CFI.co Meets CSL Stockbrokers

Gboyega Balogun (Managing Director)
Mr Balogun holds a B.Sc. in Economics and Management from the University of London (Royal Holloway College) and M.Sc. in Property Investment from City University, London. He is a registered member of the New York Stock Exchange (Series 7), the London Stock Exchange, through his accreditation with Futures and Securities Association Registration (SFA) and is an authorized dealer on the Nigerian Stock Exchange.

Gboyega’s professional career began as a trainee with Merrill Lynch International Bank Chester Street, London and subsequently moved to private wealth management at Merrill Lynch Financial Centre (London) within a team of financial consultants managing in excess of $600m in assets for ultra-high net worth clients in the African and Middle East regions. Gboyega returned to Nigeria in 2003, assuming the position of divisional head of stock broking, asset management and registrars business. In 2008, Mr Balogun was appointed managing director of CSL Stockbrokers Ltd.

Temi Popoola, CFA (Sales Director - Lagos)
Mr Popoola holds a First Class degree in Chemical Engineering from the University of Lagos and obtained a Master’s Degree from the Massachusetts Institute of Technology (MIT). Prior to joining CSL as the head of private client services, he spent some years in New York with Bank of America Securities where he was responsible for managing the bank’s financials and industrials equity derivative portfolio.

While at BofA, Mr Popoola gained extensive experience in assisting clients to develop strategies that help maximize returns while managing risk. Prior to his role at CSL, he has worked as an asset manager with Material Managers in London and he was very recently the head of structured products at the United Bank for Africa, Lagos where he was responsible for investing the bank’s capital across numerous asset classes on exchanges in both New York and London.

He is also a dealing clerk of the Nigerian Stock Exchange.

Guy Czartoryski (Sales Director - London)
Guy Czartoryski has 18 years’ experience as an analyst and investment strategist in emerging markets. He has consistently held Top-5 Greenwich survey rankings for his multi-sector research on emerging markets in Central and Eastern Europe. He has brought deals to market in the banks, telecoms and media sectors. He previously has worked for Deutsche Bank, UBS, HSBC and most recently for an emerging market hedge fund. He is a graduate of Cambridge University.

Alan Cameron (Head Economics & Strategy - London)
Alan has a MA in Economics and International Relations from John Hopkins University and a BA (Hons) in History from Queen’s University. Before joining CSL in 2011, he was a sovereign risk analyst at Business Monitor International where he was responsible for producing in-depth economic analyses on sub-Saharan African economies. The scope of his work ranged from making forecasts for key macroeconomic indicators to commenting on his economic analyses for both Reuters and Bloomberg. Prior to this, Mr Cameron worked as an economic analyst for the Economist Intelligence Unit, covering Western Europe.

Olabode Oladejo (Head, Corporate Brokerage - Lagos)
Bode joined the FCMB group as the head of marketing and business development for the Asset Management Business at CSL. He started his career in 1996 as a Research & Investment Analyst with Premium Securities Limited (PSL) before moving to the banking industry. He has worked with Zenith International Bank, Finbank, Access Bank and National Bank (now Wema Bank).

His banking experience spans through corporate banking, investment banking, internal control/audit and commercial banking. He is a qualified stockbroker/dealing clerk of the Nigerian Stock Exchange and an associate of the Institute of Chartered Accountants of Nigeria (ICAN). Mr Oladejo holds a Bachelor of Science Degree in Agricultural Economics (First Class honours) and a Master of Science Degree in Economics, both from University of Ibadan. He is currently head of Corporate Broking of CSL Stockbrokers Limited.

John Gannon (Head Trading - London)
John boasts no less than 28 years’ worth of experience in stockbroking operations and trading. After leaving school at the age of 16, he joined Orme, a stockbroker in the City of London where he spent the next seven years in the back office learning settlements and accounts set-up. In 1990 Mr Gannon joined Enskilda Fund as an assistant to portfolio managers in equity and bonds. In this role he executed all trading and oversaw settlement.

John was transferred to the continent in 1992 to set up Enskilda’s Luxembourg operations. In 1994 he joined Latin American investment brokers Latinvest, to set up the sales, trading and market-making business. John moved to ABN Amro in 2000 as Latin American and EMEA sales trader. In 2004 John joined Evolution China to set up their sales trading desk. He remained with Evolution till 2009 when he joined CSL (UK), a division of FCMB (UK) Ltd to set-up and run the London trading desk. i


CFI.co Meets Agha Abani

Mr Agha Abani is the founder and CEO of Harrybeat lnternational Services Limited, an oil and gas services company with its corporate head office in Port Harcourt in the Rivers State, Nigeria. Mr Abani is a member of National Association of Corrosion Engineers (NACE) lnternational and The Society for Protective Coatings (SSPC). He is also an accountant and as such held a number of positions of distinction.

Previous to the founding of Harrybeat International, Mr Abani trained and worked for the chartered accountants office of KPMG Peat Marwick Ani Ogunde& Co. During the course of his career, he accumulated 22 years’ worth of experience in the oil and gas industry. For seven years Mr Abani was employed by International Corrosion Control Limited – one of the field leaders in the oil sector. After holding various positions at this company, Mr Abana resigned 1999 from his job as acting general manager.

Over the past decades, Mr Abani has found great satisfaction in expanding on his professional capabilities and knowledge by attending a number of management and technical courses in Nigeria, the United States and Great Britain. These courses concerned, among others, the Fundamentals of Corrosion and Corrosion Control Methods, Economic Aspects of Corrosion Control and Contract Administration at Etchingham Training Centre in East Sussex.

He also found the time to attend several conferences, technical programs and business summits at Salt Lake City, Houston, Florida, Atlanta and Las Vegas in USA and Paris, France.

“We have plenty of good people right here in Nigeria who can successfully compete with any expatriate. You just need to know how to find and recruit these highly-qualified Nigerian engineers.”

Mr Abani went on to become the co-founder and operations director of Petro-source Nigeria Ltd. He also was deputy managing director of Worldwide Oilfield Services Limited.

At Harrybeat International, Mr Abani is particularly proud of the local capacity his company has helped built. Thanks in part to the Nigerian Content Law skill development has taken a veritable leap thanks to which Harrybeat International is now able to execute even the most advanced jobs on time, spec and within the allotted budget using 98% locally recruited oil workers and other professionals. Indeed most jobs are completely using Nigerian labour exclusively.

“If we do need to hire an expatriate worker, it is mostly to impact project-specific knowledge to our workers after which we are done and the expat may return home,” says Mr Abani who credits the Nigerian Content Law for the great strides made in employing local professionals and experts. “We have plenty of good people right here in Nigeria who can successfully compete with any expatriate. You just need how to find and recruit these highly-qualified Nigerian engineers.”

Harrybeat International is celebrating its tenth year of expanding operations this year and Mr Abani foresees a bright future: “Nigerian oil and gas services companies are now first claiming their home turf and have been thriving on the challenge. It is not at all unthinkable that in a few years from now – perhaps a decade – we’ll actually be able to export our accumulated knowledge and experience to other countries.” For Harrybeat International, quite proverbially, the sky appears to be the limit.


CFI.co Meets Dzika Danha

While born in Zimbabwe, Dzika was raised in Cameroon and Cote d’Ivoire, and spent the formative years of his education in Dorset, southwest England. Here he attended the Sherborne School for Boys.

After his studies Mr Danha moved to back to Zimbabwe to join his family. It is here that his career began. Dzika Danha now boasts over 10 years of experience working in Zimbabwe’s capital markets. His focus has been on equity markets.

His career started in 2003 when he joined Barnfords Securities (formerly the HSBC franchise in Zimbabwe) as a trainee sell-side equity analyst. This gave him the initial grounding in equity market analysis. Mr Danha subsequently worked at two local asset managing firms: Tetrad and GP2 Asset Management.

After leaving GP2 Asset Management in 2005, he set up his own research boutique: 3IA Advisory. This company was not limited to market research but also became involved with advisory services to high net worth individuals and their investments on the Zimbabwe Stock Exchange.

“Within 3 years he had risen to Director in charge of the Equity Product Group for East and Southern Africa.”

In 2007, Mr Danha was hired by Renaissance Capital, a Moscow based bank specialising in emerging and frontier markets which was undertaking an expansion into Africa opening offices in Harare, Lagos, Nairobi, Lusaka and Accra.

Mr Danha was initially hired as an associate analyst with focus on Zimbabwean equities. Within three years he had risen to director in charge of the Equity Product Group for East and Southern Africa with a special focus on the Zimbabwean, Kenyan, and Zambian equity markets.

This role involved the build out of research capabilities in these markets as well as the creation and maintenance of key client relationships. He was part of the Renaissance Capital team that was voted the best research team in Africa by African Investor - sponsored by Thompson Reuters in association with NYSE Euronext in 2008.

In 2010, Mr Danha left Renaissance Capital to become a founding partner of the IH Group, which consists of a brokerage company (IH Securities, a Member of the Zimbabwe Stock Exchange) and a corporate advisory firm (licensed by the Securities and Exchange Commission of Zimbabwe). At IH Group his role is primarily focused on equities research and sales for the brokerage as well as business development.

