IMF: Turbulence and the Lessons of History

Opportunities are born of crisis, but the lines that connect them are far from direct

Events of recent years, and most recently the COVID-19 pandemic and the war in Ukraine, have forced all of us to confront some of the hazards inherent in our interconnected world. In the 21st century, the gravest threat to international stability appears to lie in our societies’ greater interdependence, reinforcing the power of a shock from anywhere in the world to become systemic.

History counters society’s perception that the challenge presented by this increasingly interconnected world is new. In the first half of the 20th century, the world reeled from one shock to another: World War I, the Spanish flu, communist revolutions, a Great Depression characterized by rival trade blocs, and a global geopolitical crisis generated by the Axis powers that resulted in World War II.

After 1940, efforts ensued to build a new world order, centered around the United Nations (UN). Over time, the continued proliferation and specialization of multilateral organizations appeared to signal their success, and by the early 2000s the benefits of institutionalized multilateralism were self-evident and went largely uncontested.

The 21st century has put an end to the notion that international institutions can anticipate and manage shocks. Charges that the World Health Organization is partisan and that the UN has failed in its response to the war in Ukraine have spawned the revival and reassertion of Cold War battle lines, with talk of democratic versus authoritarian powers. As the world turns its gaze to Turkey and China as possible mediators to end the war, the global order established in 1945—and the liberal institutions that embody it—seems at greater risk than ever before. This comes as we face the real possibility of more shocks, which will severely threaten political stability, social cohesion, economic prospects, and the natural systems that support us.

Managing future shocks

These tribulations come after more than 20 years of challenges to the UN system. Problems with the UN organization are sometimes conflated with the operations of its many specialized agencies. These pose the risk of the UN system going the way of the League of Nations, the world’s first intergovernmental body, which was in many ways the forerunner and foundational cornerstone of the UN institutions that succeeded it. With history mobilized by actors on all sides in the Ukrainian war, are there any lessons this history of failure can teach us as we face the challenge of future shocks?

The long view of history shows us it is better not to think of periods of historical time as eras of stability or crisis, equilibrium or shock.

First, and most immediately, the long view of history shows us it is better not to think of periods of historical time as eras of stability or crisis, equilibrium or shock. The first half of the 20th century was not a period of unending shocks any more than the Cold War era was stable—a world order apparently determined by two superpowers, the United States and the Union of Soviet Socialist Republics, and harmoniously overseen and managed by global institutions. The US unipolar moment, which followed the end of the Cold War, similarly masked deeper complexities. A new power shift is underway, but it is not just in China’s favor. China is no more likely to be the sole dominant power in the 21st century than the United States was in the 20th century. The debate about managing future shocks needs to focus on the challenge of multipolarity and the uneven distribution of global resources and power.

It is better to anticipate the problem before us as one of managing turbulence rather than to see each shock as separate. This encourages us to avoid the dichotomy between stability and change, to confront their different chronologies, and to recognize the relationship between different types of shocks. For example, it will help us recognize that the current disruption to food and fertilizer supplies in Ukraine will have consequences that outlast the war. This is what happened after 1918, when the rapid development of overseas markets for the United States turned from boom to bust, with lasting effects on North American wheat prices that had consequences for US trade policy and diplomacy. Similarly long-lasting were the effects of population displacement after both world wars. In the decade or more after these wars ended, the West largely forgot about the large numbers of displaced central and eastern Europeans who still lived in temporary camps. The risks to European solidarity will be considerable if countries such as Poland are left to deal alone with a socioeconomic challenge that will endure for some time to come.

One of the core lessons—if not the key lesson—of the failure of international cooperation and global governance on the road to World War II was the absolute centrality of the political economy. There were persistent efforts to promote new international norms and practices that would facilitate coordination and cooperation throughout the 1920s and the 1930s among liberal democracies. This shared history—and the intelligence it generated—was the cornerstone on which a new order was built. And planning for it began as early as 1940. This should not be forgotten by 21st century diplomats, even as geopolitical issues necessarily take center stage in the short term.

Ukrainian artists are mining the history of their cultural resistance to Joseph Stalin in the late 1920s and 1930s as they resist Russian imperialism once more. It is a stark reminder that global order is not forged by political leaders from on high. The 1920s, more than any previous decade, was characterized by waves of social mobilization around international questions relating to war and peace across the political spectrum. Many of the nongovernmental organizations currently supporting displaced Ukrainian civilians grew out of local, grass-roots activism. Recent events signal a strong shift akin to that of the 1920s, with claims for justice emerging across many parts of the world, providing an opportunity to reengage public interest in international organizations (not just activism). There is now a new generation of self-starting aid entrepreneurs, who have found an authoritative voice and can help set the framework and determine the language for broader conversations about reforms needed to produce better solutions to our shared challenges.

From local to global

And what should those solutions look like? The global pandemic has underscored the significance of the local to the global. The fight against epidemics of typhus, cholera, and tuberculosis in the 1920s established international mechanisms of scientific and humanitarian collaboration that continued even as countries went to war with one another. These practices recognized the need for a global commitment to supporting local, community-based programs that includes economic and financial support as well as better health care. In 1945, this history gave rise to new institutions of global governance in the field of health and economics—the World Health Organization, the Food and Agriculture Organization, the International Monetary Fund, and the World Bank—highlighting one of many moments when the practices and institutionalization of global governance were challenged, disassembled, and reassembled in the wake of new shocks.

It is extremely difficult to create cooperative institutions of global governance from scratch. In 1945, the multipurpose League of Nations gave way to single-purpose UN institutions, suggesting that strands and forms of governance are discrete from one another—health, food, finance, trade, geopolitics, displaced peoples, climate change. Events of the past few years, and notably the COVID-19 pandemic and the war in Ukraine, make it clear that they are not. Recognizing how economic and social issues are connected should be central to future efforts to stem escalating geopolitical tensions. When planning for the future—and we need to plan—we must give just as much attention to how shocks such as population displacement, disease, geopolitical conflict, disruptive technological innovation, and climate change interact and how to effect and coordinate multiagency and state engagement. Managing these shocks cannot be left to individual institutions, such as the North Atlantic Treaty Organization (NATO) or the IMF.

Crucially, the war in Ukraine has underscored the importance of regional institutions to global governance. Decades-old, apparently moribund, questions about how NATO, the European Union, and the UN Security Council and General Assembly should relate to one another in regard to human security are now alive and kicking. If regional governance is key, the global implications of new regional institutions, such as the Asian Infrastructure Investment Bank, are far from clear. Global governance, as the history of the United Nations itself shows, is strongly path-dependent. If this presents a new reform agenda and possibility for action, the challenges of the return of geopolitics, if sometimes frightening, should be familiar. While many commentators dwell on the bitter lessons of the 1930s and the early Cold War years, in reality power politics shaped and limited the prospects of global governance for the entire 20th century. Recognizing this presents an opportunity because it is a reminder that arguments for, or against, international cooperation and organization are rival attempts to find solutions to common dilemmas. The war in Ukraine makes it clear that for all state leaders the realm of international relations is where they have the least control. Paradoxically, although war signals the failure of dialogue, it is also a lesson in the importance of effective institutionalized collaboration and diplomacy.

Diplomacy necessarily must focus on the immediate challenge of securing a peace that respects Ukrainian sovereignty while addressing its—and Russia’s—need for security, but the implications for the reputation of international law and institutions must not be ignored. The prosecution of war crimes is understandably at the forefront of public debate. But one of the thorniest problems after World War I was how to reopen international trade after prolonged sanctions. The Allied blockade of the central powers facilitated the rise of protectionist legal instruments that impeded the recovery of world trade until the 1960s. Protectionism proved persistent not just because of the boom and bust in the 1920s and 1930s but because the norms and practices of free trade—drafted by the victorious powers, notably Britain and the United States—were deemed wildly unfair. Although the terms of the peace demanded that Germany and Austria become entirely free trading, the same most-favored-nation legal clause in the Paris Peace Treaties included provisions for Britain and the United States to enhance their own protection legally. Over time, the public perception in Germany and Austria that the Allies had cut themselves a special deal damaged the legitimacy of the settlement, as well as the reputation of the democratically elected statesmen who signed it in 1919. It reminds us that while the need for cooperation may be self-evident, the meaning of cooperation is not. We must constantly be open to alternative views about order and governance.

Ukrainian artists are mining the history of their cultural resistance to Joseph Stalin in the late 1920s and 1930s as they resist Russian imperialism once more.

Finally, it’s worth remembering that while Austrian and German critics of the international system that emerged after 1919 were unhappy about the terms of the peace, these states challenged it through the mechanisms of the League of Nations. The institution, and global order, faced an existential challenge only when the National Socialist government—a fringe group throughout the 1920s—opted to challenge the League, joining forces with Japan and Italy, and Britain and France, hoping to avoid another war, colluded with the strategy. Allies seeking to aid Ukraine must refer to and deploy international law and the organizations that embody it while recognizing the need for reform. Working outside these organizations, in scrambled efforts for a speedy resolution, as Neville Chamberlain sought to do in Munich in 1938, risks delivering a fatal blow to global order as well as to prospects for peace.

Turbulence can push individuals, institutions, and states to their limits. History shows that it simultaneously fosters creative, pluralistic, and dynamic advocacy that leads to new modes of cooperation, often in history’s darkest hours. Let’s remain purposeful—if not always optimistic—as we face the challenge of turbulence in our world for some time to come.

[caption id="attachment_22436" align="aligncenter" width="300"] Author: Patricia Clavin[/caption]

Patricia Clavin is Professor of Modern History at Oxford University. In this podcast, journalist Rhoda Metcalfe asks Clavin what the geopolitical fallout from the war might mean for globalization.

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BVI Finance: One Country’s Role in the Ongoing Globalisation Story

BVI Finance is the voice of the British Virgin Islands’ financial services industry. Here chief executive Elise Donovan gives CFI.co readers a glimpse of a globalised, co-operative future…

[caption id="attachment_22445" align="aligncenter" width="900"] CEO: Elise Donovan[/caption]

One of the topics under discussion at this year’s World Economic Forum meeting in Davos Switzerland was: Is there a future for globalisation? The pandemic, the war in Ukraine, rising energy and food prices, supply chain disruptions, global warming: these challenges threaten to destabilise decades of steady advances.

