German does just 1393. Yet Germans get more done while at work compared to their New Zealander cousins, contributing US$58.30 of GDP per hour worked compared to NZ’s US$37.80 of GDP per hour.

Europe is not done though. The continent continues to trial new ideas to improve the lives of its workers, in part, hoping to boost productivity further and grow its economy. Here is how some of those initiatives could impact the future of working in Europe. 

Less Commuting

Many businesses have been experimenting with remote work for years, with tools like Zoom and Microsoft Teams helping this to become a reality for more workers more recently. Remote working means that workers can spend more time at home (or near their home) and less time travelling to the office. 

Cutting down on the amount of time we spend commuting can yield many benefits to us, our pockets, and the environment. In the UK, the average commute took 62 minutes a day in 2019, with 15% of British workers spending more than 102 minutes getting to and from work. That means the time spent commuting over a whole year is 21 hours longer than in 2009 – that’s almost an entire extra day wasted on travel.

Reducing the number of days spent in an office means workers could get back much of this time, with the added benefits that they’d save money in the process. According to Totaljobs, the average worker in the UK will spend more than £135,000 over their lifetime just to get to and from their job, more than double the size of the average pension pot at retirement.

Spending less time in a car also means workers can spend less time sitting down. Many modern jobs are desk-based, meaning workers can spend eight or more hours in a sedentary, seated position. A London-based yoga instructor, who has consulted on simple stretches that can be used by gamers during long sessions of playing, also visits offices in the capital to offer workers the chance to “break away from their desks”.

However, these sorts of exercises are less necessary when a worker has a more balanced lifestyle that includes less sitting and more time moving with other activities. 

The Four Day Week

The five-day working week has been the norm for around a century. It was pioneered by Henry Ford and some other industrialists who felt that giving workers an extra day off would mean they would be better rested and have more time to go and buy Ford’s cars, driving up demand. 

Since then, we’ve developed many tools that can help us get more work done in a day, but instead of reducing the amount of time we work, we’ve just crammed tasks into our working hours. 

Recently, Spain began an experiment to move workers in some companies to a four-day working week, helping to create a better work-life balance. This trial is ongoing but, if successful, could be replicated elsewhere in the country and on the continent. 

Universal Basic Income

One radical idea that has been touted in recent years is that of a universal basic income. This would mean that every person receives a flat-rate sum of money from the government each month. It would be enough to cover basic necessities and little else. 

People would, in theory, then be free to find work they enjoy to earn additional income, start a business, or contribute to charities and other good causes. 

Universal basic income pilots have been taking place in Germany, Spain, Finland, Scotland, and The Netherlands. Its proponents argue that it could help solve poverty and improve working conditions by rebalancing the labour market, while critics believe it will be too expensive and will discourage people from finding a job. Results of the pilots have been mixed, but the concept continues to receive a lot of support.

If it does get rolled out further, we could see the world of work change completely in Europe.

The post What is the Future of Working in Europe? appeared first on The European Business Review.

UN Women has dubbed the theme for this year’s International Women’s Day, 8 March 2021, as “Women in leadership: Achieving an equal future in a COVID-19 world”. It is a day of uplifting and bringing to light all the wonderful efforts by women and girls all over the world to stay resilient and hopeful for an equal future for all, as well as collective recovery from the global health crisis.

Long before the pandemic hit, women have stood at the front lines of keeping society upright and flourishing. Some of the most exemplary and efficient national leaders that have graced our history books have been women, such as Queen Elizabeth I and Anne Frank. History has conveniently painted women second to their male counterparts, but with the recent movements for more equality and diversity, more women have risen to the challenge of taking the pen and writing their own part in history.

In the business world, it is especially hard to make a name for yourself as with all the adversity one has to overcome to even get a foot in the door. But women leaders have proven they can weather any storm that passes their way and even manage to set up contingency plans for the next disaster, as recent years have seen more female leaders demonstrate their skills, knowledge, and efforts to effectively lead a rocky world.

Female leaders bring more than just different experiences, perspective, and skills to their respective industries for the betterment of all. With their place in the world, they are rewriting history as we know it.

It is for this reason The European Business Review has asked female leaders in their respective leading industries to give us an insight on what they think contributed to such success, and what advice they can give to aspiring women who also want to succeed.

1. Anne Krog Iversen, Co-founder of TimeXtender

“For women aspiring to become a business leader, Anne believes anything is possible with self-confidence coupled with curiosity, proactivity, determination and an eagerness to learn and grow.”

Anne Krog Iversen is the Chief People, DNA & Culture Officer and co-founder of TimeXtender. Anne drives the effort at TimeXtender to build resilience and a robust, purpose-driven culture and DNA to help people achieve new heights of innovation and growth. She is a well-known thought leader and visionary in corporate mindfulness.

2. Sasha Baillie, CEO of Luxinnovation

“It’s always a challenge to speak up when you feel you are different. That’s a challenge many women still face in industries where most of their peers are men. But it’s not only a challenge for women. It’s a challenge for anyone who is different. Gender, class, LGBT, culture or colour. Yet diversity is absolutely essential to move our economies forward in a positive and sustainable way by listening to diverse voices and finding better ways of doing things.”

Sasha Baillie is the CEO of Luxinnovation. She is also a member of the Coordination Committee of the Ministry of the Economy, which she joined in 2014 as Deputy Chief of Staff and Diplomatic Advisor of the Deputy Prime Minister, following her 20-year career as a Luxembourg diplomat.

3. Corinna Schulthess Traumueller, Founder and CEO of Family Office Management Consulting

“It is not only being at the right place at the right time equipped with the necessary skillset, but first and foremost meeting inspiring leaders and mentors who entrust you with outstanding opportunities, which ultimately makes the deciding difference on your career path. Thriving to become and continuously be such a leader yourself, will make a difference for others and essentially the entire organization, changing future business environments bit by bit, also for women.”

Corinna has more than 15 years of experience in working with business and wealth owners, in her current function as well as while previously heading up the UBS Family Office Advisory business globally. In her roles, Corinna has worked with numerous notable families, entrepreneurs and family offices worldwide covering a multitude of aspects and advisory activities. She has been in the lead of substantial liquidity transactions from a structuring and operational perspective, thereby setting up some of the largest wealth and investment structures in Europe, North and South America, the Middle East, and Asia.

4. Farah Hawilo, Executive Director of Trust Capital TC

“Being organized and setting priorities are important ingredients of achieving success. Time management is another important aspect in order to cover all the checkpoints within deadlines. We don’t find time, we make time; this is what I follow.”

As an experienced leader who specializes in driving Trust Capital TC’s business vision, Farah focuses on bridging the gap between the forex world, traders and the company. While building high performing teams to deliver successful results, Trust Capital TC under Farah Hawilo is committed to providing the most trusted and secure trading platform for their clients. Her commitment and the right directional strategies are the key factors that’s driving Trust Capital TC towards success.

5. Chie Ito, CEO of FINOLAB Inc.

“I believe that all women are tough, flexible, charming, future-oriented, and down-to-earth by nature. Doesn’t it sound like characteristics for entrepreneurs? Let’s think and act on what you can do now for the future and yourself. We can create a new business to make the world better. Happy International Women’s Day!”

Ms. Chie Ito is the Chief Executive Officer of FINOLAB Inc. After taking charge of building a money exchange trading system for a major bank, engaged in partner alliances with overseas solution vendors and launching new businesses. Since 2014, she has been in charge of new business development and partner alliances, in addition to working with FinTech startups such as Japan’s largest FinTech pitch contest “FIBC”.

6. Franziska Gsell, Chief Marketing Officer of IWC Schaffhausen

“If you are passionate about a product and you know your customer, you can do a great job anywhere. We women should not take such biases too seriously and put limitations on our career choices and ourselves.”

Franziska Gsell has been the Chief Marketing Officer of IWC Schaffhausen since 2015 and also chairs the company’s Sustainability Committee. After majoring in Business Administration and Marketing at the University of Applied Sciences in Zurich, she worked as Brand Manager and Marketing Manager for Carlsberg SA and joined Fogal as CEO in 2012, after leaving her positions as Marketing Director at Lindt & Sprungli AG and as International Marketing Director at Navyboot Zurich. And in 2015, she began her journey at this famed watchmaking house.

7. Gina Lodge, CEO of Academy of Executive Coaching

“My philosophy is that leaders are there to set the direction and to guide and support their colleagues to be their very best, enjoy what they do, and have a sense of achievement in their working lives.”

Gina has over 20 years experience in management roles while employed by Shell International Chemical Co. Ltd and subsequently in IT and Education. During her career she gained significant experience in project and change management. Gina was directly involved in implementing Quality Management standards, Business Process Re-engineering projects, and IT applications.

