IFC on Climate Smart Investment: A Gateway for Green Growth in South Asia

[caption id="attachment_12646" align="alignright" width="300"] Kuala Lumpur[/caption]

Today in India, with a tap of a smartphone, a manufacturer instantly books shipping services for his/her goods through a virtual marketplace. BlackBuck’s online platform has rapidly grown to connect over 350 shippers with a network of over 80,000 freight truckers, much like the Übers and Olas of passenger ride-sharing applications. Using this profoundly simple idea, BlackBuck is bringing unprecedented efficiency and transparency to transport logistics in the world’s fastest growing economy.

This innovative and climate-smart business model, and many others like it across South Asia, sheds light on how the private sector in the region has adapted to global economic headwinds, capitalising on climate-related opportunities for rapid growth. A recently issued report by the International Finance Corporation (IFC) – a member of the World Bank Group – Climate Investment Opportunities in South Asia finds an aggregate investment opportunity of $3.4 trillion in key sectors such as green buildings, transport including electric vehicles, urban infrastructure, renewable energy, and climate smart agriculture in the region’s transition towards a low-carbon growth path. Although a significant portion of this investment potential lies in India due to the scale of its markets and size of its population, there is substantial untapped opportunity for growth in the rest of South Asia.

"Although a significant portion of this investment potential lies in India due to the scale of its markets and size of its population, there is substantial untapped opportunity for growth in the rest of South Asia."

Where Are the Investment Opportunities?

Businesses in South Asia are now taking a leadership role in transitioning the region towards a low-carbon and climate-resilient economy, benefitting from unmistakable signalling from state and local governments. Recognising that inaction could cost the region more than $73 billion per year on average through 2100, the governments of Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka have each established climate action targets as signatories to the 2015 Paris Agreement. These policies are creating a favourable environment for businesses to invest in ambitious climate-smart technologies and account for climate risks inherent to their business models. There are several areas in the region that hold the greatest promise:

Climate-smart urban infrastructure: The Climate Investment Opportunities in South Asia report finds that 250 million more people are expected to inhabit South Asia’s cities by 2030. This will create a $1.5 trillion opportunity for green buildings investment between 2018 and 2030. In few countries is this more apparent than in India whose urban population is expected to grow to 590 million, or 40% of the total, by 2030. Movement of India’s young, large, and growing labour force to urban areas is creating a significant investment opportunity to create climate-smart urban infrastructure to accommodate this shift. Ground-breaking public-private partnerships, such as street lighting renovation in cities like Bhubaneswar, are demonstrating how the private sector can rise to meet ambitious targets set by the government. By tying private sector rewards to energy saved by the city, this agreement has accommodated retrofitting of nearly 20,000 street lights throughout the city and created a centralised control and monitoring system. The IFC is replicating this project across the country in Jaipur, Berhampur, Cuttack, Rourkela, and Sambalpur – collectively reducing greenhouse gas emissions by nearly 50,000 metric tons per year while making streets safer for citizens.

[caption id="attachment_12641" align="aligncenter" width="590"] Figure 1: South Asia's climate-smaart investment potential 2018-2030 ($ billion). By fully meeting climate targets South Asia can unlock nearly $3.4 trillion in climate-smart investment © IFC.[/caption]

The need for modern, climate-smart infrastructure is no less vital in rural areas. In Bangladesh, where approximately 70 million people lack access to grid-based electricity services, and another 60 million have only sporadic access, there are new clean energy solutions. IFC’s Lighting Bangladesh initiative aims to provide access for 2.5 million people in the country to clean, affordable energy by catalysing the country’s private sector market for modern off-grid lighting products, home systems, and mini-grid connections.

With a role to serve in both urban and rural communities, alow-carbon transportation infrastructure is also emerging as an attractive private sector investment opportunity that will play a key role in driving future economic activity. For example, Bhutan’s 2040 Integrated Strategic Vision outlines the construction of 2,500 kilometres of rural roads by 2040, expanding and improving highways, and introducing low carbon inter- and intra-city public transport services. In particular, the country has announced plans to replace its entire fleet of cars with electric vehicles and has partnered with Nissan Motor and Mahindra & Mahindra to replace the entire public-sector and taxi vehicle fleet with electric vehicles in its capital city, Thimphu. The government has provided tax exemptions for the importation of electric vehicles to further promote their uptake.

Clean energy: Rising to meet demand for access to energy, South Asia can unlock over $411 billion in renewable energy investments, not including hydropower projects, through 2030. This significant financing requirement cannot be fulfilled entirely by public funds given competing government priorities and the sheer scale of investment required. Businesses and investors across the region are already acting to increase their green investment. In 2015, 293 companies pledged to invest in $100 billion worth of renewable energy projects in India by 2022 as part of the country’s RE-Invest Summit.

[caption id="attachment_12644" align="aligncenter" width="579"] Ravi Saini sells fruit under new street lighting in Jaipur. © Iwan Bagus/IFC.[/caption]

In Sri Lanka, the government’s target to shift away from imported fossil fuels to achieve energy self-sufficiency by 2030 through domestic renewable energy has attracted significant private sector interest. In 2017, the IFC extended its long-term partnership with the Commercial Bank of Ceylon, committing $100 million to help the bank expand its lending for private sector renewable energy and energy-efficiency projects in the country. These projects are expected to create up to 23,250 new jobs while saving over 165,000 tonnes of greenhouse gas emissions annually.
Climate-smart agribusiness: Climate-smart investment opportunities in the region are also abundant in sectors beyond infrastructure and energy. In Nepal, agribusiness employs almost 66% of the working population and contributes a third of the country’s GDP. Highly vulnerable to climate change, the country has prioritised resilience to ensure food security by promoting resource efficient technologies and local crops – creating an investment opportunity of $4.8 billion through 2030. To help lay the foundation for future investments in its agribusiness sector, Nepal has partnered with the Pilot Program for Climate Resilience, which aims to increase revenues of farmers and agribusinesses throughout the region by identifying and promoting high yield climate resilient soil and seed varieties and water management practices.

Financial innovation plays an important role helping South Asian companies adapt and thrive in increasingly climate-vulnerable industries. Bangladesh’s agribusiness sector, for example, contributes 20% of the country’s gross domestic product but is highly vulnerable to frequent natural disasters – making lenders reluctant to extending finance to the sector. Responding to this unmet need, Green Delta Insurance has developed weather index-based insurance products for smallholder farmers and financial institutions lending to the industry, helping to minimise the impact of crop losses caused by drought, flooding, and cyclones. Once fully subscribed, these products are expected to cover 75,000 farmers across Bangladesh, helping the country realise a potential $9.1 billion in climate-smart agribusiness investments through 2030.

Continued Signalling Remains Critical

Despite this admirable progress, unlocking trillions more in finance for climate-smart projects in key sectors such as transport, green buildings, waste, water, agriculture, and renewable energy will require further appropriate reforms. By intensifying their upstream engagement with the private sector and streamlining processes for project development and approval, South Asia’s governments can more efficiently channel funds towards catalytic market-creating investments.

For example, Sri Lanka has announced plans to introduce standardised e-procurement and permitting processes for climate-related projects. Meanwhile, Bangladesh and Nepal are pursuing public-private partnerships for public transport infrastructure and hydropower, respectively. These proactive investment policies are helping reduce project transaction and administrative costs while providing developers more certainty with more predictable returns on investment.

[caption id="attachment_12643" align="aligncenter" width="879"] Agriculture employs two-thirds of the population in Nepal. ©Simone McCourtie/World Bank.[/caption]

Often these infrastructure projects and public-private partnerships occur at the local or city level, where creditworthiness is a bottleneck to accessing the long-term resources needed to finance projects. Introducing credible accounting frameworks, financial management systems, and independent audit can help these projects achieve investment-grade creditworthiness and tap into international capital markets. For example, in 2017 the Indian city of Pune raised $30 million in financing for urban water infrastructure through a municipal bond. Its creditworthiness was earned by modernising its tax collection system, developing a debt policy, and offering state guarantees and escrow accounts for funds.

"South Asia’s governments have already taken significant steps towards outlining and fulfilling their nationally determined contributions as per the Paris Agreement."

Targeted sector-specific incentives aligned with national climate goals can also help create opportunities for private sector engagement. For example, India has introduced auctions for solar power, Sri Lanka has a green buildings code and evaluation system, Bhutan has a target for electric vehicles deployment, and Maldives is integrating resilience into its new urban infrastructure development. These policies can be supplemented by campaigns to raise awareness among companies, financiers, and the public to increase demand for climate-smart investments.

IFC’s new report offers recommendations to help unlock private sector financing for climate-smart investment opportunities in key sectors of interest to businesses in South Asia. Demonstration projects can be implemented to signal commercial viability and raise awareness in the market. Streamlining procurement and processes through measures such as e-procurement will help to encourage public private partnerships. All of this will help to create markets for climate business. With the right policy frameworks in place, trillions more in climate-smart investment will follow.

South Asia’s governments have already taken significant steps towards outlining and fulfilling their nationally determined contributions as per the Paris Agreement. However, to fully meet their climate-friendly development goals, countries in the region will need to scale and replicate their progress across sectors. Attracting private finance through incentives, financial innovation, and business models targeted at sector specific local conditions will help create markets for climate business essential to achieving these targets.

