Otaviano Canuto, Center for Macroeconomics and Development: Is There a Middle-Income Trap?

The “middle-income trap” has become a broad designation trying to capture the many cases of developing countries that succeeded in evolving from low- to middle-levels of per capita income, but then appeared to stall, losing momentum along the route toward the higher income levels of advanced economies.

Such a trap may well characterise the experience of most of Latin America since the 1980s, and in recent years middle-income countries elsewhere have expressed fears of following a similar path. Underlying these views is a more general feeling that moving up on the income ladder gets harder the higher one climbs.

"Traps are seen as shortcomings resulting from the absence of any of those policy and institutional changes considered key to gearing up the transition from middle- to upper-income levels."

This article outlines two different ways in which the concept has been approached since its first use 12 years ago by Gill and Kharas (2007). One has been empirical, where search is made to identify — or deny — breaks or turning points in time-series data exhibiting growth traps for middle-income economies. The other, closer to the way it was originally suggested, refers to the need of policy and institutional change for a country to keep climbing the income ladder after a transition from low levels.

Traps are seen as shortcomings resulting from the absence of any of those policy and institutional changes considered key to gearing up the transition from middle- to upper-income levels.

Is there a middle-income trap? The empirical approach

Some authors have taken up the task of checking whether one can empirically detect, using either econometric techniques or other criteria, features that can be considered as common — or frequent — among middle-income economies.

One way to define the middle-income trap is in absolute terms, as a productivity and growth slowdown impeding hitherto fast-growing economies to graduate into the ranks of high-income countries. Since the 1950s, rapid growth has allowed a significant number of countries to reach middle-income status; yet, very few have made the additional leap needed to become high-income economies. Rather, many developing countries have become caught by a sharp deceleration in growth and in the pace of productivity increases.

Chart 1 depicts several countries as staying in a narrow income band over the period from 1960 to 2014. The question then becomes whether middle-income countries are more likely than others to experience a growth slowdown or whether they face a greater frequency of slowdowns than either advanced or low-income countries.

[caption id="attachment_13974" align="aligncenter" width="889"] Chart 1: Absolute approach. Source: ADB, Asian Development Outlook 2017: transcending the middle-income challenge.[/caption]

The middle-income trap can also be defined in relative terms, as a lack of convergence to some benchmark high-income country. Chart 2 displays the stagnation, in relative terms, of some Latin American countries (Mexico, Brazil, Ecuador and Guatemala), while Hong Kong, Spain, Ireland and Taiwan have managed to move up the scale toward high-income levels. The question then becomes whether middle-income countries are more likely to experience a slowdown of their catching-up with upper-income countries than it is the case at lower stages of the income ladder.

Overall, the evidence on the supposed middle-income trap is mixed. While Spence, Eichengreen, Park, and Shin, Aiyar et al find evidence that countries are more likely to slow down at middle income than at high or low income, others — Im and Rosenblatt, Felipe et al and Han and Wei — do not find growth patterns conforming to one clear pattern that can be characterised as a trap.

Bulman et al distinguish between “escapees” and “non-escapees”. Escapees grow rapidly at all income levels (and all income ranges), whereas non-escapees tend to grow slowly at any development stage (not only within the middle-income range). Felipe et al remark that the small number of former middle-income economies that became high-income economies relatively quickly were outliers from a historic perspective, whereas the rest of the middle-income economies have exhibited a weaker growth performance.

They conclude: “(W)e reject the existence of a middle-income trap as a generalised phenomenon. Instead, we argue that what distinguishes economies in their transition from middle to high income is the speed of these transitions, fast versus slow, a standard growth question.”

Such attempts to identify turning points or any other empirical regularities across middle-income countries are inevitably riddled with challenges (Glawe & Wagner, Agenor). Thresholds — which often vary among studies — reflect some arbitrariness; results are data-sensitive. Empirical definitions have no theoretical underpinning that may lead someone to expect the observed phenomena to be independent of space and time of observation.

They also differ from the way Gill & Kharas approached the possibility — not as a matter of destiny — of middle-income traps as the result of lack of requisite policy and institutional changes to underpin the transition from middle- to upper-income levels, as policy and institutional requirements tend to be different from those of the evolution from low- to middle-income. As the authors remarked later, they referred to complacency risks — taking past successes as a guarantee of future ones, rather than updating policies and institutions (Gill & Kharas).

This approach leads to assessing economies as individual cases. Furthermore, Gill & Kharas also call attention to the need of theoretical developments on growth and productivity appropriate to inform policies in middle-income economies as such. There is a gap between the classic poverty trap arguments used as references regarding the departure from low-income levels. On the other hand, there is the Solow growth model, where technological learning is absent and endogenous growth models mainly applicable to frontier advanced countries. Implications of being in the middle of the trajectory between low- and upper-income levels are also uncovered in North-South growth models (Krugman, Ocampo).

In what follows, we summarise a possible narrative about policy and institutional changes expected to be faced by middle-income countries to climb up the income ladder.

Middle income as a stage of growth and development

In most cases of successful evolution from low- to middle-income per capita in recent history, the underlying development process has been broadly similar. Typically, there is a large pool of unskilled labour that is transferred from subsistence-level occupations to more modern manufacturing or service activities that do not require much skill upgrade from those workers, but nonetheless employ higher levels of capital and embedded technology. The associated technology is available from richer countries and easy to adapt to local circumstances. The gross effect of such a transfer — usually happening in tandem with urbanisation — is a substantial increase in “total factor productivity”. an expansion of the value of GDP that goes beyond what can be explained by the expansion of labour, capital and other physical factors of production to the economy.

Reaping the gains from such low-hanging fruit, in terms of growth opportunities, sooner or later faces limits, after which growth may slow, and the economy may get trapped in middle-income levels. The turning point in this transition occurs either when the pool of transferrable unskilled labour is exhausted, or in some cases, when the expansion of labour-absorbing modern activities peaks before that exhaustion happens.

[caption id="attachment_13975" align="aligncenter" width="584"] Chart 2: GDP per capita relative to the US. Source: Federal Reserve Bank of St. Louis, “Relative income traps”, first quarter, 2016.[/caption]

Beyond this point, raising total factor productivity and maintaining a fast growth pace becomes dependent on the economy’s domestic ability to move upward in manufacturing, service or agriculture value chains, toward activities characterised by technological sophistication. Also, there are high requirements in terms of human capital and intangible assets such as design and organisational capabilities. The path from low- to middle- and then to high-income per capita corresponds to increasing the shares of population moved from subsistence activities to simple modern tasks, and then to sophisticated ones. Within-sector productivity gains and “moving up value chains” rise in weight relative to productivity-lifting cross-sector structural change (Gill & Kharas).

An institutional setting supportive of innovations and complex chains of market transactions is of the essence. Instead of mastering existing standardised technologies, the challenge becomes the local creation of domestic capabilities and institutions, which cannot be simply brought or copied from abroad. Provision of education to labour and of appropriate infrastructure becomes a minimum condition.

Current middle-income countries in Latin America decelerated their labour-transfer process from subsistence before exhausting labour surpluses, as macro-economic mismanagement and inward orientation until the 1990s established early limits to that process. Nevertheless, some enclaves up on the ladder of value chains have been established (for instance, the technology-intensive agriculture, and sophisticated capabilities of deep-sea oil drilling and aircraft design in Brazil).

By contrast, fast-growth Asian economies have relied extensively on international trade to scale-up their labour transfer through insertion into the unskilled labour-intensive segments of global value chains. This has been facilitated by advances in information and communication technologies, combined with decreasing transport costs and lower international trade barriers. Taken together, these factors made possible the unbundling of production lines in chains of tasks with different degrees of sophistication requirements that can be geographically dispersed (Canuto).

Chart 3 shows the structure of wealth for economies by income group and they illustrate the path of evolution that a country is expected to cross on the way up the ladder. It displays averages and individual countries will differ because of different levels of natural wealth (Canuto & Cavallari). However, three broad features may be highlighted: the high and increasing weight of human capital (World Bank); the weight of produced capital — physical capital — stabilises in relative terms after the ascent from low-income levels; and, regardless of country-specific natural resource richness, its weight decreases relatively along the ascent.

Natural resource-rich middle-income countries face a road of their own. Unlike manufacturing, natural resource use is to a large extent idiosyncratic, in the sense that each concrete experience is unique. That creates a privileged scope for local creation of capabilities in sophisticated upstream and downstream activities, with the corresponding challenge to do so in a sustainable fashion. Nevertheless, an institutional setting supportive of innovations and complex chains of market transactions, high-level education and local building of intangible assets are also preconditions.

Although not included in the data displayed in Chart 3, one may expect a strong correlation between the human capital accumulation and local development of intangible assets (capabilities to adapt technologies and innovate; managerial and organizational capabilities; rules and institutions that do not impose costs and waste on chains of transactions which tend to become dense and complex as the economy climbs the ladder). One may expect the return from these assets to underlie what Moses Abramovitz called our “measured ignorance” – namely, total factor productivity increases not explained by the accumulation of production factors in exercises of production function-based GDP and productivity decomposition.

Local development of capabilities of imitation and creative adaptation of existing technologies, followed by or in tandem with capabilities to innovate, is a requisite to raise productivity, upgrade occupation and move up the income ladder. Any application of technology needs locally specific content that cannot be acquired or transferred by means of textbooks or other codifiable forms of knowledge transmission. This knowledge cannot be made explicit, simply transmissible in blueprints, and thus cannot be perfectly diffused as public information or private property. It must be developed locally. Production, technology adoption, and invention requires a relatively high level of such idiosyncratic knowledge and local capabilities (Canuto).

