Navigating Complexity: How The Access Bank UK Limited Delivers Unmatched Trade Finance Solutions

In the rapidly evolving landscape of global trade, businesses face pressures that can disrupt even the most carefully planned transactions. Currency volatility, shifting regulations, supply chain disruptions and liquidity gaps increasingly define the international marketplace. During these moments of uncertainty, The Access Bank UK Limited has distinguished itself as a resilient and strategic partner, delivering tailored trade finance solutions that help customers navigate complexity with confidence.

[caption id="attachment_28132" align="aligncenter" width="900"] "Through its unwavering commitment to tailored solutions, collaborative problem-solving and operational excellence, The Access Bank
UK Limited continues to prove that with the right partner, global trade can remain resilient and sustainable."
Jamie Simmonds CEO/ MD of The Access Bank UK Limited[/caption]

One example of this commitment can be seen in how the Bank supported a customer confronted with severe foreign-exchange challenges during an important acquisition. The customer had already made a significant initial payment and was relying on local currency receivables to complete the transaction. Unexpected devaluation and limited access to foreign currency in the local market jeopardised the completion of the purchase and placed the initial deposit at risk. Acting with a strong sense of duty of care, The Access Bank UK Limited structured a bespoke facility backed by a secure guarantee from a correspondent bank. This intervention ensured the customer could complete the transaction without suffering a major financial loss. It also highlighted the Bank’s ability to combine empathy with innovation, demonstrating deep expertise in structuring complex trade solutions within prudent risk parameters.

The Bank’s commitment to empowering development across Africa is further reflected in its support for a large-scale initiative to modernise electricity metering in West Africa. The project aimed to improve billing accuracy and strengthen the energy infrastructure by deploying advanced metering technologies across multiple districts. Vendors participating in the rollout required robust and dependable financing to meet procurement and implementation timelines. The Access Bank UK Limited provided tailored trade finance structures, issuing confirmed Letters of Credit to equipment manufacturers and ensuring secure ownership of the financed goods until repayment. A dedicated collection mechanism linked to daily utility revenues offered further comfort and facilitated the repayment of trade loans. By enabling the smooth delivery of critical infrastructure, the Bank helped enhance operational efficiency and played an instrumental role in driving digital transformation and revenue growth in the region.

[caption id="attachment_28133" align="aligncenter" width="900"] The Access Bank UK Limited headquarters in the City of London[/caption]

The Bank also proved its adaptability during a period of significant economic strain in West Africa, where exporters faced severe headwinds including currency instability, limited foreign-currency inflows and operational bottlenecks. Many businesses in the agricultural export sector were at risk of reduced operations or closure. The Access Bank UK Limited responded by developing a comprehensive Pre-Export Finance model that supported the entire value chain, from raw material sourcing to processing and shipment. Working closely with local partners, manufacturers and international off-takers, the Bank ensured that exporters retained access to working capital and that funds flowed securely throughout the trade cycle. Its global network, extensive cross-border capabilities and deep knowledge of international trade regulations enabled the Bank to maintain transaction visibility and restore confidence among overseas counterparties.

The Bank’s capacity for coordination and leadership was further demonstrated in East Africa, where a major logistics company required substantial working capital that exceeded the capacity of local Banks. Regulatory limits, risk-distribution requirements and differing domestic frameworks across countries made a straightforward facility impossible. The Access Bank UK Limited led a structured, multi-bank risk-participation arrangement involving several African Banks. It guided teams through regulatory treatment, credit-risk allocation, documentation and execution processes, ensuring all parties were aligned. The resulting facility was fully subscribed and delivered on schedule, giving the customer the liquidity needed while distributing risk safely across the participating Banks. This collaborative achievement showcased the Bank’s role as a central orchestrator of complex, multi-jurisdictional financing.

These cases underscore The Access Bank UK Limited’s position as a trusted partner in global trade. Its ability to design flexible, innovative and secure solutions—while coordinating seamlessly across jurisdictions—demonstrates a level of expertise essential in today’s unpredictable economic environment. More than just facilitating transactions, the Bank plays a strategic role in supporting growth, strengthening supply chains and enabling customers to pursue opportunities even in the face of volatility.

As international trade continues to expand and diversify, the challenges businesses face will only grow more complex. Through its unwavering commitment to tailored solutions, collaborative problem-solving and operational excellence, The Access Bank UK Limited continues to prove that with the right partner, global trade can remain resilient, sustainable and full of possibility.


The Silent Giants: The Critical Role of MSMEs in the Global Future

Micro, Small, and Medium-Sized Enterprises (MSMEs) are more than just business units operating in the shadow of large corporations—they are the beating heart of national economies.

In every region of the world, from dense cities to remote rural communities, MSMEs fuel the engines of growth, job creation, innovation, and social cohesion. For countries striving toward economic resilience and inclusive development, empowering MSMEs is not just an option; it is an economic imperative.

When MSMEs succeed, nations prosper. Across many nations, MSMEs account for 50–90% of all jobs, providing employment opportunities across manufacturing, services, agriculture, digital industries, and retail. Economically, they contribute 40–60% of national GDP in many countries. They are the primary drivers of income generation and poverty reduction; when they thrive, families gain stability, communities prosper, and national development accelerates.

They are the connective tissue of entire value chains. Their activities stimulate local economies, circulate capital through communities, and support the operations of larger enterprises by serving as vital suppliers, subcontractors, distributors, and service providers.

The Engine of Innovation and Stability

MSMEs underpin economic dynamism through their entrepreneurial spirit. Their agility and capacity for rapid experimentation allow them to innovate faster than large corporations. Many of the world’s most transformative technologies and business models originate from small enterprises willing to take risks and enter niche markets.

Furthermore, MSMEs bring diversification. They spread economic activity across sectors and regions, protecting national economies from over-reliance on a handful of industries or large firms. When shocks occur—whether financial crises, geopolitical disruptions, or supply chain breakdowns—diversified MSME ecosystems soften the impact and accelerate recovery.

They also operate where large companies often do not: in rural towns, border communities, and underserved districts. By anchoring regional development and reducing migration pressures, they promote territorial cohesion. Their openness to youth and women entrepreneurship makes them powerful engines of inclusive growth.

And, in case governments need reminding, MSMEs are vital contributors to public finances. Individually, their tax contributions may be modest, but collectively, they represent a significant portion of government revenue, funding infrastructure, healthcare, education, and national development programmes.

The Great Barrier: Why MSMEs Struggle Globally

Despite their importance, MSMEs face an uphill battle when venturing into international markets. Success hinges on a delicate balance of strategic, operational, financial, and regulatory capabilities—areas where small firms are historically under-resourced.

 The Operational Capability Gap Limited organisational capacity hampers international expansion. Exporting is technical; it requires managing documentation, understanding HS codes (product classification), navigating Incoterms, and meeting market-specific labelling rules. Missteps here lead to held shipments, penalties, or rejected goods. Managing these cross-border logistics, customs agents, and foreign buyers requires a bandwidth many MSMEs simply do not have.

 The Financial Void MSMEs consistently name finance as their number one barrier. They face limited access to affordable trade finance or guarantees, leaving them vulnerable to currency volatility and shipping disruptions. Unlike better-capitalised multinationals, they lack the cushion to absorb delayed payments or cash flow shocks.

 The Digital Imperative Digital-enabled MSMEs are the fastest-growing category globally, but their success depends heavily on infrastructure and international interoperability. As the World Economic Forum’s recent white paper, “Empowering Small and Medium-Sized Enterprises through Digital Business Model Innovation,” notes: digital transformation is no longer a competitive advantage—it is a survival strategy.

With the climate transition set to dominate the global agenda (looking toward Davos 2026), MSMEs are heading toward a marketplace where capability, sustainability, and digital readiness will determine who thrives and who disappears.

A Multi-Layered Approach for Resilience

The major question before policymakers is how to strengthen MSME resilience. Collaboration is the strongest multiplier available; it helps MSMEs share risks, reduce costs, and amplify impact. This requires a coordinated effort:

Governments must create enabling environments by simplifying regulations, reducing administrative burdens, and promoting digital infrastructure. They must provide vocational training and open public procurement opportunities to MSME participation.

Large Enterprises must act as anchors. They should integrate small suppliers into their value chains, share technology and market intelligence, and, crucially, ensure fair payment terms to protect MSME cash flow.

Multilateral Organisations must provide guarantees and blended finance for MSME lending. They should support trade facilitation, promote harmonized standards that MSMEs can realistically meet, and offer knowledge platforms to enhance competitiveness.

Regional Trade Blocs (such as AfCFTA, ASEAN, and Mercosur) should rise to the challenge of harmonised global regulation by understanding the five pillars of MSME success: strategy, regulation, operations, finance, and capacity.

The Call to Action: An MSME Trade Council

Despite representing the vast majority of businesses in G20 economies, MSMEs enter the global arena vastly underpowered. While multinational corporations enjoy lobbyists, negotiators, dedicated trade desks, and access to policymakers, MSMEs navigate labyrinthine regulations alone.

The world needs an MSME Trade Council now.

A global champion bold enough is needed to reshape the rules of the game. MSMEs are everywhere yet represented nowhere. This Council would fill the gap, becoming a forceful, coordinated voice to influence international trade rules, AI regulation, and ESG standards.

The MSME Trade Council will:

Engage with the WTO, G20, UN bodies, and development banks to ensure MSME priorities shape policy.

Negotiate global financing platforms, blended finance solutions, and credit guarantees to fix the funding gap.

