António Guterres: SDG Champion

[caption id="attachment_17861" align="alignright" width="300"] Secretary-General of the United Nations: António Guterres[/caption]

“The global coronavirus pandemic, which has already caused unimaginable devastation and hardship, has brought our way of life to an almost complete halt,” he said. “The outbreak will have profound and lasting economic and social consequences in every corner of the globe.”

The Secretary-General of the United Nations, António Guterres, certainly seems to agree with Defoe (see below) that the world should now look on things with “differing eyes”.

“Another plague would remove the animosities among us, and bring us to see with differing eyes, than those which we looked on things with before.”

These are the words of Daniel Defoe in A Journal of the Plague Year, a vivid account of life in London in 1665 when bubonic plague wiped out 15 percent of the city’s population, and brought the economy of the whole of England to a standstill.

Many of those who didn’t die, lost their livelihoods, and just as in the global pandemic of 2020, after a period of fear, isolation and hysteria, the great and pressing concern was how to build a better world from the devastation. Defoe’s graphic description of the plague, and the subsequent economic ruin has distinct echoes for our times.

Some economists are forecasting a V-shape recovery; a fast bounce-back. But many more suggest the most likely outcome will be an L-shaped impact – a rapid dip followed by a long period of no significant growth, perhaps continuing for many years.

The United Nations, in its response to the pandemic is perhaps facing the greatest test since its inception in 1945. But the organisation is determined not to be blown off course in its pledge to achieve Sustainable Development Goals (SDGs) by the end of the decade.

The task of finding a way through this world-wide catastrophe has fallen to 71 year old Mr Guterres who became Secretary-General of the UN in 2017 having served two terms as Prime Minister of his native Portugal. The leader of the country’s Socialist Party, he was widely admired at home and abroad for his support for humanitarian causes. He began his career at the UN as High Commissioner for Refugees where he became convinced that sustainable development would be essential for the eradication of poverty and inequality.

Since his appointment as Secretary-General, he has enthusiastically championed the UN’s blueprint of 17 Sustainable Development Goals, which aims to achieve “a better and more sustainable future for all”. These include an end to poverty and hunger, promotion of good health and education, gender equality, clean water provision, clean energy and action on climate change.

This holistic response to the root causes of conflicts – integrating peace, sustainable development and human rights – was going to be challenging enough without an unforeseen global crisis like the Covid-19 virus.

The UN had hoped to achieve their SDG aims by the end of the decade, but the pandemic has thrown a giant spanner in the works, threatening destabilisation in many of the developing countries of the world, most notably in Africa, where progress was being made towards the SDG target.

Mr Guterres, attending a virtual high-level UN the meeting aimed at finding solutions to tackle the damage done by the pandemic to the UN’s 2030 Agenda for Sustainable Development, warned that Covid-19 would cause “unimaginable devastation and suffering around the world”. He predicted that millions would be pushed into extreme poverty, that there would be famines of “historic proportions”, and that we would witness the sharpest contraction of the global economy since the Great Depression of the 1930s.

“Despite all the technological and scientific advances of recent decades, we are in an unprecedented human crisis – because of a microscopic virus,” he said.

He said that there must be immediate, collective action in six crucial areas: Global liquidity and solutions to debt; incentives for creditors; incentives to boost sustainable development; a crackdown on illicit financial dealings; the alignment of incentives in global financial systems with SDGs to boost confidence and relaunch investment in sustainable development; and finally, the creation of an over-arching global framework to aid rapid recovery.

“All our efforts must go towards building sustainable and resilient pathways that enable us not only to beat Covid-19, but to tackle the climate crisis, reduce inequality and eradicate poverty and hunger,” he said.

“Getting through Covid-19 and recovering better will cost money, but the alternative will cost far more. This is a global crisis and it’s up to all of us to solve it. Let us continue to wage peace, defeat the pandemic and build a better future.”

Mr Guterres has been at pains to insist that in the pursuit of sustainable economic recovery world governments must build upon the UN’s SDG blueprint. There was a triple imperative, he told the UN’s Economic and Social Council (ECOSOC) in May, to stem the pandemic, safeguard development gains already made, and ensure that all recovery efforts followed the SDG 2030 Agenda.

“Working together, with our foot on the pedal and our eyes on the (SDG) 2030 Agenda, we will get through this crisis and reach our destination, protecting hard-won development progress and accelerating our joint efforts,” he said. “Our objective remains clear; to help countries navigate and accelerate progress towards achieving the goals.”

One element of the SDGs is gender equality, and Mr Guterres singled out the role of women in the world economy. The pandemic, he said, had laid bare the extent to which national economies are sustained by the unpaid domestic labour of women. He urged governments to tackle the issue in the post-pandemic world to ensure a better recovery. “Returning to our previous path is simply not an option,” he said.

His words were echoed by ECOSOC president, Mona Juul, who said that the pandemic had exposed the disproportionate burden on women who perform unpaid care work and are overrepresented as frontline health workers. She said that the inclusion of a gender perspective, as enshrined in SDG, into social and economic responses to the virus was essential.

Mr Guterres emphasised that bold action taken now, based on the UN’s SDGs, would not only protect the weakest, it would help ensure a stronger recovery. And he again stressed the regularly-quoted phrase that he would “leave no-one behind”. The recovery, he said, had to be focussed on building inclusive and sustainable economies that are more resilient in the face of future global challenges.

At the beginning of the year, the UN announced a “Decade of Action” for SDGs. The conversation at the time was about how to build momentum in the final ten years of the initiative. In its 2019 SDG report, the UN had warned that progress towards the goals was slowing, even reversing in some areas.

Now there are many who paradoxically believe the pandemic, far from being an unanticipated obstacle to SDG progress, may help reinvigorate the project. The UK Stakeholders for Sustainable Development (UKSSD), for instance, pointed to the way many businesses supported communities and the vulnerable during the pandemic, showing a willingness to help society and go above and beyond the normal.

UKSSD blogger, Emily Auckland, said: “It is only by working together that we will create a post-pandemic future that is fairer, just and sustainable.”

Failure to respond quickly at this point in history, said Mr Guterres, could jeopardise progress already made towards achieving SDGs. The UN has drawn attention to several areas where a substantially improved outcome might be achieved because of the effects of the pandemic – one being the question of remittances.

Remittances – the money sent by migrant workers in developed nations to their families in poorer countries – currently account for more than five percent of GDP in as many as 60 low-income countries. During the pandemic, this flow of cash has been dramatically reduced, causing great hardship in developing countries.

But the pandemic has exposed vulnerabilities in the global remittance system, said Gilbert F. Houngbo, president of the UN agency, the International Fund for Agricultural Development (IFAD). He called for an overhaul of money-transfer systems to ensure more of the cash reaches needy families, and less is lost in transfer fees. IFAD is currently in negotiation with financial technology firms, mobile operators, banks and postal networks to find a solution to high transaction costs.

Mr Guterres focussed specifically on the effects upon mental health as a result of the pandemic, especially among the young. “Mental health is at the core of our humanity,” he said. “The virus is not only attacking our physical health, it is also increasing psychological suffering. Throughout my life, and in my own family, I have been close to doctors and psychiatrists treating these conditions. I became acutely aware of the suffering they cause. Even when the pandemic is brought under control, grief and anxiety will continue to affect people and communities.”

His observations were confirmed in late May 2020, when the International Labour Organisation (ILO) warned that more than one in six young people worldwide had lost their jobs due to the coronavirus.

The ILO reported that under 30s had been particularly hard hit, claiming that their financial prospects could be blighted for decades. Guy Ryder, the ILO’s Director-General said that many young people would simply be left behind. Youth unemployment in the EU for instance, which still stands at around 15 percent, had never fully recovered from the financial crisis of 2008, he said.

This was just one aspect of the potential fall-out from the pandemic. Mr Guterres also drew attention to the plight of the world’s developing nations, especially those in Africa, whose progress towards the UN’s SDG targets was being thrown off course as a result of the economic damage caused by coronavirus.

Mr Guterres had earlier called on UN member states to adopt a “war economy” to fight the effects of the virus. Defeating coronavirus, he said, was the first stage, but the world should seize the opportunity to create a global economy which was more “inclusive and sustainable going forward”.

“We need to prepare for a recovery for a better economy, a more sustainable and inclusive economy,” he said. “We don’t need to replicate exactly the economy of the past. Many things will change, I would say irreversibly in our lives.”

He said that the world needed to use the current situation wisely; “to seize it as an opportunity” to achieve more inclusiveness and sustainability in national economies. He also expressed the hope that another effect of the pandemic would be to force governments to re-evaluate relationships with the environment, and redouble efforts to combat climate change.

Unsurprisingly for a man who sees his fundamental role as UN Secretary-General to be the achievement of the eradication of poverty and inequality, Africa is at the heart of his Covid-19 concerns.

As the virus began to spread across the continent, Mr Guterres called on warring factions in several African states to agree to a general ceasefire, in the hope that the pandemic would somehow make peace easier to achieve.

Mr Guterres knows that the pandemic will not be defeated until Africa is safe. Economic instability could lead to catastrophic collapse in the region, leading in turn to more conflict, famine and an upsurge in migration.

“In recent years Africans have done much to advance the well-being of the continent’s people,” he said. “Economic growth has been strong; the digital revolution has taken hold. A free trade area has been agreed. But the epidemic threatens Africa’s progress. It will aggravate long-standing inequalities and heighten hunger, malnutrition and vulnerability to disease.”

It was already the case, he said, that African exports were in serious decline because of coronavirus, and demand in the continent’s tourism industry had all but dried up. The opening of a pan-African trade zone, upon which so much is staked, and which was due to take place in 2020, has been postponed as a direct result of the pandemic.