While technology originators tend to follow a sequence reverse to latecomers, it is typical for the latter to start from production and technological adoption and only then move on to invention. That has been the case in South Korea and China (Canuto). These countries have developed innovation capabilities after intense learning through using and adapting existing technologies.

Simple interconnectedness does not automatically spark productivity increases and local innovation. Success depends on the presence of a broad set of complementary factors: access to finance, infrastructure, skilled labour, and good managerial and organisational practices. In the absence of these factors, returns from investing in the development of capabilities are likely to be low (Canuto, Dutz & Reis; Cirera & Maloney).

[caption id="attachment_13976" align="aligncenter" width="598"] Chart 3: Composition of wealth by country income levels, 2014.
Source: World Bank, The Changing Wealth of Nations 2018: Building a Sustainable Future, 2018.[/caption]

Solutions must be found to market failures that generate disincentives to the accumulation of knowledge, but the private and public sector interaction cannot be unfriendly to the rising density and complexity of chains of transactions accompanying progression. Transaction costs associated with doing business” — trading across borders, hiring and enforcing contracts — cannot be too high, whereas other dimensions of the investment climate —policy uncertainty, macroeconomic instability, corruption, losses due to crime, infrastructure and others — must be favourable so as to not disincentivise investment in the acquisition of capabilities. In a broad sense, the structure of incentives for economic agents must be such as to favour the search for efficiency rather than seeking “rents” (Canuto & Ribeiro dos Santos).

International trade and technology transfer have proven to be important boosters to such a journey, but institutional change, high-level education and local building of intangible assets are also essential for sustaining this over the long run. South Korea is a prime example of a country that exploited these opportunities to move all the way up the ladder.

It is worth remarking that, particularly in the case of large economies, heterogeneity and diversity of states is to be expected. Brazil’s per-capita income, classified as upper-middle by the World Bank, is associated with an economic structure where one locates both high- and low-income types of activities and jobs. Overcoming middle-income traps in such a case means upgrading a substantial share of overall employment, including by rescuing low-income agents left behind as such by the previous transition.

Traps may take place in situations when upgrading faces high obstacles to gain competitiveness because of incumbents in global markets. Gill & Kharas used “middle-income trap” to designate economies that were being squeezed between the low-wage poor country competitors that dominate in mature industries, and the rich-country innovators that dominate in industries undergoing rapid technological change. Manufacturing in Latin America was relatively squeezed by the large addition of cheaper labour to the global economy, resulting from the downfall of the Soviet Union as well as China’s economic integration.

Ultimately, however, one may point to local insufficiency or appropriateness of some of the policies and institutions necessary to underpin the transition upward as potential causes of middle-income traps. Agenor & Canuto developed analytical models of multiple equilibria in which distorted incentives and misallocation of talent, weak contract enforcement and protection of intellectual property rights, lack of access to advanced infrastructure, and lack of access to finance create the possibility of a middle-income economy to settle on a “bad” low-growth path. In turn, Aiyar et al and Han & Wei approach the negative implications for growth of a high frequency of macroeconomic booms-and-busts.

Policies and institutions needed to climb the ladder

ADB offers a summary of the morphing set of policy priorities if an economy is to move beyond the track from low- to middle-income stages:

As economies evolve from low- to middle-income, so do their growth drivers. While accumulating physical (produced) capital remains important for growth in middle-income economies, human capital accumulation and total factor productivity improvement — or growth in production not derived from higher use of inputs — acquire larger weight in growth determination. Productivity-centred growth is needed to reach high income.

Innovation matters more as economies approach the technological frontier and entrepreneurship turns new ideas or technology into innovation-based growth. Opportunity-driven entrepreneurship, which is often built on new ideas or technology, increasingly outweighs necessity-driven entrepreneurship, which responds to existing market needs.

Risk-taking entrepreneurs take the lead in fostering innovation, and these individuals respond to incentives that are either strengthened or weakened by economic policies and institutions. Governments can promote innovative entrepreneurship through stronger intellectual property protection and rule of law, better access to finance, and allowing private-sector competition to prevail.

Graduation to high income requires a diverse and sophisticated product mix. In addition to producing a wider range of goods, middle-income economies must aim to produce more complex goods and services, which support higher productivity and better wages.

Human capital accumulation rises in relevance and the emphasis must be on ramping-up the quality of education. Economies with relatively high cognitive skills benefit from having a critical mass of students likely to become innovators. As economies move closer to the technological frontier, the returns on research-oriented innovation increases.

Infrastructure needs to shift as an economy becomes more complex and sophisticated. There is a nexus between advanced infrastructure, highly developed skills, and innovation.

The role of the government necessarily evolves as an economy progresses, becoming more of a supportive type as the private sector is fully fledged. The government must shape an environment conducive to innovative entrepreneurship by promoting investment in education and infrastructure.

An environment conducive to growth needs macro-economic stability. When a country reaches middle income, its growth rate tends to become more vulnerable to indicators affecting macroeconomic stability — given hysteresis effects of banking and currency crises, the exposure to capital inflow fluctuations, and the legacy of macroeconomic instability.

The qualitatively distinctive nature of the middle-income stage of development differentiates it from both high- and low-income phases, demanding an effort to go beyond generalisations about growth and productivity. In our view, the relevance of the concept of middle-income traps stems not from being a hypothesis about deterministic trends in growth, but rather as a warning shot about complacency risks of casting forward past transition successes instead of updating policies and institutions to new requirements. Individual middle-income country experiences of falling into a trap may be approached as cases of lack of or failing performance in footing the bill in terms of appropriate policies and institutions. i

About the author

[caption id="attachment_11391" align="alignleft" width="138"] Author: Otaviano Canuto[/caption]

Otaviano Canuto is principal at the Center for Macroeconomics and Development, a senior fellow at the Policy Centre for the New South and a non-resident senior fellow at Brookings Institution. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund, and a former vice-president at the Inter-American Development Bank. Otaviano has been a regular columnist for CFI.co for the past seven years.
Follow him on Twitter: @ocanuto


Mohamed A El-Erian: America’s Unusual Recovery is  Now Also its Longest

Data released over the next few months will show that the current US economic expansion is the longest on record. But while the United States continues to outperform other advanced economies, this success has yet to dispel many Americans’ persistent sense of economic insecurity and frustration; nor does it alleviate concerns about the lack of policy space to respond to the next economic downturn or financial shock.

The current expansion began in mid-2009, following the 2008 financial crisis and the “Great Recession.” Powered initially by exceptional fiscal interventions and previously unthinkable monetary policies, the economy built enough of a foundation for private-sector confidence to return, and for corporate balance sheets to recover. Coupled with accelerating advances in new technologies, the expansion came to be led in large part by technology and platform companies presiding over the new “gig economy.” It was given further impetus by pro-growth measures, including deregulation and tax cuts.

With the US unemployment rate at 3.6%, real (inflation-adjusted) wages are now growing at 1.6%. And with the most recent quarterly data indicating an annualised GDP growth rate of 3.1%, US economic activity continues to outpace that of Europe and Japan by a significant margin. Owing to this strength, America has become increasingly assertive in pursuing national objectives abroad, including by circumventing longstanding cooperative and conflict-resolution mechanisms and threatening import tariffs and other protectionist measures.

"No wonder trust in institutions and expert opinion remains so low. Coupled with excessive inequality (of income, wealth, and opportunity), frustration and political anger remain high."

To get to this point, the US had to overcome headwinds from abroad, including an existential debt crisis in Europe and slowing economic growth in China. Domestically, deep political polarisation, especially since 2011, has impeded congressional legislative activity and produced multiple actual or threatened government shutdowns (including the longest on record). In the absence of new pro-growth measures from Congress, monetary policy became the “only game in town.” After being forced to expand its role in the economy substantially during the crisis years, the US Federal Reserve flirted with some major policy mistakes, and became more vulnerable to political interference.

Because annual growth over the past decade has often been tepid and insufficiently inclusive – what has become known as the “new normal,” or secular stagnation – the US economy has been left with a residual sense of underperformance and potential vulnerability. According to an oft-cited Fed survey, almost half of US households report having insufficient savings to cover a $400 emergency expense.

No wonder trust in institutions and expert opinion remains so low. Coupled with excessive inequality (of income, wealth, and opportunity), frustration and political anger remain high. Making matters worse, fearmongering about the implications of technology and globalisation continues to fuel concerns of job dislocations and disruptions. And outside the US, many have come to worry that the superpower responsible for issuing the global reserve currency, and that plays a decisive role in many multilateral interactions, is no longer a reliable and predictable anchor for global trade and finance.

Moreover, unlike in prior expansions, the US is yet to build sufficient buffers to deal with future economic and financial challenges. Or, to quote former US President John F Kennedy by way of IMF Managing Director Christine Lagarde more recently, we have not fixed the roof while the sun was shining.

Beyond the lack of self-insurance at the household level, the Fed’s ability to counter economic recessions and financial disruptions is rather limited. Whereas the current policy rate is 2.25%-2.5%, past downturns have usually required cuts of five percentage points or more. Also, the Fed has a bloated balance sheet and a rather weak mechanism for transmitting monetary-policy measures to the real economy. And even if fiscal policymakers were to become more responsive, they would be starting from a point of relatively high deficits and debt.

Prolonging the current expansion will require great care. Policymakers, particularly Congress, need to avoid big mistakes and minimise the risk of market accidents while doing more to promote growth. The US needs a well-targeted approach to modernising and upgrading its infrastructure.