They are also factors that have led the International Monetary Fund to predict a slowing of global growth — from an estimated 6.1 percent in 2021 to 3.6 percent in 2022. But in the face of such widespread crises, it’s important to not lose sight of the fact that globalisation has for many decades been a force for good. It has increased trade, investment and jobs, and these things have in turn elevated living standards, reduced poverty and created opportunities not afforded to previous generations.

In his blog post, academic Douglas Irwin points out that globalisation has enabled most countries to grow richer over the past 40 years — along with a decline in global inequality. The proportion of the world’s population living in extreme poverty fell from 42 percent in 1981 to just 8.6 per cent in 2018. This fact is reinforced when considering world GDP, which grew from some $50tn in 2000 to about $75tn in 2016 — primarily as a result of economic interdependence and increased global trade.

International finance centres such as BVI have an important role to play in the story. They provide robust, trusted platforms that enable businesses to efficiently trade, transact, and invest across borders. Investments mediated by companies domiciled in BVI provide the underlying finance for investment in the infrastructure — roads, hospitals, and broadband — essential for growth.

Research has shown that investment mediated by BVI led to the creation of 2.2 million jobs globally, with an estimated annual contribution of over $15bn to government coffers worldwide (Capital Economics 2017). Developing countries in Asia, Africa and Latin America have been key beneficiaries of this efficient flow of capital and investment. None demonstrates this better than China, the poster child for globalisation — and the country that has helped take some 700 million people out of poverty on the way to becoming the world’s largest economy when rated in purchasing power parity (World Bank and IMF).

BVI  Finance has been a key strategic partner in this journey. According to UNCTAD World Investment Reports, it was the second-largest investor in China from 2006 to 2012, providing $7.72bn of inward foreign direct investment (FDI) to China in 2012. In terms of China’s outward FDI, in 2012 BVI was the fifth-largest recipient. Mainland Chinese and Hong Kong companies accounted for more than 40 percent of the $1.5tn in assets mediated through BVI, underscoring the offshore investment centre’s growing status as a hub for overseas investment.

More recently, the World Bank’s International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have been involved in programmes which have used BVI vehicles to help facilitate projects in developing nations. In recent years, the IFC has invested $100m in a project in Tanzania. The sponsor had a registered office in BVI. Another project in Azerbaijan saw the EBRD lending $100m to five companies, one of which was a BVI-registered entity.

Over the past 40 years, globalisation has led to measurable improvements in the lives of millions. As Douglas Irwin says in his blog, globalisation deserves some credit for enabling once desperately poor countries to grow, and reduce poverty.

BVI Finance will play its part in the next chapter of the story — by continuing to provide the most efficient platform for facilitating investment and trade, and in supporting economic growth. i


Add a Swoosh, Some Sweat, and Serious Business Nous — You have Victory on Your Side

Nike founder, athlete, philanthropist, battler: Phil Knight pulled himself up by his own running-shoe straps

By HAL WILLIAMS

There’s nothing like a bit of history to bolster a brand. A mental association with an elite figure or personage doesn’t hurt; add a snappy name, and that’s the trifecta right there. American billionaire Phil Knight, founder of Nike with Bill Bowerman in 1964, is the guy with the winning ticket.

[caption id="attachment_22451" align="alignleft" width="300"] Founder of Nike, Phil Knight[/caption]

History and a link with high-fliers? Check and check. The eponymous Nike is the mythical Greek goddess of victory, so she goes waaay back. She’s bang in the centre of the VIP section, too, as a winged attendant to the gods Zeus and Athena; so, yeah. Cool name? Check again. Nike was a title just begging for appropriation — and the addition of an elegant logo.

The trouble with Phil Knight is knowing what to focus on, but let’s stick with Nike and the athletics link for a moment. The businessman ran track during his time at the University of Oregon, coached by Bill Bowerman, who later became one of Nike’s co-founders. He and Bowerman each chipped-in $500 to start the company, such as it was.

And Knight was a runner to his bones. His personal best was a 4m 13s mile — not far off Roger Bannister’s earth-shattering 3m 59.4s record in 1954. A great athlete, then; but perhaps we’re giving Knight too much credit when it comes to titles and branding.

His vigour lent him respect and his business acumen was beyond reproach — he started selling low-cost Japanese running shoes from the back of a Plymouth car at the track events where his own athletic performances shone. But before Nike was Nike, it went under the more prosaic name of Blue Ribbon Sports. Employee Jeff Johnson (the company’s first) suggested the Nike moniker to Knight. Boom. Sure-fire winner.

[caption id="attachment_22454" align="aligncenter" width="1000"] Track runners 1958 — Nike founder Phil Knight second from right. University of Oregon, Public domain, via Wikimedia Commons[/caption]

The famous swoosh logo wasn’t Knight’s brainchild, either; it was commissioned in 1971 — for $35! — from a graphic design student named Carolyn Davidson; we hope she gets some royalties. Knight apparently didn’t much care the graceful curve at first, but — again showing prescience and business nous — decided that it would grow on him. It did. Boom again.

Phil Knight — who retired as CEO in 2004 and company chairman in 2016 — has a track record for picking winners. Two years ago, in July 2020, he was ranked by Forbes as the 24th richest man in the world with a fortune of $54.5bn. He’ll have slipped a little in the rankings — at the most recent tally this July he has a mere $40bn to his name — but he won’t be sweating over the missing beans. His name and status may be linked to the godly sportswear company, but lay out a selection of pies and you’ll find Knight’s fingers in a few of them.

Seen the animated kiddie chiller Coraline? Knight, again. He owns the stop-motion film production company Laika — another cracking title, this time the Russian equivalent of Fido, and the name of the first dog in space. The company was previously Will Vinton Studios, an up-and-coming animation outfit looking for investors. Knight took a 15 percent stake in 1998, and his son Travis — a failed rapper — joined the operation as an animator.

But Will Vinton Studios didn’t meet with the high standards of Knight senior, a Stanford School of Business graduate. He bought the company and assumed control, because that’s how he rolls. Travis was swiftly elevated to the board and dad rebranded the company. And that’s Laika. Knight ploughed in $180m, and its first feature film, Coraline, was released in 2009. Instant success. Travis Knight became president and CEO of Laika. Knight had another son, Matthew, who died in a diving accident at the age of 34. Laika Studio's 2005 short film Moongirl was dedicated to him.

If the nepotism hinted at in the previous paragraphs turns you off a little, bear in mind that Knight was himself no recipient of family favours. His father, William W, owner of the now-defunct Oregon Journal newspaper, denied Phil a summer job when he was a student. Let him find work for himself, was Knight the elder’s philosophy. One hopes he was impressed when his son took up a post on a rival paper, The Oregonian, tabulating sports scores — running seven miles there and back each day.

Also in the plus column against Knight’s name are philanthropic endeavours. The Portland native has donated millions to his alma mater universities, Oregon and Stanford, as well as the Oregon Health and Science University. He was in the military, worked as a certified public accountant (first with Coopers & Lybrand, then with Price Waterhouse). He even worked as an accounting professor at Portland State University for a time.

These events and career paths may all have shaped the man, but the whole is greater than the sum of the parts. Whichever way you look at it, Nike founder Phil Knight created a company that has become a household name and brings in nearly $45bn in annual revenues.

Knight. Nike. Swoosh. Boom.


Steve Fechheimer: Brewing Up a Storm to Combat Climate Change

[caption id="attachment_22459" align="alignright" width="300"] Steve Fechheimer[/caption]

New Belgium’s craft beers were inspired by a bike ride, first brewed in a basement, and showcased at the Colorado Brewer’s Festival — where they were so popular, they sold out.

That was 30 years ago, and there have been some changes. Co-founders Kim Jordan and Jeff Lebesch have long since stepped down. Steve Fechheimer became New Belgium’s chief executive in 2017.

New Belgium lost a little of its grassroots cachet in 2019, when the employee-owned company was acquired by Lion Little World Beverages — the craft division of Australian brewer Lion — which is in turn owned by Japanese conglomerate Kirin Holdings.

Jordan saw the positive side of the takeover: a well-deserved recompense for the people who helped to build the brand. “More than 300 employees are receiving over $100,000 of retirement money,” she said, “with some receiving significantly greater amounts.” The total amount paid to current and former employees is nearly $190m.

“This isn’t an immaterial number,” Fechheimer points out. “This is co-workers talking about being able to fund college education, or being able to buy a home.”

New Belgium, with a 700-strong workforce, has consistently ranked among America’s top employers. Free beer is just one of the perks; employees also enjoy insurance cover, paid time-off, an onsite clinic, and wellness programmes. It also offers anniversary gifts, including an all-expenses-paid trip to Belgium at year five and a full month of paid sabbatical at year 10.

Before the acquisition, New Belgium was ranked the fourth-largest craft brewery in the US by the Brewers Association. The American trade group stripped New Belgium of its “craft” designation after it joined the Lion family — but that hasn’t hurt the company’s bottom line. Corporate backing has afforded Fechheimer the time and financial flexibility to focus on the long game.

“Craft beer consumers care about how you operate your company, and the beers you make,” he said. “It’s about how we continue to drive positive social and environmental change.”

Fechheimer spearheads the mission to use business as a force for good. New Belgium has consistently reduced its carbon footprint. It invests in renewable energy, funds research into climate-resilient crops, and has donated nearly $17m to non-profits dedicated to conservation and climate solutions.

In 2020, its Fat Tire brew became the first certified carbon-neutral beer in the US, and New Belgium has pledged to make all its beers carbon-neutral by 2030. The company shares its sustainability journey with other breweries.

