Dame Helena Morrissey: Women Rising to the Top and Helping Business to Flourish

[caption id="attachment_19519" align="alignright" width="300"] Lead Non-Executive Director at the
Foreign & Commonwealth Office: Dame Helena Morrissey[/caption]

Dame Helena Morrissey understands how isolating and intimidating it can be for women in the male-dominated financial sector.

She’s a seasoned expert with over three decades of experience in the financial services sector. During her 15-year tenure as CEO of Newton Investment Management, she helped to more than double the firm’s AUM.

But it took time for Morrissey to gather the courage to make her voice heard in those homogenous spaces.

She launched the 30% Club campaign in the UK in 2010, pushing the top brass at FTSE 100 companies to recognise the benefits of diverse leadership. As the name suggests, the global campaign encourages the people in power to reach 30 percent female representation on all boards and C-suites — worldwide.

“Helena Morrissey understood that while women’s networks are very important, they were not actually moving women up,” said Brenda Trenowden, the former Global Chair of The 30% Club. “The only people who could do that were the people in power, and Helena’s idea was to start with the board: it’s at the top of the organisation, it’s visible, and it gets measured.”

By 2015, when Morrissey passed the reins to Trenowden, the campaign had achieved measurable progress, pushing female representation on FTSE 100 boards from a previous baseline of 12.5 to 26 percent. It also saw the end of all-male FTSE 100 boards drop from 21 to zero. New targets call for the inclusion of at least one person of colour to all FTSE 350 boards and executive committees by 2023 — still with gender balance, so that half of those positions go to women.

Trenowden’s successor, Ann Cairns, celebrates the campaign’s continued commitment to its global mission and the progress made thus far, but warned there was still much to do. “The glass ceiling is still pervasive and women of colour face some of the greatest hurdles of all,” she said. “It’s a time of change, a time of acceleration, where we can build a much better world for everyone.”

Morrisey echoed that sentiment, stating that if she had it to do it all over again, she wouldn’t limit the focus to women, but attempt to broaden diversity in all dimensions.

Morrissey does just that. Her cross-company initiative seeks to increase inclusivity within the investment and savings industry.
“We don’t want to ‘fix the women’ and then ‘sort out’ ethnicity and socioeconomic diversity. The Diversity Project very overtly is trying to broaden diversity in every dimension,” she said.

Despite reams of research showing that diverse companies perform better, Morrisey is disappointed that few business teams rarely reflect the wider population, leaving an untapped pool of talent, perspectives and backgrounds.

“The science backs up the fact that female powers of empathy and collaboration are beneficial,” she said, citing a 2020 study that found senior management teams comprised of one-third female leaders achieve a net profit margin of 15 percent — while those with none could expect less than two percent.

“It is very obvious to me, both as a parent and a businesswoman, why companies with greater numbers of female executives bring in ten times greater profits,” she said.
“All the evidence suggests we continue to make painfully slow progress towards encouraging more women into fund management and to build their careers in our industry. At the same time, a sense of fatigue has set in around the topic of gender diversity. Yet the arguments for having more women run money, manage people, lead client relationships and contribute to our industry’s culture and future are stronger than ever.”

Morrisey recently joined the House of Lords and was appointed to the board of the wealth management company, St James’s Place. She was confirmed as the lead non-executive director of the Foreign, Commonwealth & Development Office in September 2020.

She is a shrewd business leader — and mother to nine children. She met her husband, Richard Morrisey, when they were both studying at Cambridge.

“Richard volunteered to stay at home after our fourth child and that’s a big part of how I cope.”


World Bank on COVID-19: The Road Back Must Be Green, Resilient, and Inclusive

By Axel van Trotsenburg World Bank Managing Director of Operations

[caption id="attachment_19523" align="alignright" width="300"] World Bank Managing Director of Operations: Axel van Trotsenburg[/caption]

COVID-19 has imposed a deeper, more widespread shock than the global community has faced in many decades. The pandemic is causing illness and death, disrupting livelihoods, and potentially pushing an estimated 150 million more people into extreme poverty by the end of 2021. And while the rapid development of vaccines offers all of us some hope, the pandemic continues to dominate our lives.

For developing countries, COVID is also compounding the risks posed by climate change, along with other long-term challenges. In many places, fragility and conflict were eroding development gains long before the pandemic. Far too many countries were also coping with unsustainable debt levels. And every country was facing challenges to create more jobs in a global economy marked by accelerating technological change.

Taken together, these factors mean that most developing economies were highly vulnerable when COVID struck. And they are now the ones suffering the greatest damage from its impacts. Given the pressing nature of these challenges—notably climate change—countries don’t have the luxury of putting off action on other crises and risks until the pandemic subsides.

This means that the financing needs in low- and middle-income countries are at a historic high. While industrialised countries have spent up to 15–20% of their GDPs on stimulus packages, emerging markets have spent around 6% and the poorest countries have spent less than 2%. To help developing countries at the scale they need will require substantial new resources, from the World Bank Group and other multilaterals, from the donor community, and from the private sector. Sustained, robust financial support for the poorest countries is critical to boosting their capacity to beat the pandemic, build more resilient economies, and restore momentum on the 2030 agenda.

The World Bank Group is committed to helping close this financing gap. Our COVID crisis response over the past year has been fast and decisive in bringing massive support to developing countries, particularly the poorest and most vulnerable. Across the World Bank, IFC, and MIGA, we have stepped up to this challenge since the onset of the pandemic. World Bank programs, normally in the range of $42 billion per year, grew last calendar year to $71 billion to meet intensified client demand. About 60 percent of our operations are currently COVID-related.

We are also starting a year early on the negotiations for the next replenishment of the International Development Association (IDA), our fund for the poorest. IDA has been a steadfast and increasingly important source of support for the poorest countries through various crises, and it has stepped up even more during the pandemic. This is especially evident in our support for health, education, and social protection.

In addition to increasing the provision of large concessional resources to the poorest countries, as IDA is doing, debt relief has been a key part of the support package. The G20 Debt Service Suspension Initiative (DSSI) has helped free up resources for governments, which they have been able to direct to priority areas for combatting the pandemic. But there are still challenges, particularly with private creditors, who have not been participating actively in this important initiative. And while the DSSI has provided essential short-term relief, many of the poorer countries also face longer-term concerns on debt sustainability. The G20 Common Framework, about to begin, should help address these problems on a case-by-case basis.
While debt relief and concessional resources from multilateral organisations and donors are critically important, more needs to be done. Tackling this global crisis effectively can happen only with more international solidarity and more international action. With the pandemic affecting every country simultaneously, there’s a risk that wealthier countries will focus mainly on their own COVID-19 recovery. While this is perhaps understandable, as every government is accountable to its own people, it runs the risk of leaving poorer countries behind. This ultimately jeopardises the well-being of all.

The COVID vaccines illustrate this risk very clearly. We are working closely with many other organisations to get the vaccines to the people of developing countries. The World Bank is providing up to $12 billion to governments and the IFC a further $4 billion to manufacturers of vaccines and related equipment in developing countries. Efforts include using COVAX, a mechanism that the international community has set up to ensure global, equitable access to vaccines for major infectious diseases. But at this early stage, the industrialised countries have bought up most of the supply of the COVID vaccines, leaving developing countries with insufficient coverage. Therefore, it is very important to ensure fast and equitable distribution of vaccines worldwide.

But beyond these immediate concerns, the pandemic has wider impacts that could affect developing countries for the long term. Continued, sustained financing will be critical to ensure a lasting recovery but rebuilding better will also mean embracing key shifts that are transforming the global economy. COVID-19 has already spurred changes in how people work and live, and in how economies are organised. The crisis is underscoring the value of robust health, education, and social protection systems. It is making clearer than ever that digital access and innovation can support every sector of the economy. And it highlights the need for effective government and community leadership.

This is why we need to start focusing our support, both financial and technical, on the green, resilient, and inclusive transformations that will help economies withstand a range of potential shocks in the future. While the emergency phase is far from over, we must partner with countries now, not just to anticipate health risks, but also to help them brace against climate change, natural disasters, conflict, and economic disruption.

The World Bank Group believes that countries can chart a new, sustainable route to higher living standards by pursuing their climate and environmental goals. Their recovery from the pandemic is a chance to accelerate this progress and rebuild better. Hence, we are preparing to support developing countries on a much larger scale as they invest in green infrastructure, develop environmentally sustainable technologies, and phase out harmful fuel subsidies. The goals of long-term growth and job creation are inextricable from countries’ efforts to reduce carbon emissions and to mitigate and adapt to climate change.

As they plan for the road ahead, developing countries will also need policies and reforms that expand economic participation, that leverage technology for more robust and inclusive delivery of key services, and that make it easier for the public and private sectors to work together toward development goals.

By focusing on key climate investments, countries can not only unlock short-term gains in growth but also deliver long-term benefits: lower carbon emissions, greater resilience to climate change, and more good jobs in emerging, greener sectors.

The international community stands at a critical moment, with COVID-19 and climate change imposing dual crises of global proportions. Both require a massive global response, and they must be tackled simultaneously. Meeting investment objectives will call for significant financial resources at a time when countries are facing fiscal constraints and debt overhang, and there is a need to augment all sources of finance – including from the private sector, domestic resources, and development financing – and use it effectively.

Developing countries have been the most vulnerable in this pandemic, just as they are to climate impacts. And they face the steepest path back. The World Bank Group is working hard to help them secure the financial resources and sustained international support needed. We are all in this together, and I remain optimistic that we will see real improvement in many countries during 2021.

About the Author

Axel van Trotsenburg is the World Bank Managing Director of Operations.