Coordinate trade missions, global expos, and B2B matchmaking to connect small firms to new buyers.

MSMEs stand at a crossroads internationally. Those who digitise and professionalise will capture new opportunities; those who rely on outdated systems will fall behind. But they cannot do it alone.

What is missing is the structure—and the champion—to bring it all together. This is that moment. This is that mandate. This is the rise of the global MSME movement.

[caption id="attachment_13312" align="aligncenter" width="500"] Author: Lord Waverley[/caption]

By Lord Waverley - If you have any feedback or want additional information please feel free to contact me at chair@smetradecouncil.org.


Sanae Takaichi - Becoming Japan’s First Female Prime Minister

The election of Sanae Takaichi as the President of the Liberal Democratic Party (LDP) in October 2025, and her subsequent appointment as Prime Minister, marks a watershed moment in Japanese political history. At 64, she shattered the decades-old "bamboo ceiling," not only becoming Japan’s first female Prime Minister but also one of the very few post-war Japanese leaders who ascended to the top without the advantage of a political dynasty—a striking contrast to the customary Tokyo political elites. Her remarkable journey from a heavy metal drummer in Nara to the nation's highest office is a testament to her tenacity, political skill, and strong connection with the LDP’s conservative grassroots base, forging a new, distinctly non-establishment path to power.

[caption id="attachment_28144" align="aligncenter" width="900"] Prime Minister of Japan Sanae Takaichi (AP Photo/Eugene Hoshiko)[/caption]

A Life Outside the Inner Circle

Japan’s political landscape has long been dominated by a relatively small group of powerful families and hereditary politicians, particularly within the LDP. Former Prime Ministers like Shinzō Abe, Tarō Asō, and others benefited from multigenerational political networks and inherited seats. Takaichi, however, arrived in the Diet as an outsider, making her ascent all the more notable.

Born in 1961 in Yamatokōriyama, Nara Prefecture, a region steeped in ancient history and far removed from the immediate political hub of Tokyo, Takaichi’s background was solidly middle-class and professional. Her father worked for an automotive firm, and her mother served in the Nara Prefectural Police. This grounding in the realities of a working family, rather than the rarefied air of Tokyo's political kaki (cliques), has often been cited as a source of her perceived authenticity and popular appeal.

Her early life was unconventional for a future conservative leader. A graduate of Kobe University, she pursued interests far from the traditional political track. An accomplished musician, Takaichi played the drums and piano, famously performing in a heavy metal band during her university years. This unusual resume—heavy metal drummer and a motorcycle enthusiast—stands in stark opposition to the staid, conformist image often associated with Japanese political elites.

The Path to the Diet: Independent and Self-Made

Takaichi's formal training for public life came from the Matsushita Institute of Government and Management, an academy founded by Panasonic's Konosuke Matsushita to train future leaders outside the traditional bureaucratic track. Her time there included a stint in Washington D.C., working as a legislative aide for a Democratic Congresswoman, providing her with invaluable exposure to Western politics and governance.

Even after completing her fellowship and working as a newscaster and political analyst for TV Asahi, she did not immediately align herself with the LDP machine. When she first ran for the House of Representatives in the 1993 general election, she was elected as an independent candidate for the Nara at-large district. This initial victory, achieved without the backing of a major party, underscored her ability to connect with local voters based on her own merits and platform.

She later joined the LDP in 1996, eventually aligning herself with the Seiwakai (later the Mori and then the Abe Faction), the party’s largest and most conservative faction. This pragmatic political choice provided the necessary institutional backing, but Takaichi’s foundational political identity remained rooted in her grassroots origins and her unwavering, hard-line conservative principles, which resonated with the core of the LDP’s national membership.

The Abe Connection and a Rising Star

Takaichi's career trajectory gained significant momentum through her close alignment with former Prime Minister Shinzō Abe, a fellow conservative and one of her longest-serving political mentors. They were both first elected in 1993, sharing similar ideological beliefs, particularly a desire for constitutional revision and a more assertive national defence posture. Abe championed her career, appointing her to various influential posts, including Minister for Internal Affairs and Communications and, more recently, Minister of State for Economic Security.

Her repeated appointments to these high-profile roles—often as the first woman to hold them (e.g., first female head of the LDP's Policy Research Council)—established her as a competent administrator and a formidable conservative voice. However, unlike many of her predecessors, Takaichi did not benefit from a powerful political dairi (surrogate) to push her through. She leveraged her political competence and her authentic connection to the conservative grassroots, who viewed her as a figure of strength and clear ideology, a refreshing change from the often-compromised centrists who emerge from behind-the-scenes factional bargaining.

The 2025 Victory: Grassroots over Geopolitics

Takaichi’s path to the LDP presidency was a classic upset, largely powered by the party's rank-and-file members outside the Diet. In the 2025 LDP leadership election, she defeated the younger, more establishment-friendly Shinjirō Koizumi in a runoff. At 64, she was not the youngest candidate, but she successfully channeled the political mood among LDP members and conservative voters disillusioned with the LDP’s handling of recent crises and scandals under her predecessors.

Her victory demonstrated that the LDP's membership base was willing to look beyond hereditary privilege and establishment consensus, opting instead for a leader with unflinching conservative convictions and a compelling, self-made narrative. Playing up her background—a "woman of Nara" who grew up outside the Tokyo bubble—she effectively contrasted her life with that of the blue-blooded Koizumi, whose name alone symbolised political heritage.

This triumph—the first woman to lead the LDP and, by extension, become the Prime Minister—is a powerful narrative of a political outsider breaking the most stubborn of ceilings. It is a win for the self-made politician over the scions of the Diet, signalling a possible, albeit cautious, shift in the LDP’s internal power dynamics, demanding a leader with conviction whose story resonates far beyond the polished halls of Kasumigaseki. Takaichi, the heavy metal drummer from Nara, now wields the baton of power, a profound symbol of change in a nation famously resistant to it.


Decoding Sanae Takaichi’s Unyielding Conservatism

Sanae Takaichi's rise to become Japan’s first female Prime Minister has inevitably earned her a sobriquet that evokes both admiration and trepidation: "The Iron Lady of Japan."

This comparison to former British Prime Minister Margaret Thatcher is no accident; it is one Takaichi openly encourages, viewing the iconic British leader as a revered role model. The label reflects not just her gender in a male-dominated political sphere but, more crucially, her uncompromising, hard-line conservative ideology and her reputation for resolute, unyielding political resolve.

The Political and Personal Parallels to Thatcher

The comparison between the two "Iron Ladies" rests on several distinct pillars of philosophy and personal style:

Unflinching Ideology: Just as Thatcher was a champion of small government and monetarism in Britain, Takaichi is the standard-bearer for the right-wing nationalist wing of the Liberal Democratic Party (LDP). Her political stances are clearly defined and rarely waver. She is a hawk on security, a proponent of muscular fiscal policy, and a staunch defender of traditional Japanese social values.

Political Outsider Status: While Thatcher came from a modest background as a grocer's daughter, Takaichi, too, lacks the typical aristocratic or dynastic connections of many of her LDP colleagues. Both women achieved the highest office through sheer personal drive and an appeal that cut across established political elites, relying instead on the party's conservative grassroots base.

Decisive and Uncompromising Leadership: Takaichi is known for a tenacious work ethic and a take-no-prisoners approach to policy debates. After her LDP presidential victory, she famously declared her intent to "scrap my work-life balance and work and work and work and work and work," echoing the image of a leader entirely devoted to the national cause, a trait that defined the Thatcher era.

This admiration is not merely rhetorical; Takaichi has been observed to emulate the Iron Lady’s style, sometimes wearing clothing and accessories that invoke the former British premier.

The Pillar of Hard-Line Conservatism

Takaichi's policies and political philosophy firmly place her at the right end of Japan's political spectrum, making her an ideological successor to her mentor, the late Shinzō Abe. Her conservatism is multifaceted, encompassing national security, economic strategy, and social tradition.

Security Hawk and Nationalist

On security and foreign policy, Takaichi’s views are perhaps her most hard-line:

Constitutional Revision: She has long advocated for the revision of Article 9 of Japan's pacifist Constitution to explicitly codify and strengthen the status of the Self-Defense Forces (SDF), pushing for a more assertive military role for Japan in the region.

Defence Spending: Takaichi fully supports the goal of increasing Japan's defence spending to 2 percent of GDP, aligning it with NATO standards—a clear response to the perceived security threats posed by China and North Korea.

Historical Issues: Her regular visits to the Yasukuni Shrine, which honours Japan’s war dead, including convicted Class A war criminals, have drawn consistent, sharp condemnation from Beijing and Seoul. This stance is seen as a rejection of Japan's post-war apology diplomacy and a firm embrace of historical revisionism, further cementing her nationalist credentials.

Economic Interventionist (Sanaenomics)

While Thatcher championed fiscal austerity and privatisation, Takaichi's economic conservatism, often dubbed "Sanaenomics" or "New Abenomics," is a more interventionist version suited to Japan's unique challenges. She advocates for:

Fiscal Expansion: Proactive, massive government spending, particularly "crisis management investment" in strategic sectors like semiconductors, AI, biotechnology, and defence, often proposing to fund this through bond issuance, raising concerns among fiscal moderates.

Economic Security: She is a fervent champion of economic sovereignty, proposing tighter restrictions on foreign investment and stricter rules to protect Japanese technology from being siphoned off by foreign powers.

