Christian Mumenthaler, CEO of Swiss Re: Insuring Future Growth

[caption id="attachment_12504" align="alignright" width="300"] CEO: Christian Mumenthaler[/caption]

The new frontier of insurance runs through cyberspace. Hacking has professionalised and is no longer the preserve of lone bespectacled teenagers with more brains than brawn trying to prove the point they failed to make during recess. Today’s hackers are organised into clandestine, yet professionally-run, businesses and have targets and quotas to meet. The threat from cyberspace has become so large and immediate that the insurance industry is asking governments to provide a backstop in case of large and sustained attacks.

Christian Mumenthaler of Swiss Re, based in Zurich and the world’s second-largest reinsurance company, argues that cyber attacks are no different from terror strikes and warrant a similar response.” So far, the CEO has found no government willing to engage and talk about the topic. Mr Mumenthaler worries about the accumulation of risk, a concept used by insurers to describe a large number of policyholders exposed to the same risk at the same time - potentially causing a massive avalanche of claims that could undermine the industry’s ability to respond.

“We thrive on risk diversification; risk accumulation is the enemy and leads to uninsurability which, in turn, stifles our clients’ businesses - and our own.” The number of cyber security breaches reported by companies worldwide shot up by almost 28% last year. The average cost per incident rose to $3.6m (€2.9m / £2.6m).

Mr Mumenthaler notes that hackers increasingly adopt destructive techniques that deprive businesses of their data: “Ransomware attacks are the start of something possibly even more sinister such as the hijacking of industrial control systems or the insertion of malicious data with the intention to corrupt company records and make them unusable.”

In charge of Swiss Re since July 2016, Mr Mumenthaler is determined to leverage Swiss Re’s deep knowledge of specific segments of the insurance market - natural catastrophes, nuclear incidents, biometrics, and pandemics, amongst others - to take the company forwards. “We are transitioning into a risk knowledge company that mainly invests in risk pools with long-term growth potential.”

In 2016, the company took a severe hit with its exposure to the wildfires in Alberta’s (Canada) oil patch which displaced around 88,000 inhabitants of Fort McMurray and destroyed more than 2,400 homes and other buildings. The fires scorched the town and spread from Northern Alberta into neighbouring Saskatchewan, impacting mining operations in the Athabasca oil sands and interrupting supplies. The final damage amounted to C$10bn (€6.2bn / £5.5bn). Swiss Re carried around 80% of the losses sustained.

The company was praised for its quick response to the emergency in Canada but saw its net income fall to Sfr 315m (€269m / £237m) from Sfr 3.4bn (€2.9bn / £2.6bn) in 2016. Swiss Re is in preliminary talks with Japan’s SoftBank which mulls acquiring a sizeable minority stake in the company - an idea that enjoys the strong support of the reinsurer’s CEO.

The industry still has plenty room for growth. Mr Mumenthaler is particularly eager to tap into the underdeveloped insurance markets of emerging economies where penetration is still low: “We are keen to help close the protection gap in high-growth markets where insurance coverage is simply not yet available or too expensive. Swiss Re coordinates with governments and local institutions to insure people and businesses. As a result, insurance penetration is steadily improving.” Swiss Re maintains a global network with offices in 25 countries.

The Swiss executive also seeks to remedy persistent gaps in industrialised countries where insurance is both available and affordable but people still do not take out coverage. In California, for example, only about 12% of home owners have bought coverage against earthquakes. Surveys have detected a widespread conviction that earthquake insurance is prohibitively expense. Others expect the state to help in case of a major quake. “Interestingly, those surveys also show that people are actually willing to pay considerably more for insurance coverage than the actual price of the product. In other words, for insurers California is a major growth market.”

Looking to make the world more resilient, Mr Mumenthaler would like to reshape his company into a repository of relevant knowledge - a purveyor of data that powers the future: “When people hear of Swiss Re, I’d like them to see a long-term thinker and not just an ordinary reinsurance company.”


Marc Langenbrinck, Mercedes-Benz Schweiz CEO: Finding and Keeping the Exact Right Competitive Angle

[caption id="attachment_12550" align="alignright" width="327"] CEO: Marc Langenbrinck[/caption]

Mercedes-Benz is enjoying a great run. Its cars have set new sales records in Switzerland, Spain, Belgium, Portugal, and Poland - and elsewhere. In fact, the iconic German carmaker just reported its 60th consecutive month of record sales. Last year, the company did particularly well in Asia, registering double-digit growth in key markets such as India (+25.7%) and China (+18.6%).

Mercedes-Benz Schweiz CEO Marc Langenbrinck may also smile as his brand reigns supreme in the country’s highly competitive luxury car segment. It is now also the country’s second best-sold brand by unit. In 2017, Mercedes-Benz Schweiz reported a massive 12.1% increase in its unit sales, gaining considerable market share by units sold.

Sitting atop a vast dealer network that exudes a corporate culture of excellence, Mr Langenbrinck notes that his “the-best-or-nothing” approach has proven successful: “We not only put in plenty of hard work, but also possess the agility, expertise and, indeed, the passion to deliver on our promises.”

The days of salespeople preying on unsuspecting customers who had strayed, inadvertently or otherwise, into a showroom are definitely - and thankfully - gone. Today’s dealers are professionals who thrive on the quality of their product and - as the customer-facing end of a vast and complex organisation - are charged with keeping up the company’s enviable reputation as the purveyor of superior mobility products. The change entails much more than use of business-speak: it includes finding the exact right competitive angle and fitting the product to the customer - rather than the other way around.

“I am convinced that we are not only a car brand, but a company driven by an agile corporate culture that keeps us ahead of the competition and right on the edge to best serve our customers.” Mr Langenbrinck points out that few others can match Mercedes-Benz’ extensive and well-diversified product portfolio: “We are able to deliver tailor-made solutions for any mobility need – one of the numerous reasons why we became the number one luxury car manufacturer not only in Switzerland but worldwide.”

With a corporate culture centred on purpose, passion, and power, Mercedes-Benz smoothly and almost imperceptibly accelerates as it plots a course forward. The company is justifiably proud to be the only European brand included in the top ten of the prestigious Best Global Brands ranking compiled annually by Interbrand, the world’s largest brand consultancy. Even more impressively, Mercedes-Benz does not need to appeal to gimmickry to make it to the top and stay there. The carmaker has received ample praise for its marketing strategy, driven exclusively by the quality of its cars.

“I am delighted that we found many new customers who have discovered – and realised – their passion and dream to drive a car with a star. I would think that we reflect the ‘zeitgeist’ of most target groups and meet their highest expectations with regards to design, top-notch technology, and customer centricity. Our brand represents modern luxury, pioneering spirit, and excellent quality. This enabled Mercedes-Benz Schweiz to sell over 25,000 units in the Swiss market in 2017.”

Switzerland is the only market besides Germany where Mercedes-Benz has launched a pilot programme to deploy its fully-electric eActros trucks. The vehicles participating in the trial fall into the 18 to 25 tonne range and boast an autonomy in excess of 200 kilometres. A number of premier logistics companies have already signed up for the programme and submitted glowing reports. Mercedes-Benz is also close to introducing its eCanter light-duty truck, the eSprinter van, and Citaro - an electric city bus.

On the cutting edge in both the passenger car and truck segments, Mercedes-Benz and its Swiss subsidiary are facing the future with full confidence that, whatever shape the transition to electric mobility takes, the brand will continue to dominate the luxury car segment it has ruled since time immemorial. Worryingly - for its competitors - Mercedes-Benz has now ventured outside its traditional territory to claim a major share across all segments of the car market - including the lower end where its application of superior technology, meticulous attention to detail, and automotive finesse is rewriting the rules and democratising access to a car with a star.

https://youtu.be/VulTF9k2qus


Obituary: Stephen Hawking (1942-2018)

[caption id="attachment_12562" align="alignright" width="450"] John Preskill, Kip Thorne, Stephen Hawking[/caption]

The word battle used in connection with any ailment is an odd euphemism, but particularly so in the incurable and progressive. There is no battling ALS; one by one it robs the you of your motor functions and, as yet, there is nothing we can do about it. There is no dignity won by naked lies; don’t condescend to the afflicted, certainly not to the giants amongst them. You embarrass only yourself. To suffer and endure to the very last muscle is heroic enough.

Public appearances by the late Stephen Hawking were always protracted affairs. As the professor composed a sentence on his monitor, at first with hand-clicker, but then, after losing what mobility he had in his arms, by a sensor attached to his glasses and activated by moving his cheek muscle, a silence would be maintained in the invariably packed auditorium. Was this the courtesy afforded to an invalid, or reverence awaiting further pronouncement? Either way, this ambiguity certainly accommodates our culture’s appetite for figures of barely accessible genius. Of course, he was a man; let those who remember him as an esteemed colleague, imposing professor, dear friend, father, and husband remember his wit, determination, kindness, what have you: it’s not really for the rest of us. Science has a pantheon of its own.

“Only by a rapid whirling on his heel could he hope to comprehend the panorama in the sublimity of its oneness.”

- Edgar Allen Poe, Eureka

Apotheotic language, but an obituary is no occasion to humanise an icon: the man died last March, it doesn’t get much more human than that. The contrarian impulse is to – however courteously – deflate slightly the fervour and add a hearty dose of perspective to proceedings. Was his status in popular culture proportional to his contribution to science? The romantic retorts that it doesn’t matter; the Hawking we mourn is cultural shorthand for the life cerebral, whose motor neurone disease and bleak prognosis when he was a postgraduate at Cambridge plays as atrophy of the mortal bonds. His popular science books adorn millions of bookcases complete with yet pristine spines (more than can be said for the author's), whose cautions about the potential dangers of extra-terrestrial civilisations, climate change, and AI are lent an eerie weight by the synthetic voice with which they are pronounced (DECtalk dtc01 Perfect Paul). Of course, name recognition is not divided up in proportion to accomplishment. There is a decent case to be made that Stephen Hawking was the most important physicist of the last half century, but the scientific laity doesn’t revere his colleagues and co-authors in order of contributions made, and that’s no great shame: it’d be exhausting if we did; it just indicates that we need only a few figures to fill the role.