Mr Guterres praised the way African countries had moved rapidly to establish regional co-operation to fight the spread of the disease, including co-ordinated quarantines and lockdowns. He also commended African governments for drawing on their experience of epidemics like HIV/Aids and Ebola in the fight against rumour and misinformation, debunking anecdotal speculations and overcoming mistrust of government agencies.

But the international community, he argued, had to step in to help strengthen local health systems, and try to avoid a financial crisis which could push millions of Africans into poverty.

Elsewhere, Inger Andersen, the Executive Director of the United Nations Environment Programme (UNEP) shone the spotlight on the effect of the pandemic on environmental issues, insisting that the world’s response must not be seen as simply a philanthropic reaction. Sustainable recovery and development will need to be fully future-proofed, she said. The threat posed by rising global temperatures increases the likelihood of more pandemics, flooding, droughts and the destabilisation of economies.

Meanwhile attention has also been focussed on the generational response to the crisis. Those reaching adulthood in the early 21st century – Millennials and Generation Z - were initially accused of having too carefree an attitude to the virus, even being blamed for helping to spread infection. But it is becoming clear that the response of young people is leading to intergenerational innovation to find ways to survive and grow.

Millennials and Generation Z make up nearly 40 percent of workers in fragile areas such as childcare, restaurants, and tourism – and are bearing the brunt of the economic impact of measures designed to tackle Covid-19. But these young people are also collaborative, comfortable with electronic communication and the use of technology, and above all, adaptable.

They are the generations most likely to seek out sustainable brands, say economists. Unilever, the giant Anglo-Dutch consumer goods company, is a pioneer of in this field. In 2018 their 28 Sustainable Living Brands grew 69 percent faster than the rest of the business – up from 46 percent the previous year. Much of this growth, Unilever believes, is down to the attitudes of younger generations.

Elizabeth Uviebinené, the British author of Slay in You Lane: The Black Girl Bible, summed up this opinion, saying: “Despite the uncertainty ahead, I take comfort in the fact that millennials are a resilient and adaptable generation because we’ve always had to be, and this setback will be no different.”

The Business & Sustainable Development Commission, launched in Davos, Switzerland in 2016, believes that at least $12 trillion could be unlocked through the expansion of sustainable business over the next decade, creating up to 380 million new jobs by 2030.

Elizabeth Boggs Davidsen, the Director of SDG Impact at the United Nations Development Programme (UNDP), says that the pandemic has exposed the world’s weaknesses, and “reminded us about how interconnected all our fortunes are”.

“We now have the opportunity to create a better, stronger, more sustainable, resilient and inclusive future for all,” she says. “Rather than assume that the pandemic makes our task harder, we should capitalise on the opportunity and space it provides to challenge conventional wisdom.”

In 2018, KPMG reported that of the world’s 250 largest companies, only 101 mentioned SDGs in their corporate reporting, and of these, just eight made the business case for SDGS.

Ms Davidsen says: “Too often the SDGs are used as just another reporting lens to communicate existing activities differently, rather than to make different decisions. While interest in the SDGs has been building, business leaders tell us they still do not have all the tools and information they need.”

Her role, as the pandemic recedes, is to build a common business framework to guide companies, creating a greater sense of confidence in an uncertain time, she said.

António Guterres believes that people have finally become conscious of the seriousness of the virus and its effects, and now understand that global solidarity and co-ordination of action was required not only to defeat coronavirus, but also to keep the wheels of the world economy turning.

Despite the apparent chaos in the global response to coronavirus, the conflicting advice of experts, the attempts to pin blame, the rhetoric of leaders like Mr Trump, the failure to follow WHO guidance by some, the opportunistic crackdown on civil liberties by others, Mr Guterres remains optimistic that the world can recover, and a new, equitable future be created.

And it would seem that his cautious optimism is shared. Global Web Index, a London-based consumer research body, believes that optimism is a key factor in navigating the coronavirus crisis – and its extensive market research appears to bear that out.

An internet survey of 14,000 people across 13 countries conducted during the height of the pandemic in March 2020 found a reassuringly high level of optimism for recovery among respondents, though there were significant variations between countries.

China saw the highest levels of optimism at 93 percent, while in Japan only 17 percent were hopeful of a positive outcome. In the USA and UK, there was an approximate 50:50 split between confidence and pessimism. According to Global Web Index, good communication appears to be the key to maintaining consumer optimism, with those who felt well-informed being generally less concerned for the future.

The Great Plague of 1665 was the first time the citizens of England had suffered such pestilence since the dreadful years of the Black Death in the 14th century. It took them by surprise in much the same way as coronavirus shocked a modern world where such events were seen as things of the past. The Black Death wiped out almost 45 per cent of England’s population in the mid-1300s, and in doing so, also obliterated the feudal system, laying the foundation for a modern nation. Similarly, the Great Plague, followed the next year by the Great Fire of London, allowed the city to transform into a progressive capital. From calamity can come hope.

In his journal of the plague year, Daniel Defoe echoes this conviction with a grimly comic observation that there may yet be cause for hopefulness:

“This is a world of corpses strewn in the streets and pits, yet in the deadcart itself a drunken piper wakes up to cry, ‘But I an’t dead tho’ am I?’”

See the article in CFI.co Autumn 2020 issue.

[caption id="attachment_11181" align="aligncenter" width="287"] Author: Tony Lennox[/caption]


Investors Depart as Tech Stocks Come Under Assault

Zoom zonked out this week. Investors dumped shares in the videoconferencing service during a wholesale selloff that drove the company’s shares over the cliff, lopping 17 percent off its market cap on Monday and another 6 percent yesterday. A more or less imminent return to the comforts of the corporate office, and its coffee corner, has become all but a certainty after Pfizer’s unveiling of an effective vaccine gave global markets a shot in the arm, albeit one with serious side-effects for tech stocks that came under assault.

The Nasdaq dipped into the red whilst EU antitrust watchdog Margrethe Vestager added to the tech dump as she took aim at Amazon, accusing the online retailer of hurting the interests of about 150,000 European merchants selling goods on its platform. After a year-long investigation of Amazon’s business practices, the EU Commissioner for Competition concluded that the company uses non-public data to boost sale volumes of its own house brands and services. Vestager said that the EU will not allow ‘dual-role platforms’ with considerable market power to distort competition: “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers.”

Vestager left the door open for a settlement and praised Amazon for its engagement and willingness to resolve outstanding issues. In a short statement, the US retailer said it ‘disagreed’ with the commission’s findings and will continue to make ‘every effort’ to clarify the facts. During a congressional hearing earlier this year, Amazon’s Associate General Counsel Nate Sutton denied that the company uses data generated by private sellers in decisions regarding its own product line-up. After the Wall Street Journal discovered otherwise, Amazon founder and CEO Jeff Bezos promised Congress that he was ‘not satisfied that we have gotten to the bottom of it’.

Iffy

However, the EU’s case against Amazon rests on an ‘iffy’ premise and must show that the online platform is indispensable to third-party sellers and that the company’s conduct drives these out of business. Commissioner Vestager now takes on a business model that is quite common in the retail sector and does not include a duty of neutrality. Grocery stores may either sell prime shelf space to the highest bidder or put their own house brand products there.

Tech stocks took a beating in China too, with Alibaba, JD.com, and Meituan each retreating almost 10 percent during a day of hectic trading, pulling the Hang Seng index down by 11 percent since the start of the week. An estimated $300 billion in market valuation evaporated. The frantic selling spree followed the publication of new regulations designed to curb the market power of big tech companies. With their vaguely worded edict, Chinese government authorities indicated they wish to check monopolistic practices and strengthen consumer rights.

Ma’s Comeuppance

The clampdown comes barely a week after the embarrassing public dressing down meted out to Jack Ma, the former poster boy of China’s digital prowess. Ma was told in no uncertain terms that the $35 billion initial public offering of shares in his Ant Group (formerly Alipay) had been indefinitely suspended. The fintech had been poised to become the country’s largest online retail bank.

Markets have also been ill at ease over the unseating of four Hong Kong pro-democracy legislators who were stripped of their mandates for ‘unpatriotic’ behaviour. On Wednesday morning, the remaining fifteen opposition legislators collectively resigned in protest over the Beijing-ordered move. Hong Kong’s chief executive Carrie Lam explained that the special administrative region needs a ‘political body composed of patriots’. In China, and now in Hong Kong as well, the voicing of dissent is deemed seditious.

Daniel So, a market strategist at CMB International Securities, expressed concern that the regulatory changes may deal a heavy blow to China’s tech giants: “It coincides with investors rotating out of tech and into old-economy shares because of the vaccine boost.” So expects Alibaba and Tencent to face continued downward pressure.

Stop the Chatter

Whilst China silences the Hong Kong opposition, Facebook and Google are trying to mute the ‘Stop the Steal’ internet chatter promoted by diehard Trump loyalist from within and without the White House. Both companies have discretely extended the ban on political and election-related advertising.

Facebook CEO Mark Zuckerberg is seen to be slowly retreating from his earlier position that private companies should not be ‘arbiters of truth’. Now Facebook seeks to ‘reduce opportunities for confusion or abuse’. Last week, Facebook introduced changes that make it harder for its users to share posts containing misleading information. However, the ban also affects the candidates in the January twin senatorial Georgia runoff election.

Facebook’s change of mind followed complaints voiced over Twitter by Bill Russo, head of President-elect Joe Biden’s press office who accused the company of ‘shredding the fabric’ of US democracy.

YouTube, owned by Google parent Alphabet, is said to mull changes to its free-for-all approach after the platform had been criticised for allowing the dissemination of fact-free content and misinformation.