Policymakers and leading economists also must be more sensitive to how the fruits of economic growth are shared; among other things, there should be better protections for the most vulnerable segments of society and stronger automatic stabilisers. Businesses, for their part, need to do more to embrace their social responsibilities, if only to avoid ending up in the same position as the banks after the 2008 crash. There is already a growing chorus calling for more regulatory constraints on Big Tech.

Moreover, having shaken up global trade, the US needs to ensure that it will remain the anchor of the rules-based international system. Otherwise, its ability to inform and influence economic and financial outcomes around the world will weaken.

The US will – and should – soon be celebrating its longest-ever expansion. But it must not lose sight of its remaining challenges. The last thing the world needs right now is for today’s expansion to give way to a sustained period of lower growth, higher financial instability, and greater cross-border tensions.

About the Author

Mohamed A El-Erian, Chief Economic Adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-Chief Investment Officer, was Chairman of US President Barack Obama’s Global Development Council. He is President Elect of Queens’ College (Cambridge University), senior advisor at Gramercy, and Part-time Practice Professor at the Wharton School at the University of Pennsylvania. He previously served as CEO of the Harvard Management Company and Deputy Director at the International Monetary Fund. He was named one of Foreign Policy’s Top 100 Global Thinkers four years running. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.


Invest Durban: ‘First-Stop-Shop’ to Stimulate Growth in South African Metropolis

[caption id="attachment_16123" align="alignright" width="300"] South Africa: Durban[/caption]

Invest Durban was an initiative recommended by the Durban City Council and private businesses as the “first-stop-shop” to stimulate new investment in the South African metropolis.

It acts as a link between the council and the private business sector, offering a free investor-advisory service as well as promotion, facilitation, and aftercare services for all investment stakeholders.

Investor support encompasses a four-part business mandate: investment promotion and marketing; foreign investment identification, attraction and facilitation and FDI aftercare and expansion.

Invest Durban works with organisations such as the Department of Trade and Industry, Invest SA, Trade and Investment KZN (TIKZN), the Durban Chamber of Commerce and Industry, the KZN Growth Coalition, and State-Owned Enterprises such as Dube TradePort, the DBSA, IDC, ACSA and others.

The thrust of Durban's proposition to attract investors can be put into three broad categories:

Premium destination: a business and lifestyle environment most conducive to profitable, sustainable investments, with ample land available.

Catalytic Projects: initiatives with the potential to shift the socio-economic landscape and trigger a series of investments across several sectors.

Priority Sectors: areas attracting planners in various ways, including the creation of clusters and the development of value chains to promote new ventures and investment opportunities.

Durban is working on a number of large-scale projects with the potential to make a regional impact. The location of these projects is vital. They must either be on national trade routes or should help to break down the old apartheid living/working dynamics. Projects are selected for their scale in terms of job creation, investment size and potential revenue creation. Ideally, the projects should include a combination of uses (retail, commercial and housing, for example) and they should fit in with the United Nation's Sustainable Development Goals.

The Point Waterfront Development, for instance, an ambitious plan linking the city's beach promenade and the harbour, fits into the category of a catalytic project. Projections put the potential investment value at R40bn (£2.3bn), with the creation of 6,750 jobs.

Property use for the development offers a mix of office space, retail, residential and leisure options. The 55-ha site has already seen significant investment. A new cruise line terminal in the harbour, backing on to the Point, will dovetail well with the new precinct’s atmosphere.

Other major projects include:

GO!Durban Transport Oriented Development, which has received major road upgrades and will facilitate trade;

Centrum Government Precinct which would formalise the relationship between buildings such as the International Convention Centre (and extensions) and a related hotel, the library, council chambers and the redevelopment of Gugu Dlamini Park;

Cornubia integrated human settlement development north of Durban, on 1,300 ha, a partnership between Tongaat Hulett Development, the human settlement departments at national and provincial level, and eThekwini municipality

Dube TradePort, the multi-modal facility at King Shaka International Airport.

Cluster Initiatives

Durban has a diverse economic landscape, including some large-scale enterprises. Co-operation between the public and private sectors is formalised by cluster initiatives which draw experience and expertise from commerce and industry, labour organisations, government and academia.

Under manufacturing, the following clusters or programmes are active:

KZN Clothing and Textile Cluster (KZN CTC)

Durban Automotive Cluster (DAC)

Durban Chemical Cluster (DCC)

eThekwini Maritime Cluster (EMC)

KZN Furniture Incubator

Agro-processing development programmes

Research in how best to grow particular economic sectors is on-going, and in-depth discussions are being held about how to develop and grow value chains. The resources of the KwaZulu-Natal province are mostly consumed or exported in their raw state; more could be done to add value through processing.

The priority sectors are:

Automotive and allied industries

Logistics and logistics management

ICT and BPS (IT and communications) and Business Process Services

Agri-processing

Life sciences (pharmaceuticals, medical device manufacturing, and Health Facilities)

Tourism asset development

Some of these initiatives play to the existing strengths of the regional economy, some seek to exploit newer avenues with the emphasis on the environment. A variety of projects link tourism, renewable energy generation, recycling and job creation.

There are various programmes with their own goals and positive spin-offs for targeted sectors. These include the drive to increase local content, boosting metal fabrication across sectors; the promotion of black industrialists, promoting exports; and the over-arching eThekwini Industrial Development Policy Action Plan.


Unveiling the Role of the COO: The Playing Field is Changing

While the role of the Chief Operating Officer, or COO, has been embraced by organisations for decades, the true value of the position is still unfolding as economies emerge and diversify.

As the way we work, live and interact evolves, the essence of the role is having a greater impact on the wider economy. Emerging COOs need to equip themselves with new skills, connections and insights.

There is notion that once you reach the C-suite, the need for learning and professional development diminishes. After a year of studies into the needs of COOs across the GCC region — with a focus on the UAE — a trend has emerged. There appears to be a need for a platform where COOs can to share their challenges and solutions to benefit one another. COOs also require real-time insights on emerging trends and challenges which may impact their firms and roles.

Founder and Board Member, Mandip said: “The vision of the COO Network (Middle East) is to address these needs. The network aims to build a more vibrant ecosystem for COOs to continue developing their roles, while building a more meaningful peer group to solve emerging challenges.”

The forum was established and is operated as a not-for-profit organisation, and serves as a platform for:

Building an inclusive and diverse network of like-minded COOs, who can learn, share and develop together;

Sharing insights which will drive commercial and strategic thinking;

Providing a platform for COOs to engage in thought-provoking themes which will impact the evolution of the role;

Supporting the drive for an inclusive boardroom through mentoring and coaching.

The network was founded by a group of senior professionals with experience in the role, or who are positioned to provide strategic development for a community of change-makers. The founding partners represent firms such as McKinsey & Co, Standard Chartered, Thomson Reuters, Clyde & Co, Hawkamah, Beehive, Heidrick & Struggles, and Aditya Birla.

Founding partner and board member Pierre Arman, of Thomson Reuters, shares his insights on the need for such a network: “COOs play a critical role in today’s corporate world and yet, it is often overlooked from a career development perspective.

“The COO Network’s aim is to provide a platform for existing and aspiring COOs to up their game and skillset with their peers, mentors and coaches, but also to stay up-to-date with best-practice and insights.

“It is humbling to be part of such great initiative, especially supporting the continuous development of local talent in the Middle East.”

COOs operating in today’s rapidly evolving market must develop new skills and disciplines to remain relevant and invigorated for future challenges. The COO Network aims to solve such problems for the C-suite professionals who are central to driving this change. i

For further details on the network, please visit coonetwork.me


ADAM Global: Global Reach, Personalised Service Proves a Winner

[caption id="attachment_16151" align="alignright" width="275"] Founder: Dr Tahir Akhtar[/caption]

ADAM Global provides a platform for independent professional business services and networks, operating out of London and Dubai.

It all began back in 1999, with a group of close friends and business associates who shared a vision of cultivating long-term relationships, and enhancing their global business exposure, through networking.

The concept was first implemented in 2012, and ADAM Global has grown to become the world’s largest platform for multi-disciplinary professional business services, with unparalleled global reach across industries, geographies and 12 vertical markets.

The firm has brought business and thought-leadership to its clients and members, and is run by Yogan Yoganandan, a seasoned marketing and management executive.

ADAM Global is a B2B operation, a multi-disciplinary platform of professional services, from law to accounting, finance to business consulting.

It brings together independent professional companies and enables them to have a global presence through trusted, accredited members. It focuses on bringing in projects that are relevant to its members’ businesses, and facilitates and executes deals — but it can also stretch beyond its members’ disciplines.

The firm has 500 members and eight networks, and it is in scale-up mode. ADAM Global hopes to soon have thousands of members, and move into the consumer sector. There are plans afoot to become a B2C operation, and ADAM’s sights are set on becoming the best-known brand in the category. It wants to change the way people interact with professional services, and grow its multi-disciplined platform to include immigration, education, healthcare and wealth management. It also aims to facilitate its referral business as its core offering.

ADAM Global was founded by Dr Tahir Akhtar, who says he wants to elevate the firm’s members to become the preferred supplier of services wherever a consumer interaction is relevant. “We want to grow our business to be relevant to all users of the online space,” he says, “and become the ‘Amazon of professional services’.”

Akhtar is a serial entrepreneur based out of London, a government advisor and a regularly featured keynote speaker. He started his career as a consultant at King's College Hospital, London, with a specialist interest in cardiac and liver transplantation anesthesia and Intensive Care Medicine.

He was a director of Intensive Care Medicine at Queen Mary's Hospital, London, and completed the Chartered Director’s Programme at The Institute of Directors, London, in 2003.