Fool’s Errand

Sobriety here is a fool’s errand but we can at least make a stolid attempt to avoid hagiography and focus on his place in cosmology rather than in the cosmos. Please note that an obituary, even more so than scientific theory, cannot be exhaustively descriptive.

Theoretical physicists like evidence, but they don’t have the patience of Nobel committee members. Their work stands on its parsimoniousness and consistency with the established theory and existing evidence: as long as it makes sense they’ll run with it. Professor Hawking is associated with the triumph of the Big Bang Theory over the steady state model of the universe, and indeed his thesis pointing out flaws in the Hoyle–Narlikar Theory of Gravity – building on the work of Roger Penrose to disprove any problems arising from singularities – was considered devastating. But there had already been a marked redshift amongst cosmologists from the steady state model, especially following the discovery of cosmic microwave background radiation.

As proponents, Frank Hoyle and Jayant Narlikar had tweaked their steady state model, accounted for the low temperature of the cosmic microwave background, and proposed the existence of “C-fields” which would keep the density of the expanding universe constant. But Hawking showed it was to no avail, and instead proposed the expanding universe as a black hole in reverse (though confidence in this model wains on going back to the first 10−43 seconds of the universe, the so-called Planck Epoch).

The latest incarnation of the quasi steady state model was proposed in 1993 but still falls way outside mainstream cosmology. The discovery in 1998 that the expansion of the universe was accelerating has been just as vexing for the standard model which now incorporates dark energy and matter, just as much an ad hoc bodge job as anything the steady state proponents could come up with. This isn’t a slight, just the nature of theoretical physics. It’s the best we have got so we are running with it.
In an article published in 1983, titled The Wavefunction of the Universe, Hawking together with James Hartle proposed a model of the early universe. Just as there are no dimensions of space for the universe to expand into, nor are there dimensions of time outside the universe. The idea of a beginning makes sense only once there is a universe in which for it to occur. The inconveniently named Imaginary Time – imaginary only in the sense that it is expressed in what mathematicians call imaginary numbers, not in the sense of fanciful (or at least no less fanciful than anything else in theoretical physics that nonetheless has prediction power) – uses a method called “Wick rotation” to represent time as a plane rather than a line.

Traveling in space on this plane, you’ll come to a point where you loop back: this gives a closed yet boundaryless universe. Looking for a beginning in time would be like looking for the beginning of north at the north pole. This model was proposed to satisfy the Wheeler–DeWitt Equation and is an effort to resolve general relativity and quantum mechanics.

Precarious Waters

The opposing shores of modern physics are separated by some seriously precarious waters. On one side is the elegant well-trodden coast of general relativity, on the other are the brackish but fertile swamps of quantum field theory. Bridging the two, means traversing the maelstrom of the singularity where spacetime collapses in on itself. Classical and statistical mechanics, and even the best thought-out metaphors break down. The plunge is precarious (google “spaghettification”); the scaffolding wobbles unnervingly as if made of string, and – holy hell – do the builders bicker. Yet it already has wheelchair access.

Black holes are points of tremendous density warping spacetime such that anything too close (that is on the wrong side of the event horizon), even light, is unable to escape its gravity. For the most part they behave like any other massive objects and describing them doesn’t mean breaking out any tools more exotic than general relativity. Karl Schwarzschild somehow described the geometry of a non-rotating black hole in his solution of Einstein’s field equations in 1916. Roy Kerr did the same for rotating black holes in 1963. In 1965, Roger Penrose showed that a gravitational collapse resulting in an event horizon (as shown possible by Chandrasekhar, Oppenheim, and Volkoff) necessarily become a singularity. In 1967, Werner Israel showed that Schwarzschild’s black holes have spherical symmetry, and this was generalised to all black holes with Stephen Hawking and Brandon Carter showing that Kerr black holes were axisymmetric.

So, event horizons all centre on a singularity (except possibly the one shrouded by the Planck Epoch) and are fully described in terms of classical mechanics with no reference to information about the matter that formed or subsequently fell into them and is now inaccessible to the outside universe. This describes the problematic “no-hair theorem” first expressed by John Wheeler, that there is nothing else to a black hole, not even a single hair.

An event horizon as described by David Finkelstein is: “a perfect unidirectional membrane: causal influences can cross it in only one direction”. They seem like pure functions of general relativity, yet the universe is probably lousy with them: mercilessly taking in matter, giving back nothing, not even heat – apparently destroying it all. Either black holes violate the second law of thermodynamics or these one-way causal, unobservable systems, these quantum systems do somehow emit something, while also not emitting. This is the toe board where we find Stephen Hawking: black hole thermodynamics and quantum gravity.

In 1970, Hawking with James M Bardeen and Brandon Carter proposed the four laws of black hole mechanics, drawing an analogy with thermodynamics, and incorporating quantum mechanics. Uncertainty governs our interaction with things at the quantum scale. Models of the subatomic do not concern hard values but rather functions of probability. Following from the uncertainty principle the Casmir Effect shows that even a vacuum is a mess of spontaneously appearing pairs of virtual particles which immediately annihilate. Provided they appear and extinguish at the same rates the time average of energy in the system remains the same. Pairs of virtual particles appear near the event horizon, one may be caught in its gravitation and its antiparticle escapes; this causes the black hole to lose energy and following Einstein’s formula E=mc2 the mass of the black hole also decreases. Thus, the black hole loses mass and emits radiation.

Black Body Radiation

This is the basis of black hole thermodynamics. Jacob Bekenstein made this analogy explicit and showed Hawking’s earlier conclusion that black holes do not get smaller to be false. The quantum effect does allow black holes to emit black body radiation giving it entropy (a measure of natural tendency to disorder). The temperature of the radiation produced is inversely proportional to the area of the event horizon, and the smaller the black hole gets, the quicker it loses mass and eventually evaporates. Hawking showed the entropy to be exactly one quarter proportional to the area of the event horizon, giving us the Hawking-Bekenstein formula measuring what we refer to as Hawking radiation.

In a lecture given during a symposium in honour of his 60th Birthday, Hawking said he would like this formula, at once a testament to his fallibility and his brilliance, to be placed on his tombstone.

Black holes are compatible with the laws of thermodynamics but there remains another problem: the information paradox. Hawking radiation differs from thermal radiation in one major aspect. Thermal radiation contains information (the interaction of particles as understood in quantum theory as a wave function) of whatever went into the system. But Hawking radiation does not, as it does not relate to any matter or energy beyond the event horizon. This implies that information is destroyed in the black hole, which is impossible according to quantum mechanics. Hawking held firmly to the validity of the no-hair theorem and accepted a wager from John Preskill that information was in fact not destroyed, a bet Hawking conceded in 2004.[1] Gerard 't Hooft and Leonard Susskind put forward a strong proposal that the information is encoded on the surface of the black hole: the holographic principle, grounded in string theory. But this issue is unlikely to be resolved while our understanding of gravity jars with our understanding of the other fundamental forces.

There are four fundamental forces: the nuclear strong force, nuclear weak, electromagnetic and gravity. The first three are far stronger, are each associated with a sub atomic particle whose interactions are modelled probabilistically as quantum fields. An analogous mediating particle has not been found for gravity which is understood to be a consequence of the curvature in spacetime; there is no quantum field model for gravity and therefore no unified theory. This elusive goal is commonly referred to by the awkwardly profound term “Theory of Everything”, and harmonising gravity with quantum mechanics defined the rest of Hawking’s career, indeed that of most theoretical physicists. Hawking had his money on string theory, but we already know that doesn’t count for much.

The first observation of a black hole has been just around the corner for a while now; the likely candidate, Sagittarius A, is the one at the centre of our galaxy. Until then, the best we can manage is to detect where a black hole ought to be. A point in empty space – apparently being orbited by stars – is the probable location of a supermassive black hole. Another way of detecting a black hole is via the accretion disk: superheated matter circling the event horizon and observable as x-rays.

Sound Perturbations

In 2014, the South Pole Telescope – studying the cosmic microwave background – detected polarisation matching predictions of gravitational waves driving inflation in the early universe that were made by Alan Guth and Andrei Linde, who were working from Hawking and Hartle’s model of the early universe. The next year, gravitational waves were for the first time observed emanating from the merger of two black holes. Hawking radiation is too faint against the cosmic background to be detected. In an experiment in 2014 Jeff Steinhauer observed sound perturbations emitting from a sonic black hole, a superfluid flowing at the speed of sound, somewhat analogous to Hawking radiation.

This lack of experimental or otherwise observed hard evidence meant that Stephen Hawking did not meet all the criteria of the Nobel Prize, and now – as they are not awarded posthumously – never will. This specific lack of recognition does not detract from his standing in cosmology. Hawking did receive the Wolf Prize in Physics in 1988, the next prestigious award in the field which has gained a reputation for identifying future winners of the Nobel Prize.

Hawking was made a fellow of the Royal Society in 1974, one of the youngest scientists to receive that honour. In 1979, he was appointed to the Lucasian Chair of Mathematics at Cambridge. The chair once occupied by Isaac Newton though it wasn’t motorised[2] in his day. He was awarded a CBE in the 1982 New Year Honours, made a Companion of Honour in 1989 (though in the 1990s he turned down a knighthood), and received the Presidential Medal of Freedom in 2009.

Besides A Brief History of Time, Hawking also authored and co-authored eleven popular science books as well as six children’s books together with daughter Lucy Hawking.

A funeral ceremony was held in Cambridge on the March 31; his ashes will be interred in Westminster Abbey in a ceremony to be held on Friday, June 15.