About the Author

[caption id="attachment_12640" align="alignleft" width="277"] Author: Alzbeta Klein[/caption]

As the Director and Global Head of IFC’s Climate Business, Alzbeta’s role is to facilitate business growth, provide thought leadership, fundraise and facilitating all work related to renewables, climate-smart agribusiness, green bonds and other climate business areas. Prior to her current appointment, she was a director and global co-head of Agribusiness, Manufacturing and Services Investments group where she managed over $13 billion of assets in emerging markets, leading a group of 400 bankers in 60 IFC offices worldwide. During the past 20 years, Alzbeta worked in many areas of IFC and rose through the ranks, including serving for two years as the Chief of Staff to IFC’s former CEO Mr Lars Thunell.

In her current position, Alzbeta revitalized and grew IFC Climate Business which now accounts for a quarter of all IFC investments. She created and currently executes the new climate business strategy which envisages further growth of business anchored in new technologies and their facilitating role in business growth, particularly in emerging markets. Her team also piloted and implemented carbon pricing for the Corporation’s largest investments, and a corporate disclosure of carbon footprint.

Alzbeta joined IFC from the Export Development Corporation (EDC Canada) and the Canadian Imperial Bank of Commerce (CIBC). She received Master’s degree in Economics from the University of Ottawa, Canada, where she also studied for her doctorate; engineering degree from Prague University, Czech Republic; and executive education from Harvard Business School and INSEAD. She holds a Chartered Financial Analyst (CFA) designation. She has served on several corporate and non-profit boards, including New York University Stern Center for Sustainable Business Advisory Board, Hans Merensky (South Africa), Grupo Los Grobo (Argentina), ShoreCap Investment Fund (US) and as the founding board member of the Chartered Financial Analyst (CFA) Society in Russia.

Alzbeta currently resides in Washington, DC with her family. She speaks five languages and is an accomplished four times marathoner.


RegTech Landscape for Increased Compliance Needs

Regtech solutions seemed to offer the solution to financial institutions' (FIs) compliance woes when they first came to prominence around 24 months ago, gaining support from regulators and investors alike.

However, many of the companies offering these solutions haven't scaled as might have been expected from the initial hype, and have failed to follow the trajectory of firms in other segments of fintech.

This unexpected inertia in the regtech industry is likely to resolve over the next 12-18 months as other factors come into play that shift FIs' approach to regtech solutions, and as the companies offering them evolve. External factors driving this change include regulatory support of regtech solutions, and consultancies offering more help to FIs wanting to sift through solutions. Startups offering regtech solutions will also play a part by partnering with each other, forming industry organizations, and taking advantage of new opportunities.

[caption id="attachment_12649" align="aligncenter" width="531"] Growth in the Number of Firms in Each RegTech Segment, 2010-2018.[/caption]

This report from Business Insider Intelligence, Business Insider's premium research service, provides a brief overview of the current global financial regulatory compliance landscape, and the regtech industry's position within it. It then details the major drivers that will shift the dial on FIs' adoption of regtech over the next 12-18 months, as well as those that will propel startups offering regtech solutions to new heights. Finally, it outlines what impact these drivers will have, and gives insight into what the global regtech industry will look like by 2020.

Here are some of the key takeaways:

Regulatory compliance is still a significant issue faced by global FIs. In 2018 alone, EU regulations MiFID II and PSD2 have come into effect, bringing with them huge handbooks and gigantic reporting requirements.

Regtech startups boast solutions that can ease FIs' compliance burden — but they are struggling to scale.

Some changes expected to drive greater adoption of these solutions in the next 12 to 18 months are: the ongoing evolution of startups' business models, increasing numbers of partnerships, regulators' promotion of regtech, changing attitudes to the segment among FIs, and consultancies helping to facilitate adoption.

FIs will actively be using solutions from regtech startups by 2020, and startups will be collaborating in an organized fashion with each other and with FIs. Global regulators will have adopted regtech themselves, while continuing to act as advocates for the industry.

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

In full, the report:

Reviews the major changes expected to hit the regtech segment in the next 12 to 18 months.

Examines the drivers behind these changes, and how the proliferation of regtech will improve compliance for FIs.

Provides our view on what the future of the regtech industry looks like through 2020.

By Sarah Kocianski. Source


MegaInver: Tailored to Meet Market Demand

MegaInver is a leading independent asset management company in Argentina. The firm began its operations in 2012 and is led by a highly experienced team of professionals. MegaInver has more than $800 million in assets under management (AuM).

MegaInver provides a wide range of actively managed investment strategies and solutions for retail, institutional, and corporate investors in Argentina. The company has seventeen funds under management, each one pursuing a different investment strategy and designed to fit with different investor time horizons and risk profiles.

MegaInver uses a top-down investment approach to obtain the best risk-adjusted returns for its different clients. The company follows investment processes that combine solid macroeconomic forecasts, credit metrics, quantitative risk models, and a log-term investment outlook.

[caption id="attachment_12654" align="aligncenter" width="613"] Nora Trotta and Miguel Kiguel[/caption]

Nora Trotta - president

Nora Trotta obtained a Bachelor’s degree in Economics from the Universidad de Buenos Aires and followed postgraduate studies in Monetary and Banking Economics at the Universidad Católica Argentina.

Mrs Trotta graduated with a gold medal from the Escuela Superior de Comercio Carlos Pellegrini. Upon graduation, she was invited to start her career as an analyst of economic research at the Central Bank of Argentina.

Mrs Trotta has had a long and successful professional life, serving in management and executive functions at local and international banks such as Credit Lyonnais, Sudameris, and the Generali Group.

She co-founded and was president of Gainvest Mutual Funds and director of Gainvest Uruguay Asset Management, Gainvest do Brasil Asset Management, Portfolio Personal, and Compañía Inversora Bursatil. During this time, Mrs Trotta created the first mutual funds with settlement in 24 hours and implemented the first mutual fund financial trusts. The main characteristic of this type of fund is low volatility and good risk-adjusted performance.

In 2007, she sold her equity participation in Gainvest to INTL. Five years later, she founded MegaInver Asset Management. She was recently appointed board member of Banco Hipotecario.

Miguel Kiguel – vice-president and co-founder

Miguel Kiguel obtained a Bachelor’s degree in Economics from the Universidad de Buenos Aires and a PhD in Economics from Columbia University. He has been an economics and finance advisor of large corporations and institutions in Argentina.

Mr Kiguel is a professor and researcher at the Universidad Torcuato Di Tella and an academic advisor at FIEL. He held professorships at Maryland University, Georgetown University, and CEMA.

He is currently executive director of EconViews, consultant of Latin American governments and multilateral institutions such as the IMF, and board member at Puente. He is a former under-secretary of Finance of Argentina and chief economist at the Central Bank of Argentina. Mr Kiguel also held the presidency of Banco Hipotecario and worked as principal economist at the World Bank.


Roberta Pinotti: Top Performance on a Shoestring

For Italian Defence Minister Roberta Pinotti it is all about attaining economies of scale. Whilst EU member states spend over €226bn annually on their military and can field a million plus combat troops, a large chunk of the cash is wasted on competing programmes – often jealously guarded as national flagships – and multiple structures and processes that work alongside, rather than with, each other. Italy has been one of the principal drivers behind PESCO, the EU’s Permanent Structured Cooperation agreement which was launched in December as a first step towards the creation of an EU army.

“It took all of sixty years to get to this point. It is, however, encouraging that most EU countries now at last agree that close cooperation can no longer be postponed.” In office since early 2014, Mrs Pinotti has ordered an updated white paper to spell out and detail her country’s defence aims. All of the 23 nations that signed up for PESCO are expected to clearly outline their military priorities so that commonalities may be identified and programmes set up to meet demand more efficiently. The EU has freed €1.5bn for a European Defence Fund that is to underwrite research projects and coordinate procurement processes.

Italy boasts the EU’s third largest defence budget with outlays ascending to almost €34bn (1.1% of GDP) annually. The country squarely aims to up its military profile in the post-Brexit EU. That, however, necessitates a significant boost in defence spending and improved efficiency in the allocation of the available resources. Last year, Minister Pinotti secured €12bn in stopgap funding for bolstering the country’s military capabilities. A 2015 naval law already set aside €5bn for the building of a new class of littoral combat ships.

In a major shift, Italy last year adjusted its traditionally staunchly pro-NATO policy to one which attaches equal importance to both the transatlantic alliance and EU defence initiatives. Mrs Pinotti is particularly pleased that President Emmanuel Macron of France has now dropped his initial opposition to the takeover of the STX OSV (formerly Chantiers de l’Atlantique) naval yards in St Nazaire and Lorient by Italy’s Ficantieri, Europe’s largest shipbuilder with yards in the United States, Norway, Romania, Brazil, and Vietnam.

Representing the social-liberal Partito Democratico (PD), Mrs Pinotti must tread carefully in order not to offend those on the left of her who oppose any increase in defence spending. The PD was founded in 2007 with the merger of various progressive parties and coalitions and comprises, amongst others, remnants of Italy’s now defunct Communist Party. However, the recent influx of refugees in the hundreds of thousands has muted calls for further cuts in military expenditure.