“If you don’t have a climate plan, you don’t have a business plan,” Fechheimer insists. “Aggressive action to help solve the climate crisis is not only an urgent environmental and social imperative — it’s also a no-brainer for companies seeking to create long-term shareholder value, compete with rivals like China, and create good-paying jobs here at home.

“As a medium-sized company, New Belgium can only have a medium-sized impact. We need more of the big guys to step up, too.”

The company recently tasked its brew master with creating “a post-apocalyptic ale” to underscore the urgency of the climate crisis. Rising temperatures and extreme weather are threatening crucial ingredients — clean water, barley, and hops — so the recipe was “themed” with smoke-tainted water (in anticipation of ever-increasing forest fires), drought-resistant buckwheat, and dandelions.

New Belgium marketed the limited-edition brew, Torched Earth, as “pretty gnarly”; the CEO likened the taste to “eating a Band-Aid”. It’s hoped that the eccentric beverage will serve as a wake-up call for consumers and industry partners.


Quiet, Unassuming, Modest — and One of the World’s Most Powerful Women

Wealthy philanthropist and CEO of Fidelity Investments Abigail Johnson came up through the ranks of the family business ‘the old way’

By TONY LENNOX

[caption id="attachment_22467" align="alignright" width="400"] CEO of Fidelity Investments Abigail Johnson. Photo: Singhaniket255, CC BY-SA 4.0, via Wikimedia Commons[/caption]

Despite being one of the world’s wealthiest women, Abigail Johnson cuts an unobtrusive figure on the streets of her native Boston. She is rarely recognised, even by fellow New Englanders.

“I often can’t get a table, so I don’t eat out that much,” she joked during a recent interview. But beneath the modest façade lies resolute determination. Johnson has been president and CEO of Fidelity Investments, a Boston-based investment management giant, and chair of Fidelity International since 2014.

Asked what advice she’d give her younger self, she is emphatic: “Don’t doubt yourself — keep at it, stay looking ahead, stay committed, and stay true to yourself.” She may well have heeded her own wisdom: her personal wealth is estimated to be more than $22bn.

The 59-year-old is the product of an old Massachusetts family. Her grandfather, Edward Johnson II, founded Fidelity in 1946 with just one employee. Her father, Edward “Ned” Johnson III, who died aged 91 in March, grew the family firm before passing the reins to Abigail.

Today, Fidelity is an international business with 45,000 employees worldwide. The company’s philosophy is to make investment accessible, and affordable, to ordinary families. Abby Johnson, as she is known to her staff, abides by that — but she has her own ideas on how to take the company forward (while still following her father’s advice): “Always strive to be better. No matter how well you might seem to be doing, your job is never done.”

Part of her strategy has been to focus on millennial and female investors. Her first job at Fidelity, while she was still at high school, was fielding phone calls. This exposure gave her an understanding of the importance of customer service, and today she applies technology and personal understanding to help investors engage with the business.

“Don’t assume the answers are already out there,” she says. “The answer might not be something that’s been done before. Trust your instincts.” Johnson’s aim is to keep the company vibrant and proactive, especially in its contact with a new generation of customers. She believes women have an important role to play in Fidelity’s future — as investment managers, as well as customers.

“Asset management is a great career for women,” she says. “We have a real need right now to recruit more women, because when women customers come into our branches very often the first thing they say is ‘I want to work with a woman’. We don’t have enough women who are customer-facing.

“Women as customers are really quite different. They tend to under-rate their abilities as stewards of their own financial situations. They describe themselves as beginners, even though they know more than they give themselves credit for, and they tend to be more methodical.”

In 2015, Abigail Johnson set up Fidelity’s Boundless programme — specifically designed to encourage more young women to consider careers in the financial services. She has commissioned teams to study how the sector is perceived across genders.

Johnson holds a BA in Art History in 1984 and an MBA from Harvard Business School. She started her career with management and IT consulting firm Booz Allen Hamilton, where she met her husband, the entrepreneur Christopher J McKown, with whom she has two adult daughters.

Johnson worked in the family firm for 26 years, in a succession of obscure positions, but gradually began taking on more prominent roles. She developed a thorough knowledge of company dynamics before becoming CEO of Fidelity Investments at the age of 52. Since 2014, she’s put her own stamp on the business, moving the headquarters from sedate Devonshire Street offices to Boston’s go-ahead Seaport tech district.

Ranked sixth in the Forbes list of the world’s most powerful women, Abigail Johnson remains down-to-earth. She takes commercial flights and queues at the car-hire desk like everyone else; she supports arts projects and charities, including a young people’s club, a public radio and television station, and a Boston homeless shelter. She even serves meals there, on occasion — the Johnson family name is known for philanthropy, as well as business expertise.


Mining Disaster that Played Out Above Ground — and Brought Down ‘King Midas’

“The richest man in Brazil” was a title that business magnate Eike Batista didn’t particularly care for. It didn’t do justice to the scope and scale of his wealth, he felt; he was aiming for something more along the lines of “the richest man in the world”.

And for a while, it didn’t seem an unreasonable ambition. The multi-billionaire had, after all, created a mining and business empire, eloped with a top model, raced wildly expensive speedboats at world champion level, once sold a minor stake in his EBX Group to an Abu Dhabi investment fund for $2bn (and another to US conglomerate GE for $300m), and earned himself the nickname of “King Midas”. He claimed his oilfields were worth a trillion dollars (spoiler: they weren’t), and his personal wealth and backing helped Rio de Janeiro win the bid to host the 2016 Olympics.

[caption id="attachment_22484" align="aligncenter" width="1000"] Eike Batista in the Brazilian Senate, 29th November 2017. Photo: federal Senate, CC BY 2.0, via Wikimedia Commons[/caption]

This is no rags-to-riches tale, but it isn’t quite a riches-to-rags one, either. Batista famously lost $35bn in just two years, and yes, he’s serving a 30-year sentence (under house arrest at present, pending appeal) for paying bribes to secure state government contracts. But according to a July 2022 report in People With Money magazine, Batista is somehow on the rebound, with an estimated personal worth of somewhere between €96m and €275m, including direct earnings, advertising partnerships, royalties, and investments.

Batista was born in 1956 in the state of Minas Gerais, in the country’s south-east. His mother was German, his father Brazilian — the Minister of Mines and Energy, no less — and Batista has joint Brazilian-German nationality. He was one of seven children and grew up in well-to-do towns that date back to, and reflect, Brazil’s 18th-Century gold rush. Minas Gerais is a huge area that may be home to Rio and São Paulo’s impoverished barrios, but it also has its share of opulent mansions, and tasteful baroque churches decorated by the celebrated sculptor Aleijadinho.

After metallurgy studies in Europe (which he didn’t complete — something which was to prove important), the young Eike set out on the yellow brick road. Back in Brazil at the age of 23, he launched his own company, mining and trading gold. Natural resources were always his focus; the fortune he made (and lost) came from mining and oil and gas exploration.

His ventures in the 1980s were wildly successful, and over the next 20 years, Batista expanded his empire. At 29, he became CEO of TVX Gold, which listed on the Montreal Stock Exchange, and from 1980 to 2000 he operated eight gold mines in Brazil and Canada and a silver mine in Chile. He invested in energy, fossil fuels, logistics, shipbuilding, real estate; by 2010, he had a collection of corporations under the umbrella of the EBX Group. (Each company had an X in its title; Batista saw it as a symbol for the multiplication of wealth. It worked — for a while.) He founded oil and gas company OGX and lashed out $1bn on licenses for exploration off the Brazilian coast. Batista made Forbes magazine’s billionaire list, and by 2010 was one of the world’s 10 wealthiest people.

But there were rumblings of discontent and mismanagement. His mining company, MMX, ran into trouble for failing to follow environmental regulations. In 2008, the Tupí-Guaraní tribe accused Batista’s logistics company, LLX, of forcing them off their land on Brazil’s Atlantic coast. In 2008, police raided his offices. While the tycoon was cleared of wrongdoing, clouds were building on the horizon.

By 2012, Eike Batista’s personal fortune was sitting at a comfortable $34.5bn. Then came falling petroleum prices in an increasingly flaky domestic economy, the inability of OGX oilfields to meet production promises (they maxed-out at one percent of the goal) and calls for repayment of the bond debt he accrued for those exploration and production licences. In October 2013, Batista defaulted on a $45m interest payment. Yes, interest payment. The empire was tilting, if not toppling.

That “richest man in Brazil” title was lost in the avalanche as prices on five of his six publicly traded holdings plummeted. The main disaster was at oil and gas driller OGX Petroleo e Gas, which filed for bankruptcy — one of the biggest default applications in Latin American history. Eike Batista went on trial for insider trading (the case was suspended after the judge was caught hooning around in one of the defendant’s luxury cars), and by 2015, he was $1bn in debt. In January 2017, he was arrested for paying bribes connected with the Petrobras scandal.

Remember the young man’s aborted metallurgy studies in Germany? Batista dropped-out before graduating — and under Brazilian law, a university degree would have meant a comfier life in a special prison wing. The lazy student ended up sharing a Bangu penitentiary cell with six other inmates.

In 2017, he was released and placed under house arrest. Later that year he was fined $6.3m for insider trading. In 2018, he was found guilty of bribery and sentenced to 30 years. In 2019, he faced further charges of money laundering and insider trading. Batista was declared a fugitive when police raided his estate in Rio de Janeiro and found he had flown to New York just hours before.

The tycoon voluntarily returned to Brazil — “a Brazilian doing my duty” — and handed himself in to the authorities. He was taken to the Ary Franco prison for processing before being transferred to Bangu on the outskirts of the city. He is currently under house arrest, awaiting that appeal.

What about that return to wealth that People With Money mentioned? It comes, says the article, from “judicious stock market investments”, an impressive real estate portfolio, an advertising contract with a cosmetics firm and other business ventures. Batista has offered to personally help authorities tackle corruption in Brazil. He claims to have put almost all his money back into the companies he ran, showed some serious ambition, and borrowed against his investments.

The name of Eike Batista is not forgotten — and is still respected by many.


