Cityscape Abu Dhabi Expects Double Digit Growth in Exhibition Space as Real Estate Market Stabilises

This year’s Cityscape Abu Dhabi is gearing up to host more than 130 exhibitors over 18,000m2 of exhibition space, with an expected double digit increase reflecting the steady growth of the UAE real estate market.

According to the Q4 2014 Abu Dhabi Real Estate Market Overview by global property experts JLL, rental rates will continue to rise at a steady pace throughout 2015 with the demand for housing still increasing due to low availability across all price points. This is welcome news for both investors and home buyers who are able to take advantage of current low interest rates hovering around 2% p.a. on mortgages.

The present stability of the market bodes well for the dozens of leading property developers that are set to descend upon the 9th edition of Cityscape Abu Dhabi, which takes place from April 21 to 23 at the Abu Dhabi National Exhibition Centre (ADNEC).

Wouter Molman, director of Cityscape Group at Informa Exhibitions – organisers of the event – said: “Cityscape turned a corner in 2014 as we saw over 17,000 attendees over the three days; a 15% year-on-year increase. This year, we are forecasted to grow by over 15 per cent yet again, as registered exhibitors have already reached higher numbers than in previous years, enabling us to add an additional hall to the show.”

“Investor confidence is still on the rise and we predict that this year the majority of our visitors will be coming from not only Abu Dhabi but the rest of the GCC as well.”

The annual UAE Market Report 2014, published by Bayut.com, further underlined the stability of the real estate industry, revealing a renewed confidence in the property sector in both Dubai and Abu Dhabi. “A decade from now, when looking back, 2015 will be the year that the Emirate’s real estate market started to truly mature,” said Haider Ali Khan, CEO of Bayut.com.

“Construction activity is picking up pace again thanks to the revival in real estate developments and infrastructure projects. The recovery in real estate prices, a bounce in bank financing for construction, and the return of off-plan sales have motivated developers to resume projects that were on hold in both Abu Dhabi and Dubai.”

In addition to the capital’s key developers and banks, Cityscape Abu Dhabi will see new participants such as Eagle Hills Properties, as well as returning organisations such as Aldar Properties, Tourism Development & Investment Company (TDIC), Al Forsan, Bloom Properties, Manazel, Mubadala,  Reem Developers, and TMKN.

Other exhibitors at Cityscape Abu Dhabi include Platinum Sponsor Wahat Al Zaweya and VIP Sponsor Ejadah Asset Management Group. A strong international contingent is led by major developers from Turkey, Jordan, Russia, UK, and USA.

The Abu Dhabi Market Overview forum returns on the opening day and will be hosted in collaboration with JLL after a successful launch edition last year. The half-day forum will draw attention to the Emirate’s latest trends and initiatives, including future developments and anticipated new real estate regulations.


<br>Bolsa de Valores de Colombia: Best Stock Exchange, Latin America

 The Bolsa de Valores de Colombia (BVC) – a private organisation – was established in 2001 with the merger of three regional exchanges in the South American country. The CFI.co Judging Panel is satisfied that BVC has now become a truly world-class exchange with a quality management system that allows for optimal client satisfaction.

The BVC has made it a priority to provide a range of simple, standardized and efficient processes running on a technical platform that is safe, trustworthy and customer-friendly. The exchange’s authorities are on the constant lookout for new and innovative market developments that answer to their ambition to offer customers an ever increasing choice of continuously improving products.

The BVC doesn´t just aspire to be the leading national exchange but a regional one as well. The judging panel considers BVC (a listed company) to be a shining example, and indeed a model, for Latin America and hence a worthy winner of its 2013 award. BVC is seen to be actively contributing to the sustainable economic growth of Colombia and the wider region.


<br>Colombo Stock Exchange: Most Sustainable Growth Exchange Asia

With investor confidence solid and a booming economy, the Colombo Stock Exchange (CSE) is in a bullish mood. Thanks to exceptionally strong economic growth (7.3% in 2013), sustained over an impressive number of years, Sri Lanka has been able to maintain its lead in South Asia and is well on the way to attain the government’s stated goal of reaching a per capita income of at least $4,000 in 2016 ($3,194 in 2013).

The Colombo Stock Exchange is one of the most advanced in the region and offers investors a fully-automated trading platform. So far this year (year-to-date), the CSE All Share Index has gained almost 26%, reflecting the optimism prevalent in this market. Standard & Poor’s Sri Lanka 20 Index (S&P SL20), which replaced the now discontinued Milanka Price Index, last September crossed the 4,000 mark and has since added another 1.5%.

Sri Lanka is an exciting place to be for investors and the Colombo Stock Exchange is often their first port of call. The CFI.co Judging Panel came away impressed from a close-up study of this underreported exchange and feels that the CSE offers first-rate services to both investors and listed companies. The Judges noted that technology has been put in place – and is being used both efficiently and effectively – to further improve transparency and competitiveness.

Elected member of the World Federation of Exchanges (WFE) in 1998, and a founding member of the South Asian federation of Exchanges (SAFE), the Colombo Stock Exchange is firmly inserted into the global market place and makes a significant and consistent contribution to Sri Lanka’s now accelerated development. It is for this reason that the CFI.co Judging Panel is pleased to present the CSE with the award for Most Sustainable Growth Exchange Asia 2014.


<br>UBP Wins the CFI.co Private Banking Award, UAE

Now that many of the global universal banks are returning to their core business and divesting of private banking interests, traditional private banks are growing both organically and through acquisition. Private banks in the UAE received many strong nominations this year and after careful consideration the CFI.co Judging Panel has decided to declare UBP ‘Best Private Bank UAE 2013’.

UBP’s entrepreneurial culture and family ownership have allowed the Bank to align themselves very closely to client needs. With very high capital adequacy ratios and a conviction led approach to investment, the Bank is able to add real value to their client balance sheets while ensuring peace of mind. With very clear lines of communication the bank is able to respond quickly to opportunities while keeping an ever watchful eye on long term protection of capital. The panel feels that the Bank’s careful integration of Lloyds Bank into UBP in the UAE stands out as an example of how the divestment of private banking assets by some global banks will benefit clients and hopefully help those same clients contribute to sustainable economic growth.


World Bank Group: Sovereign Wealth Funds Investing at  Home - Opportunity Fraught with Risk

By Håvard Halland, Alan Gelb, and Silvana Tordo

Following the recent discoveries of large oil and gas deposits in East Africa, a number of countries in the region are in the process of establishing, or are discussing the creation of, sovereign wealth funds (SWFs) as a means to stabilise the effect of volatile currency inflows and to save for future generations.

Additionally, like several other SWFs established over the last decade, some East African governments are considering a role for the planned funds in economic development, as strategic investors in the national economy. The use of SWFs as a tool for strategic domestic investments opens up a range of new possibilities for deepening undercapitalised domestic financial markets and crowding in private capital to infrastructure in priority sectors such as power and transport. However, the approach also carries significant risk, and previous experience suggests great caution is warranted. What are the most important risks, how can these be mitigated, and what type of domestic investments should a SWF undertake, if at all?

New Oil and Mineral Producers Are Setting Up Funds

Sovereign wealth funds hold about $6.5 trillion in assets. Responding to the funds’ objectives to sterilise large export windfalls, save for future generations, and balance risks and returns, their holdings have traditionally focused on external assets – primarily securities traded in major markets but also real estate and other investments. Some SWFs with long-term investment horizons have invested in infrastructure, but these investments have mainly been in other countries, in high-return existing infrastructure or low-risk new projects located in middle and high-income economies. Until recently, domestic greenfield infrastructure investment was largely uncharted territory.

“Sovereign wealth funds hold about $6.5 trillion in assets.”

A number of the SWFs established since the turn of the millennium have been set up to undertake strategic domestic investment, including several of the Gulf funds, Kazakhstan’s Samruk-Kazyna and Malaysia’s Kazanah. During the last three years, Nigeria and Angola have established funds with a domestic investment function. More are in the making or are being discussed, including in Kenya, Morocco, Myanmar, Mongolia, Tanzania, Uganda, Mozambique, and Sierra Leone. Most of these funds will be capitalised by revenue from oil or mineral exports.

Why Invest at Home?

The interest in SWFs as a tool for strategic domestic investment is driven by four distinct factors. First, although several high-income countries have strategic investment funds, the countries currently contemplating strategic investment functions for their planned funds tend to be low and middle-income with a large infrastructure deficit and looking for ways to increase infrastructure investment.

Second, amongst governments and international financial institutions, there has been a loosening in the interpretation of the permanent income hypothesis, which holds that countries should save enough of their revenues from non-renewable resources abroad to maintain a permanent income flow into the indefinite future. If returns are higher at home than abroad, or if future generations can be expected to be wealthier than the current one, it might make sense to save less and invest more at home now.
Third, the global financial crisis and shrinking aid flows have led to decreased availability of long-term finance for developing countries. These have been looking to supplement foreign capital with their own.

Fourth, public investment in low-income countries frequently poses significant management and governance challenges, including low capacity, weak governance and regulation, and lack of coordination among public entities.

Given this type of shortcomings, many countries have not been able to offset the depletion of their natural resources by investment in produced capital, as is required to maintain wealth and sustain growth (Hartwick Rule). In this type of setting, some governments may see a fund as a means to improve the quality of public spending, and crowd in private investors to strengthen investment discipline.

What Are the Risks?

Several well-performing SWFs hold a significant share of domestic assets in their portfolios. Examples are Singapore’s Temasek, with approximately 25 percent, and the New Zealand Superannuation Fund with about 17 percent. Public pension funds tend to be even more concentrated in their home country or region, frequently with domestic assets dominating the portfolio. These funds invest at home because it is the profitable thing to do, and their superior knowledge of home markets allows for high portfolio concentration in domestic assets.