Surge

On Tuesday, corona-related hospitalisations in the US surged to almost 62,000 with a record 139,800 new cases reported. Both numbers are significantly higher than the pandemic’s previous peak recorded in April. Yesterday, the death toll increased by 1,440, pushing the total north of 240,000. The sharp increase in the rate of infection has moved the healthcare system closer to gridlock with some hospitals forced to suspend testing programmes to concentrate on bedside care instead. Vice-President Nancy Foster of the American Hospital Association sounded a note of alarm and said that with resources stretched thin, medical facilities may not be able to respond fully and adequately to the surge in flu patients expected as winter begins to bite.

In an interview broadcast on Australian television, Dr Anthony Fauci, who heads the US National Institute of Allergy and Infectious Diseases, admitted that working under the Trump Administration has been ‘very stressful’. The president repeatedly threatened to fire the long-serving Fauci and promised to do so upon securing a second term in office.

Fauci assured viewers that he has no time to worry about threats made against his person and remains focussed ‘like a laser beam’ on scientific work. Former presidential advisor Steve Bannon last week called for Fauci’s beheading. “That was really kind of unusual and not the sort of thing you think about when you’re going through medical school to become a physician.”


Tech, Trust, and Women’s Role in Creating the Future

[caption id="attachment_17877" align="alignright" width="300"] Cecilia Harvey[/caption]

Cecilia Harvey’s jaw-dropping career was launched by a chance careers-day visit to Wall Street. Today, she is a woman on a mission. Several missions, actually.

One of those missions is to reverse a crisis of trust in technology. “Now is not the time to have naïve optimism about technology,” she says. “Technology leaders cannot afford to be indifferent or silent about issues.

“The tech industry in all its forms has such an impact on everything we do, and so the question of how we evolve our technology, and how we lead our teams, becomes one of the most pertinent questions we have to ask. Leaders in this industry must ask: can our tech potentially be causing harm to the public, and if so, what are we going to do to mitigate that risk? And taking that further: how are we going to drive positive social change?”

Cecilia Harvey migrated from New York to London in 2008, working up through C-suite positions at Accenture and Barclays to become COO at Citigroup. After a five-year stint there, she took on leadership roles with fintech ventures and start-ups. In October 2019, she made the shift from the world of finance to become CEO of sensor technology company Hyve Dynamics.

When Harvey talks about leadership, she’s not referring to technical or logistical brilliance; she is focusing on social impact. “In these turbulent times, people are looking for leaders who are authentic, actionable, inspiring,” she says. “What do you believe? What do you stand for? These are the questions employees and consumers are asking.

“It’s not just about leading within your team. It’s about taking a leadership role within the wider world of tech and being visible and offering hope and inspiration.”

So, sensors? “Sensor technology can facilitate remote health monitoring and telemedicine, something that becomes more important each passing year with our aging population.

“It’s a privilege to work with this technology. I’m fired-up about coming to work each day and being part of a company creating technology which can improve healthcare equality and help save lives.”
Harvey believes that Hyve’s patented skin sensor technology, which enhances the real-time wireless collection of biometric data, can play a key role in assisting with pandemic recovery.

“Sensor technology enables identification of many of the key symptoms and markers related to coronavirus,” she says. These markers include temperature, heart rate, respiration, blood oxygen levels, and stress and anxiety indicators. “So it can function as a tool to help get employees back to work, students back in school, and consumers back to stores.

“All the women in my family worked in a hospital and I saw and heard their stories, of how some people couldn’t have access to high quality healthcare, and tech can play such a role in improving that. Sensor technology will reduce the patient wait-times. And it removes barriers and allows for pooling and sharing of healthcare resources between developed and developing nations.”

Raised in a predominantly female environment in New York, with mother, grandmother and aunts, “all I ever saw was women supporting other women”.

Driven by a commitment to help women achieve their goals, especially within the tech world, Harvey has spoken out publicly about the “Queen Bee Syndrome” — a term for the toxic workplace competition between women that many shy away from for fear of breaking the hidden codes of “sisterhood”.

“We don’t have large numbers of women in leadership positions,” she explains, “and if you have a situation where women don’t want to work for other women, it damages the potential for other women to succeed.

“I speak up about it because it can have such a negative impact on the development of female leaders. These behaviours often stem from insecurity or lack of self-awareness, and — as a leader — I believe the only way people are going to improve is if they are given feedback.” People need feedback, and the opportunity to make related changes, she believes. “It helps people improve their careers and it benefits the overall organisation.”

Her advice on how to succeed in a tech industry? “In the simplest way — you just have to get out of your own way. People see obstacles for themselves, but nothing is going to be handed to you on a plate, you have to work for it. You have to always create options... I wanted to create multiple streams of income, and I wanted to be in an industry where I was a leader and an influencer.

“I made a decision to leave a comfortable job as COO Citi Group in order to create those opportunities for myself. Leaving that comfort zone allowed me to launch Tech Women Today, to get into fintech, and, more recently, to join Hyve as CEO. If you’re going to get to the next level you need to surround yourself with positive people who have similar goals and values.”

Harvey believes that the pandemic, its uncertainties and challenges create a entrepreneurial breeding ground. “So many people tell me their business arose from crisis,” she points out. “Businesses will emerge from these difficult times. I want to help create a sense of community and help people understand the resources available to them, and the power that they have to make change.”

Harvey founded Tech Women Today as a global platform, a showcase and a resource for women who want to increase their influence in the workplace. Her other programmes include Ladies Who Launch, which morphed into a virtual programme due to the pandemic, and Success Unfiltered, a platform for the stories of female entrepreneurs.

“It’s through our stories that we can really connect with each other,” she says. “I started to think about this last year, and when the pandemic hit it became even more clear that it was a responsibility to get content out there that can lift, inspire and motivate. Really honest content, not slick, polished stories, but a glimpse into the gritty, difficult parts that often propel people to success.

“I’ve been blessed throughout my career to meet so many people with interesting stories to tell, and it’s our stories that show how we are more alike than we are different. My vision is to create a strong, supportive community around this: helping women change careers, start their own business, change their lives; helping them understand they have the confidence and power to do this.

“If I can have just a small role in helping people to do that — and showcase individuals that have done it — then this is my aim.”

Cecilia Harvey can be found tweeting at @ImCeciliaHarvey

Tech Women Today’s Twitter handle is @TechWomenToday.

By Naomi Snelling


Commissioner Gentiloni on EU Economy: Andante Ma Non Troppo

[caption id="attachment_17901" align="alignright" width="300"] EU Commissioner for Economy: Paolo Gentiloni. Source: Tiberio Barchielli[/caption]

The V-shaped economic recovery expected to unfold next year is merely an illusion sourced from wishful thinking. Yesterday, EU Commissioner for Economy Paolo Gentiloni warned of a double-dip recession and said the European Commission mulls an extension by at least a year – and possibly running far into 2022 – of the ‘general escape clause’ which temporarily lifts the ceiling on deficit spending and permissible debt levels as stipulated in the 1992 Maastricht Treaty. According to Gentiloni, a quick and full economic recovery is not in the books. He advised member states to keep fiscal support measures in place for ‘as long as needed’.

Initially overwhelmed by the viral outbreak – and swiftly side-tracked by member states invoking their sovereign right to tackle the emergency without deferring to Brussels – the European Union has been behind the pandemic’s curve since early March, relegated to reactive rather than proactive policy initiatives. Accepting a fait accompli, the European Commission, the union’s executive branch, mumbled its blessing of member states ignoring fiscal guidelines as most governments embarked on a panic-driven spending spree to keep their locked down economies from crashing.

The European Fiscal Board (EFB), an advisor to the commission, earlier suggested that fiscal constraints should only be reactivated once economic output has reached pre-pandemic levels – something not likely to happen before the end of 2022. In its latest forecast, published last week, the European Commission expects the bloc’s GDP to shrink by 7.4 percent this year, followed in 2021 by a strong but far from exuberant rebound of 4.1 percent.

Bounce Blues

Gentiloni said that the surprisingly strong second wave, and the restrictions on mobility it necessitated, interrupted a much more promising and robust economic bounce: “Growth will return next year, but it will be another year before the European economy comes close to regaining its pre-pandemic level.” Gentiloni hopes that the €750 billion recovery fund currently being hammered out may add another two percent or so to EU GDP whilst it is active. Disbursements are set to start early next year.

EU watchers in Brussels caution that the reimposition of fiscal rules is likely to be contested by several member states even after the corona scare has abated. Under the Maastricht Treaty, the maximum allowable debt-to-GDP ratio is 60 percent and fiscal deficits may not exceed 3 percent of GDP.

These restrictions proved exceptionally painful in the wake of the 2009-10 financial crisis and ushered in a ‘lost decade’ of austerity, resulting in low growth and high youth unemployment. Last month, the EFB urged member states to re-examine the Stability and Growth Pact and in particular its public debt ceiling which, it argues, may disincentivise public investment. Gentiloni agrees that reform is needed although he insists that a clearly delineated fiscal framework is still required to move towards a convergence of economic policies.

Steady as She Goes

On Wednesday, ECB President Christine Lagarde signalled that she is not about to disengage as she raised expectations that the bank will yet again expand its Pandemic Emergency Purchase Programme (PEPP) which has already scooped up €640 billion in bonds. The ECB’s Targeted Longer-Term Refinancing Operations (TLTROs), which provided commercial lenders with more than €1.5 trillion in credit at rates as low as minus one percent, is also set for a fresh injection of cash, adding another €500 billion to the tally.

According to Lagarde, ‘all options remain on the table’. She assured that PEPP and TLTROs have proven their effectiveness ‘in the current environment’. Lifting the veil on the outcome of the monetary policy ‘recalibration’ exercise undertaken last month, the ECB president ensured her audience that the bank is likely to use both instruments as its main tools. Though Lagarde did not rule out a reduction in the ECB’s deposit rate – already a record-low minus 0.5 percent – she didn’t mention the possibility in yesterday’s presentation, leading market watchers to believe that the bank will leave the interest rate unchanged.