Recently, Tahir Akhtar was appointed as a Member of the Independent Monitoring Board in London by the British Home Secretary. His awards include Best Medical Entrepreneur of The Year from the House of Lords, Houses of Parliament, and the UK. ADAM Holdings, ADAM Global Network, ADAM Consulting are his “brainchildren”.

He is also an advisor to governments in the Middle East and Africa.


Malpass Shows Pragmatism and Relevant Smarts in his New Role

Some critics see the nomination and election of the new president of the World Bank, David Malpass, as a continuation of the Trump administration’s stance on multilateral institutions and China.

David Malpass saw President Donald Trump as an agent of change, but Malpass is his own man, shaped by his own experiences in public service, investment banking, and his personal life.

His comments as Undersecretary of the Treasury for International Affairs may have indicated a reform agenda for the World Bank, but while Malpass’ head aspires to reforms, his speech and past actions indicate pragmatism. His heart is aligned to helping the world’s poorest countries.

But can critics see past the spectre of Trump?

After his nomination and subsequent appointment as president of the World Bank, Malpass was quick to allay the fears of critics. He has highlighted his experience for the job and has presented himself as an independent thinker, committed to increasing the median income of poorer nations. He is supportive of Trump and his general policies, but without blind fealty. He is no Trump creation.

His criticisms of multilateral organisations and China — made while Undersecretary of the Treasury for International Affairs — were a call to reform, but his speech and actions as World Bank president and nominee so far do not suggest a bold iconoclast. For now, he appears to be more Meltzer than Trump.

"Despite the critics, Malpass has so far shown himself to have the necessary experience and independence to succeed as World Bank president."

In the first week at the helm of the World Bank, he was quick to confirm his support for addressing climate change. He has also expressed his willingness to work with China (the World Bank’s third-biggest shareholder), albeit with greater transparency and conditions. If, and when, his reform agenda emerges, it is likely to represent a re-focusing of the bank, with a greater emphasis on private-sector involvement, and a championing of the dynamism of small business. None of these are revolutionary, and have long been part of the bank’s internal dialogue, one of the main competing visions in a complex and ever-evolving institution.

Malpass’ belief in the transformative power of private enterprise is drawn from his childhood. Malpass was born in a small town in north Michigan, where for five generations his family has been running an iron works. The company is no struggling rust-belt dinosaur left behind by globalisation, more a model of private sector dynamism. It services more than 150 countries, with production facilities in eight, a poster-child for how small businesses can transform communities. Malpass mentions it in speeches, and no doubt sees it as an example for businesses and countries around the world.

Malpass gained valuable budgetary and international development experience from his time working as a top Treasury and State Department official under the Reagan and George HW Bush administrations. After a physics degree, an MBA, a CPA, and graduate studies in international economics at Georgetown, Malpass entered government service with the Treasury, moving on to the State Department.

With his interest in global economics and politics; his ability to speak Spanish, French, and Russian, and his accounting background, Malpass quickly rose through the ranks. He worked as part of the Senate Budget Committee and Joint Economic Committee, and was head of Treasury’s Developing Country group. He worked on several key projects which have provided him with invaluable experience for his new position at the World Bank. These include NAFTA, the Savings and Loan bailouts, the 1986 Reagan tax cut, the Gramm-Rudman Acts, and the Brady Plan for indebted developing countries, i.e. Latin America.

The DNA of the Brady Plan can clearly be seen in Malpass’ views on helping developing countries today. Under the Brady Plan, some of the debts of developing countries were restructured and repackaged into “Brady Bonds”, which were collateralised with US Treasury 30-year bonds. The bonds proved successful; they harnessed the expertise of the US Treasury, IMF, and World Bank, as well as the liquidity of private capital markets to transform debt positions — a template Malpass may use again.

After government service, Malpasss worked for investment bank Bear Sterns, eventually becoming its chief economist. This gave him insight into global economics and the workings of private capital markets, and taught him an invaluable lesson on crises and criticism. During his 15-year tenure with Bear Stearns, Malpass won many awards, served on the board of the Council of the Americas, and wrote columns for The Wall Street Journal and Forbes. His analysis of deflationary pressure in 2001, and economic recovery in 2002-03, were well received.

However, at the start of the housing-debt crisis in 2007, he urged calm, arguing that the importance of the housing market to the health of the overall economy was overstated. Roughly a year later, Bear Stearns itself collapsed because of exposure to mortgage-backed securities. The great recession was in full force. While his call for calm now appears almost absurd, to single Malpass out for underestimating the housing-crisis ignores the fact that he wasn’t alone in that. Who knows what information access Malpass had to the secretive internal hedge funds behind Bear Stearns’ collapse. No doubt he also saw the importance in trying to inspire calm back in 2017.

Eight years later, and after a failed senate run and a successful economic research firm, Malpass re-emerged into public life, and was quick to show that while his beliefs on economics and politics are strong, he is a pragmatist. In 2016, he joined Donald Trump’s election campaign as an economic advisor. He saw Trump as an agent for change, with shared views on many issues. When Trump was elected, Malpass was appointed Undersecretary of the Treasury for International Affairs.

In 2018, as undersecretary, Malpass negotiated with the World Bank in its request for a General Capital Increase, the first since 2010. Unsurprisingly, he was initially opposed to the increase, but after negotiations he helped to deliver a $13bn increase, accompanied by a pledge to increase borrowing costs for richer nations — including China. He was willing to work with the World Bank to reach an agreeable outcome.

Malpass was nominated for World Bank presidency by Trump on February 6, 2019, after the former World Bank president, Jim Yong Kim, resigned. Malpass was the only nomination. His selection followed the usual process: the election of the US president’s nominee. This is despite media talk of breaking tradition and the nomination and election of someone else.

Despite the critics, Malpass has so far shown himself to have the necessary experience and independence to succeed as World Bank president. His past reveals strong views on the private sector and on multilateral organisations, but also a willingness for co-operation. He is his own man and continues to evolve.


Women, Science and Robots: The Gender (R)evolution Ushers-in Precision Medicine

In Germany, a team developing an AI-based human resource tool thought they had found a way to feed their system data while respecting privacy laws: they used information from newspapers dating back to the 1950s.

By Shahnaz Radjy and Maria Teresa Ferretti

[caption id="attachment_14033" align="alignright" width="377"] Forum snapshot: Sophia the Humanoid Robot being interviewed by Global Forum Ambassador Fagun Thrakar. Photo Credit: WBP[/caption]

But when the team reported back to the project leader, she pointed out that the biases inherent in such data — in particular with regard to gender — made this approach impractical.

This example was recently cited at an international forum on women’s mental health at the University of Zurich. The event brought together more than 100 scientists, policymakers, doctors, patients, and other stakeholders, and focused on the theme Sex and Gender Differences in Brain and Mental Health: The Gateway to Precision Medicine.

The world is full of paradoxes. Women have never enjoyed as many rights, and yet more and more instances of systems being designed by-and-for men — due to unintentional biases — abound. From crash test dummies to police and military equipment, things are designed for an average Caucasian male’s height and weight. Even the safety mechanisms on tractors, where the engine comes to a stop if the weight on the driver’s seat suddenly drops, are often not calibrated to women’s slighter stature.

Within brain and mental health, similar challenges can be found. The result is “shallow medicine”, a one-size-fits-all type of approach that no longer fits with our knowledge and technology. Eric Topol, in his book Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again, puts it thus: “This is where we are today: patients exist in a world of insufficient data, insufficient time, insufficient context, and insufficient presence. Or, as I say, a world of shallow medicine.”

"The work being done here is so important, we have to share it with the broader public. Everyone has a brain, and almost everyone I know has a parent, grandparent, friend, or relative suffering from brain or mental health issues."

In basic neuroscience, female mice tend to be set aside in favour of males for preclinical research — initially because female hormonal cycles may have affected the research results, and then from force of habit. Researchers often do not specify the gender of the animals used in research, making it impossible to know whether the results can be extrapolated to apply to male and female systems.

At the next level of research, Phase I and Phase II clinical trials, women tend to be highly under-represented. By Phase III trials, there is no stratification of the patient population by gender. The majority of those suffering from mental health issues are women, and not just Alzheimer’s. They are twice as likely to be affected by depression, migraines, PTSD, multiple sclerosis, anxiety disorder, and some brain tumours.

And that’s not all.

Women's Brains

Women’s brains are affected differently by diseases, symptoms, and treatment. Women and men may need different preventative strategies, different biomarkers, and even different treatments. In 2013, the Food and Drug Administration (FDA) in the US had to change the labels on Zolpidem, a sleep-disorder medication, to halve the dosage for women. They were suffering from more severe side-effects — in some cases fatal ones. Prescribing aspirin to women can reduce the risk of stroke, while prescribing the same drug to men will reduce their risk of cardiovascular disease.

[caption id="attachment_14034" align="aligncenter" width="590"] For full visual, refer to Nature article “Personalized medicine: Time for one-person trials” by Nicholas J Schork[/caption]

Enter precision medicine, defined by the US National Library of Medicine as: “an emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person”. This approach will allow doctors and researchers to predict more accurately which treatment and prevention strategies for a particular disease will work in which groups of people. “It is in contrast to a one-size-fits-all approach, in which disease treatment and prevention strategies are developed for the average person, with less consideration for the differences between individuals,” the museum notes.

Incorporating gender as a variable is a work in progress, at different stages of implementation in different countries.

Socioeconomic risk factors have an impact on gender differences in brain and mental health, too. Aside from education being a co-variable for every human disease in history (quote from Roberta Brinton, University of Arizona, at the Swiss forum), women can be exposed to a risk factor more than men, or the same situation can be experienced differently by men or women.

