The Great Dictator Becomes More and More Isolated

Russian fat cats are, of course, no longer welcome in Europe. But now, their four-pawed relations have been declared ‘non grata’ as well. The executive board of the Luxemburg-based Fédération Internationale Féline (Charmingly abbreviated to FIFe) ruled that any cat bred in Russia or belonging to an exhibitor resident in that country may no longer partake in shows or other events sanctioned and/or organized by the federation. The board will consult with the Ukrainian Felinology Union (UFU) on ways to implement the boycott of Russian cats.

The Russia of President Vladimir Putin is becoming more isolated by the day as outpourings of indignation reach a fever pitch over the apparently indiscriminate bombing of Ukrainian cities and towns.

In Great Britain, football fans swapped the colours of their sides for the blue-yellow of Ukraine. Facing West Ham United on Friday evening, Liverpool supporters dedicated their hallmark chant You’ll Never Walk Alone to Ukraine in a truly moving scene of mass support, solidarity, and commiseration for the embattled nation.

Groundswell

In Europe and far beyond, a groundswell of support for Ukraine grew to tsunamic size and force as Russian bombs and missiles rained down on civilians whilst an outgunned yet brave army managed to hold the line.

Summarily expelled from sports, culture, politics, and markets, Russia is being ignored by the wider world and returns the favour, its president seemingly deaf to rhyme or reason – and convinced that he has been called upon to rid the world of a dangerous Jewish Nazi subjugating a helpless people tricked and fooled into believing that they constituted an actual nation.

The delusions suffered by a grotesque botox-enhanced potentate – Charlie Chaplin would have enjoyed a field day with that absurdly long desk and the puffy little man sitting at one end – are of a scale that could, and probably should, warrant medical intervention. President Putin, however, keeps digging. And his hole is getting deeper.

Markets tumbled – yet again – on Monday thanks to a looming embargo on Russian energy exports being orchestrated by the US government in close consultation with the UK and EU. In panicky early morning trading, Brent crude promptly hit $139 – just $8 short of its July 2008 all-time peak – before settling around $128 a barrel.

Worse: prices seem unlikely to come down soon. The International Energy Agency expects global oil demand to peak later this year with supplies lagging significantly due to capital spending cuts made across the US shale sector in the wake of the pandemic-induced oil glut when the price of a barrel of crude briefly dipped below zero as storage facilities reached capacity and oil had nowhere to go.

How the world has changed in just two years. Some industry analysts now predict oil at $200 given the bullish state of most economies and the fact that US shale or Iranian oil will not suffice to plug the gap between inelastic supply and buoyant demand.

Times 20

The sheer magnitude of the energy price upswing is often lost in a multitude of numbers. Dutch front-month gas, the European benchmark, soared as futures suddenly jumped to €335 a megawatt hour ($575 a barrel of oil equivalent) – up 74% from Friday’s quote of $193.  Just twelve months ago that same megawatt hour was being traded at $16.

Small wonder that stocks do not fare well. On Monday, the Stoxx 600 share index retreated 3% – accumulating losses of 10% since Russia embarked on its ill-fated invasion of Ukraine. Most markets managed to claw back some of their initial losses as the day progressed. By the close of trading, Germany’s DAX was off 1% and France’s CAC 0.8%. But markets retreated more than 20% from their recent high and thus officially entered bear territory.

For its part, the Russian rouble continued its slide, losing a further 8% and closing at 131 to the dollar in an unusually illiquid market.

Meanwhile, the Bloomberg Commodity Spot Index barrelled ahead, gaining 13% last week – the largest jump since records began in 1960.

Traders appeared riled by China’s surprisingly solid backing of Russia. Foreign Minister Wang Yi descended on the ‘wrong’ side of the fence and vigorously defended his country’s “everlasting friendship” with its neighbour to the north and condemned the US for trying to create an “Indo-Pacific version of NATO.” Mr Yi also said that China and Russia oppose attempts to revive the “cold war mindset”.

The parallel reality in which the thought processes of Messrs Yi and Putin – and their associates and supporters – come to fruition is truly frightening given that it results in doublespeak whereby verifiable truths are readily denied for a higher but ill-defined national purpose. Russians questioning the Kremlin narrative now risk fifteen years in prison for spreading ‘false information’ such as calling the war in Ukraine by its proper name instead of the officially sanctioned term ‘special military operation’.

Otherwise known as propaganda, the phenomenon is not so much new as it is being applied with an almost unhear-of level of cynicism as exemplified by Mr Yi and his supposed opposition to the exact cold war mindset that prompted President Putin to re-establish the borders of that bygone era.

Totalitarian Russia has outdone China but without a functioning economy, access to foreign goods and services, and the ability to travel. Flag carrier Aeroflot has been forced to scrap its global network and no longer serves international destinations except for Minsk in next-door Belarus which, arguably, ceased to exist as a sovereign country.

An iron curtain has once again been drawn around Russia. The country is being shunned and confined in the cage it had left but some thirty years ago. Only, it’s a much smaller case, one without European satellite states and without large swaths of Asian desert.


Change, Challenge, Autonomy and Teamwork: Secrets of SENER Group's Andrés Sendagorta

[caption id="attachment_21625" align="alignright" width="300"] SENER Group President and CEO: Andrés Sendagorta[/caption]

CFI.co gets to know Andrés Sendagorta, president of private engineering and technology specialist the SENER Group. It was founded in 1956 and is active in the fields of engineering, construction, energy, environment, and aerospace.

CFI.co: What are your hopes for the future of your business, and for the industry as a whole?

Andrés Sendagorta: Changes happen at a terrific speed, and we need to always be in the right place. Our intention is to grow and extend our reputation as an important industrial player. The need to respect and protect our planet is imperative and demands a great deal of responsibility — from all of us. At the same time, we need to secure our energy and raw materials access.

What relevant changes to legislation or regulation would you like to see?

Regulatory stability over time should lead to real, lasting, and profitable investments. Energy regulation in Europe needs some deep study.

Can you pinpoint any pitfalls to help newcomers to the industry?

Engineering is a cyclical sector, which depends on countless variables that are often out of your reach, so you must be receptive, patient, and very focused on your purpose. Above all you need to have the best engineers on board.

Do you have any anecdotes to illustrate your progress over the years?

I was once a carrier fighter pilot, so I am often asked about the differences between running a company and flying an aircraft aboard a ship. There are aspects in common: working under pressure, decision making, the ability to lead people. It’s essential to be in close contact with the world of technology and to be well trained. I have had the good fortune to deal with people of great personal and professional values.

How do ESG parameters and sustainability principles affect the way your operations are run?

We are a family business, and we constantly ask ourselves: "What are we here for?" and “How can we improve the world through technology and engineering?” We want to build a sustainable world and help it evolve towards sustainable business models, relying on science, technology and innovation.

What are the mid to long-term challenges you face?

SENER is always attentive to the evolution of disruptive technologies, products, and processes. This way, we can continue to differentiate ourselves in technological terms, and consolidate our position in territories where we have created a solid base. We hope to expand our industrial position and generate more alliances with important market players. We want to accompany other firms and industries in their process of energy transition, decarbonisation, and joining the circular economy.

What is the single most important requirement to become a global business?

Keep asking yourself, and your team, the following question: “How can we make our surrounding world better through our contribution in technology and engineering?” To become global, you need to understand the unique aspects of different markets. Some solutions can’t be applied to different situations.

How do you see as the short- to mid-term prospects for your industry?

These are uncertain times. We have not yet recovered from the pandemic in 100 years and a war has just begun in Europe, the consequences of which are yet to be seen. Apart from our four well-stablished sectors — aerospace, energy, infrastructure, and marine — we are moving into the medical diagnostic field.

What excites you about the business world in general?

The opportunity to make valuable contributions through our projects around the world — and to do so with ethical, social and environmental awareness.

What lessons did you learn from your earlier career experience?

Always try to have the best professionals onboard, people with deep values. And always make the effort to be at the leading edge of your specific activity.

What motivates and enthuses you about the business?

To provide a service to society, and to do it while operations are profitable. Also the opportunity to work with inspiring and highly qualified professionals.

What is special about your organisation’s management style?

The company belongs 100 percent to the family, so family governance is key. That must be respected to move forward. I like to say that the family business works like a carriage pulled by two horses: one of them is the commercial horse that understands results, markets, competitiveness. The other understands family pride, the way you have been educated, your roots. Both horses need to pull equally. I like to surround myself with committed professionals and let them do their jobs. I give responsibility to those who deserve it; these people are experts in their respective fields.

Can you share any management or organisational secrets?

Have trust and a taste for challenge. We like to serve by providing advanced and effective engineering solutions that facilitate society’s access to best services and products. Not a big secret…

What are the key strengths of your team?

They are highly qualified; we believe in them and support their performance. They produce ideas, and with this in mind, we offer them an environment with sufficient freedom to motivate individual initiatives. We give our people space to produce, and to anticipate others’ needs.

How important is your support team?

Teamwork is essential for us, and everybody is important — regardless of the specific work they are doing.

What are the key traits of a good corporate leader?

To get the best out of your people and allow them to truly work as a team.

What is the most important question people should ask about your business?

What are the main drivers that permit you to do what you do, and how do you do that?


Luke Haverhals: Tech Platforms Unlock the Superpowers of Plants to Combat the Plastic Menace

[caption id="attachment_21631" align="alignright" width="300"] Founder & CEO of Natural Fiber Welding: Luke Haverhals[/caption]

Plastic is affordable, widely available, durable and versatile — but its environmental costs have become too steep.

