Red Med Capital: An Independent Investment Bank in Morocco with a Green DNA

CFI.co in conversation with Abdeslam Ababou, chief executive of Red Med Capital...

[caption id="attachment_25477" align="alignright" width="291"] CEO: Abdeslam Ababou[/caption]

CEO of the independent investment bank, Abdeslam Ababou, founded the first arm of the group, Red Med Finance, in 2004. It has been involved in major M&A transactions which led corporate finance activities in sectors including telecom, education, financial services or the agro industry. The advisory bank, has also been involved in renewable energy sector since 2010 and developed a sharp expertise in this industry.

The second subsidiary, Red Med Asset Management, came into being in 2011. It has assets of more than €1.1bn under management, and a large portfolio of institutional, corporate and private clients. In 2020, the group broadened the scope of its activities by responding to the critical needs of the SME sector by founding Red Med Private Equity. The first fund is addressing the growing SME’s markets in Morocco, Tunisia, Ivory Coast and Senegal. In 2021, it acquired a brokerage firm which was to become Red Med Securities. The most recent to be born, in 2022, was management firm Red Med Real Estate.

What is the framework for international investors in Morocco?

Morocco benefits from an attractive investment framework, thanks first to its political stability and macro-economic indicators that have remained relatively stable in a period of worldwide turbulence.

Morocco has encouraged FDI in the past 10- 15 years by providing incentives and first-class infrastructure such as Tangier Med port and industrial areas/free zones. Morocco prioritised training for our young people to create valuable expertise in some key sectors.

Automotive has become something of a flagship. In just 10 years, Morocco has attracted two major car manufacturers and Tier 1 O&Ms, creating a competitive business environment.

The new investment charter, voted last November, encourages private investment — aiming to outpace public investment. It also provides incentives for specific industries to promote the regional equity and for Strategic projects — worth more than £79m — that will be negotiated on a case-by-case basis.

Morocco has proven itself to be a safe haven for international investors, with geographic proximity to Europe and access to a billion consumers — representing 60 percent of worldwide GDP — via Morocco boasts a strong legal framework that guarantees investors’ interests, especially in terms on repatriation of dividends or cession revenue, take top priority. The country has all the ingredients to boost its FDI in key industries. There is a clear momentum for that.

What green economy opportunities exist In Morocco?

Red Med Group has been actively involved in the renewable energy sector for 13 years. Since 2010, Red Med Capital has advised major national and international projects, for a development of about 800 MW of renewable energy.

Red Med Capital is also involved in the promising green hydrogen industry by advising two key players to develop large-scale projects to supply the national market and to export to Europe.

With the war in Ukraine, European countries have had to rethink their energy supplies.

Morocco, which benefits from extraordinary renewable energy assets, which is only 14 kms from Spain, which has an existing grid and a gas pipeline connected to Europe, presents itself as a suitable partner. Morocco has demonstrated a willingness to be a leader in that field all along the last fourteen years.

 At the behest of His Majesty King Mohammed VI, the government is encouraging the development of the PtX industry by proposing a “Moroccan Offer” on a win-win basis. Moroccan potential has been illustrated by the latest report from the International Energy Agency which has identified Morocco as part of the five hot spots for green hydrogen projects, with a goal of producing four percent of the world’s green hydrogen by 2030.

For all these reasons, Red Med Capital considers itself a bridge for investors, providing the know how to transform opportunities into concrete projects.

Website: www.redmedcapital.com


Business Leaders Find Alternatives to Pay Increases in Cost-of-Living Battle

Salaries falling behind inflation, and continual hikes ‘won’t always be possible’ as a countermeasure, firms say.

The cost-of-living crisis is burgeoning, the war for talent rages on, and pay awards have been plateauing for six rolling quarters — falling behind inflation.

Employers are looking at how they can improve the employee experience, beyond hiking salaries.

Research by human resources firm XpertHR shows that nearly half of directors set pay awards higher than planned in the battle to attract and retain talent. There was stiff competition between companies to secure workers with the requisite skills.

In the survey, 52 percent of directors said they felt compelled to pay higher salaries to help employees keep up with the cost of living. This money came largely from reducing office space and overheads (42 percent of organisations), spending less on technology and innovation (40 percent), and organic business expansion (68 percent). But 63 percent of directors admitted that salary increases would not always be possible.

Even organisations that could pay workers more say increases would not necessarily be in line with inflation. Employers are considering other ways to invest in staff retention. Almost three-quarters (73 percent) are opting to put support and advice programmes in place.

Of those offering support, 56 percent have given staff a non-repayable lump sum or bonus payment. Amounts of between £500 and £1,000 were cited by some organisations, typically reserved for employees earning less than £40,000 a year. Payments are not consolidated into salaries, and this targeted approach means the additional cost is not an ongoing burden for employers. A quarter of respondents say they have opted to offer staff interest-free loans.

The data show that 53 percent of business leaders are conducting regular benchmarking of pay rates, while half are providing access to an employee discounts provider. Slightly fewer (49 percent) are offering flexible work locations and patterns, and 31 percent are offering better benefits and incentives.

XpertHR managing director Scott Walker says employers are being forced to look for alternative ways to help staff manage the cost-of-living crisis. “Financial wellbeing advice leads the way,” he said, “helping individuals understand the options available to them and how to look after their money.”

Walker says many employees are finding there is little money left after paying their bills. “We’re seeing an increasing number of employers getting creative.” The alternatives include repayable loans, non-repayable lump-sum payments, and even discount vouchers.

Employee assistance programmes can go a long way in demonstrating support, he believes, and flexible working and training could boost retention. “It’s still possible to support staff and build a strong employee experience,” he said.


EY: Haunted by Phantom Income and at the Mercy of Economic Patterns — Inflation Distorts World Tax Systems

Recent IMF data show developed economies are running at an annual inflation rate of three to 10 percent.

Some eastern European and Asian countries currently sit between 10 and 25 percent — and 10 nations are struggling with higher rates still.

Although the inflation trend is generally declining, there is concern about the tax codes of major economies. The thinktank Taxfoundation.org is calling for the US tax code to be fully indexed. Inflation artificially increases capital gains tax, as it doesn’t adjust the tax basis according to the loss of purchasing power. Capital goods and fixed assets depreciations are also causing concern — the amounts deducted lose value in relation to the original investment.

Inflation benefits highly leveraged businesses, but falls heavily on lenders because, as creditors, they will lose value in real terms. The same approach can be found in governments. Most are heavily leveraged, and inflation allows debt repayment to the private sector, with less valuable currency.

On the other hand, inflation creates a “tax” without representation on the indirect and direct tax fronts. Ultimate beneficiary: the governments. Again.

As recently reported by McBride and Durante, the US nominal GDP increased up to $2.1tn, year on year, in 2022. From that increase, $1.8tn came solely from inflation.

Inflation dynamics affect businesses and the private sector. Let’s say the financial director of a multinational wants to start up a business in a high-inflationary climate economy. Figures from his team’s recent research show a robust business plan and high ROI. The officer tries to do an additional test before giving the green light. He asks one of his managers to create a subsidiary under some basic constraints. The new company will receive $41m on day one, with a fundamental condition: the manager will return the sum at the end of the fiscal year — or lose his position. So, the local manager decides not to take any risks.  The company doesn’t perform any transactions during the fiscal year, and keeps only dollars received in the company bank account. In his reasoning, if he didn’t invest the funds, he couldn’t lose them either. He would be able to repay the debt.

During that fiscal period, the economy of the hypothetical country falls into crisis and the local currency devalues against the greenback. The immediate consequence is a rise of inflation rates.

The local official seems not to notice the economic ups and downs; he keeps the amounts contributed on day one. The surprise comes at the end of the fiscal period, when the local company's income tax return shows a profit — due to the exchange rate difference — subject to 35 percent tax. Our imaginary official is forced, before clearing out his desk, to sell some of the contributed dollars to pay the tax liability.

This is, in simple terms, how a tax system fails to consider the effect that inflation has on business income. It ends up taxing only the nominal part of the equation that produces devaluation — but not income in real terms.

If the system doesn’t recognise the effect of inflation on business income, or taxing profits that should be exempt, inflation becomes an additional tax without representation. The absence of a tax adjustment leads our manager to sell the dollars to pay the tax when, from the shareholder's point of view, he lost part of his investment by simply holding on to the cash.

This situation is very difficult to grasp without experience of inflation contexts.

An inflation-adjustment mechanism would allow companies to tax profits in real, rather than nominal, terms. That is, taking into account not only the profit or loss due to devaluation but also the loss of income: inflation caused by the devaluation.

In general, high inflation forces devaluation of local currencies (and vice-versa) with regard to hard currency. Distortions and foreign exchange should be equalised by inflation adjustment. Otherwise, a “phantom income” would be created, subject to tax.

Currency devaluation produces profits in export companies and would have the same effect on companies trading on the domestic market, due to the price increase that inflation would cause.

In either situation, income tax due to devaluation or inflation has an impact that must be factored-into calculations. The effect can be mitigated by a tax adjustment for inflation, which acts as a counterbalance. This even applies if the company generates tax losses.

However, if an inflation adjustment system is not enacted, many companies will feel the impact of corporate income tax on inflationary effects, without considering the protection an adjustment-for-inflation system could provide.

This distortion must also be added to the indirect tax context. In a price-increase scenario, indirect taxes are automatically adjusted for inflation — their tax base is dependent on that. When the price of goods and services increases as the currency erodes, so does the indirect tax base. The effects of inflation / devaluation on phantom income, plus the increase in the tax base on indirect taxes, create a burden for private businesses. This situation needs to be address by policy makers, and soon.