OECD: Only Scale and Development Impact Will Help Us Reach the SDG Mountain Summit

The development community is used to responding to crises but current events, not least COVID-19, have put the SDGs further out of reach.  The private sector is recognised as a key contributor to delivering the SDGs by the development community and has shown a growing investment appetite since their launch in 2015. The Private Sector have also been engaged by donors through a number of approaches, blended finance being one that has increasingly gained traction. Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries.

The financial facilitator between the demands of the SDGs and private sector investment interest of investing in the SDGs could be another characterisation of blended finance. Facilitating the demand for aligning investments with goals of the SDGs and needs of economies that are growing and developing rapidly yet where many of the SDG gaps are the most significant, is where blended finance comes in.  However, for Blended Finance to work effectively two key outcomes are required for delivery: - scale and impact.

The SDGs represent a significant mountain for development finance to scale. Currently the development system is failing to mobilise at scale, and channel funding to the countries and sectors that need it most. Over the period 2012 to 2020 more than USD 300 billion was mobilised by official development finance interventions, including ODA. Since the establishment of the SDGs in 2015, mobilisation did increase a stellar 20% the following year. In 2020, despite the COVID-19 pandemic, private finance mobilisation also slightly increased (by around 6%) compared to 2019.  However, this is from a low base and though growth significant we are not at the scale necessary for solving the SDGs.

The same unevenness we see in overall mobilisation volumes between LDCs/LICs and UMICS is reflected in the different levels of funding directed to social and more commercial components of economies. For instance, Low Income Countries (LICs) and Less Developed Countries (LDCs) mobilised only USD 4.7 billion or 12% of the total mobilisation between 2018-2019. This stands in contrast to Upper Middle-Income countries (UMICs), who, in the same period, mobilised USD 19.5 billion, or 48% of the total.

Effectively mobilising the private sector has typically fallen to Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs). These institutions have recognisable structures, financial instruments and skills set that the private sector can most easily collaborate with.  Moreover, as they understand risk and development they are structured to engage on financial transactions with varying levels of risk and returns. Many MDBs and DFIs have a credit rating which gives them enhanced funding raising and credit support, while a portfolio approach to investment ensures that project risks are effectively distributed across balance sheets.  Meanwhile, donors need to work with these DFIs and MDBs and provide them with the political and financial incentives necessary for them to capitalise on the private sector turn towards Environmental, Social and Governance (ESG) and SDG-lens investing.

Securing Scale

Blended finance now represents an established part of the development finance architecture, with a growing number of development actors across the spectrum committed to designing new approaches and structures. Within this,   Green, Social and Sustainability and Sustainability-linked (GSSS) bonds have emerged as an important asset class. GSSS Bonds are fixed-income instruments that can helpensure finance targets the SDGs with the necessary scale and development impact needed. For example, Sub-Saharan Africah is characterised largely by a private equity investments and bank lending rather than debt market instruments and limited stock markets in order to raise capital. Equity tends to have a short-term perspective and bank finance is limited in reaching the necessary scale. The SDGs meanwhile, are long term challenges that require long-term investors with stable pricing and predictable exits.  GSSS bonds typically generate the long-term returns that match the liabilities of pension and insurers. Sovereign issued GSSS Bonds allows the government, to access private sector capital and pay for new things such as green power generation. Further details on the potential of  scaling the GSSS Bond Market is presented in this OECD report[1].

DFIs and MDBs are key actors in issuing GSSS bonds in their home markets but also importantly in developing countries. The figure below demonstrates that despite the rapid growth in the global GSSS bonds market, sub-Saharan Africa accounts for only a fraction of overall bonds issued.  Increasing support from DFIs and MDBs in this region could help to scale up the market there as well

[caption id="attachment_22493" align="aligncenter" width="1000"] Annual issuance amounts of GSSS bonds (EUR billion). Source: OECD calculations based on data from LGX DataHub[/caption]

While many DFIs and MDBs are already making use of GSSS bonds, further issuance could be constrained by the need for equity injections or the risk that credit ratings could be downgraded. However, greater issuance would help in considerably expanding balance sheets by allowing DFIs and MDBs to undertake more blended finance transactions, thereby helping to address the need for increased breadth of financial capacity and depth into specific sectors. A body of knowledge has been developed that highlights the ability of MDBs to expand lending without impacting the credit ratings or having minor impact in relation to their credit rating while significantly increasing balance sheet capacity (Humphrey, 2020[18]) (Banca d'Italia, 2019[19]).  Even without touching the politically charged question of credit ratings, donors, DFIs and MDBs could join forces and work more efficiently to deliver the GSSS bond market.  For this to happen, donors need to set DFIs and MDBs the necessary incentives.

In practice, the creation of local GSSS bond markets would provide the financial capacity to fund SDG-relevant projects. Typically, these projects are in local currency, matching revenues with local financing requirements. DFIs and MDBs can, at the local level, assist the issuance of GSSS bonds through blended finance, thereby increasing the pipeline of projects that can be aggregated to issue as GSSS Bonds. In regions such as sub-Saharan Africa, this would enable greater transparency and disclosure.  This also includes debt transparency and ensuring the bonds are effectively delivering the right projects.

Scale in GSSS bond market will require co-operation across several development actors to ensure the necessary number of projects. For example, greater co-operation amongst DFIs and MDBs on bundling projects in sectors and across regions would help in developing the necessary aggregation for issuance and diversification for institutional portfolios. Co-operation not competition is therefore necessary. The DFIs and MDBs need to bring more projects to market, including targeting key countries and sectors. The GSSS bonds need to be considered as supporting all MDB or DFI activities, including investments in LDCs and Social Sectors. Capital provided by GSSS bond issuance should have the same goals as Official Development Assistance, in terms of leaving no one behind. Donors can be key actors in supporting DFIs and MDBs as issues of GSSS bonds and through blended finance and capacity building deliver help to deliver the necessary pipeline of projects for a bond issuance.

Need for Impact

DFIs and MDBs by sharing best practices in setting up eligibility criteria for the projects that underpin the bonds, as well as establishing allocation and impact reporting practices in these markets, DFIs and MDBs can help strengthen market discipline.  DFIs and MDBs can also provide technical assistance to issuers. They can also support developing countries to set up the robust frameworks within which to select and implement green, social and sustainable projects that underpin the bond. This is a key requirement for bond issuers to obtain a GSSS label. As some DFIs and MDBs are issuers of GSSS bonds, they can also act as role models and standard setters. IFC, for example, has issued several local-currency GSSS bonds in emerging markets.. This can help to shift investor focus to the region and encourage other GSSS bonds issuers to follow suit.

Pursuing investments in regions such as Sub-Saharan Africa without clarity on the development impact remains a challenge. This combined with a lack of platforms from listings on stock markets and dominance of private equity results in a lack of transparency that otherwise would encourage the financial markets to grow. Without more robust data on the development impact of investments, we cannot effectively channel mobilised finance to the geographies, sectors and people in most need.

A framework with the potential to help policymakers and practitioners alike is the OECD UNDP Impact Standards for Financing Sustainable Development. At the highest level, the OECD-UNDP Standards represent a best practice guide and self-assessment tool to help actors working in development finance manage projects in ways that generate positive impact on people and the planet, and  improve the transparency of development results. While not directly focusing on the outcome of investments into GSSS bonds, the focus on changing incentives and emphasising the need to manage primarily for impact  can help shape GSSS bond impact approaches.

GSSS bonds allow greater deal flow for development actors. The direct effect of this is more transactions and pipelines of projects delivering development. To facilitate this, development actors and the private sector need to work together in a joined-up fashion. At present, the necessary scale and impact, which would create the GSSS Bond markets of tomorrow, does not exist.

By Paul Horrocks, Jieun Kim and Esme Stout

[1] Scaling up Green, Social, Sustainability and Sustainability-linked Bond Issuances in Developing Countries (https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD(2021)20&docLanguage=En)


Climate change denier, Mining Champion, Sworn Enemy of Green Policies — Gina Rinehart’s Lonely, Determined Path

The Thatcher fan and chair of Hancock Prospecting has little sympathy for the Left, green policies, or the Channel Nine TV station…

By TONY LENNOX

Gina Rinehart has the power to move mountains — literally — and the chair of Australian mining giant Hancock Prospecting has turned an arid corner of Western Australia into one of the world’s most productive sources of iron ore and minerals.

The mining industry is Australia’s biggest producer of revenue. The country’s abundant natural resources of iron ore, coal, natural gas and rare minerals make up 10 percent of economic output. And Gina Rinehart is vocal in urging for the relaxation of what she sees as “red tape”. In 2010 she took a leading role in the fight against the Labour government’s plans to introduce a super-profits tax on minerals, funding a massive publicity campaign. The-then prime minister Kevin Rudd was deposed and replaced by Julia Gillard, who watered-down the legislation.

Over the course of her career, the Perth native is said to have become the richest woman on the planet (subject to the fluctuation of global commodities prices, of course). Rinehart bristles at the label “mining heiress”. While it is true that she inherited the business from her father, Lang Hancock, in 1992, she says it was in a desperate condition when she took over. “I became executive chair of Hancock Prospecting when our company had extensive liabilities,” she moaned, before self-directing some praise at the company. “After decades of stress and hard work we are now the leading private mining company in Australia.”

The 68-year-old is mistrustful of the media and rarely gives interviews. In a country as legendarily egalitarian as Australia, those with great wealth are a source of public fascination. Rinehart family strife is regular fodder for gossip. When she does speak publicly, her messages are not always well received. She champions her industry and claims that humans do not cause global warming.

She warns against heeding climate change “propaganda”. In a 2020 video address to an Australian business group, she brusquely headed-off any incipient environmental criticism: “Before the iron ore industry, Western Australia was a hand-out state.” She is notorious for her environmental views, and blames green policies for helping to cause global destabilisation. Her beliefs put her at odds with the scientific community and environmental organisations such as Friends of the Earth and increasingly Australian voters.