Judging Italy’s efforts by spending metrics alone, paints a distorted picture. For domestic political reasons, parts of the country’s defence establishment are financed through other departments. That helps explain how Italy is able to sustain an apparently outsized 184-ship navy structured around two carrier groups, supplemented by three amphibious assault ships. Italy remains the foremost power in the Mediterranean and manages to do so on the proverbial shoestring. The country also maintains its various international commitments and keeps in excess of 7,000 military personnel stationed outside its borders. It is a performance few in the EU can equal.


CFI.co Meets the CEO of Ghana Investment Promotion Centre: Yofi Grant

[caption id="attachment_15658" align="alignright" width="300"] CEO: Yofi Grant[/caption]

Yofi Grant is currently chief executive officer of the Ghana Investment Promotion Centre. He was appointed by President Nana Addo Dankwa Akufo-Addo in February 2017. Mr Grant is a renowned Ghanaian investment banker with over thirty years of experience in banking and finance. Having served in various capacities in corporate finance and advisory, and corporate banking and marketing, Mr Grant has accumulated broad knowledge in, and great exposure to, the international finance markets and cultivated strong relationships with international private equity funds, portfolio and investment managers, and brokerages. He was responsible for the development and implementation of AAF SME Fund LLC, one of the largest agriculture SME funds in Sub-Saharan Africa and helped achieve its first close of $30 million.

Mr Grant is a council member of the Continental Business Network of the African Union which advises African governments on private sector finance and infrastructure and has served in many directorship roles in both the public and private sector. As a partner in the Databank Group, he also served as director in the following subsidiaries of the Databank Group: Databank Agrifund Manager, Databank Financial Services, and Databank Brokerage Services. In 2009, he was the executive director for Business Development for the entire Databank Group. In 2002, Mr Grant was a consultant on finance and business for the Africa Asia Business Forum (AABF) organised by the UNDP which run workshops in twelve African and six Asian countries. Additionally, he has been in senior advisory roles and led many of the ground-breaking transactions in Ghanaian and other African capital markets.

Mr Grant is partner and co-founder to a number of companies including Grant Dupuis Investment, a real estate investment advisory firm, and Coldwell Banker Ghana, a company which holds the master franchise license for Coldwell Banker – part of the Realogy Group in New Jersey, US, the world’s largest real estate organization – for Ghana and Nigeria. In addition to this, he founded Praxis Fortune Calibre, a firm that offers general business advisory and consulting services across the continent.

Mr Grant holds several supervisory board mandates in private sector companies in the telecommunications, commodities, and education sectors and has also played many policy advisory roles for government, particularly in private sector development. He was chairman of Ghana Telecom (One Touch) and the Listing Committee of the Ghana Stock Exchange, amongst other prestigious organisations.

Mr Grant was also special advisor to the minister for Private Sector Development between 2002 and 2007 where he advised and assisted the minister with policy formulation and implementation and also on financing for private sector development projects. He currently serves on the advisory boards of the ministry for Foreign Affairs and Regional Integration, the Ghana Export Promotion Authority (GEPA), and is a member of the Ministerial Private Public Partnership Approval Committee of the ministry of Finance and Economic Planning.

As the CEO of the Ghana Investment Promotion Centre, which reports to the Office of the President, it is Mr Grant’s singular vision to make Ghana the ‘best place to do business in Africa’. He lives by the guiding principles of honesty, integrity, and a constant search for solutions, and is a fellow of the Aspen Global Leadership Network’s African Leadership Initiative, West Africa.


CFI.co Meets the Banque de Développement de Guinée Management: Banking for Nation-Building

[caption id="attachment_15655" align="alignright" width="300"] Deputy MD Fatoumata Camara Toure & MD David Ng[/caption]

Guinea’s connection with world finance dates back to the 17th century when gold from the region was used to mint the first machine-formed gold coins in Great Britain, known as “guineas”.

Today, the country still possesses significant gold and diamond, bauxite, and iron ore reserves as well as abundant hydropower and agricultural resources.

Yet, the republic remains one of the least developed countries in the world. The present administration is committed to ensuring the wealth of its natural resources is mobilised to improve its economy and infrastructure so its people can share the benefits and be alleviated from poverty.

Banque de Developpement de Guinee (BDG) is playing its part in this endeavour. Since January 2018, it has been the only non-government member of the operating committee set up by the administration to review projects attracting Chinese investment.

Established in 2013 by a consortium of private shareholders in Hong Kong, BDG strives to bridge the gap between investors and opportunities in Guinea. It also commits to strict international standards and best practices, including corporate social responsibility.

Managing Director David Ng brought 35 years’ experience as a senior banker in Hong Kong when he arrived in Conakry in February 2017.

Mr Ng said: “We saw that there was a lack of investment banking services here and that many Chinese companies are interested in taking part in Guinean projects – especially after the signing of the $20 billion master loan agreement between China and Guinea in September 2017.”

The first few years after set-up were mostly spent on acquiring information on priority projects for Guinea, building trust with government ministries – and bringing in the right talents.

“Besides being a veteran banker myself, our deputy MD, Fatoumata Toure, is Guinean and had returned from the US to whole-heartedly dedicate herself to national development. From an elite family, she was educated in France and America, before building an impressive career with Citibank and PNB Bank. She is a vital element in our formula for success. Ms Toure was recently named vice president of the Guinean Professional Bankers’ Association.

[caption id="attachment_15656" align="alignleft" width="300"] CFO Ken Looi[/caption]

“My CFO, Ken Looi, is Malaysian Chinese and qualified as an accountant in Australia before working for KPMG and JP Morgan Chase ahead of setting up BDG four years ago. He is vice chairman of the Business Association of Malaysians in Guinea, members of which include alumni, graduates, and business professionals from Malaysia working in Guinea.”

This team of executive directors is under strong leadership from the London based non-executive chairman, Andrew Chak, who previously advised the UK Treasury Department and has significant capital markets experience. A group of Hong Kong-based non-executive directors also offers valuable counsel.

Mr Ng added: “We believe BDG has built a strong corporate spirit and is ready to accept challenges in helping Guinea attract interested and professional investors. Our ultimate goal is to find long term strategic investors whose goals are in line with the national interest of the country and its people.”


CFI.co Meets the CEO of Al-Maidan Dental Clinic: Yousef Al Sarraf

[caption id="attachment_15651" align="alignright" width="300"] CEO: Yousef Al Sarraf[/caption]

A graduate of the University of South Carolina Business School, class of 1996, Yousef Al Sarraf is a people’s person. Naturally inspiring, Mr Al Sarraf brings out the best in all and knows how to spot talent too. Armed with his degree in Business Administration, a specialisation in human resources followed at the Institute for Human Resources Management Education (IHRME) where he followed numerous courses ending in the top five percentile of his class.

Returning to Kuwait, his home country, Yousef Al Sarraf was engaged by the Human Investment Corporation to help screen professionals for top positions in the private sector. The candidates he selected after careful examination of their credentials unfailingly found rewarding careers in the financial services sector and other industries, cementing his reputation as an excellent HR manager.

Moving to Wataniya Telecom (NMTC) in 1999 as a HR generalist and process improvement supervisor, Mr Al Sarraf was instrumental in the development and implementation of systems and programmes for identifying and forecasting staffing needs. Whilst at the telecom provider, Mr Al Sarraf was also put in charge of preparing the company’s budget for training and staff development. Additionally, he was responsible for producing periodic overviews and evaluations of existing training and staff development programmes and initiatives and measure their outcomes against company expectations. Finally, Mr Al Sarraf implemented a comprehensive performance management system which ensured that all employees have access to a personal development plan and have their performance assessed in a consistent manner.

As CEO of Kuwait’s renowned Al-Maidan Dental Clinic, Yousef Al Sarraf is able to fully deploy his expertise in the management of high-growth businesses. The company, a countrywide network of seven dental clinics with associated labs and state-of-the-art workshops, is both unique and revolutionary as it provides world class oral health services to both Kuwaitis and patients from abroad who seek excellence, convenience, and access to the most experienced and well-trained dental professionals in the business.

“Al-Maidan Dental Clinic sets itself apart from others by providing an iron-clad warranty on all of our work. In other words: we have the fullest confidence in the quality of our dental work and will fully stand by it. There is currently no other dental clinic that gives a guarantee on its work. Patients in Kuwait are often subjected to extensive and expensive dental treatments at private clinics that refuse to compete on quality. Al-Maidan Dental Clinic is firmly established on the other end of the spectrum and, in fact, does a lot of remedial work for customers who were disappointed elsewhere.”

Mr Al Sarraf is adamant: “We can only compete on the quality of work delivered consistently and without fail by our dental physicians. We make a lot of people smile. In fact, we’ve successfully completed well over six million treatments. Thanks to our reputation for excellence, Al-Maidan Dental Clinic welcomes a growing number of customers from outside Kuwait. That has prompted us to expand internationally and establish a number of clinics throughout the GCC Region. This way, Al-Maidan can come to its customers instead of the other way round. It adds convenience and allows customers elsewhere to enjoy the same benefits as those enjoyed by Kuwaitis.”