Mr Danha holds a degree in Banking and Finance from London School of Economics, University of London.


CFI.co Meets Michel Accad: A Q&A Session with the CEO of Gulf Bank

Gulf Bank has made headlines and received several awards recently in part because of its performance in retail banking and governance. Could you outline for us the highlights of Gulf Bank’s performance this year?
Gulf Bank is having a good year so far despite adverse market developments, which require us to continue to take high levels of precautionary provisions. Our operating performance is very strong across all our core business lines, and not just consumer banking. We are particularly proud of our achievements in risk management and in corporate governance and compliance, where a number of best practices and new systems have been introduced.

What do you think Gulf Bank’s key strengths are and what differentiates your bank?
I think our customer service standards really set us apart from the competition. We always enjoyed a customer-centric reputation, which had served us well in times of crisis. In 2011 we launched our Promise Campaign – promising the best and fastest service, “guaranteed”. We essentially make five key promises – where we guarantee very fast queuing times at our counters and same-day turnaround time for Gulf Bank cards and loan disbursements. I don’t know of any other bank in the region that makes such customer promises. It took us nearly a year to redesign our processes to achieve these targets. In 2013, we will be offering similar commitments to our corporate clients. I also believe we have been able to establish one of the best risk management processes and structures. This now has become an integral part of Gulf Bank’s culture.

The global economic climate remains unpredictable; where do you see challenges and opportunities for your bank?
As we have exited the exotic derivatives, prop trading, direct investments and hedge fund business, there aren’t many “opportunities” we can associate with volatile markets, only challenges – and we prefer it that way. However, the fact is that we were extremely proactive in building up a “fortress balance sheet” since 2009. For instance, we have taken around KD 300M in provisions since 2009, and yet, we are still making money in the end, which is a tribute to the strength and sustainability of our core operating businesses.

How has Gulf Bank’s customer base evolved over the past few years and how does that impact on new and ongoing business, including new products and services; and which areas have more room for expansion and diversification?
In fact, the evolution for Gulf Bank has been more in the other direction, i.e. exiting all non-core activities as mentioned above as well as non-core segments (such as international lending to foreign entities). Rather than diversifying our products and services, we have decided to focus on what we think we do well, which is the domestic consumer and commercial banking business. Our differentiator will be service excellence and speed.

Are there areas of business that are specific to the environment in which Gulf Bank operates and are there external and international/GCC areas that have room for improvement?
The banking environment in Kuwait tends to be a little constrained on the retail side. For example, spreads and fees are very tightly regulated and generally lower than in most other international and GCC markets. Now we understand why that is, and the justification makes good sense, as the regulators do not want the banks to encourage consumers to borrow beyond their absorption capacity and become over-extended.

What are Gulf Bank’s main targets for 2014 that you can share with us?
Our target, very simply, is to become the pre-eminent bank and to provide the best and fastest service to our clients. That will bring more business our way, as well as, ultimately, more profits.

Gulf Bank has shown positive profits and this has continued to increase. To what do you attribute this steady performance?
Our success is essentially attributed to our strategy to focus on our core competencies and differentiate ourselves through service excellence.


CFI.co Meets Dr Bernd van Linder

Dr Bernd van Linder has been Managing Director of Saudi Hollandi Bank (SHB) since May 2009. From 2006 to 2009, Dr van Linder served as the bank’s treasurer. He is a director of Saudi Hollandi Bank and of Saudi Hollandi Capital, the bank’s wholly-owned investment banking subsidiary. Dr van Linder is also director of Wataniya, a listed general insurance company affiliated with Saudi Hollandi Bank.

Prior to joining Saudi Hollandi Bank, Dr van Linder worked at the Dutch ABN AMRO Bank in a variety of functions in the bank’s Global Markets Division. He holds a PhD from the University of Utrecht, an MSc from the University of Nijmegen, and an MBA in Finance from Bradford University School of Management. Dr van Linder is married with three children and lives with his family in Riyadh.

Dr van Linder is most encouraged by his bank’s strong position to satisfy demand for financial services to the rapidly expanding segment of small and medium-sized enterprises (SMEs) in the kingdom. He notes that non-oil related economic growth, at 5-7% annually, has been particularly strong. “The forecast is excellent with a further 7% yearly growth expected for the remainder of the decade. Opportunities abound,” says Dr van Linder.

The SHB chief also expects demand for retail banking services to increase as the budding Saudi middle class expands: “Employment is up significantly as corporates expand their production capabilities and hire more people. This in turn leads to a strong demand for modern financial services which SHB is able to meet.”

However, competition among the twelve banks operating in Saudi Arabia is fierce and being heir to the kingdom’s oldest bank offers no guarantee of continued success for SHB. The bank’s director is convinced that only those institutions will prevail that are able to best serve the needs of their customers through multiple channels such as conveniently located branches, internet banking, mobile applications and excellence in service. “We are constantly on the lookout for improvements to both our products and the way in which they are delivered. Consumers are becoming ever sophisticated and the bank cannot lag behind.”

Contrary to his peers elsewhere in the world, Dr van Linder doesn’t lose sleep over the implementation of the Basel III Accords that set the future standard for capital and liquidity requirements and leverage ratios. “Our regulator, the Saudi Monetary Agency, is already now imposing much of the Basel III standards on the kingdom’s banks. Without exception, all Saudi banks have excellent capital ratios and impressively low leverage ratios. Their liquidity position is very strong. For all practical intents and purposes, Saudi banks are already operating under the provisions that Basel III seeks to implement.”

On the challenges posed by Sharia-compliant banking, Dr van Linder is adamant: The delivery of first rate financial services is not in the least hampered by Islamic Law. “Our customer demand Sharia-compliant services and we make sure that they are available. SHB has invested heavily in the development of product and structuring capabilities to the point where we today have a full range of Sharia-compliant products. In fact, any conventional product offered by us now has a Sharia counterpart. This holds true in both the retail and corporate segments. Since we are very much in the business of meeting our customers’ demand this development will continue.”

Dr van Linder was recently included in the list of 50 most efficient CEOs in the Gulf States. Under his leadership the Saudi Hollandi Bank saw its profits multiply. SHB has outperformed its local peers each year since Dr van Linder took over management of Riyadh-based SHB. The bank’s over 1,700 employees each contribute more than $74,000 to the bottom-line, another record-setting performance in the kingdom.


CFI.co Meets Citygate Securities

Citygate adheres to a strong belief in long-term client relationships and our team reflects that: It is made up of high-caliber and experienced professionals who work in close coordination to deliver excellent services. Our commitment to the customers’ best interests makes us go the proverbial extra mile to deliver exceptional results.

Perfect synchronization between each of the team’s members results in a truly efficient workflow and fosters an exceptionally high team spirit. Despite the pressures present in our daily jobs, we all enjoy working at the company. The team shares a common objective and this is key to our enduring success.

One of the founders of Citygate Securities is James Bishop - a qualified chartered accountant with broad investment experience. After identifying the need for an independent stockbroker to serve offshore clients, James and his partners started Citygate in 2010. In this regard, the firm is a niche player providing independent services to this particular segment of the market. Before Citygate, Mr Bishop held various senior positions at a number of larger financial institutions including NatWest, RBS, ICAP and Standard Bank. Despite his tight work schedule, he always finds time to dedicate to his family and to his hobbies: sailing and snow skiing.

Overviewing the daily running of the business is Laval Law How Hung, the director of Citygate Securities. He is a member of the Association of Accounting Technicians, UK and also an associate member of the Society of Trusts and Estate Planners, UK. He spent 30 years working in the accounting and taxation fields, gathering experience across a large spectrum of industries ranging from commercial, manufacturing to financial services. Mr Laval also spent seven years in a medium-sized audit firm in the Britain. His last 13 years have been spent in the sector of global business companies and investments funds. Here he held functions in accounting, tax, treasury, human resources, and business development. Mr Laval also holds various directorships at global business companies.

The Trading team at the firm is divided into two groups: One deals with listed securities and the other with non-listed ones.
Kristelle Babet is chief trader on the listed securities team and also one of the directors of Citygate Securities Limited. Kristelle is responsible for the effective execution of clients’ transactions and for monitoring the trading team as well as the daily operations of the middle and back offices. She must also ensure that the trading team adheres to regulatory and compliance requirements and meets the aims of the fund management team. She is furthermore responsible for the management of relationships among the different stakeholders: clients, counterparties, fund managers, brokers and regulatory bodies. Kristelle is a professional with nine years of experience in finance and seven years of trading experience at Superfund Asset Management where she was involved in the execution of proprietary trading models across equities, commodities, fixed income and FX (spot and futures markets). The latter also ensured proper training of the trading team to updated systems and processes. In Mauritius, she led the trading team involved in the development of efficient and cost-effective strategies for automated trading algorithms. She also managed the set- up of an offshore relocation of the middle office department for Superfund Assets Management in Seychelles and Grenada, Treasury and Cash Management. Kristelle holds a BSc(Hons) in Economics and is a member of the ACI Association in Paris and holds a Dealing Certificate. She is also pursuing the CFA designation.
Seated on the listed side, is Govinden Vyapooree, a senior trader who is responsible for the execution of client orders across different asset classes. Moreover, he manages clients’ currency exposures and has experience in middle office and back office. Mr Vyapooree has been working for Superfund Asset Management for more than seven years and has gained good knowledge of, and experience in, derivatives products like CFD, options, forwards, swaps, futures, etc. Govinden has also acquired experience on fundamental and technical analysis, proprietary trading, risk management, credit risk management and portfolio management. Mr Vyapooree holds an MBA from the Edinburgh Business School and is an associate of the Chartered Institute of Marketing. He also holds the ACI dealing qualification.