However, unlike Temasek, New Zealand’s fund, or public pension funds, most of the recent or planned SWFs are so-called resource funds, and from a risk perspective it is useful to consider resource funds separately, as a subclass of SWFs.
Two aspects set resource funds apart from other SWFs, and from public pension funds. Firstly, since resource funds are capitalised by proceeds from oil, gas, and mineral exports, the inflow of large amounts of foreign currency can lead to destabilisation and appreciation of the exchange rate, and inflation of asset bubbles.

Secondly, the political economy of resource funds differs from that of other SWFs, and from development banks, since resource funds do not need to raise capital in financial markets, and do not rely on pension contributions, fiscal surpluses, or taxes that affect a significant share of the electorate. In addition, the groups bearing the costs of extraction tend to be underrepresented in the political and economic decision making process. The lack of a strong constituency, such as pension contributors or lenders, combined with the conflict of interests arising from the government’s combined role as owner of the fund and promoter of its investments, make resource funds highly vulnerable to political interference.
Political meddling can in turn put the wealth objectives of the funds, as well as the quality of domestic investments, at risk. Funds may be captured by political factions and used to avoid parliamentary scrutiny of spending on politically motivated projects, and could undermine central bank ability to achieve monetary policy goals by capping foreign exchange reserves and channelling excess currency inflows to a resource fund not controlled by the central bank.

The Complexity of Multiple Objectives

Additional risk is generated if the fund’s domestic investment mandate is defined to include development objectives. An infrastructure project may provide economic externalities, such as the stimulation of private investments and jobs, which are not fully captured by its financial return. Economic externalities, however, are notoriously hard to measure, and no generally accepted method currently exists for trading off financial returns against the wider economic and social returns represented by positive externalities.

If fund management can no longer be assessed on the basis of the fund’s financial performance, assessment becomes very difficult. This increases the fund’s vulnerability to political interference. One way to address this problem would be to allow funds to undertake domestic investments only on a strictly commercial basis, as is the case of, among others, Temasek, the New Zealand fund, and most public pension funds.

However, many resource-rich low-income countries have underdeveloped equity markets, and the risk related to investment in greenfield infrastructure is frequently too high for these investments to be initially attractive to commercial investors.

All options face trade-offs. According to the traditional approach, oil and mineral revenues that are not saved abroad or held for short-term stabilisation purposes should be invested through the government budget, where direct parliamentary oversight can ensure accountability, macroeconomic coherence, and overall consistency of the public investment programme. This approach helps to stabilise spending in the face of uncertain resource rents and to maintain budget discipline.

On the other hand, low capacity, weak governance, and the lack of coordination among public entities could severely undermine the efficiency and effectiveness of a public investment programme. Also, a large SWF is vulnerable to being raided by future, less prudent, governments. If the fund has, or engages, the necessary expertise it could act as a specialised investor, helping to crowd in private investors through well-designed PPPs.

Checks and Balances

The risks of mandating or permitting resource funds to undertake domestic investment can hardly be eliminated. But can they be mitigated and managed? Clearly, to avoid contributing to asset bubbles, macroeconomic volatility and exchange rate appreciation, there needs to be coordination with overall fiscal and monetary policy, especially if the fund is large relative to the size of the national economy.

There should also be a clear separation between the type of investments that can be undertaken by the fund, and investments that should go through the government budget. In that regard, allowing the fund to undertake only investments that can be expected to yield a commercial or quasi-commercial return can strengthen the integrity and discipline of the investment process. Investments that do not fulfil this condition – such as schools, local roads, and rural health clinics – should go through the budget.

Allocations to domestic investment should not be in the form of a mandated share but determined on the basis of competition with the returns on foreign assets. When domestic returns are low or there are indications of asset bubbles, investment should be channelled abroad.

The meaning of quasi-commercial is important. The quasi-commercial space can be defined as a specific and limited markdown from the benchmark risk-adjusted interest rate on foreign assets, or a differential in the length of the investment horizon with respect to the benchmark. If the investment is expected to yield significant positive economic externalities, then a limited and well-defined markdown from the benchmark rate may be considered.

Investing with private investors, pooling with other SWFs, and co-financing with regional development banks could help funds to reduce risk, bring in additional expertise, and enhance the credibility of investment decisions. As an example, the Nigeria Infrastructure Fund, the domestic subsidiary of the Nigeria Sovereign Investment Authority, has signed cooperation agreements with the Africa Finance Corporation, the International Finance Corporation (IFC) and, for power sector investments, with General Electric. Limiting investments to minority shares would serve to reduce risks of politically motivated allocations.

Finally, funds need strong corporate governance, professional staffing, transparent reporting, and independent audit. There is a large body of knowledge on effective corporate governance – including the Santiago Principles, the Revised Guidelines for Foreign Exchange Reserves, and general principles of corporate governance – including for state owned enterprises, published by the OECD.

Independent nominating committees, as well as clear skill requirements, can facilitate the independence of boards. Ownership and supervisory roles should be clearly separated. To operate as an expert investor, the fund needs to be staffed with qualified professionals, just like any investor in the financial sector. Strategic and greenfield investments require special expertise. Sector-specific expertise may be needed as well.

Consistent with good practice, SWFs investing domestically should issue accessible public reports covering activities, assets, and returns. Where part of the portfolio is invested in “strategic” projects or projects with returns expected to be below market, these should be reported on separately. Internal audit should report directly to the board, and external audit be undertaken by an internationally reputable firm that is independent of the owner.

Challenges Ahead

The guidelines outlined above are generic, and will need to be expanded and supplemented according to country context. For example, the Nigeria Infrastructure Fund (NIF) has recently announced plans to set up a credit enhancement facility that will leverage its own investments with capital from external investors. Risk mitigation for this type of structure will depend on reinsurance and liability arrangements. If successful, the facility will represent a milestone in the definition of new potential roles for SWFs.

To be able to establish operations of such complexity, Nigeria has been able to draw on an extensive diaspora that includes highly experienced international bankers – ex-Wall Street, City of London, and elsewhere. In-house investment management, or direct investing, permits SWFs to avoid paying fees to private-equity firms, which typically charge 2% on assets and take 20% of profit.

However, smaller countries with less available capacity may to a large extent need to outsource complex investment functions. The incentive structures of outsourcing arrangements – to minimize moral hazard, as well as provide checks and balances – will be vital to these funds’ success. In the end, the fundamental question might not be if countries choose or not to use SWFs for domestic investment, but how such investments are implemented, and to which extent these decisions reflect sound economic and financial criteria.

About the Authors

Håvard Halland is a natural resource economist at the World Bank, where he leads research and policy agendas in the fields of resource-backed infrastructure finance, sovereign wealth fund policy, extractive industries revenue management, and public financial management for the extractive industries sector. Prior to joining the World Bank, he was a delegate and program manager for the International Committee of the Red Cross (ICRC) in the Democratic Republic of the Congo and Colombia. He earned a PhD in economics from the University of Cambridge.

Alan Gelb is a senior fellow at the Center for Global Development. He was previously with the World Bank in a number of positions, including director of development policy and chief economist for the Africa region. His research areas include the management of resource-rich economies, African economic development, results-based financing, and the use of digital identification technology for development. He has written a number of books and papers in scholarly journals. He earned a B.Sc. in applied mathematics from the University of Natal and a B.Phil. and D.Phil. from Oxford University.

Silvana Tordo is a Lead Energy Economist Sustainable Energy Department, Oil, Gas and Mining Unit of the World Bank. Her area of focus includes upstream oil and gas sector policies and strategies, legal, regulatory and institutional frameworks, taxation and petroleum contracts, sovereign wealth funds, and local content. Prior to joining the World Bank in 2003 Silvana held various senior management positions in new ventures, negotiations, legal affairs, finance, and mergers and acquisitions. Her experience includes a wide range of business development activities in the oil and gas sector.


Ahmed Emad Eldin: Resonating with Pink Floyd

[caption id="attachment_9117" align="alignright" width="270"] Album cover: “The Endless River”[/caption]

 He wants to be a doctor and has just started his freshman year at med school, but a different path may be mapped out for 18-year-old Ahmed Emad Eldin. The Egyptian youngster shot to world fame after being asked to design the cover of the highly anticipated Pink Floyd album – the band’s first in over two decades.

Showcasing his graphic design work on a portfolio website landed Mr Eldin the commission coveted by nearly all the world’s best graphic artists. Pink Floyd’s creative director Aubrey Powell contacted Mr Eldin by email, asked for a few ideas, and received a bundle of exceptionally creative artwork in reply. “I got to thinking about the intersection of life, nature, and what is beyond the world — what takes you to new limits and creates millions of different amazing feelings,” says the unassuming artist whose work now graces the cover of The Endless River.

It is not unlikely that Mr Eldin’s artwork is destined to become as instantly recognisable as the cover of The Dark Side of the Moon, Pink Floyd’s 1973 album that established the band firmly at the pinnacle of progressive rock. With his design now splashed over billboards from Berlin, Paris, and London to New York, Los Angeles, and Mexico City, Mr Eldin has already become the hottest name in graphic design.

“It fits in seamlessly in the well-established Pink Floyd tradition of highly original and slightly mystical album covers. ‘The most amazing is perhaps that the surreal image of a lone man in a skiff punting his way across the clouds to the sunset masterfully sums up the music of the new album.’”

“When I first saw Ahmed Eldin’s design it had a direct Floydian resonance. It is enigmatic, yet open to interpretation,” explains Audrey Powell who knows, as few others do, what to look for in cover art. At the height of the swinging sixties, Mr Powell set up the Hipgnosis design studio in London that was to produce an impressive number of iconic album covers for many of the greatest bands of that golden era: Led Zeppelin, Electric Light Orchestra, 10cc, Paul McCartney & Wings, Yes, etc.

Hipgnosis is now defunct. The studio fell victim to the digital era in which demand for premier cover artwork collapsed as CDs offered but limited printable real estate. Its cofounder Storm Thorgerson – of The Dark Side of the Moon fame – passed away in 2013. Still, Mr Powell felt the need to rescue the studio’s legendary fame one last time for the release of a new Pink Floyd album, an event as momentous as there will ever be on the music scene.