There would appear to be an agreement that Stephen Hawking belongs alongside Newton, in the fundaments of Westminster Abbey at least. Consider again that formula he wished for his epitaph. Annoyingly, Hawking’s solution to the formula given by Jakob Bekenstein provides an exact proportion of area to entropy as of one quarter, so the formula can be simplified to S=A/4, and of course all the symbols given hide pages and pages of workings out[3] - but for our purposes this will do.

“A” denotes the area of the event horizon. “G” is the gravitational constant which though fundamental to Newton’s classical mechanics was first measured by Henry Cavendish 71 years after Newton’s death (and to this day its value is still contentious). The “k” is the Boltzmann constant, after Ludwig Boltzmann[4] and defines the relation between temperature and the kinetic energy, (statistical mechanics and thermodynamics). The symbol “c” is the speed of light in a vacuum; according to Einstein’s special relativity the maximum speed at which all conventional matter and hence all known forms of information in the universe can travel. “ℏ” (h-bar) is the reduced Planck’s constant which gives the ratio of the energy and angular momentum (it’s spin) of the quantum. “S” again is entropy as defined by Rudolf Clausius in his “second fundamental theorem in the mechanical theory of heat” (later referred to as thermodynamics). The “BH” stands for Black Hole.[5]

A physics equation, it would appear, is a painstakingly composed and brusque piece of verse, some of the greatest minds of each generation contributing but a single character – with their colleagues through the centuries editing and agonising over the precise composition. The supersession of a life’s work being not only likely but the point of the whole enterprise. Yet this verse reveals something fundamental about the workings of the universe.

Stephen Hawking 8 January 1942 - 14 March 2018 is survived by his three children Robert, Lucy, and Timothy Hawking.

About the Author

[caption id="attachment_11498" align="aligncenter" width="279"] Author: John Marinus[/caption]

John Marinus is a freelance writer based in the Netherlands.

Footnotes
[1] Hawking was a bookie’s delight. Besides the wager with Preskill, Hawking bet colleague Kip Thorne in 1975 that Cygnus X-1 would turn out not to be a black hole. The forfeit was a subscription to a magazine of choice. Thorne choose Penthouse. He struck again with a $100 bet made with Gordon Kane that the Higgs boson would never be found. Of course, it was, and it only took digging up a sizable chunk of the Swiss countryside. Hawking did get fourth time lucky at least: betting Neil Turok that primordial gravitational waves would be detected, resulting in the confirmation of inflationary big-bang theory.

[2] This terrible joke appears in at least two of Hawking’s books. Incidentally, Hawking appeared as himself in the opening of the final episode of Star Trek: The Next Generation in which he wins a hand of poker playing against Isaac Newton, Albert Einstein, and the android Commander Data – who will be appointed to the Lucasian Chair sometime in the 24th century.

[3] The area of a sphere for example is 4π r^2. Although – come to think of it – that would only describe non-rotating black holes. This stuff is more complicated than it looks.

[4] There is precedent for equations as epitaphs. Visit Zentralfriedhof in Vienna and above a bust of Ludwig you’ll find S = k log W Boltzmann's entropy formula. Except this expression was given by Max Planck. In his 1920 Nobel Prize lecture Planck said: “This constant is often referred to as Boltzmann's constant, although, to my knowledge, Boltzmann himself never introduced it – a peculiar state of affairs, which can be explained by the fact that Boltzmann, as appears from his occasional utterances, never gave thought to the possibility of carrying out an exact measurement of the constant.”

[5] Or so it would seem. The author assumes the BH stood for Bekenstein and Hawking and still thinks that is the case.


African Risk Capacity: African Innovation in Action

For the third consecutive year, the African Risk Capacity (ARC) won the CFI.co award for the Most Innovative ESG Risk Protection Provider in Africa. The winning streak recognises an inherent quality of ARC that runs through its policy, practice, and identity: innovation. From the beginning, ARC was designed as an innovative solution to a pressing issue – climate disasters in Africa – and the institution has continued forging new paths forward through research and collaboration.

The Problem

According to the World Bank, global economic losses due to adverse natural events were estimated at $4.2 trillion between 1980 and 2014. These losses increased from $50 billion a year in the 1980s to nearly $200 billion a year in the last decade. Presently, global economic losses average to nearly $300 billion a year with almost 75% of the losses attributable to extreme weather events.

Paired with increasing losses from natural disasters is an increasing humanitarian funding gap. In 2017, the amount of funding received was $11.6 billion short of the $23.5 billion required to respond to the needs of 93 million people – nearly a 50% funding gap. This was a dramatic increase from the $4.4 billion required a decade earlier, which received 85% of the necessary funding to save and protect populations impacted by natural disaster and conflict. As climate change creates more frequent and catastrophic natural disasters, the traditional humanitarian funding model will continue to be strained as needs outpace resources.

ARC offers a sustainable solution to the systematic challenges in disaster risk financing faced in Africa. Established as a Specialized Agency of the African Union, ARC helps African governments to better plan, prepare, and respond to natural disasters across the continent by using innovative technology, financial tools, and practices.

How ARC Works

ARC is comprised of two entities: ARC Agency is an African Union institution that builds the disaster risk management capacities of African governments, and ARC Insurance Company Limited (ARC Ltd) is a mutual insurance company owned by capital contributors to the risk pool, including African governments holding insurance policies.

ARC Agency bolsters the abilities of African governments and local experts to quantify their disaster risk to certain perils, create contingency plans for the rapid utilisation of resources, and transfer disaster risk through different means such as insurance. ARC workshops break down silos to foster coordination between policymakers in agriculture, climate change, disaster management, and finance, thereby facilitating an efficient disaster response before a crisis occurs. After thorough capacity building, governments are eligible to purchase an insurance policy from ARC Ltd that would cover their losses against transferred risk each agricultural season.

ARC Ltd offers parametric insurance policies that deliver rapid payouts based on objective thresholds selected by the government. Throughout the growing season, parameters such as rainfall are monitored through Africa RiskView, ARC’s proprietary software that quantifies risk and translates them into the costs of humanitarian intervention. Once the risk threshold is crossed, payouts are disbursed immediately. Because the insurance policies are linked to predetermined contingency plans, responses are implemented quickly. Through the monitoring in Africa RiskView and predictable contingency-linked capital, ARC offers a comprehensive disaster risk management package that provides early warning, early planning, and early financing.

Disrupting the Humanitarian Status Quo

The existing model of humanitarian assistance typically involves a lengthy appeal process launched by governments to the international community after the occurrence of the natural disaster. As the crisis progresses, governments wait for capital that may arrive long after countless lives and livelihoods are lost – if funding is received at all. The ARC model disrupts the current state of humanitarian funding in Africa by offering an alternative for governments to proactively address disaster risk and receive predictable financing to launch a rapid national response when a natural disaster occurs. ARC opens access to capital at critical early moments before disaster response costs grow exponentially. Studies estimate that every dollar spent through ARC on early action saves $4.40 dollars in humanitarian assistance spent after a crisis unfolds.

Cutting-Edge Technology

Africa RiskView is the technical software underpinning ARC’s comprehensive disaster risk financing package. Using satellite rainfall data, Africa RiskView enables countries to identify and map the populations most vulnerable to drought events and monitor the predicted impact of rainfall on agriculture throughout the growing season. Because the impact is measured in a dollar amount, Africa RiskView empowers governments to respond more efficiently to disasters by providing an integrated platform that enables governments to plan ahead, monitor risk, access financing through insurance, and respond quickly to affected populations when disaster strikes.

ARC works continuously to develop the precision and coverage options in Africa RiskView. Different rainfall indexes, additional parameters like the effect of ground temperature, and features specialising in pastoral rangeland are being explored to create a more robust monitoring and insurance tool. Moreover, as ARC develops risk transfer tools for more perils, such as river floods, tropical cyclones, and outbreaks and epidemics, Africa RiskView will expand its features to manage more types of disaster risk in Africa.

Iterative, Responsive, and Collaborative

A dedication to learning and improvement lies at the core of innovation. ARC ensures that a cycle of learning, evaluation, and development are built into its work with Member States and partners. ARC hosts regional workshops among its Member States to share knowledge across borders and collectively confront the borderless impacts of climate change. Results of these workshops and the ARC Conference of Parties prompt the adaption of the ARC programme and development of new products to meet Member States’ needs. The pilot programmes for river flood, tropical cyclone, and outbreaks and epidemics were initiated at Member States’ requests to address prevalent catastrophic perils. Evaluations from ARC’s donors – the UK, Germany, Canada, Sweden, Switzerland, and the Rockefeller Foundation – feed back into streamlining ARC’s process. Collaborations with our implementing partners are also essential in improving ARC’s product development and expanding insurance coverage across Africa. Partnerships with the African Development Bank, the UN Economic Commission for Africa, the AMES and others will lead to new innovations for responding to disasters earlier and more sustainably with African interests and minds at the core.


African Open Sky: The New Face of African Aviation

[caption id="attachment_12565" align="alignright" width="300"] CEO: Max O Cisse[/caption]

With a reputation for going the extra mile, African Open Sky has set itself apart as the leading trip support company in Africa. With an expansion plan for Africa and the Middle East, the company is poised for even greater success in the years to come.

When the lid was blown open on the potential of the African aviation industry and the rise of indigenous companies, it was only a matter of time before the cracks began to show. Bad strategy and mismanagement led to the liquidation of many state-owned airline operators. Spiralling operating costs, a series of deadly yet avoidable accidents, and a drop in foreign investment threatened to kill the market before it even got off the ground. It was time for drastic measures and visionary leaders to step in, and African Open Sky (AOS) did just that.

As true as the name is, the company has set out to ensure that the African skies stay open for business by providing customer satisfaction, ease of operations, reduced costs, and accountability. The private company based in Côte d’Ivoire has had phenomenal success in an industry many had abandoned and many yet still question. Started in 2009, the company now operates its own offices in 25 African countries and one in the United Arab Emirates. AOS has provided breakthrough services all across the African continent and has itself known far beyond its home markets, winning several European and global awards in 2015, 2016, and 2017, including the CFI.co Aviation Awards Best Pan-African Aviation Services Provider Africa 2018.