On the FX side is the seemingly timid and quiet Sharon Monneron, who is fully fluent in several programming languages and is particularly savvy with numbers. As a senior trader, she executes FX trades and handles appropriate FX hedges for fund companies as a currency overlay manager. She maintains and disseminates FX exposure and manages day-to-day operational FX and treasury system activities of the company. Sharon has been an FX trader at Tokiwa in Tokyo, Japan and has also served as client portfolio manager at Credit Agricole CIB in Paris, France. She holds a Master’s Degree in Finance and a BCom from Lyon2 University France. She also completed a BSc in Computer Science and is currently a CFA level 2 candidate.

Assisting the listed team is the trader Rahul Desai. He is responsible for the execution of client orders across different asset classes. Rahul worked at Bramer Capital Brokers as an equity research analyst where his main duty was to perform research as well as carrying out fundamental and technical analysis on listed stocks. His other duties also included trading on the stock exchange of Mauritius, advising clients on their investments and actively managing the portfolios of high net worth clients. Rahul holds a degree in Mechanical Engineering from the University College London and is currently pursuing his CFA designation.

Heading the non-listed team is Preety Bugwan Bheenick, a senior trader responsible for executing client orders in instruments like mutual funds, structured notes and bonds. She also looks after the smooth and efficient running of daily operations. Preety has a professional experience spanning ten years in the financial sector, ranging from audit and business advisory to global businesses. She is a member of the Association of Chartered Certified Accountants (ACCA) and the Mauritius Institute of Professional Accountants (MIPA). Preety also holds a Bachelor of Science in Applied Accounting from Oxford Brookes University, UK and has passed Level I of the CFA program.
Also active on the non-listed team is Rishi Ladkoo, administrator of Prime Brokerage Services at CityGate Securities Limited where he administers clients’ accounts and investments into Mutual Funds. Rishi has intensive experience in the global business sector. He worked as a fund administrator at a number of leading management companies in Mauritius such as Deutsche Bank (Mauritius) Limited where he managed a portfolio of global business entities consisting of collective investment schemes, private equity companies, pension trusts and other global business companies having aggregate AUM of over USD3 billion. Mr Ladkoo holds a Bachelor in Business Administration from the Management College of Southern Africa.

Last but not least is Vikesh Bulee who is in charge of the accounting department of the firm since 2012. His main responsibilities are to keep control and records of transactions processed by the Trading and Mutual Fund Department. He also oversees all other accounting duties of the company. He is currently pursuing towards ACCA qualification and has eight years of experience in the financial sector. Mr Bulee has worked for a couple of years as senior accountant with an offshore management company where he acquired a wealth of experience in dealing with various types of businesses such as local companies, offshore companies, funds and stockbrokerages. This avid reader, and indeed aficionado, of business magazines also boasts considerable expertise in control systems set-up and shows excellent mastery of spreadsheet functions.


CFI.co Meets Chitra Ramkrishna

Ms Chitra Ramkrishna is the Managing Director and Chief Executive Officer of the National Stock Exchange, the world’s second largest `exchange in cash market trades and one of the top three exchanges in index and stock derivatives.

Over the years, Ms Ramkrishna has earned her spurs as an institution builder, policy maker and as an evangelist. She was part of a handpicked leadership team created in 1994 to set up the National Stock Exchange. In less than two decades, she has overcome strong headwinds from various quarters to create a world-class and completely transparent market institution.

Ms Ramkrishna sits on several SEBI (Securities and Exchange Board of India) committees on different policy issues, including the Secondary Market Advisory Committee and the Committee on Disclosures and Accounting Standards. She was also closely involved in drafting the legislative framework of SEBI, in the late 1980s. She has also been actively engaged in many important committees of industry bodies like the CII (Confederation of Indian Industry) National Council on financial sector development, the FICCI (Federation of Indian Chambers of Commerce and Industry) National Executive Committee and its Capital markets Committee, where she shares her thoughts on key issues of the sector and the economy.

“Ms Chitra is evangelical about her second mission: To make the exchange a vehicle for the financial well being of people in India. This she has done by introducing a combination of products that retail investors find easy and simple to use; and by spreading investor awareness through education.”

Ms Chitra was selected as one of the top 10 women business leaders in India by Forbes in 2011, and for three successive years, she has been featured in a list of top 30 women achievers by the Business Today group.

Key exchange initiatives that bear Ms Chitra’s imprint include setting up a Pan-India VSAT network; building the infrastructure and legislative framework for India’s first depository; facilitating screen-based trading; providing trading access to retail investors located across cities and remote corners of the country; ensuring continuous cost leadership and creating a technological backbone that is scalable and unassailable.

Under her watch, NSE has launched products to suit all classes of investors, including futures and options, currency, exchange traded funds, global indices like S&P 500. Recently, NSE introduced a dedicated debt platform to encourage retail investors and institutions to trade in corporate bonds.

Ms Chitra has also invested considerable time and energy in making CNX Nifty 50 a global brand: Today Nifty ETF’s are being traded in 15 prominent international exchanges. Nifty derivatives are also being traded on the Singapore Stock Exchange and Chicago Mercantile Exchange and will be trading soon on a derivative platform of the London Stock Exchange and the Osaka Securities Exchange.

Ms Chitra is a chartered accountant from the UK-based chartered Institute of Management Accountants. She is the third woman CEO to head an Exchange in the Asia-Pacific region after Sri Lanka’s Colombo Stock Exchange and China’s Shenzen Stock Exchange.


CFI.co Meets Juan Pablo Córdoba Garcés

Mr Córdoba Garcés assumed his current position as CEO of the Colombian Securities Exchange in March 2005. Since then his main challenge within the organization has been the transformation of the exchange into a modern business. For this the exchange needed to obtain a high-quality product portfolio that meets – and exceeds - the needs of both the broader market and investors in general.

Mr Córdoba’s achievements include having led the BVC to be listed on the equities market (2007); the modernization and internationalization of the Colombian capital markets through the creation of the Integrated Latin American Market (MILA) (2009); propelling the equity and fixed income markets towards improved liquidity; and the creation of the standardized derivatives market (2008).

Juan Pablo Córdoba is also President of the Ibero-American Federation of Stock Exchanges (FIAB) for the period 2013 to 2015. Previous to his current position, Mr Córdoba was director of the Colombian Fondo de Garantías de Instituciones Financieras (Financial Institutions’ Guarantee Fund, FOGAFIN), a position he held between August 2002 and February 2005.

Mr Córdoba began his career as an economist at the Fiscal Management Division of the Inter-American Development Bank (IDB) in Washington. Upon his return to Colombia, he was named general-director of public credit at the Consejo Superior de Política Fiscal (Colombian Fiscal Policy Board, CONFIS) of the Colombian Ministry of Finance and Public Credit, a position he held for three years.

In 1999, Mr Córdoba again departed for Washington, now to work as an economist at the Western Hemisphere Department of the International Monetary Fund (IMF) where he stayed till 2005.

Mr Córdoba earned a Master’s Degree and a PhD in Economics from the US Ivy League University of Pennsylvania in 1996. Previous to that, he obtained his Bachelor’s Degree in Economics in 1988 from the well-respected Universidad de los Andes in Colombia.

Mr Córdoba is confident that the Colombian Securities Exchange (BVC) stands at the threshold of a promising future. His buoyant outlook is based in part on the surprisingly successful initial public offering (IPO) of shares in Ecopetrol. “This IPO did away with no less than two paradigms that had until then hindered development,” says the BVC chief who goes on to explain that the first paradigm broken concerned the supposedly small size of the local capital market.

“This proved entirely unfounded since the Ecopetrol listing brought in $2.6 billion exclusively from Colombian investors. The second paradigm that was shattered concerned the limited access Colombians enjoy to the country’s capital markets. This proved to be nonsense as well since Ecopetrol shares were bought by investors from all levels of society hailing from well over a thousand different municipalities scattered all across our country.”

Mr Córdoba is also quite sure that the BVC will continue to reap the benefits of continued low interest levels. “Low interest rates traditionally favour risk in investments. Fixed-income instruments and mutual funds offer paltry returns on capital. It is therefore quite logical that investors both large and small start looking for alternative ways to make their money work for them. At the BVC, we are now ready to serve this demand in an efficient, streamlined and secure way.”