Social Traditionalist

Takaichi's social conservatism contrasts sharply with the "progressive" optics of her gender breakthrough. She has consistently opposed:

Same-Sex Marriage: Viewing it as a deviation from traditional Japanese family structures.

Separate Surnames: She opposes reviewing the law that requires married couples to share one surname, supporting the preservation of traditional marriage norms.

Female Imperial Succession: Takaichi maintains that imperial succession should be strictly limited to the male line.

A Paradox of Progress

The "Iron Lady of Japan" thus presents a fascinating political paradox. Her historic victory as the first female Prime Minister breaks the country's highest "bamboo ceiling," yet she is no feminist champion in the liberal sense. Instead, her rise is a reflection of the LDP’s shift to embrace a powerful, clear-cut conservative agenda to energise its base, often by co-opting the energy of rising right-wing populist movements.

Her uncompromising style, while appealing to the party faithful, is simultaneously a source of political turbulence, having already been cited as a major factor in the collapse of the LDP's long-standing coalition with the dovish Komeito party. Like her British inspiration, Sanae Takaichi is poised to be a deeply polarising figure whose resolute conviction will define—and likely divide—Japan’s future.


'Sanaenomics': The Abenomics 2.0 Shift from Deflation to Security

The economic platform of Prime Minister Sanae Takaichi, quickly dubbed 'Sanaenomics', is not a radical break but a clear continuation and evolution of the policies pioneered by her mentor, Shinzō Abe. Where Abenomics was primarily an aggressive strategy to combat decades of deflation, Sanaenomics is positioned as an expansionary, pro-growth agenda tailored to a new era of cost-push inflation and heightened geopolitical insecurity.

The Continuity of the 'Three Arrows'

Takaichi's plan maintains the conceptual structure of Abenomics, often framed around 'three arrows', but with a significant shift in emphasis:

Monetary Easing: Like her predecessor, Takaichi favours continued loose monetary policy by the Bank of Japan (BOJ). She believes the current inflation, driven largely by import costs and a weak yen, is "cost-push" rather than the "demand-pull" inflation necessary for confirming Japan has permanently escaped its deflationary trap. Her cautious stance is seen as pushing back against an immediate, aggressive interest rate hike by the BOJ, although she has stated the central bank retains autonomy in choosing policy tools.

Expansionary Fiscal Policy: This is the most pronounced aspect of Sanaenomics, mirroring the first arrow of Abenomics but with an even greater push for government spending. Takaichi advocates for a "responsible proactive fiscal policy" and has indicated a willingness to issue deficit bonds to fund crucial measures.

Structural Reform and Investment: While Abe struggled with the "third arrow," Takaichi is reframing it entirely. Her focus is less on deregulation and more on state-backed "crisis management investment" in strategic areas vital for national and economic security.

The New Economic Core: Security-First Spending

The defining feature of Sanaenomics is the merging of economic policy with national security. This goes beyond mere defence budgets and aims for self-sufficiency and technological sovereignty in an increasingly volatile world.

This heavy reliance on state-directed spending, especially in technology and defence, caused the Nikkei 225 to surge and the Yen to weaken immediately following her election, as markets factored in higher inflation expectations and prolonged monetary easing.

Fiscal Policy: Populist Relief vs. Fiscal Discipline

Takaichi's economic plan is designed to directly address the cost-of-living crisis—the key domestic issue that has undermined the LDP's support. She plans to put money back into households' hands through:

Refundable Tax Credits: A mechanism that acts as a form of "negative income tax," providing cash payments to low-income households that don't earn enough to benefit from standard tax cuts.

Tax Relief: Abolishing the provisional gasoline tax rate and increasing the basic income tax deduction.

Wage Policy: She prefers a 'high-pressure economy' (maintaining tight macro supply-demand conditions) to naturally push up wages, rather than the more direct government-mandated minimum wage increases favoured by her predecessors. Her philosophy is focused on rewarding the working middle class.

However, this push for expansive fiscal policy runs a high risk of stoking inflation and further ballooning Japan's already immense national debt, creating tension with the Ministry of Finance's (MoF) drive for fiscal discipline.

Relationship with the Bank of Japan (BOJ)

Perhaps the most controversial aspect of Sanaenomics is Takaichi’s assertive stance toward the central bank. She has explicitly stated that the government bears responsibility for both fiscal and monetary policy, sparking concern over the BOJ's independence.

While she acknowledges the BOJ's autonomy in selecting tools, her assertion that the direction of policy should be coordinated with the government is seen by critics as a direct attempt to lean on the central bank to delay any further rate hikes. This is crucial as the BOJ is currently navigating the tricky path of normalising rates after years of ultra-loose policy—a path Takaichi's expansionary fiscal impulse makes significantly more challenging. In effect, Takaichi is demanding BOJ compliance to keep the nominal interest rate below the nominal growth rate, a key condition for managing Japan's debt pile.

An Unflinching Trajectory: Assessing the Likely Transformation of Japan under Takaichi

Sanae Takaichi’s premiership, if she can navigate the immediate challenge of forging a working parliamentary coalition, is unlikely to usher in a new era of reformist politics. Instead, it is poised to accelerate a major ideological shift already underway, moving Japan towards a more nationalist, security-driven state that is prepared to take bolder, more divisive steps on the global stage. Her tenure will be a test of whether hardline conservatism can address the deep-seated economic and demographic vulnerabilities of modern Japan.

Foreign Policy: The Rise of an Assertive Japan

Takaichi's impact will be most keenly felt in foreign and security policy, where she promises a departure from the measured pragmatism of recent predecessors:

Constitutional Revision (Article 9): Takaichi will use the full weight of the Prime Minister’s office to push for the formal revision of the pacifist Article 9 of the Constitution. While Shinzō Abe laid the groundwork, Takaichi’s unwavering commitment to the issue makes it a central pillar of her mandate. If successful, this would be a watershed moment, fundamentally redefining Japan’s self-defence capabilities and its role in global security.

Security-First Diplomacy: The commitment to increase defence spending to 2 percent of GDP or more is non-negotiable. This will translate into large-scale investment in counter-strike capabilities and advanced military hardware, significantly enhancing Japan's deterrent posture.

Regional Tensions: As a renowned China hawk and a strong supporter of Taiwan, Takaichi's diplomacy is likely to be assertive and confrontational. Her historical revisionism, particularly her stance on the Yasukuni Shrine, risks undoing the recent, fragile thawing of relations with South Korea and will undoubtedly draw ire from Beijing, leading to a potential spike in regional tensions and military 'testing the waters' by adversaries.

US Alliance as a Cornerstone: Despite the potential volatility of the Trump administration, Takaichi's focus on burden-sharing and her own hardline stance make her an ideologically compatible partner for Washington. She will strengthen the US-Japan alliance and push for deeper multilateral cooperation through blocs like the Quad.

Domestic Economy: The Sovereignty-Growth Trade-Off

On the domestic front, the transformation under 'Sanaenomics' will be an experiment in boosting growth through targeted state intervention, with two key long-term implications:

Securitised Economy: As former Minister for Economic Security, Takaichi will permanently embed security concerns into economic policy. Expect massive state-backed investments in strategic technologies (semiconductors, AI, nuclear power) aimed at achieving national self-sufficiency and protecting supply chains. This represents a partial retreat from free-market globalisation towards a more state-capitalist, national-interest model.

Fiscal Risk and Inflation: Her expansionary fiscal policy, coupled with her pressure on the Bank of Japan to delay rate hikes, poses a significant risk to Japan’s already precarious financial situation. While it may provide short-term relief to households and a boost to the stock market, the long-term danger is that it locks Japan into a permanent cycle of debt-fuelled spending and a persistently weak yen, exacerbating imported inflation and undermining the fragile push for fiscal discipline by the Ministry of Finance.

Society and Culture: A Paradox of Modernity

Takaichi's election as the first female Prime Minister is a historic symbol, yet her conservative social agenda suggests she will not be a torchbearer for broad liberal social transformation:

Limited Gender Reform: While she has pledged to appoint more women to her cabinet, her opposition to gender equality reforms such as legalising separate surnames for married couples and female imperial succession means that the underlying patriarchal norms of Japanese society and the LDP will remain largely unchallenged. Her premiership embodies the paradox of descriptive representation without substantive reform.

Immigration Hardening: A crucial area where Takaichi promises a definite shift is immigration. Capitalising on populist sentiment, she has called for tighter restrictions and stricter enforcement against overstayers and illegal migrants. This stance risks further complicating Japan’s chronic labour shortage, a demographic time-bomb that requires increasing, not restricting, foreign workers. Instead of facilitating long-term integration, her policies may intensify the divide between an aging Japanese core and the foreign workforce it desperately needs.

In essence, Sanae Takaichi’s likely transformation of Japan is one of hardening resolve—nationally, economically, and ideologically. She is poised to be a pivotal figure who consolidates the nationalist, conservative legacy of Shinzō Abe, seeking to forge a more assertive and resilient Japan, even if it means sacrificing internal consensus and international stability with key neighbours in the process. The question for Japan is whether her Iron Lady conviction can overcome the structural headwinds and political instability of a fractured Diet.


Accenture on Saudi Arabia's AI Revolution: Leading the Next Wave of Enterprise Transformation

As the global technology landscape undergoes a seismic shift with the rise of agentic AI, Saudi Arabia stands at a pivotal crossroads. Accenture’s Technology Vision 2025 report highlights how enterprises worldwide are embracing this new paradigm—and the Kingdom is uniquely positioned to leverage these advancements to accelerate its ambitious Vision 2030 goals.