AOS is the largest flight support company in Africa, offering services to governmental, commercial, corporate, and private operators. Its operations cover passenger and cargo ground-handling services such as transportation, hotel accommodation, catering, refuelling, maintenance, aircraft security, flight planning, and other activities from more than fifty offices and agents across the continent. The company is licensed to operate in every country where its maintains a presence, and has direct relationships with local authorities – AOS does not use third-party agencies. This simplifies operations and significantly reduces costs. This approach of being locally certified has revolutionised the market and has made AOS fully accountable – legally and otherwise – to local authorities and, as such, enabled the company to expand at a phenomenal rate. Whilst other African flight support operators saw a 30% growth in traffic last year, AOS obtained 45%.

Winning Strategy

African Open Sky CEO Max O Cisse was named Best Aviation CEO Africa 2018 due to his exemplary leadership and innovative approach to simplifying international travel. His secret has been establishing direct links with all civil aviation authorities (CAA) in Africa. Having accepted direct responsibility and control of all its operations for clients, local authorities have come to rely on this hands-on approach and some have given AOS exclusive contractual rights. Mr Cisse believes this has been the reason for the company’s success. As such, AOS is able to procure permits within a short period of time, even in countries with complex regulatory policies. AOS is not seen as an Ivorian company, but as a local brand with an international presence.

Another primary reason for the company’s success is its ability to provide the basic and crucial necessities at unbeatable prices. Fuel supply has been one of the major services offered from AOS’ inception, and so the company ensures it has the lowest prices available. This is particularly important given rampant fuel supply problems in many countries – oil producing and non-oil producing alike. Lack of affordable and consistent fuel supply has been one of the reasons why local travel remains so expensive in Africa, significantly higher than in Europe, where low-cost airlines thrive. But with AOS’s strong local connections, they are able to reduce some of those costs.

As though this wasn’t enough, African Open Sky wants to open an office in every African country and expand its presence in the Middle East. Ambitious and necessary, this plan will seek to further increase the company’s edge over its competition and more importantly, cut costs for customers. By going over and beyond for its clients, AOS has not only improved the aviation industry, but the economy as a whole. The business and investment opportunities in Africa are growing by the day, which makes the need for smoother aviation services more pressing.

[caption id="attachment_12566" align="aligncenter" width="1000"] African Open Sky Ground Handling Staff in DIAP[/caption]

Changing Dynamics

The aviation industry in Africa has a long way to go to before it can reach its full potential. Right now, the GDP realised from the sector is $80 billion, with air passenger traffic of under 130 million. The industry is growing at 4.5% per year, all of which is considerably below expectations. It is the least performing region globally after Latin America. It aims to share in the success of the nearby Middle Eastern market, but a myriad of problems would need to be addressed.

The major issues for the region include poor airline infrastructure, fuel duties, and over-regulation. A vast majority of the airports is unable to cater to the growing middle-class in Africa and increased tourism, particularly in East and Southern Africa. The number of airports/airfields is also a problem. Fuel duties and taxes all but negate the profits of airline operators. Combine that with routine problems such as the general inefficiencies of the aviation authorities, airlines, and their partners and you have an industry in need of a transformative upgrade.

African Open Skies has is committed to doing business the only way it knows how to: with class. AOS has paced its rivals by being consistent in its service deliveries, with a very fast turn-around despite the challenges of the industry. Nothing is left to the last minute. The operations of the district offices are carefully monitored to maintain a consistent performance in all locations. The effect is a glowing report from its growing stable of loyal customers.

The aviation market is currently over-regulated, with government agencies trying to protect local airlines by restricting competition. This has led to higher than expected travel costs in most parts of the continent. With its close links to local CAAs, AOS has developed a model for other companies to follow. It stands in support of not just its own local aviation industry, but that of the continent. This has given it an acceptability standard rarely afforded to foreign operators.

Over the next two decades, the International Air Transport Association (IATA) predicts that Africa’s aviation industry will be one of the fastest-growing in the world, if not the fastest. It is clear that AOS plans to be a major part of that growth and given all indications, it most certainly will be. A lot of work needs to be put in to ensure it all goes according to plan, but CEO Cisse and African Open Sky remain fully committed.


CFI.co Meets the CEO of Fidelis Finance: Abdoulaye Kouafilann Sory

[caption id="attachment_12327" align="alignright" width="300"] CEO: Abdoulaye Kouafilann Sory[/caption]

Fidelis Finance CEO Abdoulaye Kouafilann Sory, a dedication to empower entrepreneurs’ capabilities.

Is it true that you started your first business at the age of eight?

What an unexpected question! Surely this information must come from a member of my family. Put simply, at the age of eight I invested a xof 800 nest egg, given to me by my mother, to buy a goat which, breeding from the third year, earned my family on average xof125,000 a year for five years. Three years after I left for college, the rest of the herd was sold. My elder sister, who had received the same amount at the time, had a nice outfit made for her for the tabaski [sheep festival]. The income from my investment three years later, ensured that each year, the cost of the festive costumes for my two younger brothers and sister were covered. This is a story that my mother loved to tell.

Does your passion for contributing to value-creation stem from there?

I am not sure. Even if my childhood was spent with a very enterprising father, as a young schoolboy I dreamed of becoming a pilot. After struggling to get into technical high school, I did not manage to get into the stream that would have allowed me to go on to aviation school after obtaining my baccalaureate. As a result, I found myself in the field of quantitative management techniques and subsequently continued my studies at graduate and post-graduate levels in management and economics. I obtained two masters degrees, one in Management and the other in Economics in, respectively, Ouagadougou and Grenoble. Then I obtained a DEA and a Masters in Economics at Pierre Mendès France University in Grenoble. These years of study have developed in me the passion for organisational systems oriented towards value-creation.

This passion was so strong that you left the Central Bank of West Afrca States (BCEAO) in 2000 to take charge of Fidelis Finance which, at the time, was in its infancy.

That’s correct. But, my professional experiences before the BCEAO also put me in touch with the world of the micro-enterprise. Indeed, after my studies, I joined Food and agriculture organization (FAO) in Ouagadougou in July 1991. Recruited as deputy manager, I was sent to Bobo-Dioulasso [the economic capital of the country] to join a project aimed at developing the dairy sector financed by the United Nations Development Program (UNDP) and FAO. Our mission was to help organise farmers’ groups in the region and promote dairy production – from daily collection to industrial processing and on to the marketing of fresh dairy products.
Afterwards, I joined the British NGO ADD which financed income-generating micro-projects for the benefit of disadvantaged people. From 1993 to 1996, we supported these people to create their micro-enterprises and to manage and develop similar initiatives in four Sub-Saharan countries: Burkina Faso, Côte d’Ivoire, Mali, and Benin.

At the time I joined Fidelis Finance – after spending a few years at the central bank to better understand the mechanism of monetary creation and the process of defining monetary policies and the assessment of their impact on economic factors – I had already some knowledge of the financing needs of businesses. With this wealth of experience and always relying on competent and committed people, I led the restructuring of Fidelis Finance and forged the company into a major player in the financing of SMEs throughout the Sub-Saharan Region.

Do your professional challenges leave time for something else in your day? And what are your strengths?

Yes of course, and fortunately my days outside of work are shared between my family – my wife and our two children with whom I always find love, energy and advice – and the organisations and associations to which I belong in order to learn to rediscover myself and also to discover how, amongst other things, I may be of use to my community. At the age of ten, I was already Boy Scout and at 22 I joined the Junior Chamber International (JCI) and even became its national president in Burkina Faso in 1998. In 2001, I was the founding president of the Ouagadougou Sapphire Lion’s Club. I am also a member of several professional associations in which, for the most part, I have assumed or hold leading positions. Faith, my family, and my eagerness to provide quality services remain my main assets in meeting the challenges facing all business leaders. i


CFI.co Meets the Director General of Dubai’s Department of Finance: Abdulrahman Saleh Al Saleh

Abdulrahman Saleh Al Saleh is the director general of the government of Dubai’s Department of Finance (DOF). He is also the chairman of the Dubai Financial Support Fund.

Prior to joining DOF, Mr Al Saleh spent four years as the senior executive director for Corporate Affairs of Dubai Customs (DC). In this role, Mr Al Saleh was responsible for managing the corporate support departments for DC, which included Finance, HR Management, HR Development, and Admin Services.

He also chaired a number of committees in DC such as those that prepared the introduction of Value Added Tax (VAT), the Employee Affairs Committee, and the Executive Credit Policy Committee. He was also a member of the Reform & Modernisation Programme Committee and the Information Technology Steering Committee.

Prior to this, Mr Al Saleh held numerous finance and accounting positions for government departments on a local and federal level. He gained experience in chairing and participating in various organisational and strategic committees including the Executive Credit Policy Committee and Task Force for Indirect Taxation.

Mr Al Saleh is a member of Dubai’s Supreme Fiscal Committee and also a board member of Dubai World. He is also a board member of the Federal Tax Authority and a board member of Emirates National Oil Company (ENOC).

Mr Al Saleh was a member of the Higher Committee for the Regulation of the Audit Profession in UAE (2002-2006). He is a fellow member of the Chartered Institute of Management Accountants in the UK, and holds an Executive MBA from the American University of Sharjah.


CFI.co Meets the Executive President of CABEI: Dr. Nick Rischbieth

[caption id="attachment_12354" align="alignright" width="200"] CEO: Dr. Nick Rischbieth[/caption]

Dr. Nick Rischbieth, Executive President of the Central American Bank for Economic Integration (CABEI), holds a Bachelor’s Degree in Economics from Rice University in Houston, Texas; a Master in Business Administration from Washington University in St. Louis, Missouri; and a PhD in Finance from the Institute of Money and Capital Markets of the University of Hamburg in Germany.

