Norton Rose Fulbright: EU Sets New Financial Laws for Non-EU Entities

Introduction

The Markets in Financial Instruments Directive (MiFID) is one of the cornerstones of EU financial services law setting out which investment services and activities should be licensed across the EU and the organisational and conduct standards that those providing such services should comply with.

Following technical advice received from the European Securities and Markets Authority (ESMA) and a public consultation, in 2011 the European Commission published legislative proposals to amend MiFID by recasting it as a new Directive (MiFID II) and a new Regulation (MiFIR). The legislative proposals were the subject of intense political debate between the European Parliament, the Council of the EU (the Council), and the Commission. However, informal agreement between the EU institutions was finally reached in February 2014. This led to MiFID II and MiFIR being approved by the European Parliament on 15 April 2014 and by the Council on 13 May 2014.

On 12 June 2014, MiFID II and MiFIR were published in the Official Journal of the EU with entry into force being on the twentieth day after publication. MiFID II and MiFIR enter into application 30 months after coming into force (beginning of 2017). In relation to implementing measures for both MiFID II and MiFIR, ESMA has now published its discussion paper on future technical standards and a consultation paper on draft technical advice on the possible content of delegated acts to be produced by the Commission. The deadline for comments on both papers is 1 August 2014.

Third Country Provisions: Changes under MiFID II

Of all the provisions of the MiFID II and MiFIR texts, the third country provisions were the subject of some of the most heated – and high profile – debate and lobbying. Articles have dropped in and out of different drafts produced by the Council and the European Parliament at a confusing rate, and it has been difficult to keep track of the latest developments.

The term “third country” refers to jurisdictions outside the EU and “third country firms” refers to entities incorporated outside the EU, whether they do, or seek to do, business by way of a branch established in the EU, or on a cross-border basis – i.e. providing services to persons in one jurisdiction from a place of business in another jurisdiction, without any establishment in the client’s jurisdiction.

"With the review of MiFID, the Commission has attempted to create a harmonised regime for granting access to EU markets for firms in third countries."

With the review of MiFID, the Commission has attempted to create a harmonised regime for granting access to EU markets for firms in third countries. However, the regime is limited in scope to the cross-border provision of investment services and activities provided to per se professional clients and eligible counterparties.

As regards the third country regime for retail clients and opted-up professional clients, full EU harmonisation could not be achieved, as member states are free to continue to apply national rules. However, where member states chose not to maintain their respective national regime, MiFID II provides for a detailed set of rules that are designed to harmonise the requirements with which the branch of the third country firm will have to comply in order to be authorised by the national competent authority of the member state.

To put it in the Commission’s words “third country firms should see this as a positive step forward as it reduces divergences across member states and therefore the legal and regulatory costs for third country operators.” Where a member state makes use of this option, third country firms may not provide services to these clients other than through a branch authorised pursuant to the harmonised procedure set out in MiFID II by the respective member state.

Third country firms dealing with professional clients or eligible counterparties will, on the other hand, be permitted to operate on a cross border basis either from outside the EU or (if provided for in the respective member state and then subject to further conditions) from a branch in a member state.

In each case, there will be a greater, formalised focus on agreements between the EU and third country regulators and the assessment of third country regimes. There is also an exclusion in the form of exclusive initiative.

Through an Authorised Branch

A member state may allow third country firms to provide investment services or perform investment activities to clients in its territory through a branch authorised in that member state.

However, such branch authorisation may only be given by the member state’s national competent authority:

Where the firm is authorised and supervised in respect of the provision of the relevant services in its home third country jurisdiction;

Having regard to the Financial Action Task Force (FATF) recommendations relating to anti-money laundering and counter terrorist financing;

Where co-operation arrangements exist between the relevant member state and third country regulators, relating to the exchange of information for the purposes of preserving the integrity of the market and protecting investors;

Where the branch has sufficient initial capital at its free disposal;

Where branch management consisting of one or more persons is appointed in accordance with, and complies with, the governance requirements of MiFID II and the CRD IV;

Where a tax information sharing agreement (complying with the standards in Article 26 of the OECD Model Tax Convention) has been entered into between the relevant member state and the home third country jurisdiction ensuring an effective exchange of information in tax matters; and

Where the firm belongs to an EU investor compensation scheme.

Such branches must comply with various organisational, conduct of business, trading and other MiFID II requirements and will be subject to the supervision of the national competent authority in the respective member state where the authorisation was granted. It is interesting to note that member states will not be permitted, save in limited circumstances, to impose any additional requirements on the organisation and operation of the branch in respect of matters covered by MiFID II and that such branches may not be treated more favourably than EU investment services firms. Insofar, MiFID II amounts to maximum harmonisation.

An important point to note is that the relevant member state national competent authority may only authorise a branch where the applicant is authorised and supervised in its third country home to provide all of the services for which it is requesting branch authorisation. This not only would exclude branches of unregulated firms, but would also restrict the scope of activities that a regulated third country firm can perform through a branch, to the extent that any such services are not regulated in the home third country. This may cause problems given the complexity of the definitional scope of different services and activities in and outside the EU.

Different Types of Client

On the face of it, this provision in MiFID II applies to firms providing services specifically to retail clients and opted up professional clients. However, MiFIR provides that branches authorised pursuant to MiFID II may provide investment services to eligible counterparties and per se professional clients across the EU, provided their third country legal and supervisory framework has been recognised by the Commission as equivalent (see below).

[caption id="attachment_7717" align="alignleft" width="153"] Author: Simon Lovegrove is a lawyer in the financial services group at Norton Rose Fulbright LLP.[/caption]

From this, it can be concluded that such branches can provide their services to per se professional clients and eligible counterparties throughout the EU on a cross border basis (with appropriate equivalence decisions). However, where such a third country firm wishes to provide services to retail clients and opted-up professional clients in other member states, it would either need to:
Apply for a separate authorisation in each member state in which it wishes to provide services and establish a branch in each one (where the member state’s regime provides for this possibility); or
Comply with the local regime governing market access in case of retail or opted-up professional clients.

Where a member state has implemented the MiFID II provisions on the establishment of third country branches, a third country firm that has not established a branch in that member state will not be able to provide investment services with or without any ancillary services to retail clients or opted-up professional clients (except on such client’s exclusive initiative, see below).

Where a member state’s regime does not require the establishment of a branch, the provision of services to retail clients and opted-up professional clients will be subject to the respective national requirements.

Cross-Border

However, a third country firm may provide investment services to eligible counterparties and per se professional clients on a cross border basis where such firm is registered with ESMA.
ESMA will only register such third country firms where:

The Commission has adopted a decision that the prudential and business conduct requirements in the firm’s home third country have equivalent effect to MiFID II and CRD IV;

The Commission’s decision also concludes that such third country also has an effective and equivalent system for the recognition of investment firms authorised under the respective third country regime;

The firm is authorised and supervised in its home third country in respect of the provision of the relevant services (as with the requirements for branch authorisation, this would restrict the scope of cross border services that a regulated third country firm can perform to the extent that any such services are not regulated in the home third country); and

Co-operation arrangements exist between ESMA and the firm’s third country home regulator which, among other things, relate to the exchange of information and co-ordination of supervisory activities.