[caption id="attachment_28159" align="aligncenter" width="900"] By Omar Boulos Accenture’s CEO of Middle East & Africa[/caption]

Saudi Arabia is investing heavily in artificial intelligence and automation to enhance productivity across sectors. In March 2024, the government announced a $40bn fund dedicated to AI investments aimed at optimising operations, reducing waste, and strengthening decision-making. According to Accenture’s proprietary insights, generative AI could boost Saudi Arabia’s gross domestic product by approximately $42.3bn. At an aggregate level, AI is expected to augment or automate nearly one-third of all jobs, with highly skilled roles undergoing radical transformation in productivity, agility, and collaboration.

The Kingdom, however, is only just beginning. The transition from traditional AI to agentic systems represents more than an incremental upgrade—it is a fundamental reimagining of how technology can serve business objectives. Agentic AI can autonomously perform complex tasks with minimal human oversight, creating vast new possibilities for Saudi enterprises. Currently, one in three companies is pivoting towards innovating with agentic AI, and those that move swiftly stand to gain a significant competitive edge.

In the Kingdom’s rapidly diversifying economy, the integration of these systems is not a luxury but a strategic necessity. For example, oil giant Saudi Aramco has begun deploying agentic AI solutions to optimise extraction processes, predict equipment failures, and manage complex supply chains with unprecedented efficiency. Early implementations have already shown maintenance cost reductions of up to 30 percent, alongside measurable improvements in safety performance.

Agentic systems and composable digital cores are transforming how businesses interact with technology and what users expect from it—introducing entirely new enterprise considerations. For instance, 88 percent of executives in Saudi Arabia express concern that LLMs and chatbots could homogenise brand voices. Yet 94 percent agree this challenge can be addressed by embedding personified AI experiences infused with a brand’s unique culture, values, and tone. Leading institutions, such as the Saudi National Bank, are already pursuing this approach. The bank is leveraging AI-augmented functionality to develop innovative financial products that respond to Saudi Arabia’s distinct market characteristics—analysing datasets that include consumer behaviour, religious requirements for Shariah-compliant finance, and global trends to identify underserved niches and design tailored solutions.

The healthcare sector, too, is being reshaped by AI augmentation. Physicians at King Faisal Specialist Hospital now work alongside AI systems that not only relieve administrative burdens but actively support diagnostic accuracy, treatment planning, and medical research—all while respecting cultural sensitivities that are integral to healthcare delivery in the Kingdom.

Moreover, 86 percent of Saudi executives believe robots that collaborate with people and continuously learn from these interactions will increase trust and teamwork. This sentiment could soon pave the way for robotic surgical assistants to handle simple procedures, signalling a new era of human-machine cooperation in medicine.

For Saudi enterprises, the strategic implementation of agentic AI represents a potential leapfrog opportunity. Rather than incrementally modernising legacy systems, visionary organisations are rebuilding their operating models around AI capabilities from the ground up.

The journey towards AI-powered transformation, however, is not without challenges. As the Accenture report notes, organisations globally are grappling with the ethical dimensions of AI deployment, and Saudi enterprises face these same issues—alongside additional considerations of cultural alignment. The Kingdom has responded proactively. The Saudi Data and AI Authority (SDAIA) has developed comprehensive frameworks for responsible AI use, balancing innovation with ethical governance. These guidelines are helping enterprises navigate the complex terrain of AI implementation while remaining consistent with Saudi Arabia’s cultural and social context.

Equally important is the development of human capital capable of collaborating with these systems. Through initiatives like the Saudi Digital Academy, the Kingdom is investing heavily in technology education to cultivate a new generation of professionals prepared to work with AI rather than merely operate it.

A key priority for 81 percent of business leaders in Saudi Arabia—closely aligned with the global average of 80 percent—is ensuring a positive relationship between people and AI, preventing the transformation journey from being undermined by automation anxiety. Communicating clearly, involving employees early, and building trust will be vital. Establishing a virtuous cycle in which humans and AI co-evolve to reimagine business capabilities will be central to scripting the next chapter of Saudi Arabia’s remarkable transformation story.


2025: When Markets Made Renewables Dispatchable

For years, the energy transition was argued as much on ideology as on engineering. Supporters framed renewables as a moral imperative; critics framed them as an expensive, unreliable add-on that would always need a parallel fleet of fossil backup.

In 2025, the argument shifted. Not because politics softened, but because the economics did. Battery storage crossed a cost threshold that turns low-cost solar and wind into dependable capacity in more markets and more hours of the day. Once that happens, the role of gas peakers - and even the notion of gas as a long-term ‘bridge’ - starts to look less like prudence and more like a legacy assumption.

The Tipping Point: Storage at $65/MWh

Late in 2025, Ember published auction-based analysis showing a levelised cost of storage (LCOS) of about $65/MWh for utility-scale battery projects in markets outside China and the United States (as of October 2025). At the same time, it estimated an all-in, grid-connected system cost of roughly $125/kWh for four-hour (and longer) projects in those markets.

This matters less as a headline number than as a practical consequence: storage is no longer ‘premium’ infrastructure reserved for demonstration projects. At these levels, batteries can arbitrage the solar curve at scale - charging when energy is abundant and cheap, and discharging into evening peaks - and still clear competitive returns under auctioned contracts.

From Scarcity Rent to Squeezed Margins

Gas peakers were built for exactly those evening peaks. Their business model relies on scarcity: a relatively small number of operating hours, offset by high prices when the system is tight. Cheap storage attacks that scarcity directly. As batteries take peak-shaving duty, the spread between off-peak and peak prices compresses, and the revenue spikes peakers need to earn back capital become less frequent and less extreme.

For utility CFOs and infrastructure investors, the result is not merely ‘more competition’ - it is a change in asset character. A peaker valued as a predictable, yield-like cashflow stream starts to look like a volatile option whose premium is being competed away.

Proof on the Grid: California’s Evening Peak

The clearest place to watch this play out is California. According to the U.S. Energy Information Administration (EIA), electricity generation in California from January through August 2025 was 140.9 billion kilowatt-hours (BkWh). Utility-scale solar produced 40.3 BkWh over that period - nearly double the 22.0 BkWh recorded in the same period of 2020.

Over the same January-August window, natural gas supplied 45.5 BkWh, around 18% less than in 2020. The shift is most visible in the net-peak hours: EIA data show batteries discharging an average of 4.9 GW between 5 p.m. and 9 p.m. in May and June 2025, displacing gas during the hours it historically dominated. (CAISO changed its natural-gas data collection methodology in December 2023, which affects some older hourly comparisons; EIA flags this in its note.)

California is not ‘typical’, but it is instructive. Once storage is deployed at meaningful scale, it changes the dispatch stack, not just the emissions profile. It converts surplus midday solar into a resource that can perform during the system’s most valuable hours.

The Long Game: Multi-day Storage and the Dunkelflaute

Lithium-ion batteries are strong at shifting energy across hours. The harder problem is multi-day and seasonal reliability - the sort of weather-driven lulls often described in Europe as a ‘Dunkelflaute’ (a period of low wind and low solar). That challenge has been the last refuge of the argument that fossil plants must remain the default provider of firm capacity.

In 2025, long-duration energy storage (LDES) moved from promise toward credible project pipelines. Form Energy’s iron-air technology is a leading example: in Maine, an 85 MW / 8,500 MWh multi-day storage project has been advanced under the ‘Power Up New England’ initiative, supported by a federal grant. The significance is not that a single project solves resource adequacy, but that multi-day storage is becoming an investable category rather than a science project.

LDES will not eliminate the need for firm capacity everywhere. Transmission constraints, hydrology, and extreme demand events still matter. But once multi-day storage is bankable and repeatable, it reduces the amount of fossil ‘insurance’ a system needs to carry - and it does so with assets that can be sited and built far faster than new thermal plants.

Supply-chain Realism: Sodium as a Hedge

2025 also brought a more practical conversation about supply chains. Institutional capital has become wary of concentrating the storage build-out in a narrow set of minerals and processing geographies. That has created room for alternative chemistries where the value proposition is less about being ‘better than lithium’ and more about being ‘good enough’ at lower cost and with different inputs.

Sodium-ion is emerging as one such hedge. In late 2025, Peak Energy announced a phased agreement to supply up to 4.75 GWh of sodium-ion systems to Jupiter Power for deployments between 2027 and 2030. Deals of that scale signal a willingness to diversify technology risk, and they underscore that storage is becoming an infrastructure class with multiple viable supply routes.

The Capital Shift: Follow the Money

When solar, wind and storage are not just cheap energy but reliable capacity, capital begins to behave differently. The transition moves from a ‘push’ phase - driven by subsidies, mandates and ESG pressure - to a ‘pull’ phase driven by cost of service and bankable reliability.

The International Energy Agency’s World Energy Investment 2025 outlook estimates total energy investment reaching around $3.3 trillion in 2025, with roughly $2.2 trillion directed to renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification. The same outlook highlights rapid growth in storage investment over the past decade, with battery storage investment expected to reach the tens of billions of dollars in 2025.

At the same time, the cost of capital for new fossil projects is rising. Lenders and equity investors increasingly price transition risk into thermal cashflows: if storage keeps falling in cost, a new peaker may be undercut before it has repaid its debt. In that world, the relevant question is not whether gas can still run - it is whether new-build gas can still underwrite.