In this role, which he assumed on October 1, 2019, van Trotsenburg oversees the Bank’s operational program and ensures that the Bank’s delivery model continues to meet the needs of client countries. He also builds support and mobilises financial resources across the international community for efforts to assist low and middle-income countries.

Van Trotsenburg brings deep experience in regional operations and finance, drawing on his experience as currently the longest serving Vice President at the Bank, with two tenures in the Finance Complex and two in Operations. A Dutch and Austrian national, he was Acting World Bank CEO from September 2 – 30, 2019 and served as World Bank Vice President for Latin America and the Caribbean from February 2019. In this latter position, he led relations with 31 countries in the region and oversaw a portfolio of ongoing projects, technical assistance and grants worth more than US$30 billion.

From 2016 to January 2019, van Trotsenburg served as World Bank Vice President of Development Finance (DFi). Here, he oversaw strategic mobilisation of resources, and was responsible for the replenishment and stewardship of the International Development Association (IDA), the largest source of concessional financing for the world's poorest countries. He has led the policy negotiations and process for two IDA replenishments, which together mobilised a record $125 billion—$50 billion in 2010 for IDA16 and $75 billion in 2016 for IDA18. Under his leadership, for the first time, IDA leveraged its equity by blending donor contributions with internal resources and funds raised through debt markets.

In his DFi role, van Trotsenburg also oversaw the International Bank for Reconstruction and Development (IBRD) corporate finances. He co-led the World Bank Group's efforts to obtain a capital increase which resulted in shareholders endorsing a transformative package in April 2018, including an increase of the IBRD capital by $60 billion. He also co-chaired the replenishment negotiations for the Global Environment Facility (GEF) that were successfully concluded in April 2018 and was responsible of a multi-billion-dollar trust fund portfolio.

Prior to joining the World Bank, van Trotsenburg worked at the OECD in Paris. He holds a master’s and a doctorate degree in economics and a master’s degree in international affairs. He is married and has two children.

World Bank: COVID-19 Response

The World Bank, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries respond to the health, social and economic impacts of COVID-19. This includes $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments, and strengthen vaccination systems. The financing builds on the broader World Bank Group COVID-19 response, which is helping more than 100 countries strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.


Dr Chitwan Malhotra: Healthcare Hands Meet Across the Waters in Push for Rebuild

[caption id="attachment_19542" align="alignright" width="300"] Bill Gates and Dr Chitwan Malhotra[/caption]

The global pandemic has exposed the flaws and inequalities of the world’s healthcare systems. But doctor Chitwan Malhotra, the executive director of the UNSDG Health Partnership in Geneva, believes it also represents an opportunity to build back better.

“I believe nothing is unachievable when we all work together,” the SDG expert says.

Malhotra took up her position two years ago and has served as in an advisory capacity across the gamut of the UN’s Sustainable Development Goals. She has collaborated on a range of initiatives, including global health delivery, urban and rural sanitation, clean drinking water, gender equality, women’s health, non-communicable diseases (NCDs) and mental health in conflict regions.

“I am from the conflict region of Kashmir and have witnessed the first-hand tragic effects of what limited access to health has on the forcibly (internally or externally) displaced population,” she told APN News. “I have made Universal Health Coverage, health for all, my top priority. If we are to remain true to the principles of the SDGs, and leave no-one behind, we must do a better job of getting health services to refugees and migrants.”

Malhotra grew up in the Kashmir Valley, a disputed territory between India, Pakistan and China. Now she works to strengthen health diplomacy, foster collaborative partnerships and engage with international thought-leaders and decision-makers.

As a regular keynote speaker at SDG conferences, Malhotra has crossed paths with some of the world’s most lauded business leaders. She has held discussions on technology, innovations and health with Bill Gates, Satya Nadella (Microsoft CEO) and Mukesh Ambani (Reliance Industries chairman and managing director).

During the 74th UN General Assembly in New York in 2019, Malhotra was involved in the conceptualisation of the Zimbabwe Presidential Fund. The fund focuses on using IT to build digitally enabled smart primary clinics. The fund is also dedicated to improving access to essential medicines for the most vulnerable population. It aims to strengthen primary healthcare and empower communities to better manage the growing burden of NCDs.

“In the age of global competitiveness resources, these are opportunities that we cannot afford to miss in Zimbabwe. The proactive efforts by the government have motivated us on this visit, and we are prepared to invest and partner with Zimbabwe with interest in the health sector,” Malhotra told The Herald.

She pointed to Zimbabwe’s success in tackling the HIV and AIDs epidemic — despite being one of the countries hit hardest. “It has managed to reduce the prevalence of the disease considerably, and is on track in achieving its vision of reducing infections by 2030.”

Malhotra was proud to work with health ministries from various countries to facilitate the urgent procurement and delivery of medical supplies to protect frontline workers and support health systems during the Covid-19 pandemic. She was instrumental in the landmark deal through IHD Marketplace to supply N95 masks to the US from India, opening a new chapter in bilateral ties between the two countries.

“At the IHD Marketplace, we stand by the US and other countries in their efforts to respond to demands on the health system resulting from this emergency,” said Malhotra, who also serves as chairperson of the IHD Group.

Malhotra has received recognition for her continued efforts to further sustainable development around the world. She was awarded the environment award for her contributions to sanitation and clean drinking water initiatives in rural regions of Africa and India. She was honoured by Samira Bawumia, a politician and the Second Lady of Ghana, for her contributions towards good health and wellbeing (SDG#3). She was named by Economic Times as the Global Healthcare Leader of 2020.

Her work is now focused on international health co-operation, and she leads several health committees and programmes in close collaboration with international partners. In addition to serving as head of the UNSDG Health Partnership in Geneva, Malhotra will oversee the development of the India-Africa health cooperation process. She will also initiate and nurture health cooperation within ASEAN (Association of Southeast Asian Nations) and BRICS (Brazil, Russia, India, China and South Africa) countries.

More: IHDLife Donates Ambulance to Angel of Hope Foundation - Zimbabwe

https://www.youtube.com/watch?v=_2k0lpdN_LA


A COVID-19 Silver Lining: Precision Medicine for Brain & Mental Health

Did you know that nearly 17% of the Swiss population suffer from one or more mental disorders? And that more than 150’000 persons are currently living with dementia in Switzerland, with 30’000 more individuals who develop it every year? That’s a new sufferer every 18 minutes, and about two-thirds of the people affected by dementia are women.

With COVID-19 still looming despite the distribution of vaccines, what has become clear is that this pandemic is not just about physical health. It has put brain and mental health in the spotlight, too.

That’s where the Women’s Brain Project comes in, and the reason why the 2020 International Forum on Women’s Brain and Mental Health (WBP Forum) was deemed a significant milestone on the path of sex and gender-oriented precision medicine as well as another step toward the realisation of the first Institute of Sex and Gender Precision Medicine in Switzerland.

The Impact on COVID-19 on Brain and Mental Health

The WBP Forum highlighted sex and gender differences in healthcare, and the importance of brain and mental health as the world struggles with lockdowns and quarantines.

“While our brains are wired to connect and belong, the need to be disconnected and often in isolation due to the pandemic is taking a significant toll in terms of sustained stress, which causes inflammation, a diminished immune response, and a greater susceptibility to other diseases,” stated Professor Eliot Sorel, Chair, Access to Care Committee, American Psychiatric Association, during his keynote address. “This may lead to an exacerbation of pre-existing mental disorders and new incidences of depression and anxiety, above all in the female population as they play a major caregiving role,” he added.

Combining Perspectives for Greater Insights

More than 200 people around the world registered for the WBP Forum held virtually on Sept. 19-20 last year, gathering scientists, academics, patients, caregivers, and policymakers, including Signe Ratso, European Commission Deputy Director General for Research and Innovation, and Dr Kaveeta Vasisht, Associate Commissioner for Women’s Health at the U.S. Food and Drug Administration (FDA).

Over the course of the two days, speakers discussed young suicide, maternal mental health, and sex and gender differences in dementia and Alzheimer's Disease, in addition to calls to action for better migraine policies, lifestyle interventions, and new technologies for brain and mental health.

The red thread was “Sex and gender differences in brain and mental health across the lifespan: A gateway to precision medicine”.

The Role of Technology

Almost if not every panel included references to developing technologies and their potential positive impact on brain and mental health across the board. From apps that caregivers of young people who attempted or died from suicide to opportunities to detect post-partum depression or dementia more efficiently, it was clear that the way forward is to build on artificial intelligence (AI)-powered solutions.

Since 2016, WBP has been leading efforts to study the influence of sex and gender differences in mental and brain diseases with novel technology developments to foster diversity in precision medicine. Artificial intelligence (AI) is a great source of insights for scientific research and precision medicine, but it relies on large dataset bias, mainly European, and based on white men.

One of WBP’s objectives is to break the biases in precision medicine and to promote differentiated data to make clinical trials, drugs development, and health outcomes not discriminatory.

As summarised by Dr Engelberger, Health Councillor of the City of Basel, during his opening remarks at the WBP Forum, “I am sure that gender-specific medicine will become ever more important in the future. If women receive more targeted and efficient medical treatment, fewer resources will be wasted and costs will be reduced. This is important to all of us.”

The sustainability angle is not one often discussed in healthcare, but was the cornerstone of WBP’s co-founder and CEO, Dr Antonella Santuccione Chadha winning this year’s World Sustainability Award a week prior to the WBP Forum.

Looking to the Future: A Three-pronged Approach

Raising awareness about the aforementioned issues is key, but so is having a solutions-oriented approach. That’s why WBP is spearheading a number of initiatives to translate the insights of their Forum into action.

First, WBP launched the Swiss edition of the global "Be Brain Powerful®" campaign, with the support of various partners and sponsors. Available in English, German, Italian, and French, the campaign is built around the seven pillars of brain health. Individuals can sign up to a 30-Day Brain Health Challenge by email, and while the primary focus is on women’s brain health, a majority of the challenges are relevant to both men and women.