An ESMA registered third country firm will have to inform prospective EU clients that it cannot provide services to EU clients other than per se professional clients and eligible counterparties and is not supervised in the EU. It must also offer to submit any disputes relating to its services or activities to a court or tribunal in the EU.

Transitional Provisions

Where there is no currently effective Commission equivalence decision in respect of any particular third country, member states may allow firms from such third country to continue to provide investment services to eligible counterparties and per se professional clients, if permitted by (and in accordance with) the relevant national regimes.

There is also a transitional provision in MiFIR under which firms will be able to continue to provide services and activities in accordance with national regimes until three years after the adoption of a Commission equivalence decision in respect of the relevant third country. It is not clear whether this transitional provision is intended to apply to services provided to all client types or whether it is limited to cross border business.

Exclusive Initiative of Client

A third country firm may, however, provide investment services and activities to clients on the exclusive initiative of such client, without requiring authorisation or registration in the EU.
Such “exclusive initiative” rules will likely be interpreted strictly and a number of points in particular must be considered:

There is a clear indicator that a bullish approach to “reverse solicitation”, where firms raise their profile through various forms of marketing and seek to claim that any prospective clients that subsequently get in touch have not been solicited, should not be tolerated;

Once a third country firm that is not authorised in a member state has established a relationship with a client (following the exclusive initiative of such client), it cannot subsequently provide such client with other services (unless such additional services have also expressly been sought at the exclusive initiative of the client). In other words, the “exclusive initiative” test applies on a service by service basis, not on a relationship basis; and

That said, there is some ambiguity as to whether, having been approached by the client (on the client’s exclusive initiative) to provide a service, the third country firm may subsequently provide repeat instances of the same services/product type to the client. In theory this may be possible, but in practice it is likely to be a risky approach to take.


Magatte Wade: An African Serial Entrepreneur with a Heart

 She’s none too serious, loves joking around and utterly fails to get the point of forced sex. Meet Magatte Wade, a young outspoken entrepreneur from Senegal and one of the up-and-coming power women from an awakening continent. The Davos World Economic Forum named her a Young Global Leader. She is a regularly invited speaker at Harvard, Yale, Cornell, Brown and Columbia where she fills auditoria to capacity with students and faculty eager to hear het take on the African Renaissance.

Mrs Wade is a serial entrepreneur with something of a Midas touch. Her first business venture, Adina World Beat Beverages, introduced a soft drink based on traditional Senegalese recipes to the US market and raised $30m of venture capital almost effortlessly. The drink latched on to the budding whole foods, slow food and organic food movements and immediately captured a significant market share of a growing demographic.

However, unhappy with the steady dilution and downplaying of the company’s African roots, Mrs Wade left the company in 2009 to focus on a new venture: Tiossan, a company manufacturing and marketing luxury skin-care products again based on indigenous Senegalese recipes. Tiossan offers a consumer experience based on what Mrs Wade calls contemporary African styling. She steers clear of “pity marketing” or stereotypical safari branding.

“Mrs Wade is a serial entrepreneur with something of a Midas touch.”

She is now also very careful in selecting outside investors who must agree to follow Mrs Wade’s lead on ensuring that Tiossan remains first and foremost a company rooted in both African culture and values. Half of any profits made is destined to be invested in Africa where Mrs Wade is building innovative schools that aim to unleash the creative powers of a new generation. It is also her declared intention to relocate the manufacturing of all Tiossan products to Senegal as soon as the company has gained enough traction worldwide.

Mrs Wade is not at all reluctant to use her star-like status in the US to lash out at the government of Senegal and the restrictive policies it pursues that shackle local business and condemn the country to poverty. “The Senegalese are a very entrepreneurial people. However, they are actively discouraged from deploying their business acumen by senseless policies. Senegal is one of the most difficult countries anywhere to start a company.

The country’s labour laws make it almost impossible to fire someone. If I can’t fire anyone, I can’t hire anyone.”

This is not to say that Mrs Wade is the African Donald Trump who seems to derive pleasure from sending employees home in tatters. To the contrary, Mrs Wade argues that US business has a lot to learn from the more human touch African entrepreneurs often display when it comes to human resources. “The geek culture of Silicon Valley may be admirable across many dimensions but at times does seem out of touch with human needs and human dignity.”

Mrs Wade believes that technology does not offer an answer to all questions: “While most useful, it often overlooks the importance of the human connection and mutual respect.”

As Tiossan takes flight, Mrs Wade aims to prove that a company can attain success, growth and solid profits while run on a more compassionate footing. That should be a most welcome contribution to business economics.


From Australia to the World – Rupert Murdoch: The Future of Newspapers in the Age of the Internet

Australia is simply not big enough for Rupert Murdoch, though the country did give him his first break into publishing and broadcasting: Two Adelaide city newspapers and a small town radio station in the outback. From these rather humble beginnings, Keith Rupert Murdoch conquered the world – or at least a significant part of its media.

Born in Australia to parents of English, Irish and Scottish ancestry, KR Murdoch was destined for the newspaper world. His father, a former foreign correspondent and publisher of the Adelaide News, taught young Keith Rupert the tricks of the trade. Returning home after studies in England, the young Murdoch promptly turned his attention to the family business. At the Adelaide News, he vastly increased sports and society coverage, brazenly splashing scandals onto the front page and seeing both circulation and profitably soar almost instantly.

Emboldened by his early and easy success, Rupert Murdoch sought out troubled newspapers elsewhere in Australia to add to his nascent media empire. Each paper underwent the same set of changes that had proved such a success at the Adelaide News. Soon, Australia became too small a market and Rupert Murdoch descended upon New Zealand where he promptly repeated his performance.

In 1968, Mr Murdoch arrived in the UK, buying the News of the World and, barely a year later, The Sun which he moved from broadsheet to tabloid format injecting scarcely clad ladies in the process and a dose of jingoism for good measure. From a struggling newspaper, The Sun was swiftly transformed into a giant attracting over 10 million readers by 1997.

Murdoch’s media empire News Corp today comprises a vast collection of newspapers, publishing houses and marketing agencies active on three continents. News Corp’s flagship is Dow Jones & Company, owners of the Wall Street Journal and the financial wire service. Through its UK subsidiary, News Corp owns The Times, The Sunday Times and The Sun newspapers.

Said to have single-handedly invented and popularised the tabloid newspaper format, Rupert Murdoch makes no apologies for the editorial style he imposes on his publications. Though he has kept The Times largely true to its heritage and refrained from introducing extensive sports coverage in the Wall Street Journal, Mr Murdoch does not win any prizes for style. Still, it is a major accomplishment to successfully run a daily newspaper in the days of instant news delivered wirelessly to a plethora of high-tech devices.
Rupert Murdoch not just survived the onslaught brought about by the Internet; he actually thrived by appealing to a fairly low common denominator staying true to the advice dispensed by American satirist, editor and essayist HL Mencken: “Nobody ever went broke underestimating the taste of the American public.” Rupert Murdoch applied these words worldwide and proved Mencken right by doing so.


New Study Adds Up the Benefits of Climate-Smart Development in Lives, Jobs, and GDP

With careful design, the same development projects that improve communities, save lives, and increase GDP can also fight climate change.