In her presentation, Lagarde emphasised that all sectors of the economy need to have the confidence that ‘exceptionally favourable’ financing conditions will remain in place for as long as needed: “Demand weakness and economic slack are weighing in on inflation, which is expected to remain in negative territory for longer than previously thought.” Lagarde dismissed the notion that the ECB’s loose monetary policy helps create a vast universe of ‘zombie’ companies tapping the bank’s elixir of life to stay upright: “Concerns about ‘zombification’ or impending creative destruction are misplaced, especially if a vaccine is now in sight.”

Lockdown Light

Tracking some of the more esoteric economic indicators in an attempt to gauge the depth of the second corona dip, analysts suspect that the impact of the lockdown light imposed in most EU member states may not be as severe as initially feared. Data on truck haulage miles, travel to and from offices, and retail store traffic obtained from geolocation statistics complied by Google show that mobility has barely been affected as most people go about their usual business with the exception of visits to restaurants and entertainment venues.

According to ING economist Bert Colijn, governments have learned from the first lockdown and avoided the wholesale closure of the economy by focussing instead on the maintenance of social distancing rules. Colijn called the current restrictions the ‘lockdown of fun’ and said that the largest impact on the economy is suffered by countries such as France and Ireland that have closed down all retail outlets deemed non-essential.

In Germany, work-related mobility has not been affected by the new restrictions whilst in France the drop was less than half the one recorded in March. Economic researchers broadly agree that Q4 economic output is likely to fall by no more than four percent compared to the previous quarter, delaying but not derailing the economic recovery.

Real-time transportation tracker Shippeo found the European supply chain running at 94 percent of capacity. Deutsche Bank economist Stefan Schneider, quoted in the Financial Times, said that manufacturing has been helped by relatively strong overseas demand as supply chains recovered and borders remain open.

The Freightos-Baltic Index of global freight rates, a gauge for trade volumes, has been rising steadily since early October, indicating strong demand for container shipping as well as a more pronounced divergence between the manufacturing and services sectors with the former steaming ahead relatively unimpeded and the latter struggling to regain momentum.


Fed Chair Powell: “Recovering to a Different Economy”

[caption id="attachment_15349" align="alignright" width="300"] Jerome Powell[/caption]

A river runs through it. President Christine Lagarde of the European Central Bank (ECB) argues that safely fording the ‘big river of uncertainty’ that runs through the global economy requires a sustained fiscal and monetary effort. Major interventions by central banks and governments have been ‘extremely helpful’ to support economies and minimise lasting damage.

During a videoconference yesterday, three of the world’s top central bankers showed cautious optimism that the Corona pandemic may be inching towards the beginning of its end. US Federal Reserve Chairperson Jerome Powell welcomed this week’s news of a breakthrough in the development of an effective vaccine and suggested this may improve medium-term prospects. However, Powell warned that ‘significant challenges and uncertainties’ remain on the production and distribution of the vaccine. He said it was ‘just too soon’ the assess the economic implications of the news.

Governor Andrew Bailey of the Bank of England (BoE) shared the sentiment and emphasised that notwithstanding ‘encouraging signs’, questions remain regarding the implementation of a future global immunisation drive. Bailey did say that the arrival on the scene of a working vaccine fell within the BoE’s expectations for an ‘improved health scenario’.

Hitting Low

Powell stressed that the new normal set to arrive next year will be likely be fundamentally different from the pre-pandemic one: “We’re recovering, but to a different economy.” The Fed chair said that a substantial number of workers will need support to adapt to this new economy which he expects to be geared towards technology and automation. This, Powell argued, will be felt particularly hard in the services sector and affect its lower-paid workers disproportionally.

The Fed chair has been exceptionally outspoken on the urgent need for renewed fiscal support measures to help struggling businesses and households. At a Fed policy meeting earlier this month, Powell said that the recovery will be stronger ‘if we can just get at least some more fiscal support’. A political stalemate in Washington between President Trump and the Democrat-controlled House of Representatives has derailed plans for a third federal stimulus package.

On Thursday, senate majority leader Mitch McConnell indicated that he was no longer relying on Treasury Secretary Steven Mnuchin to cut a deal across the aisle. In Washington’s hyper-charged post-election atmosphere, many Republicans consider Mnuchin ‘too eager’ to concede to Democratic demands for a much large aid package than the one Trump Administration is willing to consider.

Senator McConnell told reporters that in light of the economic recovery underway, his party deems a targeted $500 billion stimulus bill sufficient. Democrats have proposed a package worth $2.4 trillion whilst the incoming administration of President-Elect Joe Biden has promised to move fast on a $3 trillion initiative after it takes over the federal government on January 20.

Meanwhile, House Speaker Nancy Pelosi accused Republicans of being cold-hearted for refusing to provide funds for unemployed workers, small businesses, and cash-strapped state and local governments: “It’s like the house burning down and they just refuse to throw water on it.”

Though the US unemployment rate dropped to 6.9 percent in October – down from 14.7 percent in April – the pace of the decline has slackened as the pandemic’s second wave gained traction. The US economy has managed to recoup just about half of the jobs lost since the start of the public health emergency with another 10 million or so to go.

On a Slower Roll

Fitch Ratings chief economist Brian Coulton noted that the US economy has maintained some of its forward momentum even whilst the infection rate increased sharply, although he did point to a disconcerting rise in long-term unemployment – 27 weeks or over – to 32 percent of the total.

Market watchers were encouraged by a pick-up in the rate of inflation. The core consumer price index, which excludes volatile components such as food and fuel, rose to 1.6 percent and is set to climb higher yet as households deploy their surplus, accumulated from stimulus cheques and reduced spending, over the festive season.

During August’s annual Jackson Hole monetary policy meeting, Powell signalled his intention to prioritise employment numbers over inflation concerns and vowed to keep interest rate at – or close to – their present record-low: “We are not even thinking of thinking about tightening policy.” Powell also explained that henceforward the Fed will consider the average rate of inflation over a much longer time horizon to allow for peaks to emerge well over the central bank’s 2 percent target.

Back to the Future

In a sense, Powell is returning the Fed to its original mandate of using monetary policy to secure full employment. The fed chair did, however, warn that ‘excessive inflationary pressures’ would prompt the bank to act promptly and decisively. Even so, Powell expressed his view that a ‘robust job market’ can be sustained without causing an inflationary spike.

Markets reacted by adding to the yield of long-dated Treasury debt as investors are not so sure they wish to expose their assets to inflation. With the US debt-to-GDP ratio now north of 100 percent and the Fed’s balance sheet swollen to record size, pundits have been quick to spot the danger. It would certainly not be the first time that inflation is deployed as a quick, easy, and relatively painless way to erode debt.

Europe Deflated

Such worries are virtually non-existent in Europe where the ECB may pump almost limitless volumes of fresh cash into the economy without causing so much as a ripple in the price index which remains firmly stuck in negative territory.

Earlier this week, ECB President Lagarde assured markets that financing costs across the Eurozone will remain ‘exceptionally favourable’ until the bloc’s economy begins to show signs of life. Ms Lagarde said the challenge now is to bridge the gap until the economic recovery can build momentum. The ECB is ready to expand its bond-buying programme with another €500 billion though Lagarde doubted that the bank would lower its already negative deposit rate. She expected inflation to remain negative ‘for longer than previously thought’ due to weak demand.


Don’t Expect Miracles from the Multilaterals

by Otaviano Canuto

[caption id="attachment_17944" align="alignright" width="300"] Washington: Inter-American Development Bank[/caption]

Latin American and Caribbean economies need help, but organisations such as the IDB are also stretched thin.

With Latin America and the Caribbean potentially facing years of difficulties due to the pandemic and related economic crises, attention has shifted to what multilateral institutions like the International Monetary Fund (IMF) might do to help. There’s no doubt such bodies can play a crucial role in preventing another lost decade in the region. But they will also face limitations because of capital constraints and other factors.

The need is clearly acute. Latin America and the Caribbean remain the epicentre of the global pandemic, currently accounting for more than 43 percent of global deaths. There has been a surge in Covid-19 fatalities in Brazil, Mexico and other countries in the region. And GDP declines in the second quarter of 2020 have revealed how severe an impact Covid-19 has had on local economies.

As the last-resort liquidity provider, the IMF has so far doubled access to emergency funding, and provided more than $5bn of total financing to 17 countries in the Caribbean, Central and South America, mainly through its Rapid Financing Instrument (RFI).
But when it comes to full-fledged financing deals, one must distinguish between three country categories.

"But while the IMF has some remaining lending space, development banks must deal with limitations because of capital constraints."

A first tier includes countries that display strong balance sheets on fiscal and balance-of-payment dimensions, and have access to the Flexible Credit Line facility, designed not to be withdrawn except in extreme circumstances. That serves as positive stamp and a low-cost insurance. Mexico, Colombia, and now Chile and Peru, are in this category. This precautionary lending line was expanded to $107bn.

A second category includes countries that were already facing external finance difficulties prior to the pandemic, such as Argentina, Ecuador, Honduras and Jamaica. Argentina just restructured $65bn in debt held by private creditors. Now it faces renegotiation of its $70bn debt with multilateral institutions, including $44bn to the IMF. The only possibility is a new roll-over programme, which Argentina has already requested.

Ecuador has also returned to the IMF after its own debt restructuring with private creditors, while Honduras and Jamaica have recently reached agreements with the fund. It is noteworthy that the accord with Jamaica accepted a reduction in its primary surplus as a counterpart to higher public social spending. Those are clear changes from past practices.

There is a third cohort of countries, with some that are already trying package negotiations and others so far not in need of IMF support. As the pandemic and the economic crisis continue to unfold, it is probable that some members of this group will join the second tier.