Although transaction costs on the BVC remain comparatively high, settlement and clearance fees remain very low resulting in a good overall cost picture. “As the market continues to grow, these costs will come down further. Automated processes and increased trading volumes are also expected to dampen costs making Colombia’s BVC a particularly attractive option for not just domestic investors but overseas ones as well.”

Mr Córdoba expects Colombia’s recent successes in both the political and economic arenas to add to the country’s already strong GDP growth. Business is already good and now gets ready to boom. “Equity is what will generate value over the next decade or so. No matter what you happen to think about today’s share prices, in ten to fifteen years you’ll be pretty sorry you didn’t get a piece of the action. The outlook for Colombia’s publically traded companies is generally good to excellent. They are ready for take-off and so is Colombia’s Securities Exchange.”


Mark Carney: An Admirable Mind-Set at the Bank of England

Early February, Canadian banker Mark Carney spoke before the House of Commons Treasury Committee about his new job. The hearing was but a formality. Mr Carney’s appointment as the new Governor of the Bank of England had already been announced by the Chancellor of the Exchequer a few months earlier. However, the talk did give the British people their first real glimpse of the man who was about to assume the most powerful non-elected position in the country.

The first thing they noted was his North American accent, certainly a novelty for a prospective Governor of the BoE. A sigh of relief might have been heard as the odd vowel gave him away as a Canadian. Whatever his accent, Mr Carney’s words charmed those present and assured them equally of his qualifications for the job.

After studying at Harvard, Mark Carney spent thirteen years at Goldman Sachs, posted at its London, New York, Tokyo, and Toronto offices. He worked his way through the senior ranks including co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking.

After this successful stint at Goldman, he went back to academia, doing a post graduate degree at Oxford and receiving his PhD in economics in 1995. Mr Carney later went on to become Governor at the Bank of Canada, a position he held during the 2007 financial crisis which the Canadian economy weathered remarkably well.

Mr Carney supplemented his day job with chairman positions at a number of international organisations such as the Financial Stability Board (FSB) and the Bank for International Settlements’ Committee on the Global Financial System. Mr Carney is also a foundation board member of the World Economic Forum.

In Canada, Mark Carney gained popularity as a level-headed, straight-talking banker. One who very much understood the board room culture but was not afraid to take positions contrary to that of his peers. During his time as chairman, the FSB implemented measures pushing 30 or more of the world’s biggest banks to hold more capital in reserve. He also lead a campaign to monitor whether and how countries are implementing the new rules, and to “name and shame” governments that were not doing their bit to rein in the riskiest behaviour.

As governor of the Bank of Canada, Mr Carney was one of a select few financial leaders to voice support for the Occupy Movement. In 2011, as most of the world’s bankers reacted in horror at the notion that the Greek government should hold a referendum on whether or not a bailout should be accepted, Mr Carney caused eyebrows to raise when he emphasized the importance of seeking popular support for painful economic restructuring.
On July 1st, Mark Carney started his new job at the Bank of England. He was duly offered a chauffeur driven vehicle, but chose to commute by subway instead. He may even have tried a dry-run of his commute in order not to be late on day one. Expectations were running high: The coverage of his arrival was akin to that of a rock star. Scepticism was in the air as well: His plans for the major issues facing the British economy were yet unknown and he had yet to justify his handsome pay package.

Mark Carney´s forward guidance approach certainly has its share of detractors. As the British economy shows signs of recovery, many call for an increase of interest rates ahead of schedule. However, Mr Carney is sticking to his guns. Uncharacteristically for a central banker, he wants to keep interest rates at their current low level until the unemployment level has dropped to 7% or lower.

This rather novel approach of putting emphasis on reducing unemployment shows Carney to be a banker with a considered, holistic, bottom-up attitude to economic recovery. He clearly values long-term stability and wishes any economic recovery to be both robust and lasting. This mind-set is not just admirable, it is also severely lacking among his peers.


Nataly Marchbank: BEPS and Transfer Pricing in South Africa

Recently there has been a steep increase in interest in the taxability of Multinational Companies (MNCs). What effective tax rates are being paid? Are MNCs paying their fair share of taxes in their home countries? Moreover, the very contentious question being asked is: What is a fair amount of taxes to pay?

All these questions have been raised in recent months, but the answers have not been forthcoming – this is primarily due to the fact that it comes down to whom you ask. If you ask an MNC, it would most probably be that it pays whatever is prescribed by the government’s tax legislation. If you were to ask governments, they would reply that MNCs do not pay enough.

Herein lays the difficulty that most governments face. The taxation of companies generates income for a country. If collections are low because MNCs are able to structure their affairs in such a manner so as to be tax efficient, this could potentially result in lower taxes being paid. It is no surprise that governments are looking at ways to increase tax revenue.

South Africa is no different than any other government in the world when looking at increasing its tax receipts. The country’s National Treasury Department has started to shift its focus to that of Base Erosion and Profit Shifting (BEPS) principles.

“Is it prudent to think that this BEPS campaign will have an effect on the South African tax collection strategy?”

The South African tax landscape draws heavily on the Organisation for Economic Cooperation and Development (OECD). With this as the backdrop of many of South Africa’s proposed changes in tax policy, it is no surprise that South African Revenue Services (SARS) has made BEPS one of its focus areas.

BEPS is currently on the minds of every tax authority and is the buzz phrase making its rounds in every tax authority’s corridors and offices. In February 2013, the OECD published a report entitled, Addressing Base Erosion and Profit Shifting, in which it stated the view represented by the OECD member countries on the matter.

The OECD clarified in this report that base erosion constitutes a serious risk to tax revenues, tax sovereignty and tax fairness for OECD member countries and non-members alike. While there are many ways in which domestic tax bases can be eroded, a significant source of base erosion is profit shifting.

Following the February report, as well as discussions with stakeholders on 19 July 2013, the OECD then released its BEPS Action Plan that set out 15 actions to be taken and further proposing significant changes to the OECD Transfer Pricing Guidelines, the OECD Model Tax Convention, but also to domestic legislation.

These proposed changes will affect corporate tax, international tax (including CFC), and indirect tax legislation. It is evident that the OECD has been a major driving force behind the campaign against BEPS. In this report the views expressed were that it skews competition and leads to an inefficient allocation of resources because of the distorting of investment decisions and issues of what is fair.

For this reason if taxpayers view MNCs as legally avoiding income tax it will certainly undermine their voluntary compliance towards tax as a whole. But as governments struggle to deliver and contain national deficits in the post-2009 world – and South Africa is no different in this realm – the trend that has been seen world-wide is to affix blame to large corporations and their tax advisors. Therefore in South Africa, as anywhere else in the world now, BEPS is gaining momentum quickly.

Is it not fair to ask the question that a business cannot be faulted for using the rules of government? Perhaps the blame (if there is any to apportion) should shift to government. Is it not government’s responsibility to revise their rules or introduce new laws if they feel that there is an aggressive trend towards BEPS in their country? It would be most interesting to debate whether the ideals of corporate governance and the “triple bottom line” approach extend to the parameters of tax planning as well.

Is it prudent to think that this BEPS campaign will have an effect on the South African tax collection strategy? It could be argued that all the newly introduced legislation over the past ten years is enough to contain the South African appetite for BEPS. Furthermore, if there are only 459 companies with taxable income exceeding R100m, then SARS is surely in a position to detect abuse?

The answer to the question, it would seem, is no. In recent months there has been much press about the low levels of tax being paid by large MNCs. Such press has undoubtedly stirred the interest of National Treasury in South Africa with the recent introduction of WHT taxes to be levied on services and interest payments in the near future. These are expected to take effect from 1 January 2015.

Not all companies are too concerned about BEPS in South Africa as this is probably more for large MNCs conducting business in the country and how they are measured on the true taxes that are applicable to their local income.

Whichever way you look at it, South Africa is going to need the cooperation of foreign tax authorities if it is going to get to the bottom of the story entitled BEPS .There is no doubt that there is not a single country that unilaterally can ever fully address BEPS on its own.

Transfer Pricing
Controversy over Transfer Pricing (TP) has been on the rise in Africa. The amount of limited resources, along with inexperience by taxpayers and tax authorities, has made managing the risk and obtaining resolutions a major challenge.

This doesn’t mean that tax authorities in Africa, and especially in South Africa, are not sitting up and taking notice of the need to overhaul their TP principles. Looking to the OECD again, which released its initial report on BEPS, one of the key principles that underlie the taxation of cross-border activities is a mismatch in entities and instrument characterisation (hybrids and arbitrage), and related party debt financing.

National Treasury in South Africa took similar preventative measures. When the 2012 draft Taxation Laws Amendment Bill was issued it contained certain provisions whereby debt would be reclassified as equity in certain instances (i.e. the instrument when reclassified will pay a dividend and not interest).

However, these new rules were excluded from the final 2012 Taxation Laws Amendment Bill when it was introduced in parliament for promulgation. As was expected, these provisions were deferred for introduction in 2013/14. It was proposed in the 2013/14 budget that certain debt instruments, such as shareholder loans without a date of repayment or profit participation loans will be reclassified as equity.