A new study examines the multiple benefits for a series of policy scenarios addressing transportation and energy efficiency in buildings and industry in five countries and the European Union.

It provides concrete data to help policymakers understand the broader potential of climate-smart development investments.

[caption id="attachment_7740" align="alignright" width="236"] Bus rapid transit systems that shift commuters to faster public systems take cars off the road, create jobs, and reduce pollution that damages health and contributes to climate change.
Sam Zimmerman/World Bank[/caption]

Modernizing landfills and cleaning up open dumps have obvious benefits for surrounding communities, but the value reaches deeper into the national budget that may be evident at first glance.

For a country like Brazil, where waste-to-energy technology is being piloted today, integrated solid waste management practices including building sanitary landfills that capture greenhouse gas emissions to generate electricity can improve human health, add jobs, increase the energy supply, reduce the impact on climate change, and boost national GDP.

A new study looks at a series of climate-smart development project scenarios, including landfills in Brazil, and for the first time on a large scale adds up how government actions can boost economic performance and benefit lives, jobs, crops, energy, and GDP – as well as emissions reductions to combat climate change.

It provides concrete data to help policymakers understand the broader potential of climate-smart development investments.

“Climate change poses a severe risk to global economic stability, but it doesn’t have to be like this,” said World Bank Group President Jim Yong Kim. “At the World Bank Group, we believe it’s possible to reduce emissions and deliver jobs and economic opportunity, while also cutting health care and energy costs. This report provides powerful evidence in support of that view.”

The report, Climate-Smart Development: Adding Up the Benefits of Actions that Help Build Prosperity, End Poverty and Combat Climate Change, focuses on five large countries – Brazil, China, India, Mexico, and the United States – plus the European Union. It examines the benefits of all six implementing three sets of policies on clean transportation, energy efficiency in industry, and energy efficiency in buildings.

"This study makes the case for actions that save lives, create jobs, grow economies and, at the same time, slow the rate of climate change. We place ourselves and our children at peril if we ignore these opportunities."

- Rachel Kyte, World Bank Group Vice President & Special Envoy for Climate Change

In the transportation policy scenario, for example, if the five countries and the EU shifted more travel to public transit, moved more fright traffic off of roads to rails and sea, and improved fuel efficiency, they could save about 20,000 lives a year, avert hundreds of millions of dollars in crop losses, save nearly $300 billion in energy, and reduce climate changing emissions by more than four gigatons.

It also looks at the potential impact of four country-specific projects, including landfills in Brazil, if they were scaled to the national level.

Short-Lived Climate Pollutants

Some of the benefit comes from reducing emissions of what are known as short-lived climate pollutants, or SLCPs.

Black carbon from diesel vehicles and cooking fires, methane from mining operations and landfills, ozone formed when sunlight interacts with emissions from power plants and vehicles, and some hydrofluorocarbons are all SLCPs. They can damage crops and cause illnesses that kill millions. Reducing these emissions could avoid an estimated 2.4 million premature deaths and about 32 million tons of crop losses a year.

Unlike CO2, SLCPs do not linger in the atmosphere for centuries but are removed in weeks or years. Stopping these air pollution emissions from entering the atmosphere would by itself help reduce warming and provide time to develop and deploy effective CO2 interventions.

Adding up the Benefits

Until now, socioeconomic benefits and environmental externalities, those consequences of industrial or commercial activities not reflected in their costs, have often been left out of economic analysis because they have been difficult to measure.

This report introduces a new macroeconomic modeling framework that can incorporate these considerations, providing a more holistic analysis of the co-benefits of development investments. The new modeling tools:

Measure the multiple benefits of reducing emissions of several pollutants.

Can be used to better design and analyze policies and projects.

Provide a rationale for combining climate action with sustainable development.

This report utilizes the new framework in seven simulated case studies – three dealing with sector policies and four focused on project level interventions – to calculate the many benefits of air pollution reduction.

The sector policies include regulations, taxes, and incentives to stimulate a shift to clean transportation, improved industrial energy efficiency, and more energy efficient buildings and appliances.

By 2030, the benefits of these three sets of sector policies would include 94,000 premature deaths avoided annually and GDP growth of $1.8 trillion-$2.6 trillion per year. The policies would avoid 8.5 gigatons of CO2-equivalent and almost 16 billion kilowatt-hours of energy saved, roughly equivalent to taking 2 billion cars off the road. Together, these implementing these policies could represent about 30 percent of the total reduction needed in 2030 to limit global warming to 2 degrees Celsius.

The four simulated project case studies analyzed local development interventions scaled up to a national level in one country.

For example, in the Brazil landfill scenario, the report uses results from existing World Bank-supported projects in Brazil that are implementing a variety of integrated solid waste management options, including biodigesters, composting, and landfill technology that captures methane to produce electricity. If the same technologies were scaled up nationwide, over 20 years, the study estimates the changes could create more than 44,000 jobs, increase GDP by more than $13 billion, and reduce emissions by 158 million tons of CO2-equivalent.

The other three project case studies examine expanding bus rapid transit in India, the use of clean cookstoves in rural China, and the use of solar panels and biodigesters to produce electricity from agriculture waste in Mexico.

Together, the aggregate benefits over 20 years of those four projects scaled up to the national level are estimated to include more than 1 million lives saved and about 1 million-1.5 million tons of crop losses avoided. These projects could reduce CO2-equivalent, emissions roughly equivalent to shutting down 100-150 coal-fired power plants. For just three of these projects – in India, Brazil, and Mexico – the benefits equate to about $100 billion-$134 billion in additional value.

Inaction Raises the Cost

While highlighting the co-benefits, the case studies suggest the need for further development of the modeling framework. Nevertheless, the framework demonstrates that capturing environmental externalities can strengthen the rationale for projects or policies aimed at controlling air pollutants.

As the recent Intergovernmental Panel on Climate Change assessment urged, climate action can become much easier to undertake if co-benefits are captured and quantified.

“Climate inaction inflicts costs that escalate every day,” says Rachel Kyte, World Bank Group vice president and special envoy for climate change. “This study makes the case for actions that save lives, create jobs, grow economies and, at the same time, slow the rate of climate change. We place ourselves and our children at peril if we ignore these opportunities.”


Ernst & Young, Argentina: The List from Black to White - Argentina Redefines Income Tax Law

Introduction

[caption id="attachment_7748" align="alignright" width="197"] Buenos Aires[/caption]

To further our previous contribution – Tax Havens: The Argentine Government Issues a New Tax Regulation on Low or Nil Taxation countries (CFI Spring 2014) – we can now provide an update based on legislation published during the last months.

It is worth noting that the legislation introduced a significant change in how income tax is regulated in relation to the so-called “low or nil taxation countries”. Previously, Argentine law adopted the black-list criterion when defining jurisdictions as low or nil taxation countries. The new regulations take the opposite criterion – the “white list” approach.

This means that the Income Tax Law’s administrative order empowers AFIP (Federal Public Revenue Agency) to create a list of countries, domains, jurisdictions, territories, associated states and special tax systems considered to be cooperative for fiscal transparency purposes. These are then deemed cooperative countries or jurisdictions.