Conclusion: The End of the ‘Bridge’ as Default

Natural gas will not vanish overnight. But 2025 made one thing clearer: in more jurisdictions, the cheapest path to reliability is becoming a portfolio of wind, solar and storage, rather than renewables plus a growing set of fossil backups.

For investors, the message is straightforward. Storage has crossed from ‘adjacent’ to ‘structural’. Portfolios predicated on the longevity of scarcity-priced peaking assets are fighting the tape. The next decade of power-system returns is likely to accrue to flexible assets that can store, shift and firm clean generation - and to the networks that connect them.

Sources

Ember (as reported by Electrek, 12 Dec 2025): analysis of LCOS (~$65/MWh) and system costs (~$125/kWh) as of October 2025.

S. Energy Information Administration (EIA), Today in Energy (24 Nov 2025): ‘Natural gas use for electricity in California falls as solar generation rises’ (Jan-Aug 2025 generation, solar growth, gas decline; evening battery discharge averages).

Governor of Maine / Office of Governor Janet Mills (16 Aug 2024): ‘Power Up New England’ announcement including Form Energy’s 85 MW / 8,500 MWh iron-air project and federal grant support.

Peak Energy (12 Nov 2025): ‘Peak Energy Signs 4.75 GWh Contract with Jupiter Power’ (phased delivery 2027-2030).

International Energy Agency (IEA), World Energy Investment 2025 (executive summary and report): 2025 total energy investment and storage investment trendlines.

Lazard, Levelized Cost of Energy+ (June 2025): comparative ranges for new-build generation and storage economics (context for peakers vs renewables-plus-storage).


The Cost Curve That Is Squeezing Coal and Gas

By the end of 2025, the energy transition’s most persistent objection — that renewables cannot be relied upon when the sun sets and the wind drops — looked far less convincing. Not because politicians mandated a new outcome, but because the economics shifted underneath the grid.

In October, the levelised cost of storage (LCOS) in major markets outside China and the United States fell to roughly $65/MWh, according to Ember’s December 2025 analysis. LCOS varies by duration, financing and local conditions, but the direction is clear: storage is becoming cheap enough to move large volumes of low-cost renewable electricity into peak hours. For fossil generators, the danger is not a single regulatory event. It is the slow, compounding collapse of their pricing power.

This is the point where the energy transition becomes less about subsidies and more about system maths. When the grid can shift cheap midday solar into the evening, “reliability” stops being a fossil advantage. It becomes a service that can be provided by the flexibility stack — batteries first, and then other long-duration options as they mature.

The $65/MWh Inflection

A $65/MWh LCOS milestone matters because it changes the profitability of time-shifting. In many markets, it becomes economically compelling to charge batteries when solar and wind push wholesale prices towards zero — or below — and discharge when demand peaks. The value is not only the average cost of energy; it is the shape of prices across the day and the ability to capture the right hours.

That shift increasingly compresses the revenue model of thermal plants. Gas and coal were not built to compete against near-zero marginal cost generation plus arbitrage. They were built to run for long stretches, recovering fixed costs through high utilisation. The more the grid favours renewables and storage, the more thermal plants are forced into a narrower role — fewer running hours, more starts and stops, and greater reliance on external support mechanisms.

Clean Power’s Cost Advantage Is Now Structural

The broader cost curve remains decisively in favour of renewables. In its latest assessment, IRENA reports that 91 percent of newly commissioned utility-scale renewables in 2024 produced electricity cheaper than the cheapest new fossil alternative, helping avoid $467bn in fossil fuel costs that year. Renewables are no longer “competitive”; they are increasingly the default choice for new capacity in most markets.

Storage is on a similarly steep decline. IRENA notes that fully installed battery storage project costs fell 93 percent between 2010 and 2024, from $2,571/kWh to $192/kWh, as outlined in its analysis of storage as a bridge between supply and demand gaps in renewable systems (IRENA). Meanwhile, BloombergNEF’s 2025 survey found average lithium-ion pack prices fell another 8 percent in 2025 to $108/kWh, with stationary storage packs reaching $70/kWh (BloombergNEF).

In the United States, the widening gap is evident in Lazard’s June 2025 LCOE+ work, summarised in Reuters coverage. New utility-scale solar costs are cited in a range of roughly $38–$78/MWh, while new gas combined-cycle plants are placed at roughly $48–$109/MWh. The overlap is not the point; the trajectory is. Renewables are improving with scale and learning curves. New gas is being pulled upwards by higher capital costs and increasingly complex risk premia.

The Negative-Price Trap

Energy debates often fixate on average costs. The more decisive battleground is hourly pricing — who captures value when prices are high, and who is forced to operate when prices are low.

Wind and solar have near-zero marginal costs. When abundant, they push wholesale prices down, increasingly to zero or negative levels. Thermal plants cannot live comfortably in that world because they still face fuel costs, variable maintenance, and physical constraints that make cycling expensive.

Batteries, by contrast, thrive on volatility. They charge when prices are low — sometimes being paid to absorb excess generation — and discharge into peaks. As storage costs fall, batteries become progressively more aggressive competitors for the very hours that historically subsidised gas.

This is where the structural squeeze intensifies. Gas plants have long relied on peak periods to earn a disproportionate share of their revenue. When batteries begin to dominate those peaks, gas loses the premium hours while still being exposed to low-priced hours. Run-times fall, revenues thin, and fixed costs must be recovered over fewer megawatt-hours. The unit economics deteriorate not because the plant “stops working”, but because the market stops rewarding its operating profile.

The result is an increasingly familiar pattern: thermal assets that remain physically useful but become economically fragile, surviving through capacity payments, reliability contracts, or other forms of external support. The grid may still require back-up capacity during rare stress events, but the old logic — that “always-on” automatically means “commercially viable” — is fading.

Daily Volatility Is Being Solved; Seasonal Volatility Is Not

Lithium-ion economics have made daily arbitrage increasingly straightforward: shifting solar from noon to evening is now routinely viable in leading markets. The harder problem is seasonal and multi-day variability.

The International Energy Agency has explored the challenge in its work on managing seasonal variability. In most markets, it is not economic to build enough lithium-ion capacity to cover a fortnight-long winter lull. That creates a distinct “insurance” market — one where different technologies, contracting structures and policy tools will matter more than day-to-day optimisation.

Hydrogen is often positioned as part of this strategic reserve. Its core attraction is scale: it can store large volumes over long periods. Its limitation is efficiency. Power-to-hydrogen-to-power routes are materially less efficient than batteries, making hydrogen more credible as a rarely used backstop than an everyday balancing tool. It is insurance: expensive, but valuable in the deepest gaps.

Between daily batteries and seasonal backstops, technologies are emerging to cover the “multi-day” middle. Form Energy’s iron-air systems, designed for multi-day discharge, are being deployed in the United States, including an 85MW project in Maine announced via the State of Maine’s programme update. Sodium-ion is also edging into utility conversations, with Peak Energy announcing a phased agreement with Jupiter Power covering up to 4.75GWh of supply, as detailed in Peak’s announcement and reported by pv magazine.

The picture is not a single winner, but a layered flexibility stack — short-duration batteries for the daily cycle, multi-day solutions for weather systems, and strategic backstops for rare seasonal extremes.

California’s Dispatch Stack Is Already Changing

California offers a real-world view of how this transition unfolds on a large, complex grid. In 2024, renewable resources — including hydro and small-scale solar — supplied 57 percent of California’s in-state electricity generation, according to the US Energy Information Administration’s state profile.

Momentum accelerated in 2025. In the first eight months, utility-scale solar generation reached 40.3bn kWh, nearly double the same period in 2020, while natural gas generation fell by about 18 percent versus the same period in 2020, according to an EIA Today in Energy analysis. The more telling change is the evening peak. Battery generation during peak evening hours rose from under 1GW in 2022 to an average of 4.9GW in May–June 2025, per the same EIA analysis. That is storage beginning to claim the grid’s most valuable hours.

Capital Is Following the Curve

Investment patterns are now reflecting the economics. The IEA projects global energy investment will reach $3.3tn in 2025, with $2.2tn directed to clean-energy technologies, as set out in its World Energy Investment 2025 report and summarised in Reuters coverage. Renewable investment data point in the same direction, with BloombergNEF reporting global investment in new renewable energy development of $386bn in H1 2025, up 10 percent year-on-year (BloombergNEF).

This is not simply an ethical reallocation. It is capital moving towards technologies with declining costs and expanding addressable markets — and away from assets facing a tightening economic corridor.

A Grid That Has Already Begun to Re-Optimise

Fossil generation will not vanish overnight. Gas, in particular, is likely to remain online in many markets as a backstop for stress events and longer-duration gaps that batteries cannot yet bridge economically. But the distinction between physical necessity and economic viability has rarely been clearer.

The old fossil business model depended on scarcity pricing and high utilisation. The new system is re-optimising around low-marginal-cost renewables supported by flexible storage and, increasingly, longer-duration options. Once that re-optimisation begins, it becomes self-reinforcing: renewables depress average prices, batteries monetise volatility, and thermal plants are pushed towards infrequent use — exactly the operating profile that is hardest to finance without explicit support.

The decisive question is no longer whether the transition happens. It is who builds fast enough to capture the upside — and which economies are left defending an “always-on” model that the cost curve has already begun to price out.


Rolex vs Watch Flippers: How Certified Pre-Owned Became a Weapon of Pricing Power

Rolex has finally confronted the watch flipper economy — not by flooding the market or cutting prices, but by tightening control over trust in a resale ecosystem awash with counterfeits and speculation. The brand’s Certified Pre-Owned programme has become less a commercial sideline than a strategic tool: reinforcing credibility, resetting the value narrative, and preserving the aura that keeps demand structurally ahead of supply.