In 2017, Rinehart sued Australia’s Channel Nine over its production of a two-part television drama called House of Hancock, starring Sam Neill in a fictionalised account of the fallout from her aged father’s marriage to his Filipina housekeeper, Rose Porteous. Rinehart described the film adaptation as “disgraceful and false”. The channel issued an apology and a pledge not to air the show again, sell it overseas, or release it on DVD.

But these are sideshows for chair Gina Rinehart as she leads Hancock Prospecting into a new era. The company has projects in sites around the globe: new mines in Australia, a coking coal project in Canada, copper mining in Ecuador, and investment in a natural fertiliser project in North Yorkshire.

Despite her wealth, Rinehart is far from flamboyant, and dedicates herself to business 24/7. Her work-rate is legendary, and she is an admirer of strong women, most notably Margaret Thatcher. “I’m not saying I’m like this outstanding lady,” she said, “but I too think sometimes women have a beneficial trait. We’re not as guided, or misguided, by ego.”

Gina Rinehart was born an only child in Perth, Western Australia. She spent her early years “on-station” in the scorching Pilbara region where her father — who discovered the world’s largest iron ore deposit in 1952 — constructed the township of Wittenoom. The deposit was so vast that it was estimated at the time to be enough for the world’s entire iron ore needs.

Rinehart attended the University of Sydney, but (according to her biographers) became disillusioned with “left-wing professors” and dropped out after a year. She married twice, bearing two children from each union. Her second husband, American lawyer Frank Rinehart, died in 1990.


Working from Home, or Living at Work? Hybrid is ‘Hell’, and a Return to Office may be Worse

The future of work is remote, and many of the world’s corporate heads — and workers — are ready to embrace change…

Working from home was supposed to be a stop-gap measure to enable professional continuity during pandemic isolation. It quickly became more than that: a defining feature of the often-sought, seldom identified, ever-elusive New Normal.

For practicality and by default — thanks to its embrace from workers weary of the daily commute and water-fountain gossip — the flicker of freedom offered by remote working became a grassroots flame. Workers, as well as those who tread the corridors of power in the world’s biggest corporations, began recognising the positives, the problems, the possibilities — and the potential economies. With the cost-of-living and inflation spiralling, who needs the overheads of an office block? Factor in saved fuel and public transport costs for the minions, and the centre of the working day shifts towards the suburbs.

[caption id="attachment_22500" align="aligncenter" width="1001"] Working from home was supposed to be a stop-gap measure (Photo created by tirachardz - www.freepik.com)[/caption]

Corporations are finding that without mandates, many workers will shun a return to the office. The online global marketplace for buying and trading securities, the New York-based Nasdaq, tech giant IBM, Airbnb, 3M, Spotify, Lyft: all have opted for hybrid or remote working models. IBM CEO Arvind Krishna has said about 20 percent of the company’s US-based workers are back in the office for three days or more each week — but he is resigned to the fact that the proportion may never climb above 60 percent.

IBM was one of the first to incorporate the remote working trend in the early 2000s — years before the pandemic struck. At one stage, almost half of the tech firm’s 280,000 staff were working remotely. Then, in 2017, management changed tack; workers were called back to the office. Covid revived the need for flexible conditions just a few years later. Krishna seems now to have accepted the change as long-term (although there is talk of “wage adjustment”).

Worker-hire app TaskRabbit has closed its offices — San Francisco HQ included — and Elon Musk’s first winning ticket, the online payment system PayPal, has also departed San Fran. At least physically. Yelp chief executive Jeremy Stoppelman recently announced that the business directory’s 4,400-person staff will go fully remote. Stoppelman has famously described hybrid work as “hell”, and “the worst of both worlds”. The firm’s offices in New York City, Chicago, and Washington DC will close. The San Francisco HQ and a base in Phoenix remain open as day-rental office spaces.

But the ball isn’t always in the employers’ court; UK employees with 26 weeks’ service have a statutory right to request flexible-working arrangements. That includes working remotely or from home, and employers are obliged by law to consider such requests. Power to the people? Perhaps. But flexible working can benefit business owners as much as it does their staff.

And there is even flexibility within that flexibility: while workers may be quick to press for their right to work from home, they are also more likely to be less pedantic about keeping strict working hours. Psychology comes into it: A quick email or a phone call out-of-hours is likely to be unintrusive, even acceptable, in a balanced and relaxed remote routine.

The growing acceptance of new working models has not been lost on new hires, millennials especially, who are seeing a lack of flexibility as a potential dealbreaker. Mutual trust and respect can build more quickly, and more deeply, than might be the case with over-the-shoulder monitoring, evaluation, and reporting. Wellbeing, motivation, productivity and staff retention are statistically likely to rise.

So, what are the downsides? Isolation, for one; we humans are a social species; those nattering sessions around the staff kitchen or water cooler may be more important than is generally realised. Loneliness can be a trigger for underlying mental issues: depression, anxiety, feeling overwhelmed by life. That willingness to take calls or flick emails during downtime can devolve into burnout if workers lose the ability to differentiate between cheerful, voluntary compliance and whip-cracking by a cynical and bullying boss.

People learn more on-the-job than they ever did at university or through their apprenticeship — and not always through training programmes. We tend to learn from one another, sometimes without even registering it. Staff development and skills upgrades can be osmotic, the result of observing more experienced colleagues and absorbing wisdom in the process.

Then there are tech issues — data leaks, information security, dabbling with internet programmes or functions that would be better overseen by trained IT staff — and quibbles on both sides about the relative costs of commuting, who should pay phone and utility bills, whether salaries need to be adjusted (in either direction).

The “great resignation” has been a symbol of lingering, or growing, discontent. People began quitting desirable jobs from bitterness, or simple boredom, and moving to new pastures. The PwC Global Workforce Hopes and Fears survey canvassed some 52,000 people, and found that the trend is still very much alive in 2022: one-in-five respondents is considering a move over the next year. Those planning to stick around feel justified in asking the boss for a higher salary: 35 percent said they would be applying for a raise.

Salary is the primary driver for those looking around for new opportunities: 75 percent of respondents to the PwC survey said it was a factor. Fulfilment was crucial for 69 percent of potential job-jumpers, while 66 percent say they want to “truly be themselves” at work. A hybrid work environment is held up as a hopeful compromise by many, but not all employers agree (remember Yelp boss Jeremy Stoppelman’s description of it as “hell”). But for the 45 percent of survey respondents for whom hybrid is not an option, job satisfaction was ranked markedly lower.

Flexibility seems to be the core factor in this debate — and by definition, flexibility means that something bends in more than one direction. If there is middle ground to be discovered, it will be welcome — and probably wobbly.


Revolut-ionary Man: CEO Nikolay Storonsky Aims to Become Amazon of Finance

Revolut founder and CEO Nikolay Storonsky has an intimate view on the crisis in Ukraine

By BRENDAN FILIPOVSKI

Nikolay Storonsky, the CEO of Revolut, the UK’s most valuable fintech, was born and raised near Moscow — to a Ukrainian father.

“The idea of a war between Russia and Ukraine is not just horrifying, it is almost impossible to believe,” he said in a recent interview. His Revolut co-founder, Vlad Yatsenko, is also Ukrainian.

Revolut is a financial app that provides users with all the tools they need to manage, invest, and protect their money. The goal is to become the Amazon of finance. In just eight years, it has onboarded over 20 million customers and 500,000 businesses in 36 countries. It provides support in 30 currencies to 200 countries and regions. “Our mission is to unlock a borderless economy, for everyone,” Storonsky says.

[caption id="attachment_22508" align="alignnone" width="1200"] Revolut CEO Nikolay Storonsky[/caption]

He began working on the start-up in 2014, when he was just 29. He and Yatsenko officially launched Revolut in 2017. During this period, they burned the midnight oil at the Level39 fintech incubator at London’s Canary Wharf.

Personal frustrations highlighted a market opportunity. Whenever Storonsky travelled overseas, the high fees of credit card use — often, they were hidden in inflated exchange rates — appalled him. After seven years working in the City as a derivatives trader, he knew there must be a way to provide consumers foreign exchange at the market rate.

“The whole idea was that we provide the product for free, then we cross-sell other services. So we just needed to have large customer numbers.”

Working as a trader at Lehman Brothers and Credit Suisse, Storonsky also how to work hard: routinely from 8am to 10pm.

“I can’t see how work-life balance will help you build a start-up,” he admits. “Either you are all-in and you’re focused, and you spend time on it, or you have little chance to survive.”

He instilled this work ethic into the early culture of Revolut — and it has paid off. But as the company grew from 20 to over 5,000 people, Revolut failed to transition into something more sustainable. And in 2019, Wired magazine released a tell-all article with quotes from a few bitter ex-employees. It was a wake-up moment. “I think we made almost all the mistakes that are possible, and we learned from them.”

These days, Revolut looks more like a leading fintech company than a pressure-cooker start-up. “We offer more global products which local banks are just not able to compete with.”

And it continues to grow, while competitors such as Klarna and Monzo have stumbled. Some, like Bó (backed by the Royal Bank of Scotland), have disappeared. Revolut has weathered recent storms by expanding its offerings. While companies like Wise have largely stuck to their initial services, Revolut has expanded beyond foreign exchange into brokerage, short-lending, and even crypto.

Nikolay Storonsky now has traditional banks in his sights. While Revolut is still waiting for a UK banking licence, it has licences for Ireland and the EU, as well as an Australian credit license.

The ambition and competitiveness have always been there. Storonsky boxed in his youth, and later took up swimming; he became the state champion. Both sports require discipline, and he also applied himself to his studies. Before finishing his Master’s in Physics, he began another in Economics and Finance — which eventually brought him to London.

At 38, he is the CEO of Revolut, a $33bn company. A year ago, the company raised $800m in Series E funding from big hitters SoftBank Vision Fund and Tiger Global Management. An IPO could be next. Nikolay told Bloomberg that he wanted a few billion dollars in annual revenue before considering that, but industry insiders point to Revolut’s recent attempts to hire an investment relations manager — a common precursor to an IPO.