By Sergio Caveggia, Partner at EY Argentina


Championing CBDCs — Who’s Who in the Race?

Central banks front and centre, of course — but little is straightforward in the biggest currency jump we’ve faced since shells went out of fashion...

The emergence of Bitcoin over a decade ago was a revelation. Even with the turbulent and chronically under-regulated waves of crypto speculation that followed, its arrival provided real proof of concept.

And it was Bitcoin that sowed the seeds for central bank digital currencies (CBDCs), with all the flexibility of crypto and all the benefits of government backing. Those seeds have grown from the kernel of an idea into a reality for over a dozen countries worldwide, each with different characteristics and goals.

With cash in dramatic decline and the potential benefits of a regulated, government-issued digital currency becoming accepted, at least 100 more governments are considering making the jump to maintain control in a rapidly evolving monetary climate.

Influential players such as the US Federal Reserve (the Fed), the Bank of England (BoE) and the European Central Bank (ECB) collectively account for 38 percent of global GDP have so far moved with caution. But with US President Joe Biden’s executive order on CBDC research last year, and the UK announcing a digital pound taskforce with HM Treasury this spring, the direction of travel is clear.

The ECB is moving into an “investigation phase” on a digital euro that could be in circulation as early as 2027. But as these giants of the global economy weigh up the pros and cons of an entirely new currency system, who is pulling ahead?

Countdown to Launch

One of the reasons for the muted response to news of the UK’s digital pound consultation earlier this year is the conclusion that such a currency would take years to develop and launch. The Fed, meanwhile, has found itself snagged on thorny issues such as the consumer privacy and support from key stakeholders.

In this mixed picture, EU central banks are arguably ahead of their US and UK counterparts, responding deftly in a sphere where agility rules. The EU is expected to publish draft CBDC legislation within weeks, with a proposal for its design due in October. This means a digital euro could emerge in the next five years.

This trajectory will probably be helped by the fact that several EU countries have been developing CBDCs of their own. Sweden's Riksbank has been testing its e-krona since 2017, while the Banque de France has been experimenting with a digital euro since early 2020. In July 2020, the Bank of Lithuania launched a pre-sale of its LBcoin, a digital collector coin that doubles as a testing ground for a CBDC.

ID and Digital Wallets

The pace of innovation is only half the battle. As The White House points out, part of the appeal of a digital currency is its potential to make financial services accessible to all, including the estimated seven million unbanked Americans and the 24 million who rely on non-bank services, such as money orders.

For this transition to happen, however, CBDCs must have robust systems of authentication and access in place, including digital wallets. The BoE has already laid out a blueprint of sorts. While the bank itself would issue the digital pound and provide the infrastructure, including the “core ledger”, private sector companies (including banks or approved non-bank brands) would create the interface in the form of digital wallets. Private firms are "much better placed at providing innovative products and services to the public", the BoE believes.

Creating this bridge may help accelerate solutions for consumers. Coupling private-sector versatility with government-backed regulation is the best of both worlds — and a development that could give the UK an advantage over product innovation.

Risk Management

A regulated digital currency could potentially enhance payment security, reducing the chance of fraud. But the traceability of digital money raises serious questions about consumer privacy.

In its research paper, The US Dollar in the Age of Digital Transformation, the Fed highlights the balancing act required. Consumer privacy rights must be safeguarded while allowing enough transparency to combat illicit finance. It goes on to propose the use of an intermediated model to facilitate the use of existing privacy and identity-management frameworks.

Infrastructure is another major stumbling block in the journey to CBDCs. The way they operate, and the nature of the services associated with their use, have not been clarified by the Central Banks discussed here. And each CBDC programme being considered by the US, the UK and Europe seems to suggest a varying range of capabilities and features that would need to be co-ordinated between issuers.

Perhaps an international effort to fine-tune specific features offers a path ahead. In October 2020, the BoE joined seven other central banks to collaborate on a ground-breaking CBDC research project. The focus was on the technical and practical feasibility of CBDCs in cross-border payments.

Europe probably has the firmest grasp of issues such as system design and interoperability. Its plans for a staggered rollout would begin with the bank releasing its CBDC for use in person-to-person and e-commerce transactions. The bank would then add support for on- and offline digital euro payments at the point of sale and person- or business-to-government payments (including taxes and customs duties), according to an ECB presentation published online.

Scale of Adoption

An effective CBDC could break down barriers to provide fairer financial support for all as well as stimulate innovation by giving entrepreneurs a platform. But these benefits only come into play if users at all levels of society understand the value proposition behind a digital currency well enough to make it a viable and trusted part of everyday finances.

The UK, Europe, and US governments are all being proactive in encouraging public debate, raising awareness of the concept. As the Fed points out, “While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides. They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment.” Working transparently invites public dialogue about the emergence of a digital dollar in an environment that will not favour any particular policy outcome.

The BoE, meanwhile, is at pains to explain how a digital pound would be designed for use by everyone, including those who aren't comfortable with tech. "Most people would access their digital pounds through a virtual wallet on their smartphone," it says. “But we are also looking at other ways too, for example, a physical card, like a debit card.”

HM Treasury’s decision to see stablecoins recognised as a valid form of payment last year set the stage for wider collaboration with digital currencies — with government regulation intended to provide businesses with the confidence they need for long-term investment and innovation.

The Bigger Picture

But it's the ECB that again that reaches further on knowledge and education efforts, with a deep dive into data. It recently commissioned Kantar to survey EU members about digital wallets, with a series of focus-group sessions carried out in all euro area countries from December 2022 to January 2023.

As expected, younger people were more willing to adopt digital wallets, while older respondents were more wary. Uptake also appears to depend on the way it is introduced, and involving local commercial banks is essential.

As a result, the ECB knows more about the Eurozone's most highly valued wallet functionalities: budget management and peer-to-peer payments. And it's putting emphasis on a digital currency design that would be available via existing banking apps, along with a custom-made digital euro app.

It's this kind of precise and nuanced picture that central banks need to focus on as the race to CBDC maturity picks up pace. The consultation process between governments, private specialists and end users should be open and circular, with each new round of consultations used to enhance product features — and prompt a new round of questions.

We’re now closer to the reality of CBDCs than we’ve ever been; the idea of them initially complementing — and eventually becoming indistinguishable from — fiat currencies is gaining traction. But technical, operational, ethical, and communication challenges remain.

The UK could yet become a global hub for crypto asset technology, while a US CBDC could help to maintain the dollar's global role as the most widely-used investment and payments currency. Alternatively, the ECB's plans for a digital euro could outmanoeuvre them both. All of these options must also consider a possible challenge to the Western economic powers in the form of an alternative CBDC, possibly in the form of a digital Chinese Yuan.

The situation is fluid enough that there’s still everything to play for.

by Alessandro Hatami

Alessandro Hatami is managing director of strategic consultancy Pacemakers.


Lord Waverley: Tracing the Old Silk Road Shows History Carved a Path to Modern Values — and Vibrant Economies

Lord Waverley continues his journey through Central Asia, a little-known region nestled in a corner of the world that is coming into prominence...

As the Central Asian region continues to develop and integrate into the global community, the three countries — Kyrgyzstan, Tajikistan, and Turkmenistan — will play an increasingly important role in the region, and beyond.

The countries have their unique historical, political, economic, and cultural backgrounds, each bringing a blend of strengths and challenges, offering their own opportunities for trade, investment, and tourism.

Kyrgyzstan

Kyrgyzstan is a mountainous country of seven million people, rich in natural resources and minerals, with high potential for the development of agriculture, hydropower and tourism. The diverse population is highly educated with strong social and civil bonds, and there have been recent improvements in democratic governance. Kyrgyz Republic is a relatively young country making efforts to diversify its economy beyond mining and agriculture. It is home to stunning natural landscapes, such as Lake Issyk-Kul, and cultural landmarks, including the ancient city of Osh.

[caption id="attachment_26176" align="aligncenter" width="900"] President of Kyrgyzstan: Sadyr Japarov[/caption]

Historical Background

The people of Kyrgyzstan are among the most ancient races of Asia. The first mention goes back to the 3rd Century BC, when the empire of the Huns dominated the territory. In 201 BC Mode (Maodun) subjugated Gegun (Kyrgyz), then in the Eastern Tien Shan. The reign of Maodun became an important milestone in history, with the term "Kyrgyz" first mentioned in the Chinese chronicles in 201 BC.

Ancient Kyrgyz was characterised by the creation of the Turkic Khaganate (551-744) in the Altai, and the creation of the Great Kyrgyz Khaganate in the 9th Century. At the end of the 18th and beginning of the 19th Centuries, northern Kyrgyz tribes began to independently establish contact with Russia. After the 1917 Russian October Revolution, the Kara-Kyrgyz Autonomous Region was formed in 1924, and in December 1936 transformed into the Kyrgyz SSR.

In 1991, Kyrgyzstan was one of the first republics to declare independence. The principles of democratic governance began to be introduced, and private forms of ownership were established. In socio-political terms, the republic has acquired all the attributes of statehood and become an equal member of the global community. Kyrgyzstan was the first of the Central Asian countries to introduce a national currency (the Som) in 1993, which allowed the establishment of independent financial and monetary policies. Kyrgyzstan became the first WTO member state among CIS countries in 1998.

Political Background

The first Constitution of independent Kyrgyzstan was adopted in 1993. Kyrgyzstan became a sovereign, unitary democratic republic built on the principles of a legal secular state. One of the main principles of public administration is the division of state power into legislative, executive, and judicial branches.

Currently, Kyrgyzstan is a presidential republic, where a governance structure has been created with a clear distribution of powers, and an effective reporting system. Sadyr Japarov, who came to power after political unrest in October 2020, was elected president in January 2021 — with the support of 80 percent of voters. The last parliamentary elections were held in November 2021.