Great masses of discarded plastic swirl around the ocean and break down; scientists have found microplastics even in remote and pristine places such as the Arctic. Synthetic textiles are used to create about 60 percent of the clothing manufactured worldwide. And as those clothes are worn and laundered, they continuously shed microfibres into the air and waterways.

Luke Haverhals, CEO and founder of Natural Fiber Welding (NFW), is giving retailers and consumers an eco-conscious alternative to petroleum-based synthetic materials such as polyester, acrylic and nylon. He believes synthetics have had their day.

“When it comes to performance, we’ve learned that nature does it best,” he says. “We’ve been able to prove that not only can natural materials perform just as well as synthetics, but unlike plastic-based materials, they can also sustainably scale.”

The company works with natural fibres like cotton, flax, silk and wool to develop and scale circular textile solutions with uncompromising sustainability standards. NFW’s scientific breakthroughs began during Haverhals’ teaching career at the US Naval Academy.

Headquartered in Illinois, NFW holds eight global patents, with another 90 pending. Its technology platforms unlock the superpowers of plants. It has developed two key products in this vein — CLARUS® and MIRUM® — which have attracted investors and brand collaborations. NFW was launched with a grant from the US Department of Defence and fast-tracked in Fashion for Good's 2018 scaling programme. It raised $13m in a late VC funding round led by Ralph Lauren Corporation in mid-2020, and another $15m the following year’s round, led by The Community Development Venture Capital Alliance and BMW i Ventures. In December, NFW was shortlisted as a finalist in the Conservation X Labs Microfibre Innovation Challenge. The capital infusion will help to cover commercialisation and expansion plans, including 110,000 square feet of new manufacturing space and a threefold growth in the workforce.

“With our new manufacturing capabilities, and the support of companies like CDVCA and BMW i Ventures, we are advancing NFW’s mission to eliminate the need for plastics in the shoes we walk in, the upholstery we sit on, and accessories that surround us in our everyday life,” Haverhals said. “The extensibility of our platform and the tunability of NFW materials means that we can serve many customers spanning multiple large, global markets.”

The company has ongoing collaborations with leading brands. NFW and Ralph Lauren debuted the RLX x CLARUS® product line — the world’s first high-performance, 100-percent-cotton apparel — at the 2022 Australian Open. Consumers can expect to see CLARUS technology in some of Patagonia’s upcoming collections, and BMW drivers can soon enjoy a guilt-free ride with the MIRUM plant-based leather alternative.

“NFW has literally signed-on dozens of brand partners in the past couple months ... with hundreds of brands in our pipeline that all agree that plants and photosynthesis are the scalable answer to delivering performance, luxury, efficiency, economy, sustainability and circularity,” Haverhals announced on LinkedIn. “This is the beginning of a true revolution in product design that holistically respects people, animals and the planet we share.

“CLARUS breaks the stranglehold that synthetic, petrochemical-based, microplastic shedding textiles have on performance apparel. Consumers now have a very clear choice: enjoy the same comfort and features of synthetic performance apparel with the peace of mind that their clothing is from a renewable nutrient resource, contains meaningful recycled content, and will not contribute to persistent plastic microfibre pollution.”

NFW pledges to be a responsible steward of material abundance, with efficient supply chains that make use of renewable resources and textile waste. “We are pioneering an entirely new system that simultaneously enables all-natural performance fabrics while reducing waste and eliminating the need for synthetic plastics,” Haverhals said. “The textile industry is over-reliant on non-biodegradable petroleum-based synthetics. In addition, there is a gap in the industry for scalable, high-performance options for recycling natural fibres. Our solution balances performance, sustainability, scalability.

“Using abundant natural and scrap resources, we can tune fibres to outperform traditional textiles, making this process truly environmentally friendly.”


Sanctions Against Russia Resemble a Boxing Match

The economic sanctions against Russia announced last week by the US and Europe are having a profound impact on the Russian economy — and repercussions at home. As in a boxing match, the expectation is that blows to the opponent can knock them out, despite exposure on the puncher’s side.

The US has applied several sectoral and economic sanctions against Russia since the annexation of Crimea in 2014, and during military clashes in eastern Ukraine. Nothing has been comparable, however, to what was announced last week.

Between February 22 and 27, there were sanctions by the United States on the secondary market for Russian sovereign debt securities issued after March 1, and a German decision to suspend certification of the Nord Stream 2 pipeline. There have since been announcements — by the US, the 27 members of the European Union and the G7 countries — of the freezing of assets of Russian banks and some individuals, and controls on the export of technology products. This culminated with the removal of some Russian banks from the SWIFT system and the banning of transactions with the Central Bank of Russia.

[caption id="attachment_21641" align="aligncenter" width="900"] Figure 1: Bank of Russia - assets have been moved away from US and EU. Source: Bank of Russia, IIF.[/caption]

SWIFT is a messaging network connecting banks worldwide that is considered a backbone of international finance. SWIFT is a consortium managed by employees of member banks, which include the central banks of the US, Europe, Belgium, England, and Japan. Based in Belgium, the consortium links more than 11,000 financial institutions in 200 countries and territories, enabling international payments. In 2021, the system recorded an average of 42 million messages each day, including payment requests and confirmations, negotiations, and currency exchanges. About one percent of these are believed to have involved Russian payments.

Would there be any alternatives for Russians to transfer and normalise their operations outside of SWIFT? Russia has an one, the System for Transfer of Financial Messages, but it cannot be a replacement. By the end of 2020, the system included only 400 participants from 23 countries. Also, China's cross-border interbank payment system could not be a perfect replacement, at least not any time soon, as it does not incorporate SWIFT members.

Last week's sanctions are already having a significant impact on the Russian financial system and its economy. The value of the rouble collapsed. The Central Bank of Russia put interest rates up, to limit the transmission of currency devaluation to inflation. Restrictive capital controls, and possibly bank holidays, lie ahead.
Despite the strategy of reducing exposure since the beginning of sanctions in 2014, via geographic relocation of reserves and acquisition of gold, and changing currencies in commercial transactions — a kind of “de-dollarisation” — Russia has not become invulnerable and the impact will be great (Figure 1). The GDP contraction will not be light, given the tightening of financial conditions accompanying ultra-high interest rates and banks without access to foreign currency.

And outside Russia? Of course, the receiving end of payments — creditors, asset investors — will be impacted. The consequences will only be extended if the devaluation of the corresponding assets leads to some contagion effect: withdrawal of funds by investors in mutual funds forcing their managers to liquidate other assets in their portfolios to pay for the withdrawals.

[caption id="attachment_21642" align="aligncenter" width="900"] Figure 2: Annual EU27 natural gas domestic production and imports (TWh). Source: Bruegel[/caption]

The sanctions were tentatively designed to minimise their effect on Russian gas imports to Europe. The sanctions are more limited in scope than the broader targeting advocated by other countries to win Germany's support.

It will be through the rise in energy commodity prices — in addition to possible restrictions on the transport of Russian products — that the war in Ukraine will affect the economies on the other side of the fight. Also, because of a statistically proven asymmetry: what happens in the subgroup of energy commodities affects others, such as food and metals.

On top of that, the global supply of wheat will be negatively impacted, which is particularly important in regions such as North Africa and the Middle East. Russia is also a major supplier of fertilizers, palladium, and other products which may be affected by supply chain restrictions.

The inflationary shock coming from that, and higher commodity prices, will accentuate the dilemma faced by central banks on both sides of the Atlantic. How quickly and intensively can financial conditions be tightened in the face of inflation, while not bringing down the pace of economic activity? The deteriorating macro-economic outlook prompts analysts to predict that the Federal Reserve will opt for 25 basis points.

There is a fear that these economies would return to conditions like those of the early 1980s, when the second oil shock occurred while inflation was already high. The bet is that Jerome Powell and his colleagues at the Fed are not like Paul Volcker, chairman of the Federal Reserve at the time, whose option was to bring down inflation at any cost.

Returning to sanctions: of course, additional rounds extending the reach can still be adopted in new rounds of the boxing match. The Bruegel Institute, a Brussels-based think-tank, tackles scenarios such as how Europe would suffer from a halt in the flow of Russian gas (Figure 2).

The boxing match via financial and commercial sanctions has just begun. The willingness to seek Russia’s knockout in this way seems more robust than the fear of its consequences.

By Otaviano Canuto. First appeared in Policy Center for the New South.


Lord Waverley: First In, Best Dressed — UK’s Bid to Join Key Regional Trade Agreement

The United Kingdom has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement between 11 countries stretching from Vietnam to Peru, including Japan.

Its members contain some of the fastest-growing economies in the world, with an expanding middle class. Asia has taken centre stage to become a key global export destination. Membership of the CPTPP is central to trade strategy and key to ensuring future prosperity and influence in the Indo-Pacific. This partnership is potentially the most important regional trade agreement that the UK will negotiate with wide-ranging repercussions, strengthening of ties with international allies, and signalling commitment to free trade.

Representing one of the largest trading blocs in the world, home to half the global population, the wider Indo-Pacific region is the planet’s growth engine. If just Thailand and South Korea were to join the agreement, it would almost treble the long-run economic benefit from £1.8bn to £5.5bn.

It should be noted, however, that this is an accession process, not a new negotiation. It is not feasible to seek significant change with the goal of joining a high-standard agreement. The first phase of negotiations covered the UK’s compliance against each of the CPTPP chapters. Evidence has been submitted, which members are currently reviewing, before giving the green light to progress to the second phase and negotiate market access.