8. Rhoda Davidson, Director of Emylon Executive Development

“I believe you have to put in place structure and process to make sure you take care of the three key elements of health; self, family and friends, professional. It’s important to put boundaries around the amount of professional opportunity you are given, matched against the resources that you can access.”

Rhoda Davidson is an experienced educator, business consultant and entrepreneur. She has worked in executive education for over twenty years at top global institutions such as IMD, Duke CE, and EMLYON. She leads strategic innovation and corporate entrepreneurship programmes with large multinational companies. As a pioneer in business-driven action learning, her focus with MBA participants is on skill development through hands-on experience.

9. Laura Tyson, Distinguished Professor of UC Berkeley HAAS Business School

“More than business acumen, leaders must have a vision and the ability to engage the talent of their organisations to realise the vision. Great leaders are often exceptional storytellers, as they inspire others to work together toward achieving their shared vision.”

Laura D’Andrea Tyson is an influential scholar of economics and public policy and an expert on trade and competitiveness who has also served as a presidential adviser. She is a Distinguished Professor of the Graduate School at the Haas School of Business, University of California, Berkeley. She also chairs the Board of Trustees at UC Berkeley’s Blum Center for Developing Economies, which aims to develop solutions to global poverty. She is the former Faculty Director of the Berkeley Haas Institute for Business and Social Impact, which she launched in 2013.

10. Magdalena Nowicka Mook, CEO of International Coaching Federation

“Good leaders look toward to the future and are comfortable conceiving a grand, audacious vision for what’s next. They need to think beyond what is possible and instead focus on what’s needed.”

Magda acts as strategic partner of the ICF’s leadership, including the Board and a variety of committees and task forces. Specializing in strategic planning, cultural competence, ethics, international affairs and board governance, she also oversees organizational budgets and manages professional staff of the ICF. Magda is also a trained coach – she received her training from the College for Executive Coaching, and also holds a certificate in the Fundamentals of Systemic Coaching.

11. Sherilyn Williams Casino, CEO of S.I. Williams Health Family Office

“A leader today must have a vision – and the ability to enroll others in that vision. They must also have a healthy respect for all people in and out of their organisation – and shows it.”

Sherilyn Casiano is the Founder and CEO of S.I. Williams Wealth Management, LLC, a multi-family office practice in New York City that offers fully outsourced or selective co-sourced solutions to single- and multi-family offices.  She founded her family office practice 14 years ago. Over the years of operating her practice, Sherilyn has saved her families over $15 million in estate tax exposure, $1.2 million in tax preparation fees, over $2 million in income tax, and much more.

12. Petia Dimitrova, CEO of Postbank

“I do believe in gender equality and try to keep the balance in the bank’s teams, but in my work choices I try to be guided more by the qualities and professionalism of the individual. I trust that it is possible to have a successful career, but climbing up the professional ladder is not an easy task. It requires discipline, the desire for self-improvement and personal qualities.”

Mrs. Petia Dimitrova is Chief Executive Officer and Chairperson of the Management Board of Postbank (under the legal name Eurobank Bulgaria AD). She joined the team of Postbank in 2003 as Country CFO for the eight affiliated companies of Eurobank EFG Group in Bulgaria. In 2005 was appointed Procurator of the Bank. In 2007 she was appointed Executive Director and Member of the MB of DZI Bank. After the legal merger of DZI Bank and Postbank she became Executive Director and Member of MB of the unified bank.

13. Evelyne Freitag, Chief Financial Officer of Sanofi

“I always say this to the high talented offspring: Do not be impressed. Do not let yourself be told what you can’t do, but do what you think is right. Go your way. Develop your own view and present it. Do not be the blindly obedient employee, not the simple executive service provider, but have a clear opinion and defend it.”

Whatever the sector, be it automotive, pharmaceuticals or consumer goods, as Managing Director and CFO, Evelyne Freitag moves easily between different industries. This international financial expert has been taking commercial responsibility for over 20 years and is well aware of the strategic and operational challenges faced by fast-growing, publicly traded corporations and their subsidiaries. She is today Director and CFO of the Healthcare company Sanofi Aventis in Germany, Switzerland and Austria.

Conclusion

Even as circumstances are slightly different for this year’s International Women’s Day, it is nevertheless still a day meant to amplify female voices and celebrate their irreplaceable hold on life. These trailblazers are just one of many who have been steadily making their way to the top of the ladder, while also making sure to lend a helping hand to those also vying for a seat.

This goes out to all the businesswomen, girl bosses, mothers, millennial feminists, and everyone identifying with the divinity of femininity: Happy International Women’s Day to you.

About the Author

Pamela Rhyan is a writer for The European Business Review. She is dedicated to crafting timely blog pieces about business acumen, changing leadership dynamics, emerging finance and technology trends, global breakthroughs and how these spaces intersect from a millennial’s perspective. She also works as an editor and content strategist to the sister publications of The European Business Review.

The post Top Female Leaders Special Feature for International Women’s Day Celebration appeared first on The European Business Review.

It is without a doubt 2021 brings with it a newfound sense of purpose, a breath of fresh air from the lonesome year that has just passed. Likewise, there is no better time than ever to take advantage of this clean slate to dedicate time out of your busy day to work on developing yourself intellectually.

As the previous year has put a spotlight on just how interconnected our world is, it also highlighted the demand for corporate leaders to take on new perspectives to better navigate through difficult situations and offer key figures the foresight to handle potential risks with ease.

With an executive education program, it ensures your company’s executive leaders and managers are well-equipped to meet and surpass expectations beyond what is forecasted, especially during this turbulent time. These developmental programs will have senior executives and business leaders prepared for the worst to come, be it with the constantly changing environment of globalisation or a financial recession waiting to happen. 

The global market is constantly shifting gears and changing directions, which means top executives and managers will need new viewpoints, methods, and experience to combat challenges posed by COVID-19 along with other unexpected threats. Having the proficiency required to address such principal concerns will save your company from future complications and supply them with the edge they need to stay relevant in today’s oversaturated industry.

With that said, The European Business Review has curated a special list of top business schools offering their executive education courses online for those eager to lead their companies to triumph. These online open executive programs can be attended within the comfort of your own home, done alongside your current job, and can be finished within a short time period. 

Open programmes

If you find yourself unable to commit to a curriculum for long periods of time due to work-related or personal reasons, these short online programs are perfect for any busybody still looking to enrich their minds. All of these programmes listed below are fully virtual and offer flexible study hours, so you can continue with your other commitments without education getting in the way.

Most open, online programmes can either span for a week or two, but never more than a year. With these highly-intensive and compact learning sessions that will provide all the essential information you might need without the pressure of time restriction holding you back, you can become an expert in any field in no time.

1. Live Online and Online Programmes, Columbia Business School

General Profile: Now, more than ever, executives need knowledge and insights to help them adapt to change and solve complex problems. Columbia Business School Executive Education offers you a variety of programs, approaches, and means to excel. And as the business world has evolved, Columbia has applied new best practices to continuously improve your learning experience. With their live online programs, Columbia has translated their in-person programs to a fully live and virtual format, delivering the same interactive sessions with faculty that you would experience in person. Their long-standing, asynchronous online programming offers real-time impact on a flexible learning schedule. Their virtual sessions for organizations bring their faculty’s thought leadership to your organization live and virtually. When you partner with Columbia Business School Executive Education, you enter a proven partnership that puts you at the very center of business. Together, you will lead positive change through the new world of business.

Key strength or unique selling point: 96% of past participants said Columbia Business School Executive Education is pertinent to succeeding in today’s rapidly changing business climate.

Weblink: https://www8.gsb.columbia.edu/execed/ 

2. Wharton LIVE Virtual Programs, Wharton University

General profile: Experience Wharton LIVE: Real-time synchronous learning in finance, leadership, strategy, and marketing, expertly delivered live online by Wharton’s world-class faculty with the same rigour and immediate impact as their on-campus programs. Their live, virtual format connects global cohorts of about 35-40 individuals in a structured, interactive learning environment with a high level of peer engagement and networking, and exclusive access to Wharton faculty.

Key strength or unique selling point: Wharton LIVE programs are also available for teams and can be customized for your organization, which gives you the freedom to choose different programme plans specifically tailored to your needs.

Weblink: https://executiveeducation.wharton.upenn.edu/for-individuals/program-topics/live-virtual-topic/ 

3. Open programs for individuals, ESMT Berlin

General profile: ESMT Berlin’s open programs for individuals are here to help you improve your behaviour as a leader, increase functional competencies, and grow your general management capabilities to the next level. Choose from a variety of programs, grouped into five clusters: advanced management, leadership, innovation and digital transformation, strategy, marketing and sales and finance, negotiation and decision making. All of these sessions take on the brand new asynchronous programs that can be taken in a self-paced mode, so you can better use the time of social distancing to boost your skills and enhance your professional influence.