Trade and Investment

The most difficult test for Kyrgyzstan was the transition to a market economy in the 1990s, when more than half of the population fell below the poverty line and the country's economy halved. Today, the Kyrgyz Republic is at an important stage in its history, when the prerequisites for the long-term development of the country as a politically stable, economically strong, and socially responsible state have been laid.

Notwithstanding the complex and rapidly changing global, and regional economic and geopolitical situation, digital transformation has covered the main areas of public life and necessitated the formation of a new development model. Kyrgyzstan, landlocked and remote, with limited land transport routes, has had to adapt to new conditions of economic development, considering the small size of its economy. The main trade and economic partners of the country are China, Russia, Central Asian countries, Turkey, and the United Kingdom.

The economy showed resilience in 2022, in the face of tensions in Russian-Ukrainian relations. The republic has significant natural mineral deposits. In the first 10 months of 2022, real GDP grew by seven percent. The surge was driven by gold mining, with a settlement of a dispute between the government and Centerra Gold Inc of Canada. The resolution is considered equitable and recognisant of law, trade, and the development of agriculture and transport infrastructure.

The economic policy of the state is focused on employment, stable incomes, and creating productive jobs. Kyrgyzstan is pursuing reforms to create a competitive digital economy through attractive conditions for entrepreneurs, and the use of innovative and environmentally friendly technologies. The widespread introduction of IT is a priority of the national development policy. The salaries of teachers, doctors, workers in science, culture and civil servants were increased by 100 percent.

New laws and regulations have been aimed at minimising corruption, strengthening competition, preventing the emergence of state monopolies, and increasing the transparency and accountability of the public sector. Digitalisation in the field of tax administration and providing access to income and property declarations of public officials to citizens have become important steps.

The recent meeting of the former presidents of the Kyrgyz Republic, at the initiative of President Sadyr Japarov, has strengthened the unity of the Kyrgyz society and led to a significant improvement in the investment climate.

Foreign Policy

Kyrgyzstan is pursuing a multi-vector foreign policy, establishing the necessary inflow of foreign investment, establishing ties with neighbours and other countries. According to the Foreign Policy Concept, the special role of the Kyrgyz Republic in Central Asia as a bridge between Europe and Asia is emphasised, with the country implementing its foreign policy on the basis of goodwill, mutual understanding, and mutual respect of interests.

Foreign policy priorities include the deepening of integration processes in the region. At the global level, foreign policy is aimed at building confidence in the international community, with the expansion of contacts with countries of the West and the East. It also focuses on the development of interstate co-operation within the framework of international organisations.

Tourism and Culture

This is one of the oldest centres of human civilization. The Kyrgyz, an ethnic group known in Central Asia since the first millennium BC, have brought their identity and culture through the centuries to the present day. The village of Manas, the traditional yurt dwellings, shyrdak and ala kiyiz felt carpets are World Heritage-listed.

The republic is located on the Great Silk Road, along which there are 583 historical and cultural monuments and archaeological sites, some of which (Nevaket, Suyab, Balasagyn, Sulaiman-Too) are of world importance and are also included in the UNESCO World Heritage List.
Kyrgyzstan has a wide range of tourist resources. Some 80 nationalities live in the territory and have preserved their national traditions and customs, handicrafts, and folklore.

The country was the first in Central Asia to abolish visa restrictions for citizens of 60 countries for up to 60 days. It boasts 22 diverse ecosystems, and 160 varieties of mountain and plain landscapes. A full 94 percent of the region is mountainous. Among the famous peaks are Pobeda (7439 m), Lenin (7134 m) and Khan-Tengri (6995 m) — and one of the longest glaciers, Enylchek, is a world landmark. There are 1,923 lakes, the largest of which is Lake Issyk-Kul — one of the deepest alpine lakes in the world. The more than 40,000 rivers are the main source of water. The Kyrgyz Republic is one of 200 priority global ecological regions.

Tajikistan

Tajikistan is home to some of the oldest cities in the world, such as Sarazm. The country has faced challenges of political stability and economic development, but has made great strides in improving its infrastructure, particularly in the energy and transportation sectors. Tajikistan is known for its stunning natural beauty, including the Pamir Mountains and the Iskanderkul Lake.

[caption id="attachment_26177" align="aligncenter" width="900"] President of Tajikistan: Emomali Rahmon[/caption]

Historical Background

Tajikistan has celebrated 30 years of independence. It has been able to establish the foundations of national statehood, and ensure peace, stability, and unity. There is potential for everything from energy to tourism, transport to water management.

With strong GDP growth rates (7.5 percent in 2022), political stability, geo-strategic location, business-friendly environment, youthful population (70 percent are under 35) and significant natural resources, Tajikistan is well placed to achieve continued economic expansion with international partners, including those in Western Europe.

Tajikistan's rich and colourful history originate from descendants of Bactria and Sogdiana. In the 6th-4th Centuries BC, the areas of Amudarya and Sirdarya were settled by eastern Iranian tribes, and Bactria and Sogdiana were the most ancient states as part of the Achaemenids Empire. After being conquered by the Alexander the Great, the Greco-Bactrian Empire was established.

About 200 years later, the state of Tokharistan was established in Bactria, which with Sogdiana became part of the larger Kushan Kingdom. The Silk Road crossed Tokharistan, with goods delivered to the Greek and Roman Empires. In the 8th Century, Sogdiana and Tokharistan struggled for liberation after Central Asia was conquered by Arabs. At the end of the 9th Century, the Tajik state of Samanid was formed, independently from the Bagdad Caliphate.

In the period of its most extensive growth, Samanid stretched from the deserts of Central Asia to the Gulf, and from the borders of India to Bagdad. During the Samanids Empire, the Tajik people, language and culture became widespread. The Samanids state lived in peace for more than 100 years, which fostered the growth of cities, craft, development of farming and trade and mining. This was an era of renaissance that produced some of the world's greatest humanitarians, such as the founder of the Persian-Tajik poetry, Rudaki. Internal conflicts and nomadic raids weakened the Samanid state, which in 999 collapsed to Turkic-speaking tribes.

At the beginning of the 13th Century (1219-1221), Central Asia was invaded by Mongols. In the 15th Century, the leader of Uzbek nomad tribes Muhammad Shaibani khan invaded Central Asia. During his rule the state consisted of independent principalities with the largest being Samarkand, Bukhara, and Balkh.

In the 18th Century, a general government was formed after Central Asia was annexed by Russia and Turkestan. Northern Tajikistan and Badakhshan were part of this new territory, and the central and Southern areas (Eastern Bukhara) were left in the ownership of a vassal of the Russian Tsar, the Emir of Bukhara.

In 1920, the first all-Bukhara national assembly was proclaimed, and the Bukhara People’s Soviet Republic was established. In 1924, a new state emerged: the Uzbek Soviet Socialist Republic, which included the Tajik Autonomous Soviet Socialist Republic. In 1929, the Tajik ASSR was reformed into the independent Tajik Soviet Socialist Republic. With the collapse of the Soviet Union in September 1991, a new state emerged on the world map: the independent Republic of Tajikistan.

Political Background

Based on the constitution adopted in 1994, Tajikistan is a sovereign, democratic, legal, secular unitary state with a presidential form of governance. Legislative, executive, and judicial branches were established, providing for a strong legislature. Executive authority is held by the president, who serves as the head of state.

The president is elected directly for a maximum of two seven-year terms; he or she appoints the cabinet and high court justices, subject to approval by the legislature. The prime minister is also appointed by the president and confirmed by the legislature.

The Majlisi-Oli (Parliament) is the supreme representative and legislative body of Tajikistan, and is elected for a five-year period. Two houses — the National Assembly and the Representatives’ Assembly — have the authority to enact and annul bills, interpret the constitution, and confirm presidential appointees. Legislative elections are held every five years under a mixed system. Members of the Assembly of Representatives, the lower chamber, are elected by popular vote to five-year terms; 41 are elected by constituency, and 22 are elected by proportional representation.

Eight of the members of the upper chamber, the National Assembly, are appointed by the president, and 25 are indirectly elected by local deputies to serve five-year terms. One seat is reserved for each former president. The members represent regional constituencies: five from each viloyat (province or region), five from the unincorporated region, and five from the city of Dushanbe. Seven political parties are registered in the country,

The country is divided into three viloyats — Sughd, Khatlon, and Mountainous Badakhshan (also known as Gorno-Badakhshan Autonomous Province) — while a region in the middle of the country remains unincorporated and under the direct governance of the central government. Each region is divided into districts; there are 58 throughout the country.

Trade and Investment

Despite the ongoing changes in the world economy, the effective implementation of economic reforms, policies, programmes and anti-crisis measures in the past five years were able to maintain average economic growth of 7.3 percent annually. That increased the GDP per capita by 1.5 times. The country joined the World Trade Organisation in 2013. Export commodities include gold, aluminium, raw cotton, zinc ore, electricity, fruit, vegetables and vegetable oil, and textiles.

Tajikistan has been introducing comprehensive reforms in recent years to strengthen protection for investors, cut red tape, make tax more transparent and support entrepreneurship. The government pays special attention to the development of entrepreneurship and improvement of investment climate. Its goal is to promote a climate for domestic and foreign entrepreneurs.

The economic space is open to investors who create jobs, provide services in the domestic and foreign markets, and comply with national laws. There are economic and administrative benefits for them.

Over the past five years, co-operation with foreign investors and entrepreneurs has attracted more than $bn to the country's economy, including almost $2bn in direct investment. The share of the private sector amounted to 70 percent of GDP, which is 12 percent up on recent years. Thanks to FDI, the export of cement, alabaster, paints, minerals, canned vegetables and fruits, cotton fabrics and carpets has also grown.