Multilateral and regional development banks, in turn, have all sped-up their assistance and disbursements for countries to spend on health and social protection systems. This makes money arrive faster by (among other things) approving immediate disbursement projects. For some countries that did not have access to the IMF’s emergency facilities because of lack of a minimum agreement, the banks were the only resource immediately available.

But while the IMF has some remaining lending space, development banks must deal with limitations because of capital constraints. The IDB has prioritised the poorest countries in the region. A capital increase of the World Bank was agreed in 2018, but not implemented.

For the coming year, it will get harder for multilateral banks to maintain or expand the disbursement volume. That is unfortunate, given their relevance to support economic recovery, and as cross-pollinators of knowledge.

No one-size-fits-all

Covid has been a tragedy for the region, and not only in terms of human lives: income concentration and higher public debts will be part of its legacy. And it left naked the region’s shortcomings on public health expenditures, degrees of formalisation of labour occupation, and lack of digitalisation of government functions.

This gloomy picture contains a diversity of country conditions — which means the support from multilateral institutions must vary accordingly.

Latin America as a whole is expected to suffer a GDP downfall of above 8.5 percent in 2020, only partially recovered by a positive four percent average growth rate in 2021. It is worth recalling that the shrinking of per-capita income in the region follows a period of lacklustre growth. The IMF’s World Economic Outlook update in June showed Latin America as the worst economic performer of all developing-country regions, and that is not expected to change in future forecasts.

Among the larger economies, Argentina, Mexico and Peru are poised to exhibit two-digit GDP declines, followed closely by Ecuador, while projections for Brazil, Chile and Colombia show negative growth rates in the range of minus-five to minus 7.5 percent. Uruguay is the only country in this group expected to recover its 2019-level GDP by the end of 2021. Venezuela is a tragedy apart.

Such differences reflect a range of factors, from domestic conditions prior to the virus to how the pandemic has affected them, and policy responses. Countries have taken different approaches, from “let it follow its course” (Mexico, Nicaragua) to stringent mobility restrictions (Colombia, Chile and Peru). Then there are the half-hearted and unco-ordinated local shutdowns in Brazil. Many are planning or executing re-openings, while infections and deaths are declining but still present.

Economic shocks from abroad also affected countries differently. Oil exporters felt the impact of the barrel’s price drop, while Brazil and Argentina have benefitted from China’s demand for agricultural goods. While falling tourism has hit the Caribbean, remittances were less disappointing for Central America and others, helped by the US government income transfer to its residents.

Policies of “flattening the recession curve” — including income transfers to citizens and credit to companies —have played a role, mitigating local shocks at the cost of raising public debt. Brazil and Peru had the largest income transfer schemes, while Chile prioritised credit to firms; Mexico opted for neither.

In Brazil, the resources transferred to 67m citizens as emergency aid in the first half of the year outweighed in value the whole decline in wages, a major factor behind the lower-than-expected economic recession. But debt-to-GDP is forecast to reach close to 95 percent by the end of the year. While the federal government managed to cross the storm by resorting to short-term funding, fiscal challenges will be taller at the end of the crisis period.

Despite this variety of country situations, all face the possibility of a lost-growth decade. Tackling chronic problems in infrastructure, education, inequality, governance and security will be of the essence, while coping with the immediate Covid-19 legacy. Strengthening multilateral banks’ capital structures would be of great help.

This article first appeared in Americas Quarterly.


Joe Biden No Panacea to Global Trade Troubles

The imminent departure from the White House of the self-styled dragon-slayer does not necessarily bode well for Chinese President Xi Jinping. Though the incoming Biden Administration is expected to take a less ideological approach to international trade, a reappearance of pragmatism may not herald a return of the relatively relaxed attitude towards China’s more questionable trade practices.

During this year’s election campaign, Trump and Biden clashed violently on most topics, but China was the exception. The rhetoric shared by both candidates delivered an unambiguous ‘America First’ message that promised to exclude Chinese companies from government procurement processes, prioritise US manufacturers, and encourage the reshoring of production lines. The delivery style of the message differed; its substance did not.

Where Trump moved unilaterally on most, if not all, trade issues, his successor is expected to reach out and engage with others. There are early signs that the new administration will leverage the tariffs on steel and aluminium introduced by Trump to forge a united front with the European Union vis-à-vis China. Those same US tariffs stand in the way of a tentative rapprochement with the World Trade Organisation (WTO), also featuring high on Biden’s post-inaugural to-do list.

Obiter Dicta

Under the present administration, the US exited the WTO in all but name, slamming doors as it left. Trump blocked the appointment of new judges to the WTO Appellate Body, effectively neutering the organisation’s ability to settle trade disputes.

In fairness to the President, his predecessor Barack Obama also refused to sanction the installation of two judges (in 2011 and 2016), arguing that the WTO had repeatedly failed to protect US interests. Trump went further and accused the Appellate Body of ‘judicial activism’ by making new law outside the context of the dispute under consideration and adding editorial comments (obiter dicta) to its rulings – all in clear violation of the body’s 1995 charter.

Currently, six of the seven seats on the Appellate Body are vacant with Hong Zhao, the lone Chinese holdout, reaching the end of his four-year term on 30 November. Without a properly staffed and functioning Appellate Body, WTO members cannot appeal decisions made by dispute settlement panels. This has already forced the EU and Canada to look elsewhere for solutions, defeating the purpose of the WTO and undermining its role and legitimacy. These issues arise at a moment when the WTO is struggling to remain relevant in a world canvassed by a proliferation of multilateral trade deals.

The US has also vetoed the nomination of former Nigerian Finance Minister Ngozi Okonjo-Iweala as the global trade watchdog’s new director-general. At the eleventh hour, the ever-combative US Trade Representative Robert Lightizer threw a spanner in the works, and his country’s weight behind runner-up Yoo Myung-Lee, the South Korean trade minister, as someone with more ‘hands-on experience’ in international trade.

Waiting for Joe

The troubled organisation could break the precedent that requires a nomination by consensus and call for a vote. However, it is reluctant to do so after Washington signalled, not very subtly, that it would consider a vote on the next WTO director-general as a hostile act akin to a declaration of war. With Trump calling the shots on US policy until noon on January 20, the WTO is unlikely to move and ruffle feathers, remaining instead in suspended animation until an administration more amenable to its predicament takes office.

The president-elect has indicated his willingness to reengage with the Geneva-based organisation but with a view to rebuilding and reform. However, criticism of the organisation’s functioning – mainly lengthy procedures and judicial overreach – has been largely bipartisan.

Without a whiff of irony, Chinese state media have hailed Biden’s election and concluded, in perfect unison, that his administration may allow the WTO to resume its monitoring of a ‘rules-based international trade order’. Unwittingly, China’s Global Times and other mouthpieces of the state hit the nail squarely on the head: it has precisely been the WTO’s reluctance to tackle China’s abuse of global trade rules – in particular those related to dumping practices – that has undermined the organisation’s standing.

President-Elect Biden will likely face continued pressure to reduce US dependence on imports from China and to encourage the rerouting of supply chains away from that country. Democratic and Republican lawmakers not only agree that key industries need to be brought stateside but also find common ground in prioritising workers’ rights and environmental standards in any future trade deals. The angle of attack is about to change as well: future deals will be gauged from a worker perspective rather than from a corporate one.

Looking for Momentum

EU Trade Commissioner Valdis Dombrovskis said Europe is ready to bury the hatchet and rebuild its trade relationship with the US – and jointly attempt to reform the WTO – but will still slam some €3.5 billion worth of retaliatory tariffs on US-built aeroplanes and agricultural exports as authorised by the WTO at the conclusion of a 15-year-long dispute. Dutch Trade Minister Sigrid Kaag helpfully explained that the tariffs are part of a collective effort to strengthen the EU’s position ‘in anticipation of de-escalation’. She also expressed hope that a ‘new momentum’ may build in transatlantic trade relations.

Kaag and other leading voices on EU trade policy either show a rather poor understanding of US policy considerations or are being propelled by wishful thinking. Whilst the Biden White House will certainly be more civil in detailing its position, the president-elect is not known as a free trade diehard or even a reluctant supporter. He not only issued a ‘Made in All of America’ pledge during the election campaign – a mild variant of his erstwhile opponent’s infamous MAGA crusade – but also boasts a consistent congressional track record of voting against free trade agreements, opposing deals with Chile (2003), Singapore (2003), Central America (2005), and Oman (2006).

The similarities between Trump and Biden on trade are, in fact, striking. Asked if he would be willing to scrap NAFTA (North American Free Trade Agreement) during an AFL-CIO Democratic primary forum in 2007, Biden responded: “A president's job is to create jobs, not to export jobs, and the idea that we are not willing to take the prime minister of Canada and the president of Mexico to the mat to make this agreement work is just a lack of presidential leadership. I would lead, I would do that, I would change it.” Apparently, Trump was listening in on the conversation.


Moderna Delivers Booster Shot for Wavering Markets

[caption id="attachment_17950" align="alignright" width="300"] A sign marks an entrance to a Moderna, Inc., building, Monday, May 18, 2020, in Cambridge, Mass. (AP Photo: Bill Sikes)[/caption]

Equity markets received a potent booster shot on Monday and barrelled ahead on news that a vaccine developed by US biotech group Moderna had obtained an astonishing 94.5 percent inoculation rate in late-stage trials. On Monday, the benchmark S&P 500 jumped 1.2 percent to close at a record high whilst the Dow Jones was seen cosying up to the 30,000-mark, stopping just 50 points short of smashing that barrier.