Key strength or unique selling point: The functional skills and knowledge acquired throughout your career are still relevant as executives move into general management or C-level positions. 

Weblink: https://execed.esmt.berlin/open-programs 

4. Online programs, IMD Business School

General profile: With IMD Business Schoo’s online courses, your experience is fully customised. You, your needs, your aspirations are at the heart of the journey from day 1, as your coach will connect with you to determine your personal learning objectives and monitor these with you throughout the journey. IMD online programs do not leave you on your own as your dedicated coach interacts with you throughout the journey and provides bespoke feedback on every individual assignment you submit. Safe to say, your assignments and summative assessment will not enable you to rely on past achievements.

Key strength or unique selling point: IMD means ‘Real World, Real Impact’ so the teachings you have learned can be deployed in your workplace immediately through structured assignments. Every week you will see for yourself the impact you are making in the professional field.

Weblink: https://www.imd.org/online-programs/home/ 

5. Leadership Development Programmes, Center for Leadership at Florida International University

General profile: Award-winning. Actionable. World-class faculty. Based in Miami and serving the world through both in-person and online leadership development programs, the Center for Leadership at Florida International University has helped individuals and organizations find and act on small changes with a large impact. “I’ve been to many leadership programs – but I’m leaving THIS program with new skills and an actionable plan. I appreciate how I was simultaneously pushed and supported.” To learn more about their programs – visit https://lead.fiu.edu/programs, or email them at lead@fiu.edu. Future-proofing leadership since 2009.

Key strength or unique selling point: Florida International University’s live online programs take place in real-time with live instructions and continue to include all the hallmarks of the Center’s development programs – interactivity, research-backed insights, a focus on self-discovery, small and large group discussions, in-class practice, and opportunities to interact with world-class instructors.

Weblink: https://lead.fiu.edu/programs/ 

6. High Impact Online Programs, IE Business School

General profile: With IE Business School’s High Impact Online Programs that take an agile, online format, you can be more connected to your education more than ever. The university’s more than 15 years of experience as a world-leading online education institution has provided them with unique insights into the power of remote learning. This time spent growing an agile and innovative virtual environment allows the institution to provide experienced professionals with key sector tools and strategies for success across many business disciplines: from marketing and finance, to data science and leadership. With a challenging mix of discussions, case-based exercises and teamwork, program participants can increase sector-specific skills and become leaders in their fields.

Key strength or unique selling point: IE Business School’s WOW Room is an innovative space of virtual education utilised especially for online programmes. Along with their world-renowned technology is the ability to allow program professors to lead a global classroom using state-of-the-art technology and innovative learning tools.

Weblink: https://www.ie.edu/exponential-learning/high-impact-online-programs/ 

7. IESE Online Programs, IESE Business School 

General profile: Upskilling has never been easier with IESE Online Programs, where all programs are founded on an interactive blend of individual learning, group discussions and varied levels of interaction with faculty be it live, remote sessions, or recordings. Each student’s unique experiences and skills will add value to the classroom and ensure that the curriculum covers necessary and desired goals. With their program you can join classes with, and learn from, fellow knowledgeable executives. Their admission process guarantees a valuable peer-to-peer education, with many different opportunities to learn from each other and network.

Key strength or unique selling point: Surveys, games and microformats will make IESE Online Programs an active and dynamic experience digitally. They also offer synchronous sessions with the professor in which you interact, in real time, with your fellow executives.

Weblink: https://www.iese.edu/online-programs/

8. Online Programs, ESSEC Business School

General profile: ESSEC Business School’s Online Programs will help you develop a comprehensive understanding of digital transformation through a new offer of executive online programs. During a time when most companies are digitising their business procedures, they consider it their duty as a pioneering and leading business school to provide a bundle of courses and real case studies on the topic of digital transformation. ESSEC Professors have designed a certificate exploring the ongoing developments of Artificial Intelligence, Big Data, Internet of Things, Blockchain, and many more.

Key strength or unique selling point: These online certificates are best taken up by senior managers who aim to initiate/or take part in innovative projects, or administrators who want to gain digital skills to reach higher positions.

Weblink: https://executive-education.essec.edu/en/online-programs/ 

9. Open Online Programmes, INSEAD

General profile: INSEAD Online leads the world with unparalleled access to its pioneering next generation programmes, a network of international campuses, world-renowned faculty, and rich diversity of perspectives—from anywhere, without compromise. Connect to ever-evolving and immersive learning experiences that develop responsible leaders and organisations capable of making an immediate and meaningful impact on a global scale.

Key strength or unique selling point: INSEAD Online participants can earn points as they go, with a ‘leaderboard’ featuring the most engaged participants each week. Every week, questions are posted by participants for the INSEAD faculty, who then respond through just-in-time videos and live calls.

Weblink: https://www.insead.edu/executive-education/open-online-programmes 

10. Live virtual programmes, London Business School

General profile: Challenging times call for innovative solutions which is why London Business School has adapted their world-class programmes to a new virtual format that will ensure you and your business thrive through disruption. Designed specifically for the times we find ourselves in, their in-person programmes are now delivered through a dedicated live virtual format with programmes taking place over 5-10 days. Through this you’ll gain access to up to 40 hours of live learning with their world-class faculty, join an enriching learning experience in a truly global classroom, study alongside and interact with a cohort of participants from every corner of the world – just like you would on campus.  

Key strength or unique selling point: Once things are safer, you’ll have the opportunity to live the London experience by joining London Business School on campus for an exclusive day of networking with like-minded professionals and with the latest thinking from our world-class faculty.

Weblink: https://www.london.edu/executive-education/live-virtual-programmes 

About the Author

Pamela Martinez is a writer for The European Business Review. She is dedicated to crafting timely blog pieces about business acumen, changing leadership dynamics, emerging finance and technology trends, global breakthroughs and how these spaces intersect from a millennial’s perspective. She also works as an editor and content strategist and the sister publications of The European Business Review.

The post Top Executive Education in 2021: Fully Online and Blended Programmes appeared first on The European Business Review.

Legalization of cannabis

Decriminalization and legalization of medical marijuana in certain countries have led to a significant reduction in the black market as people are resorting to the legal purchase of marijuana for adult and medical use. Government income via taxation is also considered as an opportunity by many countries to make greater revenues. For example, the total tax revenue collected in California was around $345 million in the year 2018. This has attracted many local governments to provide funding to many development programs regarding infrastructure and education.

The business of legal marijuana is creating several job opportunities with close to 10,000 licenses being issued in the U.S. alone that includes manufacturers, cultivators, deliverers, dispensers, and laboratories. Due to these factors, the legalization of marijuana has led to a rise in demand within these countries and gradually eroding the presence of the black market.

Region-wise development of cannabis

In the year 2019, North America dominated the cannabis market with a whopping market share of around 89%. Several factors were affecting this such as liberal government policies and the legalization of marijuana for medical and adult-use in the U.S. and Canada. By the year 2019 use of cannabis had become legal within 33 states territories such as Guam, Puerto, and Columbia in the U.S. In addition to this, the Farm Bill introduced in 2018 legalized hemp and products based on hemp in America. It enhanced the regional product demand further. But, the legalization of medical cannabis in Europe is accompanied by strict rules and regulations about cultivation and sales placing restrictions on regional growth.

Other promising markets for the growth of the cannabis industry are Germany, Australia, Colombia, Poland, Israel, and Uruguay. Israel is leading the way at the moment providing knowledge transfer and technology to other markets around the world. The vast knowledge it possesses about the agro-business has helped the country to create new technologies for developing new strains and greater yields. Some Latin American countries such as Colombia and Uruguay are working towards turning into suppliers of cannabis in the global market. The U.S. market remains closed for export and these countries are seizing the opportunity for exports.

New Players

Some other newer markets are entering the field of cannabis such as Thailand and the U.K. They are developing a legal structure for the cannabis business as their revenues are expected to rise quickly. Other countries such as New Zealand and South Africa are considering the legalization of medical cannabis and they might emerge as potential markets in the upcoming years. There is cut-throat competition among existing players because very few cannabis companies have the technology, legal clearances, and financial resources to get into the large-scale making of medical cannabis. Trusted suppliers like TopShelf BC are helping set industry standards, and the research funding provided for this industry may also play a significant role in encouraging more startups to develop innovative products. 

Using cannabis consulting firms for leverage

If you have an established cannabis business that has run into major roadblocks in the field of profitability, compliance, or location you can use the services of a cannabis consulting firm. It can step in and develop a strategy for turning around the company out of troubled waters into a stronger than before business. If your cannabis business is thriving and you are thinking about upgrading the software, adding more products and services, or moving into a new location the cannabis consulting company can efficiently help you. There are many things these consulting firms can advise you about such as selling, buying, or merging the cannabis business. They can also help you with legal compliance, branding, and development of standard operating procedures (SOP).