As if on cue, Ahmed Eldin’s design came to the rescue. It fits in seamlessly in the well-established Pink Floyd tradition of highly original and slightly mystical album covers. “The most amazing is perhaps that the surreal image of a lone man in a skiff punting his way across the clouds to the sunset masterfully sums up the music of the new album. Pink Floyd album covers have always contained a subtle message. This one does too. But the main thing is people can read what they want into it. There is no need to spell it out,” said Mr Powel on BBC Radio 6 Music.

Meanwhile in Egypt, Mr Eldin continues his medical studies, shying away from the limelight. In a rare interview with Vice Magazine, the young artist admitted to being slightly overwhelmed: “It is an honour for anyone to work with such a great, legendary band. However, I still want to be a doctor, but I’d like to continue to make art as well.”

Ahmed Eldin said he first started dabbling in graphic design five years ago, at age 13: “Seeing artwork on the Internet motivated me to try this for myself.” Mr Eldin’s sudden rise to fame stands as a testament not just to the power of the web, but also to the vast reservoir of talent available outside the Berlin-Paris-New York corridor, waiting to be tapped.


Ross Jackson: Nero Politics Meet Limits to Growth

[caption id="attachment_9131" align="alignright" width="179"] Rome: Nero[/caption]

Nero – the last emperor of the Roman Empire - is best remembered as the man who fiddled while Rome burned. I see a direct parallel to the collective of current world leaders who are ignoring vital threats to our very survival while fiddling with far less important issues – mostly to do with the creation of short-term economic growth or greater world dominance. I will cite two recent publications to make my point.

Revisiting The Limits to Growth

The first is a study by Dr Graham Turner of the University of Melbourne revisiting the famous Limits to Growth (LtG) study of 1972 and comparing its global computer model projections with actual developments over the subsequent forty years [1].

The original study was rather controversial. Many pundits interpreted it as a “doomsday” report. Others pronounced it as a failure because we did not run out of oil by 2000. Most commentators totally misread what the report actually said. It did, in fact, not make any predictions; rather it computed a number of scenarios based on various assumptions.

“The questions I want to deal with here are why is this being allowed to happen and what may we do about it?”

The most interesting scenario is probably the one the authors called the “standard model” which projected what would likely happen in a business-as-usual scenario with industrial production, pollution, population, food supply, and resources. These are all dynamically linked with many feedback mechanisms in the LtG model.

What Dr Turner found was that the actual data since 1972 track very closely with the LtG “standard model” in all areas: Industrial production, pollution, population, food supply, etc. His study drew on extensive data from United Nations statistics, the BP Statistical Review, the US National Oceanic and Atmospheric Administration, and other reliable sources.

The Intergovernmental Panel on Climate Change Report

The second publication is the IPCC Climate Mitigation report of April 2014 [2]. The diagram below sends a very clear and sobering message: In spite of the Kyoto Protocol goal of reducing CO2 emissions by 7% from 1990 to 2012, and in spite of other promises of climate action, total emissions continue to rise inexorably each year.

In the period 1970-2000, the annual increase was 1.3%. From 2000 to 2010, the rate increased to 2.2% per annum. The actual increase for the period from 1990 to 2010 – when we should have been reducing emissions – was almost 30 %.

The IPCC report is totally consistent with the LtG “standard model”. We are on a catastrophic business-as-usual path, essentially doing nothing to change the state of affairs. Rome is burning while our leaders are fiddling.

The questions I want to deal with here are why is this being allowed to happen and what may we do about it?

Why?

In my opinion, the answer probably lies in the increased influence of the business community on politicians. This has been going on for about thirty years now as a result of the dominance of neoliberal economics.

This economic paradigm – and in particular the rules of the WTO - gives free reign to multinational corporations to pretty much do as they please: Produce their products in Asian sweatshop nations without any regard for environmental or social consequences; use transfer pricing and tax shelters to avoid paying taxes where they sell their products; and undercut more environmentally responsible products from local companies that do not share these advantages.

Due to their vast size, these corporations always have the ear of leading politicians who, in turn, vie for their favours: “Please invest here. Please create jobs.” Nation states are reduced to competitors for the favours of the 0.1% who own the majority of these behemoths and whose wealth has exploded under neoliberalism. Nation states are forced to cut back on welfare in order to pay their pound of flesh. Around 300 multibillionaires now own as much as the 3 billion poorest citizens of the world.

Another result of neoliberalism is the increasing dominance of financial speculation relative to investments in the real economy. Recent figures from the UK show that only 8% of bank lending goes to the real economy while the rest goes to speculative purchases of existing assets. The pattern is the same everywhere and this is why we will continue to experience asset bubbles.

The situation is worst in the USA where the “corporatocracy” has actually purchased Congress outright. Democracy has effectively been eliminated from the equation. The situation in Europe is marginally better but subject to the same forces. In the European Union, no major legislation is possible if it goes against the express wishes of the major industrial corporations. Hence the failure of the EU Emissions Trading System, among other things.

What Can We Do?

Rejection of neoliberal economics and leaving the WTO to form an alternative trading block based on good governance and sustainability (environmental, social, and economic). These are some of the suggestions I put forward in Occupy World Street [3]. However, realistically speaking, this is not likely to happen until after the green curve above turns south and we have a totally new situation. Once we are there, existential necessity rather than corporate wish lists will determine the course of events.

In the meantime, the best hope for avoiding a collapse is for the business community to realise that its own interest is best served by taking radical action before it is too late. The siphoning off of wealth from the real economy, from the welfare state, from developing countries, and from ordinary citizens has been so successful for the 0.1% that many ordinary workers can no longer afford to purchase the products they make. If the business community does not act decisively, then they will go down along with the rest of us.

One key thing that the business community could do is to tell their politician friends that the time has come for an effective climate solution. I am not talking about more “reduction targets” and more voluntary schemes like Kyoto. By now, we all know that they do not work.

Rather, I am talking about putting an absolute ceiling on CO2 emissions, with subsequent annual declines. That is the only way to prevent overheating of the planet. Several well thought out schemes exist, although they are not on the table for discussion in the COP meetings yet. But they could be. In Occupy Wall Street, I have put forward one such proposal that is fair and will work. I have also referred to two other similar proposals that would also work.

The positive thing about this approach is that a high price on carbon will provide the incentive for private investment in new technologies that will be environmentally friendly. We can put to work the enormous innovative potential in the private sector for solving real problems instead of the current focus on asset speculation. Think of the enormous potential of getting all that speculative money back into the real economy.

So this is my message to the business community: Get real, real fast.

Refernces
[1] Graham Turner and Cathy Alexander, “Limits to Growth Was Right: New Research Shows We’re Nearing Collapse”, The Guardian (UK), September 2, 2014.
[2] “Summary for Policymakers” in “Climate Change 2014, Mitigation of Climate Change”, IPCC, April, 2014.
[3] Ross Jackson, “Occupy World Street: A Global Roadmap for Radical Economic and Political Reform”, Chelsea Green, 2012.


New World Bank Green Bond Is a Story of Market Growth and Innovation

Green bonds have created a new way for investors to achieve the return they need while also supporting climate-friendly development projects. Many long-term investors today consider climate risk and sustainability in their investment choices.

The investor base in green bonds is expanding quickly, as the World Bank's new US$600 million benchmark green bond shows.

[caption id="attachment_9141" align="aligncenter" width="730"] Green bond proceeds have helped support the deployment of rooftop solar photovoltaic systems on schools in China, among many other climate-friendly projects. In this video, students in Beijing show off a model of their school's new solar panels. World Bank[/caption]

The arrival of the World Bank’s newest benchmark green bond, its largest in U.S. dollars to date, is a story of innovation and the growth of a market, one that is supporting climate-friendly development by reaching an expanding pool of investors who are seeking investment opportunities that have a positive impact.

The World Bank routinely issues benchmark bonds in the billions of dollars that are sold to central banks and other large institutional investors to help fund its development work while providing a AAA-rated, fixed-income return. With “green” bonds, the Bank can provide the same benefits while applying a unique approach: it reaches out to investors who consider longer-term climate risk and sustainable and responsible investing in their analyses and creates bonds that both fit their needs and support climate-friendly projects.

"Landmark green issuances from triple-A issuers such as the World Bank further enhance the appeal of the green bond market, promoting investment in sustainable projects that mitigate the effects of climate change at commercially appealing returns."

- Alex von zur Muehlen, Group Treasurer of Deutsche Bank

These investors are important for mobilizing private sector climate finance, which is the main purpose of the green bond market. With each new green bond issued, the size and the interest from investors has been growing.

The $600 million, 10-year green bond issued last week was both the World Bank’s largest in U.S. dollars and longest-dated benchmark-sized green bond.

The 25 investors in the new bond reflect the expanding interest in green bonds from around the world. They include Swedish pension funds AP2 and AP4, Deutsche Bank Treasury, asset managers Blackrock, Mirova and Nikko Asset Management, Nippon Life Insurance Company, Praxis Intermediate Income Fund, the United Nations Joint Staff Pension Fund and Zuercher Kantonalbank.

 “Landmark green issuances from triple-A issuers such as the World Bank further enhance the appeal of the green bond market, promoting investment in sustainable projects that mitigate the effects of climate change at commercially appealing returns,” said Alex von zur Muehlen, Group Treasurer of Deutsche Bank.

Deutsche Bank announced plans the same day to invest Euro 1 billion equivalent in a portfolio of green bonds, starting with the new World Bank 10-year benchmark bond. “Deutsche Bank’s decision to set up a dedicated portfolio shows the growing appeal of green bonds,” said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank. “It supports the expansion of the green bond market as it continues to mobilize private sector funds for climate finance.”

Other large investors are making similar commitments to sustainable investing. Barclays announced in September that it would invest at least GBP1 billion equivalent in green bonds over the year.