It seems that the thin capitalisation provisions (dealing with excessive connected party debt) were addressed in the 2013/14 budget. Under the old SARS Practice Note 2 it stated a debt to equity safe harbour of 3:1. This safe harbour can no longer be used, as the new Draft Interpretation note will replace the old Practice Note 2.

[caption id="attachment_5455" align="alignleft" width="161"] Nataly Marchbank[/caption]

South Africa has therefore overhauled and revised its Transfer Pricing rules with effect of the years of assessment commencing 1 April 2012. This overhaul sees South Africa move away from the old safe harbour rules to that of the at an arm’s length test.

With the draft interpretation being the source of information for Transfer Pricing currently, there is uncertainty in the universe of TP in South Africa, and this is expected to be the case for some time as the onus and risks shift more and more to the taxpayers to ensure that they have the adequate TP documents in place and that their feasibility studies are in place, in order to explain to SARS the basis for their benchmarking in their TP policies.

Taxpayers are urged to ensure that they comply with the newly introduced IT14 tax return disclosure requirements for TP and now must have a TP document almost immediately in case of a request by SARS.

With increasing focus being placed on Transfer Pricing by the media, both domestically and internationally, there is pressure on South Africans to act according to their stated intention to combat the complex international schemes that have been singled out as contributors to the erosion of the tax base. It will be interesting to see how stringent South African tax audits will become and whether they will be based in BEPS or TP investigations. Only time will tell.

About the Author

Nataly Marchbank is a qualified professional accountant (CPA (SA)) and master tax practitioner (MTP (SA)), with a specialism in Tax. She has a Higher Diploma in Tax and a Masters degree in South African and International Tax. She is currently employed as the Country Tax Manager for IBM South Africa.


Peter Blom of Triodos Bank: The Assimilated Radical

It’s the idealists you have to look out for. The more dishonourable aspects of the financial world might have been getting a bad rap as of late, but the harm this does pales in comparison to the damage wrought by those trying to make a better world.

The negligence and greed endemic to business as usual might be slowly bleeding the planet dry, but the destruction it causes is just that; slow. Slow and – historically at least – avoidable: Some of the brightest passages of the human story describe the demise of business as usual. Every one of those passages is populated with characters committed to the idea of a better tomorrow. However, those characters bear an eerie resemblance to those appearing in the very darkest of chapters. An idealist with enough momentum will change the world, whether we like it or not.

The language might seem just a tad rich for describing a bunch of bankers with a heart. For most people the financial sector is the very definition of a playground for those with less well developed senses of fair play, morality and compassion. Indeed, banks as such may not be good or evil; they just exist to make money and preferably lots of it.

From the ruins of the recent financial crisis, an entirely new sort of bank is now emerging and plotting the very downfall – or at least driving change – of the ways of the old world order. This might be a good thing - some would even say a necessity – though it also requires a certain degree of weariness on our part.

Peter Blom is an idealist. He is a banker too. The latter comes in second though. So far, Mr Blom has had two employers in his life and one of them was a vegetarian café with an anthroposophical drift. His current employer is the Triodos Bank of which he is now CEO.

Triodos Bank, a forerunner in ethical banking founded in 1980, has enjoyed a slow but steady growth. It now boasts branches in five countries. Mr Blom became a member the Club of Rome in 2010.

If Peter Blom is a freak in the financial world, one wouldn’t tell from his wardrobe. He looks the typical Dutch business man: Dull grey suit with the tie being optional and facial hair absent. Then he starts talking and the first proper noun to cross his lips is Marx. He seems to actually have read Karl Marx. But of course, bankers study economics. It’s a fair guess that most of them at some point have read Marx.
After quickly – and predictably – knocking Karl of his pedestal, Mr Blom talks at length about his admiration for the thoughts of Rudolph Steiner. Now Steiner is pretty far out there, but not an advocate of petrol bombs and proletarian uprisings. He speaks about Steiner’s threefold social theory, and how it shapes his and his bank’s approach to business.

The mission of Triodos Bank is to be a tool through which people become more conscious of what their money is doing. Mr Blom even goes so far as to state that profit is not the aim but merely an indication of sound business. This is a curious sentiment for a bank CEO.

"An idealist with enough momentum will change the world, whether we like it or not."

Triodos Bank sets very high standards for themselves as well as for the companies it invests in. The bank only conducts business with companies deemed to be sustainable and whose activities fit the ideals of the bank. Think green energy, organic farming, microfinance, social welfare, and culture. Every single one of the businesses it works with is featured on the Triodos website. This dizzying level of transparency may be the best aspect of the bank.

Precisely because of the unprecedented level of transparency offered, clients may find out that the bank’s sense of ethics does not always align with their own. This may be the fundamental flaw in the whole concept of ethical banking: The ethics by which a bank such as Triodos operates represent usually just one particular set of values.
There are a lot of things Triodos Bank stands for which are most laudabIe, other are at worst harmless, but only because Triodos is such a small bank. But they do of course not wish to stay small – Triodos is ambitious like the best of them and wants nothing less than to change the entire banking system.

What happens when the financial centres of the world start operating on competing idealistic principals? The simple supply-and-demand model of economics almost by definition lags in sustainability. Business practices will continue so long as they are profitable and a shift is only made when the return on monies invested approaches zero.

What would happen if global resource allocation is determined by a set of well-meant but ultimately flawed ideals? Marrying political ideals to power breeds dogma. It is therefore hard to see a world run by dogma-driven banks faring any better than one run by dogma-inspired governments.

It would appear Mr Peter Blom is the more dangerous kind of radical: The assimilated radical. Sure, he might be an oddball, but he’s a straight-laced oddball. The concerns expressed are merely that: concerns for a beautiful project with the potential to accomplish a lot of good. Triodos is a project born of an inspired, yet sensible mind.

The fact that Mr Blom does not shed his lofty ideals along with his coat and hat as he enters his office in the morning, is nothing if not praiseworthy.

Follow your heart, use your head, and proceed with caution.


Why an Expo 2020 Win Will Not Determine the Strength of Dubai’s Property Market

By Mat Green, Head of Research & Consultancy UAE, CBRE Middle East

Property markets around the world have proven to be acutely sensitive to changes in market sentiment. There should be little surprise then that Dubai’s ongoing bid to host the 2020 World Expo has had a resoundingly positive effect on the local real estate markets over the past year. A promising and well-received submission for the event has seen Dubai progress confidently into the last four, with the emirate now widely viewed as a frontrunner in the final vote set to take place late November.

A successful bid would be a great accolade for the emirate, opening a new window to the world for the marketing of Dubai as a global city, and one possessing a truly world-class infrastructure. More importantly perhaps, it would also drive demand in the emirate's property sector, helping it to reach new, yet untapped markets and ultimately increasing Dubai’s global reach. However, with property prices already on the rise, investors and residents alike may be left wondering exactly how Expo 2020 would benefit them and what impact it may have on the real estate market and the overall cost of living.

Although Dubai’s Expo bid has certainly boosted growth in the residential market, we should remember that prices were already on the rebound before the emirate’s expo bid gathered traction. Economic performance has been positive since 2011, fueling the initial recovery in real estate markets, albeit in a highly fragmented fashion. However, over the past 18 months the influence of speculative investors and those looking for a safe haven market has effectively overtaken core fundamentals as the principle driver of sales growth.

"However, with property prices already on the rise, investors and residents alike may be left wondering exactly how Expo 2020 would benefit them and what impact it may have on the real estate market and the overall cost of living."

Whilst still constrained by significant oversupply, the commercial office market is showing promising signs of a more sustained and long term recovery, aided by growing demand from international corporates who are now back on the expansion trail. This is now generating a major demand for new office space as companies seek consolidation into single corporate premises. This has been aided by improving conditions in home markets across Europe and the US, which has freed local offices to finally make major move decisions after a virtual hiatus in corporate relocations during the past five years.

There is no doubt that a Dubai Expo win would constitute a major catalyst for future growth across virtually all asset classes. However, there is a general feeling in the marketplace that some of the potential upside may have already been factored into recent growth as investors have effectively gambled on a positive result.

The clear winner of a successful bid would be the hospitality sector, with huge potential for the emirate to increase its share of international tourism and to develop associated infrastructure and facilities that would sustain industry growth for years to come. There would also be a direct impact on related sectors, including retail which would see a significant increase in the spending power of visitors.

The last edition of the Expo (2010) held in Shanghai attracted close to 70 million visitors, significantly boosting China’s tourism market and enabling the funding and delivery of new transport and leisure facilities. Unsurprisingly 2010 was a record year for tourist spending in Shanghai.

[caption id="attachment_5469" align="alignright" width="158"] Mat Green[/caption]

A successful result would not only accelerate the pace of implementation of recently announced projects including Mohammed bin Rashid City, but in a wider context, would also have a substantial impact on overall infrastructure development with plans to fast-track the construction of the Dubai Metro Purple Line, amongst various other projects in and around Dubai World Central. The award would also help to drive expansion of the airport itself, accelerating its as a passenger hub and becoming a further catalyst to development of the air transport infrastructure - a key driver for the sustained economic growth of the emirate.