For years, Rolex has lived with an uncomfortable paradox. It sells roughly 1.2 million watches a year and commands an estimated 32 percent share of the global luxury watch market, yet demand continues to exceed supply. That imbalance has not merely lifted prices; it has fuelled a parallel economy of flippers, grey-market dealers and counterfeiters — all trading on the Rolex name, often with minimal accountability.

In that environment, resale prices function as a global scoreboard. They signal desirability, but they also broadcast volatility, distort perceived value, and invite criminal imitation. For a brand built on durability and discretion, the reputational risk is not theoretical. It is systemic. Rolex’s response was not to wage war on the secondary market, but to professionalise it.

Three years ago, Rolex launched its Certified Pre-Owned (CPO) programme as the global market for used Swiss watches approached $25bn annually. The timing was deliberate. Pre-owned had matured from informal trade into a structured asset class, increasingly driven by investment logic as much as personal taste. By stepping into the resale channel, Rolex was acknowledging a reality many luxury brands have avoided: secondhand is no longer a footnote. It is a pillar.

On paper, the programme looks like a commercial opportunity. WatchCharts estimates it will generate more than $500m in sales in 2025. Watches of Switzerland has told investors that certified pre-owned Rolex models are now its second-biggest seller. Yet the economics are not the core objective, and Rolex appears content for the initiative to be only marginally profitable — or even break-even — by design.

The real prize is pricing power, expressed through trust. Buyers are willing to pay about 28 percent more for a used Rolex that has been authenticated and serviced to Rolex standards, backed by a two-year warranty. In certain models, the premium is far larger. A new GMT-Master II “Pepsi” retails at roughly $12,150, trades around $22,750 on resale sites, and clears closer to $26,750 when Rolex-certified. The delta is not about metal or mechanics. It is about assurance — and the brand has monetised assurance without ever holding the inventory.

That last point is the strategic elegance. Rolex remains deliberately hands-off. Authorised dealers source the watches, authenticate and service them according to Rolex requirements, and set the resale price. Rolex’s role is certification: a seal of authenticity, plus the warranty that turns a risky purchase into a bankable one. Dealers capture the economics. Rolex captures something more valuable: the right to define what “real” looks like in the market.

This structure also avoids the pitfalls that have tripped up other maisons. Brands that attempt to police resale pricing directly risk backlash, accusations of manipulation, and the operational burden of managing inventory. Rolex sidesteps those hazards. It adds friction for counterfeiters and speculators while insulating itself from inventory risk and reputational blowback. It is influence without exposure.

Zoom out and the strategic logic sharpens. Rolex is protecting the long-term integrity of its brand in an era where digital marketplaces, social media and price-tracking platforms have made resale values instantly visible. When secondary prices rise too far above retail, the brand risks appearing inaccessible and gamified. When counterfeits proliferate, the brand risks dilution. Rolex’s CPO programme does not eliminate these pressures, but it channels them — shifting power back towards authorised networks and away from anonymous intermediaries.

The broader implication is not limited to watches. Luxury brands are discovering that resale is now too large to ignore — and too consequential to leave unmanaged. If buyers will pay a premium for a guaranteed Rolex, they will likely do the same for other high-value goods where authenticity, provenance and condition are central to value. The lesson is not that luxury should “embrace flippers”. It is that luxury should make trust the product.

Rolex has offered a blueprint: squeeze out counterfeiters, stabilise perception, and extract a premium from certainty — all without cutting prices or manufacturing more supply. In the long run, it is not the speculator who wins. It is the brand that controls the definition of authenticity.


The Venezuela Trade: Markets Move Faster Than Politics

The overnight capture of Nicolás Maduro has jolted geopolitics — and, almost immediately, reset the investment debate around Venezuela’s reopening. For global capital, the question is no longer whether a “reconstruction trade” could exist, but what it would take for it to be investable.

In the first days of January 2026, Venezuela shifted from chronic political risk to acute event risk. US airstrikes in and around Caracas and the reported capture of President Nicolás Maduro and his wife, Cilia Flores, were followed by remarks from President Donald Trump suggesting the United States would “temporarily take control” of Venezuela’s government until a “safe” transition could be arranged.

For investors, the speed of the narrative matters almost as much as the narrative itself. A regime long treated as immovable has suddenly become contingent — and in markets, contingency is optionality. Within hours of the news cycle hardening, conversations that had been confined to sanctions compliance teams and distressed-debt specialists widened to include energy executives, frontier-market allocators, and infrastructure capital. Venezuela’s “trade” is not a single bet; it is a stack of scenarios with dramatically different outcomes.

A “Reopening” with Real Assets — and Real Scars

Venezuela is not a blank slate in the way that some post-conflict economies are. It is, rather, a country that has been economically isolated for years while still sitting atop strategic assets. The oil and gas system is degraded, but not imaginary; the ports and pipelines exist; the country remains embedded — at least physically — in global commodity supply chains.

That distinction is crucial. Reconstruction in a place with no operating backbone can take a decade before it is financeable at scale. Reconstruction in a place with underutilised assets can move faster, provided the political and legal architecture turns from hostile to investable. That “provided” is doing a lot of work.

The Trump administration’s public framing has leaned heavily on energy infrastructure and the claim that restoring output is in the strategic interest of the United States. In remarks reported by NPR, Trump argued that US oil companies would “fix the badly broken infrastructure” and get oil “flowing” again, while US officials pointed to indictments and longstanding allegations against Maduro’s circle.

Chevron First — and Everyone Else Watching

If Venezuela genuinely reopens, the first-order beneficiaries are unlikely to be the boldest speculators. They will be the firms already inside the perimeter, already operating under licences, already managing local risk. In the US context, that begins with Chevron, the only US oil major with an active operational footprint in Venezuela in recent years. In the immediate aftermath of the strike and capture reports, Chevron’s public posture was cautious, emphasising employee safety and asset integrity rather than opportunity.

Others will watch before they move. ExxonMobil and ConocoPhillips have history in Venezuela — and scars from it. Any renewed presence would depend not only on sanctions relief, but on the credibility of contracts, the enforceability of arbitration, and the new government’s willingness to establish rules that are stable enough to survive the next electoral cycle. The “Venezuela Trade” may be born in oil, but it will only mature in governance.

The Capital-markets Aangle: Sovereign Debt as a Political Instrument

The country’s distressed sovereign debt is another pressure point — and another potential catalyst. In a stable transition scenario, debt does not simply re-rate because investors feel optimistic. It re-rates because a credible counterparty emerges, negotiations become possible, and the path to restructuring becomes legible.

But Venezuela’s debt story is not a clean technical exercise. It is political capital. A new administration would need to decide whether it wants to pursue rapid normalisation — likely requiring engagement with creditors, multilateral institutions, and a rules-based framework — or whether it wants to keep the debt problem frozen while it triages domestic stability. Markets may prefer speed; governments often prefer control.

Why Investors Care: Scale, Not Novelty

The draw is not subtle. Venezuela’s resource base and underinvested infrastructure imply a large theoretical pipeline of projects: oilfield services, midstream rehabilitation, power generation, ports, roads, mining, telecoms, and basic urban services. In bullish circles, the opportunity set is framed as one of the largest “reopening” trades of the decade — not because the assets are new, but because the discount rate has been punitive for so long.

Even so, money does not flood into countries; it floods into enforceable frameworks. The investability question will be decided by a small set of early signals: who controls the security apparatus, how quickly technocratic ministries can function, whether the central bank is insulated, and how sanctions policy evolves.

The Risk Ledger: Sanctions, Legitimacy, and the “Transition Premium”

There is also a non-trivial possibility that the market is trying to price an outcome that politics does not deliver. NPR reporting noted that Venezuela’s government condemned the US action as military aggression, while opposition voices argued that the internationally recognised election winner, Edmundo González, should assume the presidency. The same reporting captured the regional and domestic uncertainty that typically defines the first phase of a regime break.

That uncertainty creates what might be called a “transition premium”: the spread between what assets are worth in an investable Venezuela and what they are worth in a Venezuela that remains unstable, contested, or sanctioned. The premium is large — and it is not paid out smoothly. It is paid out in bursts, often around sanctions announcements, cabinet appointments, and the first credible signals of institutional repair.

For business audiences, the most practical takeaway is also the least glamorous: compliance will shape everything. Sanctions easing, licensing clarity, and bank de-risking will determine the tempo of any capital return. Even investors with strong conviction cannot deploy at scale if payment rails, insurance, and counterparties remain constrained.

What to Watch Next

The market is already attempting to run ahead. It will not stay ahead for long unless three things become clearer: the legitimacy and durability of the transition authority, the roadmap for the oil sector and public finances, and the posture of Washington and allied capitals on sanctions and recognition.

Venezuela has been socialist for nearly three decades, and the hardest work — rebuilding trust in rules — cannot be airlifted in overnight. But the roadshow has begun in spirit, if not yet in flight schedules. Institutional capital is positioning, advisers are modelling, and corporate strategists are dusting off old maps. The “Venezuela Trade” is no longer an abstract thesis. It is now a live question of sequencing: politics first, then capital — or a rush of capital that tries to force politics to keep up.


Trump Targets Wall Street Landlords, Putting Private-Equity Underwriting on Notice

A proposal to bar large institutional investors from buying single-family homes has jolted real-estate equities and reopened a long-running political argument: is housing unaffordable because capital is crowding out families—or because the US simply does not build enough homes?