Mr Al Sarraf emphasises that Al-Maidan Dental Clinic maintains a number of corporate responsibility initiatives as well. The clinic’s fully-equipped mobile dental clinic travels the country to visit, and offer its services, to remote communities where they may not have the means to visit any of Al-Maidan’s main clinics. Moreover, the company is heavily engaged in campaigns to promote public awareness about the importance of maintaining oral health. i


CFI.co Meets the Management of Masthaven Bank: Andrew Bloom & Jon Hall

[caption id="attachment_15647" align="alignright" width="280"] CEO: Andrew Bloom[/caption]

A poster in the kitchen of Masthaven Bank’s busy head office off London’s Oxford Street reads: ‘Happiness lies in the joy of achievement and the thrill of creative effort’.

The phrase, uttered by US president Franklin D Roosevelt, provides a dose of daily inspiration to the two men responsible for the running of the specialist bank: managing director Jon Hall and chief executive officer Andrew Bloom.

“This quote captures perfectly the way Andrew and I feel about all of us sharing in the creation of Masthaven Bank,” Hall says, looking out over the bank’s busy office where, today, more than 150 colleagues – underwriters, savings specialists, servicing team, and more – mix together seamlessly.

While President Roosevelt helped the American people restore faith in themselves as the US grappled with the depths of the Great Depression, Hall and Bloom are on a mission to restore the British public’s faith in the banking industry. “It would have been pointless to bring a new bank to market that's just like everyone else out there,” explains Hall: “We're about something very simple yet rarely done: find out what customers actually need and deliver that to them – not just with words but with actions.”

For Mr Bloom, the key to the bank’s success is to always keep thinking about the future: “We mustn’t rest on our laurels,” he says. “It’s easy to say: ‘great, what an achievement’, then take your foot off the pedal and relax. We mustn't think like that.”

The comment is typical of Bloom, who built Masthaven Finance from scratch in the early noughties, working initially in a serviced office with a small start-up team of four, funded entirely from his own resources. In late 2014, Bloom reached out to Jon Hall, asking him to join. Together they would grow Masthaven into a new retail bank.

Their story is one of two determined individuals establishing themselves before coming together. Hall has a strong financial background, starting his career with PricewaterhouseCoopers before joining Aviva, then becoming CEO of Saffron Building Society. It’s while at Saffron that Hall’s entrepreneurial, digital edge, and focus on fast growth really showed, Saffron being named the second-most digitally mature building society as well as being nominated for a clutch of other awards.

The desire to push boundaries is similar to Bloom’s trajectory. After leaving university, Bloom joined KPMG where he qualified as a chartered accountant, moving to transaction services, before working in the investment division of what is now called Strand Hanson.

Following time as managing director of property investment firm Montague Knight, Bloom launched Masthaven Finance in 2004, the lender initially specialising in bridging loans and development finance before expanding into mortgages.

[caption id="attachment_15648" align="alignleft" width="277"] MD: Jon Hall[/caption]

The CEO’s expertise in running and growing lenders who specialise in risk made him the perfect fit to start-up a new entrant like Masthaven Finance. “I’d long been fascinated by the opportunities for innovation within the financial services industry, particularly bridging, so Masthaven Finance was the perfect launching post,” explains Bloom.

Success soon followed, with the lender listed in 2015’s The Sunday Times’ Virgin Fast Track 100 with Masthaven the 81st fastest-growing private company in the UK. In 2016, Masthaven launched as a retail bank, becoming the first ‘challenger’ bank to be regulated that year. In 2017, Masthaven was in the Financial Times’ Fast Track 1,000, listed as the 240th fastest-growing private company in Europe.

Today Bloom, as CEO, takes a strategic role, with Hall leading the bank’s day-to-day running. Different people, definitely, but who gel, push each other, and share a common aim. “We are definitely a challenger bank,” explains Bloom, “but that’s not all we are.”

“Whilst we don’t shy away from technology, one of the founding tenets of our philosophy is people,” Hall says. “We are all about people. We like to treat people as individuals – both our staff and our customers – choosing to see the human being behind applications.”

Hall and Bloom are proud to lead a bank that’s reflective of society, offering lending solutions to people with diverse requirements and allowing savers – not their bank – to choose when their account matures. “Today, ‘different’ most definitely doesn’t mean ‘risky’,” Bloom adds: “Different just means human.”

That ethos is clear in the Masthaven of today and one of the reasons the bank has secured the Best Digital Bank – UK Award.


CFI.co Meets the Management of The Indian Hotels Company Limited (IHCL): Puneet Chhatwal & Beejal Desai

On the 6th of November, 2017, Mr Puneet Chhatwal joined IHCL as the Managing Director and Chief Executive Officer. He is a global professional with over three decades of leadership experience at highly-acclaimed hotel groups in Europe and North America. His vision is to drive performance and oversee the next phase of expansion. In February 2018, the group unveiled the Group’s five-year business strategy titled Aspiration 2022 to drive growth and strengthen market leadership. He sits on many Tata company boards including The Indian Hotels Company Limited, Taj GVK Hotels and Resorts Limited, Piem Hotels Limited, ELEL Hotels and Investments Limited, Oriental Hotels Limited, Taj Sats Air Catering Limited and Roots Corporation Limited.

Prior to this, Mr Chhatwal was the Chief Executive Officer and Member of the Executive Board of Steigenberger Hotels AG – Deutsche Hospitality. He was also the Chief Development Officer of The Rezidor Hotel Group – Carlson Hotels Worldwide. Mr Chhatwal is a graduate of both Delhi University and Institute of Hotel Management, Delhi. He has completed an MBA in Hospitality from ESSEC, Paris and an Advanced Management Program from INSEAD.

Mr Chhatwal has won awards including the prestigious Carlson Fellowship and was rated as one of Europe’s 20 extraordinary minds in Sales, Marketing and Technology - HSMAI European Awards 2014. He was also the First Alumni included in the ESSEC-IMHI Hall of Honor 2014.

Beejal Desai

[caption id="attachment_15663" align="alignleft" width="297"] Senior VP, Legal & Company Secretary and CCO of the Indian Hotels Company Limited (IHCL) Beejal Desai[/caption]

Mr Desai is a Senior Vice President - Legal & Company Secretary and Chief Compliance Officer of The Indian Hotels Company Limited. He holds an L.L.B. degree from Mumbai University and is a Fellow Member of the Institute of the Company Secretaries of India. He has previously worked across various leadership positions with different organizations and has over 32 years of cross-functional experience in the areas of Legal, Secretarial, Compliance and Investor Relations. He also closely liaises with SEBI, RBI and various regulatory authorities. He has pioneered digitalisation of various legal and compliance projects within the organisation and won several awards.


Jaylen Brown: Hard Work Pays Off

The number three pick in the 2016 NBA draft - the much anticipated annual event when the US basketball association’s now thirty teams select promising new players - Daylen Brown was placed under contract by the Boston Celtics and has since claimed a leading role on the court, propelling his team to second place in the Eastern Conference - within striking distance of the finals.

Mr Brown (21) - all 2.01m of him - is going places. Whilst at high school in Marietta, Georgia, he established his reputation during the state basketball championship when he decided the cliffhanger with 0.6 seconds to spare, scoring two free throws to land his team a 59-58 win. He was subsequently rated a five-star recruit by ESPN, receiving countless accolades, and ushered into the University of California, Berkeley, where he committed to play for the Golden Bears home team averaging 14.6 points and 5.4 rebounds per game.

At Berkeley, Mr Brown did more than throw balls through hoops; upon arrival he immediately signed up for a number of courses, including at postgraduate level. He mastered Spanish and actively partook in the university’s Cultural Studies of Sport in Education master degree programme. A gifted student, Mr Brown plans to perfect his Spanish language skills and learn three other languages before his 25th birthday. He also plans to finish his studies.

A scholar and an introvert by nature, Mr Brown has ambitions beyond basketball, displaying an avid interest in history and philosophy. Some sports commentators have speculated that Mr Brown is too much of a budding intellectual to play professional baseball. However, Mr Brown has grown a thick skin and refuses to take the bait when confronted with open or subliminal racism. Growing up in the south, he has pretty much seen it all and remembers how spectators came to watch games dressed in monkey suits, throwing bananas onto the court, and hurling the n-word at him. “Life may have changed a lot and people will no longer tell you certain things to your face; however, racism changed as well and certainly still exists today.”

At Berkeley, Mr Brown discovered subtle forms of racism hidden in curriculums, social strata, and even civil discourse. It soon became clear to him that in US society, some are destined to win and become the nation’s leaders whilst others must lose and populate the country’s prisons: “That’s basically how America works - it’s a machine that needs people up top and people down low.”

Mr Brown joined football quarterback Colin Kaepernick, currently a free agent, who in 2016 started the ongoing national anthem protest against police brutality and racial inequality by refusing to stand up during the playing of The Star-Spangled Banner and pay respect to the flag.

Mr Brown agrees with the protest’s premise and considers Mr Kaepernick’s initiative both timely - and necessary: “After President Trump called on team owners to fire players who refused to stand to attention, more than two hundred players joined in. This had a major impact and made people think and talk about the issues that matter. Colin speaks for many people who are uncomfortable with their assigned role in life - including me.”