In this regard, the decree established that countries with which Argentine Government has signed either a tax information exchange agreement or a double taxation avoidance treaty with a broad information exchange clause – provided the information exchange functions effectively – shall be considered cooperative for tax transparency purposes. Also, countries which have begun negotiations to establish such an agreement or treaty shall be regarded as cooperative jurisdictions.

“The significant tax consequences to transactions carried out between local taxpayers and uncooperative countries will highly depend on the tax authorities’ definition of cooperative and uncooperative countries.”

According to the new legislation, all the countries or jurisdictions not included in this list are regarded as uncooperative. Therefore, the transactions carried out with parties domiciled in such countries are subject to a burdensome income tax treatment as opposed to the much more streamlined procedures befalling transactions carried out with parties domiciled in jurisdictions not classified as such.

New Regulation

The presidential decree was duly regulated by AFIP General Resolution No. 3576, published in the Official Bulletin on December 31, 2013. This resolution informs that the list of cooperative countries will be available on AFIP website (www.afip.gob.ar) as of January 1, 2014. Schedule A lists the countries, dominions, jurisdictions, territories, associated states or special tax systems considered to be cooperative for tax transparency purposes.

Although the list was made available on the AFIP website only on January 7, 2014, a reasonable interpretation would lead us to believe that the list came into effect on January 1, 2014.

A comparison of both lists – the old Jurisdictions considered Tax Havens and the current Jurisdictions Considered Cooperative – shows that some jurisdictions were moved to the cooperative category. For instance, the Commonwealth of the Bahamas and the Cayman Islands were considered low or nil taxation countries before and are now classified as cooperative. This would seem to make sense since both countries signed tax information exchange agreements with the Argentine government on December 3, 2009, and October 18, 2011, respectively.

The Published List

The new resolution establishes that to apply income tax transfer pricing provisions, the status of the country with which transactions take place should be considered based on the list published on the AFIP website. A given country’s status is in effect as of the beginning of the fiscal year to which the income (or losses) of such transactions are to be allocated.

Although the resolution only refers to transfer pricing provisions, it should be understood that the effective date of the list is applicable to all the provisions in laws related to “low or nil taxation countries”.

It should be recalled that income tax law sets forth particular provisions for transactions carried out by Argentine taxpayers with parties domiciled in tax havens (now “non cooperative countries for tax transparency purposes”): (i) CFC regulations; (ii) deductibility of certain expenses on a cash basis; (iii) increaded whitholding rates; (iv) transactions with “uncoperative” countries would not be considered to be carried out under arm´s length conditions; etc.

Classification of Cooperative Countries

The resolution under analysis also provides that the countries considered as being cooperative for tax transparency purposes are classified into 3 (three) categories:

Cooperative countries that have signed a double-taxation treaty or a tax information exchange agreement with a positive assessment of the effective compliance with information exchange clauses;

Cooperative countries that have signed a double-taxation treaty or a tax information exchange agreement, but without an assessment of the effective implementation of the information exchange; and

Cooperative countries with which a negotiating process has started or that are about to ratify a double-taxation treaty or tax information exchange agreement.

It should be highlighted that the list would be subjected to changes and that tax authorities are empowered to provide ongoing updates of the list. In the near future, tax authorities may classify the different jurisdictions based on the oversight of the agreements signed and the actual compliance with the exchange of information provisions.

Moreover, new income tax regulations could be issued on a particular tax treatment for each category. All of these are possible future scenarios since the resolution was only recently introduced and there are still some issues that need clarification.

In short, the significant tax consequences to transactions carried out between local taxpayers and uncooperative countries will highly depend on the tax authorities’ definition of cooperative and uncooperative countries. In other words, the tax agency is also the one that establishes which countries may be included or excluded from the white list. Tax payers will have to carefully analyse treaty network and public information about compliance when evaluating or anticipating cross-border transactions with certain jurisdictions.

About the Authors

Sergio Caveggia is a tax partner currently in charge of the Transaction Tax Area in Argentina. He joined the tax division of E&Y Argentina in 1994, and has developed strong expertise over twenty years in international taxation and mergers and acquisition matters. He is highly experienced in acquisition structures for inbound and outbound investments, buy side, sell side and restructuring services within the transaction tax area.
Mr Caveggia has served numerous clients across a wide range of industrial sectors. He has also been involved in practically all buy-side and sell-side due diligence procedures performed by our firm over the last fifteen years.
He has given lectures at national universities and is a frequent speaker at tax seminars. He has also written several articles dealing with Argentine tax issues.
Mr Caveggia is a certified public accountant graduated from University of Belgrano in Argentina. He also obtained a tax specialist’s degree at the University of Belgrano and obtained a postgraduate certificate in business and management from Universidad Católica Argentina (UCA). He is a member of the Professional Council of Economic Sciences of Buenos Aires and the Argentine Fiscal Association.

 Flavia Cimalando is a manager of the Transaction Tax Area in Argentina. She joined the tax division of E&Y Argentina in 2000. Flavia has developed strong expertise over thirteen years in tax advisory services, tax planning and due diligence for local and international companies. She specialises in international and local business acquisitions and M&A consulting.
Flavia is a certified public accountant and bachelor in business Administration graduated from University of Buenos Aires, Argentina. She worked as an assistant professor of Tax Theory and Technique I at the School of Economics of the University of Buenos Aires during the last seven years. She is fluent in English.

Schedule A: Countries, dominions, jurisdictions, territories, associated states or special tax systems considered to be cooperative for tax transparency purposes: Albania, Germany, Andorra, Angola, Anguilla, Saudi Arabia, Armenia, Aruba, Australia, Austria, Azerbaijan, The Bahamas, Belgium, Belize, Bermuda, Bolivia , Brazil, Cayman Islands, Canada, Czech Republic, Chile, China, Vatican City, Colombia, South Korea, Costa Rica, Croatia, Cuba, Curaçao, Denmark, Ecuador, El Salvador, United Arab Emirates, Slovakia, Slovenia, Spain, United States, Estonia, Faroe Islands, Philippines, Finland, France, Georgia, Ghana, Greece, Greenland, Guatemala, Guernsey, Haiti, Honduras, Hungary, India, Indonesia, Ireland, Isle of Man, Iceland, Israel, Italy, Jamaica, Japan, Jersey, Kazakhstan, Kenya, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macau, Macedonia, Malta, Morocco, Mauritius, Mexico, Moldavia, Monaco, Montenegro, Monserrat, Nicaragua, Nigeria, Norway, New Zealand, Netherlands, Panama, Paraguay, Peru, Poland, Portugal, Qatar, United Kingdom, Dominican Republic, Romania, Russia, San Marino, Singapore, Saint Martin, South Africa, Sweden, Switzerland, Tunisia, Turks & Caicos Islands, Turkmenistan, Turkey, Ukraine, Uruguay, Venezuela, Vietnam, British Virgin Islands.


Hamza Najeeb: Courageously Looking for Answers

Who breaks a butterfly on a wheel?

Hamza Kashgari Mohammad Najeeb is a poet in his mid-twenties. He was a columnist for al-Bilad newspaper until early 2012 when he expressed some concerns about the tenets of his inherited religion as part of a wish for more freedom of expression in his native country.