Although the positive ramifications of hosting an Expo event would be significant, failure would be far from disastrous. The Dubai bid has already created a huge amount of interest globally, generating positive press locally and internationally for the quality of the submission and for the huge strides that have been taken in the emirate’s recovery since 2008. Dubai’s economy is now clearly more robust and appears in better shape for the future, which is helping to attract a host of new companies keen to set up operations in order to service the wider region. The tourism and retail markets are also buoyant, reflecting the strength of two core industry segments. With this in mind, we see a positive outlook for the real estate sector regardless of the November’s decision.


Involving Communities to Create Human Networks

Leadership Initiative for Transformation and Empowerment (LITE-Africa)

Community Engagement

The Leadership Initiative for Transformation and Empowerment (LITE-Africa), is a leading nongovernmental organization (NGO) operating in Nigeria since 1999 with a vision to create a safe space for peace and development action and a mission to facilitate community and human development, foster good governance and create inclusive and diverse networks and collaborations within the Niger Delta region of southern Nigeria and beyond.

Both the mission and vision statements speak to the organization’s aspiration to expand programming beyond the Niger Delta, beginning across the African sub-region. Our organizational aims and objectives are to:

Enhance capacities of youth and women in livelihoods and  income generating activities;

Strengthen the capacities of women , youth, CBOs and CSOs on leadership and governance;

Facilitate dialogue, strengthen co-existence and create a safe platform for difference and diversity amongst stakeholders in the Niger-Delta region and beyond;

Create an enabling environment that promotes economic investment and developmental activities in the Niger-Delta region and beyond;

Create awareness and build capacities of stakeholders on their rights and responsibilities as citizens in the Niger-Delta region and beyond;

Encourage and promote activities and programmes that help to increase safe health practices;

Advocate for gender equity and mainstreaming; and

Promote and strengthen active citizen participation in political processes.

LITE-Africa develops and implements high impact community centred programmes that fall within the thematic areas of sustainable livelihoods and health, governance and human rights and humanitarian services support. LITE-Africa facilitates community and human development in over 300 communities in Southern Nigeria. We have successfully implemented training, research projects and livelihood programmes for the most vulnerable, socially and economically underprivileged women, at-risk youth, and adults who live in some of the most conflict ridden areas in rural Niger Delta communities. Our programmes have helped turn these residents into productive, well-esteemed members of their communities.

"Both the mission and vision statements speak to the organization’s aspiration to expand programming beyond the Niger Delta, beginning across the African sub-region."

After the recent flood of September 2012 which rendered thousands of people homeless, damaged livelihoods and crumbled the socio-economic conditions of communities in the Niger Delta and across Nigeria, LITE-Africa carried out a preliminary assessment with other development partners which led to the emergence of the Integrated Emergency Flood Response Project. Partnering with the Catholic Agency for Overseas Development (CAFOD) & Catholic Relief Services (CRS) on an ECHO grant, the Integrated Emergency Recovery Program is being implemented in Delta State. This six month intervention is geared towards supporting the most vulnerable households affected to recover their livelihoods in selected communities through provisions of unconditional cash transfers, Agricultural Services and Water, Sanitation, and Hygiene (WASH). LITE-Africa is partnering on this project under the unconditional cash transfer activities with the Justice, Peace and Development Commission (JPDC). A total of 3,240 individuals received the livelihood packages, 1700 farmers and fishermen received extension services. 438 beneficiaries attended the Disaster Risk Reduction Training.

With funding from Oxfam Novib Netherlands, LITE-Africa is implementing a 5-year project in Niger delta tagged ‘Oxfam Novib Livelihood and Governance (ONLAG)’. With 75% women’s participation, this project focuses on enhancing existing livelihoods and providing alternative livelihoods to local communities, as a means of reducing poverty and increasing household disposable income. Through the implementation Of ONLAG project, we have helped improve farm yields, enhanced households disposable income, increased women participation in decision making and created alternative livelihoods for 2,500 beneficiaries. To magnify the impact of the project our Business Development Specialist (BDS) is in talks with the Agricultural Development Programme (ADP), the Delta Agricultural Procurement Agency (DAPA) to get access to agricultural inputs, high yielding seedlings, cassava cuttings, fishing materials and linkages to agricultural credit schemes. Through these linkages we will support individual farmers and farmers in our agro-based cooperative groups to in-crease their productivity and incomes. By the end of the intervention 6,480 individuals will benefit from livelihood skills enhancement.

Our Governance and Livelihood in the Niger Delta (GOLIND) project addresses the structural issues that inhibit women’s participation in community leadership in 2 communities each in Delta and Bayelsa States by empowering them through livelihood and income generation activities. Funded by The United States Agency for International Development (USAID), this project will equip 200 beneficiaries with 75% women participation on income generating skills and leadership skills to be able to champion their causes and participate actively in community development.

‘Tomorrow is a new day (TND)’ is an 18-month project funded by the European Union through search for common ground. This project seeks to complement the Federal Government’s Amnesty Programme on Disarmament by supporting community-level conflict resolution, and the reintegration of ex-militants in 7 trend setting communities in the Niger Delta states of Delta, Bayelsa and Rivers states. The project has helped reduce barriers to reconciliation and reintegration, including bad attitudes and mind set. Beyond community capacity building, the TND intervention also brought about peaceful relationship between the different social groups in the project communities, in particular with ex-militants. Throughout the course of the project, LITE-Africa will provide conflict training for community stakeholders in conflict transformation techniques, assist in trauma healing assessments, provide advocacy training for women and youth to enable them learn the skills to effectively communicate with government representatives and TNCs on human rights needs for their communities.

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We have also developed a Citizen Report Card (CRC)  though our project ‘Niger Delta Citizen Report Card on Public Services, Good Governance, and Infrastructure/Development’ The 10-month project was implemented in 120 communities covering three geopolitical zones of Nigeria, Southeast, Southwest and South-South. Through a participatory approach, the project assessed issues of good governance, public services (health, education, public electricity, water and sewage) and infrastructure. A report was published and circulated among the communities, civil society organizations (CSOs), and international organizations highlighting areas that have been neglected including abandoned projects. The report serves as a reference tool for advocacy among stakeholders and has continued to serve as a reference for donor agencies and development partners in their project design. This project was financed by European Union Inside and Oxfam Novib.

LITE-Africa Serves as key facilitator working with various communities to negotiate GMOUs with Shell Petroleum Development Company (SPDC) and Chevron Nigeria Limited (CNL).Our Executive Director is currently serving as the Secretary to a Multi-Stakeholders Committee reviewing issues of compensation and environmental remediation on the KS Endeavours fire incident at Funiwa field, Bayelsa State. LITE-Africa is also part of a consortium of civil society organisations working overseeing community participation in the Chevron GMoU process through the Participatory Partnership for Community Development (PPCD) project.

We are presently working on a one-year AusAid funded project entitled ‘A Call to Action: Engaging all Stakeholders on the Voluntary Principles on Security and Human Rights. This project aims to increase the awareness of the VPs in the Nigeria through trainings, workshops and advocacy meetings and persuade the Nigerian Federal Government to sign on to the VPs through a VP Call to Action. Click here to sign on yourself to persuade the Nigerian government to sign on to the VPs.

LITE-Africa is stretching its operations beyond the Niger delta into other countries in Africa in the near future. This will occur through increased collaboration with development partners inclusive of CBOs in countries that host extractive industries.The impetus behind this decision is based on the reality that the Niger Delta region presents a unique case study with various competing elements. The lessons learned in this context are instructive for crisis and resource rich areas throughout Africa.

For more information or enquiries about LITE-Africa please visit www.lite-africa.org Follow us on Facebook and twitter @LITEAfrica.


James “Jamie” Dimon: How Not to Be a Good Banker

[caption id="attachment_5516" align="alignright" width="233"] Jamie Dimon[/caption]

The CEO, chairman and president of JPMorgan Chase has no shortage of supporters and fans. Just two years ago, James “Jamie” Dimon was named CEO of the Year. In its All-America Executive Team Survey, Institutional Investor has placed Dimon near the very top for five years running. This is one guy that knows how to impress.

With a pay package exceeding $23 million annually and excellent connections in the White House, Dimon has been hailed as “the best banker we’ve got” by no one less than President Obama himself. Still, Dimon has been caught lying quite a few times.

In 2012, he obfuscated trading losses amounting to well over $6 billion at the London office of JPMorgan Chase. A report by an US Senate investigative commission concluded earlier this year that Dimon misled both investors and regulators as to the extent of the losses caused by Bruno Iksil, a trader known as The London Whale. Dimon had earlier dismissed the losses as a “tempest in a teapot”.

Some tempest: The US Senate commission found that JPMorgan Chase had knowingly violated “massive numbers of key risk limits” and “neglected to disclose the truth to either regulators or the public.” These damning assessments of the bank’s behavior are cause for considerable worry.