The small-cap Russell 2000, a barometer of Main Street sentiment, advanced 2.4 percent and also moved into unexplored territory. Even the tech-heavy Nasdaq, of late a scene of carnage, inched 0.8 percent ahead as a second light was thrown on the contours of a brave new post-pandemic world. On Wall Street, analysts were waxing lyrical about the now almost tangible normalisation of economic life with corporations churning out dividends, governments cutting out budgets, and consumers maxing out their credit cards on travel, leisure, and other trivial pursuits interrupted by the pandemic.

On both sides of the Atlantic, stock markets yesterday continued their rotation away from trendy yet overhyped and overpriced ‘momentum’ stocks towards previously underappreciated and undervalued ‘value’ stocks in a black swan event as tectonic in scope as it was spinning in speed. The catalyst of this massive shift was last week’s announcement by Pfizer and BioNTech of a breakthrough in their search for a coronavirus vaccine.

Brick Blast

The magnitude of the swing was illustrated by Europe’s largest commercial real estate developer and owner URW (Unibail-Rodamco-Westfield) which went from being the most shorted stock in the EU and the UK to becoming the investors’ new BFF.

In just two days of trading, URW stock gained 50 percent in value, causing hedge funds to suffer an almost unprecedented whiplash. New York-based D1 Capital Partners, which had shorted almost four percent of URW’s outstanding shares, saw an estimated €100 million evaporate in a few hours of trading.

Dutch office and retail property manager Wereldhave dealt a similar blow to short sellers as its shares rallied 23 percent. In London, Adelphi Capital and other hedge fund managers of renown received a severe beating for ignoring the ‘factors’ that now steer global equity markets.

Instead of focussing on specific industries – such as tech, energy, financial services, etc – fund managers and their algorithms have been shifting to a more dynamic approach that splits the market into factors: Value, momentum, quality, volatility and size, amongst others, are used as quantitative parameters that define a given stock at a particular moment in time. Factors rely mostly on well-established multidisciplinary academic research into human psychology as a driver of equity markets. Stocks and entire sectors can move between factors as market conditions change and even fall into several at the same time.

After enjoying an exceptionally long and profitable run that saw tech stocks gain 225 percent over the past decade – and 25 percent since the start of the year – the upside of these funds is deemed to be limited. Even before Pfizer broke the news on its coronavirus vaccine, tech momentum stocks had been losing steam. Thus, investors needed only light prodding to revisit boring old ‘value’ stocks which retreated 7 percent so far this year (according to the MSCI Global Index) and had delivered a ‘risible’ 88 percent return in the last 10 years.

Inflationary Inflections

Considering the likelihood of additional vaccines joining the Pfizer-Moderna line-up, and the probable return to economic normality next year with the attendant rise in corporate profits, the market’s optimism seems justified. However, a few analysts remain sceptical and suspect the amount of creative destruction wrought by the pandemic is being overlooked. The true number of zombie companies surviving on cheap credit and state handouts will only emerge after economies reflate on the back of strong demand.

The collapse in bond yields, even on US Treasury inflation-protected securities (Tips), has helped push the stock market to dizzying heights. The widening of the gap – aka inflation break-even – between real (inflation-linked) yields and conventional coupon rates or nominal yields, normally points to an economic growth spurt. Not so this year, when a rise in break-evens coincided with higher bond prices and a pick-up in inflation expectations.

Analysts are still mystified and unsure what this curious trend is supposed to signal but suspect a case of ‘QE addiction’ that requires central banks to keep pushing vast amounts of fresh cash into the economy to sustain asset prices. Also, policymakers may have grown rather too fond of fiscal stimuli and may find it tempting to keep the taps running even after economies have sprung back to life.

So far, investors haven’t been overly worried about inflation with 10-year US break-evens pointing to about 1.5 percent – still well below the Federal Reserve’s target of 2 percent. However, inflation is an unpredictable beast that may roar at the slightest provocation – if conditions are right. Policymakers failing to rein in public spending and ignoring the perils of ballooning deficits and excessive debt may just create such conditions, inadvertently or otherwise.

However, one lesson can already be drawn from the 2020 experience: In a universe of zero or negative real interest rates, market volatility rules with booms and busts following in quick succession.

Scrambling for Doses

Fund managers were particularly encouraged by the Moderna vaccine which seems easier to handle and distribute than the Pfizer equivalent that requires storage at minus 75 Celsius and can only survive for five days at normal fridge temperatures. Moderna revealed that its vaccine boasts a 30-day shelf life when stored at between 2C and 8C.

The latest vaccine is unlikely to become available in the UK before spring 2021. At the last minute, only moments before Moderna released its statement, the government managed to secure 5 million doses of the jab. Nr 10 now anxiously awaits the late-stage trial results of the vaccine developed jointly by Oxford University and AstraZeneca of which it has pre-ordered a more respectable volume of 100 million doses.

At just €3.50 per dose, this promises to be significantly cheaper than the Moderna vaccine’s two-shot inoculation course which runs at an estimated €50. The Oxford University / AstraZeneca alliance is expected to announce the results of its third-stage trial within the next ten days.


World Bank's Vice President for Infrastructure: Now is the Time to Rethink Transport and Logistics

[caption id="attachment_17978" align="alignright" width="300"] Vice President, Infrastructure: Makhtar Diop[/caption]

Covid-19 has had a huge impact on transport. The response to the pandemic, from social distancing to lockdown policies for affected areas, has disrupted mobility and connectivity everywhere.

It has had cumulative impacts on the basic infrastructure and systems that keep regions, markets and supply chains going, especially in the developing world. The vulnerability of global logistics has become starkly visible.

On the supply side, workforce and industry lockdowns resulted in shortages in key sectors such as pharmaceuticals and medical equipment. Protectionism, and last-mile vulnerabilities in distribution due to the lockdowns, compounded the problem.

On the demand side, the shock came from a massive overnight reduction in the consumer base, hoarding and runs on a few key goods, as well as the collapse of travel and tourism. The second quarter of 2020 is expected to see a decline of more than 25 percent in global merchandise trade value over the first quarter.

"The World Bank is harnessing the potential of transport to help economies bounce back and working with countries to increase the resilience of transport systems against future shocks, whether it be a pandemic or any other kind of disaster."

Aviation was hit especially hard, with collapsing demand and far-ranging negative effects, even while air travel is critical to safeguard the mobility of professionals and essential goods. The International Civil Aviation Organisation (ICAO) estimates a decline of up to 60 percent in global passenger traffic, and gross revenue losses of up to $420bn.

Beyond the immediate effects, there will also be deferred demand and supply disruptions as economic activity and incomes start the long climb back up. In Africa, up to 22 countries have closed their land borders completely at some point, and nearly all have implemented screening measures at border points and ports of entry and/or closed ports of entry.

The Way Forward

Mobility must be a crucial part of the response to the pandemic, not just to deal with immediate challenges but also to rekindle economic activity and ensure that the poor are shielded from its immediate and long-term impacts.

It is important to seize on the crisis as an opportunity to address some of the factors that contributed to today’s logistics problems, build future resilience and safeguard the continuity of essential domestic supply chains. One key priority is to promote the use of emergency sanitary measures in the whole logistics sector, from operators to ports, including protective equipment and social distancing. Countries and companies need contingency plans for essential goods including fuel, medicines and foodstuffs.

Getting systems working again will also require rescuing essential operators, for example by reducing fees or taxes on airlines to alleviate the financial crunch and supporting haulage operators experiencing financial distress. Facilitating online ordering and remote delivery are quick measures that can help avoid crowding at collection points or retailers.

In the short and medium term, once the pandemic is under control, countries should look into introducing new regulations to make transport resilience and safety an integral part of their new normal. The sector should also discuss existing business models and find solutions for complex underlying issues that contributed to the current vulnerability, such as what to do with state-owned air carriers that are highly indebted and not financially sustainable.

The gradual reopening of borders, routes and corridors is likewise a chance to agree on regional harmonisation of trucking regulations, vehicle standards and licensing arrangements to promote cross-border integration, and regularisation of informal operators.

The private sector needs to have a major role in this, such as helping suggest precise inspection procedures for critically needed items. Companies and industry associations can also work with governments to patch gaps in supply chains and support long-distance and large-volume transportation for medical supplies, doctors, and nurses.

The Role of International Co-operation

International financial institutions such as the World Bank can provide timely support that ranges from financing to knowledge and technical assistance. That includes, among other interventions, activating emergency funding in existing projects or helping governments devise and implement contingency plans for critical goods and mobility.

The World Bank is harnessing the potential of transport to help economies bounce back and working with countries to increase the resilience of transport systems against future shocks, whether it be a pandemic or any other kind of disaster. In Liberia, although disruptions in the food supply chain are still minimal, we are working with the government to ensure the supply chains are sustained. We are supporting efforts to ramp up digitalisation and cybersecurity across the logistics chain — a key step toward improved efficiency and resilience.

The pandemic has brought unprecedented challenges to global logistics, but whatever the future holds post-Covid-19, the sector is too big — 10 to 12 percent of global GDP — to fail. The world depends on effective transport and supply chains to bring food to people’s tables, deliver medicines to hospitals, and help our economies grow and create jobs.

As overwhelming as the current situation might be, it provides an opportunity to address the weaknesses of the current system and come out stronger.

About the Author

Makhtar Diop is the World Bank’s Vice President for Infrastructure, a position he assumed on July 1st, 2018. The Infrastructure Vice Presidency comprises Energy & Extractives, Transport, Digital Development, and Infrastructure Finance, Public-Private Partnerships and Guarantees (IPG). In this global role, Diop leads efforts to develop sustainable solutions and help close the infrastructure gap in developing and emerging economies.