There is clear value and opportunity in working with bloc members to shape economic issues and be at the forefront of digital and trade provision innovations. Membership will deliver new opportunities for British business across many sectors, enabling the manufacture of products for various markets without the need to change processes, parts, suppliers, or components. This would be a critical enabler of supply chains, allowing companies to import and export more easily, and making investments more competitive.

Membership benefits would include modern digital trade rules that allow data to flow freely and swiftly eliminate tariffs on exports. Examples such as whisky, down from 165 percent duties to 0 percent in Malaysia, and reducing car duty to 0 percent in Canada by 2022, illustrate the benefits. Expansion to like-minded market economies is a key reason for the existence of the CPTPP. Membership will encourage free and fair trade, fight protectionism, and remove barriers to trade.

"There is clear value and opportunity in working with bloc members to shape economic issues and be at the forefront of digital and trade provision innovations."

Market access provides a single set of rules of origin, accumulating content from all member countries. If goods have at least 70 percent CPTPP content, they qualify for preferential tariffs. Questions regarding the protection of UK food standards, environment, IP, climate and data — and how this FTA will promote human rights, international development and union rights — are yet to be clarified.

There are differing approaches, across the CPTPP, to animal welfare, environmental protection, and the use of antibiotics and pesticides. Other questions that need to be resolved before accession is decided upon include rules of origin and the European Patent Convention, whose requirements jeopardise the UK’s membership of the European Patent Office.

An agreement would embody high standards in areas such as intellectual property, investment, procurement, rules on state-owned enterprises, and data flows. CPTPP has a dedicated chapter on financial services, which will open new opportunities. The provisions in that chapter include non-discrimination obligations and the liberalising of cross-border flows of financial information. There is also an annexe on professional services that encourages mutual recognition of professional qualifications.

No trade agreements should stand apart from human rights, workers’ rights, consumer rights, or gender issues. The content of negotiations also has important implications for consumers — the choices they make, the prices they pay, the standards they can expect and the rights they can rely upon. Consumers rightly expect the strengthening of four key priorities: maintaining health and safety standards of food and products, maintaining data security regulations that protect consumers’ digital rights, protecting the environment, and using trade to address inequalities.

More economies wish to sign up. Political sensitivities surround China and Taiwan, which both want to join. Thailand and South Korea do as well, with Ecuador being the latest country to indicate an interest. The sequencing of further applications is important with accession indicators suggesting that the UK will be dealt with before China and Taiwan. China will require significant work to meet CPTPP rules.

If they both succeed, the UK’s trade relations with those two countries will in future be regulated by the terms of the CPTPP and not, as now, by shared WTO status. The sequencing of these three bids for CPTPP membership, over which there is no control, could present challenges.

The least likely eventuality is that China, or Taiwan, or both, join ahead of the UK. In that case, they would have a say over the terms of accession. More likely is that two or three countries join simultaneously, in which case the UK will have no say over the terms under which the others join.

Should Britain join first, however, we will have an equal say with other CPTPP members over the terms of accession of China and Taiwan.

About the Author

Lord (JD) Waverley
Independent Member
House of Lords

Twitter: @LordWaverley

LinkedIn: linkedin.com/in/jdwaverley


Making Expo 2020 Deeply Personal: How Accenture Helped Put the Visitor at the Heart of the World's Greatest Show

[caption id="attachment_21664" align="alignright" width="300"] Dubai[/caption]

When we first started working with Expo and Etisalat Digital over six years ago, they had bold and ambitious plans for what they wanted Dubai's Expo to be. Now that it's all over, we can say without argument that Expo2020 has lived up to those goals despite a global pandemic. It has been a privilege to be the Digital Services Partner of what ended up being a global mega-event. However, for Accenture, the key to success was not the scale, although that was impressive, but the personal experience that each visitor had.

Our role as a Premier Partner was all about creating one of the smartest and most connected places on Earth, but not just for the sake of it. The intelligence and connectivity had to be in service of a bigger goal: the Visitor Experience. Expo, Etisalat and Accenture worked out from the beginning that an individual personal experience for each visitor should be the golden thread that tied everything else together. So we set out from day one to put the visitor at the heart of our thinking.

When Accenture started to work with Expo2020, it had a straightforward plan that was right for that time, but two factors combined to cause significant disruption. Firstly, the pace of technology innovation was accelerating, significantly giving the potential to better understand and serve visitors. And secondly, what those visitors wanted and expected changed considerably over the years, not just because of the impact but also because of how they consumed services from other providers like Netflix, Airbnb and Google.

"Our integrated intelligent systems for Expo teams, nations, vendors and suppliers – delivered end-to-end and integrated solutions, driving real connections."

Today, with Expo now in the rearview mirror, we can see that the event proved an ideal platform to use the latest innovations and solutions to address many of the global challenges the world will face in a post-COVID era, such as the future of work, energy transition and social change all of which aligns strongly with Expo2020's core themes of Sustainability, Mobility and Opportunity.

From an Accenture perspective bringing Expo to life was a living example of our purpose in action – delivering on the promise of technology and human ingenuity. To deliver the value that Expo was looking for required a truly One Accenture approach bringing together our expertise as a global leader in Strategy and Consulting, Interactive, Technology and Operations across more than 40 industries, all powered by the world's largest network of Advanced Technology and Intelligent Operations centers.

Helping the Expo bring its story to millions worldwide, Accenture developed Expo 2020's visitor-facing digital channels, including Expo 2020's official mobile app, virtual assistant, website, physical and digital Expo 2020 Map, as well as back end platforms as CRM, campaign management and customer profiling. The suite of digital channels leveraged Artificial Intelligence (AI), NeuroLinguistic Processing (NLP), and advanced analytics to ensure every individual's accessible and relevant experience. Delivering a personalised experience to millions of visitors meant integrating over a dozen applications, systems and platforms from multiple vendors to create a straightforward ticket-purchasing journey and access control.

Our unified approach consolidated the various systems to optimise the end user's experience. As a result, visitors benefited from a one-stop destination – a simple yet powerful, efficient, fast, and accessible cross-channel platform in the palm of their hands.

Our integrated intelligent systems for Expo teams, nations, vendors and suppliers – delivered end-to-end and integrated solutions, driving real connections. These intelligent systems supported various Expo teams from employee to participants and from visitors to partners to achieve their goals using resilient, reliable, and secure applications. For example, the Participant Portal, developed for Expo 2020, was a one-stop-shop for the more than 190+ participating countries and partners to submit their Pavilion designs, themes and content on an interactive platform that integrated authorisation, supply chain management and workforce licensing functions.

We also integrated and stage-managed the myriad components and applications behind the scenes, underpinned by our Services Delivery Platform (SDP). The SDP integrated data from more than 80 different applications, including third-party solutions and government authorities, orchestrating the digital journey for participants and visitors.

Our tailored services delivered via the Expo 2020 mobile app (which we developed) helped visitors pre-book specific time slots or reserve entrance timings as part of a smart queue management system. In addition, users could manage their bookings, send and share tickets, participate in a referral program and retrieve lost tickets.
Amal – an AI-powered Visitor Assistant developed in collaboration with Smart Dubai – helped gather information on shows and attractions and give live feedback throughout the six months of the Expo. Offering services on multiple platforms, including the Expo 2020 website and the mobile app, Amal processed and analysed volumes of information to answer visitors' questions accurately and fast. The platform was designed to learn and automatically develop and improve offered services to visitors.

Finally, as a Premier Partner, Accenture had the opportunity to create and run a dedicated venue at the heart of Expo 2020 Dubai, which we called The Accenture Exchange, designed to show our clients and employees the best of what Accenture could offer and how we used it to help Expo. At the Exchange, we had some of Accenture's most powerful, cutting-edge and engaging innovations for the duration of the Expo. As an immersive environment, the space showcased Accenture's innovative demos in artificial intelligence (AI), blockchain, cloud, quantum computing, machine learning and, in the later months, the Metaverse. Demos included information security and customer relations solutions, e-ticketing technologies, AI-powered virtual assistants, geolocation services, and more. Over the six-month event, the Accenture Exchange hosted more than 1000 clients for events covering key areas such as sustainability, energy, health, travel and tourism, and global payments.

As I look back now at the six months that Expo was open and the six years we worked with Expo 2020 and Etisalat Digital to create the world's most successful Expo, I am full of pride for what our One Accenture team achieved. We learned many things over that time, but more than anything, we learned that when you work in true partnership with your clients and partners and focus on putting the customer at the heart of everything, then nothing is impossible. I believe what we achieved at Expo 2020 will be the blueprint for future events, and not just other Expos, for years and that truly shows Accenture on its best day.

[caption id="attachment_21665" align="aligncenter" width="300"] Author: Angelo Lorusso Managing Director and Accenture's Client Account Lead for Expo 2020[/caption]


CBRE: Multifamily Assets Consolidate Real Estate Investment Growth

Real estate investor appetite for European multifamily properties has been thriving in the past decade. Resilient income-driven performance, sustained by strong occupier market fundamentals and long-term socio-demographic trends, should continue to fuel the rise of this asset class.

Last year ended by beating European multifamily records with nearly €100bn invested. With a compound annual growth rate of over 15 percent in total investment into the sector between 2012 and 2020 and a larger than 50 percent annual increase in 2021, multifamily has moved from the fringes of investors' barometers to sit firmly in the sights of those looking to deploy capital. Mega-deals have taken the investment market to new highs, such as German-listed Vonovia’s takeover of rival Deutsche Wohnen for around €23.5bn (which included €1bn in nursing home assets, or AXA’s €2bn purchase of a portfolio developed by intermediate housing provider In’li in the Greater Paris region.