Supporting Climate-Friendly Growth

The success of the new World Bank green bond was the result of seven years of work by the World Bank Treasury developing the green bond market. It started with the World Bank issuing the first labeled green bond in 2008 in response to requests from large institutional investors who were looking for a liquid investment that explicitly supported the financing of climate-related projects.

The World Bank has since issued nearly US$8 billion in green bonds through 80 transactions in 18 currencies.

The proceeds are helping to finance a range of climate- and environment-friendly projects, including sustainable urban transportation in India, geothermal power development in Indonesia, energy efficiency improvements in China, sustainable forest management in Mexico, and disaster-risk management in the Dominican Republic, among many other projects.

Investors, Principles and Standards

The World Bank has also been driving growth and innovation in the green bond market and helping further develop standards and principles for green bonds.

The growth of the market – new green bond issuances globally more than tripled last year, from US$11 billion in 2013 to more than US$36 billion last year – reflects an increasing diversity of both issuers and investors.

U.S. investors such as the California State Treasury, as well as well-known sustainable and responsible investors like the California State Teachers Retirement System (CalStrs), Trillium, and TIAA-Cref, were early green bond investors. Asset managers like Blackrock, Mirova and Nikko Asset Management are also increasing their support of this market.

Another investor group showing increasing interest in green bonds is insurance companies, with around 15-20% participation for benchmark World Bank green bonds with 5 and 10-year maturities. Last year, Zurich Insurance  announced plans to double its investment in green bonds to over US$2 billion in green bonds as the sector grows, and it recently purchased a 30-year World Bank green bond.

The latest investor group to join the green bond market is corporate bank treasuries looking for high quality assets that support their corporate sustainability mandate.

While there is growing demand for green bonds in general, investors are also looking for high standards of project selection, due diligence and monitoring as well as throughout the green bond process of defining "green" projects, and earmarking and allocating funds to eligible projects. The World Bank is recognized by the market as a leader with a transparent approach to reporting on projects that help its client adapt to and mitigate the effects of climate change. It also supports the market’s development through collaboration with investors and issuers on developing principles and standards.

"IBRD’s effort in moving forward robust impact reporting on its green bond program is impressive. We view this as an important component of our green bond evaluation,” said Blackrock’s Ashley Schulten, Director, Portfolio Manager.  “Blackrock has been a strong supporter of World Bank Green Bonds in the past, and this pioneering work on reporting standards was a key factor behind our involvement in today's 10-year bond.” Source


Nordea Asset Management: ESG Award Winner in Europe

According to the CFI.co Judging Panel, ‘Nordea well understands the benefits that accrue to investors when managers consider environmental, social and corporate governance factors in the asset selection process.

This company has been working consistently over the years to integrate ESG assessment fully into its investment decision making.

Nordea has shown clear focus and a strong determination to exclude investments that violate their ESG principles and it is clear to us that their products are all the better for this rigorous examination.

Board composition, audit policy and compliance procedures reflect good corporate governance policy and practice at Nordea.

Risk management here is exemplary and our winner does all possible to conduct business as profitably as possible but with integrity. We are delighted to name Nordea Asset Management as winner of the CFI.co award for Best ESG Investment Process, Europe.’


UBS: Best Green Bank Switzerland

Picture a world in which large power plants spewing noxious fumes into the atmosphere have been made redundant and replaced by solar panels, wind turbines, and other small-scale and environmentally sound ways of providing plentiful non-polluting energy. That is how Swiss financial services company UBS sees the none-too distant future taking shape.

In a brief sent to investors in August 2014, the world’s largest private bank states unequivocally that centralised power generators are on their way out. According to UBS analysts, these facilities are just “too big and inflexible” which will shortly make them “irrelevant.” As if on cue, German utility company E•ON in December revealed plans to split its business into two successor companies – one generating power from fossil fuels and the other from renewables. This will enable E•ON to divest its interests in carbon-based energy generation and concentrate its resources on sustainable technology.

The uncanny prescience displayed by UBS researchers underscores the bank’s dedication to not just clean energy, but environmentally sound business endeavours in general. UBS considers the shift away from fossil fuel but one of a series of major developments that will open up a world of opportunity to those willing to recognise the signs and step in on the ground floor.

Being green entails much more than just ditching incandescent light bulbs or only buying free-range eggs; it requires seeing the truly big picture, spotting trends, and identifying early-on viable new technologies. Though the CFI.co Judging Panel has no doubt that UBS will have replaced the light bulbs, the judges attach far greater importance to the fact that the Swiss bank employs its vast resources – not least its research brawn – to help empower green technology, thus facilitating the shift away from resource depletion towards full sustainability. The panel has therefore no reservation in handing UBS the Best Green Bank Switzerland 2014 Award.


King Abdullah II: An Insistent Appeal to Moderation and Reason

As Jordanians look back on twenty years of peace with Israel, they find little reason to celebrate the anniversary of the peace treaty between the two countries in anything more than a perfunctory manner. Minister of Parliamentary Affairs Khaled Kalaldeh summed up the national feeling when he remarked that “contact with Israel doesn’t mean love.”

Since the historic handshake of Prime-Minister Yitzhak Rabin and King Hussein at the Wadi Araba Crossing in 1994, the relationship between the two former enemies has been cordial, but suffering the occasional cold. Jordan is concerned over continued violence around the Temple Mount in Jerusalem, an area it still considers part of the country even though it was lost to Israel over fifty years ago. The stalled negotiations between Israel and the Palestinians are another source of ongoing frustration.

While the vast majority of Jordanians believe true peace with Israel remains impossible as long as the Palestinian issue is not properly solved, their king is fully aware that the country’s delicate geopolitical position in the volatile region necessitates some kind of accommodation with its powerful neighbour. King Abdullah II remains a lone voice of reason in a region where shouting is still the norm.
While retaining a big slice of executive power, King Abdullah II has made great strides towards the introduction of parliamentary democracy. In response to rising unrest following the Arab Spring of 2011, the king agreed to a curtailment of his powers with the creation of a Constitutional Court and an independent Elections Commission.

“In response to rising unrest following the Arab Spring of 2011, the king agreed to a curtailment of his powers with the creation of a Constitutional Court and an independent Elections Commission.”

Early general elections were held in 2013 and the king consulted with the new parliament on the appointment of his cabinet – a historical first. Though the Islamic Action Front, the Jordanian branch of the Muslim Brotherhood, boycotted the vote, most Jordanians seemed unconcerned. Through careful manoeuvring, King Abdullah II managed to avoid an escalation of political tensions.
The king also initiated an ambitious reform policy aimed at liberalising Jordan’s economy. Growth has since averaged at 6-7% annually, lifting many out of poverty. Both the transport and telecommunications sectors were privatised and six “special economic zones” created to encourage investment and foster start-ups.

The Jordanian monarch is now busy at avoiding a spill-over of the political violence wreaking havoc in next-door Iraq and Syria. So far, Jordan has managed to keep extremists outside the country. By consistently delivering high economic growth and committing to sizeable and ongoing investments in education and healthcare, the Jordanian government hopes that the country remains a veritable oasis of peace and tranquillity in the region.

In order for that to happen, King Abdullah II needs all the help he can get – even from Israel. The king recently gave a nod of approval to a $15bn energy deal that ensures the supply of natural gas to the country from Israel’s recently developed Leviathan offshore field. This deal ends Jordan’s dependence on erratic gas supplies from Egypt which are subject to sabotage by Islamist militants operating in the Sinai Peninsula.

Jordan is now also part of the international coalition fighting the Islamic State and offers its airbases to fighter jets from Belgium and The Netherlands. King Abdullah II is acutely aware that Islamic extremists are further destabilising the region and may draw in support from disenfranchised masses desperate for change of any kind.

Contrary to some other rulers, King Abdullah II realises full well that his government must simply deliver the goods in order to survive and, indeed, prosper. Improvements in governance, education, and social services – pushing the standard of living up – offer the only viable solution for the maintenance of a peaceful society devoid of radicalism. The force of arms can only accomplish so much and whilst ISIS needs to be checked, the best way by far of dealing with the extremists is to show that moderation actually gets the job done.


The Compleat Angler

“Oh the brave Fisher's life, It is the best of any, 'Tis full of pleasure, void of strife, And 'tis belov'd of many: Other joys Are but toys; Only this Lawful is, For our skill Breeds no ill, But content and pleasure.”

No other English-language book – excepting the Bible – has seen more reprints than The Compleat Angler. This book, in fact, has never been out-of-print since it was first published in 1653.

Ostensibly a treatise on the art of angling, The Compleat Angler is more akin to a self-help book on stress-free living as the subtitle suggests: A Contemplative Man’s Recreation. A keen observer of nature, Izaak Walton (c. 1594-1683) revelled in tramping – albeit lightly – through the English countryside.

The benign plot develops from a chance meeting of Piscator (a fisherman), Venator (a hunter), and Auceps (a falconer) who exchange pleasantries about the merits of each man’s preferred sport. Venator, much impressed by the fisherman’s tale, decides to accompany Piscator who promptly becomes his mentor – not just of fishing but on matters of genteel living as well.

The Compleat Angler was written during the Interregnum when England was gripped by discord between Puritans and Royalist and Oliver Cromwell ruled the land as Lord Protector. While not a political work, The Compleat Angler does extoll the virtues of a more austere – if not idyllic – lifestyle devoid of extravagance.

As a literary work of art, The Compleat Angler is perhaps best summarised as an understatement. It may require more than one reading in order for its fullness to be appreciated. The reader’s effort is, however, amply rewarded.

Title
The Compleat Angler

Author
Izaak Walton & Charles Cotton

ISBN
978-0-1996-5074-3

Link
http://www.amazon.com/gp/search?index=books&field-isbn=9780199650743


Moby-Dick or, The Whale

“For there is no folly of the beast of the earth which is not infinitely outdone by the madness of men.”