Second, the WBP Hackathon took place in January and February 2021 with participants from all over the world. The goal of the hackathon was to advance the understanding of sex and gender differences and leverage them for improved solutions, through teamwork and innovation. The topics included gender bias in ADHD, maternal mental health and organ-on-a-chip technology.

Last but not least, by hosting a regulatory roundtable, WBP is working with policy-focused organisations to better understand and catalyse ways in which sex and gender differences can be integrated in to research guidelines and requirements including an emphasis on sex and gender disaggregated data as well as clinical trials and more.

As the world struggles to identify what the “new normal” is, organisations like the Women’s Brain Project are also reshaping reality with the goal of leveraging precision medicine to offer a more effective, equitable, affordable healthcare to all.

About the Authors

[caption id="attachment_14038" align="aligncenter" width="275"] Author: Shahnaz Radjy[/caption]

Shahnaz Radjy is a member of the Women’s Brain Project Executive Committee and holds an MBA in Healthcare Management from the EHESP as well as a Bachelor of Arts in Biology from the University of Pennsylvania. She worked for ten years in chronic disease prevention and workplace health both at the World Economic Forum in Geneva, Switzerland, and the Vitality Institute in New York, USA. Shahnaz is now based in rural Portugal where she runs the Casa Beatrix ecotourism project while working as a freelance science communication consultant and writer. You can follow her on Twitter under @sradjy.

[caption id="attachment_14039" align="aligncenter" width="277"] Author: Maria Teresa Ferretti[/caption]

Maria Teresa is a neuroimmunologist with over a decade of international experience in the field of Alzheimer’s disease. She is the co-founder and Chief Scientific Officer of the Women’s Brain Project.

After a master in Pharmaceutical Chemistry in 2005 (University of Cagliari, Italy), she obtained a PhD in Pharmacology and Therapeutics at McGill University (Montreal, Canada) in 2011. That same year, she started as postdoctoral fellow in the Nitsch’s lab (University of Zurich, Switzerland), where in 2014 she became a group leader. In her research, Maria Teresa aims to identify novel biomarkers for improved individual level prediction of cognitive decline and Alzheimer’s.


Asian Development Bank: Towards a Blue Deal to Restore the World’s Oceans

Investments in recovering and maintaining a functioning marine ecosystem can form the foundation of a sustainable “blue economy.”

Marine ecosystems are threatened by extinction. Over the past 50 years, the world has lost nearly half of its coral reefs and mangrove forests, while marine populations have halved and global fish stocks depleted by a third.

[caption id="attachment_19582" align="aligncenter" width="900"] Source: ADB[/caption]

If trends continue, it is estimated that there will be no stocks left for commercial fishing by 2048 in the Asia and Pacific region alone. By 2052, oceans might contain more plastic than fish by weight and 90% of coral reefs may be lost.

The case for protecting oceans is stronger than ever. Oceans contribute to every aspect of life on earth, including regulating climate change. Oceans act as a giant carbon sink, absorbing about a third of the carbon dioxide (CO2) generated by human activities since the industrial revolution. However, while helping mitigate climate change, with greater carbon absorption the oceans are also facing a 30% rise in seawater acidity since the industrial revolution – an acidification rate estimated to be 10 times faster than at any other period during the preceding 55 million years. This is already having an impact on marine biodiversity, and with an estimated 1 billion people dependent on seafood and a global fishing market worth an annual $100 billion, ocean health decline is having an impact on the global economy.

Investments in recovering and maintaining a functioning marine ecosystem are essential to support ocean health and the foundation of a sustainable “blue economy.”

Holistic Strategies

The declining health of the world’s oceans is an issue that does not just affect a single industry, sector, or country; it is a threat to the entire planet. The solutions, therefore, must be broad and systematic as well.

Strategies must cut across multiple sectors and countries in a holistic, “source to sea” approach. This includes reducing marine pollution at the source—including agricultural pollution, wastewater, plastic and other solid waste, and discarded fishing gear—while simultaneously protecting and restoring coastal and marine ecosystems and connected rivers. It also includes sustainable extraction of marine resources including fish and minerals. Governments, nongovernment organisations, businesses, and other stakeholders all need to do their part.

Port and coastal infrastructure is overdue for modernisation. There is an urgent need for ocean-friendly infrastructure including integrated solid waste management, ecologically-sensitive port facilities, and municipal and industrial wastewater and effluent treatment. Also crucial are sustainable agribusinesses that reduce runoff of fertilisers, agrochemicals, waste, and soil erosion, as well as a sustainable aquaculture sector.

With the total asset value of the ocean estimated at $24 trillion and the global ocean economy estimated at $3 trillion per year, there is no shortage of investment opportunities, yet investments themselves have fallen short. In the last 10 years, only $13 billion has been invested in sustainable projects via philanthropy and official development assistance, and even less by the corporate sector. Currently less then 1% of the total value of ocean economy is invested in sustainable projects. At the UN Ocean Conference in 2017, only about $25.5 billion was committed, about one sixth of what is required for achieving the Sustainable Development Goal 14, Life Below Water, by 2030.

We have a good chance to obtain the investments needed if we successfully rise to three challenges. First, we need to agree on a standardised approach to valuing natural assets. Second, we must assist governments to effectively govern ocean resources, and last we need to inspire and attract private sector initiative and capital to invest in a blue future.

Accounting for Natural Resources

The goods and services the ocean provides tend to be significantly undervalued. For example, in the Asia and Pacific region, the benefits of coastal ecosystems such as coral reefs, coastal wetlands and mangrove forests that act as “natural buffers” to storms are rarely quantified and accounted for in coastal protection. This means hazard mitigation and budgetary decisions are being made without fully recognising their value. If damaged during a storm or natural disaster, these assets need to be restored so they can protect us from the next calamity.
Accounting for natural assets on public sector balance sheets will enhance transparency, value improvements to blue assets, and reinforce the need to protect these invaluable resources for future generations.

Building Ecosystem for Investments

Underlining a commitment to protect our oceans is the need to strengthen the enabling environment for blue economy investments. At the national level, this can be done by creating a central body to develop frameworks to incentivise ocean-positive businesses through supportive taxes and subsidies, and discourage and disallow ocean-impacting businesses through fiscal and regulatory reforms.

Encouraging progress has been made. To date, 57 countries have introduced ocean-related laws, policies or regulations. The conducive blue economy ecosystem that will emerge from these efforts can help channel private and public investments, as well as official development assistance, towards the sustainable development and protection of our oceans.

We need to formulate transfer mechanisms to fund support for essential ocean investments that lack revenue streams. These could take the shape of allocating income from fishing licenses, redirection of harmful subsidies, tourist charges or plastic taxes.

A Wave of Private Sector Finance

Large-scale investments are required to support ocean projects; while sovereign investments remain essential, the private sector is required to fill the gap. Attracting private investors, however, can be challenging for ocean projects.

The private sector needs a return on investment and this is usually done through user charges. Given that many ocean investments revolve around a shared common resource, it is sometimes difficult to define discrete users to pay. Moreover, when user charges can be applied, their level is constrained by affordability considerations, such as in municipal wastewater projects. This results in a volatile or at least uncertain revenue model, compromising bankability and constraining the flows of private capital.

The less bankable projects need special assistance. Blended finance can play a catalytic role in lowering risk and enhancing profitability to attract private sector participation and capital for these initiatives. Other ways to create bankable project structures includes risk allocation to the most appropriate party, either public or private, or use of subordinated instruments.

“Blue funds” also have huge potential to help overcome these challenges. Arranged by governments or development finance institutions, they could provide much-needed credit enhancement to projects in the form of blue credits. These credits are similar to carbon credits as they provide revenue support based on the value of the avoided costs from doing a high impact project. Such funds could also support issuance by underlying project sponsors of more creditworthy blue bonds to raise competitive long-term capital from the markets.

Multilateral development banks such as the Asian Development Bank (ADB) can help by developing blue project selection criteria and policy frameworks, creating financial instruments and products, mobilising concessional finance, and preparing bankable project pipelines.

Green versus Blue Finance

Green financing has already beaten a path for blue financing to follow. Green instruments aim to pool projects together to diversify risks and enable wider access to financing by tapping the capital markets through green equities and bonds. By enhancing the bankability of a project, these instruments can encourage the expansion of investments in renewable energy, reforestation, watershed management, air quality, and clean transport.

ADB has issued $9.6 billion of Green Bonds since 2010. With additional support, blue investments can be similarly successful. Given the urgency and scale of the problem, blue investments need to gain traction rapidly.

The time has come to expand the scope beyond terrestrial habitats and include investments in our blue planet. This should be echoed by financial regulators and credit rating agencies.

Globally, work is under way to define the blue universe and sustainability criteria. A detailed approach is required, since blue financing lacks the simplicity of a single metric such as carbon equivalency or a “net zero emissions” target.

One step in this direction is ADB’s Ocean Health Program, which is building a pipeline of bankable projects in marine/ coastal ecosystem protection and pollution reduction. Through innovative finance and partnerships, ADB hopes to catalyse further investments to deliver on the healthy oceans needed for a lasting recovery from the current turmoil.

About the Author

[caption id="attachment_19584" align="aligncenter" width="700"] Author: Ingrid van Wees[/caption]

Ingrid van Wees is the Vice-President for Finance and Risk Management of ADB. She assumed the position in December 2016. She is responsible for the overall management of the operations of the Office of Risk Management, the Controller’s Department, and the Treasury Department.