Prior to this appointment, Diop served for six years as the World Bank’s Vice President for the Africa Region, where he oversaw the delivery of a record-breaking $70 billion to Sub-Saharan Africa to help tackle development challenges such as increasing access to affordable and sustainable energy; boosting women’s and youth’s economic empowerment; and promoting an enabling environment for more innovation and technology adoption. A passionate advocate for Africa’s right to clean and affordable sources of electricity, he also called for greater investment in renewable energy and pushed for greater regional interconnectivity in the power and transport sectors.

Diop brings to the post a deep level of experience and understanding of complex infrastructure challenges. His prior experience includes serving as Director for Finance, Private Sector & Infrastructure in the Latin America and the Caribbean Region. From 2009 to 2012, Diop held the position of World Bank Country Director for Brazil where the World Bank helped finance major infrastructure work and was the Bank’s Country Director for Kenya, Eritrea, and Somalia.

In addition to his international organisation experience, Diop, an economist by training who started his career in the banking sector before joining the IMF and later the World Bank, has extensive private sector experience. He has also held government positions, most notably the position of Minister of Economy and Finance of Senegal, where he played a key role in instituting structural reforms aimed at laying a strong foundation for Senegal’s growth in the late 1980s.

A recognised opinion leader in the economic and social development field, Diop has been named one of the 100 most influential Africans in the world. In 2015, he received the prestigious Regents’ Lectureship Award from the University of California, Berkeley.

Diop holds degrees in economics from the Universities of Warwick and Nottingham in England.

Follow Makhtar Diop on Twitter: @Diop_IFC


ARA: REIT Pioneer Wins Recognition for its Transformative Efforts in Sustainability

Established in 2002, ARA Asset Management Limited (ARA) is a leading APAC real assets fund manager which manages real estate investment trusts (REITs), private real estate equity and credit funds, and infrastructure funds with a footprint in 28 countries globally, and S$110 billion1 in gross assets under management at present.

ARA Asset Management is one of the pioneers in the REIT (real estate investment trust) industry in Singapore.

Widely recognised as one of the pioneers in the Singapore REIT industry, ARA launched Asia’s first cross-border REIT, Fortune REIT, Singapore’s first composite REIT, Suntec REIT, Hong Kong’s first office/industrial REIT, Prosperity REIT, industrial REIT, ARA LOGOS Logistics Trust, the first offshore RMB-denominated REIT, Hui Xian REIT and Singapore’s first pure-play US upscale select-service hospitality trust, ARA US Hospitality Trust.

Beyond REITs, ARA also manages private real estate funds and infrastructure funds. Embracing an investor-cum-operator philosophy, the company has built a team of real estate professionals across the region to invest in and manage properties in multiple asset classes.

With a vision to create and manage sustainable real assets, ARA maintains a strong commitment to ESG. As an exemplary investor-operator, the company has made ESG an integral part of its asset acquisition, management and operations over the years. Its long-standing commitment to sustainability includes raising ESG standards for the properties that it manages, supporting the community, taking care of its people, as well as reducing its carbon footprint and combating climate change. These have led to consistent growth and investment returns for its investors.

ARA’s Environmental stewardship focuses on the effective management of its assets to lower its environmental footprint, conserve natural resources and combat climate change. These efforts have been recognised by industry peers through environmental certificates and awards, including GRESB 5-Star ratings, LEED Gold Award, and the ESG Real Estate Investor of the Year 2019 — Asia.

A few of ARA’s eco-friendly properties

DHL Supply Chain Advanced Regional Centre, Singapore (one of the logistics warehouses under ARA LOGOS Logistics Trust) and Century Link in Shanghai, China (Harmony VI) have both achieved the LEED Gold® certification

[caption id="attachment_18055" align="aligncenter" width="637"] 477 Collins Street, Melbourne, Australia (50% owned by Suntec REIT). It is the first building in Australia to achieve a Platinum Core and Shell Pre-Certification from the International WELL Building Institute (IWBI)[/caption]

ARA’s Social pillar focuses on people and community, as it strives to be an employer of choice and a strong advocate of diversity and inclusion. The company, via its global offices, contributes to the communities it operates in through various CSR initiatives, active staff voluntarism and philanthropy. It also aims to work collaboratively with all its stakeholders to achieve best-in-class assets and services.

On the Governance front, ARA is committed to the highest standards of corporate governance and has built a business with strong ethical standards. ARA has an impeccable track record and a reputation for strong corporate governance.

In 2020, other noteworthy developments of the company include its acquisition of a majority stake in LOGOS Group, a leading logistics developer and real estate specialist in APAC, combining ARA’s global fund management capabilities with LOGOS’ extensive APAC logistics property and development expertise. During the year, ARA also established its real estate credit business with the acquisition of a majority stake in Venn Partners (renamed ARA Venn), a specialist investment manager in real assets private debt within Europe. The company also made its foray into real estate fintech via an investment in Minterest, a leading Singapore-based crowdfunding platform. As a forward-looking organisation, ARA aims to leverage technology to create a digital marketplace that provides an efficient fund-raising platform, enabled by blockchain and tokenisation technology, to transform access to capital and seek out new investor pools.

In a post pandemic world, economic and social behaviour will change, impacting the demand drivers for real assets in the long run. While the future is uncertain, ARA is certainly positioning itself for a new normal in the global real assets fund management industry.

[1] Includes assets under management by ARA Asset Management Limited and the Group of companies (“ARA Group”) and its Associates as at 30 June 2020


Poverty Myths, and Professorial ‘Power Couple’ Dispelling Them

[caption id="attachment_18039" align="alignright" width="300"] Abhijit Banerjee & Esther Duflo: Nobel laureates, MIT professors, and
Poverty Action Lab founders[/caption]

Abhijit Banerjee and Esther Duflo give new meaning to the term “power couple”. The husband-and-wife team are economics professors at Massachusetts Institute of Technology (MIT), critically acclaimed authors and, most recently, Nobel laureates.

The duo has dedicated their lives to combating global poverty and compiled a repository of empirical data to help policymakers better understand poor people, “in all their complexity and richness”.

Along with Sendhil Mullainathan, a former MIT colleague and recipient of the MacArthur Foundation “genius grant”, Banerjee and Duflo co-founded the Abdul Latif Jameel Poverty Action Lab (J-PAL) in 2003 to support poverty-reduction policies with evidence-backed research. The global centre conducts randomised field experiments targeting a range of micro- and macroeconomic trends.

J-PAL is based at MIT and has regional offices at leading universities in Africa, Europe, Latin America, the Caribbean, North America, South Asia and South East Asia. The donor-funded organisation employs about 400 research, policy, education and training professionals, and counts nearly 200 professors in its network of affiliated international universities. Since its launch, J-PAL researchers have conducted over 1,000 evaluations in 86 countries, and the organisation has been granted $63m in research funding.

Banerjee and Duflo have a soft spot for India and have focused much of their research there. Banerjee was born in Mumbai; Duflo first visited India as a 24-year-old graduate student. Their personal observations didn’t align with existing stereotypes of poverty, and they examined those misconceptions in their 2011 book, Poor Economics.

“This urge to reduce the poor to a set of clichés has been with us for as long as there has been poverty. The poor appear, in social theory, as much as in literature, by turns lazy or enterprising, noble or thievish, angry or passive, helpless or self-sufficient.

“It is no surprise that the policy stances that correspond to these views of the poor also tend to be captured in simple formulas: ‘Free markets for the poor’, ‘Make human rights substantial’, ‘Deal with conflict first’, ‘Give more money to the poorest’, ‘Foreign aid kills development’ and the like.

“Unfortunately, this misunderstanding severely undermines the fight against global poverty: Simple problems beget simple solutions,” they warned, adding that “the field of anti-poverty policy is littered with the detritus of instant miracles that proved less than miraculous”.

They published a follow-up book, Good Economics for Hard Times, in November of 2019. It compiles research that challenges accepted theories of development economics, suggesting that “it may be time to abandon our profession’s obsession with growth” in favour of policies that acknowledge the “desire for dignity and human contact”.

“Restoring human dignity to its central place, we argue in this book, sets off a profound rethinking of economic priorities and the ways in which societies care for their members, particularly when they are in need.

“Everyone gets things wrong. What is dangerous is not making mistakes, but to be so enamoured of one’s point of view that one does not let facts get in the way. To make progress, we have to constantly go back to the facts, acknowledge our errors, and move on.

“The call to action is not just for academic economists — it is for all of us who want a better, saner, more humane world. Economics is too important to be left to economists.”

Banerjee and Duflo have joined a long list of MIT-affiliated Nobel laureates, sharing the 2019 Nobel Prize in Economics with Harvard’s Michael Kremer for their “experimental approach to alleviating global poverty”. (Harvard boasts more Nobel laureate affiliations than any university worldwide: 160; Cambridge comes in second with 120, while MIT ranks fifth with 97.)

MIT president L Rafael Reif praised the professors for their work. “By providing an experimental basis for development economics, professors Banerjee and Duflo have reimagined their field and profoundly changed how governments and agencies around the world intervene to help people beat poverty,” he said. “In doing so, they provide a proud reminder of MIT’s commitment to bringing knowledge to bear on the world’s great challenges.”

Duflo, 46, is the youngest person to win an economics Nobel, and the second woman after Elinor Ostrom in 2009. Duflo and her husband are the sixth couple to win a Nobel.

“Showing that it is possible for a woman to succeed and be recognised for success I hope is going to inspire many, many other women to continue working, and many other men to give them the respect that they deserve,” she said.


Orban on Orbán: Cease and Desist, Your Position Is Untenable

[caption id="attachment_18049" align="alignright" width="300"] Prime Minister: Ludovic Orban. Source bigstock / Emerging Europe[/caption]

Europe’s other ‘Orban’ sounds much more reasonable than the vociferous original one. Prime Minister Ludovic Orban of Romania yesterday chastised his Hungarian namesake for refusing to respect the founding principles of the European Union: “Saying that you don’t agree to the connection between rule of law and European funds is not supportable, because all EU countries should respect the rule of law.”