On January 7, 2026, President Donald Trump said his administration was “immediately taking steps” to ban Wall Street firms from buying single-family homes, insisting that “people live in homes, not corporations.” The announcement, delivered via Truth Social, framed corporate homeownership as a contributor to an American Dream slipping out of reach—and pledged to ask Congress to codify the policy into law. (Reuters)

The target set is familiar. Over the past decade, private equity and listed landlords have built sizeable single-family rental platforms, often in fast-growing Sun Belt markets where affordability pressures are most visible. Yet the proposal also lands in a market where institutional buying has already cooled, and where the deeper constraint—by most economists’ account—remains a chronic shortage of housing supply.

Markets Reprice Regulatory Risk

Investors treated Trump’s comments as more than rhetoric. Blackstone shares fell to a one-month low intraday and closed down about 5.6 percent on the day, while American Homes 4 Rent dropped and briefly triggered volatility halts before ending lower. The PHLX housing index also weakened, reflecting broader spillover into housing-linked equities. (Reuters)

Other listed names tied to single-family rentals and housing transactions sold off as well, with reports of sharp declines in Invitation Homes and a wider pullback across related real-estate stocks. (Barron's)

The message from markets was straightforward: even a partially realised policy shift can change the expected cashflows of housing landlords, widen funding spreads, and force a higher regulatory-risk premium into valuations. That repricing is especially sensitive for real-estate investment trusts and asset-heavy platforms where leverage and refinancing assumptions play an outsized role in returns.

How Big Is “Big Money” in US Housing?

The politics of corporate homeownership often outrun the aggregate numbers. According to Blackstone’s own January 2025 fact sheet, institutional investors own about 0.5 percent of all single-family homes in the United States, and their purchases have fallen about 90 percent since 2022. (Blackstone)

Those figures are broadly consistent with the argument advanced by institutional landlords: they are highly visible in certain neighbourhoods, but small in the national total. The Associated Press similarly noted that institutional investors are a small slice of the overall market nationally, though their presence is more concentrated in specific metros. (AP News)

At the same time, “small” does not mean irrelevant. A Government Accountability Office study cited by Reuters found that by June 2022 institutional investors owned around 450,000 homes—about 3 percent of single-family rental homes nationally—after building scale following the post-2008 foreclosure wave. (Reuters) Concentrated ownership in a handful of markets can influence local competition dynamics, even if the national footprint remains modest.

Affordability Has Become a Political Third Rail

The proposal arrives as homeownership metrics paint an increasingly stark picture for younger households. The National Association of REALTORS® reported that first-time buyers accounted for just 21 percent of purchases in its 2025 survey period, while the typical first-time buyer’s age rose to a record 40. (National Association of REALTORS®)

Meanwhile, investor participation has risen in a different way: not primarily through mega-funds, but through smaller landlords and mid-sized buyers stepping in as traditional owner-occupiers pull back under high prices and borrowing costs. Property analytics firm Cotality has said investors have accounted for around 30 percent of single-family purchases in 2025, with smaller investors dominating that activity. (Cotality)

This distinction matters for policy design. A ban aimed at “large institutional investors” may be politically resonant, but it could leave the bulk of investor demand intact if smaller buyers continue to accumulate properties at scale. It could also create definitional arbitrage—shifting ownership into smaller entities, joint ventures, franchise-like structures, or dispersed acquisition vehicles.

Supply Is Still the Binding Constraint

Trump’s framing casts corporate ownership as a primary driver of unaffordability. The counterargument, repeated by institutional landlords and many housing economists, is that prices are being driven chiefly by a long-running mismatch between demand and new construction.

Blackstone has argued that housing inflation is being driven by supply shortages, not Wall Street landlords, pointing to its own sharply reduced acquisition pace since 2022. (Blackstone) MarketWatch similarly cited expert views that limiting large investors is unlikely to materially improve affordability given their relatively small share of purchases and ownership. (MarketWatch)

This is the central analytical tension: institutional capital can intensify competition at the margin and influence local outcomes, but it is difficult to solve a structural shortage with ownership restrictions alone. In practice, a durable affordability agenda typically requires higher supply—through zoning reform, faster permitting, infrastructure capacity, and incentives for entry-level construction—alongside demand-side measures.

The Legal and Political Path Is Unclear

Whether the proposed ban becomes enforceable policy remains uncertain. Reuters reported that Trump did not spell out the legal basis for imposing a ban and that it was not clear what authority he would draw upon, even as he said he would urge Congress to enshrine it in law. (Reuters)

That ambiguity raises immediate questions for investors: would restrictions apply to new acquisitions only, or to existing portfolios; how would “institutional” be defined; what thresholds would trigger coverage; and how would enforcement work across subsidiaries, funds, and managed accounts? The political arithmetic also matters. Industry pushback can be expected, and legislative durability would likely hinge on whether the proposal is paired with supply-focused measures that broaden support beyond headline-grabbing restrictions.

What It Means for Private Equity and Public Markets

Even if the proposal stalls or is narrowed, its market impact is already tangible. Single-family rentals—once treated as a relatively technocratic asset class built on scale efficiencies and steady cashflows—have crossed into full political visibility. That shift changes underwriting.

For private equity, the key implication is that regulatory risk is no longer a tail scenario to be ignored; it is a variable to be priced. For listed platforms, it adds a new layer to the cost of capital—through equity multiples, credit spreads, and the willingness of counterparties to fund growth strategies that depend on continued acquisition.

The deeper lesson may be simpler. In periods of acute affordability stress, housing becomes an arena where markets, voters, and policymakers collide. Capital will continue to seek opportunity in residential real estate—but it will increasingly do so under the shadow of regulation, local political backlash, and a national debate that is unlikely to cool until supply catches up with demand.


Earth Active Under Neil Jeffery: De-Risking Capital in Complex Markets

Earth Active operates at the intersection of environment, climate, governance and social performance, helping lenders, investors and developers deploy capital effectively in complex and high-risk markets. Under Chief Executive Officer Neil Jeffery, the firm has evolved from a specialist advisory practice into a scaled ESG risk and investment business, recognised for translating environmental and social complexity into decision-grade insight that supports bankable, durable outcomes.

[caption id="attachment_28179" align="aligncenter" width="433"] CEO: Neil Jeffery[/caption]

At its core, Earth Active remains anchored in high-value, project-based advisory, complemented by longer-term strategic support to financial institutions and developers. The firm works with major banks and other investment institutions globally to align transactions with international standards, while supporting clients to identify, manage and mitigate material environmental and social risks. In parallel, Earth Active advises developers of large infrastructure projects, including road, rail, airports, mining, data centres and power generation & transmission, helping them embed robust environmental and social systems across the full project lifecycle, from early-stage planning through construction and operations.

In markets where execution risk is high and stakeholder expectations are accelerating, Earth Active’s work is defined by proportionality and practicality. The firm supports capital providers in aligning investments with the intent and substance of frameworks such as the Equator Principles, IFC Performance Standards and EBRD standards. The aim is not compliance as an administrative exercise, but risk management as an operational discipline, a means of turning requirements into measurable performance, reduced volatility and stronger investment resilience.

The financial value of this approach is increasingly clear. By strengthening how environmental and social risks are identified and managed, Earth Active contributes to de-risking transactions and lowering the cost of capital. Insurance can often be priced more favourably where concrete risk controls are in place, while early identification and resolution of issues supports project delivery against timeline, avoiding delays, containing costs and keeping capital deployed efficiently. For lenders and sponsors alike, disciplined ESG risk management has become less a reputational overlay than a commercial enabler.

Earth Active is also positioned to add value at the earliest stage of the investment lifecycle, when risk is most manageable and mitigation is least expensive. The firm supports lenders and investors by screening prospective transactions before commitment, enabling early identification of material environmental and social constraints. Formal Environmental and Social Due Diligence (ESDD) provides a structured basis for credit and investment decision-making at origination and beyond, allowing clients to avoid deal-breakers, strengthen transaction structure and reduce downstream execution risk.

This capability is underpinned by deep technical expertise and operational experience. Earth Active’s multidisciplinary teams work across the Middle East, Central and Southeast Asia, Africa and Europe, combining technical excellence with practical understanding of delivery in challenging contexts. That reach is supported by an integrated operating model that blends in-house expertise with a trusted network of specialist associates, enabling the firm to respond flexibly across geographies, sectors and project realities.

The standards landscape in which Earth Active operates is itself evolving. International frameworks are refined as lessons from lenders and developers feed into best practice, and as new sources of capital emerge, particularly in emerging markets where development needs are acute and risk can be unevenly priced. Earth Active plays a constructive role in this evolution by bringing practical lessons and policy perspectives into sector-wide discussions. The firm supports clients in responding to shifting expectations by helping develop internal guidance, policy positions and risk frameworks, and contributes to international standards working groups. The objective is to keep ESG requirements grounded in operational reality, while ensuring they remain credible to investors, lenders and regulators.

Biodiversity has become a particularly material investment variable in recent years. It is increasingly treated as a core issue in project finance decision-making, with a growing expectation that investments should not merely avoid harm, but actively improve biodiversity outcomes. This shift is reflected in requirements such as those set out in IFC Performance Standard 6, including expectations around biodiversity net gain strategies in critical habitats.