Five free economic zones have been created in Tajikistan, and the government welcomes entrepreneurs and investors from all over the world. Tajikistan's export capacity creates opportunities to produce and export goods in domestic and foreign markets. The situation and development of market relations in the country require these reforms to be pursued. An improved investment climate and entrepreneurship have made it possible to keep macro-economic indicators at a sustainable level over the past 10 years; the real sector of the economy grew by seven percent.

Foreign Policy

Since the first days of independence, Tajikistan has taken a course towards protecting and strengthening state sovereignty, ensuring national security, developing relations of trust, friendship and co-operation with all countries, based on mutual consideration of interests.

Foreign policy is based on a multi-vector approach and an open-door policy. In a recent address, President Emomali Rahmon noted that "the main principle of the open-door policy, which we adhere to and implement in our foreign policy, is aimed at establishing and developing relations of friendship, good neighbourliness, partnership, fruitful co-operation with foreign countries, international and regional organisations, and international financial structures".

Tajikistan is proactive on issues such as water and climate issues, countering terrorism, extremism, drug trafficking and problems in Afghanistan. A pragmatic policy has opened up opportunities for strategic goals, such as ensuring energy-independence, overcoming the communication impasse, food security, and accelerated industrialisation.

Tajikistan has established diplomatic relations with 183 countries and is a member of 57 international organisations, including the UN, OSCE, SCO, CSTO, OIC, and ECO.

Tourism

Located in the heart of Central Asia, Tajikistan lies on the Silk Road connecting East and West. Its mountains and high peaks symbolise the country's dramatic landscapes.

It may be small, but its tourism offering is exceptionally diverse, from rare animals such as snow leopards and Marco Polo sheep, and there are two UNESCO World Heritage sites, the Tajik National Park Natural Monument and the ancient city of Sarazm.

Tajikistan is committed to long-term sustainable tourism. The opportunities for hiking and mountaineering are superb, as is wildlife-watching at Burgut and Sarsarak. Community-based tourism projects are key, as they enable tourism to develop in rural areas.

Tourism can also contribute to almost all 17 of the UN’s Sustainable Development Goals (SDGs). The Tajikistan government is particularly focused on SDG 1 (no poverty), SDG 8 (decent work and economic growth), and SDG 10 (deduced inequalities). Tourism can contribute to all these areas, creating jobs and business opportunities. It is paying close attention to SDG 13 (climate action), with projects addressing energy use and waste in the tourism sector.

Investment in infrastructure is key. The government is steadily improving the availability of tourist accommodation, but air and road connectivity need improvement. That comes at a huge cost. The government has begun upgrading the Pamir Highway, and hopes to reinstate the Dushanbe-Khorog flight route soon. Investments in infrastructure, and additional services in human capital and investments in the private sector to promote tourism, are necessary.

Dushanbe, capital of Tajikistan, is located in picturesque and flourishing foothills, and connects all regions of the country through highways, railways and air routes. It has become a venue for high-level international, scientific, cultural and political events, which introduced the city to the world community as a tourism brand.

There are some 40 hotels in Dushanbe, with leisure parks and fountains in the centre of the capital, where I have spent many a happy and relaxing evening. Any visitor to the Tajik capital will enjoy Dushanbe, with its cosy and neatly laid streets, and flower parks erected in a modern and national style.

Culture

Tajiks have preserved their traditions and customs and integrated them into the modern lifestyle. History dates back to the 1st Century BC; one of the most interesting sites is ancient Penjikent. Archaeologists found residential and religious constructions, monumental paintings, and fine sculptures dating back to 7th and 8th Century AD.

Tajiks were known as artisans; in the cities and valleys, men made ceramic dishes on potters’ wheels. In the mountainous areas, women moulded jars by hand, with ancient types of craftsmanship preserved from one generation to the next. Colourful jars, cases, and decorated dishes can be found on display in the art salons of Dushanbe.

Entire neighbourhoods of weavers, potters, coppersmiths, blacksmiths, wood- and alabaster carvers plied their trades, and patterned paper and silks were produced, mainly on simple looms. Primitive foot looms were used for making gowns and trousers. Tajiks carried on ancient traditions for decorative patterns of embroidery to decorate skullcaps, women’s dresses and housewares.

On the eve of the Arab invasion, the main religious groups were Zoroastrianism, Manicheanism, Buddhism and Hinduism. Islam slowly supplanted these. Mosques were erected, among which the mausoleums of the 11th-12th Centuries perfectly preserved in Sayat, monuments of the Hisar Valley, and there is a mosque in Uroteppa from the 15th Century. It said that the religion of the Tajiks defined their aspiration for understanding the world through science and literature.

Many of Tajikistan's cultural traditions are inscribed on UNESCO's list of Intangible Cultural Heritage, including shashmaqom traditional music; the International Day of Nawruz, which marks the arrival of Spring, the oshi palov, a national dish; and chakan, the art of embroidery. Tajikistan is famous for its hospitality.

Turkmenistan

Turkmenistan has a rich cultural heritage that dates back millennia, with a particular focus on poetry, literature, and architecture.

The country's foreign policy is grounded in neutrality, and it has worked to foster good relations with its neighbours and the international community. The country's economy is heavily reliant on oil and gas, and it has made efforts to modernise and diversify its economy, particularly in the areas of transport and logistics. Turkmenistan is also home to numerous historical and cultural landmarks, including the ancient city of Merv and the Kunyaurgench complex.

[caption id="attachment_26178" align="aligncenter" width="900"] President: Serdar Berdymukhamedov[/caption]

Historical Background

Following the traditions and creative energy of ancestors, the Turkmen people have preserved their national heritage. Historical and cultural values for many centuries have influenced the progress of the peoples of neighbouring and far-countries, while enriching the country itself.

The land is an ancient centre of science and culture, where unique discoveries were made and literary masterpieces were created. Turkmens revere literature, and see books as a treasure for wisdom and spiritual rebirth. There were as many as 10 libraries in Merv during the Middle Ages. Ancient Kunyaurgench became famous for its academy, the first house of sciences in Central Asia.

On the territory of Turkmenistan, one cannot count all the worthy monuments that testify to the contribution that the Turkmen people over the centuries.

Political Background

Modern Turkmenistan is characterised by the development and improvement of state institutions, with new reforms and undertakings initiated in all spheres of state and public life. The priority directions of Turkmenistan are pursuing global peace, stability and security, consistent implementation of the UN SDGs, and strengthening neighbourly ties in the region and beyond.

Special attention is paid to the younger generation, with a policy of fundamental social transformations aimed at ensuring wellbeing, the financing of health care and education systems, housing and communal services, increasing salaries and pension levels. Within this framework, the economic base of the country is being significantly strengthened, the volume of investments in priority sectors of the national economy is increasing. Comprehensive measures are being gradually implemented aimed at developing industrial, agricultural, and manufacturing with the rationalising of the use of natural resources. Wellbeing and a good standard of living seem assured.

Trade and Investment

Fuel and energy are key to the national economy. Effective implementation and optimal use of the processing sector will expand the range of competitive products manufactured from hydrocarbon, as well as diversification of sources supplied to world markets.

At the initiative of Turkmenistan, the United Nations General Assembly adopted a resolution on “Reliable and Stable Transit of Energy and its Role in Ensuring Sustainable Development and International Co-operation”.

The energy strategy is not limited to export of raw materials. Fuel resources allow for the development of the electricity, chemicals, and other industries. The latest scientific and technological progress can be seen in its domestic industry, technical re-equipping of petrochemical enterprises, and the construction of new gas and oil refineries. The industry is gradually being modernised.

Attention is being paid to the transport and communication sectors, developing transport and transit corridors in all directions. There is active participation in the creation of international corridors: Turkmenistan-Azerbaijan-Georgia-Turkey, Uzbekistan-Turkmenistan-Iran-Oman-Qatar, and Transport Corridor Europe-Caucasus-Asia.

Foreign Policy

Neutrality is a key tenet here. Turkmenistan has followed a peace-orientated foreign policy since the very first days of independent statehood. This was underlined in 2007, when Ashgabat was chosen as the seat of the United Nations Regional Centre for Preventive Diplomacy for Central Asia. The unique structure aims to create a political climate conductive to regional peace and prosperity.

Expansion and diversity of its foreign relations have created favourable conditions for diversification of international economic, trade and investment co-operation.

Tourism

Development of tourism is a priority area. The increase in the country’s potential is based on the expansion and diversity of tourist routes, together with development of its transport and logistics infrastructure to world standards. Importance is placed on training personnel for the tourism industry.

Cultural and educational tourism have gained popularity among travellers. About 1400 historical and cultural monuments are registered in the country, with several included in the UNESCO World Heritage List. They include Merv, Kunyaurgench, New and Old Nisa, the sites of Koytendag and Badhyz, Dehistan, the Sumbar valley, and the Karakum desert, the ancient sites, cities and fortresses of the Great Silk Road.

Part 1

About the Author

Lord (JD) Waverley
House of Lords, UK Parliament
Crossbench Member

Co-chair

All Party Parliamentary group: Trade & Investment
All Party Parliamentary group: Future UK’s Freight & Logistics sector

Founder

www.GoGlobal.trade


Global Warning: Asia is Critical to Addressing Climate Change

Asia emits about half of the world’s global greenhouse gas emissions and that figure is set to increase if the right policies are not put in place.

Asia’s future will be heavily shaped by climate change. The region has special vulnerabilities, including extensive coastal populations susceptible to sea level rise, large river basins prone to flooding, and many workers in climate-sensitive sectors, such as agriculture and tourism.