The Great American Novel par excellence, Moby-Dick was a commercial failure and had gone out-of-print by the time its author passed away in 1891. Hailed as “a novel that needs no defence” by the Times Literary Supplement and “one of the strangest and most wonderful books in the world” by DH Lawrence in his idiosyncratic Studies in Classic American Literature, Herman Melville’s magnum opus is not just a good read; it is also a portrait of a particularly exciting time in the history of an adventurous young nation.

As American whalers and sealers roamed the Seven Seas in search of prey, they left behind the burdens of a racially-divided society to search for riches. The reason why Moby-Dick initially only sold 3,200 copies may be the short attention span of a nation that effortlessly replaced its fascination for the sea with a fixation on Klondike gold.

Moby-Dick has eluded classification by genre. Part autobiography, travel account, epic play, and sermon, the book pits man against beast. Captain Ahab explains (Chapter 36 – The Quarter-Deck) that the evil whale wears a disguise: “All visible objects, man, are but pasteboard masks.” The captain is, of course, determined to smash that mask: “How can the prisoner reach outside, except by thrusting through the wall? To me, the white whale is that wall.”

The whale which is to consume Captain Ahab and the crew of the Pequod seems in the end not so much an object of hatred as a symbol of the skipper’s own making.

Melville’s peerless yarn is based on his own seafaring experience. In December 1840, he signed articles as a green hand and joined the crew of the Quaker-owned whaling ship Acushnet for her maiden voyage scheduled to last over four years. The book also incorporates elements of two actual events: the 1820 ramming and sinking of the Nantucket whaler Essex by an enraged sperm whale in the Pacific Ocean and the 1938 killing of the well-known, if not notorious, albino whale Mocha-Dick off Chilean Patagonia. At the time of its death, Mocha-Dick was reported to carry 19 harpoons in its mauled body. The 70-feet long whale yielded over a hundred barrels of oil and a few precious lumps of ambergris.

Title
Moby-Dick or, The Whale

Author
Herman Melville

ISBN
978-0-1424-3724-7

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780142437247


“The sad truth is that most evil is done by people who never make up their minds to be good or evil.”

Highly controversial when first published in 1963, Eichmann in Jerusalem draws the picture of a man reduced to an automaton; a being whose refusal to think led him to embrace – by default – the laws of a murderous state, abdicating in the process his autonomy of choice.

Portraying Adolf Eichmann as a white-collar criminal rather than a fanatical psychopath or sociopath – driven not so much by anti-Semitism as by a sense of obedience to the powers that be (regardless of moral considerations) – Mrs Arendt denuded the regime’s minions and showed them to be rather unremarkable people.

However, for Mrs Arendt it does not follow that ordinary people may commit heinous crimes given the right incentives. She maintains that the individual moral choice remains even in a totalitarian setting and carries political consequences even though the chooser may be but a cog in the machine and as such powerless to affect change.

Hannah Arendt (1906-1975) studied philosophy at the University of Marburg with Martin Heidegger – a philosopher not altogether unsympathetic to the Nazi regime – with whom she maintained a turbulent amorous relationship before fleeing to France, and ultimately the US, to avoid arrest by the Gestapo – the German secret police. During the post-war denazification process, Mrs Arendt testified in defence of Heidegger. In the end, the rather hapless philosopher received a six-year teaching ban.

Often misunderstood and only recently more appreciated, Mrs Arendt’s impressive body of work – replete with multiple levels of insight into the human condition – constitutes a collection of must-reads for all those interested in the nature of power and how people respond to authority.

Title
Eichmann in Jerusalem: A Report on the Banality of Evil

Author
Hannah Arendt

ISBN
978-0-1430-3988-4

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780143039884


The Good Soldier Švejk

“And somewhere from the dim ages of history the truth dawned upon Europe that the morrow would obliterate the plans of today.”

Why read Catch-22 when the original on which Joseph Heller fashioned his memorable work is readily available? Catch-22 is, of course, quite unavoidable and rightly so. It is, however, outgunned by The Good Soldier Švejk. Indeed, Mr Heller readily admitted that Catch-22 would never have been written were it not for his discovery of that most endearing Švejk.

Joining the army of the Austro-Hungarian Empire at the outbreak of the war in 1914 as a volunteer, Švejk causes general mayhem and consternation by sticking to the rules, promptly – and literally – following all orders given. A most likeable simpleton, Švejk is both unsuspecting and trusting – and without an evil bone in his body. At times, he is surprisingly wise too – often dispensing unsolicited advice with perfect timing.

A dog-rustler in civilian life – catching mongrels and selling them after a brush-up as fully pedigreed purebreds – and used to stumbling from one Prague in to another following the instigations of his metabolism, Švejk easily adapts to life in the (lower) ranks of the imperial army as it mobilises to face the Russian juggernaut.

Though extremely diligent in serving all officers he meets – or gets sold to – Švejk soon lands in the brig, gets accused of high treason, and is charged with desertion. He, however, undergoes all travails in the best of spirits, reasoning that the powers that be must know best. Švejk thus brilliantly exposes the monumental ineptitude of those draped with authority.

Jaroslav Hašek, a bohemian journalist, anarchist, and reluctant soldier, was unable to finish his satirical novel: he passed away, aged 39, in 1923. Hašek had originally intended for The Good Soldier Švejk to comprise no less than six volumes. Upon his death, only three had been completed and a fourth was in the works.

A posthumous fifth volume – Švejk in Russian Captivity and Revolution, edited by journalist Karel Vanĕk at the request of Hašek’s publisher – simply fell flat. Hašek penned fragments of the fifth tome while serving on the staff of the Czechoslovan, a newspaper published in Kiev for the Czech Legions fighting with the Entente powers, after he was captured by the Russian Army. There is some indication that Hašek may actually have defected to the enemy. In any case, the scraps of the fifth Švejk instalment are permeated by a profound hatred for the Habsburg Monarchy which strangles the humour.

Still, Švejk springs eternal. The good soldier also gave rise to Schweikology – the art of subversion by idiocy – and a number of derived expressions such as Schweikism (a military absurdity), to Schweik (to loaf without an ulterior purpose other than to get by with minimal effort), and a Schweik (an unlucky and simple-minded yet resourceful little man oppressed by higher authority). Thus Spake Švejk.

Title
The Good Soldier Švejk

Author
Jaroslav Hašek

ISBN
978-0-1404-4991-4

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780140449914


The Pursuit of Love

“Always either on a peak of happiness or drowning in black waters of despair they loved or they loathed, they lived in a world of superlatives.”

A Bright Young Thing from the roaring twenties, Nancy Mitford perhaps best epitomises the carpe diem essence of a sadly bygone bohemian era that evokes nostalgia for a happier and simpler world still holding the promise – soon to be broken – of a golden, everlasting peace.

One of the six (in)famous Mitford sisters*, who collectively left indelible stamp on British history, Nancy Mitford (1904-1973) is most remembered as an authority on manners and breeding.

Her writings – novels, dramas, and biographies – are unfailingly sharp, witty, chatty, and refreshingly and thankfully devoid of the idealised views and didactic reasoning that characterised most preceding Victorian authors. Heralding modernism, Nancy Mitford became closely identified with the former in the “U” and “non-U” (“U” standing for upper class) debate on popular discourse that ignited as a joke but soon became both a linguistic and social pursuit.

During the interbellum, the later discredited notion that one could ascend the social ladder by mimicking one’s “betters” still held plenty of sway. A comedy with a tragic fringe, The Pursuit of Love may be read as Nancy Mitford’s autobiography. The novel’s leading role is awarded to Linda who perambulates the pages looking for the Right One as she samples a wealthy banker and a devout idealistic Christian before arriving in Paris the find Fabrice – duc de Sauveterre.

In real life, Nancy Mitford pursued a lasting, though intermittent, affair with Gaston Palewski – a womaniser of considerable repute and a close associate of Charles de Gaulle – whom she met in London during the war. Though Nancy Mitford moved to Paris in 1946, the relationship was never publically acknowledged and continued even after Gaston Palewski in 1969 married Helen-Violette de Talleyrand-Périgord – duchesse de Sagan.

The pathologically unfaithful duke features prominently in both The Pursuit of Love and its sister volume Love in a Cold Climate, first published in 1949. Though hopelessly in love, Nancy Mitford portrays her wayward beau with crushing honesty including his many charms and flaws.

A masterpiece of escapist literature, The Pursuit of Love reads as an ode to romance unbound. Those who seek may find but a school of hard knocks. Persistence is not guaranteed to pay off, though will result in a most interesting, and intensely lived, life. Nancy Mitford loved and lived, but never quite lost.

*) Diana, the beauty queen; Unity, the unrepentant fascist who became Adolf Hitler’s flirt; Nancy, the gifted writer; Jessica, the communist who went to fight for the Spanish Republic; Deborah, the Duchess of Devonshire; and Pamela, the least known of the sextet who never wrote a book, took up a cause, or defied authority but once confided that she would have preferred to have been born a horse.

Title
The Pursuit of Love

Author
Nancy Mitford

ISBN
978-0-3077-4081-6

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780307740816


If This Is Man / The Truce

“A country is considered the more civilised the more the wisdom and efficiency of its laws hinder a weak man from becoming too weak and a powerful one too powerful.”

A Jewish chemist from Turin, Primo Levi was picked up on December 13, 1943, by Italian militiamen and sent to the Fossoli internment camp near Modena. Put on a transport to the death camps on the eastern fringes of the already shrinking Third Reich, Primo Levi arrived at Monowitz – one of the three main camps of the Auschwitz complex and home to the IG Farben factory – with 650 Italian Jews of whom only twenty were to survive.

Luck, cunning, wit, and – most importantly – the generosity of fellow inmates allowed Primo Levi to cling to life and tell the story. In his book, Mr Levi does not seek to explain the supreme wickedness he encountered at Auschwitz; he merely seeks to describe the horror, offering the reader a glimpse into a grim world of inverted truths and lost morals.