About ADB

The Asian Development Bank, founded in 1966 and headquartered in Manila, Philippines, assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development. Under its long-term Strategy 2030, ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. ADB is composed of 68 members, 49 of which are from Asia and the Pacific.


Région Île-de-France: A Region Spearheading Sustainable Finance

Région Île-de-France is home to more than 12 million inhabitants — a fifth of the country’s population — and accounts for 31 percent of France’s GDP.

[caption id="attachment_19589" align="aligncenter" width="900"] Headquarters of the Île-de-France Region. Photo: © Hugues-Marie DUCLOS[/caption]

That makes it France’s wealthiest region; its own GDP stands at €734bn. Divided into local authorities since 1982, the French regions have seen the scope of their competences extended through decentralisation laws.

The regions are now responsible for economic development, vocational training, high school management, transport, spatial planning, environment and digital development. They are also involved in culture, sport, higher education, research and healthcare.

Région Île-de-France finds itself at the heart of things, focused primarily on economic, social and environmental development. It has dedicated 44 percent of its 2021 budget to investments, with €2bn in expenditures (excluding financial charges).

It has also shown itself to be a pioneer in the field of sustainable finance. Région Île-de-France was the first in the world, in 2012, to issue a sustainable bond in a public format and open to all investors. The move paved the way for the following years, and the market took off. It was also the first local authority in Europe to pioneer the allocating and reporting of funds for green and socially responsible projects, a process that anticipated the practices soon to become commonplace.

The regional strategy for sustainable development is broken down into a corpus of plans, schemes and measures designed to meet five objectives:

fight climate change and protect the atmosphere

preserve biodiversity and protect environments and resources

enable the individual fulfilment of all people

ensure social cohesion and solidarity between territories and generations,

establish development dynamics based on responsible and sustainable production and consumption.

The Île-de-France region is pursuing an assertive strategy for the implementation of the Paris Agreement and Agenda 2030, and the achievement of the 17 Sustainable Development Goals (SDGs) established by the United Nations.

In March this year, Région Île-de-France published its updated framework for green, social and sustainable bond issuance. It has allowed for full transparency of its practices, maintaining leadership in sustainable finance markets as one of the first issuers to disclose alignment with the EU taxonomy. The three impact indicators selected by the region to report on the projects financed are:

A single environmental impact indicator for all categories of green projects: CO2 emissions cut by the project

Two social impact indicators for all categories of social projects: The creation of jobs in the construction and operational phases, including full-time posts or equivalent, and the number of beneficiaries of the project.

Vigeo Eiris (VE) provided an external review concerning the framework and has produced an independent validation, ranking it for Best Practices in three of the four pillars relating to the ICMA Principles.

To combat the economic and social consequences of the Covid pandemic, Région Île-de-France has put into placed an ambitious, three-step recovery plan.

Step I was the establishment of emergency support investments worth €1.3 bn. Step II is dedicated to the ecological and environmental transition of the region. It is based on the 192 measures resulting from the COP Île-de-France Region climate conference held in September 2020.

Step III is a multi-year investment envelope, from 2021 to 2027, mainly focused on transport, research, culture and infrastructure.

The recovery plan aims to allow various players to resume their activity after the lockdown interruptions, taking into account the impact of the crisis, and tackling the collateral issues faced by the population.

Île-de-France was the first local authority to issue a sustainability bond in a public format, in 2012, and the region committed in 2019 to 100 percent financing for green and sustainable projects.

On April 12 this year, Région Île-de-France issued a seven-year negative yield sustainable bond worth €500m, following the outstanding €800m sustainability bond issued in 2020. The 2021 transaction was the first by a European local authority to issue a sustainable negative interest rate benchmark bond on the markets.

The operation gathered 114 orders from 16 countries. Most of the bonds have been allocated to German- and French-speaking countries. Germany, Italy, Switzerland and France generated more than 60 percent of the order book. Région Île-de-France — as a regular issuer and through its updated framework — convinced investors to take part in this operation as the order book closed at €3.3Bn (close to seven times the expected amount).

The region’s financial solidity has been assessed and acknowledged by Moody’s and Fitch agencies, respectively rating it Aa2 and AA, which underscore the region’s sophisticated and prudent financial management. That expertise is particularly evident in terms of its forecasting ability, which allows Région Île-de-France to control its annual budget and debt commitments.

Since 2016, almost 100 percent of the region’s financing needs have been covered by green and sustainable borrowings, raising the attractivity of its sustainable investment policies with the international financial community.

Between 2012 and 2021, the Île-de-France region has issued more than €4.8bn in a green and sustainable format. In July 2019, the executive committed exclusively to green and sustainable financing. The outstanding regional debt could thus be 100 percent green and sustainable by 2024.

The region also commits to the best market standards. It anticipates regulation changes, as long as green projects are classified according to the environmental objectives as defined by the EU in the Taxonomy Regulation (EU Regulation [EU] 2020/852, article 9).

Région Île-de-France’s clean transport category is fully aligned with the Do No Significant Harm (DNSH) criteria defined for the corresponding economic activity in the draft Delegated Regulation and its annex (Commission Delegated Regulation supplementing Regulation (EU) 2020/852 & Annex, version published in November 2020).


Bonds: Name of the Game for Cool (and Resilient) Operators

[caption id="attachment_15315" align="alignright" width="300"] KelloggInsight-Riley Mann[/caption]

US corporate bonds certainly lack the thrill of that other famous Bond, James. But when it comes to strength and resilience, they can genuinely hold their own with Fleming’s cunning protagonist.

By Efraim Benmelech

Corporate bond markets have proven remarkably resilient in the face of the sharp contraction caused by the Covid-19 pandemic.

Bond issuance increased substantially in the last week of March 2020 and has remained substantially above average pre-pandemic levels. For example, between March and June 2020, $502bn of corporate bonds were issued — compared with just $151bn in 2019 and $204bn in 2018.

Yet the syndicated loan market — in which groups of banks provide debt financing to firms — shut down, and the origination of new loans fell below their levels in previous years.

This pattern, in which, the bond market remains open while the syndicated loan market shuts down, is typical for financial crises. During the global financial crisis, for instance, when the Lehman Brothers filed for bankruptcy on September 15, 2008, issuance of corporate bonds declined. However, by January 2009, the market was up and running and the number of bonds issued reverted to its pre-crisis average. In contrast, syndicated loan originations declined sharply and remained low throughout most of 2009.

What makes the corporate bond market so resilient in times of crises? And why does the syndicated loan market consistently prove so fragile? There are three potential explanations for this divergent behaviour.

First, firms that issue bonds tend to be of higher credit quality than those that rely on bank financing. For example, 87 percent of recent bonds issuers have an investment-grade credit rating, while only 19 percent of syndicated loans were rated as investment grade. This phenomenon is known as credit-market segmentation. And since the segmentation becomes even more pronounced during financial crises, banks stop lending to these risky firms.

Corporate bond markets have proven remarkably resilient in the face of the sharp contraction caused by the Covid-19 pandemic.

— Efraim Benmelech

A second explanation has to do with a fundamental difference between commercial banks and bond investors. During a crisis, banks’ balance sheets become contaminated with non-performing loans, and the losses from these leave them with less money to offer new loans. In contrast, institutional bond investors such as pension funds and insurance companies are long-term investors not prone to the same balance-sheet problems.

The third explanation is that perhaps credit and monetary interventions set by the Fed or other policymakers — especially unconventional monetary policy — are more effective in stimulating bond issuance than in boosting loan originations. Unconventional polices implemented in response to the pandemic such as the Secondary Market Corporate Credit Facility (which purchases investment-grade corporate bonds in the secondary market) and the Primary Market Corporate Credit Facility (which helps large employers issue bonds) targeted the corporate bond market directly, and appear to have stimulated bond issuance significantly. Given the current ultra-low-interest-rate environment, however, it may be difficult for the Federal Reserve to affect bank lending through traditional balance-sheet channels.

This is sobering news for firms with lower credit ratings. Syndicated loans, also known as leveraged loans, exploded in recent years, and the leveraged loan market doubled in size since the global financial crisis. But while there is abundant supply of leveraged loans when credit markets are frothy, the loan market dries up during crises.

The message for chief financial officers is that the composition of credit matters: not only the amount of debt, but the type of debt. And those firms that rely mostly on the leveraged loan market will find it difficult to obtain credit when they need it the most.

Or, to put it more simply: Bonds. Issue corporate bonds.

This article from the Kellogg School of Management at Northwestern University originally appeared in Forbes.

Featured faculty: Efraim Benmelech; Harold L Stuart, professor of finance; director of the Guthrie Centre for Real Estate Research.


SPORTFIVE Plays the Game to Win – On Behalf of Its Loyal Customers

[caption id="attachment_19608" align="alignright" width="300"] CEO: Stefan Felsing[/caption]

Global sports business agency SPORTFIVE delivers customer-centric solutions based on trust, transparency, industry experience, global relations, digital data intelligence and innovation.

SPORTFIVE strategically connects brands, rights-holders, media platforms and fans to create lasting partnerships. With the goal of creating and growing long-term value, the agency leads the sports business into the future with innovative digital solutions. It aims to be “the most progressive and respected partner in sports”.

SPORTFIVE operates with a global mindset and network of over 1,000 local experts based in 15 countries. It is active in football, golf, e-sports, motorsport, handball, tennis, American football, basketball, ice hockey, and multisport events.

It provides comprehensive services for brands, rights-holders, media platforms and athletes. Heineken, SAP, BMW and Longines are among the brands that benefit from the agency’s consulting, partnership acquisition and activation services.

Rights-holders such as the UEFA, DFB, Borussia Dortmund, Riot Games, Atletico Madrid and the LA Lakers rely on the agency’s expertise for marketing partnerships, consulting, partnership sales, hospitality, media sales, international marketing, digital and analytics projects as well as stadium services.