Whatever the shape of its near-term trajectory, knowing Nikolay Storonsky, it is bound to be upwards and onwards.


A Winner, All the Way: Gautam Adani, Businessman, Negotiator, and Survivor of Two Kidnappings and a Terror Attack

Infrastructure tycoon Gautam Adani, founder of the Adani Group, has created ports, infrastructure, and thousands of jobs. He’s also been kidnapped by bandits and twice held for ransom; it hasn’t slowed him down…

By HAL WILLIAMS

[caption id="attachment_22522" align="alignright" width="250"] Gautam Adani. Photo: CC BY 3.0, via Wikimedia Commons[/caption]

Life at the top of the India’s commercial food chain may be rewarding — Adani Group founder Gautam Adani’s personal wealth is estimated to be in the region of $118.3bn — but it comes with certain setbacks.

The billionaire was kidnapped by bandits in 1997, and when terrorists attacked Mumbai 11 years later, Adani was among the hostages held at the seafront Taj Hotel. It’s not known what, if any, ransom was paid in either incident, but Adani appears to have taken it all in his stride. He remains one of the country’s, and the world’s, most prominent and successful businessmen.

Last April, with domestic and national economies flailing, writhing, and wilting under pandemic woes, and business titans worldwide tied to the metaphorical mast, India’s Adani Group was doing very nicely, thank you. In the middle of the most disruptive financial crisis in recent years, it became the third Indian conglomerate to cross $100bn in market capitalisation.

The wind was still filling the Adani sails exactly one year later. This April, the Ahmedabad headquartered multinational doubled that 2021 figure, and comfortably crossed market capitalisation of $200bn. It was just the third Indian conglomerate — after Tata Group and Reliance Industries — to achieve that.

Gautam Adani was born in the western state of Gujarat; he dropped out of college and moved to Mumbai as a teenager, working for a while as a diamond sorter in the gem trade. He returned to Gujarat and began his business empire by importing PVC for his brother Mahasukhbhai’s plastic business. Adani Enterprises was created to import and export commodities.

[caption id="attachment_22521" align="alignright" width="1000"] US Ambassador Timothy Roemer greeted by Gautam Adani, Chairman, Adani Group at Adani House in Ahmedabad, Gujarat. Photo: U.S. Embassy New Delhi, Public domain, via Wikimedia Commons[/caption]

Adani created his eponymous group as a commodity trading company in 1988. Today, it has an annual revenue of over $20bn, with operations in 50 countries including port management, power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure. The flagship, Adani Enterprises, is a standalone holding company. It began as an import-export firm, but now focuses on mining and the trading of coal and iron ore.

Adani Enterprises is the incubator for group business ventures, with three main subsidiaries: Adani Wilmar (food processing), Adani Airport Holdings, and Adani Road Transport. Other subsidiaries are diverse: defence and aerospace, rail and metro infrastructure, solar PV module manufacturing, oil exploration, petrochemicals, water infrastructure, data collection, agricultural storage and distribution, bunkering, real estate, financial services, and cement.

There’s not much consolation for those seeking environmental awareness in the current portfolio, but Gautam Adani intends to become the world's largest producer of green energy — and has vowed to invest as much as $70bn in renewable energy projects.

There’s a Monopoly flavour to Gautam Adani’s game plan. He controls India's largest port, Mundra, in Gujarat, and he’s the country's biggest airport operator. He acquired a 74 percent stake in Mumbai International Airport, in 2020. In May this year, he acquired Swiss giant Holcim's cement business in India with the investment of a cool $10.5bn.

Gautam Adani doesn’t leave much to chance — and he thinks big. The first-generation entrepreneur is driven by the motto of “Growth with Goodness” and the desire to build world-class infrastructure capabilities for India. He has transformed the country’s coastline by building ports and logistics hubs, creating thousands of jobs, and bringing in expertise via partnerships with international companies.

The bulk of his fortune comes from public stakes held by the Adani Group: 75 percent of Adani Enterprises, Adani Power and Adani Transmissions, 37 percent of Adani Total Gas, 65 percent of Adani Ports & Special Economic Zone and 61 percent of Adani Green Energy. Shares are held by promoter groups, including Adani family members and holding companies

Adani is a hands-on honcho unfazed by challenge; he was personally involved in negotiation with 500 private landowners across India in 1994 while setting up the harbour facility at Mundra Port. The hard work paid off; Mundra became a special economic zone in 2007, and with a huge investment in infrastructure, another arrow was added to the Adani quiver.

Gautam Adani is no shrinking violet when it comes to flashing the cash. He owns not one, but three private jets, including his personal favourite, a UK-produced Hawker Beechcraft 850XP. He around-towner is a BMW 7-series, with a Rolls-Royce Ghost and a Ferrari California set aside for sunny Sunday jaunts. His pad is the modestly titled Adani House, a luxurious hideaway — if such a thing is possible in New Delhi, where he lives — with 3.4 acres of land in the densely populated metropolis.

He has created an almost unimaginable lifestyle for himself, but Gautam Adani has also boosted his country’s profile, economy, and prestige. A winner, all the way.


Rich Pickings for Carlos Slim, a Financial Prodigy who Started Young — and Kept on Going

Wealth and status mean little to the founder of Grupo Carso who allows himself the occasional indulgence of a fine cigar…

By TONY LENNOX

Depending on the state of the world’s stock markets and which wealth-list you consult, Carlos Slim is one of the richest men in the world — though the Mexican industrialist and businessman claims to be indifferent to such rankings.

Carlos Slim is the founder of Grupo Carso, a business empire so sprawling it is sometimes referred to as “Slimlandia”. Despite his $78bn fortune, this self-made man leads a frugal lifestyle: he has lived in the same house in Mexico City for 40 years. The one luxury he allows himself is an indulgence in Cuban cigars.

[caption id="attachment_22530" align="aligncenter" width="1000"] A meeting between Founder of Grupo Carso Carlos Slim, President of Mexico Enrique Peña Nieto and actor Leonardo DiCaprio. Photo: Presidencia de la República Mexicana, CC BY 2.0, via Wikimedia Commons[/caption]

As the founder of one of the largest conglomerates in Latin America, he is aware that fortunes can plummet just as quickly as they can soar. Faster, even: it’s said that he lost some nine percent of his wealth when Donald Trump was elected in 2016. The former president’s bellicose rants caused a sudden fall in value of the Mexican peso. In the closing days of Trump’s presidential campaign, he even singled out Slim as part of a globalist cabal intent on snuffing out his populist candidacy.

Within weeks, Carlos Slim was dining with the president-elect at his Palm Beach estate. Such were his charisma and political nous that Trump emerged beaming from the meeting with the words: “A lovely dinner with a wonderful man.”

Carlos Slim was born in Mexico City in 1940 to Julián Slim Haddad (born Khalil Salim Haddad Aglamaz) and Linda Helú Atta, Maronite Christians from Lebanon. Khalil was a successful local businessman, who imparted a love of mathematics and economics to his son. At age 11, the young Carlos invested his pocket money in a government bond, keeping details of his financial endeavours in a hand-written ledger — which he still owns.

In his teenage years, Slim continued to dabble in stocks — under his father’s guidance. He was just 13 when Khalil died, and he inherited the small family business. Within a few years, he was confidently investing growing profits in a range of sectors.

Carlos Slim studied civil engineering at university in Mexico City, and is still referred to in the Mexican press as “el Ingeniero” (“The Engineer”). But his interests include such diverse areas as telecoms, education, healthcare, manufacturing, transport, real estate, media, energy, hospitality, entertainment, technology, retail, sports, and financial services. The founder of Grupo Carso's businesses account for 40 percent of the listings on the Mexican Stock Exchange, and his net worth is equivalent to six percent of Mexico’s GDP.

Slim was married for 32 years to Soumaya Domit Gemayel, who died in 1990. The couple had six children, most of whom work in their father’s businesses. An interest in art led to Slim to fund the establishment of a non-profit museum in the city, named in honour of his wife. He has said he has no plans to remarry, but there were rumours in 2009 that he was romantically involved with the widowed Queen Noor of Jordan.

In recent years, Carlos Slim has been gradually handing the empire’s reins to his children, stepping back from day-to-day involvement — but retaining ultimate control. He prefers to concentrate on philanthropic endeavours, nowadays, but every week he has dinner with his children and their families to discuss business affairs.

There are several biographies, in Spanish and English, of Carlos Slim. Most are unauthorised and concentrate on his business acumen, his mathematical brain, and his proclivity for acquiring businesses during periods of recession, at knock-down prices. In his 2019 biography Carlos Slim: The Power, Money and Morality of One of the World’s Richest Men, author Diego Osorno advanced another theory for his stellar career.

After a series of one-on-one interviews with the great man, conducted over a period of years, Osorno concluded that it was Slim’s ability to navigate politics that was the cornerstone of his success. He wrote: “It has been his loyalty to the political system that has helped him to consolidate a personal empire unimaginable in a country with more than 52 million people in poverty.”


Modest, Frugal, Retiring, and Famous for Being Anonymous: the Founder of Zara, Amancio Ortega

By TONY LENNOX

When the famously private Spanish entrepreneur Amancio Ortega finally gave his consent to a biography, he had one simple request: “Don’t just put in the good parts.”

Ortega, the 86-year-old founder of the Zara fashion brand and the multinational clothing group Inditex, has built a business which has dominated high street fashion for decades. He remains the driving force of his empire, and with a fortune estimated to be in the region of $72.8bn — making him the wealthiest individual in Europe.

The contrast to his early life is stark. He was born in north-western Spain, the youngest of three children, just as the civil war broke out. His father, an itinerant railway worker, had to travel to find employment, which is why the young Ortega left school at 14 to start work in a shirt-making shop.

“My ambition was born of poverty,” he once told a journalist. “I still remember that day when a shopkeeper turned my mother away. It didn’t take much for me to realise that every penny counts. I try to be as grounded as possible, and it is not something to brag about. It’s just the way I am.”