Robust factors underpin the performance of the multifamily sector. These include continued urbanisation and strong city demographics, changes to household formations, affordability challenges, and persistent supply-demand imbalances. These factors are typically de-linked from economic cycles and have allowed the sector to continue performing well during a period of wider economic instability through 2020 and 2021.

Strategic Partnerships

There is a general shortage of modern, efficient investment grade stock in mature multifamily markets, while the opportunity to buy fully stabilised assets is virtually a non-starter in nascent investment locations. With compressing yields, many investors are also looking up the value chain towards development opportunities and taking advantage of local partnerships or in-house development expertise.

[caption id="attachment_21669" align="aligncenter" width="1000"] Figure 1: European multifamily investment sharp increase in 2021. Source: Savills Research[/caption]

With the ownership of a scaled platform the continued goal for many investors, some are looking even further up the value chain and taking stakes in developers as a way of securing pipeline, or working on a more strategic manner across a number of sites.

The 32 percent of equity invested in the European multifamily sector during 2021 came from cross-border investors, roughly in line with the five-year average. Nearly three-quarters of cross-border capital invested throughout 2021 came from other European countries, significantly above the five-year average (52 percent). Asian and North American money accounted for around 10 percent of total cross-border investment, but are increasingly involved in assessing deal opportunities.

Urbanisation Trends

Demographics probably constitutes the most relevant factor when assessing residential property investments. As in most regions, population growth prospects are expected to be impacted by an increasingly ageing society and a subdued birth rate in the coming decades. Despite a muted top-down picture, some European countries are likely to experience a dynamic population development between 2020 and 2035 (see Figure 2). This is evident in countries such as Sweden (ca. 13 percent) and Ireland (ca. 10 percent).

Despite the increasing digitalisation of the job market, which enjoyed an additional boost from the pandemic, urban centres will remain the hotspots for the service sector, which makes up the largest stake of the job market. These locations are likely to remain attractive due to their cultural and entertainment offering. However, as home- and near-office activities are expected to gain traction, suburban municipalities and well-connected secondary cities — particularly locations with strong public transportation links — will probably become more attractive. This could also influence the geography of the European multifamily market on a micro-level.

[caption id="attachment_21670" align="aligncenter" width="685"] Figure 2: Expected demographic growth 2020 - 2035. Source: Oxford Economics[/caption]

The threat of regulatory changes constantly looms over the sector. Despite record levels of investment, there remain some headwinds, not least political interventions in the housing and investment markets that could restrict investment opportunities and deter potential new entrants.

Regulatory changes were felt in various locations over the past year and the outlook in many cases remains uncertain. The best-documented intervention was the rent freeze introduced by the Berlin government and its subsequent removal following a national court ruling. The new coalition government does not look likely to grant the state’s wishes to grant it the legal mechanisms to re-introduce the freeze, but popular and media perception will continue to influence investor behaviour.

Elsewhere, Spain’s Housing Law has progressed and includes provisions for rent control (already enacted by Barcelona) and taxation of empty flats. During last year, the Irish government tightened permitted rent increases in Rent Pressure Zones (RPZs) and introduced a transfer tax surcharge on bulk purchases of single-family rental homes.

At a broad level, most investors are generally not deterred so long as regulation is stable, well-signposted and proportionate, but local and national governments need to ensure private capital is not deterred from helping meet housing related challenges. These include facilitating newbuild delivery to ease supply constraints and renovating stock to improve quality and energy efficiency.

Europe’s multifamily market has grown from a small, geographically concentrated market to an investment opportunity with more depth and complexity. Despite some near-term concerns over rising interest rates, multifamily returns are still significant, and it continues to be one of the more favourable real estate sectors across the continent. Equally investors are turning to multifamily-adjacent sectors — particularly shared and single-family rental — to achieve higher returns and bring portfolio diversification benefits.

By David Casas Alarcón Property Management Accounting Lead at CBRE’s European Center of Excellence


AVEVA: Software is the Key to Sustainable Industries

Digital thinking and data-led operations will accelerate the drive to net-zero and a decade of action.

By Peter Herweck, CEO of AVEVA

[caption id="attachment_21676" align="alignright" width="300"] CEO: Peter Herweck[/caption]

The world is on the cusp of transformation to sustainability. Global leaders are faced with a golden — but finite — window of opportunity.

Climate change effects have accelerated and are already impacting countries across the globe. But as international players look to address energy efficiency and emissions, targeting sustainability has shown itself to be an important lever of global growth and innovation. Making the most of these tools can help us meet the challenges — and bring about a new era of energy and resource efficiency.

The UN has declared the 2020s as the decade of climate action. Without immediate efforts, at scale, we will miss the Paris Agreement goal of limiting global heating to 1.5°C. Now is the time to think about the role that industries can and must play.

AVEVA Software Drives Sustainability

Despite the gravity of the crisis, there is good news: the software to enable companies to reach net-zero exists — and it is affordable and accessible.

Fourth Industrial Revolution tech such as AI, machine learning, cloud computing, biotechnology and the industrial internet of things can help to achieve 70 percent of the United Nations’ Sustainable Development Goals over the next decade, according to the World Economic Forum.

Sustainable development is within our reach — but getting to that point demands a new way of thinking.

Sustainable and Digital

With the private sector accounting for 75 percent of global GDP, businesses have a responsibility to work with governments and policymakers, and digital technologies are a key part of this plan.

An enterprise supported by a digital data backbone is more agile, innovative, and resilient. It can also be more sustainable and carbon-neutral.

Consumer goods and industrial chemicals manufacturer Henkel realised that supply-chain resource efficiency slashed filling-line waste and energy consumption by up to 16 percent. It introduced digital solutions to track activities along the value chain, from raw materials to finished goods. One of North America’s largest clean power generators, Canada’s Ontario Power Generation, boosted energy efficiency and saved $4m by implementing the AVEVA PI System and AVEVA Predictive Analytics solution to optimise performance of their hydro-electric and nuclear power networks.

Window for Climate Action

AVEVA believes that a tremendous opportunity exists for industries to build new, more sustainable business models. This decade of action will leave the world changed.

Companies that proactively embed data intelligence and predictive analytics throughout their value chains will be the first to reap the benefits of this new era.

Welcome to the age of performance.


Rebecca Carter, WiseEnergy: Aligning the Stars to Create a Smart Solar System

When Rebecca Carter joined WiseEnergy as COO in February 2019, she was seeking to return to an international role in a socially responsible industry with enormous growth potential.

[caption id="attachment_21679" align="aligncenter" width="2000"] Rebecca Carter, Global Managing Director at WiseEnergy, with the Senior Leadership Team of the Company[/caption]

She was successfully assimilated into the renewables sector and within nine months she had been promoted to global managing director, responsible for the company’s operations in eight countries across Europe, America, Africa and Asia.

Carter was employed for her experience of running operations in multiple markets and her ability to take a holistic approach to a global business, but a mere four months after taking on her role, the Covid-19 virus struck — and the resulting pandemic meant a radical reappraisal of working practices.

She saw this as a mixed blessing. Obviously she would miss the face-to-face aspect of her position, but she would be able to employ technology to forge strong relationships through interpersonal skills honed during a diverse and multifarious career.

After obtaining her PhD in Neuroscience from Cambridge University, she spent two years at Marakon Associates, which gave her a good grounding in strategy and finance. Seeing an opportunity to combine her business acumen with her scientific background, she joined Bristol Myers Squibb as a UK scientific adviser before transferring to Paris to lead European Medical Communications, helping launch a new drug for Hepatitis B in the EMEA region.

In 2006, she took an MBA at the London Business School and was subsequently appointed associate director for sales and marketing in the UK and Benelux.

After almost a decade working in the pharmaceutical industry, a change of direction seemed to be in order and she embarked upon a new journey, first as director of sales and marketing, and subsequently as director of organisational strategy, planning and communications at The Challenge Network, the leading UK charity for creating a more integrated society.

This involved working on a local level across England to bring together young people from different backgrounds with the aim of connecting communities and building trust: over 100,000 adolescents benefited from programmes by The Challenge during her time there.

Six fulfilling years later saw her yearning to return to work in an international environment, while at the same time staying in a socially responsible sector. Renewable energy seemed the perfect fit and she joined WiseEnergy.

She has repeatedly demonstrated her ability to use her scientific and business capabilities to maximum advantage. She says of her decision to join WiseEnergy: “This is a rapidly growing business and sector, and I feel very lucky that, slightly late in my career, I joined the renewable energy sector — and specifically WiseEnergy. I really, really enjoy it, and love seeing how people work together to make great things happen.”

Collaboration and teamwork have formed the bedrock of her career and she is in her element managing a team of diverse talents, infusing them with her enthusiasm for “their sustainability mission”.

She strongly believes in offering employees opportunities, no matter where they are based, and views investing in technology as a key way of doing so. Other examples of good employment practices at WiseEnergy include hybrid working, providing all employees with 30 days of annual leave a year and offering access to psychological support services (the company has several members of staff trained as “mental health first-aiders”).

Carter has introduced monthly virtual meetings for all WiseEnergy employees, and every quarter they hold a virtual “townhall” for every member of staff across the group. This was essential during the pandemic, but continues to be practical “given we will never have all employees working together in the same office”.

The company´s commitment to diversity and inclusion is a cornerstone of its corporate ethos and many women hold senior position in the organisation.

It would be fair to say that — having warmed to every task presented to her — Rebecca Carter has earned her place in the sun.


Spring Reads: Three Business Books on the CFI.co Radar

Naomi Snelling buries herself in some inspiring works that bring meaning — and more — to corporate life.