Prior to joining CABEI in 1995, Dr. Rischbieth held several key positions within the Financial Division of Dresdner Bank in Germany. His experience in Germany led him to be named as Treasurer of the Central American Bank for Economic Integration in 1995 to eventually become the Bank’s chief financial officer. In 2007, he was appointed vice-president of CABEI, a position which he held for two years until he was elected as CABEI’s executive president for a five-year period that began in 2008. In 2013 he was re-elected for another five-year period as CABEI’s executive president, becoming the first president in the Bank’s history to be elected for a second term.

During his first period as CABEI’s executive president, Dr. Rischbieth led the implementation of a modernisation plan that would lay the groundwork for a new capitalisation scheme aimed at increasing the bank’s relevance for the Central American region. As a dedicated promoter of human development initiatives to increase the impact of the bank’s operations in the region, in 2010, Dr. Rischbieth supervised the implementation of a development impact assessment tool (I-BCIE) that is used to measure the bank’s contributions to the MDGs and the SDGs.

In his second term as CABEI’s executive president, Dr. Rischbieth has taken strategic decisions that have made the bank evolve into a new and dynamic institution ready to face the challenges of an ever-changing economic and financial outlook. The approval of amendments to CABEI’s Constitutive Agreement by the board of governors in 2015, can be described as one of the main and critical decisions taken by the bank throughout its history. These amendments seek to consolidate CABEI’s preferred creditor status; strengthen its capital base to become more attractive to new members; and diversify its geographical loan portfolio. Specific results of this strategic decision were immediately seen with an increase in capital by the Republic of Panama and the Dominican Republic, a change in status by Belize, and improvements in CABEI’s credit rating to stand as the third best in Latin America.
Dr. Rischbieth’s commitment to have a new bank that complies with the highest international standards led CABEI to reform its environmental and social policy and governing instruments. These and other reforms allowed CABEI to become an international observer of the United Nations Convention on Climate Change and obtain its accreditation to the Adaptation Fund and Green Climate Fund between 2015 and 2016.

Dr. Rischbieth was born in Tegucigalpa, Honduras, in 1954 and is a father of two children.


CFI.co Meets the CEO of BOD Tech: Mike Than Tun Win

[caption id="attachment_12360" align="alignright" width="300"] CEO: Mike Than Tun Win[/caption]

It is often said that the world is a book and that those who do not travel only read one page. If that is true, then those who start traveling from an early age have quite an advantage over those who do so later and especially over those who rarely travel at all. Given that he spent the first eight years of his life in his native Myanmar only to move to Singapore, it comes as no surprise at all that Mike Than Tun Win is today a successful CEO and founder of several progressive, forward-thinking, and exceptionally successful companies. Because that’s what happens when one gains life experience: it overcomes challenges by thinking outside the box.

Having spent a number of years in school, studying hard at Victoria School, then Temasek Junior College and, ultimately, Nanyang Technological University in Singapore, Mike Than Tun Win returned to his home country in 2010 with a unique dream: to transform Myanmar entrepreneurship in a way never before seen. His mission? To do so by making giant leaps forward, one of which was founding no less than eight companies across Myanmar, Thailand, and Singapore. These successful companies cover the automotive, distribution and petrochemical sectors.

However, this was only the beginning. In 2014, and thanks to his business prowess and foresight, Mr Win founded BOD Tech with a single goal: unleashing the power local entrepreneurship in Myanmar through the use of technology and then growing and nurturing it until it becomes the single most advanced and creative industry in the nation. Too bold? Overly confident? Supremely arrogant, perhaps? Not at all, and here’s why: in order to achieve great things, one needs to not only be extremely hardworking and have an unconventional approach to things, but also needs to be in the right place at the right time. Would Steve Jobs be who he was if it hadn’t been for Bill Gates? No way to tell for sure, but likely not.

Mike Than Tun Win not only has an impressive education that enables him to leverage every existing business strategy to his favour but more importantly, the hardships that he has endured have inspired him to realise that only by disrupting existing rules can one truly revolutionise any endeavour. Mr Win’s impressive track record speaks for itself. All of the companies he has founded still stand strong today, something that is evident even in his latest business venture. Being a local venture capitalist involves not just taking risks, but rather taking educated guesses about the future of start-ups and of the entire economy. If you were to define venture capitalism in such a way, then that definition would be incomplete in any encyclopaedia without Mr Win’s picture above it.

BOD Technology typically invests in internet companies – something Mr Win sees as the fastest and most secure way to the future. Among its portfolio are companies such as laundry.com, travel booking site flymya.com, online-to-offline platform Yangon Door2Door, and e-commerce platform shopmyar.com. However, all the hard work in the world will not result in progress, let alone a revolution, unless it is fuelled by a clear and precise vision. Because of his vision to completely transform the way companies conduct their business in the future, Mr Win will continue to tirelessly overcome challenges in making sure the future is here much earlier than expected.


CFI.co Meets the Chairman of Kuwait International Bank: Sheikh Mohammed Jarrah Al-Sabah

[caption id="attachment_12590" align="alignright" width="268"] Chairman: Sheikh Mohammed Jarrah Al-Sabah[/caption]

A seasoned veteran of the Banking industry, Sheikh Mohammed Jarrah Al-Sabah has served as Chairman of Kuwait International Bank (KIB) since 2010. Al-Jarrah joined the Bank’s Board of Directors in 2007, bringing extensive professional experience accumulated in the banking and financial sectors in Kuwait. His strong leadership and focused vision have proven to be a vital element driving the Bank’s continuous growth and success over the years, helping to position KIB at the forefront of the Islamic Banking sector not only in Kuwait, but across the region as well.

Al-Jarrah came on board at KIB during a pivotal moment in the Bank’s history, as it was making the transition from a conventional specialised real estate Bank, known then as Kuwait Real Estate Bank, to a full-service Bank operating in accordance with the principles of Islamic Sharia. Under his leadership, the newly invigorated KIB succeeded in achieving exponential growth across all areas, and in just a few short years, managed to cement its position as a key player in the Islamic Banking sector of Kuwait. In fact, it was only six years later that the Bank garnered its first award for Best Islamic Bank from World Finance – and that was only the first in a string of prestigious accolades for KIB and Al-Jarrah.

A Prominent Figure in the Arab Banking Industry

Over the years, Al-Jarrah has established himself as a key influential figure in the Arab Banking industry, earning a reputation for being a world-class leader and savvy financial strategist. In addition to his role at KIB, Al-Jarrah also serves as Chairman of the Union of Arab Banks (UAB) and Board Member of the Kuwait Banking Association (KBA). Al-Jarrah is also a member of the Board of Trustees at the Arab Academy for Banking and Financial Sciences, and serves as Vice-Chairman of the Board of Directors of Warba Insurance Company.

In his role as Chairman of UAB, Al-Jarrah has focused his efforts on shedding light on the significant role that Arab Banks play in the international economic landscape, especially as global paradigms and balances of power continue to shift. Moreover, he has been an instrumental force in furthering UAB’s efforts to enhance the reputation of Arab Banks around the world, showcasing the industry’s strength and continued growth despite political and economic challenges facing the region.

As a keen advocate of joint Arab-International Banking cooperation, Al-Jarrah has always sought to promote greater collaboration and unity amongst financial institutions across the Middle East and the GCC in an effort to harness their combined resources and capabilities to drive sustainable social and economic development in the region. The UAB Chairman has frequently reiterated his belief that Arab Banks should unite and align their efforts to encourage more domestic investment within the Arab region. Intra-Arab trade, he believes, promotes greater collaboration to achieve development, stimulate more investment, and even attract foreign investment to the region. Al-Jarrah also supports public-private economic partnerships for accelerating national economic growth and ultimately achieving sustainable development in the country.

A Decorated and Distinguished Career

Sheikh Al-Jarrah has enjoyed a prolific professional career marked by numerous achievements and awards, during which he has held several key leadership positions with major market players in Kuwait, including: Kuwait Real Estate Investment Consortium, Commercial Bank of Kuwait, Kuwait Re-Insurance Company, Salhiya Real Estate Company, and Arab Insurance Group (ARIG).

Al-Jarrah’s efforts have won him many awards and recognitions from key regional and international bodies throughout his long and distinguished career, serving as testaments to his achievements and exceptional leadership. In 2013, Al-Jarrah received the Golden Medal Award of Merit from the Tatweej Academy for Excellence and Quality in the Arab Region. He was further recognised as GCC Chairman of the Year by World Finance, the premier London-based global Banking and finance journal, in 2015, and was also named Islamic Banking Chairman of the Year this year for the second time.


CFI.co Meets the Chairman of GCC Board Directors Institute: Mohammed Al-Shroogi

[caption id="attachment_12346" align="alignright" width="277"] Chairman: Mohammed Al-Shroogi[/caption]

Mohammed Al-Shroogi is Investcorp’s co-chief executive officer, responsible for placement, investor’s relations, and administration. He became chairman of GCC Board Directors Institute in 2015.

Over the course of a career that began more than four decades ago, Mr Al-Shroogi has built and nurtured a wide network of strategic business relationships across the Middle East and North Africa, spanning key regulators, central banks, financial institutions, corporates, and senior government officials.

Mr Al-Shroogi joined Investcorp in 2009 as president of the firm’s Gulf business. He oversaw the development of private equity investment business in the MENA and Turkey region. Investcorp is now the largest private equity investor in the Gulf Region. He also was instrumental in rebuilding the Placement and Relationship Management Team after the financial crisis and this team is now raising more capital in alternative investments than any other firm in the Gulf Region.

Mr Al-Shroogi was appointed co-CEO in 2015, upon the founding chief executive officer’s retirement. Since then he has been instrumental in a number of growth initiatives for the firm. These include broadening the client base and deepening market share with a wider product offering like core US real estate, club and co-investment private equity deals, and European real estate. He is also spearheading an initiative for distribution of Investcorp’s products in Asia.