Some 350 top athletes – among them Phil Mickelson, Jadon Sancho, Christian McCaffrey and Toni Kroos – trust SPORTFIVE for talent representation, digital audience development, partnership sales, merchandising and event management.

Media platforms such as ESPN, Twitch and ARD work with the agency on consulting matters, rights and content acquisition, broadcast production, and partnership and ad sales.

The go-ahead agency possesses the biggest network of C-level contacts on brand-side worldwide, and commands the largest salesforce in global sports marketing. It can act as a single partner for any stakeholder along the whole value chain of B2B commercialisation.

SPORTFIVE is a pioneer in automated sales platforms, virtual ads, fan data, e-sports, digital products and services, influencer management and stadium experience.

Sports business expert Stefan Felsing chief executive officer and leads a four-person executive committee that operates out of Hamburg, Germany.

Exciting Career Dominated by Passion for Sport and Business

During his time at SPORTFIVE, Stefan Felsing showed his expertise in the field.

Felsing studied law in Hamburg and Lausanne, graduating in 1997. He led the sale of the global media rights for the UEFA EURO 2008 and created a dedicated team of experts based in Nyon (Switzerland) to build lasting value for the project.

In 2008, Felsing left the SPORTFIVE Group and founded UFA Sports with former leading SPORTFIVE managers Robert Müller von Vultejus, Nikolaus von Doetinchem and Karsten Mahlmann.

At the same time, he was the pro-bono vice-president of the German Tennis Federation, supporting its legal affairs and marketing. In 2015, UFA Sports was acquired by the Lagardère Sports Group and rebranded U! Sports.

Since that time, the company has been part of the global network of Lagardère Sports and Entertainment, and Felsing was appointed executive vice-president of global media of LSE.

Stefan Felsing left the company at his own request in 2018 to start his own company specialising in sports business consulting. After successfully advising HIG Capital on the acquisition of LSE, Stefan returned to the agency and was appointed CEO. In 2020 the agency was rebranded to SPORTFIVE.

For more information please visit sportfive.com


Scotland: The High Road to England or a Brave Step to Independence?

[caption id="attachment_19613" align="alignright" width="300"] Loch Awe: the ruins of Kilchurn castle[/caption]

When the Emperor Hadrian ordered the building of a wall to divide the troublesome, blue-painted northern tribes from the more subdued southerners in the second century AD, he literally set in stone the concept of two distinct peoples in Britain.

Some say that Scotland’s identity has always been defined by its relationship to England. Indeed, there’s even a phrase for it – the Scottish Cringe, a sense of cultural inferiority which has, over the centuries, fostered resentment.

The bitterness which has simmered since the Act of Union in 1707 is about to boil again – thanks to Brexit. A majority of Scots (62 percent) voted to remain in the EU in the 2016 referendum. The fact that the UK left the bloc regardless of Scottish wishes has thrown fuel on the fires of nationalism.
There have been 20 opinion polls since Brexit, each showing that support for independence is now the majority attitude north of the border. If support for the Scottish Nationalist Party (SNP) continues to grow, demands for a new referendum on independence could be on the cards.

Even if a vote takes place, and independence becomes inevitable, there would still be a long and tortuous path to tread – more difficult, say some commentators, than the UK’s labyrinthine Brexit negotiations. But the question is now being asked: Could Scotland survive, and even prosper, as an independent state?

Those who yearn for independence point to countries of similar size – Ireland, Denmark, Norway, Finland – as examples of countries which perform well as sovereign states. Surely, they say, Scotland, with its wealth of resources, could perform equally well?

Scotland’s population of 5.4m is similar to that of a number of EU member states: Scotland would be 19th of 27 in terms of size. Scotland has oil and gas reserves – although their value has diminished since the boom years of the 1980s and ’90s. But even as the world turns its back on fossil fuels, Scotland finds itself blessed with an abundance of renewable energy opportunities.

Scotland gets a quarter of Europe’s offshore winds and tides. More wave and tidal power devices are being tested in Scottish waters than anywhere else in the world. The renewables sector already generates more than a third of the country’s energy needs.

Scotland suffered from the decline in manufacturing industry in the later decades of the 20th century, as traditional industries such as coal mining and ship-building were wiped out. Replacing lost jobs by developing the tech industry – “Silicon Glen” – seemed initially promising. But the sector was hit by a global collapse in the early 2000s, and jobs were lost as international firms withdrew.

But the idea is experiencing a revival. Greater diversity in the tech sector has paid dividends – Amazon recently set up a software development centre in Edinburgh, its first such development outside the US. Scotland also runs 18 percent of the UK’s space industry: Glasgow-based firms build more satellites than any other city in Europe. Plans for the UK’s first space centre, to be based in Scotland, are well-advanced.

Excluding oil and gas, the top five Scottish exports are mineral fuels (worth £10.2bn), machinery and transport (£7.2bn), beverages and tobacco (£4.3bn), chemicals (£2.5bn), and manufactured goods (£2bn).

But the country’s major export destination is the rest of the UK – a market which could be threatened by independence. Recent figures show Scotland exports £32.4bn to the UK nations, £17.6bn to the rest of the world, and £14.9bn to Europe. Trade is certain to be a major area of debate in any move towards independence.

In February 2021, a team of economists at the London School of Economics warned that Scotland’s economy could shrink by as much as £11bn a year as a result of the double whammy of Brexit and independence. The effects, said the report, would be lessened only slightly by Scotland re-joining the EU, but that alone wouldn’t make up for the potential loss of trade with the rest of the UK.

One of the report’s authors, Hanwei Huang, said: “This analysis shows that, at least from a trade perspective, independence would leave Scotland considerably poorer than staying in the United Kingdom.”

The report was greeted with scorn by Nationalists, who made the point that it covered only trading costs and didn’t include factors such as inward investment, cuts to public spending, tax changes, or immigration.

In response to the LSE report, Fiona Hyslop, the Scottish government’s economy secretary, pointed to the fact that EU membership had helped transform the Irish economy – and that the EU market was seven times larger than the UK’s.

“Independent Ireland has dramatically reduced its trade dependence on the UK, diversifying into Europe, and in the process its national income per capita has overtaken the UK’s,” she said. Scotland would be “very well-placed” to grow its economy in the same way, she said.

There is optimism among Nationalists that Scotland could hold its own, even without an open market with the rest of the UK. There are many trade opportunities to be exploited, putting Scotland on the world stage, they believe.

It is the world’s third-largest producer of salmon, for instance. Scotland lands 60 percent of the UK’s fish and supplies more than 25 percent of its beef. It is estimated that 40 bottles of Scotch whisky are exported every second.

Tourism annually contributes £10.5bn to Scotland’s economy. Until the pandemic, almost 16 million visitors came every year. The sector employs more than 218,000 people – eight percent of the total.

The Office for National Statistics reported in 2014 that the Scots were the best educated people in Europe, with 45 percent of those aged 25 to 64 having some kind of tertiary education. Independence campaigners believe this fact means the country would be well-placed to exploit new opportunities. However, the Programme for International Student Assessment reported in 2019 that young Scots were beginning to lag in maths and science.

Membership of the EU is seen by many as the key to future prosperity. And here, problems may lie. On the positive side, Brexit has changed the game as far as the EU is concerned.

At the time of the 2014 independence referendum, José Manuel Barosso, then president of the EU Commission, said it would be “extremely difficult, if not impossible” for Scotland to secure membership due to the EU’s reluctance to encourage secessionist movements.

But Herman van Rompuy, a former president of the European Council, believes the EU would now engage with Scotland on the subject independence. While the process would be complicated, an application would be “seriously considered”. The EU’s attitude has changed since Brexit. The UK is now a “third country” – there is no reason to oppose Scottish secession.

Van Rompuy was president of the European Policy Centre (EPC) think-tank which produced a report on Scottish independence in 2019. It concluded that while the EU should be positive towards Scotland, the country could not expect special treatment. An independent Scotland would have to accept all the obligations of membership, including an agreement to use the euro.

Another fly in the ointment was pointed out by Karel Lannoo, the head of the Centre for European Policy Studies. In a TV interview in December last year, he suggested that any referendum on an independent Scotland would be subject to a vote by all UK citizens.

Fabian Zuleeg, an economist and one of the authors of the EPC paper, also serves as an advisor to the Scottish government. He noted that Brexit had changed the case for Scotland’s future in Europe, and that it would now be inconceivable for the EU to reject an approach.

“EU countries recognise that Scotland has been taken out of the EU against its will, and there could well be a legitimate case to re-enter,” he said. It was vital, however, that any referendum was legally constituted. Pursuit of alternative routes to independence would create a dangerous legal precedent in the eyes of EU member states, especially those which have issues with secessionist movements, he said.

He also made the point that Scotland’s motives for wanting to join the EU would have to be studied. “The last thing the EU would want at this stage is a new ‘awkward’ partner,” he said. “The key is a strong and visible commitment to EU values and the rule of law, in step with the overall direction of European integration. If willing to commit to these values and accession conditions, it is highly likely that an independent Scotland would become a member of the European Union.”

There are other issues regarding EU membership. A sizeable portion of voters in Scotland also voted for Brexit. And even among the ranks of the SNP, a large number see no sense in swapping Westminster for Brussels, and would prefer to see a Scotland independent of both.

Equally, the Covid-19 pandemic has battered Scotland’s economic prospects – and it would have to show a rapid and robust recovery to satisfy the EU.

Kirsty Hughes, director of the think-tank Scottish Centre on European Relations, says: “Independence, if it happened in the coming years, will take place in a transformed post-Corona Europe and world. The EU is facing big challenges in continuing to tackle Covid-19 and its wide fall-out – on borders, the single market, on global geopolitics, on the Eurozone and, more broadly, on solidarity and strategy within the EU27. Where the EU will be in one or two years’ time is an open question.”