What makes If This Is Man particularly powerful is that for all the mindless cruelty, human kindness ultimately prevails. Mr Levi ascribes his survival mostly to luck. However, he also acknowledges that a daily ration of soup delivered by Lorenzo Perrone, a bricklayer and forced labourer from Fossano, ultimately saved him from starvation.

Mr Perrone – recognised as one of the Righteous among the Nations in 1998 – never asked anything in return for the life-saving meals he unfailingly brought at great peril to himself. “But Lorenzo was a man; his humanity was pure and unblemished, and he was outside this world of denial. Thanks to Lorenzo I happened not to forget I myself was a man.”

After the war, Mr Perrone was unable to deal with the indelible memory imprints Auschwitz had etched on his mind and descended into alcoholism. Though Primo Levi repeatedly did his utmost to help his friend and benefactor, Mr Perrone passed away in 1952.

Whereas If This Is Man describes the depravity of state-organised mass murder, its twin volume The Truce deals with the, at times agonisingly slow, ascend from these depth. The Truce tells the story of the liberation of Auschwitz by the Red Army and the plight of the wandering masses of survivors in the chaotic times leading up to the final defeat of Nazi Germany.

Mr Levi again succeeds in portraying this confusing moment in history with a sense of reasoned optimism. The return home turns into an epic journey – tragicomic at times – through the ruined remains of Poland, Belarus, Ukraine, Soviet Union, Romania, Hungary, Austria, Germany, and Italy. As such, The Truce is perhaps best categorised as a road novel avant-la-lettre. Gracious, devoid of hatred or wagging fingers, and unfailingly to the point, Primo Levi’s diptych stands at – or close to – the apex of the literature that reminds humanity of its darkest days and the awesome power of the individual for shaping his/her own world.

Title
If This Is Man / The Truce

Author
Primo Levi

ISBN
978-0-3491-0013-5

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780349100135


In Search of Lost Time

“Love is a striking example of how little reality means to us.”

A novel in seven volumes with a total page count of well over 4,000, In Search of Lost Time (À la recherche du temps perdu) is reportedly the most voluminous of literary works ever published. Its length, however, does not detract from its quality: Marcel Proust’s masterpiece has been repeatedly hailed as both the most respected and most influential novel of the twentieth century.

Proust enjoyed only a few months of acclaim and recognition for his inestimable contribution to the realm of letters before his death in 1922. Earlier, he had been considered – if at all – a mere trifler in French fin-de-siècle literature or, at best, a coterie writer for the high nobility of Faubourg Saint-Germain. It was only after the first tome of his monumental work appeared in English that Marcel Proust attained a status equal to his literary skills.

Originally titled Remembrance of Things Past – taken from Shakespeare’s Sonnet 30 – In Search of Lost Time (adopted and in common usage since the 1992 revision by Prof DJ Enright) and its author have become cultural icons that bestow social distinction on all those who claim familiarity. However, only a select – and persistent – few actually fully mastered the novel and thus gained access to its marvels.

Readability greatly improved with revised translations that cleaned up some of the flowery Edwardian prose originally employed by Charles Kenneth Scott-Moncrieff who in 1921 quit his job as private secretary to the rather eccentric Alfred Harmsworth, Lord Northcliffe owner of The Times, to work fulltime on the translation of the text. Though the Scott-Moncrieff translation merits lavish praise for its consistency, it also dulls the original insofar as Proust is at times sharp and coarse in getting to the point where his translator prefers graceful detours and verbose evasions.

Rather than a “purveyor of high-grade cultural narcotics,” the Proust of contemporary translation is one closer to the original. During his lifetime, Proust eschewed the intellectually pretentious forcing his publisher Bernard Grasset to slash the price of his novel, arguing that “people who spend ten francs on a book are generally stupider than those who buy them for three.”

In Search of Lost Time follows a loose, and at times slightly surreal, plot inhabited by a multitude of protagonists whose diverse perspectives and involvements explore the connection between experience, memory, and writing in a way that de-emphasises the outward plot. Not unheard of in contemporary novels, Proust’s approach was nothing short of revolutionary in 1913 when the first volume of À la recherche appeared in print.

Title
In Search of Lost Time

Author
Marcel Proust

ISBN
978-0-8129-6964-1

link
http://www.amazon.com/gp/search?index=books&field-isbn=9780812969641


Piketty’s Capital: A Problem Analysed In-Depth but not Solved

When a book on economics cites Honoré de Balzac and Jane Austen to provide evidence, one cannot fail to take note. It sure beats the rather uninspiring conclusion that R > G and this means trouble. The rate of return on capital being greater than the rate of growth of the overall economy has all but a few of us becoming poorer as time goes by.

That is the conclusion French economist Thomas Piketty reaches after some 700 pages in his best-selling Capital in the Twenty-First Century. This hefty tome confirms what most people since the days of Robin Hood already suspected – the rich get richer while the poor get poorer. But we had to wait for Mr Piketty to burst onto the scene to find out why this is so.

The cliché just cited is dubbed “the central contradiction of capitalism.” And while Karl Marx came pretty close to deciphering it, his rather verbose and rambling analysis missed the point: Working for a living is financially much less rewarding than marrying into money. It is perhaps why Victorians spent such a great deal of time liaising with distant but wealthy family members or moneyed acquaintances.

Mr Piketty has marshalled an impressive array of historical statistical data to prove that, if left unchecked, capital grows faster than the economy. Over time, the ratio of wealth to income soars. This cycle is only interrupted by events of a catastrophic nature such as world wars, pandemics, and revolution. It explains why social disparities in post-war Europe and North America were much smaller than they are today.

Some economists – undoubtedly a tiny bit envious of Mr Piketty’s near-rock star status – argue that his book is but an extended “duhh” moment: “Of course capital accumulates faster than the economy grows. That’s noncontroversial and reflects merely the reward for delayed gratification. People who save and invest rather than spend expect to be rewarded. Since the future is uncertain, their reward should be significant,” says Scott Winship of the Manhattan Institute.

Rather than pleading for an apocalyptic conflagration, Mr Piketty’s answer to the capitalism’s central contradiction is the introduction of a global tax on wealth. The global nature of such a burden on outsized fortunes means that the über-wealthy can no longer take their money and run for cover. Though many countries have dabbled in wealth taxes, most have desisted of the idea.

Mr Piketty’s global wealth tax proposal has as much chance of survival as the proverbial snowball in hell. It represents the weak spot of his book and of his reasoning. Apart from the fact that it is well-neigh impossible to have all countries in the world agree to such a scheme, taxes on wealth tend to accomplish little.

Also, what is to be done with the monies thus raised? Are these funds to be allotted to poor countries so they get a free ride to prosperity? Are free lunches to be called into existence, and if so, does that not send the wrong signal by rewarding incompetence and/or inefficiency?

Mr Piketty’s book is a lot stronger when it comes to analysing the consequences of unrestrained wealth accumulation. It may cause societies to become less equal, less socially mobile, and even less democratic. US President Barack Obama recently called inequality “the defining challenge of our time.” The book’s US release followed in the wake of the Occupy Wall Street movement that expressed the growing popular concern about the one-percenters claiming all the wealth leaving the rest of society to face an impoverished future.

Mr Piketty argues that the concentration of wealth will inevitably lead to social and economic upheaval. He concludes that the world is returning toward “patrimonial capitalism” dominated by an oligarchy backed up by inherited wealth. To illustrate this point, Mr Piketty appeals to literary greats such as Honoré de Balzac, Jane Austen, and Henry James who vividly described life in the 1800s when societies were rigidly organised along class lines determined by wealth.

Should the progressive concentration of wealth be left unchecked, Mr Piketty predicts that economic growth will suffer severely. Though not a Luddite, he dismisses the notion that advances in technology will provide the impetus for future growth spurs.

To avoid a bleak world of a few haves and a great many have-nots, Mr Piketty pleads not just for the introduction of a global wealth tax of 2%, but also proposes to increase income tax ceilings to 80% or more. Only draconian measures such as these can, over time, reduce wealth inequalities.

Though rather impractical given the current political climate, Mr Piketty’s radical solution to the problem he tabled is not without historical precedent. It is only since the late 1980s that top tax brackets have come down and it is precisely since then that inequality has soared. The causality is debatable, but the existence of the problem may not be denied.


Mercury Capital Advisors Group Best Fund Raising Team Global

Mercury Capital Advisors Group have perfected flat management within the company, creating a team where everyone takes responsibility for their actions and strives to exceed expectations. The CFI.co Judging Panel felt that through an emphasis on teamwork, Mercury Capital Advisors Group have been able to leverage the nearly three centuries of combined experience to deliver an impressive track record.

The company has effectively used both internal and external feedback to foster and develop skills, entrepreneurial spirit, and maintain strong relationships and understanding with all stakeholders.

Mercury Capital Advisors Group has created an extended family that makes for a winning approach when it comes to the globalised world of fundraising, ensuring that clients enjoy excellent access to institutional investors across the world.

With an unwavering belief in teamwork, Mercury Capital Advisors Group has amply demonstrated that the power of the group – and the highly effective use of its collective knowledge and experience – makes for a winning approach. It gives the CFI.co Judges particular pleasure to recognise Mercury Capital Advisors Group as the Best Fund Raising Team Global 2014.


<br>Best Commercial Bank, China: CFI.co names China Merchants

China Merchants Bank, headquartered in Shenzen and boasting 500 branches, is the CFI.co 2014 winner of the award ‘Best Commercial Bank, China.’

The CFI.co Judging Panel congratulates China Merchants on pioneering cross-border financing activities and notes the Bank’s resolve to develop an international presence with the opening of its branch office in New York City.

Trade financing at Merchants is outstanding and the Panel comments that, ‘China Merchant’s Bank is a wise choice for companies seeking out international business opportunities.’