Deep Purpose: The Heart and Soul of High-Performance Companies by Ranjay Gulati

A wave of books about corporate purpose has broken over 2022, and this pithy offering from Ranjay Gulati serves up useful advice on charting a principled corporate course.

Aimed at business leaders, entrepreneurs, and heads of organisations, Deep Purpose gets to the core of issues facing business: the need to connect with employees and stakeholders to create a sense of belonging.

A cutesy set of ethical values just won’t cut it. Many businesses have dabbled in sustainability policies without truly aiming to lower their carbon footprint; some demonstrate a similarly tenuous grasp on “purpose”.

For measurable results, businesses need to embrace deep purpose — as opposed to convenient purpose, or purpose-as-disguise. This, says Gulati, is where the magic is, and it’s rooted in the concept of a wider measurement of “success”. When an organisation is rooted in meaningful purpose, it is possible to have your cake and eat it too. You get to outstrip your competition while helping humanity.

Far from being a fluffy indulgence, the art and science of creating that purpose is what sets great companies apart from the pack. Gulati’s book details the steps of the journey, packed with practical examples. It’s a pragmatic guide that goes beyond the adoption of purposeful words to the making of ideals and goals to drive a business.

Most of the case studies are American, but the concepts and analyses can be applied to businesses anywhere. Gulati’s own sense of discovery and transformation shines through, making his book an inspirational read. One not to miss.

The Power of Regret: How Looking Backward Moves Us Forward by Daniel H Pink

Like all Daniel Pink’s insightful books, this one is delivered with empathy and clarity. In characteristic straight-from-the-hip style, Pink illuminates the significance of regret. By showing us how to get our heads around this complex emotion, he allows us to use it as a momentum driver, and a force for good.

Regret is a universal human emotion, complete with a range of processing and response styles. Essentially, regret can be resolved or reframed. One of the tools elaborated in the book is projecting forwards: helping to reframe a situation with an understanding of whether or not your choices will matter.

Many of us have regrets that play on our minds, and this book helps us to examine that. Past mistakes should not paralyse us or stop us from moving forward: recognising, acknowledging, and processing regret is the key habit to adopt.

All That We Are by Gabriella Braun

If you’ve ever wondered why people behave the way they do, then this book is for you. Packed with relatable and moving stories, Braun’s gripping work is an accessible and insightful read that focuses on the unconscious human processes that operate in team working environments.

With case studies and anecdotes, Braun shows how psychoanalytic techniques can be applied to professional as well as personal environments.

This book is a great choice for anyone wanting to understand more about relationship dynamics — and a must-read for anyone interested in psychology.


Graphite and Graphene for the Green Transition: Tirupati Graphite Leading the Way

[caption id="attachment_21688" align="alignright" width="242"] CEO: Shishir Poddar[/caption]

As the world moves deeper into the energy transition, new materials are needed to support technologies that will lower carbon outputs for the future.

Graphite is officially listed as a critical mineral in the EU and the US. Its potential is vast: it has 150 applications, improves energy efficiency, and reduces carbon emissions in sectors from concrete manufacturing to fire safety.

Demand for the mineral has been further spurred by the transition to electric vehicles and is expected to grow threefold by 2030. Tirupati Graphite is a fully integrated specialist graphite and graphene producer with operations in Madagascar and India.

The firm works across the supply chain to mine and efficiently process graphite with bespoke carbon- and cost-saving equipment, and develops new technologies that promote lower emissions.

CEO Shishir Poddar is enthusiastic about the company’s growth parallel to the increase in demand. "Our growth projects across the primary graphite division remain on-track to achieve total flake production capacity of 84,000 tonnes annually by the end of 2024,” he says, “in line with our vision to be a world leader in the graphite space.”

Tirupati’s global goals reflect the broader trend of diversifying the geography of graphite suppliers. Governments are co-operating to ensure a secure supply chain for critical transition materials, and Poddar notes that Tirupati Graphite “provide an essential alternative to Chinese sources”.

High-Value Initiatives

The company embraces its responsibility to make a sustainable impact in the communities in which it operates. “We contribute towards a greener globe,” Poddar says, “and welcome this as an opportunity for value creation.”

As the mining sector is held to higher standards for monitoring community impact, Tirupati Graphite aims to add value with well-considered environmental and community initiatives, as outlined in its first sustainability report.

To develop high-value and maintainable initiatives, Tirupati consulted with communities and government bodies surrounding its projects, gaining an in-depth understanding of their needs. It has provided essential infrastructure, including drinking water facilities in four villages and 65km of road connecting projects, villages and schools. It prioritises reductions in waste and energy consumption, repurposing sand from production for house construction, and donating solar streetlights to the community.

Innovating for Sustainability

Tirupati Graphite attains industry-high recoveries of over 85 percent of graphite from ore with innovative technologies. It extracts materials as by-products to streamline processes and deliver zero-waste.

The commitment to efficiency is powered by the Tirupati Graphene & Mintech Research Centre, which leverages in-house graphite expertise to create more effective processing technologies and equipment.

Tirupati Graphite recently announced the development of a column flotation device that reduces power consumption during the flotation stage of graphite processing by around 40 percent. Installing this technology in Tirupati’s Vatomina plant and upcoming processing capacities in Madagascar will eliminate corrosion and wear in flotation and reduce the number of stages required to achieve desired graphite purity levels. The overall costs of maintenance and production are lowered, along with energy consumption.

Poddar sees this as crucial to Tirupati’s mission for both planet and business. "We believe in continued innovation and technological improvements,” he says, “and we make an important contribution to the energy-transition economy. In the process, we seize opportunities to create sustainable value for our shareholders."

Sustainable Materials and Tech

While the primary operations in Madagascar provide high quality flake graphite, the advanced materials that derive from it are essential to the energy transition and global sustainability goals.

Developing a suite of advanced graphite products for energy storage and e-mobility, thermal management, flame retardants and composites is core to Tirupati’s activities. Graphene, the first 2D material discovered, remains a focus area. Graphene can be just one atom thick, a wonder material with unprecedented strength and conductivity.

Tirupati believes that it has overcome the key technological and commercial barriers to commercial graphene applications in the development of composite materials that reduce consumption of metals and materials. It also expects to commercialise the use of graphene in concrete, which can cut consumption and the emissions associated with construction.

The suite of expandable graphite-based materials Tirupati manufactures provides the key ingredient for graphite-based flame retardant, effective in reducing melt dripping, smoke, and toxic gas emissions. The ultimate benefit is in reducing the threat to human life. Innovations such as this contribute to fire-safe environments and demonstrate graphite’s many applications.

Poddar sees massive potential for these technologies, and Tirupati Graphite’s role in developing them. “Graphene and advanced materials using green technologies are not only unique, but also application-friendly,” he says. “We expect our hard work to bear fruit in the not-so-distant future."

By taking a holistic approach, Tirupati Graphite has developed energy-efficient manufacturing technologies, carbon-reducing advanced material applications — and sustainable value for stakeholders.


A Reacquaintance with Inflation: Safe Havens in Short Supply

An entire generation of workers, executives, and entrepreneurs has never experienced inflation and know the phenomenon only from history books. The Great Inflation of the 1970s is usually attributed to the sudden rise of oil prices after OPEC asserted its power in the wake of the Yom Kippur War. However, monetary policy loosened on the wrong side of the Keynesian equation also played a part.

Those were different times indeed when Richard Nixon, a staunch Republican, continued to spend lavishly on the Great Society and the Vietnam War both inherited from Lyndon Johnson, his Democrat predecessor. Arriving in Washington as a fiscal conservative, President Nixon soon and agreed to a big expansion of Social Security legislation and the imposition of wage and price controls. He also made the dollar into a fiat currency by severing its last link to gold, sparking a major devaluation, and slashing the value of the petrodollars held by Middle Eastern oil barons.

The Nixon experience holds warnings for today’s policymakers. By forcing the US Federal reserve to keep interest rates low – thus ensuring full employment and his own 1972 re-election – President Nixon set the stage for the long recession that was to follow, and which saw inflation rise to 14% in 1980 and jobless numbers to 10%. President Nixon, by then long gone, essentially got the worst of both worlds by stubbornly ignoring inflationary pressures.

Different, Dangerous

The present moment is slightly different, and much more dangerous, from the one lived in the 1970s. Today, central bankers enjoy precious little monetary wriggle room thanks to their bloated balance sheets and near-zero interest rates. Structural factors that kept inflation at bay, such as efficient global supply chains, are crumbling.

Though OPEC may constitute a spent force, energy prices are being pushed to record-highs by war and fears of climate change. Fiscal discipline has taken a hit as governments rich or poor bankrolled businesses and households to the tune of untold trillions during the corona pandemic.

All our collective peccadillos – from structural overspending and geopolitical intrigues to reckless globalisation and carbon emissions – seem to have merged into one Big Fail. In February, the world’s 30 most prosperous countries registered an average 7.7% jump in consumer prices, up from just 1.7% in the same month last year. Central banks have, of course, responded by (tentatively) raising interest rates but consumers and business alike may have trouble adjusting to the coming liquidity squeeze. Absent accommodative financial conditions, historically high levels of private and public debt could well become problematic.

Saddled with a $9 trillion balance sheet, the US Federal Reserve now seems determined to squash inflation by aggressively raising interest rates and offloading treasuries and mortgage-backed securities at a monthly clip of about $105 billion. During her Senate confirmation hearings, Fed vice-chair nominee Lael Brainard invoked former chairperson Paul Volcker whose tight monetary policy tamed inflation in the early 1980s – and sparked a deep recession.