After an application to the EU, the commission would have to assess whether Scotland met the “Copenhagen criteria” on democracy, a functioning market economy, and an ability to take on the EU’s laws. Hughes predicts that the effects of the pandemic will have increased debt-to-deficit ratios all round – meaning that the bloc may be tougher on those wanting to join. Even if all the hurdles were successfully cleared, Scotland’s accession process would take at least four or five years after independence, which itself is likely to take at least three years.

The most pressing question facing an independent Scotland is that of currency. Many believe this issue derailed the Yes vote in the 2014 referendum. The canny Scot may be a stereotype, but there’s little doubt that economic fears swung the vote against independence.
The new nation would have a number of currency choices: to use sterling under a currency union agreement with the rest of the UK, to use sterling unilaterally, set up its own currency, or adopt the euro.

Hughes said: “The Scottish debate has always been tentative on joining the euro, and more focused on the domestic question of using the pound or creating a Scottish currency. And in terms of the deficit and debt criteria, it would seem an independent Scotland would not anyway be eligible to join the euro straight away.”

A 2020 YouGov poll revealed that only 18 percent of Scots favoured adopting the euro, with 43 percent favouring sterling.

Oliver Harvey, a strategist at Deutsche Bank, believes there are two obvious advantages to retaining sterling – it’s a trusted and stable currency, and creating a new Scottish currency could be problematic. It would be worth less than sterling, and there was a risk of deposit flight from Scotland to England, he believes.

Westminster has told the Scottish government that any sort of currency union is off the table, but the SNP believes Scotland could keep the currency, regardless of Westminster’s wishes. The matter may be taken out of the hands of politicians, though. Several major Scottish banks have already said they’d move headquarters south of the border in the event of no-currency arrangement.

“If they did that,” says Mr Harvey, “they’d continue to receive liquidity from the Bank of England, and they’d continue to benefit from the implicit fiscal guarantees. The banks themselves have decided it’s not worth the risk.

“Scotland could issue a new currency in parallel, with existing stock of sterling assets. That’s pretty risky, because you might find that lots of people in Scotland might not have much confidence in this new currency, and may not be willing to use it.

“I think a more likely outcome is to have some kind of currency union or ‘sterlingisation’. If the banks move south, it takes it out of Scotland’s and Westminster’s hands… Sterling continues to circulate in Scotland, but the Scottish government doesn’t have much control over monetary policy. Is it costly to have a currency union without a political union? Yes, it’s very costly. The bottom line of this debate is that there are really no good options for Scotland.”

A poll in The Scotsman newspaper, in the days leading up to the last referendum, revealed that half of those canvassed would vote for independence – if it made them better off. The romantic draw of a free Scotland ultimately fell on the sword of economic realism.

But as a post-Brexit independence momentum builds, it falls to Prime Minister Boris Johnson to try to hold the precarious 300-year-old Union together. The Conservative Party hasn’t been a significant force in Scotland since the 1950s. Despite this, Tory governments have regularly ruled Scotland from Westminster since then – adding to the Scottish sense of English disrespect and neglect.

Johnson appeared on the BBC in 2017 to praise his 18th Century namesake, the great English man of letters Samuel Johnson. “If I could claim kin with the great man, I certainly would,” quoth Boris.

Legendary lexicographer Samuel Johnson is better known north of the border for his acerbic observations of Scotland and the Scottish, including his often-quoted remark: “The noblest prospect which a Scotchman (sic) ever sees is the high road that leads him to England”.

Boris Johnson had no reason to disguise his admiration for a man who once described Scotland as “a worse England” – but now he may see that discretion is a wiser path to tread.

By Tony Lennox


Convergence Partners CEO Brandon Doyle: Converging on Strategy and Social Needs

[caption id="attachment_19636" align="alignright" width="300"] Brandon Doyle[/caption]

Investors naturally want to be associated with a success story that has a purpose, and positive progress. Convergence Partners gives them a chance to do so.

Over the past 15 years, the company has been a seasoned player in pan-African private equity. Convergence Partners seeks impact investing opportunities to fuel communications and ICT infrastructure across the continent – while generating above market investor returns. Convergence Partners’ portfolio reflects its commitment to communications access, broadband services and tech offerings in Africa. Its track record reflects the team’s capacity to add value across the investment lifecycle.

Brandon Doyle was one of Convergence’s founding partners and has been running the business since its inception. He has spent half of an almost 30-year career striving to fulfil the firm’s impact investing aspirations. Before Convergence, he held leadership roles at Nedbank, FBC Fidelity and Anglo American.

“I was an investment banker before I started getting involved in the private equity world,” he said, “and I got to a point where it felt like what I was personally doing, on a daily basis, had a lack of meaning and purpose.”

Brandon Doyle was doing well, by all accounts, generating profits for clients and company. But, amidst the endless shuffling of paperwork, he began to dream of getting involved in something that would make a meaningful difference.

“It was that point of realisation that set me down a different path,” he said. “With the skills and capabilities that I have, could I not be doing something that is a great deal more satisfying?”

Brandon Doyle shared the desire to create a purpose-driven, future-focused organisation with the fellow founding partners of Convergence, Andile Ngcaba, Idan Segal and Stefan Ferreira. The leadership team benefits from a camaraderie formed years before the business came into being, as colleagues, partners and friends. Together, they have built an organisation that, at the micro level, has a family style and partnership orientation.

“I think that's carried forward to the structure and the culture of the organisation,” says Brandon Doyle. “Anyone walking through our doors will immediately be struck by a number of things. It's a very, very flat structure, and a culture where everybody is welcomed. And when it comes to decision-making, there’s a lot of democratisation.”

The leadership act as libraries of excellence and instruction, while the democratic management model encourages initiative and accountability from each team member. Convergence Partners has assembled a diverse, inclusive and multicultural team with a balance of age, gender, background, race and origin.

As a business focusing on the broader technology sector, there are rapid changes that the team must stay abreast of. “Young professionals in their early 20s bring a lot to the table. They have a real life understanding of these technologies and how they work and what the good and the bad is. And so, for us, age diversity is actually quite a critical factor.”

Convergence Partners goes beyond the typical private equity fund model to get involved in early-stage projects and to engage with investee companies via active participation beyond just board activities. “There's a lot of work we do that is much more than just investing in promising businesses,” Doyle says. “It's actually making businesses happen.”

Convergence Partners has invested to build networks, launch satellites and repurpose infrastructure of telecom operators across Africa to ensure it’s well-positioned to capitalise on the changing market landscape. The emergence of the mobile wave in Africa has proven the investment thesis that there is both a commercial market for ICT in Africa, along with a positive impact orientation and acted as a catalyst for independent network development.

“The world is changing and we're turning to digital communication,” notes Doyle. “Networks, particularly in a continent like Africa, are going to be the delivery mechanism for almost all services and occasions, whether it's education, health care, security, trade or banking.

“If the hypothesis holds and data is going to be what needs to be traversed over communications networks, then you can't have a situation with these backbone networks owned by a single, monopolistic incumbent or which were built to only serve a voice market.”

Convergence Partners takes a wholesale open-access approach to gain market share through investee ownership stakes and to create economies of scale anchored in accessible price points, far-reaching coverage and quality services.

“Price points are rapidly coming down. Availability and coverage are rapidly increasing as is the quality of networks. This is massively vested in, and that's created this enabling mechanism for a number of new players to come along and rely on the underlying telecoms networks and trusted business networks to deliver a raft of new fintech players,” Doyle said. “They're often tech players and solutions and services that are really making a difference. But without that underlying enablement, they couldn't exist and couldn't do what they need to do for the people that really need it.”

He points to the digital divide as a key — and massively understated — challenge. Instead of the conventional meaning, which is mostly a measure of physical access to the telecoms networks, Doyle widens the lens to consider other factors that often come into play, like education levels, affordability or access to power to recharge mobile devices.

“What are the emerging business models and technologies that could deliver that?” he queried. “We're very excited now about what's happening in the global domain.”

The company is partnering with big players — Google, among others — to bring commodities to market using its infrastructure. Convergence Partners is deconstructing market challenges to develop cutting-edge solutions. It’s excited by the potential combination of emerging technologies in cloud computing, 5G networks, the Internet of Things, AI and blockchain security.

Convergence Partners’ first fund raised $85m and the second closed at near $200m. Its third fund aims to raise a total of $250m. Capital is deployed in a strict multistakeholder approach to target meaningful outcomes for all.

“I think a lot of impact investing up until quite recently has been papering over and just putting a little bit of tinsel on things,” he said, but there’s a sense that investors are starting to demand more of the businesses that they back, more than a healthy return on investment. “Because across multiple facets, it's not just social impact issues, but also the environment, climate change and the development of good corporate citizenship policies and procedures.”

There's a lot of momentum pushing corporate behaviour towards more responsible, sustainable and integrated activity. But Doyle believes that some corporations are still putting too much emphasis on certain financial dynamics, which is skewing the content and tone of public reporting and driving the wrong management behaviours.

“So they're still on the road to travel here, but at least directionally, things seem to be moving slowly in a positive way,” Doyle commented. “I don't think it translates into any meaningful change in behaviour just yet, but the mindfulness is starting to creep into the dialogue. And, of course, this is a good thing.”


Convergence Partners Executive Chairman Andile Ngcaba: Tech is at the Heart of Things for This Believer in the Power and Potential of the Internet

[caption id="attachment_19638" align="alignright" width="300"] Andile Ngcaba[/caption]

Technology has been Andile Ngcaba’s passion, hobby, and profession for four decades. “It's been fun all along and I've been enjoying it,” he says. “And there is no dull moment, every day is a wonderful day.”