[caption id="attachment_22546" align="alignright" width="1000"] The famously private founder of Zara has a business empire with more than 7,300 retail outlets in 94 countries. Photo: Rowanlovescars, CC BY-SA 4.0, via Wikimedia Commons[/caption]

Despite the trappings of wealth — the yachts, the private jets, the desirable properties around the world — Ortega lives modestly with his second wife, Flora Perez, spending most of his time in a simple apartment overlooking the harbour in A Coruña on Spain’s Atlantic coast. He uses an unremarkable car to take the short drive to the vast Inditex complex in nearby Arteixo.

In her book, The Man from Zara: The Story of the Genius Behind the Inditex Group, published in 2012, journalist and close friend, Covadonga O’Shea, says that the founder of Zara's desire for anonymity is legendary. She spent many years, she says, trying to persuade him to tell his story. She describes him as “a man lacking in sophistication, with a passion and capacity for work, simplicity, and a vision of the future”. “Because of his passion for anonymity,” she writes, “he has unintentionally become an almost mythical figure in the world of business.” His relaxed management style is influenced by his lack of formal education, say observers. Despite the international nature of the fashion business, Ortega has never learned to speak English. He prefers to communicate in-person rather than electronically, and he listens rather more than he speaks. He eats in the general canteen with his workers, and tends to shun invitations to speak at industry events.

Having learned to stitch clothing by hand, he set up in business with his first wife, Rosalia Mera, at the relatively late age of 37. They created simple bathrobes in their living room; before long they needed to employ a seamstress.

In 1975 he opened his first store, Zorba, named after the title character in the 1964 film Zorba the Greek. Following complaints from a nearby restaurant, also named Zorba, Ortega changed the shop’s name to Zara.

From the beginning, the company’s USP was producing good quality, fashionable clothing at a low price. Before long, Ortega was opening Zara stores throughout Spain and Portugal. In 1988, he created Inditex, which today operates numerous global fashion brands, including Zara, Pull & Bear, Massimo Dutti, and Bershka, among others. Inditex is now the world’s number one clothing retailer, with more than 7,300 retail outlets in 94 countries, employing 150,000 staff.

Ortega’s business is still driven by a basic mantra: Give the customers what they want, as quickly as possible. He eschews traditional advertising. The company has practically no marketing budget, relying on reputation and location for sales — though it helps that the Duchess of Cambridge is regularly photographed in Zara creations.

The founder of Zara still protects his privacy, though. “The only people I want to recognise me in the street are my family, friends and workmates,” he says. “I’m trying to live a quiet life, be just another person, able to go where I want, have a coffee on the terrace, or take a stroll along the promenade without everybody knowing who I am.”


Nicole Hu: Tackling Disaster with Data — and First-hand Experience

California-based One Concern lets tech do the thinking and take the fear out of preparation for disasters and extreme weather events

By HEATHER LEAH SMITH

Extreme weather events are wreaking global havoc. The US suffered nine billion-dollar weather and climate disasters in the first half of this year. Drought and record heatwaves have sparked wildfires across Europe, Asia and the Americas. Flooding has become a recurring nightmare for many communities.

Climate-charged catastrophes in 2021 caused an estimated $343bn in economic losses — more than half of which were uninsured — but one company is harnessing data science and machine learning to mitigate, and prepare for, the damage.

One Concern’s team is unified behind the need to solve real-world problems. Its CEO and CTO, both born in India, bonded as young immigrants in the start-up scene. The company, based in Menlo Park, California, was founded in 2015 by three Stanford alumni: two structural and earthquake engineering graduates, CEO Ahmad Wani and board observer Timothy Frank, and computer scientist Nicole Hu, the company CTO.

Digital twins for the climate win

[caption id="attachment_22554" align="alignright" width="250"] Nicole Hu, CTO of One Concern[/caption]

One Concern creates “digital twins” of cities, communities, and infrastructure systems to build climate resistance. The company combines AI, machine learning and trillions of curated data points to create interactive simulations to help communities and industries stay ahead of climate risks. The model maps out potential hazards, including earthquakes, floods, and windstorms, then analyses vulnerability factors to predict direct and indirect impacts.

“With digital twins, we’re able to measure resilience using data,” Nicole Hu says. “Armed with better data and AI, we can run thousands of … simulations before a natural disaster to identify vulnerable communities and critical infrastructure in harm’s way. Our machine learning systems also ‘fill the gaps’ within the data to account for the ongoing effects of climate change, allowing us to improve our predictive analytics and see into the future with greater confidence.”

From the classroom to the C-suite

First-hand experience prompted the trio to turn a machine-learning class project into a purpose-led start-up. Indian-born Wani was visiting his home in Kashmir when the 2014 floods hit, stranding him and his family for seven days without food or water. Shortly after his return to the US, he experienced another shock as a severe earthquake shook South Napa, California. Chief resilience officer Craig Fugate once led emergency management forces at the federal and state level.

The founders credit their Stanford professors with pushing them to pitch their ideas to investors. Wani says the first batch of municipal emergency managers and venture capitalists thought the algorithm was “magic” — and seven years of continuous investment in tech and data mastery followed.

Building climate resilience through a single platform

“Resilience to climate threats — a framework where organisations, communities and private and public sector actors understand, forecast and mitigate climate risk — is among our most critical global priorities,” Hu says. “It demands an entirely new approach to understanding and acting on climate risk, one that mitigates climate threats and their ripple effects on businesses and communities, rather than scrambles to react after the damage has been done.”

The One Concern platform is underpinned by three pillars. One Concern DNA compiles curated resilience data for precision risk-mitigation. One Concern Domino provides enterprises with advanced resilience analysis and visualisation tools. One Concern Ready Fast focuses on improving the decision-making process for disaster preparation and response.

“We help cities understand that by running multiple scenarios [for disaster] events, they can figure out which places have the highest level of risk,” Nicole Hu said. “We also try to show that if you add certain mitigation strategies, you can reduce your risk and your cost of responding to disasters.”

The company is developing a climate resilience scoring system that it hopes will become an industry standard. It works with clients across the financial services, real estate and insurance sectors to increase accuracy in risk pricing and selection, valuation, and mitigation investment.

“One Concern provides clients a first-mover advantage as asset valuations begin to reflect differentiated resilience,” said chief strategy officer Jeffrey Bohn, suggesting that “market participants who incorporate new analytics to capture a differentiating valuation driver — before the driver is widely reflected in market prices — can potentially find positive alpha strategies”.

Team cohesion and cultural fit are important to Nicole Hu

“For a mission-driven company, company culture is pretty important,” Hu said. “Once you are able to get the right team, all these other problems surrounding prioritisation work themselves out because you have key players helping to solve those issues. I wouldn’t say I have all the answers; my team has all the answers.”

Investor support and industry recognition

Since its launch, One Concern has raised $119.2m in funding. The latest infusion of $45m, in June 2021, came from the holding company of one of Japan’s largest insurers, SOMPO. The investment is part of a multi-year $100m deal easing the company’s expansion into the Japanese market.

One Concern was recognised as a WEF technology pioneer in 2019 and has been selected to participate in an ESG-impact programme organised by Taronga Ventures.

Nicole Hu has been listed among Inc. Magazine’s top 100 female founders and Forbes’ top 30 Under 30 innovators.


ARCA Fondi SGR: Another Year, Another Profit Record

ARCA Fondi SGR has won recognition — and financial rewards — with go-ahead strategies, transparency, and a focus on client needs.

Italian asset management specialist ARCA Fondi SGR has become a leading light in the sector thanks to collaborative innovation, a focus on quality, and consistent attention to customer needs.

Since its launch in 1983, the firm has developed a range of value-added savings and investments solutions. It has built on strong expertise, responsible governance, and operational excellence. The financial statement for 2021 — the best in the company’s history — showed consolidation of a growing trend. The bottom line was a record net profit of €78.6m — an increase of 39 percent over 2020’s €56.7m — with a distribution of dividends to shareholders for a total of €15m.

Thanks to an innovative and high-quality product range in 2021, company assets under management have increased by more than €4bn to reach €37bn by the end of December. ARCA Fondi SGR is the investment partner of choice for more than 825,000 clients throughout the country.

Subscriber-centric Approach

With 39 years of experience, ARCA Fondi SGR gained a prominent position in the market and is widely recognised as a reliable investment partner. At the heart of this recognition is a customer-centric approach, aimed at understanding and addressing needs. Also crucial to the ongoing success is the company’s co-operation with a network of distributors — 100 banks with more than 8000 branches — that share ARCA’s values and sense of business ethics.

ARCA Fondi shaped the Italian investment management market with a dynamic approach to management aimed at adding value, mitigating risk, and seizing opportunities both at fund and product range levels. ARCA manages portfolios with high levels of transparency and diversification across securities, markets, issuers, currencies, and sectors. It’s an approach that has enabled the delivery of consistent performance across the product range.

Digital Transformation

ARCA Fondi has developed a digital ecosystem made up of a website, an app, customer- and distributor portals, chatbots and social media channels. Together, these innovations allow continuous interaction with customers and stakeholders.

Data, news, and information flow through a seamless multi-channel infrastructure to provide clients and distributors with a real-time view of the market, its drivers, and any impact these factors may have on investments. Portals offer a comprehensive view of investment portfolios and details on investment composition, risk contribution and performance attribution are appropriately provided.

Focus on ESG

[caption id="attachment_23815" align="aligncenter" width="900"] Arca Fondi SGR[/caption]

In recent years, ARCA Fondi SGR has become one of the main points of reference in the Italian financial market for ESG funds. To add value for its customers, it meets the needs of a new generation of investors who are increasingly concerned about the environmental impact of their choices.

The range of sustainable investments (Art 8 and Art 9 SFDR) includes four equity funds, three balanced funds and one flexible fund. All respect the highest ESG standards, thanks to a rigorous best-in-class approach to investment limitation — and to a set of eligibility criteria that must be met by any investment manager hoping to be compliant to ARCA’s ESG Policy.