<br>Bentley Powers Ahead in Customer Satisfaction: CFI.co Award Winner, Middle East

There has been powerful performance at Bentley Motors, Middle East this past year. Dubai is the home of a specially designed Bentley workshop which is the largest such facility anywhere in the world. And the welcome extended to the Continental GT, launched in 2012, has resulted in a large slice of Bentley’s worldwide business coming from this part of the world.

The Judging Panel commented that, ‘To say that Bentley customers have nothing to complain about is an extreme understatement. We have no hesitation in naming Bentley as winner of the award ‘Best Customer Satisfaction, Middle East, 2013’. Outstanding customer service ensures that Bentley delivers one of the world’s most desirable driving experiences’.


Recovering the Magdalena River Waterway: Challenge Accepted

[caption id="attachment_9348" align="alignright" width="430"] Magdalena River Waterway[/caption]

Historically, Colombia has suffered from a deficient and incomplete transportation network that isolated the country from overseas markets and made even domestic communication between provinces and regions a challenge. Numerous geographical, economic, and political factors that have profoundly impacted Colombia’s development over the years.

Traversed by the Andes mountain range, the country’s topography makes the development of an adequate transportation network a particularly expensive proposition. Additional challenges were posed by internal strife – now abated – and weak political institutions.

Colombia’s recently reoriented trade policy, introduced by the administration of President Juan Manuel Santos, has already led to the signing of a series of free trade agreements with some of the world’s largest markets such as the USA, EU, Canada, EFTA (European Free Trade Association), and a host of other countries like Chile and South Korea.

“President Santos has proclaimed the updating of Colombia’s transport infrastructure a priority of his administration’s economic policy.”

This new approach aims to open up the economy. That requires the government to adequately prepare the groundwork in order to maximise benefits and strengthen the national economy, thus increasing Colombia’s competitiveness in the global marketplace. To achieve this, there is but one job to tackle: The country needs to vastly expand, develop, and improve its infrastructure.

It is with this objective in mind that a Public Private Partnership (PPP) programme was devised to usher in a new era of innovative project funding. The programme aims to empower the infrastructure development drive by offering a financing vehicle capable of removing the obstacles that historically blocked transport.

The centrepiece of this programme is the Magdalena River Waterway PPP. This megaproject is set to transform the country’s main river into a pivotal transportation artery and the backbone of an extensive logistics network. Conceived as a major component of a new transportation grid, the waterway project ran into a series of challenges caused by a misalignment of public and private sector interests. Other stakeholders – municipalities, financial institutions, etc. – asked for s slot at the negotiating table as well.

Sustainable Growth: How to Reach It?

After a decade of accelerated economic growth, major advances on the security front, and record-breaking levels of fiscal and foreign direct investment, the international community has now taken a keen interest in Colombia – a country on the rise.

The question the nation now faces is how to consolidate recent accomplishments and assure sustainable growth well into the future. The momentum cannot be sustained much longer without an infrastructure that matches, in size and quality, the larger and more open economy of the country.

Infrastructure bottlenecks may easily become economic death knells. However, the national government is keenly aware of the magnitude of the task ahead. President Santos has proclaimed the updating of Colombia’s transport infrastructure a priority of his administration’s economic policy.

With weak and inefficient networks connecting the country to overseas markets, logistical expenses currently account for 18.6% of the cost of doing business in Colombia. This is 4.3 percentage points higher than the Latin American average. Public policy is focused not only on upgrading the outdated and overburdened road network, but also on creating and restoring alternative modes of transportation such as rail- and waterways.

One of the main problems identified by the Santos Administration is the lack of options available to shippers. Roads carry around 80% of all goods transported. In this context, the Magdalena River Waterway Project, aimed at restoring the river’s navigability, offers a valuable alternative. In the more distant past, the Magdalena River used to be one of Colombia’s most important transportation arteries, however it has been neglected for most of the 20th Century.

The Project: The Magdalena River Waterway PPP

The project has been conceived as the key element of a drive to significantly decrease the cost of shipping cargoes from Bogotá – Colombia’s capital – and the surrounding central region to the Caribbean Sea. It is also designed to increase the range of options available to shippers of goods from the country’s central and northern regions.

The waterway project was awarded by Cormagdalena (Corporación Autónoma Regional del Río Grande de la Magdalena), the agency set up specifically to recuperate the river’s navigability, under a PPP contractual scheme. The contract comprises the construction of canals between Puerto Salgar/La Dorada and Barrancabermeja – a distance of 256km – encompassing rock-filled trench coats and dykes, as well as dredging and maintenance work between Puerto Salgar/La Dorada and Bocas de Ceniza – the river’s mouth – over a distance of 908km.

The project’s contract amounts to $857 million and contains a CAPEX (capital expenditure) segment of $476m with 70% of that amount earmarked for canal building and the remainder destined for dredging and maintenance work. The financial closing is expected to be approximately $683m and will require an equity contribution of $174m.

The contract is to run for a 13.5-year estimated term which includes a five year construction phase and a seven year maintenance period. During the maintenance period, the private partner will need to guarantee a minimum depth of at least seven feet along the entire length of the waterway. The navigating channel must be maintained at a width of at least 52 metres with a curvature radius of 900 metres.

These specs will contribute to an exponential growth in the volume of cargo travelling the river. The waterway will be plied by barges with a capacity of 7,200 ton each – equivalent to about 180 trucks. This volume is even more impressive when considering that today, no cargo at all is carried over the river.

A Challenging Project to Structure

The project’s execution is envisioned with a new type of concession mode of which there are but a few examples in the world – and none in Colombia. As such, its structuring posed a considerable challenge. Both Cormagdalena and BONUS Banca de Inversión, the latter in its capacity as the financial and legal advisor of the project, encountered several obstacles along the way including often disruptive clashes between the interests of the private and public sectors.

Facing this scenario, BONUS decided early-on to apply the principles of competitive dialogue as a way to encourage an open and ongoing discussion between stakeholders – both private and public – regarding perceived threats and hazards. These talks were aimed at improving the project and ensure better conditions for everyone involved.

BONUS coordinated this process, serving as a mediator looking to align the interests of the parties involved. Additional studies were required as well as a both a revaluation and redistribution of risk – a point of crucial importance for private investors and banks alike.

A competitive dialogue had never been used before as a negotiating tool in Colombia. Its successful deployment contributed in no small degree to the refinement of the project. The pre-operational stage was extended to allow time for the necessary environmental permits to be issued. The construction phase was also enlarged as a risk mitigation measure to enable proper placement of rock-filled structures and increased dredging. Both construction and operational risk distribution was addressed in case the river’s water levels rise to above their ten-year average.

These and other measures, ensure the private sector that its investment is secure. Moreover, the solid framework arrived at facilitated access to debt resources both domestically and internationally. For its part, the public sector embarked on an inter-institutional effort to secure funding from national, state, and municipal governments as well as from the partly state-owned Ecopetrol oil company.

The issues described above generated a special challenge for both Cormagdalena and BONUS who needed to conciliate all elements with a viable technical, legal, and financial figure that would assure the sustainability of the project. This resulted in the drafting of the entire concession contract with its technical specifications. This was not just a construction contract since it provides for works that are meant to stay with higher quality standards over a long term (30 years or more). It measures the compliance of service indicators that ease the navigability and transportation of goods and natural resources in almost perennial conditions during the contract execution.

A Catalyst for New Investments and Economic Growth

The situation of the Magdalena River is akin to the chicken or egg conundrum. Private investment, such as commercial quays, were never made because the river wasn’t navigable. Public investments in dredging were never made because there were no ports to benefit from a navigable river.

This dilemma was at long last solved thanks to the government’s determination in taking the first and most important step: Structuring a project that is viable financially, legally, and technically. The Magdalena River Waterway Project has now become a reality. The Navelena SAS consortium, headed by Odebrecht, won the public bid to execute the contract (works and dredging). As of today, Cormagdalena has received more than forty requests for river ports concessions, representing investments totalling over $1.2 billion.

Ultimately, this shows how the project has become a catalyst for investment in the Colombia’s transportation infrastructure. It is expected to have several ramifications. The country’s main population centres – Bogotá, Medellín, and Cali – will be more efficiently interconnected. Each centre will enjoy easy access to a major port.

Medellín will benefit most in terms of economic development and international trade. The city will be connected by both road and river networks to the Caribbean coast, and by road and rail systems to the Pacific coast. Colombia’s manufactured goods and natural resources – including coal, oil, nickel, and agricultural crops – will be easier and cheaper to ship and this become more competitive. Additionally, with alternative means of transportation, possible labour strikes and attacks by rebels will have a smaller impact on the flow of commodities and, therefore, on the national economy.

The transportation infrastructure projects now envisioned reflect Colombia’s geopolitical orientation and its needs. The country will continue to develop and strengthen its access to both the Pacific Ocean and the Caribbean Sea, recognising their enormous importance to the full exploitation of the new free trade agreements and to the maintaining of the current economic momentum. An outlet to the largest consumer market in the world, the Magdalena River Waterway will continue to drive Colombia’s development trajectory as a pivotal corridor for transportation, connectivity, and general economic growth.

From bonus.cfi.co


In Real Estate, Boring Is Good as Is Stability

Perfection is a moving target. Good luck nailing it. Such is the plight of the real estate investor: The perfect market – should it exist outside the realm of fancy – moves about the globe at a pace not fit for the frail of heart.

Property, being very much the essence of a fixed asset, cannot possibly keep up. As the surrounding market moves up, down, or sideways, real estate stays put.

[caption id="attachment_9365" align="aligncenter" width="900"] The 6th annual International Real Estate and Investment Show – IREIS 2014, the real estate event in Abu Dhabi.[/caption]

It may be a shocker, but enticing returns are perhaps not quite as important to most real estate investors as they are to others looking to put their money to work. For the property investor, political stability and – even more importantly – the rule of law, jointly form the bedrock on which great portfolios are built.

“As far as the real estate investor is concerned, Berlin is very much an emerging market.”

Today, some of the most profitable real estate markets are to be found in Africa. Take Nigeria, a nation of some 170 million, and – quite conceivably – one of the more exciting places for investors to be. If you can make it there, you can make it anywhere! Perhaps.