Earth Active supports clients in meeting these requirements by applying the mitigation hierarchy, identifying, quantifying and costing practical actions to avoid, minimise, restore and, where necessary, offset impacts. The approach creates an actionable pathway through biodiversity management and offset planning, helping clients respond to requirements in a way that is achievable, auditable and commercially realistic. The firm has supported programmes at meaningful scale, including work on one of the world’s largest biodiversity offsets at a site in Southeast Asia, illustrating how biodiversity risk can be addressed rigorously without undermining investment viability.

Alongside the evolution of its client offering, Earth Active has undergone a substantial period of internal transformation. Jeffery was appointed to lead a change process designed to prepare the business for its next phase of growth. With two decades of experience in change management, particularly within small and medium-sized firms operating across emerging markets, his mandate was to sharpen the company’s operating model, strengthen leadership structures, and position Earth Active to better leverage its capabilities in a rapidly maturing ESG market.

That change programme, delivered over just more than a year, culminated in the successful sale of Earth Active to the Ecology and Environment Group. Integration into a wider ecology and environmental consultancy has created new opportunities for growth, enabling the business to streamline operations, benefit from economies of scale and expand its client base. In doing so, Earth Active has strengthened its ability to support capital deployment through project finance, delivering specialist services to a broader set of clients across more diverse and complex markets.

The transaction also unlocked new investment into the business, enabling Earth Active to deepen its technical specialisms across environment, biodiversity and social performance. This capability expansion strengthens the firm’s ability to respond to increasingly sophisticated client requirements, while remaining focused on outcomes. In Jeffery’s view, success is measured by the firm’s ability to resolve business issues efficiently, manage risk with discipline and unlock investment that delivers enduring value.

Internally, the transformation placed people, systems and culture at its centre. Jeffery sought to lead change in a way that empowered staff and strengthened delivery, recognising that advisory credibility depends not only on technical skill, but also on consistency, collaboration and trust. Leadership structures were reinforced through the establishment of a new Executive Team, while communication around change became more structured and transparent.

Staff support was strengthened through a refreshed talent management strategy, alongside improvements in client and account management designed to elevate the customer experience. Cultural change included a more disciplined approach to internal communication, training and professional development. Greater clarity of roles and stronger line management were achieved by restructuring consultancy teams around technical disciplines and introducing dedicated line-management training. A stronger feedback culture, coupled with consistency between rhetoric and action, proved central to building alignment across the organisation.

The result has been a business with higher internal cohesion and stronger delivery momentum, a workforce more invested in the company’s direction of travel and better positioned to deliver outcomes for clients. Following the move into the Ecology and Environment Group, Earth Active has also widened share ownership to a larger number of team members, reinforcing the link between performance, culture and long-term value creation.

Today, Earth Active stands as a mature, lender-trusted ESG advisory business supporting responsible investment and sustainable growth in regions where robust environmental and social risk management is indispensable. Under Neil Jeffery’s leadership, the firm continues to demonstrate a simple commercial truth: disciplined analysis, applied early and intelligently, creates value. It protects downside, accelerates execution, strengthens credibility, and helps capital reach the projects that will shape resilient, inclusive and sustainable development.


Otaviano Canuto: The US Economic ‘K’

Global GDP growth has proven resilient in 2025, despite the shocks caused by the trade policies implemented by United States President Donald Trump in the first year after his return to office. The gloomy projections offered by multilateral and private institutions in the first quarter of 2025 have given way to revised levels mostly in the 2.5% to 3% range for the year.

However, the gloom has not dissipated entirely. In the U.S., while investment in technology and related areas—such as the construction of data centers to meet the needs of artificial intelligence (AI)—have sustained growth, job creation has stagnated. The U.S. economy has been described as exhibiting a K-shaped trajectory, with wealth gains for the top of the income pyramid resulting from the overvaluation of stocks, accompanied by real-wage and purchasing-power squeezes at the bottom.

On April 2, 2025, dubbed by Trump as “Liberation Day”, extremely high U.S. tariffs were announced on almost every country in the world. In a sort of tariff regret, many of these were eventually scaled back, sometimes after ‘deals’ in which other countries made various promises to the U.S. (Figure 1). None of the worst-case tariff scenarios came to fruition.

[caption id="attachment_28195" align="aligncenter" width="900"] Figure 1: US average effective tariff rate. Source: Yale Budget Lab[/caption]

But some tariffs have remained in effect, with those levied on US allies higher than those on China. In any case, general uncertainty about future tariffs has exploded. This, along with concerns about institutional resilience in the U.S. and the national public debt, led to a depreciation of the dollar, as some investors protected their investments through hedging, or even by diversifying their reserve asset holdings.

The tariffs did not sink the economy or increase inflation as much as predicted, but they are exerting a corrosive influence by raising costs, affecting employment, and harming the manufacturing sector. As happened in Trump’s trade war during his first term, tariffs on intermediate goods are hurting the manufacturing industry, disrupting and reducing supply chains.

There has been a redirection of global trade. With tariff rates on imports from China higher than those on Mexico and other Asian countries, trade flows have been redirected to economies that face lower U.S. tariffs. In part, this rotation has also reflected spillovers. With the collapse of its sales to the U.S., China has redirected its exports to other markets, a factor that has been underlying its growth resilience in 2025.

It is also worth highlighting the caution of U.S. companies have shown in passing on higher costs, given the slow and uncertain trajectory of tariff increases. Continuous increases in prices of U.S. imports show that foreigners are not bearing a large part of the tariff bill. The tariff transmission to the consumer price index is evident; but the transfer has been limited so far. The ‘tariff saga’ has paused but its unfolding is not yet complete.

And what about the upward-pointing part of the K? The AI ‘boom’ has been accompanied by frequent portrayals of it as a bubble about to burst. The extraordinary rise in stock values, as expressed by the evolution of the S&P Index (Figure 2), has been mainly down to a small group of AI-related companies (the ‘magnificent seven’).

[caption id="attachment_28194" align="aligncenter" width="900"] Figure 2: Hourly earnings, stock prices, and home prices. Source: Financial Times, November 12, 2025[/caption]

 It is tempting to draw analogies with the dot-com bubble which inflated in the second half of the 1990s and burst in the early 2000s, associated with the expansion of the internet. Indeed, the recent brutal increase in the ratios between the share prices of leading technological companies and their effective earnings is reminiscent of that previous experience.

Historical experience suggests there is a time lag in the transition from capital expenditure to productivity gains. With AI spending still in its early stages, productivity dividends will still be limited in 2026.

In addition to doubts about how significant and widespread the adoption of AI by companies will be, and its impacts on productivity, there are doubts about the extent to which the impact of AI will be reflected in earnings for most of the overvalued companies. After all, only a few survived the dot-com experience.

I confess I doubt that next year will see a collapse of the bubble. AI spending should provide a second year of solid gains in capital expenditure. The big AI ‘hyper-scalers’ are still funding much of the data-center expansion with formidable cash reserves. In addition, borrowing has not yet reached the extraordinary levels previously associated with major crises.

However, there are doubts over the sustainability of the journey on the ‘dual track’ (resilient growth but stagnant job creation) and the ‘K’. Weak demand for labor is eroding purchasing power in the U.S., where slower growth in private-sector labor income combines with persistent inflation and a concentrated negative impact from the public sector in the short term. Figure 3 shows how differentiated the evolution of the annual nominal wage growth rates between bottom and top quartiles has been.

[caption id="attachment_28191" align="aligncenter" width="900"] Figure 3: Annual wage growth. Source: Krugman, P. (2025). "A New K in America", Substack, December 23 (data from the Atlanta Fed)[/caption]

These negative factors interact with business pessimism. Expansion without job creation has exacerbated distributional concerns, and consumer confidence has fallen (Figure 4). Not coincidentally, ‘affordability’ was a keyword in elections in New York and other places where Democrats have won in 2025, leading Trump to revise downwards tariffs on imported food.

[caption id="attachment_28193" align="aligncenter" width="900"] Figure 4: US consumer confidence. Source: Bloomberg (2025), December 23 (data from the Conference Board)[/caption]

After the reversal of supply shocks related to the pandemic and Russia’s invasion of Ukraine, inflation in the U.S.—and globally—remained at 3% for two full years (Figure 5). The U.S. Federal Reserve’s ongoing monetary easing is expected to continue due to the slow pace of job creation, but the policy will be halted if resilient inflation creeps up.

[caption id="attachment_28192" align="aligncenter" width="900"] Figure 5: Increasing share of CPI items with price rises. More than 50% of items in the CPI basket show at least a 3% price increase. Source: BLS, Apollo Chief Economist[/caption]

Labor supply constraints are expected to put downward pressure on U.S. unemployment rates during the second half of 2026, generating pressure for the Fed to tighten monetary policy again. The expected recovery in labor demand will occur amid much weaker supply than before. If labor demand couples with overall growth, inflation will remain persistent and labor markets will have to contract by the end of 2026.

Meanwhile, the economy will continue to be characterized by a ‘K’ shape.

This article first appeared in the Policy Center for the New South. By Otaviano Canuto

[caption id="attachment_26574" align="aligncenter" width="300"] Author: Otaviano Canuto[/caption]

Otaviano Canuto, based in Washington, D.C, is a former vice president and a former executive director at the World Bank, a former executive director at the International Monetary Fund, and a former vice president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at the University of São Paulo and the University of Campinas, Brazil. Currently, he is a senior fellow at the Policy Center for the New South, a professorial lecturer of international affairs at the Elliott School of International Affairs - George Washington University, a nonresident senior fellow at Brookings Institution, a professor affiliate at UM6P, and principal at Center for Macroeconomics and Development