As a student in the 1970s, Andile Ngcaba was opening up radios to study their circuitry. He travelled the world to receive training in communications technology. He was also active in the anti- Apartheid movement in South Africa, later helping to establish the party headquarters of the African National Congress in Johannesburg. He headed the organisation’s IT department, and was responsible for launching the country’s Centre for Development of Information and Telecommunications Policy.

These days, the businessman divides his time between California’s Bay Area and the countries where Convergence Partners has investments: West Africa, East Africa and Southern Africa. Andile Ngcaba shared with CFI.co the company’s projects and spoke about the role he believes technology will play in world development.

“Technology is my hobby,” he says, pointing to a wall covered with gadgets. “Technology is also my profession. I speak about it, I implement it.” Technology, he believes, changes people's lives. “That is what I've seen over the years, and that is what makes me to continue to do this. Have you ever seen someone using the Internet for the first time in their lives?” He has, and he remembers the wonder on their faces.

Andile Ngcaba believes that ignorance tops the list of the challenges facing the world. “The Internet today brings about enlightenment. Ignorance is as dangerous to society as — if not worse than — not having food or water.”

The executive travels throughout Africa — visiting colleges in Ghana, Togo, Cameroon, Uganda, Kenya, Zambia — hailing the transformative power of connectivity and technology.

“That’s what really sparked me to have that excitement every day in my life, I don't get bored. I don't get frustrated.” Ngcaba has spent most of his life making sure that ordinary people, non-profits and businesses have access to the Internet. “That's what I live for. It's a very simple life. It's beautiful when you see the Internet changing people, changing the lives of a community, of a start-up. That's what makes me tick.”

Ngcaba has big dreams for Africa. When he first pitched his ideas to a bank — plans to build a satellite, lay a submarine cable, to connect every city to the web — the financial advisors politely passed on the opportunity. But another bank soon recognised the project’s potential. “These are now my colleagues, who are bankers. I'm a technologist.

“These guys were saying: Wow, this is exciting, we think we can work with you. So for three years, they were advising me.” Then it was decided that they could “do this thing together”.

Convergence Partners has been building a portfolio of impact investments in Africa since 2006. The founding partners — Ngcaba, Brandon Doyle, Idan Segal and Stefan Ferreira — subscribe to the standards that make for investor impact. They prioritise diversity, environmental responsibility and social development, with the UN’s Sustainable Development Goals as guidelines.

“Parallel to that, return on investment is a critical issue for us ... financial returns are at the centre of what we do. But impacting society is really the embodiment and the value of who I represent.

“We are now 7.9 billion people. We will soon be 10 billion people. The future of the 21st Century or the fourth industrial revolution is digital. If you invest in us, you are investing in the future.” That, he says, will make sure that the poor are uplifted, and that “ignorance does not exist in our world”.

He reminds would-be investors that when Africa goes fully digital, it will represent a market of some 1.2 billion digital users. The continent is no charity case, it’s an investment opportunity.

“The future of the world is technology,” Ngcaba asserts. “Future pandemics will be solved through technology. Also, there will be a peaceful world, free of wars. Remember, the Internet has no borders. We live in the virtual world, so the physical world is really neither here nor there. At the end of the day, if you ask me where I live? I live on the Internet.”

Life-long learners can access information through online courses. Unbanked populations can access financial services and build a credit history. Farmers can apply tech advances to improve crop yields, helping to shore-up national and regional food security.

Africa’s future will be marked by rapid tech advances, so Ngcaba and his partners are building bridges with Silicon Valley to transplant the most innovative ideas across the African continent. He expects to see big developments in these areas over the next decade.

As more technology centres open in Africa, there is an opportunity to address some of the biases and prejudices that often occur in tech development. Silicon Valley continues to receive flak for its predominately white male workforce.

Apart from his role at Convergence, Ngcaba serves as the executive chairman of inq. digital, a pan-African cloud and digital service provider. He’s also involved in early child development through incubators and start-ups, and stays connected with the preschool that was founded in 1999 by his late mother.

Even off hours, when he’s just pottering around, Ngcaba plays with a sense of purpose. He’s currently constructing a pipe framework to test some vertical farming techniques. “It's not gardening. No, it's really a piece of research that I'm busy with. It's all coming together.”

Keep an eye out for his other ongoing hobby: an attempt to build an independent power source…


CFI.co Has Awarded Best Central Bank Governance Europe 2021

[caption id="attachment_19642" align="alignright" width="300"] Narodowy Bank Polski (National Bank of Poland)[/caption]

Narodowy Bank Polski (National Bank of Poland, NBP) started its operation in 1945. Narodowy Bank Polski is the central bank of the Republic of Poland. Its tasks are stipulated in the Constitution of the Republic of Poland, the Act on Narodowy Bank Polski and the Banking Act. The fundamental objective of NBP's activity is to maintain price stability. Under the Monetary Policy Strategy beyond 2003 drawn up by the Monetary Policy Council, the objective of NBP is to stabilise the inflation rate at the level of 2.5 percent with a permissible fluctuation band of +/- one percentage point.

The most important areas of activity of NBP are monetary policy, issue of currency, development of payment system, management of official reserves, education and information, and services to the State Treasury.

Narodowy Bank Polski – a European leader

Narodowy Bank Polski under the leadership of Professor Adam Glapiński has been presented with  “The Best Central Bank Governance Europe 2021” award by CFI.co.

The outbreak of the global pandemic in 2020 caused unprecedented challenges for economic policy. The economic authorities of many countries suddenly had to face an unknown and unprecedented shock. Under conditions of total uncertainty, urgent decisions had to be taken and responses to the crisis caused by the pandemic had to be made. At the same time, rapid and appropriate action was key to limiting the economic costs to households and firms in the aftermath of the pandemic shock.

World Bank – January 2021

The policy response of Narodowy Bank Polski has been swift and large and effective in limiting the economic scarring effects of the pandemic. Adequate liquidity provision remains critical in the short-term (…).

Asli Demirgüç-Kunt, Chief Economist of the Europe and Central Asia Region of the World Bank

Narodowy Bank Polski met these challenges by correctly diagnosing the situation and the risks involved. Despite the lack of data, which are always delayed, and amid great uncertainty regarding the course of the pandemic and its economic consequences, NBP took swift, firm and wide-ranging measures aimed at easing the financial conditions in the economy. The actions taken by NBP have significantly contributed to improving the prospects for the Polish economy: we can expect a robust recovery as early as this year, and the business and economic performance in 2021 should be significantly better than that achieved in 2020.

[caption id="attachment_19643" align="aligncenter" width="900"] Professor Adam Glapiński[/caption]

Under the model leadership of Professor Adam Glapiński – President of Narodowy Bank Polski –  NBP reacted swiftly, strongly and with conviction to the upcoming shock – reads the justification of the award by CFI.co (Capital Finance International).

It was the President of NBP that first signalled the need to lower interest rates, promptly slashing the main policy rate to 0.1 percent. NBP also launched the largest asset purchase programme among the emerging market economies, which was a huge step for combating the economic consequences of the pandemic. NBP purchases government securities and government-guaranteed debt securities on the secondary market and offers bill discount credit to support lending to private sector – reads the CFI.co jury report.

The Adopted Strategy Worked

NBP was the first bank in Central-Eastern Europe which signalled a cut in interest rates. It also immediately took additional steps to ensure the uninterrupted operation of the banking sector and reduce the cost of servicing and obtaining financing for all sectors of the economy. The broad set of measures taken by NBP included a three-time reduction in interest rates, including the reference rate by 140 basis points, to 0.1 percent, the launch of the purchase of Treasury bonds and bonds guaranteed by the Treasury on the secondary market, reduction of the required reserve ratio from 3.5 percent to 0.5 percent and offering a bill discount credit ensuring the possibility of refinancing loans for enterprises. NBP's reaction was firm, but also consistent with the conditions of increased uncertainty: the launched asset purchase programme was designed in such a way as to provide the central bank with considerable flexibility and the ability to react to changing conditions. For this purpose, NBP did not announce ex ante the scale and duration of the purchases and made its course dependent on the market conditions. When it proved necessary, NBP did not hesitate to intervene in the foreign exchange market in order to strengthen the impact of a looser monetary policy on the economy.

International Monetary Fund – February 2021

Narodowy Bank Polski took the right decisions. In the opinion of the IMF, Narodowy Bank Polski’s quick and appropriate monetary easing helped to mitigate the negative impact of the pandemic on the economy and the banking sector.

Executive Board of the International Monetary Fund report on the annual review of the Polish economy

NBP has also taken appropriate initiatives in the field of macroprudential and regulatory activities, thanks to which, for example, the systemic risk buffer was lifted. This facilitated the release of significant capital buffers and allowed banks to absorb losses resulting from the crisis.

The proactive decisions taken by the NBP Management Board have helped Poland to achieve the lowest unemployment rate in the European Union, one of the lowest economic contraction rates in the European Union, and a record high in capital accounts – emphasised the CFI.co jury.

The Spectacular Effects Were Not an Accident

The beginning of 2020 saw an increase in the price index of goods and services, which significantly exceeded the upper bound for deviations from the NBP inflation target; however, already in the following months the inflation index decreased and was in line with the NBP inflation target. Ultimately, average annual inflation amounted to 3.4 percent, which is in line with the target set by the Polish central bank (2.5 percent, +/- one percentage point).

At the end of 2020, the unemployment rate in Poland was one of the lowest in Europe. In December Poland was one of nine countries in Europe in which unemployment had declined instead of increasing. In January 2021, the unemployment rate was the lowest in the whole of the EU.

Industrial output growth in 2020 was a positive surprise. With a production increase of 6.1 percent year on year, Poland achieved the second-best result among EU countries.