Mr Najeeb is a Saudi national but according to some of his fellow citizens not of pure enough blood because of his Turkmen family background. A Saudi cleric urged that he be tried for apostasy and a Facebook group of some 26,000 called for his execution.

A smaller group begged that all charges be dropped. In the event, Mr Najeeb was deported to Saudi Arabia by Malaysia while en route to New Zealand where he had hopes of being granted political asylum. He was jailed for almost two years for “denigrating religious beliefs.”

“Mornings of hope... souls that live and never die. Thanks to God.”

(Tweet from Hamza Najeeb upon his release from jail in Saudi Arabia 10/29/2013)

Referring to that call for execution, the Grand Mufti of Egypt said, “We don’t kill our sons. We talk to them.” Ali Gomaa’s first concern was to find out the precise wording of Mr Najeeb’s statements in order to determine if their significance: Was this a mere misconduct, an expression of doubt or even an insult?

It was indeed relevant that the young man had made an apology. The Association of British Muslims went further by saying that, “a state penalty for supposed blasphemy runs counter to the spirit of Islam. No one should suffer for expressing their opinions.” Islam is a religion of love, tolerance and peace. These are indisputable facts.

Could it be that Najeeb’s support of Arab Spring was germane to the prosecution and imprisonment of this young man? Perhaps his criticism of the Saudi Religious Police – aka the Committee for the Promotion of Virtue and the Prevention of Vice – had something to do with all this.

Hamza Kashgari Mohammad Najeeb is a perhaps reluctant hero. He deserves praise for expressing honest doubt about both religious and secular affairs and thinking out loud about possible solutions and answers. He did so at great personal risk running afoul of stern dogmatists who sadly fail to realise that most people, even the devoutly religious, have a habit of using thought processes to analyse their surroundings and find answers that aim to make the world a better place.

As to the dogmatists, more often than not, their vain and misguided attempts to protect religion from detractors but serves to foment further dissent. Faith is by its very nature a liberating experience. Theologians of whatever religion who do not grasp this simple universal concept should probably find a more fitting line of work.


World Bank Policies Include Screening for Climate Risks

The World Bank Group has made a priority of helping countries adapt to and mitigate the risks of climate change, and it is increasingly viewing its lending through a climate lens.

Over the past few years, it has started implementing climate and disaster risk screening requirements for projects and country partnership frameworks, along with tools to help carry out the assessments.

It is also expanding its accounting for greenhouse gas emissions within its portfolio and projects.

[caption id="attachment_7773" align="alignright" width="241"] Curt Carnemark/World Bank[/caption]

Over the past year, nearly a quarter of the World Bank Group’s lending supported projects that also helped countries address the drivers of climate change and adapt to climate risks. Solar power in countries including Chile and China, energy efficiency in regions like the Balkan states, and climate-smart agriculture in countries including Kenya and Malawi are just a few of the examples.

As scientific understanding of the threats posed by climate change has grown, the World Bank Group has made a higher priority of helping countries adapt to and mitigate the risks of climate change, and it is increasingly viewing its lending through a climate lens.

That work starts with a foundation of risk screening, greenhouse gas accounting, and analysis.

Risk Screening

The World Bank screens operations and country strategies for climate change and disaster risks under several existing requirements.

Starting this fiscal year, new country partnership frameworks, which are used by World Bank management and the Board for guiding the World Bank Group’s country programs and gauging their effectiveness, are also expected to address climate change and disaster risks as appropriate for each country. That includes assessing how policies, programs, and projects could be affected by short- and long-term climate change and disaster risks; accounting for the impact of projects on the global climate through greenhouse gas emissions and short-lived climate pollutants; and addressing risks from fossil fuel price volatility and climate-related regulations.

For the 82 countries funded through the International Development Association (IDA), the Bank’s fund for the most vulnerable, climate change and disaster risks draw additional attention. Many of these countries have been hit hard by water shortages, extreme weather and other climate impacts in recent years.

"Climate change is a fundamental threat to development within our lifetimes, and the cost of addressing it is rising. We know that if we don’t confront climate change, we won’t end poverty and the poorest and most vulnerable will suffer the most. That is why we have made it a priority for action."

- Rachel Kyte, World Bank Group Vice President & Special Envoy, Climate Change

All IDA operations are now screened for short- and long-term climate change and disaster risks, and resilience measures are integrated as appropriate. Also, all country partnership frameworks through IDA (pdf) will incorporate climate and disaster risk considerations into the analysis of development challenges and priorities, and, when countries agree, in the content of programs and results frameworks. A new set of climate and disaster risk screening tools is helping to guide project and country teams to identify potential risks in proposed projects and strategies.

World Bank economists are also developing indicators to help countries further measure climate and disaster risk resilience.

Greenhouse Gas Accounting

To better understand and measure its greenhouse gas "footprint," the World Bank Group is also expanding accounting for greenhouse gas emissions within its portfolio and projects.

The International Finance Corporation (IFC), the World Bank Group’s private sector arm, began gross greenhouse gas accounting for direct investments in 2009 and greenhouse gas accounting for all mitigation activities in 2011. The World Bank now accounts for emissions from energy, forestry, and agriculture projects where it has agreed methodologies, and it is working on adding water, urban development, and transport over the coming year. The World Bank Group has harmonized the overall approach to greenhouse gas estimation (pdf) for mitigation projects with other multilateral development banks and international financial institutions and continues to work to harmonize approaches at the project level.

Analysis

The World Bank Group also has been conducting analytical work on the risks of climate change and benefits of action to help guide its work.

A series of studies, led by the World Bank-commissioned Turn Down the Heat series, has drawn attention to the risks developing countries face in a world even 2 degrees Celsius warmer than pre-industrial times and the urgency for action. Other studies have looked at the risks from weather-related disasters and the need for resilience, and the impact of reducing short-lived climate pollutants on the world's ice and snow regions, and the benefits of climate-smart policies.

World Bank economists have also been exploring ways to design and assess development projects and policies to ensure they have strong positive effects on communities and economies and minimal impact on the environment and climate. In policies, that work includes improving urban planning, climate-smart agriculture, low-carbon growth, renewable energy, and energy efficiency, and removing fossil fuel subsidies, among other focal areas.

Structure

This increasing understanding has led the World Bank Group to be increasingly vocal about the risks of climate change and the need for action, and its work and structure are reflecting that concern.

The principle of sustainability is now integrated into the World Bank Group’s goals of ending poverty and increasing shared prosperity, and in January, a new World Bank Group vice presidency for climate change was also created, combining the International Bank for Reconstruction and Development, IDA, and IFC to address climate change under the leadership of Group Vice President and Special Envoy for Climate ChangeRachel Kyte.

“Climate change is a fundamental threat to development within our lifetimes, and the cost of addressing it is rising,” Kyte said. “We know that if we don’t confront climate change, we won’t end poverty and the poorest and most vulnerable will suffer the most. That is why we have made it a priority for action.”


MIGA (World Bank): Islamic Finance - A Growing Source of Capital for the Developing World

The World Bank has its eye on Islamic finance, and with reason.