The post The Rise of the Cannabis Industry in the Global Market appeared first on The European Business Review.

In the political arena, they have published commentary on recent issues such as the election and its potential fraud, the politics of vaccine development, Critical Race Theory, and even the effects on education is an outflow of the 2020 Presidential election.

The recent article “Remedy for Election Irregularities and Vote Fraud is Found in the Constitution”, published November 19, 2020, provided commentary from The Discovery Institute on the 2020 Presidential Election. Senior fellow Scott Powell pointed out the centrality of vote-counting integrity as a pillar of valid democracy. Indeed the American government is fundamentally “of the people, by the people, for the people”—but what if the votes of the people are not rightly counted? For a democracy, the wrongdoing of voter fraud or meddling is “a sort of national suicide.” There is merit, therefore, in national attentiveness to the integrity of our vote-counting systems, as it is the lifeblood of this constitutional nation. Powell further writes that the reason for the investigation of this issue is “because honest elections are the fundamental source of legitimacy of the United States government,” and “because that legitimacy only comes from the people.”

In another Discovery Institute article, “Will it be the Hammer or the Constitution that Determines the People’s Vote?” Scott Powell again examines, in detail, the potential interferers of the election. Systems known as “THE HAMMER” and “THE SCORECARD” were pointed out as possible tools of vote tally manipulation. Born out of Dennis Montgomery’s Al-Qaeda penetration system, developed in the early 2000’s, these systems have been used in foreign elections and are suspected of usage in the swing states of 2020. The problem with these systems is that they are hard to detect, especially under the time constraint of officialization of vote counts outlined in the election system. Were there substantial evidence with which the Supreme Court could work, there is a constitutional provision whereby the election would be decided by the individual state legislatures, as they maintain the power over the electoral college. Fraud in the election system, as Discovery Institute is quick to point out, is lethal to a democracy that is built on the voice of the people.

Undertaking a more encouraging response to the 2020 election, Cofounder and Chairman of the Board for the Discovery Institute, Bruce Chapman, wrote a piece titled “Politicians: Can’t Live With Them, Can’t Live Without Them.” In a cultural moment in which it proves easy to criticize politicians, Chapman asserts that they set the “preconditions for progress,” that they do so while stumbling, and that they almost always fail to see their own good progress. They are not above those who move society forward in other ways. Rather, they must aim for virtue, and for a “more perfect union, not a perfect one.” In a time of political chaos, Chapman makes a worthy call toward good work in that sector. Indeed it is the generosity of the American people, to those above and around them, which pushes forward the good of the society.

As a 501(c)(3) non-profit think tank, generosity is vital to production of such commentary from the Discovery Institute. One such financial contributor, Howard Ahmanson, also sits on Discovery Institute’s Board of Directors. Mr. Ahmanson comes from the esteemed Ahmanson family, a family of benefactors whose successes in the greater Los Angeles business and insurance landscape provided for ample channels of generous giving. Recipients of this generosity surpass the Discovery Institute to other educational centers and organizations for religious freedom. Ahmanson’s private philanthropy through Fieldstead and Co., has contributed to endeavors such as the political commentary published by the Discovery Institute.

The post The Discovery Institute Commentary on the 2020 U.S. Election appeared first on The European Business Review.

Therefore, 2020 into the new year has been the perfect time to speculate and accumulate GBP, a currency that has faced the dual backlash of the Brexit referendum and the coronavirus pandemic simultaneously.

An absolute catastrophe was avoided when Boris Johnson managed to agree on a deal with European Union negotiators – a ‘no deal’ scenario would have sent shockwaves through the market. Even so, the Pound Sterling has fallen from 1.20 against the Euro in February 2020 to 1.12 less than a year later.

So, is this an appropriate time to start trading with or against GBP? As long as you choose the most effective forex account management services, it goes without saying that there’s money to be made trading Pound Sterling right now.

An uncertain future

On the day of writing (January the 19^th), the UK had the highest daily death rate from COVID-19 than any other country on the planet.

With the government insinuating that a full national lockdown is likely until February at the earliest, the damage to the British economy will continue for the foreseeable future.

Naturally, that will have implications for GBP, especially when you compare the currency to that of AUD, CAD and the like, which are being buoyed by the fact that their respective countries are beginning to get a hold of the pandemic.

But things are moving in the right direction for the UK now, with a seemingly robust vaccination programme allied to further financial support from the government to those unable to work. Should some restrictions be lifted in time for the spring, a jolt to the economy seems a certainty.

Beyond that, there are still known unknowns. What kind of trade deals will the UK seek after divorcing from the EU? Turkey is on board as one such trade partner, while the UK’s close ties with the US and parts of Asia will be retained. But will that act as the necessary stimulus to create trust in the British economy once more?

European strife

The nature of the European Union, and the disparate countries that make up its membership, mean that there’s a considerable difference in how each is faring in the wake of the pandemic.

The irony, with financial stimulus within the EU being slow in moving forward, is that the Euro is struggling post-Brexit, with many pundits expecting GBP to recover at a quicker rate than EUR.

If that is the case, savvy traders may close any EUR positions they have in favour of the GBP – that in turn will help to build trust in the Pound and swerve traders towards investing in the currency.

American (cov)idiot

Donald Trump is all set to leave the White House and his successor, Joe Biden, is expected to oversee improvements in the US economy. They will be linked to growing inflation and a more settled political stance with China and other nations that have become something of an enemy to America in recent times.

That said, the implications of the coronavirus pandemic on a country with 328 million inhabitants are stark, and it could take a long time before the American economy reaches anything like its pre-COVID levels.

With travel restrictions remaining in place, tourism will remain thin on the ground for much of the year, so reliant states like Florida and New York will be bereft of their usual steady flow of income.

That will naturally pull the GBP/USD forex pair downwards, and so perhaps seeking out currency pairs that look set to enjoy a swifter recovery – maybe GBP/AUD or GBP/CHF – is the smart move right now.

The post How will the GBP perform in forex markets while being affected by Brexit and the ongoing pandemic? appeared first on The European Business Review.

Despite ousting features and excellent popularity, there are still several bitcoin facts that most people don’t know about. Some of the most shocking and interesting facts about bitcoin are listed in the following paragraphs.

No one knows about the founder of bitcoin

One of the most astonishing facts about bitcoin is its creator. It has been more than ten years of bitcoin being introduced, and it still is a mystery who created bitcoin. There have numerous people who have claimed to be the owner or creator of bitcoin, and no one of them has clear proof. There is a name connected to bitcoin’s founder, and it is Satoshi Nakamoto, but no one knows who he is, where he lives, and even if he is alive or not.

There are several rumors about bitcoin’s creator in the market as some people believe that big companies such as Samsung, Toshiba, Motorola, etc., created bitcoin with a group effort. But the anonymity of bitcoin’s owner is healthy for it as it is a decentralized currency, and it is better if there is no one to claim it.

Bitcoin transactions cannot be traced

With banks and online transactions, it has become almost impossible to make a transaction while being anonymous. Banks and financial institutions have all the information and details about you and your transactions. Each transaction of users is recorded, and authority can track any one of them anytime using the transactions. There is no such thing with bitcoins as bitcoin transactions are untraceable. Bitcoin transactions are recorded in a public ledger known as the blockchain, but no one can track the user using the transaction history.

Bitcoin users can even hide the IP address using different services or VPN. It offers excellent privacy to the users and allows them to make transactions worldwide without worrying about being tracked or traced. No personal or financial information is revealed when bitcoin transactions are recorded in the public blockchain ledger.

You cannot use bitcoins without the private key

The private key is the key required to access a bitcoin wallet, and it is imperative to store the private keys carefully as, without them, your bitcoins are of no value. If you lose the private keys, you also lose your bitcoins as there is no way to recover lost private keys. So, you must be careful while storing private keys and create few backups so that even if one gets lost, you have the backups to access the bitcoins stored in your wallet. You will be shocked to know that around 25% of bitcoins worldwide are lost forever. So, you better be careful and store private keys safely.

Bitcoin’s supply is finite

If we talk about fiat currency, its supply is controlled by the government as it can issue as much currency as it wants, but bitcoin is a bit different. It is a decentralized currency, so no authority issues bitcoins. Bitcoins are created by miners, and the process of their creations is known as bitcoin mining. Twenty-one million is the maximum number of bitcoins that can be mined ever, and out of it, 16.3 million has already been mined. It is believed that by 2140 all bitcoins will be mined, and after that, no new bitcoins can be issues in the market.