Prime Minister Orban – the ‘nice’ one – also reminded his Hungarian and Polish counterparts that the obstructionist attitude harms both Europe and the interests of their own citizens. Since taking office late last year, Orban has overturned a number of controversial judicial reforms introduced by the previous government, including the decriminalisation of corruption which led to the early release of around 22,000 convicted white collar felons.

Orban also closed an office charged with investigating the personal lives of unbending judges. The bureau had been created by Liviu Dragnea, a former leader of the Social Democrat Party (PSD) who in May received his second corruption-related prison sentence.

The PSD has ruled Romania for 20 of the 30 years since the collapse of communism. The party, still a power to be reckoned with in parliament, has been tainted by numerous scandals involving its leaders. It also cooked the books, overestimating state revenues by as much as €4 billion for the current fiscal year.

The uncovering of the PSD’s relaxed attitude to fiscal accounting standards prompted Standard & Poor’s to attach a negative outlook to the country’s BBB– sovereign credit rating, presaging a descent into non-investment grade territory.

EU Largesse

Since 2007, Romania stands under close scrutiny of the European Commission and the Council of Europe for its dubious and intermittent adherence to the rule of law. However Prime Minister Orban has vowed to implement all of the EU’s recommendations before long and has received both praise and encouragement from Brussels for his determination in addressing long-standing concerns.

Orban’s dedication to the rule of law has already paid off handsomely. The country is in line to receive up to €80 billion in grants and loans from the union’s post-corona recovery funds, underwriting the government’s National Resilience Plan and potentially pushing GDP growth to 6% or higher by 2024.

“Never before has such financial support been offered to Romania. We appreciate that very much,” said Orban, explaining that at least €6 billion is earmarked for investment in public healthcare which has been struggling to cope with the pandemic.

Meanwhile, the European Parliament seems in no mood to compromise on the setting of rule of law benchmarks. German MEP Manfred Weber of the European People’s Party (Christian Democrat) called the link between the allocation of EU funds and the recipients’ respect for rule of law a ‘red line’ and warned that no money can be spent where fundamental principles such as judicial independence and press freedom are under siege. Weber reminded that all EU disbursements need parliamentary approval.

MEP Rasmus Andresen of the European Greens accused Hungarian Prime Minister Viktor Orbán of holding Europe ‘hostage’ to his domestic policies: “The resistance of Orbán and the Polish government is irresponsible. Orbán is afraid that the new rule of law mechanism will harm his autocratic regime.”

Potentates United

MEPs from across the political spectrum have called on German Chancellor Angela Merkel to defuse the crisis without giving in to the demands of prime ministers Orbán and Morawiecki.

Orbán is particularly irked by the suggested mechanism to gauge a member state’s observance of shared values. Sanctions against rogue EU countries may be invoked after a simple majority of member states agree.

The new procedure differs substantially from the one stipulated in Article 7 of the EU Treaty which can suspend an offending member state’s voting rights but requires unanimity. Both Hungary and Poland have indicated that they would protect each other should an Article-7 procedure be initiated against them. Successive attempts to steer both countries back into the fold via Article 7 failed after Hungary and Poland made common cause against Brussels.

According to EU officials, the rule of law mechanism seeks to increase accountability over the use of EU funds. Commission Vice-President for Values Vera Jourova called the procedure the ‘bare minimum’ to ensure that taxpayer money does not end up where the rule of law is ‘under threat’.

Working behind the scenes in Brussels, EU diplomats are preparing a ‘nuclear option’ in case Hungary and Poland refuse to budge. The €750 billion post-corona recovery fund may simply be relabelled an ‘intragovernmental treaty’ between all EU members states – of course without the two recalcitrant ones.

Though considered a last resort, the solution enjoys broad support as most agree that countries hard hit by the pandemic must be able to tap emergency funds and cannot be expected to wait for Hungary and Poland to pull back from the brink.

Remarkably, the Brexit epic now closing in on its climax has offered the EU a masterclass in dealing with member states intent on deriving advantages from national idiosyncrasies or presumed exceptionalism. The lessons were, however, painful and not easily absorbed.

Insular Peculiarities

After decades of catering to British demands for deference to the insular peculiarities of both the land and its people, the EU lost patience and finally put its institutional foot down in 2015 after Prime Minister David Cameron requested an opt-out from one of the four foundational freedoms (of movement of goods, capital, services, and people).

Astonishingly, Cameron wished the UK to be excused from taking part in the EU’s institutional endeavour to ‘create an ever-closer union among the peoples of Europe’ – a task it had been charged with since its foundation and one that features prominently in the preamble of the 1957 Treaty of Rome, the document that constitutes the union’s legal bedrock.

At the time, Cameron’s demand for an opt-out on the freedom of movement of people caused considerable consternation in Brussels. The British request showed a staggering and corrosive level of ignorance about the EU’s entire raison d’être, including its mission, scope, workings, and philosophy.

In what since has become known as ‘cakeism’, some member states are treating the EU as an à la carte menu from which they can take the choosiest bits and discard the inconvenient filling. Today, the prime ministers of Hungary and Poland are re-enacting Cameron’s profoundly misguided attitude and approach. In 2016, Cameron unwittingly burst a bespoke UK bubble, just as Orbán and Morawiecki are dead set on repaying EU generosity, protection, and hospitality with demands for deference to their totalitarian inclinations. If that is where they truly wish their nations to go, the future lies to the east.

Baldrick’s Revenge

Over the course of its 47-year-long membership, the UK has been wildly successful at exploiting divisions within the union to its own benefit, securing a number of sizeable rebates and a string of opt-outs from legislation deemed harmful to its national interest.

Amongst the more memorable opt-outs secured by London are the 1992 Maastricht Treaty (establishing the euro), the 1997 Schengen Acquis (creating a passport free travel area), the 2000 Charter of Fundamental Rights (enshrining the political, social, and economic rights of EU citizens), and a blanket permission (granted in 1997) to ignore most EU legislation pertaining to security and justice.

Cunningly – or cynically – the UK also arranged for a staggering number of opt-ins from opt-outs. For example, though the country flatly refused to join the Schengen free travel area, the UK did manage to secure direct access to the Schengen Information System containing details on people and property and, moreover, succeeded in being accepted as a full member of Schengen Chapter III, the framework which regulates and facilitates security and judicial cooperation between participating states.

Thanks to Prime Minister Cameron and his rather equally hapless successors, the European Union has now institutionalised its response to obstructionist members. Though shrouded in the flowery and inoffensive language that diplomatic etiquette requires, and accompanied by rich offerings of fig leaves, Brussels’ message is clear: Get Lost. In the EU’s many fora, members are free to raise and debate any and every topic imaginable – and expect to be rewarded with the reasoned compromise that is the inevitable outcome in a collective of 27 diverse nations. However, there is no compromising on the few core values that bind the old and formerly warring world together. What changed is that before the taboo was unspoken. Now, it is being cried from Brussels’ rooftops.


Founder & Executive Chairman of FLI Global Michael Flynn: On the ESG Front Line with a Solid Set of Values

[caption id="attachment_18079" align="alignright" width="222"] Founder and Executive Chairman of FLI Global: Michael Flynn[/caption]

Michael Flynn is the founder and Executive Chairman of FLI Global. A business  created in the 1980s that is still an action oriented sustainable solutions provider in the front line of environmental protection and has adapted and changed as the business has grown and diversified.

FLI Global is a strong team of professionals with vast experience of designing, building and delivering sustainable solutions to reduce emissions to air, improve process wastewater in industrial and municipal applications for reuse and remediate contaminated land for both residential and commercial developments. It has also evolved into designing and manufacturing offsite modular precast concrete infrastructure for a range of applications in industry including new technical developments in data centre infrastructure and the design and manufacture of residential housing structures.

While the global ESG sustainable investment initiative did not exist until very recently, Michael has been influenced by his exposure to global environmental protection drivers since his early career as a project manager in the US in the 1980’s in the fledgling geosynthetics industry, and from that time on projects globally that led to him forming his own environmental services business in 1989.

Building a formidable and effective operational and leadership team takes time, patience, resilience and investment, and above all the creation of a stable foundation and belief in a vision based on a set of values that you live by. FLI Global represents those values of trust, openness and integrity in delivering quality services to all clients in a highly professional manner, by all staff across all disciplines of our business. FLI build relationships with clients by adding value through their creative approach to solving problems and delivering projects on time in a flexible, dependable, supportive and reliable manner.

Michael sees FLI Global positioned as an action oriented frontline delivery team directly engaged in the creation and delivery of sustainable solutions, as a partner of the extended ESG global community where making a difference to the greater good is the objective. Delivering on that objective requires financing, investment, technology and expertise. Sustainability costs money to implement but the costs of not investing in protecting our natural resources could amount to far greater monetary and social costs in so many ways. The current pandemic may be such an example of such a cost and one that was unforeseen less than one year ago. Mr Flynn is of the firm opinion that sustainable investment is very much a bottom line financial concern and that prudent and timely investment can enhance the financial performance of a wide range of organisations.

Michael is a family man, a leadership and performance coach and his interests outside business include road running, cycling and classic British motorcycles. Currently in the masters category of the running world he has several marathons, half marathons and 10k’s under his belt. His running discipline while part of regular exercise and relaxation is guided by the F.A.S.T. approach to improving and maintaining performance. The acronym stands for: Focus, Alignment, Stability and Timing. In his view these are essential and integral elements to improving performance and goal setting whether you are setting out to walk a mile, run a marathon or drive a business.

Change, Transition and Transformation all start with a Thought - and choosing to act on, or ignore that Thought is the gift of nature and sets us on a course in life.

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For more information, please visit FLI Global: www.fli-group.com