Islamic finance’s recent globalization – in both Muslim and non-Muslim countries alike – has increased the total size of its assets to around $1.5 trillion. In both the public and private sectors, transactions based on Sharia principles clearly have gained a place in global financial markets. The World Bank Group sees the historic and development significance of Islamic finance’s rise and is increasingly coordinating its efforts with respect to Islamic finance. Indeed, the World Bank, IFC (International Finance Corporation), and MIGA (Multilateral Investment Guarantee Agency) recently reported on closed and pipeline transactions in this arena to the group’s Board of Directors.

Importantly, last October, the World Bank announced the opening of the first Global Islamic Finance Development Center in Turkey, under the roof of Borsa Istanbul. This historic facility offers services that include information sharing on the development of Islamic finance, technical assistance, and harmonization initiatives. The creation of this center is a reflection of the global efforts to improve and standardize Islamic finance while contributing to ending poverty and boosting shared prosperity around the world using this increasingly important source of finance.

“Currently, MIGA is looking at several projects involving yet another type of Islamic finance – sukuk, or financial certificates representing bond issuances to the capital markets.”

For its part, MIGA – the political risk insurance and credit enhancement arm of the World Bank Group – has already supported two Islamic finance transactions, and is looking at several more. The first was a port project in Djibouti, for which the agency issued a contract of guarantee in 2007.

A New Port in Djibouti

The Doraleh Container Terminal involved the development, design, construction, management, and maintenance of a new container terminal port terminal in the city of Doraleh. The terminal has a total quay length of 2,000 meters and an annual handling capacity of 1.5 million 20-foot container equivalent units.

MIGA issued guarantees totalling $427 million for both the equity and debt portion of the terminal. Because the sponsor of the project – DP World of the United Arab Emirates – required that the transaction be financed through an Islamic finance structure, the financiers to the project, led by the Dubai office of the Standard Chartered Bank, put together a financing structure involving a Musharaka arrangement. Under a Musharaka agreement, sponsors and financiers collectively pool together resources (contract rights and capital respectively) to undertake a joint venture, or partnership, which is the literal meaning of Musharaka.

In the case of the Doraleh Container Terminal, the construction portion of the project was done through an Istisna’a arrangement whereby the financiers allow for cash payments in advance for the construction period in exchange for future delivery of the assets. The Musharaka venture appointed the project company to construct the terminal and ensure delivery of the assets to the joint venture at the end of the construction period.

Finally, the repayment of the financier’s capital was structured through an Ijarah lease arrangement whereby the financiers leased their portion of ownership in the assets back to the project company in exchange for rental payments linked to a floating benchmark. During construction, the rental payments were made in advance of the actual lease, creating an advance lease, or Ijara mawsoofah bil thima, and at the end of construction, the leasing contract buys out the assets in their entirety, at which point the financiers receive periodic lease payments. Early repayment of the financiers could be accomplished through either a put (purchase undertaking) or a call (sale undertaking), whereby the financiers’ portion of the partnership could be bought out at the original purchase price.

For MIGA, covering such a structure involved major contractual changes to its normal ways of covering a loan. The MIGA contract had to specify that the amounts covered included advance rental and rental under the Ijarah contract, any potential termination payment of the Istisna’a, any payment owed under the put option, and any additional amounts owed to the financiers under a potential unwinding of the Ijarah Musharaka.

Despite the complexities of the transaction, MIGA was able to provide the financiers with the comfort they required: both ongoing repayments of the financing and any potential early termination payments would be insured and covered for a political risk event. The Doraleh Container Terminal transaction was a major milestone for both the Republic of Djibouti – it represents half of the nation’s annual GDP – as well as for MIGA.

Mobile Network Expansion in Indonesia

In 2011, MIGA closed its second transaction supporting a project with an Islamic financing structure: A telecommunications project in Indonesia. For this project, MIGA provided political risk insurance to two financial institutions, Deutsche Bank Luxembourg and Saudi British Bank, for their $450 million financing to the Indonesia telecoms company PT Natrindon Telepon Selular, or NTS. The company was majority-owned by Saudi Telecom, and the deal formed part of an overall $1.2 billion financing to help NTS greatly expand its GSM network in Indonesia.

MIGA supported the transaction because the new financing helped the company increase network quality and expand coverage, getting telecommunications to lower-income segments of the Indonesian market as well as to remote islands of the archipelago.

Unlike the Djibouti transaction, which involved Musharaka financing, the NTS project involved a particular type of Islamic finance known as Murabaha financing that essentially involves a sale and purchase of commodities. There are four basic steps, which happen instantaneously, and four basic players: Financier buys commodities at market price from a commodity seller. Financier sells the commodities to the project company at a deferred price with a profit component, so that the sales price plus the profit component matches an amortization schedule on a loan. The project company sells the commodities to a commodity purchaser at the sales price. The commodity purchaser sells the commodity back to the original seller at the sales price.

Since this all happens instantaneously, the commodities never actually change hands, and the transactions are recorded by book entry only so that the financier directly funds the project company. However, though this mechanism, unlike a loan, there is no actual interest component, which is prohibited under Islamic law.

Although the concept is fairly simple, MIGA’s documentation was far from it. To add to the complexity, there were a number of novel issues to be addressed.

Challenges Overcome

Consider these examples: First, there are three separate tranches of funding, and MIGA was covering a minority share of the financing, which had implications for MIGA’s policy covenants; second, two separate currencies were used, whereas the MIGA guarantee was only in US Dollars and the potential currency fluctuations needed to be tackled; third, there were challenging details to work out over coverage of principal and profit (analogous to the interest component of a conventional loan), which resulted in MIGA covering 100% of principal of a loan for the first time; fourth, in addition to the MIGA guarantees, the project involved sponsor guarantees, so it was necessary to ensure that there was no overlap in coverage; fifth, the financing was being syndicated after closing, and the banks wanted to ensure that syndicates could opt-out of MIGA cover; sixth, as the project company was responsible for paying the premium, special provisions and timing arrangements needed to be included for any instance where it may fail to do so; and seventh, MIGA had to obtain reinsurance from the private market, so all of these special provisions were subject to reinsurance approval.

In the end, MIGA was able to tackle all of these issues successfully and to issue the agency’s first-ever contract of guarantee for Murabaha financing. This was an important demonstration of MIGA’s flexibility and – given the growing role of Islamic financial markets in supporting projects in developing countries – it was indeed a landmark transaction.

Currently, MIGA is looking at several projects involving yet another type of Islamic finance – sukuk, or financial certificates representing bond issuances to the capital markets. After having closed its first capital markets transaction using its non-honouring of sovereign financial obligations cover in support of Hungary’s Ex-Im Bank last October, there has been much interest in expanding the use of this application, including in the Islamic finance model. MIGA is currently in discussion with ICIEC, the political risk insurance arm of the Islamic Development Bank, on using this cover for sukuk issuances.

Islamic financial products are founded on sound principles including investing in a real asset, basing the yield on production or trade income rather than interest, and displaying risk and yield transparently. Islamic finance emphasizes asset-backing, thereby ensuring a direct link between financial transactions and real economic activities. It is also a more equitable form of financing, as lenders and borrowers share risks and rewards, which increases the focus on long-term goals and discourages excessive short-term risk-taking. Undoubtedly, these principles dovetail nicely with those of development institutions like MIGA.