No one can ban bitcoin

Fiat currency is controlled by the government, and it can ban it anytime, but bitcoin cannot be banned. Bitcoin is controlled by its vast network of users, so no one can ban bitcoins forever. Governments can impose few restrictions on it, but it cannot prohibit its use. In simple words, bitcoin can be regulated, but it cannot be banned. Several countries have tried to ban bitcoins, but that has failed to do so. It is the primary reason that some countries have imposed some regulations on it and has allowed its use.

The post Astonishing facts about bitcoin that you must know about! appeared first on The European Business Review.

If we talk about cryptocurrencies in general, about more than 6700 different currencies have been traded publicly. They raise the money through initial coin offerings (ICOs) hence proliferating. The recorded value of all cryptocurrencies on exactly December 18^th, 2020 was more than $645.7 billion. The most popular cryptocurrency, “Bitcoin” was determined and calculated at $421.7 billion.

Increasing Popularity of Crypto

Cryptocurrency is viewed as a way of investment so the customers rush to buy them assuming they would become more and more valuable as time goes by. The traditional currency system has a number of loopholes, and inflation is also one of the reasons it loses value from time to time. Therefore, buyers prefer digital currency over banks for their money supply. Additionally, blockchain is a decentralized process and recording system which is more secure than any other system so it is more preferred by buyers of this digital age. Some speculators like cryptocurrencies because they are going up in terms of value and have no interest in the currencies’ long-term acceptance as a way to move money.

Benefits to the Global Economic Structure

The rate of these digital currencies is shooting into the skies, as Bitcoin breaches the mark of $35,000 as well. People now have a chance to make profits by analyzing the market and investing at the right time. The early investors of Bitcoin were able to make thousands and millions of dollars in profit. Today, there are various platforms for digital currencies, like bitcoin evolution which provide guidance and accessibility to traders and investors through their comprehensive ecosystem. These platforms use automated software and AI algorithms to influence the trades of their users.

Nonetheless, people tend to get involved in lending practices, which shows an unstable interest rate. Blockchain allows the buyers to trade across borders without any extra charges so it allows everyone to be more financially stable, connected, and empowered. Also, digital currencies do not require actual infrastructure to exist, so the cost of tractions is very low. It attracts new people to use these tools for financial purposes allowing for the global economy to be more closely intertwined.

These digital currencies are monitored through different ledgers for each transaction which eliminates the risk of anyone manipulating them for unfair advantages. This means that underdeveloped countries also have a greater chance of entering the financial transactions game and boost their own economic and social prospects. Through crypto, common citizens will be able to keep track of where state funds will be oriented and will thus have a say within their own political climate.

The post The inclusion of Cryptocurrency in the Global Economic Structure appeared first on The European Business Review.

However, the US dollar is as mighty as ever. Despite the talk of wavering American supremacy, the dollar has successfully ruled as the medium of international trade, continuing to be the anchor against which other nations value their currencies.

The Truth?

It is unlikely that Bitcoin will replace the dollar as the world’s dominant currency or at least not anytime soon. Bitcoin does have many money-like qualities as well; payments can be made with it, to buy day to day items.  All you need is a seller that is ready to accept payment in bitcoin. And due to all the buzz surrounding bitcoins, many sellers are willing to do that.   

Bitcoin does, however, have something that other commodities do not, something that is vaguely sinister, which may in fact have been a driving force behind its increasing popularity;  Bitcoin allows its holders to complete transactions anonymously.

On the other hand, one reason why bitcoin taking over the dollar seems like speculation at best is that the maximum number of bitcoins that can exist is fixed, capped at 21 Million. But it is a well-known fact that the supply of money needs to expand in order to meet the needs of a growing economy. Since there can only be 21 Million bitcoins, it makes its chances as the superior currency very low.

Another crucial reason, behind bitcoin not being a viable alternative to fiat money, is its highly volatile and unstable nature. Granted, the value of the dollar fluctuates as well. Its worth in terms of foreign currencies changes frequently on currency exchanges, and inflation has eroded its value significantly in terms of real goods and services. 

However, drawing parallels with Bitcoin, the dollar is a model of stability. Inflation, on average, runs around 2% annually and the changes against other currencies attract attention only if they amount to more than 5%. An investor holding assets in dollars will have a pretty good idea about the future value of holdings in a year or more. Simply put, the dollar remains a stable and superior store of value.

Shifting attention towards Bitcoin, in 2017 it surged recording a growth of about 350% in terms of dollars. Unfortunately, it gave back all these gains in just a matter of months. Considering just the month of January in this year so far, Bitcoin was able to register a record trading price of $40,000. But only half an hour later, it plummeted to $36,000.

Such wild swings go to show that Bitcoin is certainly not a stable store of value. Nevertheless, these price gyrations are also what makes Bitcoin so incredibly attractive to speculators. Especially with the increasing availability of trading programs that allow users to take advantage of these crypto booms. Therefore, if you invest with Bitcoin Champion, one such trading program, you don’t even need to be an active trader to take advantage of price surges resulting from the volatile nature of the market.

Many traders and investors may be able to make a great many dollars by investing in bitcoin. But the price swings, at least for ordinary people, don’t do much for ordinary people.

It gives people no way to plan their future as an acceptable currency must due to the excessive amount of uncertainty involved. Conversely, if the dollar is less stable in terms of real goods and services or doesn’t have a value as high, it still has a better track record and ultimately is a better store of value than Bitcoin, giving it an edge as a currency.

There can be little doubt that many Bitcoin fanatics will point out, saying that the massive fluctuations in the dollar price of Bitcoin speak of the dollar’s instability rather than Bitcoin’s. And that may have even been a compelling argument if Bitcoin and the dollar were the only two measures on earth. But, by contrasting their movements against, say, per capita income, it is equally apparent that the movements in Bitcoin’s worth fluctuate far more.

Perhaps someday, Bitcoin will be successful in becoming widely accepted and be able to acquire a stable value in real terms. Maybe then it might be strong enough to challenge the dollar and get established as an independent international standard. But for now, bitcoin remains a volatile commodity, and its replacement as a global currency sees to be a distant dream.

The post The Lingering Question Of The Decade: Is Bitcoin The New Global Currency? appeared first on The European Business Review.

Spanish property has been a hot favourite with British investors for decades. The country’s clement climate and relatively affordable property prices made the dream of a purchasing place in the sun achievable for many in the UK. Seducing one million British buyers into an Iberian investment, usually in the sunnier south of Spain or the Balearics and the Canary Islands.

Now however there is a possibility that these dreams could be tarnished by Brexit.

Around 50% of these properties belong to long term residents, expats who are officially resident in Spain. Whilst the other half have been purchased as retirement boltholes, holiday rental investments and second homes by UK residents, who remain non-resident.

And it is this latter group of property owners who are about to experience some considerable changes in both their tax obligations and their ability to visit and stay in their second homes in Spain, as a result of the UK’s withdrawal from the European Union.

Maximum 90 Day Stay

Many British investors purchased property in Spain to escape the long dreary winter in the UK. Prior to Brexit these ‘swallows’ could spend up to 183 days per year in Spain, before becoming tax resident there, enabling them to enjoy the best part of 6 months at a time outside Britain.

Now however, as non-EU nationals, they are limited to a maximum stay of just 90 days in any 180-day period. Whilst previous rights to reciprocal health care have also been rescinded – a factor of considerable concern to senior citizens and retirees.

It is of course possible to extend this stay by applying for a Non-Lucrative Residence Visa. However, this constitutes an application for settled status in Spain – so is not a viable work around for anyone who wishes to remain resident in the UK for tax purposes.

It is possible that the Spanish and British governments may reach some sort of future agreement about the rights of second homeowners to visit their properties for longer than 90 days at a time. But currently there is no provision for this within the withdrawal agreement.

Higher Taxes on Holiday Rentals

A large proportion of Spanish second homes were bought as investments, designed to generate both capital appreciation and rental returns from holiday makers.

The market for privately owned holiday rental property has certainly boomed over the last decade, fuelled by the emergence of platforms such as Airbnb and the greater availability of cheap air travel.

In the Canary Islands, owners can enjoy a 12-month calendar of rental returns thanks to the year-round climate. Making investment properties in Lanzarote Tenerife and the other islands in the archipelago particularly appealing.

As EU nationals, British tax residents who owned a holiday home in Spain were able to pay tax on their holiday rental earnings at the standardised pan European rate of 19%. Now however, they will be required to pay 24%. Worse, they will also be unable to offset expenses involved, such as cleaning and maintenance. Making a holiday rental property in Spain a much less attractive investment proposition.

Some observers and legal experts have suggested that these regulations are manifestly unfair and in fact violate European law – however, at the time of writing these are the new rules for British non-resident owners.