Prior to joining Investcorp, Mr Al-Shroogi was division executive for the Middle East and North Africa region and CEO for the United Arab Emirates at Citigroup.

In addition to being co-CEO of Investcorp, he currently serves as chairman of L’Azurde Company for Jewelry, a Saudi joint stock company; chairman of GCC Board Directors Institute (GCC BDI); member of the board of trustees for Bahrain Centre for Studies & Research; member of National US – Arab Chamber of Commerce, Washington DC; member of the board of Injaz Al Arab; and board member of the Crown Prince’s International Scholarship Program (CPISP).

Mr Al-Shroogi has been a member of the Bahrain Shura Council, member of the board of trustees at Bahrain University, and a member of the Bahrain Economic Development Board, as well as serving as chairman of Investcorp Saudi Arabia Financial Investments Company.
Mr Al-Shroogi holds a BA in Commerce from Kuwait University and has attended the Harvard Management Executive Program.


Gibson: Guitar Legend on the Ropes

"You know, I imagine a lot of you wanna know why I call the guitar Lucille. Lucille has practically saved my life two or three times. No kidding, it really has."

- From My Lucille – BB King

One of the three Kings of the Blues Guitar alongside Albert King and Freddie King, BB King was born under a good sign on a Mississippi cotton plantation in 1925.

Riley B King (1925-2015) acquired his taste for music in church and launched his career in local barrelhouses and on AM stations with a $15 Sears Roebuck Silvertone on which he had mastered three chords.

Inspired by King Biscuit Time – the longest-running radio show in the US, broadcast daily since 21 November 1941, and birthplace of blues greats such as Sonny Boy Williamson, Pinetop Perkins, and Robert Lockwood Jr – Riley B King went pro and joined the Famous St John’s Quartet to tour the delta. Lured to Memphis by the promise of steady gigs, he eventually signed up with WDIA, one of the first black-owned stations in the country, where Riley B King became the Beale Street Blues Boy. The on-air personality was soon shortened to Blues Boy before being further abbreviated to BB. The initials stuck.

In 1948, BB met T-Bone Walker – the legendary inventor of jump and electric blues – and his fate was as good as sealed. The acoustic guitar made way for electric and before long Lucille took to the stage – a Gibson.

BB King risked his life for that $30 Gibson, rescuing the instrument out of a dance hall set alight during a fistfight between two men over a woman called Lucille. To remind him of the twin follies– entering burning buildings and fighting over women – BB King decided to call all his guitars – the one saved from the blaze and those that followed – Lucille.

BB King’s Lucille is a Gibson by unwritten, yet unbroken, rule – the king does not play instruments made by others. In that he is not alone: on his duckwalk that heralded the arrival of Rock ‘n’ Roll in 1955, Chuck Berry famously carried a Gibson (ES-350T). So does Angus Young, the AC/DC schoolboy, who performs his one-legged duckwalk whilst squeezing an almost incendiary lead tone out of a Gibson SG Standard.

Led Zeppelin lead guitarist Jimmy Page, to whom Angus Young owes an enormous debt of gratitude, played Gibsons (such as a double-neck EDS-1275 on Stairway to Heaven and The Song Remains the Same), as did Pete Townshend of The Who (SG Special), Joe Walsh of The Eagles (Les Paul Standard), Frank Zappa (ES-5 Switchmaster), Jan Akkerman of Focus (L5), and Keith Richards of The Rolling Stones (assorted Firebird and ES models), amongst a veritable rollcall of guitar virtuosos past and present.

"Whilst Gibson has perhaps lost that special touch, the company still possesses enough of an aura to amaze even the best of guitarists – and a new generation of musicians now waking up to life outside the realm of digits."

Yet, the 124-year old Nashville guitar factory is in serious trouble and may soon have to petition the courts for Chapter 11 bankruptcy protection. The company – officially Gibson Brands – must cancel debts of up to $145m before July 23 in order to keep the bailiffs at bay. A further $377m tranche of secured notes is set to mature on August 1. Standard & Poor’s already lowered Gibson Brands corporate credit rating to CCC-minus – near the bottom of junk status. Moody’s assigned a likewise depressing Caa3 rating citing “substantial credit risk” and an unsustainable capital structure.

Though known and celebrated for its peerless guitars, Gibson diversified into consumer electronics in 2011 with the acquisition of Stanton Group – makers of Cerwin Vega, KRK, and Stanton DJ semi-pro audio gear. A year later, newly-formed Gibson Pro Audio took a significant stake in Japanese consumer electronics giant Onkyo Corporation which was increased over time to 16.5%. Gibson also secured a majority stake in TEAC and, in 2014, bought the consumer electronics business of Royal Philips of The Netherlands.

The company also owns Baldwin Pianos. Last year it shut down Cakewalk, a professional sound recording software package in a first attempt at a corporate reorganisation. Gibson Brands has now also announced the “streamlining” of its Philips product line and the “monetising” of underperforming business segments. Expect more plant closings.

Powers That Be

However, Gibson Brands’ troubles extend to beyond its electronics division. The company has repeatedly run afoul of environmental legislation – and political sensitivities – as it sourced hardwood for its acoustic and electric guitars. Twice the US Fish and Wildlife Service raided the company’s factories in Nashville and Memphis seizing wood imports from Madagascar and India which had been mislabelled on customs forms.

CEO and co-owner Henry Juszkiewicz agreed to a $300,000 fine but insists that his company was unfairly targeted and accused the Justice Department of “legal overreach.” Mr Juszkiewicz promptly appealed to Republican Tea Party members for support, which he received, arguing that arch rival Fender uses the same hardwood, imported from the same German supplier, without suffering raids.

Part of the rosewood and ebony wood the company managed to reclaim from the Fish and Wildlife Service was used for the fretboards on a special edition Government Series of guitars, finished in a dull grey tone and marketed under the slogan Fight the Powers That Be.

Power, however, is now vested in a core group of bondholders who fear the company will founder unless drastic measures are taken. They want Henry Juszkiewicz to resign as CEO and entrust the company to a new management team. A tug of war is about to begin. Bondholders raised the alarm after CFO Bill Lawrence suddenly quit late last year, barely twelve months into his job. Following Mr Lawrence’s hasty departure, Gibson Brands unveiled plans to sell off property, business segments, and stock holdings in order to raise cash.

Mr Juszkiewicz and two of his mates from Harvard Business School bought Gibson in 1986 for a reported $5m from its Ecuadorian owner Norlin Music. At the time, the company languished with sales barely topping $10m annually – and haemorrhaging money. It was saved by the business savvy of its new owners and, crucially, by Saul Hudson – aka Slash – of Guns N’ Roses whose brilliant guitar work, as brutal as original, made his instrument of choice – a Gibson Les Paul – an immediate object of intense desire in the eyes of millions of fans and aspiring rock stars. The 1987 release of Guns N’ Roses debut studio album Appetite for Destruction afforded Gibson a new lease on life. Mr Saul “Slash” Hudson is still the brand’s global ambassador.

Survival Mode

Market analysts believe that a stand-alone guitar division can profitably be spun off from the long-suffering group, thus ensuring the survival of the iconic brand, albeit under new ownership. Industry watchers agree that Gibson is probably too big to fail as a purveyor of choice guitars and point to Fender for a blueprint of a profitable future.

Arizona-based Fender Musical Instruments Corporation – home to the Stratocaster and the Jazzmaster – has refused to stray from its core business and remains doggedly focussed on designing and manufacturing the guitars and amplifiers demanded by the market. As Gibson diversified and became an audio electronics company, Fender consolidated and remained a musical instruments manufacturer. However, Gibson is, at least in part, also a victim of its own success.

Gibson is to the electric guitar what Stradivarius is to the violin. Gibsons are nearly indestructible even in the hands of rock guitarists. Built like a brick house and requiring only minimal care, a Gibson will outlive its owner and traverse generations. In a corporate environment that thrives on built-in obsolescence and inconsequential marketing-driven tinkering, a company that manufactures a product for the ages is not just an oddity but a financial disaster in the making.

The zeitgeist also turned against Gibson and the art of guitar-making as newer generations of musicians went digital and Chinese factories churn out copycat guitars that reach retailers for $50 or less and are, actually, not all that bad. Gibson’s attempt at keeping up with the times – and the demand for gizmos – backfired badly in 2015 when the company decided to outfit its entire line of guitars with the G-Force automatic string tuner. The device proved erratic and made tuning actually more difficult than before. As a result, second hand prices for 2015 vintage Gibson guitars have hit rock bottom. The gadget has since been dropped.

Americana

Proudly made in the US of A since the late 1800s, first in Kalamazoo, Michigan, and from 1984 in Tennessee, Gibson already enjoyed a solid reputation when it introduced the legendary Les Paul range of guitars – in custom, standard, special, and junior versions – in 1952. The series, still in production, was designed by, and named after, jazz, country, and blues guitarist Les Paul (1915-2009), widely considered a pioneer of the solid body electric guitar and credited with the first use of the sound-on-sound recording technique – a precursor to multitrack recording.

Since then, the company has launched a full range of electric and acoustic guitars to almost universal acclaim. Of late, however, quality has sagged and the brand seems to coast on its rich heritage. Gibson guitars still command top dollar with some models retailing for $5,000 or more. The price differential with imports is exceptionally steep and no longer entirely justified on the basis of quality alone. Cognoscenti looking for the “real thing” increasingly turn to the Heritage guitar company set up by former Gibson luthiers in the old Kalamazoo plant. Here, innovation is a swear word and guitars are made the old fashioned way – by hand, one at a time.

Whilst Gibson has perhaps lost that special touch, the company still possesses enough of an aura to amaze even the best of guitarists – and a new generation of musicians now waking up to life outside the realm of digits. There may be better guitars out there for less money – ESP (Japan) and PRS Guitars (US) are making serious inroads – but none of them carry the heritage of an original Gibson – especially one to which a personal history or anecdote is attached.