MIGA is pleased to participate in these types of transactions and hopes to be more active in the industry in the years to come.


Mikkelson Brothers: Doing Good through a Chance Meeting

 Danes David and Christopher Mikkelson are solid heroes for the humble and conscientious work they have done in establishing Refugees United (REFUNITE) in 2008. This organisation helps family members search online for refugees in order to connect and communicate with them.

The REFUNITE website is stark, very much to the point and offers anonymous and free-of-charge services. What could be more important than bridging the gap between a displaced individual and a loved one? This is a search engine that delivers hope.

The Mikkelsons estimate that there are 43 million displaced individuals globally. A large percentage of these displaced folks have lost contact with the very people they so desperately need to alleviate their suffering.

The Mikkelsons set up REFUNITE after experiencing first-hand the almost insurmountable difficulties they encountered when trying to reunite Mansour, a boy from Afghanistan, with his long-lost parents and siblings. The obstacles they faced at the time were so overwhelming that the brothers realised something radical had to be done to smoothen this path. Happily, one of Mansour’s brothers was eventually traced and the two were reunited in Moscow after six hard and long years apart.

“In a pioneering way, the innovators of Refugees United have used modern technology to alleviate the terrible pain that separation from, and uncertainty about, family members bring.”

- Morten Kjærum - Director of Fundamental Rights Agency

The well-known actor Mads Mikkelen is a goodwill ambassador for REFUNITE and acts as its public face. Given his fame throughout Denmark, Mads is able to draw maximum attention to the plight of refugees and the people left behind, worrying and searching.

Visitors to the REFUNITE website are encouraged to spread the word - especially through the social networking sites. There is also an opportunity to make an online donation to this good cause. The organisation is completely independent, with headquarters in Copenhagen and an office in Nairobi that acts as a hub for activities in East Africa and elsewhere.

The Mikkelsons were members of the Clinton Global Initiative (2010/11) and have received accolades from Monocle and Daz magazines. Major broadcasters such as the BBC, CNN and CNBC have reported on REFUNITE’s activities. Their good work has drawn the attention of publications such as The Guardian, Der Spiegel and Newsweek. These news outlets reported very little about the founding brothers themselves and instead concentrated on the search efforts and the tools offered to friends and family of displaced persons.

The unassuming style of David and Christopher Mikkelson is both remarkable and appropriate. They stumbled into this undertaking quite by accident after meeting a bewildered young Afghan boy who had somehow found his way to Denmark. The Mikkelsons knew that they had to do something to help – not just the boy but the countless others just like him. They merely did what they had to and ended up making a profound difference in the lives of a great many people. That is the stuff heroes are made of.


Why Business Leaders Support a Price on Carbon

Climate change can put the resources, supply chains, and infrastructure that companies rely on at risk, while also threatening to roll back decades of global development progress.

Business leaders recognize the risks. Several have started to use an internal “shadow price” on carbon to help guide their investment decisions and seize opportunities.

A growing number of business leaders are speaking out in support of carbon pricing policies.

The companies we turn to every day for electricity, transportation, consumer goods, and even electronics face risks from climate change. Most need reliable water for production processes and products. Extreme weather and temperatures can hurt their productivity and damage their supply chains and assets.

Business leaders understand that climate change can have real economic impact, and that their current business models may not be profitable in a 4-degree warmer world. They also see opportunity in innovating for a cleaner future.

Several global companies, including Google, Walmart, and Shell, have started using a “shadow price” on greenhouse emissions in their investment planning to help avoid risks and find opportunities that can increase energy and resource efficiency, reduce emissions, and give them a competitive edge. An internal price on carbon used by proactive leaders won’t move an entire industry to better practices, though; a sector- or economy-wide price on carbon emissions will.

"We need to engage governments to create an environment that is supportive to meeting the big sustainability challenges the world faces."

- Unilever

In about 40 countries and more than 20 cities, states and provinces, these companies and others also work with a formal price on emissions that is set or planned for entire sectors or economies through carbon taxes or carbon markets. That price on carbon, as it frequently referred to, sends a consistent economic signal that investing in cleaner, low-carbon growth can pay off for everyone.

Business leaders are increasingly speaking out in favor of expanding those carbon pricing policies.

More than 250 companies have joined a statement that is being organized by the World Bank Group and partners including the World Economic Forum, UN Global Compact, and the Prince of Wales’s Corporate Leaders Group encouraging governments to explore carbon pricing methods and set their own predictable price on carbon.

Flexibility, Innovation & Efficiency

The energy giant GDF Suez, sees carbon pricing as a cost-effective way of addressing climate change while letting businesses choose how they lower their emissions. The France-based multinational operates on five continents in about 70 countries – some of which have carbon pricing systems in place. In positioning itself for the future, the company is aggressively developing renewable energy resources to reduce its carbon footprint, a move that has put it at the cutting edge of the energy sector.

“We at GDF Suez support carbon pricing because we believe there is a need to address risks linked to climate change, and we support action to address emissions reductions cost effectively. We are in favor of market-based approaches and emissions trading which allow business the flexibility to reduce when and where it makes the most business sense,” the company wrote in adding its name to the public statement encouraging governments worldwide to put a price on carbon.

[caption id="attachment_7796" align="aligncenter" width="400"] Industries face several risks from climate change. The Thirsty Energy infographic looks at the energy-water challenge.[/caption]

KDF Energy of Romania, another supporter of the carbon pricing statement, writes that “carbon pricing improves the efficiency of the economy, and it is a signal for investment in low-carbon and resilient economic growth.”

Software company Microsoft, which uses shadow carbon pricing, describes similar benefits from its internal carbon fee model. It says the internal pricing mechanism provides justification to prioritize efficiency at every level of the organization. “We’ve found over time that the more we can integrate sustainability goals across the business, the better position we are in to respond to changing economic, social and environmental conditions. Our carbon fee model supports a culture of innovation and efficiency,” Microsoft told CDP for a recent report on internal carbon pricing.

Investors

For investors, transparency and sustainability are important. A price on carbon helps bring to light the risk of stranded assets and connects the damages caused by burning fossil fuels to their sources, costs that are rarely reflected in stock prices today.

“In addition to encouraging investment in low-carbon generation, a carbon price also provides investors an incentive to pursue other low-carbon activities, such as tilting portfolios away from high-carbon investments, as they have a clearer view of the economic cost of holding high-carbon assets,” four investor groups from Europe, Asia, Australia and North America wrote in a recent online article. “The continued improvement and expansion of carbon pricing is crucial to a low-carbon energy future.”

The French public service pension fund ERAFP proposes that companies report their carbon footprint as a proxy to assess how businesses are preparing to deal with climate change.

“Assuming that, as a result, it would be in the interest of any company to gross the highest revenue possible for the least carbon footprint, pressure would increase for a subsequent overhaul in corporate business models,” ERAFP writes in supporting the price on carbon statement. “We will never stress enough the importance of being transparent.”

Small Businesses

Small businesses are also concerned about climate change; they have fewer resources to endure extreme weather events, recover or adapt. The American Sustainable Business Council works with small businesses and sees value in properly pricing the burning of fossil fuels and using the proceeds to reduce taxes elsewhere.