As a result of the pandemic, many holiday rental owners will have not generated any rental income during the course of 2020. But even if they decide to stop renting their property out altogether as a result of Brexit, they will find that they are still liable to pay a tax on their holiday villa or apartment. As Spain’s tax authorities require submission of the Modelo 210 tax form even when no income whatsoever is recorded.

The post Brexit’s Impact On Spanish Second Home Owners appeared first on The European Business Review.

Yet businesses will be all too aware that there are challenges to clear before the vaccine allows some sort of normality to return.

We’ve already seen – as IG demonstrates – that different countries have taken very different approaches to managing the virus. That’s likely to continue as the continent – and world – begin to open back up for business. Getting the balance right and doing so in a safe way will be tricky but it’s clear that some precautionary measures – including social distancing, masks and increased hygiene measures will need to be in place for a while yet as the vaccine is rolled out at scale.

The vaccine rollout will take time

The timescales are still unclear but we can expect a large proportion of people to get the vaccine during the first quarter of 2021. Given the challenges in storing the vaccine at the right temperatures, for example, it’s easy to anticipate delays.

One of the vaccine’s co-creators, for example, told the BBC that he expects normal life could return by the winter of 2021. Prof Ugur Sahin, co-founder of BioNTech, said: “Summer will help us because the infection rate will go down in the summer and what is absolutely essential is that we get a high vaccination rate until or before autumn/winter next year.”

Disruption of some form is, therefore, likely to continue for all businesses for a while yet.

Distributing the vaccine fairly

The nature of the vaccine rollout itself will also present several challenges. Firstly, decisions need to be taken on priority recipients – should it go to the elderly first or to working age people who desperately need to be able to get on with their lives? Should key workers be higher on the list – or those with medical conditions? In the UK, care home residents will be followed by the eldest members of society – with business owners and consumers likely to be waiting for some months.

Then there’s the question of distribution across the globe. The pandemic will only really ever be truly under control in our globalised economy once every country is able to get on top of infection rates – and measures need to be put in place to help those nations with less spending power to be able to vaccinate their population.

Health or immunity passports

As increasing numbers of people have the vaccine, the chances of ‘health passports’ rise – giving those who’ve received it a pass to safely return to ‘normal’. This could be attractive to businesses who are able to get key employees travelling for work again or, perhaps, to attract overseas visitors from countries that are among the first to rollout the vaccine.

A slightly wider ‘immunity passport’ – that covers those who have recovered from coronavirus as well as those with the vaccine – is also up for discussion. As The Lancet noted, some people feel there are privacy concerns over such documents – and that those without them are unfairly discriminated. However, it concluded: “Immunity passports would potentially allow some proportion of the population to access more freedoms during lockdown periods. It is unethical to restrict freedom unless there is a real risk to other people. If we have the technology to decide who is not a risk, we should use it.”

Governments will need to balance up the needs of industries such as tourism and hospitality who are keen to make up for lost time (and revenue) with that of their respective healthcare systems. Businesses too will need to be patient – with a significant portion of the year likely to be dominated by the vaccine rollout. In the meantime passports and the relaxation of lockdown measures do offer a glimmer of light at the end of the tunnel.

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It has been stated now that all the concepts we’ve had related to our financial securities were a myth and an individual needs to survive on its own during recession times. Authorities around the world have unable to track and trace such huge levels of data. 

Modern challenges require modern solutions. Blockchain and AI are modern technologies for now and it can genuinely help to address the economic problems. We exist in a globalized world where we need to interact with businesses around the world to ensure smooth global economic activity. Let’s evaluate how blockchain and AI can help to initiate and catalyze the economic recovery process in 2021.

Possesses the ability to unlock the true potential of IT operations.

When we are dealing with mobile, web, and cloud applications, there are databases in the backend where data is placed and retrieved. Current IT systems have limited database operational capacity and the number of processes being performed over the digital world is bound to rise. 

There is a dire need to implement blockchain technology networks where we have the facility of distributed ledger systems. Along with the better integrity of database security, the operational capacity is also multiplied. Blockchain and complex algorithms now lead to the creation of the latest technological applications like Bitcoin Digital that has automated online trading operations.

IT operations are to be truly unlocked at the moment specifically to assist policy managers around the world. Authorities need to implement integral and fast processing systems to have centralized databases with decentralized controls. Along with this, the assistance of artificial intelligence would help recognize transactional patterns among these. 

Leads towards Digitized Economy

It has been greatly realized how wealth exists in few hands with masses facing quite a few obstacles to generate wealth for themselves. This has happened because market controls are often centralized and people at lower levels are unable to execute their own thinking and strategies. Now technology leverages each of us and provides decentralized power to effectively control our asset’s worth. 

The freelance economy and online trading is now a force on its own. You simply need to have domain knowledge, access to the right tools and platforms to make a fortune for yourself. This can only happen where modern IT systems are moderating things without any probability of bias. 

Smart algorithms now ensure that each of us has a level playing field to compete within international markets. It is essential that we get used to making optimized usage of our time and invest rightly our time and money. We need to push our leaders to promote ecosystems that would ensure us collectively towards mutual growth and success without leaving anyone behind.

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Group CEO, Itai Pazner, also spoke of his optimism for the future, explaining that they had continued to “trade ahead of expectations” and EBITDA for the year will likely come in “significantly ahead of prior expectations”.

How they did it

Poker was perhaps the standout performer, with increasing numbers heading online to find some fun. Poker has long been a popular pastime, with origins dating back several hundred years. Since the advent of the internet, and online poker along with it, the game has enjoyed huge surges in popularity, with millions of players attracted to the convenience of playing online. Between around 2003 and 2006, the world experienced a poker boom, in which player numbers more than doubled every year as the game moved online. While restrictions imposed on gambling in the United States in October of 2006 slowed the boom, there are still significantly higher numbers of players today than there were prior to 2003. An estimated 100 million people worldwide regularly play poker online.

888poker was ideally placed to capture a large audience share of new members signing up during the height of boom-time, having launched in 2002 and enjoying much success even in the early days. Initially branded as Pacific Poker, 888poker has grown to become one of the world’s best-loved and most used online poker sites. 888casino also offers a variety of games, with minimum and maximum bets ranging from as little as a penny to as high as £1,000 for the high rollers.

Attracting players

Sign-up bonuses have been cited by many online poker players as a significant factor when choosing where to play. 888poker offers new customers a comprehensive sign-up package which includes an immediate cash sign-up bonus, no-deposit bonuses bonus points which can be traded for cash or tickets when a certain level has been reached. First-time players are also presented with a package of tournament tickets, which can be used to play for cash or other prizes.

The 888poker software supports a comprehensive range of poker variations and includes sit-and-go tournaments, cash games, practice games, large tournaments and patented unique games such as Snap and Blast. The site is accessible to players of all levels of experience and ability and has a wide range of options in terms of betting to suit every pocket. A new look poker product was announced at around the same time as the H1 2020 figures were released, so players could have even more to entice them in the second half of the year.

Why players return for more

Online poker provides all players with unique opportunities to develop their game, whether that’s new players learning the rules or experienced players testing new strategies. Free-play or micro-stakes tables allow for hours of practice with very little financial outlay, with other players online and ready to join in at any time of day or night. Online poker sites also usually offer several variants of poker, giving players of one genre the chance to try their hand at another.

While online poker has proven extremely popular, there will always be those that prefer face-to-face games in a real venue. Some of the primary reasons stated for preferring live games include the atmosphere and the ability to play with friends rather than strangers. 888poker has solved both of these conundrums to extend their offering to a wider demographic. There are a series of live 888poker tournament events held each year, with members able to compete online for tournament entry tickets. Live dealer games at 888casino help to recreate the ambience of a real casino, while 888poker online has an option to set up a private sit-and-go tournament or cash game with friends who are also members.

Looking to the future

With something in the pot for almost every style of poker player, it is perhaps no wonder that new memberships have more than doubled in the first half of 2020 compared to the previous year. Share prices in 888.com have increased from 174.86p per share at the end of June 2020 to 268.50 as of the middle of October, testament to high investor confidence in the products and services offered and the momentum of the company on its growth trajectory. 888 Holdings is able to demonstrate quality financial metrics to investors, such as a solid 33.2% ROCE, or five-year return on capital. The financial history of the company is strong and improving all the time, with earnings and sales accelerating. All of this adds up to 888 Holdings being classed as one to watch in terms of investment, with all signs currently pointing towards 888 shares being a profitable investment.