Ms Brainard said that inflation would be particularly painful to households with limited resources and warned that price increases will likely outstrip wage growth, depriving workers of purchasing power to the ultimate detriment of the entire economy.

Not Amused

Ms Brainard is also troubled by the effect on already stretched global supply chains of both the war in Ukraine and the reimposition of draconian lockdowns in mainland China which is battling a resurgence of the Corona Pandemic. During the hearings in Washington, Ms Brainard suggested that both developments stress the need for a decisive tightening of monetary policy. Markets were not amused. Bond prices dropped (as yields rose) whilst the S&P 500 stock index interrupted a modest rally to retreat 1.3% after Ms Brainard was done speaking.

The risks associated with the Fed’s newfound assertiveness are considerably higher than in Mr Volcker’s days. Back then, the Fed chair risked a recession. Now, central bankers must also factor in a leveraged financial sector bloated with derivatives. The financialisaton of most industrialised economies – aka the mother of all bubbles – may yet exact a terrible toll as increases in productivity are unlikely to compensate for higher interest rates. Another notable difference with former times is that the US debt-to-GDP ratio currently stands at an all-time high of 137% (2021) versus a record low of barely 32% in 1981.

The Fed and other major central banks are, in essence, looking to (fairly) rapidly unwind quantitative easing in its many forms without causing the patient to succumb to withdrawal symptoms.

In case this gets a bit too hectic, watch the price of gold futures. Currently flat or falling marginally and decidedly unexciting as an asset class, the bulls have encountered some resistance to break through the $2,000 per troy ounce ceiling as the yield on treasury paper improved. However, as central banks get into a funk over inflation, geopolitical tensions persist or escalate, and the unwinding of QE introduces negative pressures on the stock market, safe havens such as gold will likely be in short supply.


Société Générale Congo: Innovation in Congo Puts Societe Generale in Leadership Position

Société Générale Congo launched in April 2012 as a subsidiary of leading European financial services provider Société Générale Group. It has since become one of the main players in the country’s banking sector.

[caption id="attachment_23357" align="aligncenter" width="1024"] Société Générale Congo: Headquarters[/caption]

Managing director and CEO Alain Calmels has been with Société Générale Congo since 2019. He is in charge of supervising the client services division (grouped back offices) and relations with social partners, banks and regulators. He and Société Générale Congo’s team of professionals combine expertise and individual dedication to offer tailor-made, relevant and optimised solutions — adapted to individual client needs.

The Societe Generale network includes five branches in the main cities of Brazzaville and Pointe Noire. “We provide a comprehensive range of universal products and insurance, remote, and daily banking services for corporate, professional, and individual clients,” says Calmels.

Société Générale Congo addresses all local and international economic actors and sectors of the Congolese market, with an impressive product portfolio: current and classic savings accounts, term deposit, personal, vehicle, and back-to-school loans, as well as personal-loan real estate and overdraft insurance

For professionals and companies, Société Générale Congo offers spot credit, overdraft facilities, discounting, vehicle loans, investment credit, term deposit and leasing (Sogelease).

International Operations

For importers, Société Générale Congo offers international transfer, documentary credit, documentary remittance, guarantees and SBLC. For the export side, it provides documentary credit with confirmation and documentary remittance — managed in-house by the expert team.

Transfers and management of export flows are speciality services, with advantageous conditions on transactions between XAF and foreign currency.

Prior to his appointment, CEO Calmels was deputy managing director of Societe Generale Banque de Polynesie, and previously worked in the positions of secretary-general, senior inspector, and deputy inspector.

[caption id="attachment_23358" align="aligncenter" width="500"] Managing Director & CEO: Alain Calmels[/caption]

He achieved a Master of Public Affairs degree cum laude, and is bilingual in English and French. He graduated from the Faculty of Business, Economics and Law at the University of Queensland, Brisbane, and was awarded the dean’s recommendation for his part in the university’s Honours Exchange Programme.


Active Re COO Luis Antonio Ibáñez: Sound Underwriting, Respect, and an Eye for Opportunity…

[caption id="attachment_21703" align="alignright" width="300"] Active Re Global Chief Operating Officer: Luis Antonio Ibáñez[/caption]

‘Our policy? No policy. We have strategy instead,’ quips COO of reinsurance giant Active Re

Active Re, founded in 2007 and headquartered in Barbados, has business development offices in Miami, Panama City, and Madrid.

The company has 54 representatives around the world, covering eight languages and serving 346 insurance companies and 117 reinsurance brokers in 107 countries.

It has a global portfolio of products and solutions, as well as traditional lines of reinsurance and risk management.

CFI.co put a few questions to chief operating officer Luis Antonio Ibáñez…

What are your hopes for the future of your business, and for the industry as a whole?

It’s a resilient industry, with the usual ups and downs. Insurance and reinsurance performed brilliantly during recent crises, overcoming the financial crash in 2008 and the recent pandemic.

In recent years, Active Re has detected the right opportunities — providing the services and support that mainstream reinsurers were not in a position to offer. We took some innovative approaches, and earned the trust of our clients. That was the key to our growth and success.

Now we must consolidate these relationships and continue implementing creative business models. I think there are many opportunities ahead.

Can you pinpoint any pitfalls to help newcomers to the industry?

You must stick to one thing in this business, whatever your strategic approach, and that is sound underwriting. You must respect the techniques and rely on people with suitable experience.

The most challenging part is balancing a top-line approach and a bottom-line one. You won’t last long if you focus on the top line and drop the technical fundamentals. But if you’re too wary of risk, you’ll miss opportunities. A good manager must be well advised by underwriters, be proficient in the business, and bring balance to both approaches.

What is the most important requirement to become a global business?

A reinsurer does not have excuses to remain local or regional. Becoming global is essential. Spreading risk is the best technique to protect your capital, and territorial diversification is necessary. A reinsurer does not need to move into new locations to expand its business geographically.

There are three requirements to become global: have a good rating, visit the markets, and trust the right people.

What excites you about the business world in general?

The business world is endless: you can always find new opportunities and people interested in doing business with you. There are people you can help, and people that can help you. I see business as a creative challenge where we must provide more efficient solutions, and work with smart people.

This challenge has a straightforward goal: to improve all participants' lives by generating profits for everyone.

So, two fundamental aspects of business that excite me: (i) you can always do more, and (ii) there is risk in the decisions, so we must do our best to decide well.

What lessons has your career taught you?

That you must first understand what a business is about, if you intend to manage it. My most admired senior managers were people with strategic and practical views who knew by heart the peculiarities and the details of the business.

I also learned that when you get to a reflected conviction — one based on knowledge, elaborated reasoning and inputs from other professionals — you must try to implement it, even if nobody has done it before. A reflected conviction is not just an idea; drawers are full of brilliant ideas.

What is special about your organisation’s management style?

Our policy is that, aside from our stringent (and essential) compliance rules, we do not have a policy. We do have a strategy, however.

What do I mean by that? We don’t have a predetermined picture of the classes of business we want to grow and which ones we want to reduce, nor a clear territorial target. We want to find good opportunities wherever they are.

If we get an opportunity in a new class, we try to find the right underwriter, or a qualified opinion. We try to find the right broker in that market, or go there. Our business is very much about finding and identifying the right people.

We have a strategy for the company: protect our capital, stay with a lean structure, provide excellent service, and write profitable business. The rest, we can accommodate. I think our business partners appreciate this.

Can you share some management or organisation secrets?

Yes, but don’t tell anyone. They are: (i) work hard, (ii) never stop learning, and (iii) think a lot.

What are the key strengths of the team?

We are few in number, and based in many different countries. Each person is responsible for their tasks; there is no rigid supervision. Our staff is autonomous, accountable, and experienced in the class or territory under their responsibility. There is an element of entrepreneurship in all of us.

How important is your support team?

Luis Antonio Ibáñez: Everyone is essential in an organisation with such a lean structure.


Charlotte McCurdy Getting Creative about Climate Change: Time to Plant the Seed

[caption id="attachment_21707" align="alignright" width="300"] Designer & Researcher Charlotte McCurdy[/caption]

Charlotte McCurdy, a Rhode Island School of Design graduate and professor, wants creatives to join the fight against climate change.

McCurdy believes the world needs more STEM innovators to solve its most pressing challenges — and more dreamers to ask the right questions. “Design is demonstrably an important factor of choice,” she says. “Design is the business of shaping desire, and therefore behaviour, and we need a lot of that right now. We need creative practitioners of all stripes to be imagining the possibility of a better future.”

McCurdy is an interdisciplinary designer and researcher with a passion for materials innovation and decarbonisation. Petroleum-based plastics are omniprevalent across industries and applications, but McCurdy believes alternatives will soon break society’s dependence on “the energy of ancient sunlight”. Petroleum is a finite resource, formed by the decomposition of organic matter — primarily zooplankton and algae — under intense heat and pressure over millions of years. In contrast, McCurdy’s algae-based plastics rely on present-day sunlight and atmospheric carbon as the primary input.

She developed the bio-based, carbon-negative, petrochemical-free plastic as part of her industrial design graduate studies. It’s an ideal solution for the fashion industry, which accounts for more greenhouse gas emissions than the airline and shipping industries combined. Fast fashion tactics and an overabundance of petroleum-based plastics in textiles have already taxed the system, and global demand for plastic is expected to increase threefold by 2050.

“Expanding the cultivation of marine macroalgae to meet our demand for plastic will not divert freshwater resources, will not compete with the food supply, will increase biomass and carbon sequestration, and will have the potential to offer refuge and support to marine ecosystems that are already stressed by the effects of climate change,” she wrote in an op-ed for Inverse.