World Bank Group Unveils New Initiatives in Investment Policy and Promotion

[caption id="attachment_12617" align="alignright" width="300"] Participants of the Investment Competitiveness Forum, hosted by the World Bank Group in October 2017, discuss policies to reduce investor uncertainty.[/caption]

For many developing countries, foreign direct investment (FDI) has become the largest source of external finance, surpassing official development assistance, remittances, or portfolio investment flows. In 2016, more than 40% of the nearly $1.75 trillion of global FDI flows was directed to developing countries, providing much needed private capital.

The benefits of FDI, however, extend well beyond attracting capital. In today’s global economy, better paying jobs depend on the production of new and better goods and services, and on finding more efficient ways to produce them. FDI is a key vehicle to enable the transfer of technical know-how, and managerial and organisational skills. It also helps countries diversify their exports and improve access to foreign markets. FDI thus has a significant potential to transform economies through innovation, enhance productivity, and create better-paying and more stable jobs, both in sectors attracting FDI as well as in the supportive industries.

Despite the increasing role FDI plays for developing countries, the financing required to achieve the Sustainable Development Goals (SDGs) remains large and largely unmet. To meet the SDGs, private investment will have to expand into new territories. For countries seeking to increase levels of private investment, what policies or approaches should they prioritise? What drives the investment decisions of multinational corporations?

"In today’s global economy, better paying jobs depend on the production of new and better goods and services, and on finding more efficient ways to produce them."

Research from the World Bank Group seeks to answer these questions. A recent survey of 750 executives from multinational corporations – presented in the Global Investment Competitiveness Report – finds that investment decisions are driven not only by the characteristics of individual investment projects, but also by the underlying conditions in a country. The survey confirms that above all, a country’s political stability and security matters for investment decisions. The legal and regulatory environment in a country was also important. Laws that are in line with international best practices combined with transparent and predictable administrative processes can make or break a country’s desirability as an investment location.

Surprisingly, low labour costs and low tax rates were a critical factor to only one in five interviewed executives. Indeed, further research suggests that investment incentives – such as low tax rates and tax holidays – are generally effective only when investors are wavering between similar locations as a new base for their exports. When investment is motivated by a desire to access a domestic market or extract natural resources, incentives are generally ineffective.

[caption id="attachment_12609" align="aligncenter" width="583"] Figure 1: FDI Inflows, Global and by Development Group, 2005-2016. Source: Statistics and World Investment Report 2017, UNCTAD.[/caption]

Lessons from What Works: The Investment Reformers Network

Knowing what matters to investors gives policymakers an edge when it comes to attracting FDI. Armed with this information, policymakers can design rules and regulations designed specifically to influence the decisions of potential investors.

Yet, it is nearly impossible to apply a one-size-fits-all approach to investment policy and promotion. Investors prioritise different investment factors depending on their business goals. Moreover, different types of investment affect development in different ways. For instance, investments leveraging a country’s natural resources will have different effects on socio-economic development and respond differently to investment climate factors than investments seeking to sell to the domestic market.

Further, maximising FDI extends beyond attracting new investments. Governments must address policy challenges throughout the investment lifecycle, from attraction to entry, expansion, and linkages with the local economy. Lawmakers need a nuanced understanding of all these factors to generate benefits from FDI. The problem is that policymakers often face a shortage of hard evidence regarding what works.

The World Bank Group, which regularly works with its client governments to help them articulate a vision for investment and prioritise reforms to achieve their goals, is uniquely positioned to help fill this knowledge gap. Its new Investment Reformers Network recognises countries which have made effective reforms relevant to international investors and shares these success stories with other governments. By doing so, the network increases the visibility of transformational investment policy and promotion reforms and rewards those governments that have been especially committed to reform. The network highlights their reform stories for other governments to emulate and to increase investor awareness of the reforming economies as potential destinations for foreign investment. Such recognition also helps to bolster the political will for client governments to continue advancing evidence-based investment policy and promotion agendas.

At the first meeting of the Investment Reformers Network in October 2017, the World Bank Group recognised from its portfolio of client governments twelve countries, which have achieved significant investment policy and promotion reforms – Armenia, Ethiopia, Georgia, Ghana, Guinea, Kazakhstan, Mongolia, Myanmar, Pakistan, Saudi Arabia, Serbia, and Tunisia.

Participants of the Investment Competitiveness Forum, hosted by the World Bank Group in October 2017, discuss policies to reduce investor uncertainty.

[caption id="attachment_12610" align="aligncenter" width="592"] Figure 2: What influences investors' decisions? In a survey of 750 executives of multinational corporations, political stability and friendly regulatory environment were top investment decision drivers. Source: Global Investment Competitiveness Report.[/caption]

Learning from Ethiopia

Ethiopia is in the process of a potentially historic economic transformation. Showing bold leadership in Africa, the government’s economic strategy has focused on the transformation of agriculture, the development of manufacturing sector, and the fostering export diversification. Ethiopia’s Vision 2025 strategy aims to achieve an annual growth rate of 11% and create two million manufacturing jobs in medium and large firms. By 2025, Ethiopia envisions an economy increasingly driven by exports and manufacturing.

To achieve this vision, the government is promoting FDI to accelerate industrialisation, boost and diversify exports, and better integrate its market with the global economy. Under this plan, targeted and high quality FDI will play a key role in job creation, export promotion, and in developing domestic capabilities.

Ethiopia’s development strategy has started to deliver positive results. In 2016, the country’s GDP grew by 7.6%, making Ethiopia one of the world’s fastest growing economies. Furthermore, its FDI inflows have increased from $278 million in 2012 to nearly $4 billion in 2016. The recent establishment of major FDI manufacturing projects in the country’s industrial parks, such as the PVH-led investment in Hawassa with its planned 60,000 jobs, shows promise for the success of Vision 2025.

[caption id="attachment_12611" align="aligncenter" width="592"] Figure 3: FDI in Ethiopia is on the Rise. FDI inflows to Ethiopia increased from $278 million in 2012 to nearly $4 billion in 2016. Source: World Bank Group.[/caption]

Reducing Uncertainty Through Reforms

Governments can take specific actions to encourage and attract FDI that benefits their own local firms and businesses. Investment incentives or investment guarantees are frequently used to boost local economy’s competitiveness for FDI. In some industries, this type of de-risking can help, however, fundamental weaknesses in a country’s investment climate must be addressed first. Even the most generous incentive packages are unlikely to sway investors if they cannot obtain a business license, enforce contracts, or get a construction permit.

Encouraging transparent and predictable conduct within government agencies can go a long way to boost investors’ confidence in a particular location. Limiting or eliminating bureaucratic inefficiencies, complex regulations and procedures, and unpredictable or arbitrary government conduct can signal that a country is open for business.

"To maximise the gains from foreign investments, developing country governments must adopt effective reform strategies, champion reform at the highest political levels, and strengthen interagency coordination."

Finally, investment protection can be even more critical than investment promotion. Government efforts should aim to encourage investors to stay in the country and expand their operations. Policy initiatives should include strengthening investor protection guarantees, providing proactive investor aftercare, and managing grievances.

To maximise the gains from foreign investments, developing country governments must adopt effective reform strategies, champion reform at the highest political levels, and strengthen interagency coordination. They must also balance the public interest with investor preferences to ensure that the host country truly benefits from FDI. An effective FDI policy does not favour foreign investment over domestic; rather, it links the two to build a relationship between firm and host country that is mutually beneficial.

About the Authors

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Christine Zhenwei Qiang, a Chinese national, is Practice Manager for Investment and Competition of the World Bank Group’s Macroeconomics, Trade & Investment Global Practice. Her teams advise client governments in over 100 countries on catalyzing competition and private investment through legal, policy, regulatory and institutional reforms. Christine joined the World Bank Group in 1998. Prior to joining the Investment Climate Department in 2011, she was Lead Economist at the Policy Division of the Global ICT Department of the World Bank Group. Her main responsibilities included overseeing the Bank Group’s analytical agenda on ICT policies, private investment in telecom infrastructure, economics and impact analysis, as well as leading operations and policy dialog in Asian countries. She has published many journal articles, book chapters and reports on private sector development, economic growth and productivity. She has a PhD in Economics and a M.S.E. in Computer Science and Engineering from Johns Hopkins University and a BA in German Language and Literature from Shanghai International Studies University in China.

Roberto Echandi is the Investment Policy Global Lead in the Macroeconomics, Trade and Investment Global Practice of the World Bank Group. Prior to joining the World Bank Group, he was Director of the Program on International Investment at the World Trade Institute (WTI) of the University of Bern. Appointed Ambassador of Costa Rica to Belgium, Luxembourg and the European Union (2007-2010). He also served as the Chief Negotiator of Costa Rica to the negotiations of the Association Agreement between the European Union and Central America. Echandi undertook his doctoral and LL.M. studies in International Trade Law at the University of Michigan School of Law at Ann Arbor, Michigan; his M.Phil. in Latin American studies with emphasis in economic integration at the University of Oxford. He has published extensively on the legal and political economy dimensions of investment issues, dispute settlement, trade in services and regional economic integration in the Americas.

Peter Kusek leads the Applied Research Program on Investment and Competition at the World Bank Group’s Macroeconomics, Trade and Investment Global Practice. His team produces new research on investment, develops analytical tools, and implements novel diagnostic approaches supporting economic policy reforms in developing countries. Kusek specializes in foreign direct investment and advises developing country governments on investment climate reforms. Kusek has led several flagship publications, including the Global Investment Competitiveness Report and Investing Across Borders Report. Prior to joining the World Bank Group, Kusek worked on small-enterprise development in Bangladesh, on microfinance in Tanzania, and on structural reforms at the Ministry of Finance of the Czech Republic. He was also program manager at the Center for Strategic and International Studies, a Washington-based foreign and security policy think tank. Peter holds a master’s degree in economic policy and international development from Princeton University’s Woodrow Wilson School of Public and International Affairs.