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For many homeowners, selling a house in a normal economy can be a somewhat tense and stressful endeavor. However, if you are attempting to sell yours in a slow economy when few people are buying, it can be a process of near misses and tested hope. A slow economy contributes to what is known as a buyer’s market in that there are more houses for sale than there are buyers. That said, for the diligent homeowner, selling your home in a slow economy is not really more difficult than doing so in a bustling economy because all that is required is that you pay very close attention to the basics of preparation and marketing, which include paying attention to your home’s appearance, your marketing, and the house’s price property auction bidding. For more insights and professional guidance, you can visit The Estate Lawyers APC official website.

In terms of buying a house, you have a much easier task ahead of you. The most important things you want to do include being ready to negotiate and being willing to ask for concessions. After all, in a buyer’s market you are calling the shots because there are often many other equally nice homes for sale right down the road.

Selling

1. Update

As any broker at Rowling & Co Real Estate Agents will tell you, a home that has been updated will attract more potential buyers than a house that is marketed with its day-to-day appearance. For maximum appeal, you should update the refrigerator and stove, ensuring they match. When it comes to window treatments, blinds are warm and professional.

Painting the walls is an absolute must. Although it is an unwelcome task for the seller, buyers will look at any house painted in colors they do not like and see an unwanted chore. As, such, they will then continue shopping for an easier house.

2. Curb appeal

Curb appeal usually offers no real return on investment other than the fact it helps get potential buyers in the door. In a slow market, this is your primary task. The yard should be manicured, and the exterior bushes should be neat and trim. If possible, you should paint the house and ensure the overall façade is warm and inviting.

3. Neutral

As a seller, you should make the job of buying and moving into a home as easy as possible. As such, walls painted to suit the personal tastes of the owner need to be re-painted to neutral grays or tans. Doing so will allow potential buyers to better imagine what the house might look like once they move in.

4. Online listing

The modern home buyer shops online. As such, you should have a minimum of 10 photos. Ideally, you should have 20 to 24. Too many photos, however, can make shopping for a house a tedious process. Additionally, you should have two photos of every room. This is something that sellers often do not do, thinking one photo is enough. However, you should have a second photo of a room taken from a different angle. All photos should be wide shots that capture the room’s total area. Finally, you should avoid closeups of oddball objects.

In terms of information on the house, you should list the house details as objectively as possible. Modern buyers are sophisticated. Such marketing terms as cozy, for instance, are interpreted as cramped. If you’re wondering: “How can I Sell my mobile home?”, visit US Mobile Home Pros for a helpful consultation to guide you through the sales process.

5. Tax assessment

You should ensure you have the latest tax assessment listed in the online listing. Doing so will allow you to show that the pricing is fair or even inexpensive.

6. Online estimate

Many sites offer a free online estimate of a home’s worth. If your price deviates from this estimate, the reason better be obvious. A price that is set slightly too high invites negotiation. A price set dramatically high invites a potential buyer to shop elsewhere.

Buying

1. Negotiate

In a fast economy, it might be prudent to offer full price for a house in order to actually get it. However, buying a home in a slow economy affords you two important options.

First, you should ensure the price is equal, more or less, to the average estimated value of the home as indicated by your favorite house-listing website.

Second, you should compare the price to other homes in the area on what they are offering that is similar to Cash Offer in Florida, understanding that updated homes reflect a higher price. Once you have found a house priced appropriately, you should make an offer of at least 10 to 15 percent lower than the asking price. Sometimes, in a buyer’s market, sellers become very motivated and will often accept an offer that is 25 percent lower than asking price.

2. Repairs

Before the house passes inspection, major items will need to be repaired, but you should also ask that minor items also be repaired. After all, in a slow market a seller cannot simply wait for the next buyer as there might not be one. Knowing this, you should require the seller to take care of the chores you would otherwise have to do.

About the Author

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.

The post How to Buy and Sell Houses in a Slow Economy appeared first on The European Business Review.

Sadly, vaccines are still being developed, so the only tool the government has is its lockdown measures. Restriction of movement reduces contagion, but it disrupts social and economic ties. Consumers are stuck in their homes, and many people lose jobs. They have to adapt to the new reality and find opportunities for remote work. Here is an overview of the situation at present.

Severe Economic Shocks

Many experts agree that the economic effects of the lockdown are larger than the demographic ones. This may sound cynical, but it will take years for the economy to fully recover. The negative shock of the outbreak triggered immediate shrinking of business activities.

The South African government did not hesitate to impose lockdown measures.  President Ramaphosa has referred to the crisis as a “post-war situation” marking a watershed moment. The country may use the shock as the impetus for transitioning to a more viable economic model and eliminating all remnants of apartheid. Still, losses are growing relentlessly, and the government does not seem to be doing enough.

The crisis has affected the economic structure from top to bottom. Across the industries, the damage has been uneven. The least affected sectors are those linked to supply of essentials: healthcare, food and agriculture, finance and insurance, and telecommunication. Low-income consumers were hit particularly badly, especially those employed in the following industries:

• tourism;
• accommodation;
• catering;
• services;
• transport;
• mining;

Lay-offs and New Opportunities

As the economic activity was halted globally, millions of people became jobless. The shutdown of the local economy has resulted in dozens of thousands of lay-offs. The unemployment situation was already gloomy before 2020, as only two-thirds of residents were employed. The government launched an emergency unemployment benefit for roughly 6 million people.

In these desperate times, consumers are looking for alternative sources of income. E-commerce and online trading have been developing at a rapid pace. Lockdowns have spurred digitization all across Africa. In 2019, South Africa was the continental leader in terms of daily Forex volumes. This year, the number of online traders has ballooned.

The region is attractive to brokerage brands from abroad. The local industry is fairly regulated. Every Forex broker has to be licensed by the FCSA. Global brands like ForexTime are also authorized and monitored by foreign watchdog organizations like the CySEC.

A trusted Forex broker provides free software and educational resources, so clients can learn safely. The range of tradable instruments includes currency pairs, stocks, spot gold and silver, and derivatives like CFDs. Everything is managed via platforms or apps. This is a perfect solution for someone stuck at home, and traders can start new careers.

Inadequate Reaction by the Government

The initial support package worth $26 billion equalled a tenth of the national GDP. By mid-2021, the package is projected to reach $46 billion. In September 2020, South Africa’s auditor general said that some money may have been mismanaged and paid to the wrong beneficiaries. There have been reports of questionable agreements between state officials and providers of medical equipment or food aid.

A Look Ahead

Projections of recovery include different scenarios. The most optimistic and quickest scenario includes a GDP decline of 5% by the end of the year. This would have been regarded as disastrous in 2019. Now, it is the most positive view. The other — “Slow” and “Long” scenarios — are even more menacing.

A new report by UNDP and other UN agencies projects a plunge of 8%. The experts suggest that recovery may take five years. Over half of households that are now out of work may become impoverished. Generally, a third of all households may leave the middle class.

The SA-TIED working paper “Impact of Covid-19 on the South African economy: An initial analysis” highlights two key conclusions:

• the government’s transfer programs to low-income households are providing the most vulnerable demographics with crucial support, and they should be continued;
• it is vital to coordinate economic policies and epidemiological measures to mitigate the economic implications.

The Bottom Line

COVID-19 has had a devastating effect on the South African economy. To contain the virus and rebuild the economy, the government must take decisive measures today. Sadly, the response has been inadequate. The efforts to reduce the damage are hampered by corruption. Massive lay-offs, malnutrition and inadequacy of the healthcare system mean that recovery will be long and painful.

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Ambassador Dario Item shared some of the great measures and ongoing initiatives the government has introduced in its efforts to put the country back on track. At the same time, he has been proactive with the ongoing emergency COVID-19 fundraising efforts as the country needs help to boost its economy again. 

In order to bounce back from the COVID-induced slope, Antigua and Barbuda is showing the world why it’s not only one of the leading tourist destinations in the Carribean, but also fast becoming one a crucial investment hub in the region. 

The Ambassador to Spain, Monaco, and Liechtenstein, Dr. Item, lauds the government’s effort to re-introduce the country, not only as a tourist destination but as an investment target as well. 

Programmes to reboot the economy

The country’s Citizenship by Investment Programme (CIP) is one of the most known programmes in the region. Now, paired with its Nomad Digital Residence (NDR) programme, these initiatives make the country poised to supplement the tourist-friendly terrain and people of Antigua and Barbuda. 

As the tiny yet beautiful nation re-opened its borders in June, the momentum of fresh new tourists, investors, and entrepreneurs (particularly those who are location independent, or commonly known as ‘digital nomads’), have picked up. 

Why UHNWI investors are choosing Antigua & Barbuda

The growing interest from both investors and entrepreneurs did not come as a surprise. With its innate beauty, Antigua and Barbuda is home to an astounding 365 beaches scattered along 95 miles of coastline. The year-long splendid weather amplifies the attractiveness of the Caribbean paradise and has been attracting ultra-high-net-worth-individuals since they started the programmes. 