McCurdy has showcased the algae-plastic as a raincoat at the Cooper Hewitt Smithsonian Design Museum to spark conversation and raise awareness. “I wanted an object that embodies the immediacy of climate change in the extreme weather we already face. I hope a raincoat also invites you to imagine putting on a future where we have broken free from our dependence on fossil-carbon.”

She also collaborated with luxury fashion house 3.1 Phillip Lim, using the algae-plastic to form translucent green sequins for a catwalk creation. McCurdy introduced the product in the fashion industry partly due to the sector’s heavy carbon footprint — and for its thriving luxury niche. She points to the iPhone, which spurred miniaturisation of smartphone components, and to solar panels, which spent 60 years as a luxury item before becoming sufficiently cost-competitive.

“We like the hypothesis of having to start in low-volume, high-margin markets where people are willing to invest in this vision and this value,” she said. “That's how the technology will be able to get cheaper, more efficient, more accessible to everyone.”

Investing in material innovation often means slow returns when compared with apps reaching unicorn status in record time. But McCurdy urges investors to play the long game and back the innovators. The world is at a crossroads of risk and reward, with the opportunity to get in on the ground floor of the next industrial revolution.

She likens the moment to the metaphor of germination. “You have you have to plant the seed, even if it's a challenge, or a long shot, or will take lots of nurturing and work. We need serious investment in material innovation and its slower returns.

“ESG funds have outperformed our expectations, and my contention is that other, even more ambitious, slower capital investments will probably be even more important and outperform even more — because there is no cogent alternative.”

McCurdy is working to patent the process — not for commercialisation, but for democratisation. She hopes to see a climate-action thinktank formed to draw on various disciplines, much like MIT’s Media Lab unites research in technology, media, science, art and design. Within 10 years, she would like to be collaborating with a multi-institutional coalition of technical engineers and creative thinkers, working to replace the current gloomy narrative with determination — and hope.


Otaviano Canuto: Some Economies May Soon Face a Hard Landing

Weaker performance of emerging markets is expected in the immediate future.

This year began with simultaneous signs of a slowdown in global economic growth and a reorientation toward tightening of monetary policies in advanced economies.

In its latest Global Economic Prospects, the World Bank forecasts that global growth — at 5.5 percent last year — should moderate to somewhere between 3.2 and 4.1 percent this year and next.

In addition to the effects of the pandemic, a fall in fiscal support and lingering supply chain disruptions point to a slowdown.

For China, the World Bank expects a GDP growth of 5.1 percent this year, well below the eight percent that had been forecast. In addition to possible restrictions on mobility due to the “zero covid” approach, the adjustment in the property sector will contain consumer spending and residential investment.

While advanced economies reduce their pace of expansion, central banks are on a tightening path — apart from the Chinese case. The Federal Open Market Committee (FOMC) believes the reorientation of its monetary policy since October has been made clear in the minutes of its meetings, and in statements by Federal Reserve chair Jerome Powell. With unemployment rates below four percent, consumer price inflation ended the year at seven percent, a level not seen since the early 1980s. Its listing as a “transient” phenomenon has been abandoned by the Fed.

A FOMC meeting last September suggested an interest rate hike this year. The end of the Fed's bond-buying programme was brought forward, while Powell telegraphed that the Fed's balance sheet reduction should begin as early as mid-year.

[caption id="attachment_21712" align="aligncenter" width="1000"] Figure 1: Emerging Market and Developing Economies lagging behind. Source: World Bank (2022). Global Economic Prospects, January.[/caption]

After interest rate hikes in England, Norway, and New Zealand, the same is expected in Canada. Similar moves by the European Central Bank and Sweden are anticipated for early 2023.

This is the scenario faced by emerging and developing economies that are making a slow recovery from the pandemic. The World Bank does not expect a return to pre-pandemic GDP and investment trends in 2022-23.

High inflation rates and public debt during the pandemic are constraining the adoption of expansive fiscal and monetary policies. Not coincidentally, higher interest rates and the downward revision of fiscal support have taken place in many cases. The question is whether the growth slowdown, with tightening financial conditions in advanced economies, is likely to be disastrous for some countries.

Tightening external financial conditions will doubtless accentuate challenges for emerging market policy-makers. For emerging market economies undergoing domestic inflation, the risk of additional pass-through pressures from currency depreciations — after markets embed higher US interest rates — will be key in setting monetary policy. While tightening cycles began in 2021 in Brazil, Mexico, and Russia as inflation rates moved above target levels, central banks in India and Indonesia maintained an accommodative stance.

Pro-cyclicality of capital flows would also be a factor for those countries. Emerging market economies with a high share of foreign participation in domestic capital markets and more open financial sectors are vulnerable to the volatility of such flows.

Central banks in these countries may be forced to tighten monetary policy beyond what would be adequate from a growth perspective: South Africa and Mexico are potential examples. In cases of financial markets that are largely domestically funded — India, Brazil, and Malaysia — the vulnerability to capital outflows driving substantial currency depreciation is lower.

The answer to the question about the nature of landing of emerging market economies will ultimately depend on how aggressively the monetary policy reorientation in advanced economies takes place. If growth remains minimally robust as inflation moderates in the US, due to reduced fiscal stimulus and fading supply chain restrictions, emerging markets could avoid a hard landing.

[caption id="attachment_21713" align="aligncenter" width="1000"] Figure 2: Emerging market trade balances. Source: Lanau, S. and Fortun, J. (2022). Economic Views – EM External Imbalances in 2022, Institute of International Finance – IIF, January 11.[/caption]

There has not been a large inflow of foreign capital into emerging market economies in recent years. Jonathan Fortun, in the capital flows tracker by the Institute of International Finance (IIF), suggests that there has already been a sudden stop, albeit with great differentiation between emerging markets.

Sergi Lanau and Fortun also highlight that emerging-market current account deficits have been low or nil in the past two years. In the case of Latin America, foreign reserves increased in 2021, following the reinforcement of liquidity buffers started in the second half of 2020, in addition to the increase in Special Drawing Rights (SDRs) by the IMF last year.

Are exchange rates at levels of overvaluation that make them vulnerable to sudden and catastrophic devaluations? Here Robin Brooks, Fortun, and Jack Pingle, all from the IIF, suggest a more heterogeneous picture. Although most emerging currencies have experienced real devaluation in the past decade, there is huge differentiation, with some now exhibiting devaluation and others overvaluation.

In the case of Brazil, they estimate a degree of around 20 percent of excess devaluation of local currency below what its fundamentals would indicate, such as current account balances and stocks of foreign assets and liabilities. The non-return of the exchange rate to pre-pandemic levels contributed to the Brazilian inflation ending 2021 in double digits — on top of food and energy shocks. In the case of Brazil and other emerging countries without exchange overvaluation, a high probability of dramatic exchange rate adjustments is not foreseen — provided that the reorientation of monetary policy in advanced countries does not take on dramatic contours.

Except in the case of drastic monetary adjustments in advanced economies, one must focus on domestic factors to understand the weaker performance of emerging markets in the immediate future.

This article first appeared at Policy Centre for the New South.

About the Author

Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, a visiting public policy fellow at ILAS-Columbia, and principal of the Center for Macroeconomics and Development. 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. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil. Otaviano has been a regular columnist for CFI.co for the past ten years.

Follow him on Twitter: @ocanuto


A Perfect Storm Perfected: EU Battles String of Calamities

[caption id="attachment_21716" align="alignright" width="300"] Marine Le Pen[/caption]

It’s about the only thing missing from a world in turmoil: France going haywire and off the rails. The solid showing of Marine Le Pen at last Sunday’s polls gives plenty of cause for concern. More moderate in her policy proposals and promises than five years ago, Ms Le Pen may no longer seek to extract her country from the European Union, she now merely aims to undermine it. Her pledge to reinstate the primacy of French national law contains echoes of Poland’s thus far frustrated attempts to assert the supremacy of its own laws over those of the EU and, in the process, ditch several European core values such as an independent judiciary and a pluriform free press.

Without providing too many details, Ms Le Pen called for a ‘Europe of Nations’ which, presumably, implies a diminished role for Brussels. Former Polish Foreign Minister Jacek Czaputowicz is all in favour and said such a loosely bound ensemble of states would likely show more respect for the ‘cultural identity’ of individual nation states – by which he seems to mean the freedom to reinterpret the rule of law.

Tone deaf to the mood prevailing in much of Europe, Ms Le Pen repeatedly said that Russia “could become an ally of France again” after the war ends. She also called on NATO to promote a rapprochement with Moscow “after the war.”

Dissonant Concert

Unwittingly or otherwise, Ms Le Pen seems to long for a return to the 19th century Concert of Nations – the grand conspiracy between Europe’s great powers that sought to establish carefully balanced alliances and carve up the continent into well-defined spheres of influence. Concert diplomacy, celebrated in a great number of ‘congresses’ staring in Vienna (1814-15), sought to ensure continental stability but ended up setting the stage for the world wars that followed.

Earlier this week, Luxembourg Foreign Minister Jean Asselborn repeated in public words usually only spoken behind closed doors when he said that the French must prevent Ms Le Pen from gaining power: “Her victory would not only mean a breakaway from the core values of the EU, but it would also totally change the union’s course.”

One cannot help but wonder how many storms need to converge for the EU to buckle and succumb to outside pressure. So far, the union has survived Brexit, Corona, Trump, and a Hungarian-Polish revolt plus a refugee crisis and a financial meltdown, the latter two sparked by arguably misguided US policies. The succession of calamities has arguably strengthened the union’s resolve and deepened cooperation between its core members. However, a derailing of France, at the same time when a shooting war involving a major trade partner is destabilizing the EU’s eastern fringe and economy, is possibly just too much for Brussels to bear.