Just Like AI

Just like the AI system described in the opening paragraph, having the right data is a necessary stepping-stone to address gender bias in health and illness.

This is why, in 2016, a group of scientists, artists, healthcare professionals, and technologists founded the Women’s Brain Project (WBP), the organisation behind the forum. The WBP is a non-profit that advocates for women’s mental health, and is pushing for differential research based on gender, a first step towards precision and personalised medicine. Having precision medicine will eventually lead to more efficient drug discovery and early diagnosis, saving healthcare systems money, so the arguments are financial, too.

With a patient-centric and multi-stakeholder approach, the forum in Switzerland was the first time patients, the FDA, drug developers, regulators, the World Health Organisation, Google, and the OECD came together to discuss hurdles and potential solutions to the pervasive gender bias.

Position papers and calls to action will be some of the tangible results of the forum, to engage policymakers and regulatory authorities in the goal of better science and data.

This non-profit organisation and its annual event are supported by a mix of entities that reflect how relevant these issues are – from Lobnek Wealth Management to Alzheimer Research UK, Eli Lilly, Microsoft, Roche, and the Wyss Centre, to name but a few.

The mother of Emilia Clark (Daenerys in Game of Thrones) attended; Sophia, the former queen of Spain, sent her regrets at not being able to attend, but added encouraging words about the importance of the WBP mission. The global ambassador for the event was actress, activist and film director Fagun Thrakar. Sophia the Humanoid Robot closed the last session of the forum, rounding-off an impressive array of speakers.

As Fagun put it, “The work being done here is so important, we have to share it with the broader public. Everyone has a brain, and almost everyone I know has a parent, grandparent, friend, or relative suffering from brain or mental health issues.”

This is a clear example of female leadership in health. “Achieving precision medicine— starting from sex and gender and then including any other type of diversity, to move from shallow medicine to precision medicine — will impact the cost of health as well as our collective ability to provide better, more adequate treatment across the board” says WBP co-founder and CEO, Antonella Santuccione Chadha.

The vision of the organisation is to create a sex and gender precision medicine research institute, because whether you credit Abraham Lincoln, Peter Drucker, or another source, the wisdom of the words, “the best way to predict the future is to create it” is indisputable. i

About the Authors // forum-wbp.com

[caption id="attachment_14038" align="aligncenter" width="275"] Author: Shahnaz Radjy[/caption]

Shahnaz Radjy is a member of the Women’s Brain Project Executive Committee and holds an MBA in Healthcare Management from the EHESP as well as a Bachelor of Arts in Biology from the University of Pennsylvania. She worked for ten years in chronic disease prevention and workplace health both at the World Economic Forum in Geneva, and the Vitality Institute in New York, USA. She is now based in rural Portugal. Follow @sradjy on Twitter.

[caption id="attachment_14039" align="aligncenter" width="277"] Author: Maria Teresa Ferretti[/caption]

Maria Teresa Ferretti is a neuro-immunologist with over a decade of international experience in the field of Alzheimer’s disease. She is the co-founder and Chief Scientific Officer of the Women’s Brain Project. She holds a Masters in Pharmaceutical Chemistry, a PhD in Pharmacology and Therapeutics at McGill University, Canada). She is a group leader in the Nitsch’s lab (University of Zurich). In her research, she aims to identify novel biomarkers for improved individual level prediction of cognitive decline and Alzheimer’s.


Acharya Balkrishna: Billionaire Monk Makes Modesty and Empathy Watchwords for Progress

 Acharya Balkrishna projects an aura of modesty, often clad in a traditional India dhoti, the simple garment of the people — which is fitting for someone who is a billionaire monk.

Balkrishna’s journey to wisdom and wealth began with a chance encounter with Baba Ramdev, a charismatic and yoga disciple in the Gangotri caves in the Himalaya. Decades later, the business the two men cofounded, Patanjali Ayurved Limited, has catapulted Ramdev to international fame as a yoga guru, and has landed Balkrishna on the Forbes rich list.

With at estimated net worth of $5.2b, Balkrishna ranks as the 25th wealthiest person in India. Patanjali Ayurved has a reported annual revenue of $1.6bn — selling everything from clove and turmeric toothpaste to cow-urine floor cleaner — and Balkrishna owns 98.6 percent of it.

The principle of Ayurveda is “the belief that health and wellness depend on a delicate balance between the mind, body, and spirit”. The company abides by that philosophy, and specialises in herbal and mineral preparations to provide natural solutions for every health and household need. Patanjali formulas may be crafted according to ancient traditions, but they offer prevention and treatment options for many modern ailments.

Patanjali aims to “nurture and develop the science that is present in our tradition, and spread it to the benefit of the masses”, says Balkrishna. “We want to use this wealth to serve others and not ourselves.”

Thousands of farmers form part of Patanjali’s agricultural network to produce the herbs and plants — some of which are rare or endangered — for its products. Patanjali research centres fuel Ayurvedic development as a viable branch of modern medical science, with a mission to establish a model for the rest of the world. Patients suffering from chronic maladies have been successfully treated at Patanjali hospitals and clinics with a regime of yoga, Ayurveda, and science. Co-founder and managing director Balkrishna has documented these cases in books he’s authored.

National pride and concern for people’s wellbeing govern Patanjali’s daily operations, but diversification has always been a clear business focus for Balkrishna. Under his leadership, Patanjali has given multinational heavyweights a run for their money, offering fast-moving consumer goods that celebrate India’s revered traditions while embracing sustainability standards. Balkrishna is driven by the desire to tap India’s rich consumer market — with the Patanjali perspective. “We consider our consumers as family,” he says, “and our sensitivity is towards achieving their welfare.”

Patanjali aims to “nurture and develop the science that is present in our tradition, and spread it to the benefit of the masses”, says Balkrishna. “We want to use this wealth to serve others and not ourselves.”

Ayurvedic products appeal to India’s sense of tradition, as well as to the growing global interest in natural and holistic trends. Its products have begun to have an impact in international markets, and Patanjali exports to 10 strategic countries and boasts a global reach. Registration with the US FDA and alliances with international trade organisations have further greased the wheels for Patanjali’s expansion.

The company’s steady growth — with revenues rising from Rs500 crore ($72m) and Rs 10,000 crore ($1.44 bn) by 2016 — has slowed recently. Balkrishna attributes the unexpected lag to demonetisation policies and new tax requirements that cut into profits — just as product demand began to outpace production capabilities.

He has corrected the company’s course, with strategic investments to strengthen its supply and distribution infrastructure. Freshly inked agreements with several e-commerce giants, including Amazon and Flipkart, should boost Patanjali’s online product sales.
Balkrishna is a Sanskrit scholar who has been pushing the boundaries of alternative medicine, while combining a scientific approach with pragmatic planning — an enlightened entrepreneur.


Ameet Nathwani: Big Pharma, Big Changes to Traditional Ways of Thinking

[caption id="attachment_14058" align="alignright" width="300"] Ameet Nathwani[/caption]

Big Pharma might not be the obvious choice for tech talent looking for a new home or project — but Ameet Nathwani is hoping to change that.

Over his career, UK citizen Nathwani, who is based in Paris, has gained a comprehensive understanding of the healthcare industry. His experience ranges from providing individual patient care and pharmaceutical research to managing global health initiatives. He rose through the ranks at Novartis, one of the world’s largest pharmaceutical companies, and was a driving force behind the company’s digital health strategies.

In 2016, Nathwani was appointed as the chief medical officer and executive vice-president of medical at Sanofi, the global life-sciences company pushing innovation for improved healthcare solutions. In addition to his other roles and responsibilities, Nathwani was recently appointed Sanofi’s chief digital officer.

In the latter role, Nathwani networks with promising tech companies — large and small — to pose the question: “What would you do differently to address our problems?”

He’s reframed the company’s challenges as an open-call for collaborative partnerships. Nathwani makes the pitch at tech conferences such as the CES international consumer electronics show in Las Vegas, the annual VivaTech in Paris, StartUp Health in San Francisco, and Stanford University’s LIGHT Forum (Leaders in Global Healthcare and Technology).

"I think that healthcare is changing very rapidly."

He says the conferences are one of the most uplifting and energising aspects of his new role, presenting him with an ideal opportunity to immerse himself in the health-tech “ecosystem of innovation”. Nathwani is taking the company from analogue past to digital future, and conference participation is a crucial tactic for the recruitment of top tech talent.

“It’s very hard to attract entrepreneurial, techie individuals and data people into big pharma,” Nathwani said in an interview at StartUp Health last year, “because nobody wants to work for an analogue-based company.” Sanofi employs more than 100,000 people, providing healthcare solutions in 170 countries. The company has put together a 20-strong team, with Nathwani at the helm, to usher-in the digital health era.

Nathwani believes data will be key factor in the transformation of the company’s organisational structure — and the industry as a whole.

“I think that healthcare is changing very rapidly,” he said, citing the increased accessibility of genomics, proteomics, and transcriptomics. “The data are getting cheaper, and in the healthcare environment, data are the new healthcare currency.”

Nathwani hopes to see patients own their personal health data — and reap the benefits. He envisions a world where patients armed with health data from wearables can share them with their doctors or commoditise them through voluntary participation in scientific research or clinical trials. Privacy concerns present a possible challenge, but blockchain technology could be used to protect users’ personal information.

The shift has already begun, he says, citing more than 40 “virtual hospitals” in the US and 150 “cloud hospitals” in China. “Our problem is that our industry hasn’t necessarily rapidly adapted to it, because there are lots of regulatory constraints, people are worried about privacy, and the regulations. But I think all of that’s changing.”