Since 2003, Nigeria’s GDP has expanded at an average annual rate of about 7.3%. The country now boasts the largest economy in Africa and the 26th largest globally. Construction accounts for just slightly over 3.1% of Nigeria’s GDP. Clearly there is room for growth.

Nigeria’s housing deficit is estimated at some 17 million units. Annual demand runs upwards of 700,000 residential units, yet each year only about a 100,000 new dwellings get built.

So, this would seem like a no-brainer, right? Please, do stop and think again before hopping on a flight Lagos-way.

While the numbers make Nigeria look quite interesting, if not possibly attractive, its laws and common practices detract from the picture.

The country’s court system is rather cumbersome. Pity the landlord who depends on it to evict a non-paying, or otherwise misbehaving, tenant. In Nigeria, property management often involves trickery and even thuggery. Here, the strong arm is not the law. Moreover, the odd bribe may need be disbursed as well.

In booming Lagos rental yields currently hover around 4%. That’s because the rent control law has not been implemented. Nobody really knows when this law, which is already on the books, will come into force. That may be tomorrow or in ten years from now. What we do know is that, when rental controls are imposed, as they eventually will be, yields will plummet.

Couple this none-too-rosy picture to a rather dysfunctional land and property registry system, and a notoriously over-regulated construction industry, and suddenly you know why Nigeria faces a housing deficit. Just try building there: Fully 20% of your costs will consist of regulatory fees.

As the real estate investor continues to scan the globe for property hotspots, he or she may very well take a look at Germany, and more particularly at Berlin. Surprisingly enough, the German capital is an excellent place to stall your money in bricks and mortar.

As far as the real estate investor is concerned, Berlin is very much an emerging market.

Bless the Berlin Wall. Its tearing down, now 25 years ago, opened up vast tracts of land for development. It’s all about location, and the wall was exceptionally well placed – cutting right through the heart of the city.

Berlin is a veritable heaven for property developers and buy-to-let investors. While elsewhere in Germany a property price bubble is in the making, Berlin is still emerging from its Cold War era vacuum.

The eastern part of the city is home to countless apartment and office blocks, factories, and former government buildings that are right now being snapped up at bargain-basement prices for redevelopment into luxury residential estates.

The rather sinister-looking Karl Marx Academy – where an entire generation of communist party drones was formed to ideological righteousness – has now been transformed into a collection of bright, ultramodern, and exclusive lofts, penthouses, suites, and garden homes. These are provided with all the amenities moneyed hipsters require for their decadent lifestyle. The irony of it all…

The “epicentre of cool,” Berlin currently offers real estate prices comparable to Athens with a basically unlimited upside. The city is, after all, the capital of Germany – Europe’s economic powerhouse. Rental yields in Berlin’s central districts are just shy of 5%. However, the really interesting story is the widely expected rise in property prices. Berlin has a long way to go to catch up with the likes of Frankfurt, Hamburg, and Munich.

Check this: Berlin is dirt-cheap. The average residential property price is about EUR2,900 per square metre. The number for Munich is EUR4,800 while in London a square metre is valued at well over EUR11,000. Please keep in mind that Berlin is not some provincial backwater.

With interest rates at near zero, a solid economic outlook, and a stable political environment, there would seem to be few – if any – downsides to investing in Berlin real estate.

It is, perhaps, ever so slightly boring.

Such is most definitely not the case in Dubai and the wider UAE. After the troubles following the 2008 market crash, the Dubai real estate market has rebounded impressively. Moreover, the Emirates have buoyant markets, free from excessive regulation, and with solid legal frameworks in place. To real estate investors, the UAE offers that rarest of combinations: Opportunity and stability.

The new Real Estate Investor Protection Law – Tanweer – is now ready and waiting for the court’s approval. This law is the first of its kind not just in the Middle East, but in the world.

In essence, the law offers investors who are duped by less-than-scrupulous real estate developers a short-track procedure to seek redress and obtain a full refund of their capital.

With this law, Dubai now offers the real estate investor a climate that is hard to beat. While property prices are shooting through the roof, with average residential prices rising more than 27% over the last year, market analysts still see no bubble. In fact, the surge is slowing somewhat with growth projected at more moderate, but sustainable, clip for 2015 and beyond.

Interestingly enough, this down-shifting is not the result of investor doubt or reluctance, but of soft state interventions such as the mortgage cap. In a real estate market that has matured considerably since the crash of 2008, authorities are very much aware that housing bubbles must be avoided by sensible legislative initiatives that may dampen overly excited markets to the benefit of all stakeholders. As a real estate investor, what more could you possibly want? i


<br>BCI: Our Fund Manager Winner in Chile

The CFI.co Judging Panel rates BCI Investment Management very highly and has announced that the award for ‘Best Fund Manager, Chile, 2013’ goes, with their congratulations, to this company. BCI works to high levels of operational efficiency and has strong risk management capabilities. According to the CFI.co Judging Panel, ’BCI ends the year on a high note providing them with a strong start to 2014. This firm has a good track record over the years and a history of strong and consistent portfolio managers. We wish them well.’


Julius Bär Group: Best Private Bank Switzerland

Managing the assets of private clients across the globe, Julius Bär Group maintains offices in over twenty countries with an emphasis on Europe and Asia – the bank’s two home markets. The Julius Bär Group, one of the world’s oldest and largest private banks, has embarked on a significant expansion project. In July 2014, the group acquired the private banking division of Israel’s Bank Leumi. Earlier in the year, the venerable Swiss bank also upped its stake in the Brazilian private bank GPS Investimentos e Participações to 80%.

The Julius Bär Group has also trained its sight on the Middle East. The bank recently celebrated the tenth anniversary of its landing at the Dubai International Financial Centre and is now working hard to offer clients a full suite of Sharia-compliant products and services.

Julius Bär CEO Boris Collardi suggested that the changing economics of private banking may result in additional acquisitions. In a recent interview, Mr Collardi explained that regulatory costs are on the increase and while market and risk appetites of clients have been subdued: “Margins are now lower and that leads to consolidation.”

The CFI.co Judging Panel has nothing but praise for Mr Collardi’s management of the Julius Bär Group. He initiated a somewhat overdue revamp of the bank’s ageing IT systems and also stylishly implemented a process of growth that has kept the bank well ahead of the market curve.

In his five years at the helm of the Julius Bär Group, Mr Collardi has increased the volume of assets under management by a solid 85% to over $282bn in 2014. The CFI.co judges congratulate the bank on its enduring success and are pleased to name Julius Bär Group, for a third consecutive year, Best Private Bank Switzerland.


<br>Saudi Hollandi: Best SME Bank, KSA, for a Second Year

The CFI.co Judging Panel is always delighted when winners repeat their success in subsequent years. It is therefore with great pleasure that the panel confirms that this year’s award for ‘Best SME Bank, Saudi Arabia’ goes to Saudi Hollandi Bank – who won the same award in 2013.

According to the panel, ‘it is heartening to see Saudi Hollandi’s constant commitment to supporting SMEs in Saudi Arabia. The Kingdom’s Kafala (SME Loan Guarantee Programme) is exemplary and is translating into new business and employment opportunities which are critical to the development of the country. By the end of 2013, Saudi Hollandi was placed fourth of the Saudi banks in terms of Kafala loans and looks set to jump at least one position by the end of this year. Their ambition is clear and we wish the Bank great success. They have dedicated SME teams in place and they really do mean business.


Brazil: Arrest of Fraudsters Decreases Deforestation Rate

[caption id="attachment_9399" align="alignright" width="281"] Deforestation[/caption]

One man can make a difference. Since Brazilian authorities in August 2014 issued an arrest warrant and forced Ezequiel Antônio Castanha into hiding, deforestation rates along the northern stretch of the BR-163 highway have decreased by as much as 65%. Over the weekend, Mr Castanha’s life on the lam came to an end with his arrest in Novo Progresso, an Amazonia frontier town.

Mr Castanha was taken into custody with a number of his business partners and associates. The arrests are the culmination of Operation Chestnut (Operação Castanheira) – a six-month old coordinated effort of the environmental protection agency IBAMA (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis), federal police, tax authorities, and the public prosecutor’s office. The initiative aims to identify, detain, and prosecute land speculators who deal in forged title deeds and illegally harvested timber.

“The numbers are staggering. Never before have we uncovered fraud on such large scale with publically-owned land.”

A preliminary investigation by the public prosecutor’s office estimates that Mr Castanha and his associates may have been responsible for up to €170 million in environmental damages: “The numbers are staggering. Never before have we uncovered fraud on such large scale with publically-owned land,” says district attorney Daniel Azeredo.

Using forged title deeds, Mr Castanha subdivided large areas of the Amazonian rainforest from which hardwood trees were culled for sale to local lumber mills. The remaining forest was subsequently slashed and burned resulting in rangeland ready for sale to ranchers and investors. The land sales were usually channelled through unregistered real estate companies which would fold and disappear after a few deals had been made.

Mr Castanha’s lawyer dismisses the allegations and insists his client is a “remarkably successful businessman” who fell victim to accusations motivated by envy.

Dubbed the “King of Deforestation” by the media, Mr Castanha on Monday was denied bail. The court considered the flight risk too great and expressed its concern over the likelihood of Mr Castanha continuing his environmentally damaging practices noting that the accused seems oblivious to the irreparable damage he has wrought.

Over the first six months of 2014 close to 5,000 square kilometres of virgin rainforest was lost to deforestation in Brazil. Around a fifth of this destruction took place along the northern tranche of the BR-163 highway where Mr Castanha was operating.

The only partially paved highway is one of Brazil’s most important longitudinal corridors connecting Tenente Portela in Rio Grande do Sul to Santarém, a port on southern bank of the Amazon River, in Pará State. The road traverses both the Pantanal tropical wetlands and the Amazon rainforest over a distance of 3,462 kilometres.