Germany Squeezed

Against this disconcerting backdrop, pressure is mounting on Germany to cut off Russian oil and natural gas supplies in support of Ukraine. Five German economic research institutes are unanimous in their conclusion that without oil and natural gas imports from Russia the country’s GDP is likely to suffer a contraction of 2% or more next year. According to numbers from the Kiel Institute of World Economics, an estimated 400,000 jobs would be lost as well. However, a YouGov poll found that, even so, 54% of Germans queried supported a Russian energy boycott.

The ECB has calculated that a suspension of energy imports from Russia may knock 1.4 percentage points off the 3.7% eurozone GDP growth forecasted for 2022. Experts agree that Germany, which imports 60% of its energy needs, may find other sources for its oil and coal requirements but not for natural gas – mainly used for household and industrial heating and electricity generation. A switch to liquefied natural gas (LNG) is hampered by the lack of infrastructure. Germany has no LNG terminals or regasification facilities.

Plans are underway for a large-scale LNG storage and regasification plant in Wilhelmshaven, but its completion is likely to take four years and will only add about 12 billion cubic meters (bcm) to capacity – or 9% of domestic demand. Several companies have proposed building modular ‘jettyless’ LNG terminals which take about 12 months to become operational. These floating units attach to the side of gas carriers and pump their cargo via cryogenic floating hoses to onshore regasification plants.

The urgent need to wean Germany – and Europe – off energy imports from Russia is almost self-evident given the long string of atrocities committed by the country’s armed forces in Ukraine. Russia seems lost and unable to redeem itself for a generation or longer.

Last year, EU member states imported €99bn worth of coal, oil, and natural gas from the country. Since the start of the invasion of Ukraine, the EU has paid some €35 billion for hydrocarbon imports from Russia – ready cash to help sustain the economy and the war machine.

Orban’s Gambit

A 10-point plan proposed by the International Energy Agency (IEA) concludes that German imports of natural gas can be cut by a third to slightly less than 100 bcm within a year and without running afoul of the EU’s green agenda. However, the plan – at best an exercise in wishful thinking – also includes an appeal to households to ‘temporarily’ lower their thermostats by one degree – a measure that can EU reduce gas use by 10 bcm annually.

Meanwhile, German Chancellor Olaf Scholz has assured the EU that his government is working hard to find alternative sources of energy whilst it still refuses to keep its remaining nuclear power plants open. Officials indicated that the country may be ready to join an oil embargo later this year.

Apart from practical considerations there is also a political dimension to a ban of Russian oil and gas: the reinvigorated government of Viktor Orban in Hungary indicated it considers any measures targeting Russia’s oil and gas experts a ‘red line’, effectively scuppering a sanctions regime that requires unanimity amongst the bloc’s 27 member states. In Brussels, however, the possibility of a Hungarian veto is not often entertained with most diplomats and watchers agreeing that such a shameful move would almost instantly trigger a host of punitive measures up to and including membership suspension over unrelated irritants such as a muzzling of the free press and attacks on the independent judiciary. The EU lacks a mechanism to expel member states.


A Bipolar World? Searching in Vain for a Dollar Alternative

The seizure of Russia’s dollar reserves, part of the first wave of sanctions decreed in response to Moscow’s ‘special military operation’ in Ukraine, has a growing legion of pundits wondering if the time has come to look for a new global reserve currency. Some of the wilder suggestions propose a fresh look at China’s renminbi and a renewed appreciation of bitcoin.

The weaponization of the dollar has been noted elsewhere by assorted despots who fear running afoul of Western rectitude. Last week, US Treasury Secretary Janet Yellen added to their concerns during a little-noticed address at the Atlantic Council in Washington when she called for a new Bretton Woods-like global framework and stressed the need to relink trade and values.

Ms Yellen detected a ‘pivot point’ for the global economy with Russia’s invasion of Ukraine and China’s – and thirty other countries’ – refusal to condemn the aggression and join the sanctions regime. The treasury secretary proposed to use US trade policy as an instrument to uphold and further certain principles, including sovereignty and labour rights. She said that trade should not merely be free but also secure.

Friend-Shoring

In her address, Ms Yellen rallied against countries leveraging their raw materials and technology for geopolitical advantage. She said the US would henceforward encourage the ‘friend-shoring’ of supply chains, rerouting them away from authoritarian states to ‘trusted countries’ that share norms and values.

Knowingly or otherwise, Ms Yellen seeks to bury the neoliberal world order and set the stage for a, presumably, monumental clash of civilisations. Neoliberalism’s premise was, after all, the idea that trade brings shared prosperity to all by connecting markets. The need to protect and expand that prosperity would, so it was thought, further the cause of freedom and democracy.

A term often misunderstood and widely despised, neoliberalism forms the root of the European Union – its greatest achievement. By creating supranational institutions that break down national barriers to the free exchange of goods, services, capital, and labour, the European Union, and its predecessor (EEC – European Economic Community), managed to stabilise and bring together and unite a continent of bickering and warring tribes.

More recently, in the late 1990s, a similar approach sought to bring China in from the cold. The country was shoehorned into the World Trade Organisation (2001) in the full expectation that the accession would presage China’s embrace of democracy. The thinking was not without logic: after all, no country has benefitted more from the neoliberal world order than China which owes its rapid ascendancy – and its riches – to free trade and open markets.

China graciously accepted the gift but of course kept its own counsel, leading to the present ‘one world, two systems’ conundrum. Ms Yellen acknowledged as much when she noted that China maintains practices that “unfairly damage US national security interests.” The problem occurs when real or imagined domestic concerns and sentiments outweigh the benefits of neoliberalism. Brexit is the prime example of such a gap.

In her Washington address, Ms Yellen expressed the hope that the world doesn’t end up with a bipolar system. However, that horse seems to have bolted. The West can only try to slide the barndoor shut as, indeed, it did on Russia.

Going Ballistic

The war in Ukraine has sparked a display of transatlantic unity and resolve not seen in decades. The US and its European allies went ballistic to remind all and sundry that they still rule the global roost. Some may well argue that the flexing of the neoliberal’s financial muscle represents nothing more than a dead cat bounce as the epicentre of power has long since moved east. And fair enough: it is one thing to shut out Russia – an economic nincompoop by any measure – but quite another to take on, say, China or India.

The ’other side’ of the bipolar world is unlikely to be impressed. Working quietly and leveraging their considerable economic heft, China, and its ‘non-aligned’ hangers-on, are looking for ways to deprive the West of its mightiest weapon – the dollar.

One upon a time, a global reserve currency had to meet at least three basic requirements:

Its issuer needed to be a major, if not the dominant, trade power, and

Enjoy (macro)economic stability to inspire confidence, and

Have deep and liquid financial markets.

Prior to World War I, sterling was the undisputed reserve currency of the world with British gilt-edged securities the near-perfect safe asset. Backed up by an empire of unmatched size and scope, fiscal prudency, rule of law, and gunboat diplomacy in times of trouble, sterling and gilts were the preferred – and arguably only – safe way to store value.

Two world wars ended British financial pre-eminence and knocked sterling off its lofty perch, a fall initiated when Great Britain was forced to let go of the gold standard on the eve of the Great War (1913) and the Bank of England imposed exchange controls after a run on sterling which deteriorated the bank’s liquidity position. Subsequently, the US dollar – then still on the gold standard – took over as global reserve currency, a position it managed to preserve even after President Richard Nixon severed the link between dollars and gold in 1971 to help finance the Vietnam War.

The desire to dump the dollar as reserve currency is quite understandable. If the issuer can seize savings at will, an alternative vehicle for the storage of value is needed. With well over $3 trillion in reserves, China is understandably worried. However, its renminbi remains a poor alternative to the dollar. Notwithstanding attempts to tinker with the premises of a global reserve currency, the classic requirements are still in place – and for good reason.

Dreams of Renminbi

Of the three basic requirements for the role, China only meets one (major trade power). However, the country’s financial system is notoriously weak and relatively undeveloped. The renminbi is not fully convertible, and China lacks open and liquid financial markets. The Chinese government also fails to inspire confidence as it is liable to suffer bouts of irrational anger when ‘offended’ by those deemed unfriendly to the country’s interests. The best Beijing can hope for is to create a ‘walled garden’ for the renminbi with its closest like-minded allies. However, any interaction with the West will require settlement in dollars, euros, or yens.

Bitcoin, the great hope of a collective nostalgic for value-backed currencies (as opposed to fiat money), is even less likely to become a reserve currency. For all its wizardry and technological prowess, bitcoin is hopelessly cumbersome in daily – not unlike gold. Moreover, the market ‘value’ of all cryptocurrencies together amounts to no more than $2 trillion, or just 16% of the world’s currency reserves. Finally, sanguine bitcoin fans conveniently forget that cryptocurrencies are neither backed by gold or any other commodity, or by the issuer’s ability to raise taxes – the hallmark and strength of fiat money.

In the long run, and making all the right moves, China’s renminbi may well replace the US dollar as the world’s reserve currency. However, and paradoxically, those right moves would require China to shift towards the neoliberal model which defeats the purpose of the exercise.

Until such a time, the dollar is here to stay and only rogues need fear that. US treasury secretary Janet Yellen can perhaps find some solace in the fact that the bipolar world appears near but may yet turn out to be a mirage. The horse that bolted can be lassoed and ushered back home.