The Celtic new star player does not intent to dedicate his entire life to sports. In fact, he longs for a return to academia: “I miss Berkeley. There, I was learning something new every day. Though I’m in a good place now, I need to keep a well-balanced head instead of a single-minded one.” For Mr Brown that means taking piano lessons. He just spent a year teaching himself how to play, practising every day as a way to deal with the pressures of a professional athlete. As with everything that Mr Brown does, which incidentally is quite a lot, he seeks perfection - hence the piano lessons.

In order to show star-struck kids that there is more to life than professional sports, Mr Brown last year set up his own YouTube channel where he posts short documentaries showing his pursuits during, and outside of, the basketball season. He named his channel - and his Twitter and Instagram accounts - FCHWPO: Faith, Consistency, Hard Work Pays Off. That’s the man in a nutshell.


Kenneth Rogoff: Are Emerging Markets the Canary in the Financial Coal Mine?

[caption id="attachment_12789" align="alignright" width="300"] Christine Lagarde, Managing Director of the IMF[/caption]

Are brewing exchange-rate and debt crises in Argentina and Turkey localised events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalise interest rates?

Rising interest rates could test stability in some advanced economies as well, especially in Italy, where voters, particularly in the less developed south, have opted decisively for a disruptive populist government. With an economy ten times the size of Greece, a default in Italy would blow up the eurozone. Indeed, the populist coalition government that has now taken power has hinted that it wants write-offs for some of its under-the-table debts (not included in Italy’s official public debt of over 130% of GDP) to the euro system through the European Central Bank.
The good news is that a full-blown global debt crisis is still relatively unlikely to erupt. Even with a recent softening of European performance, the overall global economic picture remains strong, with most regions of the world still growing briskly. Although it is true that several emerging-market firms have piled up worrisome quantities of dollar-denominated external debt, many foreign central banks are brimming with dollar assets, especially in Asia.

"Economists who assure us that advanced-economy debt is completely “safe” sound eerily like those who touted the “Great Moderation” – the supposedly permanent reduction in cyclical volatility – a generation ago. In many cases, they are the same people."

The International Monetary Fund, moreover, has sufficient resources to handle a first wave of crises, even if it includes, say, Brazil. The main concern is not that the IMF will fail to deliver funds, but that it will make the same mistake it did in Greece, by not imposing a realistic deal on debtors and creditors. As for Italy, chances are that Europe will find a way to grant temporarily some of the extra budget slack the new government seeks, even if there is no way eurozone officials can allow high-debt Italy simply to destroy the common currency.

The most important reason for optimism, notwithstanding all the surrounding political noise, is that global long-term real interest rates are still extremely low. Even with all the drama surrounding Fed tightening, 30-year inflation-indexed Treasury bills are paying around 1% – far below long-term real returns, which have averaged closer to 3%. As long as the underlying global interest-rate picture is so benign, it is hard to see the big Kahuna of bond-default waves coming just yet.

It is notable how much the IMF, the world’s debt and financial crisis watchdog, has been ratcheting up its warnings. After years of saying advanced countries no longer need to worry about their near-record public-debt levels – now averaging over 100% for general government debt – the IMF has started to warn that many countries may find themselves squeezed for fiscal space if faced with a new recession anytime soon. The challenges stem not only from debt that is on the books, but also from hidden liabilities, owing most notably to massively underfunded old-age pension and health-care programmes – implicit debts that in many cases are far larger than the official figures.

The overwhelming evidence of recent research supports the IMF view. Countries with historically high debt levels have (on average) significantly poorer growth performance in the face of major shocks, and the long-term relation between high public debt and growth is distinctly negative. This, of course, says absolutely nothing about the economic consequences of actively reducing the burden of government debt, popularly known as “austerity.” Deep recessions are the time to use a country’s war chest, not the time to build it up.

Admittedly, there are those on both the left and the right who think “this time is different” for advanced economies. With no realistic danger (in their view) of a major war or financial crisis anytime soon, it is folly to exercise too much restraint on public debt or pension promises. This is dangerous thinking even for the United States, despite the greater fiscal scope it enjoys as the issuer of the global reserve currency.

Very bad shocks can happen to any economy, and their sources might not be the ones we normally consider. For example, risks stemming from cyberattacks (especially by state actors), pandemics, and certainly financial crises are probably far higher than anyone would like to admit. It is certainly not difficult to imagine a temporary slowdown in fast-growing China that could roil world markets. And if the completely unexpected does happen, one thing we can anticipate is that governments with strong access to global credit markets will have much better options for responding.

Even if the best bet is that any emerging-market bond meltdown would remain contained, today’s jitters ought to be a wake-up call, even for advanced economies. After all, no country, however rich, should bet its future on the prospect that today’s ultra-benign interest-rate environment will last forever.

Economists who assure us that advanced-economy debt is completely “safe” sound eerily like those who touted the “Great Moderation” – the supposedly permanent reduction in cyclical volatility – a generation ago. In many cases, they are the same people. But, as we saw a decade ago, and will inevitably see again, we are not at the “End of History” when it comes to global debt and financial crises.

About the Author

Kenneth Rogoff, professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He co-authored This Time is Different: Eight Centuries of Financial Folly. His new book, The Curse of Cash, was released in August 2016.


AMAC Aerospace: VIP / VVIP Aircraft Completion and Maintenance

AMAC Aerospace is offering narrow and wide-body VIP completion and maintenance for the corporate/private aviation market. The company was founded in 2007 in Basel, Switzerland. Today, the company is the largest privately-owned facility in the world and led by Kadri Muhiddin, executive chairman and group CEO, Bernd Schramm, group COO, and Mauro Grossi, group CFO. The successful progress attests to the commitment to excellence. With long-term industry engagement, deep industry roots, extensive experience, and a strong international network, the AMAC team collaborates to exceed the expectations of clients, airworthiness authorities, and original equipment manufacturers.

[caption id="attachment_22476" align="aligncenter" width="900"] Turkey: Istanbul[/caption]

The founders created AMAC Aerospace in 2007 to serve the corporate and VIP/VVIP demand. Today, AMAC Aerospace is represented as a group of companies that spans the width of Europe and maintains a presence in Turkey and Lebanon. AMAC Aerospace operates a network of seven hangars for mid-size jets, narrow, and wide-body jets and is dedicated to maintenance complex design, modifications, and completion work that covers a footprint of over 100,000m2. AMAC Aerospace has over one thousand employees in specialised domains of aviation to offer a one-stop shop for all client’s inquiries.

[caption id="attachment_22478" align="aligncenter" width="900"] Turkey: Bodrum[/caption]

The core service is certainly the unique VIP completion business. AMAC Aerospace is able to provide multiple completion and refurbishment requests simultaneously – no request is too ambitious. The aim is to exceed client expectations and consistently deliver on-time and within budget. The state-of-the-art workshops are manned by the best craftsmen in the industry and outfitted with modern cabinet, upholstery, sheet metal, composite, and electro/avionic workshops. AMAC Aerospace is authorised to upholster, inspect, install TSO tags and ship completed seats directly to end users, or install them in the aircraft as part of the completion or refurbishment project.

[caption id="attachment_22479" align="aligncenter" width="900"] Switzerland: Basel[/caption]

AMAC Aerospace has three affiliated sister companies which make up the group of companies:

AMAC Corporate Jet – Located in Kloten, Zurich, the Aircraft Management and Charter Division host approximately fifteen aircraft on portfolio with regard to direct aircraft management. The company helps facilitate charter requests, fuel arrangements, insurance coverage, crew selection and training, to name but a few services.

AMAC Aerospace Turkey – Located at Atatürk International Airport, Turkey and at Milas-Bodrum airport, these facilities provide MRO services on Pilatus PC-12, PC-24, and Dassault, Airbus, and Boeing products. Equipped with all necessary tooling, this hangar in Istanbul was created by AMAC Aerospace to service the Pilatus aircraft products on an exclusive basis in the Middle East Region and then was developed to cover Dassault aircraft maintenance support in the region as well. The new hangar in Bodrum was completed in September 2017 for narrow and wide body aircraft maintenance up to and including the B777 series. To date, AMAC Aerospace are the first to use a mixed business model for this hangar in Bodrum where during the winter months, the facility carries out commercial line and base maintenance. During the summer months, the MRO services flips over to VIP business maintenance.

JCB Aero was acquired in May, 2016. JCB is one of the world leaders in composite and carbon fibre production techniques and methods, and can carry out completion works using their DOA & POA approval status. JCB is also a qualified completion specialist in the VIP helicopter world and is in the process of acquiring its 145 approval for maintenance too.

AMAC Aerospace Lebanon - A regional sales base for the Middle East, is located in Solidere, Beirut.

The AMAC Aerospace Team: Over a Century of Experience

With long-term industry engagement, deep industry roots, extensive experience, and a strong international network, the AMAC team collaborates to exceed the expectations of clients, airworthiness authorities, and original equipment manufacturers. Between them, the three shareholders have over a century of accumulated experience in the aviation industry and each one of them comes from a successful background within this particular sector.