As regulators scramble to play catch-up to consumer demand for health-tech, Nathwani challenges the industry to push for digital healthcare as the new standard. The industry’s lingering attachment to the analogue system, particularly in expensive and extensive clinical trials, baffles him.

Nathwani says it takes about $1.6bn, and around eight years, to develop a drug — and it’s rare that the finished product will ever pay-back that investment in full. Traditional clinical trials also require that the test subjects make numerous physical visits to the clinical facility. Nathwani proposes a complete and fundamental shift, where AI and telehealth can slash the cost, time and effort required to research and develop new treatments.

“I think the more the patient gets empowered and demands a different level of care, a level of individualisation, and a participation in the innovation, that will force industry anyway, to change.”


Delen Private Bank: Perfectly Combining a Personal Touch with the Latest in Digital Technology

The Belgian bank specialises in private wealth management and has managed to combine what many other banks are finding impossible: keeping a personal touch while introducing the latest technology.

Delen is not afraid to go against the flow. While other banks are replacing staff with robots capable of answering basic queries, Delen continues to put priority on the personal touch. As other banks close branches, Delen has been opening new regional offices across Belgium in recent years. In addition to Antwerp (where it has its headquarters), Brussels, Ghent, Hasselt, Liège and Roeselare, the bank now has offices in Namur, Kempen area, Knokke, Leuven and – since last June – Waterloo.

“We are committed to keeping and even growing our local roots, to ensure we keep the personal touch with our clients,” says CEO René Havaux. “Being able to meet a client close to their home or office is a prerequisite, preferably without unnecessary traffic woes.”

In Belgium the bank has 380 employees; it also has offices in Luxembourg, Switzerland, the United Kingdom and the Netherlands.

Running parallel with this commitment to the personal touch is a drive to introduce the latest technology. While private banking has long been considered rather slow-moving in its embrace of the digital era, Delen Private Bank once again swims against the flow. It’s been recognised as a trailblazer in harnessing the power of IT to deliver a superior private banking product, with the attendant excellence in client services.

Delen Private Bank is continuously investing in innovative solutions – digital or not, that’s up to its clients – and making substantial efforts to improve them and enhance client satisfaction. Having this in mind, it launched Delen Family Services, a platform that brings all of the client’s assets together to offer an excellent overview of his investment portfolios, real estate, insurances, art etc. All neatly arranged in the bank’s safe IT environment. Moreover, this platform can be smoothly integrated in the existing Delen app for mobile devices and Delen Online. Delen’s efforts to improve the functionalities and user experience of its award-winning app convinced the jury to reward the bank once again with the award.

From Family Business to Acknowledged Niche Player

Established by André Delen in 1936, Delen Private Bank initially operated as an exchange office. The bank has grown steadily since then, acquiring various private banks and asset managers. “Their teams are still part of the Delen Investments group today,” adds René Havaux, “since continuity is key to the bank’s growth strategy.”

In 1975 the founder passed the management of the company to his sons. Delen Private Bank is now part of the holding company Finaxis, which is mainly controlled by Ackermans & van Haaren, and Promofi. The Finaxis portfolio also comprises Bank J. van Breda and Co., which caters mainly to entrepreneurs and professionals.

In 2011 Delen acquired a 74% (today 91%) majority stake in UK brokerage JM Finn and Co. In July 2015, it reached an agreement to acquire Oyens & Van Eeghen, a transaction which marked the company’s debut on the Dutch market. On 16 September 2019, the bank took over the assets of Nobel Vermogensbeheer, consolidating its position in the region.

Delen Private Bank is a credit institution under the supervision of the NBB (National Bank of Belgium) and the FSMA (the Belgian Financial Services and Markets Authority).

Delen Private Bank has no corporate finance, a limited credit activity, a sound financial base and a highly stable and healthy balance sheet. On June 30, 2019, the equity capital amounted to €741,6 million thanks to a Tier 1 capital ratio of 31,5%, and a cost/income ratio of 58,6%.

Focused, No-nonsense and Personal Approach

Delen Private Bank prides itself on its focused and no-nonsense approach, which covers discretionary asset management and Estate Planning, and enables client assets to grow in a balanced and sustainable manner.

Clients can leave the financial management of their portfolio (Discretionary Asset Management) to a team of financial experts who closely follow the markets. They act proactively, always from a long-term perspective. For the financial planning of clients’ property (Estate Planning) the bank’s lawyers and tax consultants provide detailed and personal advice. They are experts in all matters concerning succession, donations and business transfer, and follow the current fiscal and legal affairs.

A Passion for Art

Art and interior design are among Delen’s passions. This is reflected in the selection and design of the bank’s various offices, as well as in its involvement with artistic events. The bank partners with BRAFA, the Brussels Art Fair (created in 1956). BRAFA has become one of the world’s most prestigious art fairs, famous for fine art, antiques, modern and contemporary art and design. In 2020 BRAFA and Delen Private Bank will celebrate their 14th year of co-operation.


Wey Education: Wey to go! Education Group has Interests of Students at Heart

Wey Education solves the problems of the one-size-fits-all education system.

It challenges the outdated bricks-and-mortar buildings and mandatory PE lessons with the flexibility and autonomy of online learning. Times are changing, technology is changing; now is the time for the education sector to draw level.

Using state-of-the-art digital technology, Wey Education operates two established divisions. InterHigh, a non-selective fee-paying online primary and secondary school, provides students with the flexible balance between school and other commitments, enabling them to thrive by offering everything that a traditional school can — and then some. Wey also supports students with special learning needs through its alternative provision platform, Academy 21, a B2B division serving other educational providers, schools, local authorities and public bodies.

For the outstanding work it does, Wey Education has won the award for the Best Online Educator — Global 2019 for Centre of Excellence Awards. It illustrates the strides the firm is making in the sector, and recognises the opportunities that their schools provide. Describing Wey as “a class act”, judges commend the business for establishing an independent academic advisory board to cut through the white noise of commercial concerns, enabling them to make recommendations based on the pursuit of education excellence.

Wey Education was also celebrated for putting children’s learning experiences at the heart of everything it does.

Wey Education CEO and co-founder, Jacqueline Daniell, was driven to start the business when she noticed how some young people were experiencing difficulties. She noticed that the traditional education system no longer supported all young people, especially those who are struggling to find alternative learning styles.

Through this understanding and gap in the market, Wey Education was formed to help learners reach their full potential. From that moment, the business has progressed into a successful online education platform.

Despite challenges of first bringing the idea to the market, with far less technology and a majority of people still using dial-up internet, Wey Education has developed one of the UK’s leading online schools, InterHigh.

It has done so by staying true to its core values of providing all students with the best possible education prospects, regardless of where they are in the World or what else they have going on.

Wey Education presents a viable and proven alternative to traditional education. The inroads into online learning being made are profound and unmissable by those in the education sector — and this is just the beginning.


Banco Económico: Angola on the Brink of a New Era

Angola is a country with huge economic potential that is facing an encouraging political environment for foreign investment.

[caption id="attachment_16089" align="alignright" width="392"] Banco Económico: Headquarters[/caption]

There are several activity sectors with a strong development potential, including agriculture, tourism, infrastructure, environment and the manufacturing industry. Although the next two years will still be a time of economic adjustment, now is the time to look for investment opportunities in the country.

This may be a challenging year in the Angolan market, considering the economic adjustments that will continue to affect families and companies. The expected increase in prices of utilities will have a further impact on the economy. Unemployment levels are currently uncomfortably high, and cost-reduction will be mandatory for many companies.

The adjustments introduced in the economy will show results in the medium term. Investment is critical for the development of the economy, with the creation of new businesses and jobs. Given the state's limited capacity in this role, the private sector and external investment must play a part in boosting the economy and ensuring a steady evolution of the main macroeconomic indicators.

The Angolan government is working hard to improve the business environment and to promote the country to private and international investors. In terms of economic outlook, these measures to attract foreign capital to the Angolan economy are very positive, and market agents are reacting positively. Investors, banks and the international community are enthusiastic, and if things continue along this path, the benefits should soon be seen.

In the banking industry, results of the consolidation efforts in the financial system are expected for the year ahead. The central bank will continue to raise the requirements on the financial sector. An asset-quality review will be carried out this year, which may dictate additional capital requirements. Attention is focused on the availability of capital, so new players in the market, mainly foreigners, can be expected.

Another factor in the equation is the Extended Fund Facility agreement with the IMF. This facility will allow the government to make necessary structural investments and reforms.

The entry of the IMF also adds peace of mind to some investors, and can boost confidence for foreign investment.

Some challenges remain. Although the foreign currency market has stabilised, the economy contracted significantly last year. The devaluation of the currency had a huge impact on sales for many companies, with reported reductions of 30-40 percent as a result of a loss of local purchasing power. In the corporate and financial industries, cost reduction strategies and adjustments to business structure must be considered.

In 2018, we had a solid increase in terms of commercial activity. Our year-end results will be positive. We also have improved all of our KPIs in terms of the bank’s commercial activity. We have raised our customer base by 20 percent and increased revenues and the number of transactions made, year-on-year. For that, it was very important to stabilise the foreign currency market. The new policies from the central bank stabilised the operations of our corporate customers, who can now access foreign currencies more easily and regularly through the banks.

In March 2018, for the first time, we published our Moody’s rating — becoming the second bank in Angola to be rated by this international agency. It was a significant step for our clients who had faced restrictive rules for banking services, and an asset for our banks. Moody’s ranked us at the same rate level of the Angola Republic, a great outcome.