International Monetary Fund – March 2021

NBP’s response to the challenges posed by Covid-19 was agile, forceful, and added innovative elements to existing policy frameworks. Poland is well positioned for a strong recovery. 2021 should be much better than 2020.

Alfredo Cuevas, an economist at the IMF responsible for the latest IMF review of Poland’s economic situation.

In the pandemic year of 2020, exports did well. According to the data of the Polish statistical office (Statistics Poland, GUS), the surplus on goods trade after 2020 amounted to EUR 12 bn.

The coronavirus pandemic and the related restrictions led to a decline in GDP in Poland. However, it was only about half of what the estimates formulated in spring 2020 had expected. This is a relatively good result if we compare the GDP indicator with, for example, the euro area. The economy, supported by “anti-crisis shields”, adjusted to the restrictions and remained partially resilient to the economic shock.

NBP Always on Standby

The experience gathered during the pandemic has shown how important it is to take care of rudimentary matters. Maintaining buffers in the decision-making space and ensuring the health of the entire financial system are essential elements of a strategy to prepare for the unexpected. The comprehensive response of the economic policy of the government in Poland, comprising the “anti-crisis shields” and supported by the active approach of Narodowy Bank Polski, was also possible thanks to the strong credit rating of the state.

It is worth noting that the Polish central bank was able to provide support through an accommodative monetary policy and macroprudential easing thanks to the credibility it has built up over the years and its long-term efforts to support a sound financial system and strong regulatory and supervisory structures.

The Achieved Results are a Consequence of Teamwork and Wise Management

NBP’s response to the pandemic crisis was not only quick and decisive, but most importantly, effective. It contributed to a significant reduction in interest rates on loans, generating significant savings for indebted households and enterprises, thus supporting their financial situation in this difficult period. The actions of the central bank also ensured a stable situation in the Treasury bond market, thus enabling the implementation of anti-crisis measures by the government without an excessive increase in the costs of these measures for the taxpayer.

NBP made a very significant contribution to mitigating the economic effects of the pandemic. Despite the stricter sanitary regime and periodically introduced restrictions on the activity of selected sectors of the economy, it was possible to avoid a significant deterioration in the financial situation of the enterprise sector. Most Poles managed to avoid the unemployment which affected many citizens in Europe – the unemployment rate in Poland is currently the lowest in the whole of the European Union. Overall, the Polish economy experienced a much milder pandemic crisis than many other economies: real GDP fell by 2.7 percent in 2020 against an average decline of 6.2 percent in the European Union.

European Bank for Reconstruction and Development – March 2021

The quick and strong monetary easing policy implemented by Narodowy Bank Polski and the asset purchase programme helped mitigate the negative effects of the pandemic on the Polish economy. This proves that the Polish central bank has made good use of the experience of other central banks from the period of the global financial crisis. The actions taken by NBP were very positively assessed by the IMF during the last consultation held in February this year.

Prof. Beata Javorcik, Chief Economist of the European Bank for Reconstruction and Development

Under the leadership of Professor Adam Glapiński, the Polish central bank met the expectations arising from the economic challenges associated with the outbreak of the pandemic. This allowed the Polish economy to be protected against a deep recession and high unemployment.

As the jury of the competition noted: NBP is supported by a team of experts who safeguard the value of the zloty, the Polish currency. A modern arsenal of tools is in place to monitor data and identify risks. […] NBP acts with full independence. With market confidence, it strives to advance the economic wellbeing of the country and Poles and supports government policy.

The bank’s activities were appreciated by the world’s largest financial institutions, such as the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development, and Professor Adam Glapiński was awarded the special prize of Personality of the Financial Market, awarded by the editors of the Polish business daily paper, Gazeta Giełdy i Inwestorów “Parkiet”.

In April 2021, appreciating the merits of Professor Glapiński, the President of the Republic of Poland Andrzej Duda stated that the head of the central bank should continue his mission for the next term of office.

The award granted by CFI.co (Capital Finance International) confirms the correctness of the decisions taken by NBP in the difficult times of the COVID-19 pandemic.

According to the jury, a great achievement of NBP was the profit generated by the Polish central bank of $2.5bn — 95 percent of which goes to fund the state budget. The bank also deserves credit for storing significant reserves of gold, which is purchased with a great feel for the market.

President of the Republic of Poland Andrzej Duda – April 2021

Narodowy Bank Polski is the entity that has regularly generated profits in recent years, and […] I wish to emphasize very strongly that […] Professor Adam Glapiński is an excellent president of Narodowy Bank Polski. The situation has been very stable during his term of office. The task in terms of the state’s financial security is being fulfilled very well indeed and, if there is a commander-in-chief who manages the matters and leads the army so well, then I think that the task entrusted to him can be prolonged. […] I do respect Professor Adam Glapiński and I must admit that I really appreciate what he has been doing over recent years as well as the way he has managed the financial affairs of Poland, its monetary matters, [and] currency matters […].

President of the Republic of Poland Andrzej Duda for the Polish nationwide TV channel Polsat News in the broadcast Gość Wydarzeń

The jury also stated that: NBP has the strength and readiness to withstand market pressures, and the flexibility to respond to dynamically changing market conditions. The Polish central bank is able to respond swiftly since it is prepared for different scenarios, having at its disposal a broad and modern arsenal of tools to support Poles.

Thanking on behalf of all employees of Narodowy Bank Polski for the award granted by CFI.co, Professor Adam Glapiński said: Narodowy Bank Polski reacted swiftly and decisively to the pandemic-related risks, mitigating the negative economic effects on both society and the economy. This happened, amongst others, because we constantly prepare for different scenarios, not only those arising directly from economic events. We analyse the experiences of other central banks and draw conclusions from them. We are able to react flexibly and very quickly, i.e. in advance, also when our assessments are not yet confirmed by data that are always delayed.


Lord Waverley on WTO: Inclusive and Sustainable Trade Reforms are Vital for Shared Benefits

The previous US administration, the politicisation of trade and a looming economic crisis due to the pandemic and Brexit are creating an environment of protectionism. This must not be allowed to happen, argues Lord Waverley.

The need has never been greater to deliver inclusive and sustainable trade reforms, and the opportunity to deliver could be now.

The incoming World Trade Organisation director-general, the upcoming G7 meeting in the UK, and the identification of impediments to reform could make this a reality. This would build on the work of G20 finance ministers at the World Bank and the IMF.

The major contributing factor to reform was the failure to implement the WTO Doha round. Reduction in government spending on subsidies in agribusiness were held hostage in the US and the EU to the detriment of developing economies.

That was regrettable. Major benefits could come from freeing-up economies. A broad zero-tariff regime would create wealth in impoverished nations and bring employment and new participants to the supply-chain cycle from the developing world. Making trade reform happen should become our mantra.

"The UK’s call for a more balanced and honest debate on trade reform is welcome if we are to lead by example and move the dial on the world stage. What we never debate is what we are prepared to give up to make this possible."

There is simmering hope that change might be afoot. The UK must stand ready to lead on the front foot. It is easy to call for WTO reform, but for some governments the rhetoric masks the unsavoury reality that trading systems are stuck in the 1990s. Digital trade and services are systems that fail to live up to modern interconnectivity and speed. Processes are hopelessly antiquated in sectors such as agriculture, with farmers unable to compete with the heavy subsidies in G7 economies.

Trade is ultimately give-and-take. Everyone at the table needs to contribute to a deal that works to the benefit of all. Ngozi Okonjo-Iweala, the first African to head the WTO, has a reputation that suggests that she could deliver. We stand ready in support. Africa, interestingly, is where we could improve the multilateral system for intra-regional trade. It is a region where future-proof rules and standards could easily be incorporated.

The opportunity to build-in modern digital trade infrastructure is enormous, but requires support and investment from the global community. Root problems remain on modernising the digital rulebook, with India and South Africa creating a stumbling blocking effect. Understanding the role of these two G20 economies is as vital as understanding those of the EU, China and the US.

The UK’s call for a more balanced and honest debate on trade reform is welcome if we are to lead by example and move the dial on the world stage. What we never debate is what we are prepared to give up to make this possible.

This is key if we are to make meaningful progress. We must bridge the dialogue gap and find more sustainable and inclusive solutions for all nations, and do so regularly, to keep abreast of changes. New opportunities will drive innovation and solutions to the challenges we face.

The Commonwealth also has an important role to play as a diverse, cross-regional network. It’s a microcosm of WTO membership, and a perfect proving ground for global policy-making and co-operation. If agreement can be found in the Commonwealth, the chances are it will work in the wider trade community.

Capacity building is an important part of the reform challenge. Strengthening the connectivity between Geneva and national capitals is also at the heart of the problem. Too often there is a disconnect, which means we lose the ability to move forward because the flow of dialogue is not happening as it should. In the case of developing countries, teams are often over-stretched and under-resourced, putting them at a significant disadvantage. Input from national capitals and business communities in home countries is vital to enable trade negotiators in Geneva to move forward with confidence when being challenged to make commitments.

Not only has the UK not delivered on Doha, it has now drastically cut the aid budget, a lifeline to help developing countries build trade capability. A decision that looks hasty in the context of G7 – where the UK is arguing for serious change – has undermined its position by removing a key bargaining chip on foreign aid assistance.

Development assistance is vital if any proposal is to succeed, and must be delivered to achieve the opening-up all economies. The government is right to call for WTO reform, but we should stop pointing fingers and have a more honest conversation with ourselves about what we are prepared to give up. Only then will we really make trade work for everyone.

About the Author

Lord (JD) Waverley
Independent Member
House of Lords

Twitter: @LordWaverley

LinkedIn: linkedin.com/in/jdwaverley