[caption id="attachment_22477" align="aligncenter" width="900"] Bernd Schramm, Kadri Muhiddin, Mauro Grossi[/caption]

Kadri Muhiddin, Group Executive Chairman & CEO

Kadri Muhiddin is an accomplished aviation expert with more than forty years’ experience in aircraft and engine maintenance, overhaul, and modification. An aeronautical engineer and aircraft maintenance licensed engineer holding EASA and FAA PPL, Mr Muhiddin is a fellow member of the Royal Aeronautical Society in the UK. As a chairman of the board for other aviation ventures, Mr Muhiddin provides industry insights, profound knowledge, and a vast commercial network of associations alongside financial, commercial, and legal knowledge to AMAC Aerospace Switzerland AG.

Bernd Schramm, Group COO

Bernd Schramm has acquired strong operational and procedural expertise in MRO and VIP completions in almost ten years as general manager, senior vice-president, and vice-president of completions in previous business aviation endeavours. As an aeronautical engineer with more than twenty years of industry experience, he has key client relationships throughout Europe, the Middle East, Africa and the Far East.

Mauro Grossi, Group CFO

Mauro Grossi is a recognised expert in optimisation and organisational restructuring as well as operational and financial project management. He brought to AMAC Aerospace more than twenty years of previous experience as chief financial officer in other companies. His key client relationships establish a secure and dependable financial footing for AMAC Aerospace throughout Europe and the rest of the world.

At AMAC Aerospace, the philosophy is to get the aircraft in and out on time and on budget. The management team is not interested in creating a parking lot outside the four hangars: they are only interested that the aircraft remain up in the sky to serve their purpose. To date, AMAC delivered over twenty completion and refurbishment projects, covering all sizes from narrow to wide body aircraft. As for the maintenance business area, AMAC has tabulated over 3,400 modification projects in its ten years of existence. Those projects range from belly camera installations, self defence systems, and satcom installations to specific single and multiple STC (supplemental type certificate) developments.


CryptoEvolution™: Why Bitcoin Will Overtake Fiat

First, There Was QE

Two things happened after the financial collapse of 2008. First, the US Federal Reserve started printing money in furious fashion to rescue banks and businesses “too big to fail.” The extreme amounts of excess capital which found its way into stocks and bonds put a floor on the US stock market which found its lows in early 2009.

Thus began the chapter of quantitative easing, aka QE, culminating in historically low interest rates and record levels of debt. Since then, the US market being the tallest standing midget has reaped the greatest benefits while the rest of the world’s markets struggle by comparison. Here is what China’s stock markets have been doing since the initiation of QE in late 2008:

The situation over in the United Kingdom is not much better:

If the last few thousand years of history is any guide, when the world has taken on this much debt, collapse has always been the inevitable conclusion. One of the most famous cases is the rise and fall of ancient Rome. The Dark Ages came as a result, lasting hundreds of years.

Luminaries such as Ed Seykota whose seminal work, “Govopoly in the 39th Day” suggests inevitable collapse along with major transformation. In pond ecosystems, duckweed doubles each day. In the first 20 days or so, it goes unnoticed. But by day 30, it is clearly a hindrance. By day 39, duckweed doubles once more and suffocates all life in the pond by day 40. Seykota equates today’s overreaching, overregulated, bureaucratic governments to duckweed. Others such as Jim Rogers, Bill Gross, and Ray Dalio share similar views.

Second, There Was Blockchain

Blockchain technology is the counterbalance to the collapse and the key ingredient to the evolution of existing platforms into much higher orders of efficiency. Blockchain is the beating heart of bitcoin. When you remove third party middle men and transact on a peer-to-peer basis, far greater efficiencies can be achieved. This was one of the primary incentives behind Satoshi Nakamoto creating bitcoin in 2009 as an answer to the financial crisis of 2008. I discuss this at some length here.

Limited Lifetime of Fiat

Fiat currency has an average lifetime of 40 or so years. In today’s world, Ray Dalio of Bridgewater is predicting that there will be a major global devaluation of fiat within the next 2-3 years based on his studies of the long term debt cycle of which he says we are at a major tipping point. This is not difficult to accept if one remembers the last time we were at a tipping point when the US government single-handedly devalued the dollar by 41% overnight in 1934 at the height of the Great Depression. That was only 84 years ago. While the US Federal Reserve has ended its QE program, global central banks continue to print at near record levels simply because their respective economies remain stuck, even after the record levels of QE. So while central bank heads continue to suggest a meaningful deceleration of their respective QE money printing programs, these heads are politicians first so must say whatever it takes to keep markets calm.

So despite “healthy” looking inflation and growth figures, central bank heads know they are unable to reduce QE since these figures are greatly distorted. The recent second quarter US GDP pointed to an expansion of 4.1%, in line with consensus. This is more than twice the 2.0% expansion seen in the first three months of the year and its strongest since the 5.2% reading in the third quarter of 2014. Yet despite the strong reading in Q3 2014, the economies at home and abroad continued to struggle. The song remains the same today. CPI figures are grossly distorted suggesting inflation at levels much lower than reality. This in turn artificially inflates the GDP numbers. US markets reacted negatively to the 4.1% figure.

It has been suggested that the world has been in global recession for a number of years since one must subtract real inflation from GDP figures to arrive at the correct GDP figure. Inflation on basic goods has risen well past the suggested 2% or so rate over the years, thus if actual inflation is closer to 4 or 5%, subtracting this from GDP figures would result in flat to negative growth.

The Rise of Bitcoin

As an answer to the lackluster growth and egregious amounts of money printing that has occurred since late 2008, the price of bitcoin which was set at the cost of electricity back in 2009 at a price of $0.0007 per bitcoin has climbed to around $8000 today. Thus $1 invested in 2009 would today be worth over $10 million.

Bitcoin’s “killer app” is its store of value. It is deflationary. No government can print more of it. It has a fixed supply. It is decentralized. Centralized systems which include centralized governments and corporations are inferior since decentralized, open source, trustless, p2p, censorship resistant, private, secure protocols will always win over centralized, closed source, third party, insecure platforms.

Bitcoin’s utility as a method of exchange is the last stage that will come once mass adoption takes place. Of course, adoption by the masses is always the last phase of any S-curve technology.

So while bitcoin has “died” more than 150 times based on news accounts since 2011, and has suffered multiple corrections exceeding 75%, with two corrections as steep as 94%, it nevertheless continues to defy by hitting new highs. It is currently in another bear market which could see new lows based on various metrics I use which I discuss here. That said, I include a number of major tailwinds that heading toward bitcoin which could see bitcoin find a major low and embark on a new crypto bull market sooner than expected.

Bitcoin at $250,000 to $1,000,000 by 2022

The CEO of Twitter and Tim Draper both have stated bitcoin will overtake fiat within the next 5 to 10 years. More recently, Tim Draper predicted bitcoin will hit $250,000 by 2022. This is less than my $1,000,000 prediction by 2022 but still within an order of magnitude since with bitcoin, it’s all about orders of magnitude than multiples.

Below is an exponential graph of how bitcoin’s valuation trajectory could overtake M1 and M2 money supply within the next few years:

QE is a legalized Ponzi scheme that devalues fiat while bitcoin is disguised as a Ponzi scheme as it overtakes fiat… or as Naval Ravikant has said, “Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme.”

We’re going into a new era. Buckle up!

by Dr. Chris Kacher
www.virtueofselfishinvesting.com
The Evolution Will Not Be Centralized™

View the article from the CFI.co app (download from iTunes or Google Play).

About the Author - Dr Chris Kacher Cryptotech / Nuclear physicist turned stock market wizard (KPMG audited) / Top 40 charted musician / Bestselling author

Dr Kacher is CEO of Creative Group Trading, Inc., an investment and trading vehicle for cryptocurrencies. He founded one of the first Internet-based stock advisory services in 1995 then went on to generate triple digit % returns for 6 years in a row during the 1995-2000 period before moving to cash for most of the 2000-2002 bear market. He has published numerous works including 4 books through Wiley & Sons including Bestseller "How We Made 18,000% in the Stock Market" available in five languages.

Dr Chris Kacher has appeared in major business media including CNBC, Reuters and Bloomberg and was a regular contributor to MarketWatch among others until 2012-2013 when he became involved in the blockchain.

Dr Kacher received his PhD in Nuclear Physics from University of California at Berkeley. He co-created Element 110 on the Periodic Table of Elements and "confirmed" the existence of Element 106 which his team named Seaborgium after Nobel Laureate Dr. Glenn Seaborg who discovered plutonium and supervised Dr. Kacher's work as a doctoral student at UC Berkeley.


Ian Fletcher, IBM: Fourth Industrial Revolution - Positioning for Change

We are living in one of the most transformational times in human history, creating a paradigm shift that will bring change at a speed, scale, and force unlike anything we’ve ever experienced before. This paradigm shift is widely recognised as the Fourth Industrial Revolution (4IR) and has the potential to change everything. What defines the 4IR as distinct from past cycles of industry revolutions is the convergence of the physical, digital, and biological worlds.