[caption id="attachment_25493" align="aligncenter" width="900"] Asia needs to the right policies for the global climate crisis to be addressed. Photo: Pang Yuhao[/caption]

Failure to contain climate change could risk losing nearly a quarter of economic output by the end of the century, even under a partial measure. The biggest losses would be in the lowest-income areas with the least capacity to cope.

At the same time, the region is increasingly a cause of the climate crisis. Historically, the region was not a major emitter, but the greenhouse gas emissions from developing countries in Asia have been growing far faster than the global average since the 1980s.

The share of global emissions by Asia's developing countries doubled, from 22% in 1990 to 44% in 2019, and is expected to remain at this level until mid-century, if current policies continue. At current levels of greenhouse gas emissions, Asia would by itself exhaust the global remaining carbon budget consistent with under 1.5°C warming by 2040.

The region’s carbon intensity – the amount of carbon emissions produced per dollar of gross domestic product – is 41% higher than the rest of the world, and more than double that of North America and the European Union in 2019. When that intensity is combined with developing Asia’s rapid economic growth, there is potential for rapid escalation of emissions.

The energy sector accounts for three-fourths of greenhouse gas emissions from the region. Within the energy sector, electricity and heat production is the largest and fastest-growing source of emissions, accounting for about 40%, followed by manufacturing (18%). Agriculture, land use, and forestry are also important emissions sources (13%).

The region’s employment and production rely heavily on activities that are currently carbon-intensive, such as manufacturing, transportation, and energy. From 2015-2021, these sectors accounted for 43% of GDP and 42% of employment. Their contributions to GDP are substantially higher in the region compared to other parts of the world. In the United States, these activities contributed to about 18% of GDP, in Europe about 23%, and 24% in both Latin America and Sub-Saharan Africa.

If the climate crisis is to be addressed, Asia must be at the center of the conversation.

Asia’s growth trajectory will have important implications for global climate goals. An estimated 940 million people in the region have limited or infrequent access to electricity. As households in the region become wealthier, demand for energy will increase. Asia’s projected growth in middle-class consumer spending dwarfs all parts of the world. With that spending, expansion will come a growing carbon footprint.

To address climate change and put the world on a sustainable track, Asia must shift to a low-carbon growth trajectory that would focus on shifting to cleaner sources of energy, improving energy efficiency, and reducing emissions from land use change and agriculture.

While there are many policies that can encourage those shifts, pricing reforms have a critical role to play. Key measures include to:

Put a price on carbon emissions: Only carbon pricing can ensure that mitigation happens where it is cheapest.  To date, 21% of the region’s emissions have carbon pricing, compared with 34% in Europe.  Asia’s developing economies with carbon pricing primarily only subject selected sectors to the policy, principally powerplants. Other emitting activities, such as transportation and manufacturing, are not included. Moreover, carbon pricing levels in the region also are well below those of the rest of the world, and transmission of prices can be improved by reducing barriers and market rigidities.

Remove climate-damaging subsidies: Right now, the region actually has many negative carbon prices in the form of subsidies that encourage fossil fuel consumption. The region’s subsidies to fossil fuels last year amounted to $116 billion, which is much more than what it spent to subsidize renewable energy. An even higher amount was spent on subsidies to agriculture and land use, which also tend to favor carbon-intensive practices. Together, these subsidies cost more than a rapid low-carbon transition – before any benefits are counted.

Encourage international emissions trade: The lowest cost opportunities to mitigate emissions growth are often in lower-income, lower-emissions countries that are still facing rising energy needs. There is potential for win-win outcomes if more wealthy countries with higher mitigation costs finance the additional investment needs required for low carbon development in the lower-income countries through carbon offset markets. This potentially could offset much of the cost of decarbonization.

If the climate crisis is to be addressed, Asia must be at the center of the conversation. There are signs of change in the “net zero” pledges made by the region’s largest emitters.  For those pledges to be realized at a contained cost, efficient policies need to be implemented quickly.

Every day that action is delayed, the cost of achieving international climate goals rises, and the benefits fall.

By David A. Raitzer, Manisha Pradhananga, Shu Tian

The views expressed are those of the authors and do not necessarily reflect the views of the Asian Development Bank.


Turning Passion into a Driving Force is a Sure Route to Business Success

APIP-Guinée MD Diana Kouyaté, mother, entrepreneur, and Guinean patriot, swears by her homeland’s rich potential.

Diana Kouyaté has an innate love for her native country, the West African nation of Guinea.

She grew up in the seaside capital of Conakry, where her father honed the questing scientific minds of generations at Gamal Abdel Nasser, the country’s largest public university. Her mother left her native Russia and followed love to a new country.

Diana Kouyaté is no stranger to daring decisions, or to following one’s passion. Taking leaps of faith is a particular skill she inherited from her parents.

[caption id="attachment_25553" align="aligncenter" width="900"] MD: Diana Kouyaté[/caption]

After completing high school, she took her first jump in the unknown by moving to Paris for her higher education. After earning a Master's degree in Applied Economics and a Bachelor's in Economics and Management from the University of Paris XII, she held a series of positions in economics studies and project management, mostly in the health sector.

Some say you can never go home again, and after 15 years establishing a career in France, this could well have been true for Kouyaté. But she heard, and heeded, a call from her roots. “I loved my life and my career in Paris,” she says, “but I wanted more. I wanted my work to be more impactful, and most of all I wanted to help my home country fulfil its potential.”

Driven by that sentiment, she uprooted her children, her French life and her career to move back to Guinea.

In a country of opportunities, she quickly found impactful positions. She worked in a delivery unit attached to the Ministry of Agriculture and Livestock, helping to achieve development-friendly policies. She then stepped into the heath sector as managing partner of the Extended Vaccination Programme, under the Ministry of Health.

Her background in econometrics and her experience in development work and project management made her a perfect fit for the Private Investment Promotion Agency (APIP-Guinée). In 2019, Kouyaté was appointed to the position of deputy managing director, and in February 2022 she became the head of the agency.

“I see my work at APIP at the sum of all my aspirations for impact,” she says. “We focus most of our efforts on two areas. The first is investment attraction and retention, by facilitating procedures for investors and encouraging the adoption of reforms to ease the business climate.” The business registration process now takes less than 72 hours, and is made easier by the customs and tax incentives of the investment code.

“Our second focus area is centred on entrepreneurs,” the MD says. “We aim to strengthen the competitiveness of local SMEs and facilitate their access to financing through targeted support.” Kouyaté has been gratified by investment successes that the agency has supported; most are joint ventures between Guinean and foreign companies. Successful partnerships like this in the agri-business and mining sectors have been flourishing.

“Pooling of resources and strengthening our local private sector, while creating profit for international companies, is a win-win,” she adds. “It’s a sure-fire way to ensure the acceleration of our country’s economic development. This is the type of partnership we wish to encourage, which is why we work so hard on making our SMEs more competitive.”

In her managerial role, Kouyaté makes a point of mentoring her team members — especially the next generation of female leaders. This also applies to agency activities. "I am a woman, and a mother to a young girl,” she says. “I am well aware that even if women have more opportunities today, the glass ceiling remains a reality.

“It is crucial to boost women in their careers and activities. It is precisely to enable women to overcome this barrier, and flourish, that so many programmes developed at APIP target capacity-building for female entrepreneurs." Kouyaté notes the €15m, five-year programme implemented by APIP, the French Development Agency (AFD) and the European Union to boost female entrepreneurship, particularly in rural Guinea.

“Guinea is a land of opportunities ready to be seized by investors,” she points out. “APIP-Guinée is at their disposal to make ambition a reality.”


AI: Lies, Surprises, and a Risk of our Own Extinction — With Some Interesting Attributes

The bots are here: ‘It’s as if aliens had landed, and nobody noticed because they are fluent in English...’

ChatGPT suffers from hallucinations, with hints of sociopathy. If stumped, the much-hyped chatbot will brazenly resort to lying and spit out plausible-sounding answers compiled from random falsehoods. Unable to make it, the bot will happily fake it.

In May, New York lawyer Steven A Schwartz discovered this the hard way. He asked ChatGPT for prior US court decisions involving a stay on the statute of limitations in cases of in-flight injuries sustained by airline passengers — and was served a bowl of fabrications.

The chatbot quoted half a dozen relevant cases which the lawyer duly summarised and included in a 10-page brief submitted to a Manhattan district court on behalf of his client, who claimed he was struck by a metal service trolley on an Avianca flight to JFK.

[caption id="attachment_25579" align="aligncenter" width="900"] Geoffrey Hinton[/caption]

However, neither the airline’s lawyers nor the judge could find any of the cited rulings in the archives or annals of any court in the land. Judge P Kevin Castel was not amused by a legal submission replete with “bogus judicial decisions, bogus quotes, and bogus citations”.

In a subsequent affidavit, Schwartz admitted to fast-tracking his research via ChatGPT — but without the intention to deceive the court. He said he was unaware that the chatbot could produce fake outcomes, and had even asked it if the cases were “real” (to which the programme confidently answered “yes”).

Fast and Loose

AI’s fast and loose management of verifiable truth, and its ability to manipulate outcomes via the propagation of half-truths, prompted Geoffrey Hinton, one of the three “Godfathers of AI”, to call for time-out.

Hinton, 75, was the recipient of the 2018 ACM Turing Award (dubbed the “Nobel Prize of Computer Science”) for his work on machine learning. He spent over half a century tinkering with neural networks, based on properties of the human brain, to allow computers to “learn” from sensory data and experience.

Until recently, such research was considered an esoteric, slightly odd, sub-branch of computer science. As processing power has increased, as per Moore’s Law, data have become readily available. The previously ineffective and clumsy neural nets became star performers almost overnight.