Iker Casillas: Scoring Goals for Change

The first football player to play in 20 Champions League seasons is Spanish goalkeeper Iker Casillas, who now tends the goal of FC Porto, one of the Big Three Portuguese clubs.

So far, his season has been sketchy, conceding seven goals in six matches. However, Casillas (37) is still considered by many to be Europe’s best goalie for his quick reflexes and athleticism. He is a commanding presence on and off the field, and captained the Spanish national squad for over 10 years. In 2010, he raised the Word Cup with his team after knocking out The Netherlands 1-0 in the grand final. That game cemented Casillas’ reputation as a steel-nerved goalkeeper: twice he stopped Arjen Robben from scoring after the Dutch striker had left all defenders in his wake.

Four years later, during the group phase of the 2014 World Cup in Brazil, the Dutch served up their revenge cold in a 5-1 mismatch he would rather forget. But in 2012, Casillas drew level to Dutch international goalkeeper Edwin van der Sar, who until then held the record for clean sheets, managing to keep his team’s opponents from scoring in 72 matches. He has now surpassed the retired Van der Sar’s record, adding another two clean sheets. That same year, the Spanish goalie added yet another trophy to his name: 95 wins for his country’s national squad.

In South Africa, Casillas was voted the tournament’s best goalkeeper, keeping a clean sheet for five matches and blocking a penalty shot in the quarter-final against Paraguay.

Iker Casillas knows how to man his goal and keep balls from crossing the line. As UNDP goodwill ambassador, a job he accepted in 2011, Casillas has now moved to the other side: “On the pitch, I’m paid to stop goals; with the UNDP, I choose to score goals.” The Spanish international emphasises that the eradication of world poverty requires a sustained team effort. Casillas has been promoting humanitarian programmes in South America and produced a number of inspirational videos aimed at young people from disadvantaged backgrounds.

Casillas is one of the oldest football players still active in top European leagues. The other two aging stars in the pantheon of truly great goalkeepers are Gianluigi Buffon, who just renewed his contract with Paris Saint Germain, and Arsenal’s Petr Cech. Buffon will be 42 when his current contract runs out, while Cech (36) has so far managed to keep his place in Arsenal’s goal, even though the club recently hired Bernd Leno, the German Mannschaft’s last line of defence, known for sporting a Soviet-style tank helmet on the pitch.

Now close to retirement from professional football, Casillas is travelling the world in support of victims of natural and man-made disasters, drawing attention to people’s plight and extending a hand in friendship. He uses social media platforms to help raise global awareness of the Sustainable Development Goals (SDGs) that are being implemented across the world in a bid to eliminate poverty and reduce social inequities by 2030.

Casillas is aware that only a dozen years are left to honour these commitments. He has launched appeals to governments, civic organisations, and other stakeholder entities to accelerate the pace at which the SDGs are put into practice. He advocates for increased volunteerism as a way to engage people, especially youth, with both the wider societies and its many needs.

During a visit to Uzbekistan, Casillas said that social innovation and traditional mutual-help initiatives can help to share intergenerational knowledge and contribute towards peace, understanding, and – crucially – forms of community-based development that immediately impact people’s lives.


Michelle Yeoh Choo-Kheng: A Miss and Bond Girl on a Quest for World Peace

Saving the world from the scourge of war: Malaysian actress Michelle Yeoh Choo-Kheng, of Tomorrow Never Dies fame, aims high.

Earlier this year, the former Miss Malaysia put her obligatory desire for world peace to work as she attended the United Nations High-Level Meeting on Peace Building and Sustaining in New York, where she told participants of her experiences as a roving UNDP goodwill ambassador. She has met people displaced by war and civil strife, and warning those present in New York that, unless something changes, by 2030 more than half of the world’s poor will be living in countries plagued by conflict.

Choo-Kheng emphasised that the reactive approach to war – dousing the flames after societies are set alight – no longer suffices. “In the future, our efforts should be directed at preventing the outbreak of war,” she says. “This will save lives and billions of dollars in damage.” The actress was pleased to note that the UN has already begun to shift its attention from peacekeeping to war-prevention, and welcomed its renewed interest in the role of women in conflict resolution and peacebuilding.

For her work on and off screen, Choo-Kheng has been showered with awards and honours. At home, the actress hasn’t been that fortunate. The former Bond girl was reminded in the media of the praise she bestowed on now-disgraced Prime Minister Najib Razak. She has since distanced herself from the toxic political scene and commended the authors of the book Billion Dollar Whale for their thorough investigation of Jho Low, the unassuming and mild-mannered man whose financial manipulations brought down Razak in what FBI agents called one of the biggest heists in history.

How is a girl to know? Indeed, Choo-Kheng has displayed a commendable dedication to her work as UNDP goodwill ambassador, promoting preventative diplomacy as a way to avoid conflict and get the world talking, not just about conflict but also the set of 17 Sustainable Development Goals (SDGs) that aim to eradicate poverty by 2030. The actress points out that dialogue is not just confined to the big screen and must, indeed, be used as a tool to mitigate conflict and eliminate misunderstanding across cultures. “We all talk, but seldom listen,” she says, suggesting that an exchange between different cultures is an excellent starting point for increased co-operation on a global scale.

Of late, Choo-Kheng has been on a public quest to find an outfit that is fully sustainable, as in fashion that causes no harm to the planet. Partnering with Italian designer Tiziano Guardini, she made a short documentary film – Made In Forests – about her successful attempt to create durable and elegant garments from certifiably sustainable wood fibres. Choo-Kheng noted that people don’t usually think twice about the provenance of their clothes: “If it looks good and is not too expensive, we buy it without giving a second thought to the environmental impact.”

Olga Algayerova, Executive Secretary of the UN’s Economic Commission for Europe, warned in New York that fashion’s ecological footprint now borders an environmental emergency. According to Algayerova, the industry needs to shift gears and take inspiration from natural, renewable resources. The current prevalence of cotton and polyester is no longer sustainable: the former needs large amounts of pesticides, insecticides, and water; the latter is made from fossil fuels and releases plastic microfibres that taint the global food chain.
With Made In Forests, Choo-Kheng has embraced a new cause she is particularly well suited to. Starring in the hit romcom Crazy Rich Asians, Choo-Kheng knows all too well what money can and cannot buy. Having been married for four years to billionaire Hong Kong business tycoon Dickson Poon also helped her to chart the flow and impact of excessive wealth.

However crazy rich Choo-Kheng may have become, she has never lost touch with her audience – or, indeed, her social conscience. Playing the overly discerning Eleanor in Crazy Rich Asians, Choo-Kheng reminds viewers – in between the excessive bling – that even the über-rich prioritise family life and love over material wealth. That sentiment is no different from the one found across all society’s strata – a message to remember as she battles for world peace.


CFI.co Meets the President & CEO of Azizi Bank: Mohammad Salem Omaid

[caption id="attachment_12634" align="alignright" width="255"] President CEO: Mohammad Salem Omaid[/caption]

Azizi Bank, Afghanistan’s largest commercial bank with a Pan-Afghanistan presence across thirty provinces and headquartered on Zanbaq Square in Kabul, is the outcome of the professional and entrepreneurial commitment of its founder Mirwais Azizi and its top management team, to establish a high quality, customer-centric, service-driven, private Afghan bank catering to the future businesses of the Islamic Republic of Afghanistan.

Azizi Bank, established in 2006, has been recognised as one of the top and fastest-growing banks in the region by prestigious international media houses and global advisory firms, and has received several international honours from across the globe. The bank caters to various business segments that include retail & corporate banking, treasury, payment & settlement, remittance services through Western Union, credit, alternate delivery channels, and sustainable practices through responsible banking via numerous corporate social responsibility initiatives. The bank is steadily evolving as the professionals’ bank of Afghanistan with the long term mission of “building the finest quality bank of the world in Afghanistan” by 2020.

Azizi Bank has adopted international best practices, the highest standards of service quality and operational excellence, and offers comprehensive banking and financial solutions to all its valued customers. Today, Azizi Bank is the largest bank in the country with more than 140 branches along with its 100% subsidiary bank, the Islamic Bank of Afghanistan, the country’s first full-fledged Islamic bank. Azizi Bank also has a fleet of more than 100 ATMs – the highest in the country.

In its digital expansion phase, the bank has procured Flex Cube to change its existing core banking system and introduced many first-of-its-kind technological innovations in the country such as mobile wallet solutions, agency banking, pay commerce, amongst others.

The bank is spearheaded by Mohammad Salem Omaid who is currently its president and chief executive officer. Mr Omaid has been working for the bank since its inception.

Mr Omaid served the bank in various capacities and carries immense experience in the diverse areas of strategic polices, financial regulation, forex management, and banking operations. He has been also associated with maintaining International business relations with key corporates, banks, and stakeholders. He is a doctorate in Financial Management from a leading Indian University and is also a post graduate and a holder of a MBA with specialization in Banking, Risk Management, and Finance.

Mr Omaid has been recognised by the government of Afghanistan and international agencies on different occasions for his persistent efforts in developing the banking structure in the country. Few of his accolades are listed below:

Awarded by the government of Afghanistan for playing an effective role in the development of the Afghan banking sector.

Awarded by the Ministry of Defence for the establishment of a proper and transparent salary payment system for the Afghan soldiers.

Promising Young Banker Award by the Asian Banker, Singapore.

Queen Victoria Badge by the Europe Business Assembly, UK.

Best Private Banking CEO, Afghanistan by the South Asian Partnership Summit – A SAARC initiative.

Mr Omaid also holds the following portfolios and memberships:

Chairman - Afghanistan Banking Association.

Member – Thames Valley Chamber of Commerce, UK.

Member – World Confederation of Business, USA.

Member – International Chamber of Commerce.

Guest Faculty at the various Universities of Afghanistan.

[caption id="attachment_12632" align="aligncenter" width="800"] Azizi Bank[/caption]