Each industrial revolution had a profound impact, allowing humanity as a whole to adapt and evolve. The first is commonly defined by physical mechanisation through water and steam – increasing power – where the second saw mass production, assembly lines, and electricity dominate our lives – increasing scalability. Around the 1960’s, and cresting now, is the third, defined by digitisation – increasing information integration. On the horizon, the 4IR wave will be far more transformative through physical, digital, and biological convergence.

“Without data, you’re just another person with an opinion.”

- W Edwards Deming American statistician, IBM IBV C-suite Study

Unprecedented advancement in technology, the explosion of data, and our ability to consume and convert it into intelligence, is causing our physical and digital worlds to converge at rate like never before. Consider the convergence of medical data and wearable technologies or 3D printing. Genome sequencing and DNA technologies converging with artificial intelligence and 3D printing to someday “print” organs – organ donation could become obsolete. That same foundation of medical data and new knowledge applied to patient information, captured through mobile and IoT enabled wearable devices, used to monitor patient health in real-time, can lead to improvements in healthcare modalities such as personalised cancer, diabetes, and maybe even mental health treatment. There are a myriad of innovation examples possible across every industry that will drive these profound changes. Even current limits of computational capability are being addressed with the advent of quantum computing that is expected to provide the exponential increase is computational power necessary to enable this – science fiction is becoming science fact.

Double-Edged Sword

In the midst of all this opportunity, 4IR also brings to the forefront some important concerns. Every industry in every country is likely to experience a new cycle of disruption of a breadth and depth never seen before, through the transformation of systems of production, interaction, management, and governance. These advancements also necessitate a level of transparency and information sharing about everything that can pose some ethical concerns that are just now starting to be addressed through regulation. A current topic high on the list is privacy – brought to light by the EUs GDPR regulations. Respecting individual privacy whilst being able to drive these innovations will become an important balancing act as we move forward. For those enterprises not already riding the crest of the current wave, the disruptive impacts of both disruptive new solutions and regulatory challenges aimed to protect citizens, may become foreboding obstacles for many organisations.

The 5 Pillars of The Fourth Industrial Revolution

There are so many domains impacted by this new wave, and new conversations arising across all industries when considering the opportunities 4IR brings – trying to wrap one’s mind around it necessitates a framework to ground our thinking in how best to approach and prepare. To that end, we might consider five pillars, critical areas to be considered as part of a transformation journey into the Fourth Industrial Revolution.

1. Digital Dexterity – “A common vision for your agile data strategy with ownership, and accountability, underpinned by trust and compliance.”

Very few organisations have a full understanding of what data they have, what more they can acquire and use, and how it can be harnessed to create measurable value. According to IBM MDI research – Chief Data Officer: Creating Value Through Data – data today represents up to 31% of the company’s revenues, and is expected to grow. It is vital that organisations put this high on their agenda. Management and governance is essential, hence the advent of the Chief Data Officer (CDO) role.

The CDO’s role is to clearly articulate a data strategy and culture across the organisation and within the business ecosystem, aligning all under a common vision of how the convergence of data and emerging technologies will help enable new innovation and offerings to customers – whether consumers, patients, or citizens. Essential to this success is the creation of a cognitive journey map, driving a clear innovation strategy to maximise use and value.

"Cognitive Journey maps define how data will be entrenched in all parts of the organization and beyond, for actionable insights and optimized business processes, infused with Cognitive Capabilities for artificial or human like intelligence at scale."

How is digital dexterity then enabled?

One example is the concept of self-sovereign identity. The challenge to be dexterous rests in finding the correct balance in sourcing and using needed data, whilst being trusted and compliant. Today’s typical models are leveraging centralised and decentralised sources of data from a variety of sources, mined without full disclosure and transparency. A key concern of regulators is the enterprise assumption that customers are ceding their ownership of data about themselves (their privacy) through terms of service contracts. As regulatory scrutiny increases and new controls, such as GDPR, come into play (right to be forgotten, right to transfer, right to cancel, etc.) – a more efficient approach will be needed. Self-sovereign identity begins to address this by acknowledging a change in ownership of our personal data – from the domain of the enterprise to the domain of the individual. Then the individual can gain control over “what they can do”, as opposed to the enterprise determining “who they are” and offering things they may or may not want.

Imagine air travel with all its current challenges to reduce queues, digitise border control, airline efficiency, and customer experience. Visualise walking through an airport scanner that recognises a traveller’s biometrics, retinal scans, because they exchanged them for loyalty points or an upgrade to business class. Take it one step further, their data packet is connected to their personal or a corporate blockchain, and their luggage has an RFID sensor with immersive security recognition built in. Finally, the traveller has given permission for this convergence of information because of what they want to do – travel with greater ease and benefit. The innovative use case here for self-sovereign identity is ease of travel; no passport, corporation interaction, government border confrontation, whilst better addressing current concerns about individual privacy.

2. Cultural Organisation – “Building talent communities, recognising the true value of the people, intelligent education, and ultimately driving brand advocacy.”

With 66% of the jobs forecast for the next ten years not yet invented, this represents a real challenge for organisations to define their workforce talent needs, educators to evolve curricula to meet future demands, and individuals to explore new career opportunities which in turn influence their education journey. This is essential when considering how organisations are constantly evaluating the talent and skills needed from the human workforce in the face of evaluating opportunities for work that can be transitioned to cognitive solutions – for instance cognitive robotic processes enabled by emerging technologies such as artificial intelligence or blockchain. Controversy is created today when questions are focused on the socio-economic, ethical, or personal implications of the potential for machines to replace human in the workforce. Arguably, the conversation needs to change to what evolution is needed to influence how we prepare for this future and ensure widespread employment displacement does not occur leading to unintended adverse economic conditions.

Embedding technologies like artificial intelligence and cognition into workplace processes is becoming more prevalent. C-suite executives are realising the value these could bring, especially in areas of process automation, efficiency, data analysis, performance insights, and even new products and services – all integral to any company’s DNA. Traditional human job roles are changing, and emerging technologies are creating new ones at a rapid pace. There is a recognised global “skills gap” emerging, largely in the digital skills space, often referred to as “new collar” and “digital collar” jobs.

The answers lie in new ways to source talent and the recognition that it’s about “man and machine convergence”, but not the controversial man or machine conversation dominating media today. Artificial intelligence and cognitive automation are inevitable and will become integrated into every day society and cultures as “pervasive artificial intelligence”. We are already seeing examples of this with Dubai Government by announcing the world’s first state minister for AI in October 2017, whose goal it is to make the UAE a leader when it comes to Artificial Intelligence research, development, and innovation to better serve humanity and its citizens.

For executives, reshaping and engaging their businesses to cope with the impending employee fluidity will be a key measurable ingredient in organisational success to build brand advocacy (this is a great place to work), in order to attract and retain new and needed talent. This will necessitate rethinking how talent is sourced as well. Some experts are starting to refer to the old term “crowd sourcing”, as the “human cloud”. This necessitates reinventing the traditional organisation model by addressing culture, recognising the value of human insights as uniquely human, adopting new talent sourcing channels, continuing to evolve the employer-employee “contract” and encouraging perpetual learning, if companies are to survive and thrive. At its core, it necessitates the recognition that workforce displacement and continued erosion of the middle class is an unacceptable outcome for this new world – humans are essential.

To help with the impending skills shortage 4IR will bring and the changing landscape of the future workforce, governments and the educational system also have a huge responsibility in nurturing the talent of the future. Schools and universities must align themselves with business and industries early in the lifecycle, recognising they have an essential role in both building the foundation for new learning ecosystems and creating new learning paths. By aligning closely with business leaders, enablers, and by monitoring thought leadership trends, educators should be better placed to support future generations with the right skills and help build or contribute to the organisational or human cloud ecosystem.

Despite all the technological advances, it is still the human-only characteristics such as emotion, intellect, wisdom, and ethics that set us apart. These values need to be nurtured because everything that can’t be digitised or automated in the future will become valuable commodity. The truth is, people remain the most important asset a company has, so it must ensure they provide a culture in which to excel in the new Cultural Organisation.

3. Cognitive Enterprises – “Where Consumable Platforms meet Artificial Intelligence, deep learning and augmented reality, driving Systems of Insights through connected business model platforms that have immersive security, agility, and scalability.”

The Cognitive Enterprise is the rise of a new business paradigm that leverages exponential technologies to use data in a way which gives rise new opportunities and experiences for the world. The first such businesses are well known today – Apple, Google, Über, Airbnb, and many others.

A platform is a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers, but as we progress, this will expand to become a fully immersive, collaborative ecosystem, all interrelated and supporting the platform economy.

In 2009 we witnessed examples of digital disruption appear or Überisation. This was a great example of disintermediation, described as “the removal of intermediaries in economics from a supply chain, or cutting out the middlemen in connection with a transaction or a series of transactions”. Today we are starting to see even more radical industry convergence through re-intermediation, where the disrupted are fighting back to become disruptors, breaking down the process workflow even further in order to take back market share.