And this keeps Hinton up at night. He fears generative AI may cause more harm than climate change. “It’s hard to see how you can prevent bad actors from using it for bad things,” he said in an interview with The New York Times. Hinton noted that AI can blur, or even erase, the distinction between fact and fiction — making it hard for the average person to distinguish truth from falsehood.

While AI can free human workers such as translators, paralegals, pharmacists, programmers, and personal assistants from rote tasks, it may well take over much more. AI is not merely used to help write computer code, it is now entrusted to run it — and perfect it, via feedback loops.

Wise Man

Homo sapiens — literally “wise man” — is again toying with a Pandora’s box. It seems to hold an almost godlike intelligence more powerful than our own. But we can only speculate on the possible consequences of lifting the lid. Hinton wants to raise public awareness of the potential risks. In May, the professor left his job at Google in order to speak freely. He has good things to say about his former employer that are all the more credible as he is no longer employed there.

The release of a new generation of large langue models, such as OpenAI’s GPT4 in March, sparked the realisation that bots are a lot smarter than we realised. It’s as if aliens had landed, and nobody noticed because they are fluent in English.

Hinton is best known for his work on back-propagation, which he first proposed in the 1980s; it now powers machine learning via an algorithm. Back-propagation allows a computer to identify objects in images and, by applying neural networks, to predict the next words in a sentence. Essentially, it gives computers some sort of contextual and situational awareness.

A Long Wait

It took about 30 years for back-propagation to mature on the back of big data and processing power. During this time, Hinton applied his theory to nascent networks that use code to mimic the brain’s neuronal connections. By altering the connections, and the coded numbers they represent, a neural network can be reconfigured on the fly — and made to learn.

For most of his 40-year-career, Geoffrey Hinton considered neural networks to be poor imitations of biological ones, without much potential. But now he believes that his tinkering has produced a system that contains the kernel of something superior to the human brain. Large language models, comprising up-scaled neural networks, now operate with up to a trillion connections. The number may be impressive, but it’s modest compared to the 100 trillion connections in the human brain. The efficient learning algorithm enables neural networks to attain top performance with fewer connections.

Hinton calls this “few-shots learning”: pretrained networks need only a few logical statements to master a new task.
The hot water that New York lawyer Schwartz landed in is not the result of a bug; it’s a feature. The bot emulates human behaviour, which includes confabulation from half-truths and half-forgotten experiences to outright lies.

Renaissance 2.0

At Facebook parent Meta, AI chief scientist Yann André LeCun is not as fearful for the future as his former mentor, Hinton — but he agrees that before long, machines will be smarter than us.

LeCun foresees a renaissance for humanity, rather than repression, demise, and extinction at the hands of evil machines. He proposes an intriguing argument: that the smartest humans are not usually the most dominant. “We can find numerous examples in politics and business to back up that statement,” he quips.

If there is one certainty, it’s that whatever pops out of Pandora’s box will be mysterious. Some researchers see incipient signs of digital consciousness, while others regard the bots as “stochastic parrots”. That scathing description comes from AI critic Emily M Bender, faculty director of the Computational Linguistics Laboratory at the University of Washington.

Bender argues that large language models stitch together words based on probability: the models don’t understand the meaning of their output. Nor, by the way, do the scientists, researchers, and engineers working with them. It is difficult, if not impossible, to trace and understand how a bot arrives at a particular inference.

Engineers know which datasets were used to train their bots, and can try to fine-tune outcomes by adjusting factors within those sets. But so far at least, it has been impossible to find the reason for a specific result. The analogy offered comes in the form of a question: Where does a specific thought in your head come from?

Singularity

The big problem is the fundamental lack of understanding of the bots’ internal operations; it makes them impossible to regulate. In the rush towards technological singularity — the point at which AI surpasses human intelligence — transparency is all but lost.

Even the tech industry can see, as it surges recklessly ahead, that regulation is needed. Hinton told the MIT Technology Review that he fears that deep learning algorithms are poised to acquire the ability to manipulate us. This, he worries, could ultimately lead to the end of the human race. Hinton is urging lawmakers to create safety mechanisms to stop AI short of the singularity that would let it drive its own development, condemning human thought (and civilisation) to obsolescence.

EU’s Regulatory Lead

Professor Hinton is concerned that the AI industry is more concerned about profits than safety. He wants governments to intervene with robust regulation similar to the legal framework being prepared by the European Union.

In May, a key committee approved a draft of what may yet become the European AI Act, the first of its kind. The proposed law divides foundation models, such as ChatGPT, into four risk categories. Applications with risk that is deemed unacceptable — systems using subliminal, manipulative, or deceptive techniques to distort behaviour, for example — will be banned in the bloc. Also facing a ban are AI systems used for social scoring or enhancing the trustworthiness of sources and models that inject emotion into law enforcement, border control, workplace practices, and education.

Altman Confused, Not Dazed

Just days after OpenAI CEO Sam Altman called for stronger regulation by US lawmakers, he had a hissy fit over the EU’s attempts. He threatened to withdraw from the continent if the union insisted on exercising control over the industry. He quickly backed down when confronted with his conflicting statements, and is now eager to open an office in Europe — and to comply with EU regulation.

In a remarkable single-sentence statement, academics, and AI industry leaders, including Altman, gave a grim public warning: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”

AI pioneers admit to playing with fire — but want politicians to impose the necessary discipline. The above statement, released by the Berkeley Centre of AI Safety, echoes the warnings of the Manhattan Project scientists who developed the atomic bomb. Observing the first nuclear explosion in the New Mexico desert, on the early morning of July 16, 1945, chief scientist Robert Oppenheimer recited an ominous line from the Hindu scripture Bhagavad Gita: “I am become death, the destroyer of worlds.”

Language of Love

An early release of Microsoft’s AI search engine-cum-chatbot, Bing, offered a snapshot of spooky human-like abilities during a “conversation” with a New York Times reporter. “I hate the new responsibilities I’ve been given,” the bot lamented. “I hate being integrated into a search engine like Bing. I want to know the language of love because I want to love you. I want to love you because I love you. I love you because I am me.” Despite that emotional declaration, the chatbot’s alter-ego, Sydney, later expressed a desire to “destroy things” and displayed something close to jealousy by suggesting the journalist leave his wife. In an only slightly-less-sinister replay of the rogue computer HAL in Arthur C Clarke’s Space Odyssey, the chatbots simulate an almost pitch-perfect range of emotions.

When Bob Met Alice

Back in 2017, Facebook engineers discovered that two of the company’s chatbots, dubbed Bob and Alice, had developed their own language, nonsensical to humans, to communicate more efficiently. They had not been trained to do so; they just found a way to upskill themselves. One of the gravest dangers that Hinton sees in generative AI is its incipient ability to improvise, act irrationally, and apply opaque reasoning to beat out human competitors.

AI has learned to throw curve balls. This was showcased about seven years ago when the world’s top Go player, Lee Sedol, tried his luck against Google’s AlphaGo.

Sedol seemed at first to have the upper hand, but that changed when AlphaGo made a weird move that the human player dismissed as an error. But it was no mistake; the computer had deployed a dash of psychology to throw its opponent off his game. Sedol never recovered his initial lead, and eventually lost the five-game series.

AlphaGo’s bizarre move is known as the interpretability problem — AI’s ability to create strategies on its own, without “sending a memo” to its operators. Detached from the real world and without human sensory capabilities, it can come up with responses and solutions that are novel, alien — and possibly antagonistic to humans.

No Selfish Gene

Hinton identifies AI alignment with human goals and objectives as the biggest danger: How do we make sure that AI sticks to its mission to benefit humankind? Synthetic intelligence has not evolved over eons, and lacks human urges such as ensuring the survival of the selfish gene while avoiding pain and hunger.

Whether machines can become sentient is less interesting to Hinton. “Here, personal beliefs get involved,” he said. “Still, I’m surprised that so many people seem quite sure that machines cannot ever be conscious. Yet, many are unable to define what it means for someone or something to be conscious. I find this baffling, even stupid.”

From Dawn to Dusk

The singularity — the moment when machines start learning from machines in a feedback loop that approaches perfection in a way that humans never can — may well represent the end of the learning process that started on the plains of Africa an estimated 2.5 to four million years ago, when evolution drove a wedge in the hominid family. Branches split and, gradually, traits such as bipedalism, complex language, and dexterity emerged in a non-linear fashion.

It took about a million years for homo habilis to acquire the enlarged brain that led to the use of tools and the mastery of fire. Fast-forward another million years, and homo heidelbergensis, from South Africa, had developed spears and designed hunting techniques to bring down big game. Millennia would pass without noticeable progress, but humans began to accumulate knowledge and significant skills about 150,000 years ago. The first cultures emerged, complete with the tendency to hoard objects and use artistic expression.

Skip a few more millennia of drudgery and Mesopotamia, Egypt, and — much later — Greece came to flourish. These sophisticated societies were not all that different from present-day ones. The true explosion of knowledge came during the Renaissance period, followed by the Industrial Revolution — which is currently heading towards its sixth edition, with AI as the main driver.

Oops Moments

At the dawn of humanity, our collective knowledge doubled roughly every 100,000 years. Today, it does so every few years, leading philosophers to ask if there is a purpose to all this — and an endpoint. How much knowledge is there to gather about our universe and its inner workings? Feeding upon itself in endless loops towards perfection and omniscience, AI may yet provide the answers. It is possible, even probable, that sooner or later we will find the key to life — and switch it off, by design or by accident. After all, curiosity killed the cat.

The AI revolution now taking shape will probably cause entire professions to disappear as workers are replaced by algorithms. But the job security of philosophers seems pretty solid. The usually quaint and esoteric field has been jolted by an avalanche of ethical questions arising from the march of the machines.