Banco Económico has a sound market strategy based on deep market segmentation of products and services for retail consumers and corporate clients. The bank has a solid portfolio of financial solutions, including current and savings accounts, leasing, trade finance, investment banking, digital banking, savings and investment solutions, insurance, forex hedging products, real estate and pension investment funds. Banco Económico is well exposed to the corporate segment and expecting continuous growth.

Through a structure based on specialised business areas, Banco Económico has different products and services customised to the needs of different economy sectors — oil and gas, trade finance, investment banking, corporate and entrepreneurship — as well as to the main economic activities, which are vital to the country’s sustained development.

Banco Económico has been an active supporter of the country economic development due to its strong position in the corporate segment, mainly in the top-level corporates and SMEs. On the individual consumer side, we have been moving from an approach of private banking to a more retail, mass-affluent market bank. We are preparing for a new phase of the Angolan economy.

We believe this new influx of foreign investment will create more companies, more jobs and more wealth, and problems we have faced — such as high unemployment and lack of capital — will decrease in upcoming years.

We are preparing the bank for this period, and revisiting our business plan and our strategy to start approaching new market segments that have so far not been tackled.

Angola is entering a new era and we will have the opportunity to target lower and emerging market sectors. We will push our operation and business results forward. These are the main changes in terms of how Banco Económico will approach the market, and the future.


La Société Centrale de Réassurance (SCR): Assuring the Future of Reassurance with Training, Compliance and Effort

La Société Centrale de Réassurance (SCR), a subsidiary of the Caisse de Dépôt et de Gestion (CDG), holds a leading position in the Moroccan reinsurance market.

[caption id="attachment_16093" align="aligncenter" width="900"] La Société Centrale de Réassurance (SCR)[/caption]

Year 2018 figures (in millions)

ROE = 12.26%

Solvency ratio = 218.81%

Written premium: 210.68 USD

Dedicated Gross Investments: 1,149.19 USD

Total Balance: 1,553.53 USD

It acts as an institutional investor by participating in keeping insurance premiums in-country, and mobilising savings in the national economy. The SCR’s profitability is ensured by placing the company at the service of the Moroccan market while simultaneously developing foreign business.

The SCR’s long experience and thorough understanding of international reinsurance markets enables it to shelter the Moroccan market from international turbulence regarding reinsurance conditions.

SCR is one of the oldest reinsurance companies in Africa and the Middle East. With three contact offices in Rwanda, Egypt and the Ivory Coast, SCR has contributed to the creation and operation of regional organisations such as the Arab General Insurance Union and the African Insurance Organisation.

The SCR has also worked towards the creation of regional companies, such as the Arab Reinsurance Company and the African Reinsurance Company, firstly at the studies stage, and then as a founding member and shareholder.

Some Key Ffigures from 2018

SCR has used its experience to assist many Arab and African countries that have created similar companies, welcoming their representatives to its informational and training missions.

Main strategic priorities:

Reinsurance support for the Moroccan market

General interest missions: central role in the management of the catastrophic-risk plan

Serving Moroccan insurers and major companies in their international development

Implementation of new products on behalf of Moroccan and African insurance companies (credit and surety, parametric insurance, insurance against political violence)

Underwriting Zone: Africa, Middle East and certain Asian markets (India, China, South Korea, Pakistan et al)

SCR is the only Moroccan company with an AAA Rating from Fitch Ratings (local level). Since 2017, the AAA (Mar) grade that Fitch Ratings assigned to SCR reflects its solid institutional framework and the fact that it is adequately capitalised and has healthy governance and financial management.

This confirmation by Fitch of the Moroccan reinsurer’s solidity bolsters the strategy SCR has been pursuing in terms of transformation based on the “Strong II” plan, which aims at growing facultative reinsurance assignments in terms of profitability and revenue at national and international levels.

In addition to its Fitch rating, SCR has a B++ grade from AM Best, which confirms its underwriting policy and its financial and technical fundamentals.

“Strong II” Transformation Plan

The “Strong II” Transformation Plan is considered an essential tool for SCR’s medium- and long-term strategic development, delivered across several projects.

The plan was launched in 2016 and works to put in place a global projects portfolio, mobilising and bringing together all associates in service of SCR’s clients. This plan is organised along four developmental axes:

Future growth and visibility

Technical and risk-management expertise

Operational excellence and client satisfaction

Company culture and improvement of management style

Through this plan, the SCR will reinforce and consolidate its role in Reinsurance at local and regional levels, while accounting for new development challenges in the Moroccan and international markets.

Human Capital

The SCR invests in several projects to develop human capital, all of which target the increase and reinforcement of associate skills, as well as the strengthening of management style, team cohesion and company culture. In parallel, the SCR regularly promote internally and recruit externally high potentials for certain job openings. The goal is to offer growth opportunities to its associates and loyalty among its best team members while maintaining mixt promotion internally and externally.

Knowing that it must always invest, especially in human resource development, the SCR has continued to pursue its policy of professional development to maintain competence and achieve the expectations of clients and partners.

Most SCR associates receive professional development along profession-specific and risk-management themes, as well as other cross-functional and linguistic training.

The SCR is in the process of deploying one of the best risk management tools in the world. It is a highly calibrated SAS solution to manage well our appetite of risk. It should be noted that the SCR is the first and only reinsurance company with a high performance ERM tool in the region.

Dynamism

To meet the demands of the Insurance and Reinsurance Markets, the SCR launched its SCR Academy RE foundation, an initiative whose objective is to provide SCR’s technical expertise in various lines to its Moroccan and African partners, as well as to SCR employees.

Strong momentum has been gained in the foundation, with a programme covering different insurance lines (fire, engineering, aviation, maritime and liability) as well as pricing, actuarial and prevention.


Powergas: Fulfilling an African Energy Need with Safety, Drive and Efficiency

Powergas is the largest Producer & Distributor of compressed natural gas (CNG) in the off-pipeline Gas Distribution in Africa.

It provides CNG to clients where piped natural gas (PNG) is unavailable. Its operations are predominantly in Nigeria, one of Africa’s largest economies and a major natural gas producer.

Powergas operates four CNG plants in the country, with a total production capacity of over 720,000 SCM (standard cubic metres) per day, and is building a fifth plant which will add an additional 384,000 SCM to daily capacity (equivalent to almost 180-200 MW Power Generation Capacity).

The plants are strategically located in Lagos, Ogun, Abia and Rivers States with distribution network extended to 18 (of 36) States. In the past seven years of operations, Powergas has a 100 percent safety record in more than 75,000 CNG deliveries to power generation companies, heavy industries, commercial complexes and residential estates.

Deepak Khilnani is the chairman/CEO of Powergas Africa. With over 30 years' experience in Energy and Industrial Power Distribution, Khilnani is committed to driving the firm’s long-term vision to deliver clean, cost-effective and reliable energy solutions.

He is a chartered accountant (UK – ICAEW) and has held many senior positions in business development and general management. He is a member of the Oil and Gas Advisory Board of UKTI (a UK government-industry consultancy body) and a board member of Pratham, one of India’s largest education charities.

Pulak Sen, MD/CEO for Nigeria Operations, has over 30 years of senior management experience in West Africa and Asia. With a Master’s degree in Technology and an MBA from the Indian Institute of Management, Ahmedabad, Sen worked with leading multinationals including the Tata Group, Inlaks Group and Larsen & Toubro (L&T) before joining Powergas.

He holds vast Nigeria experience in the Oil & Gas, Power & Engineering and Procurement & Construction (EPC) industries. He has successfully driven Powergas' strategic vision and leadership position in the CNG market, while implementing a strong governance platform.


Simba Group, Nigeria: Strategy Written in Pencil, Values Engraved in Stone

[caption id="attachment_16099" align="alignright" width="300"] Head of Strategy: Kunal Grover[/caption]

CFI.co: Simba is present in several sectors that are key to Nigeria’s development. Can you tell us about the group’s journey to this point?
Kunal Grover: The Simba Group has been operating in Nigeria since 1988. Our flagship company, Wandel International, started its journey with a simple idea: to offer our customers the highest quality products, sourced from around the World but customised to their taste, usage conditions and operating environment. The vision has expanded to include products and solutions, with a specific emphasis on service and innovation, but three decades later, this idea still represents our core philosophy.

CFI.co: To what to do you owe the success of your businesses across industries?
KG: We place a lot of emphasis on the values established by our founder, Vinay Grover, which serve as guidelines for many of the questions our business leaders face. Operating in a continent of opportunity and challenge, it’s impossible to stick to one strategy. I believe ours is written in pencil, while our values are engraved in stone, and the latter guides our decision-making.

When it comes to selecting international partners, we identify companies which are aligned to our values, and share our vision for innovation, localisation and commitment to investing in after-sales support. We represent TVS Motors, part of the $8bn TVS Group, for assembling, distributing and servicing TVS motorcycles and tricycles in Nigeria. We also represent Mahindra EPC, part of the $20bn Mahindra Group, for agricultural equipment and mechanisation solutions. We partner with Luminous Power Technologies, part of the $25bn Schneider Electric group. What’s important is not their size, but that these companies share our values and are committed to sustainable development in their respective economies.

CFI.co: The Simba Group has recently been recognised for socio-economic value-creation in Nigeria. How much of a role does this play in your strategy?
KG: The recognition is truly humbling and serves to reaffirm the importance of what we are doing. Socio-economic value-creation is fundamental to what we do. Our motorcycles and tricycles touch the lives of millions of Nigerians every day — taking them to work, to school, to pray — driving them, and driving the economy in turn. Our inverters and solar solutions bring light into people’s homes, and our agricultural solutions help improve efficiency across the agricultural value-chain, so that that the food they eat is affordable.