The value of these new business models derives from the exponential scalability associated with low marginal costs, relative to traditional asset, service, or technology-based businesses. to capitalise on the cognitive enterprise. Organisational CXO’s should consider four primary aspects – consumable platforms, business insights, cognition/AI, and immersive security:

Consumable Platforms – Cloud – (public, private and hybrid): Build platform business architectures that can scale through shared services, encouraging trust and collaboration to facilitate a sharing economy. Integrate legacy environments with the digital platform technology such as IoT, blockchain, applications, and business process automation, and foster partnerships ecosystems in their value chains. Look to agility and even be open to sharing assets and people skills. Senior executives should encourage rapid prototyping, fail fast and encourage innovation, and ensure you transform quickly for competitive advantage. Create value from reciprocity and adopt a deeply collaborative approach that spans your ecosystem to create win-win propositions and commit to innovation, reallocating capital and resources from defending markets to innovating in new ones.

Business Insights – Data: Maximise the cognitive power of your data fabric, from the data lakes of structured and unstructured data, to the data science capabilities of deep learning, data mining and predictive, prescriptive, and cognitive analytics. Harness your systems of record (SoR), systems of engagement (SoE), and systems of insights (SoI) through real-time dash boards and self-service reporting for measurable value.

Cognition/AI: Capitalise, cultivate, and orchestrate data assets to hone performance and the capacity for continuous change. Build the cognitive platform, encompassing self-learning systems, natural language processing, robotic process automation, enhanced data intelligence, augmented reality, and predictive patterns – all accessible through an open API economy (application program interface). These elements should be supported by cognitive journey map, cognitive enabled workflow, business process automation, empowering the business to make faster, more informed decisions.

Immersive Security: Recent forecasts predict that two-thirds of crime in the next ten years will be cybercrime, which raises the question: what will our law enforcement look like, will they need to be data scientists and will Tom Cruise’s film, Minority Report, about predictive crime become a reality? A clear reality is that as the world becomes more reliant interchangeable data, it will be vitally important to consider a security approach from a data centric model. Understanding our data, where it is, and its taxonomy is a prerequisite to enable us to understand how to apply security controls and related technology. To succeed in the new world, executives need to ensure with have the governance and policies in place to combat change. In short embed trust and security into everything.

In the fourth industrial revolution, the IT landscape will look fundamentally different to the one we see today, and won’t be a collection of systems but an array of interconnected eco-systems based on platform business models. Future reallocation could approach an estimated $1.2 trillion in the next few years, up $730 billion, an increase of 72%. This is what experts refer to as “making the platform play” and requires a strong belief in their own market position, core capabilities, technologies, and business models. If they get it right, it will not only provide ways for organisations to capitalise on their own transformational strategies, but encourage their ecosystems, partners, or even competitors to leverage their platforms. This opens the door for entirely new business model platforms at industry, country, or government level, supporting economic platforms, smarted cities, and improving GDP.

These disruptive behaviours are forcing organisations to reassess the attributes of effective platform business model strategies and the execution required for monetising them. A growing number of organisations are embracing radically new models and instead of going it alone, they’re innovating with partners. These new partnerships are building shared platform ecosystems – harnessing and creating large scalable networks of users and resources – that can be accessed on demand through data sharing. This is referred to as: coopetition.

"Man and machine always get a better answer than man alone or machine alone."

- Chairman, President and Chief Executive Officer IBM - Ginni Rometty. Think 2018

4. Collaborative Ecosystems – “This is where Networks of Networks harness transactional, ecosystems & business process transformation, monetising and connecting the dots, leveraging the cognitive enterprise.”

If cognitive enterprise platforms represent the technological foundation for the successful transformation into the fourth industrial revolution, then collaborative ecosystems represent the ability to monetise and scale. Successful organisations will need to engage with multiple ecosystem of platforms to support their business. The competitive advantage will depend on how well and how fast a core platform is able to learn exponentially and continually adapt to the shifting marketplace.

Equally important and vital to data monetisation are the transactional ecosystems, supported by game changing “smart” technology platforms like AI, weather, mobility, blockchain, IoT, and eventually quantum. These platforms will help facilitate radical decentralisation, creating new business models, business redesigns, integrate supply chains, and provide platform innovation that can be both transformative and disruptive.

Many large organisations are radically digitising the world’s trade through the supply chain. The result is an integrated ecosystem platform that provides more efficient and secure methods for conducting global trade using blockchain technology.

For example, we are seeing evidence of first of a kind blockchain solutions to transform the diamond marketplace, to ultimately reduce fraud and black market trade. The technology is used to track the provenance of the diamond, thus providing an immutable, distributed ledger audit trail for the traded stones by digitizing the current paper based diamond certification system, the Kimberly Process. Food organisations are improving traceability and transparency of the food supply chain using blockchains and IoT, to build the ultimate digitized food system that can be tracked within minutes from an ecosystem of suppliers to retailers and ultimately to consumers. Banks are establishing a digital identity verification network that shares identity attributes and will reduce costs for banks and improve customer experience. Future business models build trust as they interact with the correct individual helping to enable Self-Sovereign identity, leveraging a blockchain network, to access a range of services across organizations and share only the minimum required identity attributes.

A different perspective of new collaborative ecosystems that leverage the sharing economy is DreamLab (vodafone.com.au/foundation/dreamlab). This represents an attempt at helping solve societal problems such as cancer, by encouraging communities to download an application that uses the processing power of your idle phone while your sleep. The more people that use the app, the faster it works, and the faster we can help develop more personalised treatments. This innovative application was created by the Garvan Institute of Medical Research, and Vodafone Foundation Australia, which funds health and well-being projects that use mobile technology. When a phone with the DreamLab app installed is fully charged and plugged in, the app will automatically download data and analyse it using an algorithm, before uploading it back to the researchers via the cloud. The app uses “distributed computing” to harness the combined power of thousands of small computers, effectively turning them into a supercomputer. What both these examples represent is the ability to leverage the platform ecosystems, connecting the dots for mutual value, and proving innovation from different ends of collaborative spectrum.

5. Customer value – “Data driven insights leveraging real-time interaction, augmented intelligence, and immersive innovation, delivering measurable valued experiences”.

Customer value represents shift from the simplistic digital models characterised in the third industrial revolution, to much more complex innovations based on products and services being enhanced by data and with an openness to collaborate. We are moving forward from a path to personalisation to an experience that is all about individualisation. No one size will fit all and 4IR will help tailor an experience to meet the lifestyle of one. As corporations compete for our time and, more importantly, our cash, they need to understanding consumers at a micro level, using cognitive real-time analytics, artificial and augmented intelligence, and deep learning. These elements will have a profound effect, helping understand our lifestyle behaviours, preferences, and buying patterns, recognised as 'the attention economy'. Transformative business models that support brand advocacy will also play and essential role in the support of a contiguous customer’s journey, with consumers, citizens, and employees playing a far more interactive role through perpetual real-time feedback.

"These disruptive behaviours are forcing organisations to reassess the attributes of effective platform business model strategies and the execution required for monetising them."

One of the profiles that embodies customer value – and looks at who will shape and live these new paradigms of experience – is Generation Z or GenZ. This group will engage whenever and wherever they want. So be responsive by experimenting and reconfiguring capabilities to meet their needs. Leverage voice and facial recognition and AR and VR to knit together digitally integrated experiences. They embrace robotics and cognitive/AI to remove friction, offer autonomous services, fix issues, and implement speedy resolutions. Enable your physical spaces to be more intelligent, using sensory devices to collect and learn from data about shoppers, and broaden the mobile and digital experiences to add convenience, education, and games to keep them coming back.

But it’s not just restricted to the consumer end of the scale, corporations and governments also need to embed all of the above and include traits like provenance, ethics, sustainability, and corporate responsibility into everything they do, understanding their influence, ultimately measuring the experiences they provide.

Conclusion

In order to make the transitional journey from the later stages of the third to the fourth industrial revolution, corporations should look to embrace and leverage many of the key characteristics of digital dexterity, cultural organisation, cognitive enterprise, and collaborative ecosystems to deliver actionable insights that support customer value. In order to thrive, they should harness these combinatorial elements and infuse them into every aspect of business decisions and processes to drive efficiency and agility, ensuring they measure success and maturity in this new data-led and on-demand” economy.

The world is changing at an exponential rate where data, AI and immersive security, if not already, will become part of our everyday DNA fabric, embedded into everything we do. Everything that can be connected, will be connected and the fusion between the physical, digital, biological, and neural networks have an air of inevitability. For humans to succeed in this ever changing world, we all must embrace the change and transcend the technology, not let it overpower us, harnessing its transformative power for greater good and to improve our world.

About the Author

[caption id="attachment_12846" align="alignleft" width="175"] Author: Ian Fletcher, IBM Institute for Business Value Director MEA[/caption]

Ian Fletcher was educated in the UK, graduating from Birmingham University, and built a successful career in IBM Global Technology Services and Global Markets. With over thirty years’ experience in technology and business consulting services, Mr Fletcher leads the IBM IBV C-Suite study for the Gulf & Levant Region. Mr Fletcher also runs IBM’s thought leadership programme locally, advising clients on business transformation and strategy. More recently, Mr Fletcher has competed his substantial research on the impact of the Fourth Industrial Revolution and, in turn, its impact on the C-Suite.

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About IBM Institute for Business Value

The IBM Institute for Business Value, part of IBM Services, develops fact-based strategic insights for senior business executives around critical public and private sector issues.