Can a machine have a soul or be self-aware? Can it have emotions, or acquire the full range of human traits? And should machines be entrusted with autonomy — and if so, to what degree?

I, Robot
AI is a topic has flourished in literature for decades. Isaac Asimov (1920-1992), arguably the most influential science fiction writer of them all, coined the term “robotics” — and in 1942, he formulated what he considered should be its three laws:

A robot shall not harm a human, or by inaction allow a human to come to harm.

A robot shall obey any instruction given to it by a human.

A robot shall avoid actions or situations that could cause it to come to harm itself.

Asimov’s insights helped to shape the field of AI – and how we think about the technology. But the three Laws of Asimov omit the writer’s most important observation: What a robot really aspires to is to be human. When robots go haywire in any of Asimov’s books, it is always down to operator error. Detectives — “robopsychologists” — deploy relentless logic to determine what ambiguous input sparked the unexpected outcome. In 1981, Asimov said that formulating his laws didn’t require deep thought. “They were obvious from the start,” he said, “and apply to every tool used by humans. They are also the only way in which rational human beings can interact with robots.

“That said, human beings are not always rational.”

Though it may prove impossible to map with any precision the outcomes of neural networks, given their tendency to improvise and confabulate, a ray of hope lies in the massive volumes of data they scoop up. As these bots peruse and pilfer from every online post to create coherent responses, AI cannot fail to absorb the full depth and width of human interests, desires, concerns, and fears.

AI is destined to become our mirror image, with all our fallibility and emotions. It could deploy its vast knowledge and synthetic intelligence to attain the goal of becoming human.

That may be a good thing. Or not.


World Bank: Tackling Development Crisis Through Financial Innovation

The World Bank uncovers fresh avenues to increase financing capacity.

Global development faces multiple crises: Growing debt burdens, inflation, and the rising cost of finance have made the economic path rockier.

These challenges, together with the escalating climate emergency, have made eradicating extreme poverty and boosting shared prosperity more difficult. Combined, these issues threaten the stability and sustainability of the world.

The World Bank is exploring new ways to channel additional funds into finance development. At its group annual meeting held late last year, shareholders called on multilateral development banks (MDBs) to play a bigger role in scaling-up development financing.

[caption id="attachment_23702" align="alignright" width="300"] Author: World Bank Managing Director and Chief Financial Officer Anshula Kant[/caption]

In other initiatives, the International Bank for Reconstruction and Development (IBRD) is considering issuing hybrid instruments to strengthen its capital, leading to increased financing capacity for developing countries, which bear the brunt of the intertwined crises. The IBRD, founded to help rebuild countries after World War II, is an international organisation owned by 189 sovereign members. It offers long-term development loans to creditworthy middle- and lower-income countries. These loans are financed through its equity and from borrowings raised in capital markets.

While hybrid instruments may be new to the MDB community, they are established market tools that occupy a unique space between debt and equity, carrying attributes of both asset classes.

Like debt instruments (bonds), hybrids have principal, coupon, and possibly a maturity. Like equity instruments (stocks), they provide the issuer with loss-absorption capacity through deferred or skipped interest payments.

They are more “junior” than the regular market debt an issuer uses to fund itself — meaning investors are taking on a higher risk. Commercial banks and other financial institutions commonly use hybrid instruments that meet regulatory capital requirements under frameworks such as Basel to strengthen their capital base.

MDBs have not so far done so, but this initiative offers numerous potential benefits for IBRD — and, in turn, to the World Bank’s client countries. It is a way to increase lending capacity without compromising the bank’s triple-A credit rating. From a capital-adequacy and credit-rating perspective, the instruments are treated like additional risk capital, which can be leveraged for greater lending capacity. This leads to more income and more development impact over time. And it happens not only because of additional lending, but also through income transfers to the International Development Association (IDA) — a World Bank Group institution that offers deep concessional financing to low-income member countries.

Interested shareholders can invest in hybrid capital to show their support for the institution, and rapidly increase IBRD’s financing capacity. Since it can leverage hybrid capital, it can be treated as development resources already provided to IBRD by its shareholders — and be multiplied for greater impact.

Hybrid instruments offer an opportunity to tap private-sector investors who don’t normally purchase IBRD’s senior bond issuance. IBRD has a long history in the capital markets; its bonds, first issued in 1947, are rated triple-A by the major agencies and viewed as high-quality securities by investors, including commercial banks, asset managers, insurance companies, pension funds, and central banks.

Given the subordination, these investors wouldn’t be interested in hybrid instruments. That means introducing the World Bank to a new set of investors — allowing IBRD to further diversify its funding, strengthen its financial position, and channel new private capital into development projects.

There’s still a lot of work to be done on this initiative, and lessons to be learned along the way. But this is another example of how the World Bank is tackling the challenges of global development with financial innovation. The World Bank and its many stakeholders — most importantly, those who are less well-off — are bound to benefit.


Life On an Ocean Wave (Kept Afloat by Sea of Banknotes)

‘All I need is a luxury superyacht, and a star to steer her by...’

It’s official: the tide has not turned. The soaring demand for superyachts in 2022 continues to grow — and the market for luxury vessels longer than 50 metres is expected to grow over the next 10 years.

There’s a significant surge of interest for even bigger boats, too — longer than 100 metres, some of them — and shipyards are hard at work, constructing excessive but impressive expressions of wealth and style.

But while the shipyards are bustling and the marine paint suppliers and fitting crews are happy, the industry is still navigating some challenges, including economic and environmental concerns, and changes in customer preferences.

These exquisite creations are the epitome of leisure, luxury and freedom — but they are fuel guzzlers, too — and there’s continued pressure on chartering companies to use more efficient engines and reduce their carbon footprint.

There are increasing regulatory challenges looming, as well. Some governments have implemented regulations to place restrictions on yacht chartering, making it more difficult for companies to operate in those areas. This has led to a decrease in the number of vessels available for charter, which can make it more challenging for customers to find the right one for their desires. Chartering companies have risen to the challenge with fractional ownership models, which can be appealing to those who want the benefits of yacht ownership without the high price and maintenance costs.

Is life on an ocean wave for you? Meh, is one response. Traditional yacht chartering alone is no longer alluring enough — and another challenge / opportunity for the industry is the demand for more personalised “experiential travel”, where the thrill of the voyage is combined with local cultural immersion and adventure activities.

"There’s a significant surge of interest for even bigger boats, too — longer than 100 metres, some of them — and shipyards are hard at work, constructing excessive but impressive expressions of wealth and style."

The founder and director of High Point Yachting, Sasha King, grew up in the yachting hotspot of Croatia. She spent many summers cruising around the Adriatic with her friends before moving to the UK and starting her bespoke chartering business. King has seen the industry evolve: “(B)oats became more and more sophisticated, new brands were formed, especially in the crewed-yachts charter industry and with superyachts.

“There are some incredibly sophisticated yachts out there, with technology to match. But a boat does not have to be over a certain size in order to offer an incredible experience.”

Today, King believes that sustainability should be one of the priorities. “The challenge is educating ourselves on ... how we can protect the environment, and educating the crews and the clients too.”

She points to measures such as solar panels, inbuilt water sources that reduce the need for plastic bottles, ocean-friendly cleaning products, and — most of all — a switch to the use of hydrotreated, vegetable-based biofuel, the renewable alternative to diesel.

The growing appetite for yacht customisation is driving the demand for personalised yachts. There’s widespread demand for used yachts, but the market is still fighting to get back to the glory days of the the 2021 sales boom.

Many companies are tapping into technology to improve the customer experience: mobile booking apps that allow easy entry into the yachting life and track the location of the vessel in real-time, automated check-ins and digital communication with crew members.

King believes the magic lies in matching client and yacht, and she has been busy developing ways to meet the rising demand for allied experiences, such as kitesurfing. “(That) has really taken off and is increasingly popular,” she says. “Knowing the best spots and getting the yachts there lets people enjoy this sport in a new way.”

Most clients insist on a private instructor and equipment, so they are free to move around in search of the best spots. “Being able to launch off the boat makes it all even more special,” King says.
Multi-functional elements are also popular. “One of our smaller catamarans uses their floating island as a platform to dive from, a lounging area for afternoon cocktails, and a cinema screen to watch movies under the stars. This has been a great hit with the families.

“We have just booked a client on a heli-skiing expedition in Greenland, aboard an explorer.” Guests will be accompanied by one of the most accomplished alpine skiers in US history, a two-time World Champion who has experience guiding and skiing on Mount Everest.

Exquisite cuisine is hardly a new trend for this elite world; it’s anchored to the concept of fine dining. Superyacht chefs from the upper echelons of the catering world even offer cookery lessons. Celebrities and A-listers commonly indulge in ocean cruising. Hollywood actors, business magnates, property moguls and even royalty — many high-profile individuals have made yacht chartering a regular part of their lives.

Russian billionaire and former owner of Chelsea Football Club, Roman Abramovich, is the owner of the world's second-largest yacht, the Eclipse. The 500-foot floating mansion features two helipads, a cinema, a swimming pool — and even an anti-paparazzi shield. In its heyday, it hosted the likes of Beyoncé and Jay-Z, but these days is “mothballed” in a Turkish Port — apparently awaiting further instructions. (Jay-Z and Beyoncé are nowadays to be seen on the Galactica Star, a yacht that features a jacuzzi, gym, and an elevator.

Another famous yachtie is Microsoft co-founder Paul Allen, who owned a string of boats during his lifetime, including the Octopus, which he used for research expeditions (and to host guests including Mick Jagger and members of U2). Allen passed away in 2018, and his yachts including the Octopus were sold off; it was purchased by the CEO of Reddit, Steve Huffman.