JPMorgan Chase was one of the few big US banks that did not actually need a taxpayer-funded bailout when the financial crisis hit in September 2008. Even so, the bank was urged to accept $25bn to help assure markets that all big banks were safe and being well looked after by the Federal Reserve. JPMorgan Chase was the first of the nine taxpayer supported banks to hand back the full amount.

"JPMorgan Chase was one of the few big US banks that did not actually need a taxpayer-funded bailout when the financial crisis hit in September 2008. "

Dimon now seems to have concluded that risky behavior carries its own rewards. If things go wrong, a bailout will follow. If things go well, profits loom large. It’s the socialization of losses and privatization of profits. The fact that a single trader is allowed to expose its employer to over $6bn in losses on positions hard to unload at short notice, seems indicative of a culture in which deregulation has gone wild.

This has absolutely nothing to do with banking any longer. JPMorgan Chase is not providing the public with any discernible service by having traders make outrageously risky bets in order to chase a quick and easy buck or two. While it remains a formidable feat of financial engineering, bordering on alchemy, to create billions in profits out of thin air - or by shifting bucket loads of digits around the globe and seeing their number increase as they move – the monies thus created seldom if ever proof beneficial to the wider society. In fact they are detrimental to nations and their real economies (as opposed to bankers’ flights of fancy) inasmuch that its creation attracts the brightest young minds.

There is no doubt that Jamie Dimon has an absolutely brilliant mind. He might even be a kind of genius. It is, however, most regrettable that he didn’t choose to apply his intellectual and creative powers to, say, engineering, medicine or some other form of activity that actually produces real wealth and prosperity. And if you do insist on becoming a banker, then at least try to make an honest buck by facilitating investments in worthwhile human activities that give a good and decent return to the bank, its depositors and shareholders and to society at large. Risking billions in iffy schemes is not part of that equation.


Greece on the Mend: Investors Find New Land of Opportunity

[caption id="attachment_5523" align="alignright" width="225"] John Paulson[/caption]

The severely battered Greek economy is on the mend. A rebound may even be in the works. The same hedge funds that contributed in no small measure to Greece’s downfall are now seen as the engines of the country’s revival.

The rush into Greek equities is led by none other than John Paulson whose Paulson & Co. hedge fund has already booked a 290% profit on its sizeable stake in Alpha Bank. Mr Paulson now wants more and has nothing but praise for the Greek government: “Its pro-business stance is decidedly helpful.”

Mr Paulson – who made $3.7 billion in 2007 short-selling subprime mortgages – expects the banking sector to benefit most from the improved economic conditions. “Both Alpha and Piraeus banks are now very well capitalised and poised to recover with sound management in place.” The US investor emphasizes that Greek banks were the victims of the financial crisis rather than its cause as was the case with banks in Spain and Ireland.

The two main Greek banks have seen their shares rally significantly since their recapitalisation earlier this year; separately traded warrants have already doubled in value. These warrants were given to investors participating in the June bail-out of Greek banks and may eventually be swapped for shares at a set price. Though Alpha Bank shares have shot up 32% over the past three months, they are still trading at only 0.8 times the bank’s book value.

Banks are by no means the only star-performers at the Athens exchange. Investors have been snapping up shares of lottery operator OPAP (up 70% so far this year), telecom giant OTE (+63%) and mining conglomerate Ellaktor (+48%).

“Both Alpha and Piraeus banks are now very well capitalised and poised to recover with sound management in place.”

Achilles Risvas of Dromeus Capital, a hedge fund specifically set up to cash in on Greece’s recovery, thinks the good times haven’t even fully begun yet: “People laughed at us when we launched Dromeus; now they want to invest with us.” In 2012, Dromeus Capital was up a market-beating 40%. So far this year, the fund has returned a staggering 93%.

Mr Risvas sees plenty of future opportunities, particularly on the private markets: “Real estate may be close to bottoming out and should shortly become a most promising segment, though the upswing in publically traded companies is far from over.”

Foreign direct investment in Greece is also gaining some lost ground. Hewlett Packard, SAP and Boehringer Ingelheim have expanded their presence in the country. “We are a great place for investments and working hard to make it an even better one,” says Notis Mitarakis, Greece´s Deputy Minister for Development and Competitiveness.

Mr Mitarakis joined Prime Minister Antonis Samaras earlier this month in New York to pitch their country to US investors. “We now have legislation in place that speeds up the formation of new businesses. Red tape is being cut by the yard. Greece is dead-set on becoming the place to be.”

However, Mr Mitarakis’ job is far from done. Though moving in the right direction, Greece is still a country not quite suited for the fast and furious business dynamics its government seeks to foster. On the World Bank’s latest annual Ease of Doing Business ranking, Greece has moved up to slot number 78 (out of 183). In 2010, the country ranked 109th and lagged far behind any other EU member state.

But, even with new streamlined procedures in place, Greece remains one of the most difficult places in the world (146th) to start a new business. “For investments two flow, two basic requirements need to be met. There must be an opportunity to profit and a legal framework that protects the investor. Opportunities abound, but much of our regulation remains a bit too stiff and antiquated,” admits Mr Mitarakis.

The secret to unlocking Greece’s potential for economic growth is finding a way to engage the huge stock of domestic capital now sheltering elsewhere. “Any return to prosperity must go via the repatriation of the billions that fled the country as it imploded. We cannot really expect foreign investments to drive future growth while Greek investors keep up their vote of no confidence,” says Achilles Risvas who thinks the Samaras government is on the right track but might want to consider speeding up the necessary reforms. “This is not the time for complacency. Good progress is being made but in order for Greece to recover lost ground much more needs to be done.”


Lady Rice: Wisdom as an Acquired Taste - A Voice of Reason

Lady Susan Rice is the first woman to head a UK clearing bank. Currently, she is managing director of Lloyds Banking Group in Scotland. Born and raised in the United States, Lady Rice now lives in Aberdeen with her husband Professor Sir Duncan.

Lady Rice bristles at the mere notion of a glass ceiling that might somehow inhibit the advance of women in business. Once the idea of restrictions on female progress has taken roots, it is – as far as she is concerned – Game Over. Hard work and dogged perseverance should deliver the results desired regardless of gender. This has certainly been true in her case with senior appointments at the Bank of Scotland and as a dean at Yale and Colgate universities.

A poacher turned gamekeeper, Lady Rice is now referred to as the voice of reason in Scottish banking. Her credentials on corporate social responsibility (CSR) are impeccable. She is one of the few bank executives that may perhaps have seen the error of their ways. During the earlier part of her career, Lady Rice was as aggressive a banker as they come and this certainly contributed to her advancement in the industry. However, she has mellowed with age. Or become wiser.

“CSR is fundamental to running a successful business. We must help solve society’s problems in order to keep our business strong.”

Lady Rice became a Prince of Wales Ambassador for Corporate Responsibility in 2006 and has said that, “CSR is fundamental to running a successful business. We must help solve society’s problems in order to keep our business strong.”

She is a former president of the Community Finance Association and a driving force behind Social Investment Scotland which connects capital to communities. Projects financed by the latter organisation include Factory Skate Park, the Collande Youth Project and the Maritime Rescue Institution which now provides a lifeboat to help safeguard the north east coast of Scotland. These seem to be activities close to this senior banker’s heart.

Under her stewardship, Lloyds Banking Group has become an active supporter of the shift to a green economy. In 2009 Lady Rice became a member of the high level 2020 Group working on climate change targets. It is also heartening to note that with her total support, Lloyds is now very keen to help SMEs respond to climate change. The bank has trained about 300 relationship managers to better understand the challenges in this sphere.

On the overly generous, and at times even quite outrageous, pay packages bankers claim, Lady Rice takes a slightly less clear stance and points out that not all at the top of the banking industry receive vast bonuses. She also mentions that rewards should relate distinctly and transparently to a given company’s overall strategy. This suggests a reasonable way forward, provided that bank strategies are indeed responsible.


European Federalist Party: Power to the People? The Road to the 2014 European Parliament Elections

[caption id="attachment_5547" align="alignright" width="247"] Pietro De Matteis[/caption]

Apart from the election of the first European Parliament in 1979, European elections have hardly been considered a decisive moment in European politics. But this time it is different. The Eurozone crisis has dramatically shown us how our lives are deeply interconnected, and how policies decided (or not decided) in Brussels may dramatically affect the life of citizens Europe-wide: The endless debate about austerity-led policies or growth-oriented measures is just one example. As argued below, such interconnection between Europeans has increased at every level and could make the 2014 European Elections the first one accompanied by a true European debate.

We have all lost the count of the number of meetings and summits that our heads of state and government attended over the past five years in their attempt to tackle the Eurozone crisis. In the same vein, the European media have increasingly highlighted the European relevance of national events, such as the elections in Greece and in Germany or the political uncertainties in Italy, just to name a few. Such awareness of European affairs has also facilitated the development of increasingly heated debates about member states’ domestic policies involving foreign officials: What previously would have been labelled as “unacceptable foreign interference” has become increasingly common. Indeed, those who have always argued that a “European political public sphere” does not exist will have to acknowledge that it does now, thanks to the crisis.