The country’s tourism and hospitality industry have been streamlined to accommodate the growing demand, especially of those who can’t wait to revisit its pristine beaches. There is also a vast array of both local and foreign cuisines available through its 5-star restaurants. These amenities have been certified by the government, and ready to welcome both new and returning tourists. 

Citizenship, residency and investment options

The tourism department has also launched an information program to ensure that all the necessary health and safety protocols are in place and implemented for the safety of both its residents and visitors. 

Tourists, investors, and entrepreneurs visiting, or look to establish their businesses in the country, may still expect to receive the usual warm welcome, with a little twist as they can now be greeted “with a smile even from behind a mask”.

As if the paradise-like setting were not enough to encourage new visitors to Antigua and Barbuda, the government decided to bring an enjoyable meaning to working from home. The Nomad Digital Residency allows a two-year, visa-free stay in the island. 

This is a very suitable condition for those people who work from home and still wish to be close to nature. Antigua and Barbuda boasts of a very reliable and state-of-the-art connectivity infrastructure that allows seamless data transmission and reception. This makes it even more comfortable for people who would like to work or run their company from a splendid and comfortable satellite workplace.

Antigua & Barbuda is also known for its safe location, great quality of life, as well as excellent travel links. It is one of the most secure and safest countries in the Caribbean. It also compares very well worldwide for its low crime rates and the rule of law. The country also has little or no exposure to large-scale security concerns, such as terrorism, cybercrime, and money laundering.

Meanwhile, many entrepreneurs and investors have been taking notice of Antigua and Barbuda’s Citizenship by Investment Program. Depending on how an applicant wishes to earn citizenship, he or she may invest in the National Development Fund (minimum of $100,000), real estate ($400,000), commercial operations ($1.5 million in an approved business), or the University of West Indies Fund ($150,000 requirement).

These programs are tailored to revitalise the tourism sector as well as other economic activities of Antigua and Barbuda. Dr. Dario Item’s enthusiasm has been very evident and his office continues to reach out to his areas of representation to encourage more potential visitors and investors to the Caribbean paradise. 

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It is these three Mediterranean nations that are poised to record the worst downturn out of the 19 Eurozone members. In data published by Italian national statistics agency Istat, GDP fell by 12.8% in Q2 compared to the previous quarter – and 17.7% to the same quarter in 2019. With Covid-19 still at large in Europe, it’s hard to see how the figures will improve before 2021 too.

The economic challenges facing Italian businesses

For the Italian economy, there was almost no precedent for what Covid-19 would bring – not in modern times, especially. As the first European nation to go into lockdown, there were no other countries to learn from. France, Spain, Germany, the UK and others would follow. As shops and factories closed, investment plummeted and consumer spending was scaled right back.

The Istat data shows that consumer spending dropped 11.3% and exports were down by more than a quarter. All the factors added up to a record contraction – worse than first thought. The signs of improvement seen since the easing of those first restrictions are welcome. At the same time, however, there is still a lot of ground for businesses to make up in the months ahead.

What are businesses doing to minimize the impact?

In research from global audit and consulting firm RSM Italy, businesses are taking multiple and diverse actions to minimize the substantial impact. For nearly two-thirds of those surveyed, the first and primary aim has been to perform an analysis of exactly how they are being affected. It is an action RSM Italy sees as more common among firms with higher turnovers (€15m >).

Many European governments – not just in Italy – went far beyond their usual intervention in an attempt to support businesses and the economy. It is no surprise, therefore, that half of Italian companies are making use of government subsidies and financial initiatives. Meanwhile, there’s also a notable shift towards the adoption of tech solutions to support home-working.

But the longer-term economic impact of Covid-19 is likely to be felt for many months to come – even changing the face of how some businesses operate. From the RSM Italy research, half of businesses are planning to negotiate and/or renegotiate contracts. But there is also a desire to improve tax planning, restructure and rethink the management and design of supply chains.

Italy’s future course amid fiscal and political fallout

The prevailing mood among Italian businesses, according to RSM Italy, is that business models will change because of Covid-19. But it is also concerning to note that more than a quarter are fearful of what the future holds – even in a post-pandemic landscape. And there are maybe one or two pressing reasons for there to be such negative expectations.

As the pandemic swept through the country earlier this year, the Italian government called out to the European Union (EU) for assistance. But even some pro-European politicians had started to wonder if that call had landed on deaf ears. Amid all the discussions around Brexit, there are fears that Italy could be moving in a direction that could end their relationship with the EU too. 

If it were to materialise, it could be calamitous for many Italian businesses – not least for those with significant cross-border operations. It could prove an unwelcome distraction as the country counts the cost of emergency fiscal measures. Until Covid-19 is crushed, however, we’re still to find out just what the future economic landscape looks like – and how long a recovery will take. 

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Anil Chaturvedi, whose career spans over forty years, is the Managing Director of Hinduja Bank in Switzerland. He got his start at the State Bank of India, the largest bank in the country, which means he’s witnessed first-hand the ebbs and flows of foreign investment in India.

As he’s observed the Indian economy, particularly with an eye on foreign investment, he’s picked up more than a thing or two about what makes the Indian economy tick. He’s also had plenty of experience working internationally, specifically in Switzerland and the United States.

This unique combination of knowledge and experience informs his highly sophisticated view of the Indian economy and the investment opportunities it presents for European countries. Mr. Chaturvedi teamed up with several panel members to discuss the most promising opportunities for European companies. Here’s what they found.

Pricing and Branding Are a Priority for Indian Startups

In every country, cultural and educational differences, as well as the abundance or scarcity of natural resources, have a huge effect on what the country produces. And not just regarding physical goods. For example, in India, many startups are run by highly data-driven, well-educated entrepreneurs. However, Anil Chaturvedi and the other panelists agreed that many of these entrepreneurs fail to tell a compelling story for their brand.

In today’s global marketplace, even great products can fail miserably if the branding isn’t effective. Branding is what creates the relationship between consumer and product, and thus allows more favorable pricing. And pricing is another area in which Indian startups need improvement and guidance. While working with early-stage entrepreneurs, Chaturvedi’s panel agreed that providing coaching on proper pricing for goods and services was a top priority.

This could be another great opportunity for European investors who are particularly competent when it comes to branding and pricing. Efficient economics, after all, is all about making deals that benefit both sides. In this case, Indian entrepreneurs can benefit from the branding and pricing experience of Westerners, while Europeans can benefit from Indians’ cultural knowledge and their experience in the Indian business community.

Smartphone Revolution to Change the Face of Retail

While countries like the United States are long past the peak of their smartphone revolution, India’s is just hitting its fever pitch. In fact, as of late 2017, India had as many smartphones as the United States has people. That comes out to about 300 million smartphone users. Of course, this makes India a target for mobile phone sellers, but it also has implications for e-commerce.

Traditionally, in India, consumers made purchases from vendors that purchased goods from other vendors. As a result, both the original vendors and the consumers lose value to the middleman. Smartphones might not eliminate the middleman, but they will help consumers and manufacturers wrestle some power back.

Smartphones allow customers access to more information about the pricing of goods. That increased transparency means that both consumers and the providers of goods keep more money in their pockets. More money in the pockets of consumers and providers means a more efficient economy. Also, it means consumers will have greater buying power to purchase the goods and services provided by opportunistic European companies.

India’s Startup Scene Will be Heavily Influenced by E-Commerce

In tandem with the explosion of smartphone users in India, perhaps unsurprisingly, is the incredible growth in internet users. And with that growth come many e-commerce opportunities. So much opportunity, in fact, that, according to Morgan Stanley’s forecasting, the Indian e-commerce market will be worth $200 billion by 2026.

Predictably, Amazon and Walmart are building a strong presence in the growing Indian e-commerce market. And while it’s unlikely any startups will challenge these e-commerce behemoths, plenty of niche opportunities will be available for those who pay attention.

Small manufacturers, online businesses, and niche retailers will benefit from the digitization that is quickly spreading throughout India. And, since most rural areas in India don’t have internet access, there is still a considerable untapped customer base left in the Indian market.

An Emerging Market with Upsides and Downsides

As is usual with emerging markets in any country, investing in India carries significant risks. The customer base for industries such as e-commerce is very large, so there’s plenty of opportunity. However, Indian tax laws and business regulations can be complicated. This makes it difficult for European companies, especially those unfamiliar with India’s business practices, to compete effectively. Foreign investors who develop connections within the Indian business community before investing will be well-positioned to capitalize on the opportunities that India presents.

Also, given India’s recent moves towards allowing more foreign investment, European countries have reason to be cautiously optimistic about the future of Indian investment. While the full effects of lowering barriers to foreign direct investments haven’t yet emerged, the results so far are encouraging. India is starting to establish itself as one of the premier emerging markets for European investors.

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