Our impact is even more direct in terms of the employment our products create, even beyond our factory walls. The riders of the motorcycles and tricycles earn a daily wage ferrying passengers to-and-fro. Then there are our dealers, microfinance partners and fleet owners who play critical roles in our value chain, and ensure that the vehicles are made available. Tens of thousands of mechanics and spare-parts dealers repair and service the vehicles and ensure that they are back on the road as soon as possible.

CFI.co: How do you ensure your products are affordable and accessible by those who stand to benefit most?
KG: At the heart of our vision is a desire to enrich Nigerian lives — and that unambiguously means all Nigerian lives. While we have high-end inverter systems for large homes and offices, we also have solutions such as our Luminous DeLite range, which consists of affordable entry-level inverters and batteries which can deliver four hours of standby power to a small home. This comes at an accessible price point, but with the same level of service we assure across our product range.

We also recognise that some of our products are used in commercial applications, such as our motorcycle and tricycle taxis. Affordability is key, but so is ensuring minimal downtime for the vehicle owners, whose livelihoods depend on our products. Our leadership position in this industry is testament to the creation of an ecosystem consisting of affordable, quality products, backed by a network of service centres, and supported by mechanisms for providing access to finance.


The Credit Direct Story: Audacity, Innovation, and a Heart for Inclusiveness

[caption id="attachment_16102" align="alignright" width="300"] MD & CEO: Akinwande Ademosu[/caption]

With a culture of simple execution, consistency, dedication and authenticity Credit Direct Ltd has carved a niche for itself in Africa’s largest economy and most populous nation.

Credit Direct pioneered the unsecured lending business in Nigeria, and in the following decade it has continued to embrace its leadership role by setting the pace for non-bank financial services inclusiveness in the country.

The company, with its bold entrance into the Nigerian market, led a movement that has seen exponential growth of consumer and retail lending organisations across several market segments. Twelve years after the advent of Credit Direct as the first mover, operator numbers have grown from just Credit Direct in 2007 to structured operators across Nigeria.

This innovation has created a multi-billion Naira industry that now employs several thousand people. It ranks as one of the most important developments in the Nigerian economy in recent years.

It has had a significant impact on the financial industry for the underbanked and unbanked segments of Nigerian society and on the growth of the country’s middle-class. The business model it introduced has countered lending biases that existed against women in the financial services sector. Now men and women can equally exercise their entrepreneurial skills, contributing to their family living standards and the country's GDP.

In the short time Credit Direct has been in operation, it has empowered more than 1.5 million Nigerians from all walks of life with a disbursement of well over N150billion ($410m) across the country. The injection of this much-needed, unsecured credit has significantly cushioned the sometimes harsh effects of economic reality. That effort is having a catalysing effect on entrepreneurial activities at small- and medium-scale enterprises, as well as on personal well-being.

Salary earners and small enterprises excluded from funding by traditional financial institutions now have access to credit. Previously they were either neglected or had to borrow at rates ranging between 120 and 500 percent per annum from unstructured loan companies using their personal belongings as collateral. Credit Direct re-wrote this otherwise painful experience and changed Nigeria’s lending space forever.

Credit Direct ran with an idea that many thought would fail. With singular focus, resilience, teamwork, technology, and outstanding leadership, the model is now tried and tested and continues to thrive. The company is more determined than ever to lead technological advancement and expand the horizons of financial service and customer experience.

Credit Direct’s story over the past 12 years has been been led by Akinwande Ademosu, whose stewardship brought about the paradigm shift in the unsecured lending business. Akinwande says: “The understanding that social capital is the key to serve, and lead, successfully, and our pragmatic position in this regard, could be considered our stroke of genius. Our team members are connected and committed to the same purpose.”

Credit Direct has maintained a sterling record of corporate governance, regulatory compliance, effective risk management, innovative technology and profitability that are well above the industry average.

The company has progressively put together the components for sustainable growth, and indicated a resolve to remain the dominant player in its market space.


Etihad Credit Insurance: Creating a Central Role in a Changing Economic Landscape

[caption id="attachment_16105" align="alignright" width="300"] CEO Etihad Credit Insurance (ECI): Massimo Falcioni[/caption]

The UAE’s burgeoning non-oil exports over the past three decades have made it one of the most diversified economies in the GCC.

By using the UAE as a model, Massimo Falcioni, the CEO of federal export credit company Etihad Credit Insurance, has demonstrated how to play a key role in supporting diversification and economic growth by being a stabiliser and an accelerator.

The UAE's central bank revised its growth forecast for the economy upward to 2.4 percent for 2019, from an earlier projection of two percent in May. The economy grew by 2.2 percent in the second quarter, with non-oil growth expanding 1.5 percent. This compared to an official estimate of non-oil growth of 0.3 per cent in the first quarter by the Federal Competitiveness and Statistics Authority of the UAE.

These statistics underline the importance of diversification, something further proven by the manufacturing sector’s contribution to the UAE’s non-oil GDP; that grew by 2.5 per cent to Dhs122bn ($32bn) in real prices in 2018.

The UAE has always played an important role in the arena of exports and re-exports, as evidenced in a recent Ministry of Economy’s report.

The global non-oil foreign trade of the UAE in 2018 accounts for $443bn, of which $54bn is exports and $126bn is re-exports. Over the past three decades, the UAE has achieved steady economic growth and noteworthy export diversification. The UAE also remains to be the main regional destination of Foreign Direct Investment (FDI) inflows attracting about $11bn in 2018, which is equivalent to 2.9% of the country's GDP.

The UAE Federal Export Credit Company, Etihad Credit Insurance (ECI), was established by the UAE Federal Government and its founders, the governments of Abu Dhabi, Dubai, Ras Al Khaimah, Fujairah and Ajman. The company started its operations in 2018 and has played a vital role in the development of strategic sectors, under the leadership of H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, and Chairman of ECI; and the strategic direction of H.E. Eng. Sultan bin Saeed Al Mansoori, UAE Minister of Economy, and Deputy Chairman of the Board of Directors at ECI.

ECI has been steadily progressing its mission of support for the UAE’s non-oil exports, trade, investments, and strategic sectors development. Its has supported UAE businesses’ regional and international expansion with strategic platforms across government, insurers, re-insurers, banks and lenders, regional and international Export Credit Agencies, governments, and trade promotion agencies, in addition to world organisations for economic development.

ECI’s Journey

The first initiative that ECI undertook was the customer voice project. It collaborated with Abu Dhabi Chamber of Commerce and Industry, RAK Chamber of Commerce and Industry, and Dubai Chamber of Commerce and Industry. The ECI team interacted with a diverse group consisting of 60 manufacturers, entrepreneurs, and exporters to quantify and qualify the challenges. The recommendations put forth by this group were further analysed and studied to identify the key areas of support.

This categorisation put ECI on the path to generate a sample based on the team’s interaction with 80 global entrepreneurs, and by comparing the local and global scenarios.

The responses helped ECI to gain a deeper understanding of the challenges faced by exporters, and were used to create customised solutions based on prevailing requirements — ranging from accessing new markets, investing abroad, and protection for existing customers.

Building a Strategic Eecosystem

A comprehensive glimpse into ECI’s activities since 2018 shows its solid advancement in terms of goals and vision. One of the striking accomplishments was the company’s establishment in a record time of just 11 months.
ECI’s first mission, steered by its deputy chairman, His Excellency Sultan bin Saeed Al Mansoori, UAE Minister of Economy to Italy, concluded with a successful partnership with SACE, the Italian export credit company (CDP Group).

ECI later joined hands with the Abu Dhabi, Dubai, Fujairah, Sharjah and RAK Chambers of Commerce, and has informed the exports and re-exports sector through seminars. ECI has also tapped the banking sector — regionally and internationally — through partnerships with FAB, RAKBANK, Emirates Development Bank, Abu Dhabi Commercial Bank, Standard Chartered Bank, and Natixis.

ECI has partnered with international entities including Dhaman (the Arab Investment and Export Credit Guarantee Corporation) and Markel International. It collaborates with key ECAs like SACE, the Italian export credit agency, and the UK Export Finance and Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). ECI has memberships in associations such as Berne Union and Aman Union, and has been sending out an emphatic statement of commitment to its mandate.

Launch of a Specialised Product

The UAE government is committed to boosting the contribution and performance of SMEs and has established strategic initiatives to support funding. ECI participated with the launch of SME Protect, an export trade credit solution specifically designed for UAE-based SME expansion plans into high-growth markets.

It aims to improve ease of doing business, accelerate SME growth and sustain the UAE’s non-oil foreign trade growth development.

[caption id="attachment_16106" align="aligncenter" width="1000"] Volume of Non-Oil Foreign Trade. Billion USD 2011-2017, including Free Zone, & Warehouse (2016-2017)[/caption]

Path Ahead

ECI has a clear mandate to connect with various industries in the marketplace through interactive workshops to educate the UAE businesses about ECI’s solutions.

According to Global Industry Reports, 2019 has been a challenging year for the global economy. To help the insured UAE businesses cope with risks, it is crucial to understand the nature of challenges and risks. ECI’s role is to minimise risks and stabilise economic development by facilitating trade and investment, and affording access to funding. ECI believes that a strong credit agency corresponds to a robust economy — which in turn equates to a strong country.

In terms of specific sectors, manufacturing is one of the least insured. ECI understands that the reason behind this is a lack of understanding and a lack of knowledge on the risk associated with trade and exports.

The company believes that by tapping the existing openings in the insurance marketplace and educating local businesses, an export credit agency can augment the confidence of the insured while expediting the exporters’ turnover.