Some of the Art 9 funds — the Oxygen Plus Funds — adopt an impact investment approach, including in their portfolios only companies that are committed to reducing their CO2 emissions in-line with Paris Agreement goals.

Recognition

Thanks to its consistent approach and dedication, ARCA Fondi SGR has achieved significant recognition and praise over the past 11 years. The company has a track record of success in the CFI.co awards programme.

In 2022, it was elected — for the second consecutive year — as the Best SME Equity Fund in Italy. It had previously won CFI.co awards for Best Emerging Markets Debt Manager in Europe — repeatedly, from 2015 to 2018 — and then again in the past three years (2020, 2021 and 2022).

A Look into the Future

In 2022, the company will continue to focus on technological innovation, digital evolution and process optimisation. Sustainability, real economy, and pension funds will be at the core of the ARCA strategic evolution for product development.

Man at the Top - Ugo Loeser

[caption id="attachment_23813" align="aligncenter" width="900"] CEO & General Manager: Ugo Loeser[/caption]

Ugo Loeser has been chief executive and general manager of ARCA Fondi SGR since 2011; he is also a member of Assogestioni’s board of directors.

Before joining ARCA Fondi, Loeser held the post of director at Finlabo SIM and Banknord SIM; he was also a partner at Bain & Company Italy. He previously held the position of European senior strategist for fixed-income derivatives at Paribas, and was executive director of fixed-income research at Goldman Sachs International.

Loeser holds a degree in Economics and Social Sciences from Bocconi University, Milan.


Craig Ferguson The King of  Chat who Vanquished Personal Demons — and Enchanted his Audience

If Craig Ferguson had been just another chat show host, his legacy may not have endured. At an imposing 6ft 2 inches Craig Ferguson height never intimidated guests and from the start, the witty Scot’s televised encounters with celebrities unleashed a superpower: the ability to loosen people up and allow them to be their fullest, funniest, weirdest selves.

[caption id="attachment_22561" align="alignright" width="500"] Craig Ferguson. Photo: Gage Skidmore from Peoria, AZ, United States of America, CC BY-SA 2.0, via Wikimedia Commons[/caption]

Ferguson was one of the UK’s leading comedians when he skipped the Atlantic and shot to fame in Hollywood. With a combination of stand-up, a role as prickly Nigel Wick on The Drew Carey Show and a burgeoning portfolio of writing gigs, he was well on the way. But it was his time as the host of The Late Late Show, which followed The Late Show With David Letterman, that made his name.

The presenter’s slot opened up with the departure of host Craig Kilborn; Ferguson won out against four other pretenders to the throne and took over the CBS franchise in 2005. He held his place until 2014 and achieved the highest ratings that the show — which began in 1995 — had ever seen. It usually opened with a theme song written and performed by Ferguson himself, followed by a monologue or a puppet show.

The charming Scot was a master in flirtatious banter as Craig Ferguson wife can testify, and his puppets, puns and parodies brought paroxysms of laughter — but Ferguson had his serious side. He wasn’t averse to addressing serious issues — including his own complicated past.

In his autobiography American On Purpose, Ferguson describes his battle with substance abuse. Not that substances were always his enemy; he claims he set out one night to commit suicide — but popped into a bar, got side-tracked, and forgot all about his grim intention. But he is under no illusions about the evil lure of alcohol. “(It) ruined me financially and morally,” he wrote, “broke my heart and the hearts of too many others. Even though it did this to me and it almost killed me, and I haven't touched a drop of it in 17 years, sometimes I wonder if I could get away with drinking some now.

“I totally subscribe to the notion that alcoholism is a mental illness because thinking like that is clearly insane.”

Craig Ferguson wife helped his recovery, sobriety, self-reflection and gave him the self-awareness to engage celebrity guests in an unpretentious, direct, and easy-going way. He had the gift of improvisation, and often tore up his prepared interview cards. He displayed a genuine interest in his guests as people, rather than as conduits to promote a product or an achievement.

Although the show was reliably comedic, Ferguson’s emotional breadth and confidence enabled him to tackle taboo themes such as death — including that of his parents — and national tragedies. He didn’t shy away from major events or politics, and his interview with South African apartheid opponent Archbishop Desmond Tutu earned a 2009 Peabody Award.

Ferguson penned two other books, a novel called Between the Bridge and the River and a retrospective entitled Riding the Elephant: A Memoir of Altercations, Humiliations, Hallucinations & Observations. He wrote and starred in three films, directing one of them, and appeared in several others. He lent his voice to animation productions as Gobber in the How to Train Your Dragon film series (2010–2019), Wol in Winnie the Pooh (2011), and Lord Macintosh in Brave (2012).

Since his 15-year stint at The Late Late Show ended in late 2014, Ferguson has continued with presenting work and stand-up comedy. Since January 2021, his main gig has been as the host of ABC’s game show The Hustler where Craig Ferguson height this time helps his screen presence.

A choice Craig Ferguson quote to wrap things up and showcase his sharp sense of individuality: “If I start giving people what they like I'll turn into one of them — and I don't want to be one of them, I want to be one of me.”


Dawn of a New Age in Data Control: Oasis Gives Power to the People

By HEATHER LEAH SMITH

Dawn Song and the Oasis team are striving to bring about a better internet by giving users control over their own data.

Users sign away the rights to their data without ever reading the fine print. For some it causes rage, others are resigned to it, but most people understand that if you’re not paying for a product, you ARE the product. User data is collected by companies, sold to brokers, and used as fodder in ad algorithms. Song calls for stronger enforcement of data property rights and insists that ownership should reside with the user.

“Today, companies are taking users’ data and essentially using it as a product; they monetise it,” Song told The New York Times. “The world can be very different if this is turned around and users maintain control of the data and get revenue from it.”

Oasis for a Better Internet

Dawn Song, the co-founder and CEO of Oasis Labs, believes that the internet is broken — but it can be fixed with a combination of privacy computing and blockchain.

[caption id="attachment_22564" align="alignleft" width="300"] Dawn Song, co-founder and CEO Oasis Labs[/caption]

“I strongly believe that building a responsible data economy is critical for our society, and this requires a community effort,” she said. “Today’s privacy concerns are numerous, and solving them will involve not just technology but also businesses and governments using this technology to be better stewards of our data.”

Oasis enables users to collect, protect and govern their own data. Song likens the process to the Black Box system used in aviation. Encrypted data goes into a trusted execution environment (TEE) of interworking software and hardware. Data is processed within a secure enclave, from which only encrypted results emerge. Blockchain sets and enforces the parameters for use policies.

“Through TEEs, Oasis Labs can help ensure that data isn’t copied, stolen or misused, allowing individuals to put their data to use without giving up control,” she told PC Mag.

Oasis uses differential privacy techniques to help businesses make the most of valuable data without jeopardising individuals’ privacy. “Companies often find themselves making a false trade-off between using and securing their data,” says Song. Oasis enables them to extract insights from siloed data, previously deemed too regulated or risky to use.

The company has launched its own blockchain-native crypto token, ROSE, which can be earned as a reward for sharing data on the Oasis Network or purchased through crypto exchanges.

Oasis Origins and Ecosystem Fund

Oasis Labs was founded in 2018 with $45m in early-stage VC funding from a16z crypto, Accel and Binance, among others.

Oasis was quick to establish an Ecosystem Fund to fuel project building on its network. It targets founders and projects in gaming, non-fungible tokens (NFTs), data tokenisation and decentralised finance (DeFi). It was seeded with $160m from major VC firms, including Dragonfly Capital Partners, Draper Dragon Fund, and Electric Capital. The Oasis Ecosystem Fund continues to attract fresh patronage. It reached a $235m milestone in May 2022, after a capital infusion of $35m from a funding round with participation by Newman Capital and Seven X Ventures.

In November 2021, Oasis introduced Emerald, which is compatible with Ethereum Virtual Machine — but claims “99 percent lower gas fees than Ethereum, high throughput and instant transaction finality”.

Partnerships

Oasis’ privacy-preserving message has resonated well with the market, as evidenced by the company’s active project pipeline and thriving partnerships.

Google Cloud Platform has brought its confidential computing product to Oasis’ software development kit, Parcel. The BMW Group has announced an early-stage project for differential privacy solutions. MetaAI (formerly Facebook AI) is partnering with Oasis to explore “secure computing technologies in AI”. YuzuSwap, the first decentralised exchange (DEX) on the Oasis Network, reached a $323m trading volume within 24 hours of operation. DeFi insurance provider Tidal will “provide asset coverage for lending protocols and DEXs that will be integrated into the Oasis Network”.

Dawn Song hopes to see widespread adoption of Oasis tech, particularly in the medical field, where data can be used to advance the development of drugs and cures. Oasis collaborated with Stanford University Medical Centre on a project allowing patients to share retinal data with researchers through its privacy-protected platform.

With Oasis, analysts can still do their jobs, says the company CEO. “But we can prevent them from doing things they are not supposed to do — like, in the case of Uber, giving out individual riders’ information.” (Song was part of the team brought in to clean up that mess.)

Dawn Song: Academia and Recognition

Song, described at the time as an exceptional student, was encouraged by a high school mentor to pursue the sciences. She got an undergrad degree in physics from Tsinghua University, the top science school in China, before migrating to the US to continue her studies. She started a physics course at Cornell University before switching to computer science. She earned a Masters from Carnegie Mellon University, where she also taught for five years, and a PhD from the University of California Berkley, where she’s been a faculty member since 2007.

The professor is an award-winning researcher and a frequent guest speaker at global tech conferences. The MacArthur Foundation awarded Song a “genius” fellowship in 2010 for her work on computer security and privacy. Her research in cybersecurity yielded more praise and prizes: a CAREER award by the National Science Foundation, a Guggenheim Fellowship and a Sloan Research Fellowship. She’s one of the most cited scholars in computer security and has received the Faculty Research Award from companies including Google and IBM.

Dawn Song is a serial entrepreneur, launching Ensighta Security in 2008 (acquired four years later by FireEye for $3.2m) and Menlo Security, a spin-out co-founded with fellow Berkley alumni in 2013.