“What previously would have been labelled as ‘unacceptable foreign interference’ has become increasingly common.”

The exchanges did not increase only at the heads of state level or through the media. European civil society and trade unions have started to organise Europe-wide protests and to offer their proposals to overcome the crisis. This was further helped by the fact that Europe appeared to be less able as of late to deliver growth, jobs and social stability.

Of course, when we say Europe we must consider the European Union as well as the individual nation states. In fact, while the former is limited primarily by the amount of competences (and budget) attributed to it by the member states, the latter are intrinsically constrained by their own size and resources; mostly insufficient to make the difference in the twenty-first century.

It could be argued that European nation states are among the most visible victims of the success of process of globalisation of production and consumption. If, on the one hand, they have accompanied the rise of new continental-scale economic powerhouses such as China, India and Brazil to the benefit of some European businesses, on the other hand European countries have seen dramatically reduced their political weight in the international arena, as in a “quasi-zero-sum game”. Furthermore, the new global business paradigms based on “tax optimisation” together with the competition from emerging markets is making the foundations of the European social model increasingly unsustainable.

The growing “collective incapacity” of EU countries to keep delivering on their promises of providing a constant improvement of our standards of living and the impossibility for the EU to step in to fill the gap, created a large political vacuum which is now being filled by an increasing number of extremist, separatists and anti-euro political movements in most European countries.
This is the case in Greece, in France, in Germany, in Hungary, in Italy, in Romania and of course in Spain, Belgium and in the UK. These movements represent the unease of an increasing number of citizens who are unhappy with the status quo and who feel left behind in a rapidly changing world. For them, the fundamental question is how to change things and to determine whether the benefits of being part of a larger political entity outweigh the costs in terms of bureaucracy and reduced accountability.

From such an assessment – not always very accurate - some would argue that the “go it alone” is the best strategy, and would set as their objective the regaining some sort of “independence” from the larger political entity; be it the unitary state in the case of separatists movements, or the European Union as it is the case for nationalists and eurosceptics. Others, instead, would argue that only by working together in a Europe-wide democracy can we actually tackle this century’s challenges, and that if we do so through a well-functioning federation we can significantly improve efficiency and accountability.

If we take a step back and look at today’s Europe, we will realise that what we are facing is an expectation-capability gap between what the average citizen’s expectations and the capabilities of the current political structures to tackle them. In addition, citizens’ expectations are either stable or increasing over time while the capabilities of those bodies tasked to fulfil those expectations in Europe (i.e. national and local authorities in primis) are constantly reducing given the changing global context.

Through their membership to the European Union and the relative economies of scales so obtained, the capabilities of European countries to manage globalisation have significantly improved. This has de facto allowed these governments to delay and reduce their adjustments costs while enabling them to benefit directly from access to global markets.

“This crisis had the role of raising the awareness among Europeans of both our shared strengths and weaknesses.”

Today, however, the above mentioned expectation-capability gap is widening and only a more effective readjustment of the competences and policies to be managed at the local, national and European level can provide the necessary efficiency gains that Europe needs to remain competitive at the global level. However, such gains can only be obtained by shifting very sensitive policy areas such as taxation, security or industrial policy (just to name a few) from the national to the European level.

Such shifts in competences and powers cannot happen without the necessary political legitimacy and that is why the peoples of the EU need to make their voices heard ahead of the next European elections. Whatever the path that Europeans decide to take, it is increasingly clear that their voice cannot be bypassed anymore. Citizens will have to take ownership of decisions that are taken in Brussels through a strengthened and more participative democratic process.

A sort of new “social contract” (or “social pact”) – to use Rousseau’s terminology - should be drafted among the people of Europe and the different levels of government in order to provide certainty about which competences are to be managed at which level and about the nature of the mandate and the key principles that should guide the new European Parliament. This is crucial in order to strengthen the accountability and the transparency of European political processes.

In the past, many argued that it was just not possible to have such a participatory process due to the lack of a truly “European political public sphere” - which, nonetheless, existed in other areas such as sports and culture for instance. Now, as noted at the beginning of this article, this excuse cannot be used any longer, as a true European political public sphere has sprung into being thanks to the Eurozone crisis. T
The shared awareness of being “all in the same boat” is clearly the starting point of a debate which is yet to happen. The question to be asked now is whether each of the passengers should jump off and try to reach the nearest shore by him/herself (be it the Chinese or the American one) or if the passengers are still willing to sort this situation out by themselves and start rowing all together to reach their own destination.

The overall social, political and economic environment is conducive to transform of the upcoming European Parliament elections an important turning point. In addition, the elections provide some new opportunities for people to make their voice heard. One of the key innovations is that the major groups in the European Parliament are expected to present their own candidates for the job of President of the European Commission. This means that European citizens will be able to elect their own European president – even though not directly as in the United States.

Also, in addition to the top-down alliances of traditional national parties created for the European elections, this time there will also be truly European parties in the running, such as the European Federalist Party (www.federalistparty.eu). This party was founded as a bottom-up political entity which has progressively opened sections all over Europe and which moreover aims to present candidates in several European countries. This will allow raising the debate about Europe during the electoral campaign and counterbalance the increasingly prominent role played by the nationalist and extremist political movements.

Unfortunately the current legislature did not legislate on “transnational lists”, which would have allowed candidates to feature on a Europe-wide electoral list instead of national lists as it is the case now. Nonetheless, all these innovations - together with the changing European and global context outlined above - could make of next year European elections a real “game changer” in European politics.

It is now up to us, the European people, to make our voice heard and shape our own future.

About the Author

Pietro De Matteis is the co-President of the European Federalist Party, the only bottom-up and pan-European political party with sections in 18 European countries. An economist by training, he obtained a PhD in international studies from the University of Cambridge and carried out research in China and in the USA. He has lived in several European countries and has worked for various European Institutions. The positions expressed in this article are personal.

Contacts
E-mail: pietro.dematteis@federalistparty.eu
Website: www.federalistparty.eu
Twitter: https://twitter.com/eufederalists
Facebook: www.facebook.com/EuropeanFederalistParty


André Esteves: No Limit to Ambition - Looking to Dominate the World

From intern to owner in barely eight years: If anything, Brazilian banker André Esteves is a financial whirlwind. After grabbing the reigns of Banco Pactual in 1997, becoming one of the bank’s five partners, he engineered its sale to Swiss giant UBS in 2006 for $3.1 billion, making his personal first billion in the process.

Mr Esteves subsequently became the UBS point man in Latin America. After a year he ascended yet further becoming the global head of UBS’ fixed income division. He left the Swiss banking giant in 2008, reportedly after a failed take-over attempt. Me Esteves prevailed in the end though with his newly found BTG (Back to the Game) investment company. With barely $1.5bn in managed assets on the books, tiny BTG acquired Banco Pactual, with some $26bn on its books, back from the Swiss for just $2.5bn.

Mr Esteves is used to getting his way. From early on, young André is quite determined to escape the life of worry and financial difficulties his parents suffered as he was growing up in Rio de Janeiro. After attending the Federal University in his city of birth, André entered Banco Pactual as an intern in 1989. His meteoric rise through the ranks was set to begin.

"Mr Esteves is used to getting his way."

Mr Esteves belongs to a very special breed of bankers. At the time his career started, macro-economic conditions in Brazil were atrocious, bordering on the surreal. Financial regulations shifted dramatically with the change of season. A rampant inflation, bordering multiple hundreds of percent annually, called for creativity in the design of investment vehicles safeguarding the value of the amounts committed. Relative price levels were moving up and down with the tides and nobody knew what tomorrow would bring.

These dreadful market conditions – prevalent in Brazil between the early 1980s and the mid-1990s – required an exceptional degree of financial acumen from bankers. The ones to survive and prosper under such circumstances were widely hailed are veritable geniuses. Mr Esteves learned his trade from what were then undoubtedly the best bankers in the world. Nobody could hold a candle to these flexible, sharp-minded guys who could adapt to any and all game-changing events without so much as blinking an eye.

Small wonder that even such a financial powerhouse as UBS should find itself outwitted by this young (44) Brazilian banker.
Mr Esteves financial prowess would be sufficient reason to celebrate him as a “good banker”. But he is much more than just a Brazilian banking tycoon. Mr Esteves has his eyes on world domination. Whereas most of his Brazilian fellow businessmen are quite contend to play on the domestic market, Mr Esteves sees the entire global market as his sandbox. He is not hampered by the parochial attitude so often found in Brazilian business and thrives when competition is particularly fierce.

As such, Mr Esteves is indeed an oddity in Brazil, a country still much plagued by the effects of its long-standing protectionist trade policies and the resulting “mediocrity-is-quite-profitable” mentality of his peers. By actively pursuing overseas expansion and showing courage in the face of competition, Mr Esteves is perhaps the poster boy for a new generation of Brazilian entrepreneurs – one brought up with the notion of a global village in which national markets are no longer insular places of boredom. Brazil has some way to go yet before truly joining that global village from where Mr Esteves is already beckoning.