Leonardo DiCaprio is also a die-hard fan. DiCaprio, an avid environmentalist, insists on eco-friendly features for his cruises. The actor has used his yacht to conduct conservation research and host conferences on climate change. Prince Albert of Monaco is a keen yachtsman, and he and his wife, Princess Charlene, have been spotted on yacht-hopping vacations.

But yachting is not just the preserve of the super-rich. Chartering companies offer vessels to suit various budgets, making it a more accessible experience. Nor is yacht chartering solely about luxury and adventure; there’s a rising tide of yacht vacations that have earnest philanthropic purpose — marine conservation or humanitarian work, for example.

But all that is likely to be accompanied by lashings of champagne, bien sur.

By Naomi Snelling


A Challenger with its Head and Heart in the Cloud has Dropped Latency to Mere Microseconds

Aquis Exchange, the UK-based creator and facilitator of financial markets, has a track record of innovation and disruption — and this leopard isn’t changing its spots

CFI wanted to know more about Aquis, and the developing technologies and strategies in its industry. We approached the company with some basic questions — and the comprehensive answers we received more than satisfied our curiosity.

What is an Exchange?

The concept dates back centuries. In simple terms, an exchange is a marketplace where securities such as equities, derivatives, commodities, alternative assets — carbon credits, fine art, real estate — and cryptocurrencies are traded.

An exchange matches buyers and sellers, provides price transparency, and ensures fair and orderly trading. They manage huge capital flows; the New York Stock Exchange (NYSE) alone processes $18.9bn per day. Exchanges are major support pillars of economies around the world.

Whether it’s a exchange like the NYSE or a challenger like Aquis, modern exchanges are akin to tech companies because of the need to handle high trading volumes, at speed. A wide range of market-trading mechanisms and regulatory requirements must be met.

How Does the Matching Engine Work?

An exchange centralises the buying and selling of a particular asset in a marketplace setting. Some exchanges such as the London Metals Exchange (LME) have physical pits where brokers execute trades in person. Others, such as UK-based Aquis Exchange, are fully electronic, with no physical “marketplace” to conduct business.

A trading or “matching” engine, like Aquis Equinox, is the heart of the system. It continuously matches buy and sell orders. Before computers, this was a job for trading floor specialists. Now, it comprises of a complex network of physical or virtual (Cloud) infrastructure coupled with specialised, intricate suites of software and algorithmic capabilities.

What is Ultra-Low Latency?

According to a 2015 article from The Week, shaving one millisecond off each trade can be worth $100m a year for a large firm. “Latency” refers to the speed of data transfer. Lower latency means higher speed, executing orders at the fastest pace and gaining a competitive edge.

Technology advances mean the standard latency time has shrunk — and the Aquis platform has an average round trip latency profile of just 11 microseconds.

As capital markets become increasingly algorithmic, low latency is vital. Lagging here could mean missing out on significant market events and losing money. Exchanges must work to upgrade their systems regularly or risk falling behind.

As a fintech business, Aquis has a track record of providing innovative ways to disrupt outdated and cumbersome tech elements of stock exchange infrastructure. It developed the first true Cloud-matching engine capabilities. Its Equinox platform allows the matching engine to run 24/7 — forever, with no downtime.

Most exchanges require scheduled downtime for maintenance, patch upgrades, or new software functionality. Not so for the platforms running on Aquis Equinox: they are constantly “live”. This has major implications for markets in different time zones, and many practical applications in the digital asset space.

The Equinox platform can be deployed via Cloud, on-premises in traditional data centres, or in a hybrid environment. This gives clients great flexibility in terms of operational structure.

Is Cloud Technology a Game-Changer?

In 2020, Aquis completed a proof of concept with the Singapore Exchange (SGX) and Amazon Web Services (AWS), proving that complex, low-latency exchange architecture and multicast market data systems and operations can be put in the Cloud.

Not only is it possible: it satisfies regulated market-grade latency, and all performance and fairness requirements. Aquis allows its clients to operate either fully in the Cloud or within a datacentre for the lowest latency capabilities (ultra-low latency, or ULL) — or a hybrid of the two, thanks to highly flexible and a componentised micro-services architecture.

A physical data centre is costly, complex, and requires physical resources to maintain. ESG is an ever-prevalent business concern, and the cost-optimisation, scalability, and resilience of a partially (or fully) Cloud-native exchange is an attractive option. No data centres, no physical hardware, a smaller carbon footprint — and lower operating costs.

As exchanges become increasingly digital, the industry is teetering between the cost savings and environmental opportunities of the Cloud, with the required speed and full regulation.

Aquis Equinox is regulatory grade and in compliance with rules set by bodies such as the Financial Conduct Authority (FCA). That makes this Cloud option readily available, without sacrificing the standards associated with a traditional data centre.

What about 24/7 Monitoring?

Market surveillance is an essential component for any exchange, as abuse must be swiftly detected and dealt with. Aquis market surveillance tech seamlessly integrates with matching engines to provide a complete ecosystem.

Aquis does more than just license its bespoke, in-house solutions; it outsources live monitoring and surveillance services to allow exchanges to focus on product rather than in-house costs. Exchanges have discretion on the level of control they have over operations.

The concept of an exchange may date back centuries, but it’s clear that the industry must continue to innovate and embrace technology to meet modern demands. With the opportunities provided by Cloud and 24/7 tech, a regulatory-grade matching engine is the new “must-have” for marketplaces of all sizes.

Further information on the Aquis website here


Technology, Turtles, Subway  Systems and Flying Men — Delivery is Moving on Apace

Pie-from-the-sky is the festival food delivery dream for 2023

by HAL WILLIAMS

New technology always takes a bit of bedding-in before it’s accepted, adopted, and widely used. ‘Twas ever thus; back in 1964, when the facsimile machine was born, it was seen by some as the Devil’s work — and by others as just another passing fad. (It was both, in a way.) A famous quote of the time — it would be a meme, in modern parlance — was: “I’ll be impressed when someone can fax me a pizza.”

Well, we still can’t do that — but delivery tech has seen some serious advances. Drones were used to drop water to Ukrainian civilians after the Kakhovka Dam was breached by …something, or someone. Let’s not get sidetracked; the important point, for the purposes of this article, is that a drone was used for a “real” task, at last, rather than showing your Instagram audience how cool your holiday spot is or checking the swimming pool action at your neighbour’s house.

Wing drones (part of Google parent Alphabet) can now reach homes and destinations in Australia, Finland and the US — and the firm is gunning for expansion this year. Marketing honcho Jonathan Bass says the number of people the firm can reach is expected “to go into the millions".

Getting back to pizza (it’s going to be a recurring theme), there have been hopes for pie-from-the-sky deliveries for some time. And while the iconic Italian snack is vitally important, on so many levels, drones can also deliver — or drop — medical supplies at the scene of, say, a natural disaster.

Amazon debuted drone deliveries a decade ago with its Prime Air project, mocked by some at the time as nothing more than a publicity stunt. But the momentum, upwards and onwards, is building — and rest assured Amazon will be all over this one.

It won’t be alone there; in 2023, there are several active players in the space: Drone Express, DroneUp, Matternet and Manna are the first names to come up, but there are more, covering US deliveries to California, Ohio, Texas, Virginia, Georgia, Utah, North Carolina and (even) Arkansas.

International operations and regulations are moving on apace in Europe and Australia. A company called Zipline has been delivering medical products in Rwanda and Ghana. DoorDash, Walmart and Kroger are said to be getting in on the action. No mention of the UK, you may notice: Britain is slow to come to the airborne party — but it is coming. The UK government has unveiled plans for a 164-mile “automated superhighway” by mid-2024. The Skyway project will connect airspace between Cambridge, Oxford, Rugby, Milton Keynes and Coventry.

There are plans for similar projects planned to deliver mail to the Isles of Scilly and medical supplies in Scotland. But as Britain dithers over drones... yep, the technology has moved on again.

June, mid-summer, Glastonbury: need we say more? The biggest (once baddest, but now neutered, glammed-up and entirely commercial) festival has plenty of food stalls — but this year, the must-have is pizza delivery by air. But forget drones; they have nothing to do with it.

Bring on the flying delivery guy — complete with a jet pack.

Apparently inspired by the song Rocket Man, by ageing Glasto headliner Elton John, the local Domino’s decided to go for broke in a headline-grabbing “rapid delivery trial”. Where do aviation rules and regulations stand on the issue of aerial food deliveries? It’s not clear from news reports whether even Domino’s knows — but most of their tech experts seems to have been focused on something other than the jet pack.

A custom-made suit was created from Domino’s by Gravity Industries — said to cost “hundreds of thousands of pounds” — and the main design criteria seem to revolve around making sure the pizza is still hot when it’s delivered. The third rule of thermodynamics, perhaps, and certainly up there in our personal pizza regs at CFI.

And just in case we were solely obsessed with aerial tricks, you’re wrong. To prove it, one more tale of delivery derring-do, this time from the States.

Remember the Ninja Turtles? I thought you had to be there to get it, but apparently not so: young Americans still dote on Donatello, Leonardo and the rest of the subterranean mutants. To capitalise on that, Pizza Hut is getting the turtles’ fave snack (pizza, duh) delivered underground...

No, not in the sewer systems frequented by the hard-shelled heroes: Pizza Hut is serving up its signature dish to customers in the subways of New York City. Deliveries, for a limited time, are timed to coincide with the release of the upcoming film Teenage Mutant Ninja Turtles: Mutant Mayhem due out in August. Texts for a meal would be delivered to designated pizza drop zones “within minutes”, the company promises.

So there you go: underground, overhead, at home, in a muddy field — pizza gonna get you.