“By returning some of the revenues to the lowest income earners, a price on carbon actually benefits small businesses that serve this segment of consumers,” the ASBC writes. “Addressing the climate crisis will not just avert economic catastrophe, it can serve as a wellspring of innovation, job creation, and produce economic and international competitive benefits.”

A similar model has been used in British Columbia since 2008. The Canadian province set a tax on emissions from fossil fuels – paid at the pump and in an energy bills – but then cut business taxes and personal taxes and added a low-income tax credit to protect the poor. The revenue-neutral approach led to one of the lowest income tax rates in Canada and lowered the province’s emissions.

Private Sector Involvement Matters

The World Bank Group has been working with business leaders to increase investment in clean energy and low-carbon development, and it recognizes the value of a price on carbon in encouraging that shift.

The private sector’s involvement is critical. Climate change threatens to roll back decades of development progress in countries around the world and puts the poorest and most vulnerable at greatest risk. Public money alone will not be enough to shift the world to low-carbon growth than can reduce missions to safer levels. Nearly two-thirds of finance for projects today that help mitigate climate change, such as renewable energy development and expansion of energy efficiency, comes from the private sector, and the combined total is far short of the investment needed.

Solving the challenges of climate change will take both public sector and private sector leadership.

Global consumer products company Unilever described the connection and the impact on consumer goods companies in joining the carbon pricing statement: “Many of the impacts of our operations fall outside our direct control, so we need to engage governments to create an environment that is supportive to meeting the big sustainability challenges the world faces.”


Gabriel García Márquez (1927-2014): A Farewell to the Patriarch of Literature

It is a rare genius who can encapsulate in writing the soul of a country. One who does so with an entire continent is rarer still. Those attributed with such virtuosity tend to be long dead, and most had the good sense not to be born in South America. That did not stop Gabriel García Márquez from leaving an indelible mark on literature.

To condense into novel form all the tempers, colours, and rhythms of such a vast place where every individual component feels somehow ancient yet transplanted, smuggled, stolen even, and haphazardly reassembled on the other side of the world. A continent with a deceptive familiarity, an unrelenting heat, and the tranquil disposition you’d expect from a place founded by men who thought they had found paradise, only to immediately start tearing it apart looking for gold and other riches. Such a literary feat would require a mind as vibrant, as blunt, as melancholic, as magical as the continent itself. It’s that vibrant, blunt, melancholic mind that won Gabriel Márquez the 1982 Nobel Prize for Literature.

Mr Marquez launched his writing career in the early 1950s, after quitting his studies at the National University of Colombia. His first job at El Heraldo in Barranquilla earned him three pesos per article. He went on to become a contributor and film critic for El Espectador in Bogotá. In December of 1957 he accepted a position at El Momento in Caracas just in time for the 1958 Venezuelan coup. That same year he married Mercedes Barcha Pardo who would accompany him for the rest of his life. The following year their first son Rodrigo was born.

Mr Márquez’ literary debut, The Story of a Shipwrecked Sailor, was a journalistic expose of a marooned sailor, Alejandro Velasco, from a Colombian naval vessel carrying contraband goods. The following controversy forced him to accept a post as a foreign correspondent in Europe.

After this sojourn, the family settled in Mexico City in 1961, where a few years later Gonzalo, their second son, was born.

Back to the Roots

Since starting out as a writer, Mr Márquez knew he wanted to write a novel based on his childhood in Aracataca, a town near the Colombian Caribbean coast, and the grandparents who raised him. This was to be a novel based on the stories of his grandfather Nicolás Márquez Mejía, a veteran of the Thousand Days’ War and a hero among Colombian liberals, who had shaped Marquez’ political outlook. The novel was also to be rooted in the stories of his grandmother, who conflated the superstitious with the sensible, and the magical with the mundane, all delivered in the same matter-of-fact tone.

“Many years later, as he faced the firing squad, Colonel Aureliano Buendía was to remember that distant afternoon when his father took him to discover ice.” That opening line finally came to Marquez while driving his family on a vacation to Acapulco. Marquez later tells how he immediately turned the car around, got home and locked himself in a room with four packs of cigarettes, and worked on the book every day for 18 months. The result was A Hundred Years of Solitude; an epic novel telling the story of several generations of the Buendía family from the time they founded the village of Macondo. The book became an instant bestseller going on to sell over 25 million copies worldwide.

The success of A Hundred Years of Solitude was followed by a string of best-selling novels such as Autumn of the Patriarch which recounts the thoughts of a dictator of a fictional Caribbean country who is simply referred to as the General and who serves as an amalgamation of several Latin American and European dictators. He also penned Love in the Time of Cholera, a love story based on his parents’ courtship, as well a number of nonfiction books and short stories.

Upon receiving his Nobel Prize in 1982, Marquez gave a speech entitled The Solitude of Latin America concerning the colonial legacy of the continent and its relationship with the rest of the world.

Public Duty

Márquez held strongly that the writer had a public duty to speak out on political issues, and put his fame to good use. He was a particularly vocal critic of US imperialism, which resulted in him being labelled a subversive and banned from entering the US. In 1975, Gabriel Márquez pledged not to publish again until the Chilean Dictator Augusto Pinochet was deposed, a pledge, as it turned out, he could not fulfil.

His socialist views led him to consistently back the regime in Cuba, and he became a close personal friend of Fidel Castro. His faithfulness to the Cuban revolution led to him falling out with many of his own generation of Latin American writers, who were increasingly critical of the lack of intellectual freedom on the island.

Despite the occasional controversy, Marquez was seen as a man respected by all parties in the region where he is affectionately known as Gabo, even acting as a facilitator in several negotiations between the Colombian government and the guerrillas, including the former 19th of April Movement (M-19), and the current FARC and ELN organizations.

In 2002, Marquez published Living to Tell the Tale which was intended to be the first part of a three volume autobiography. Volumes two and three were never published. In 1999, Gabriel García Márquez was diagnosed with lymphatic cancer. Three years later, his brother Jaime announced that Márquez was suffering from dementia. He was hospitalised in Mexico City for lung and other infections. Mr Márquez died of pneumonia at the age of 87.

This decade marks the bicentennial of independence in many Latin American countries, including Marquez’s own Colombia. Those 200 years have brought revolution, civil war, and military coups. The decolonisation process was also reverted with large swaths of the continent bought up by foreign interests.

As Marquez himself pointed out in his Nobel Prize acceptance speech; the metaphorical nation populated by her forced migrants rivals Norway in size. It is the continent of the Amazon River, of the United Fruit Company and El Dorado, of drug cartels, carnival, and the Andes Mountains. A continent of ancient devotion and superstitions - both indigenous and imported - and of fervent rationalism and ideological dogma (mostly imported).

It is also home to 99 billionaires and counting and host of the 2014 World Cup and the 2016 Olympics. It is the continent of Fidel Castro, Pablo Escobar, Christiana Figueres, Pope Francis, José Mujica, Augusto Pinochet, Carlos Slim, and Diego Rivera. It is the continent of Gabriel García Márquez. This very well may be the century that the region finally finds stability and prospers, but that hope could just as easily be the naïve optimism of the contemporary. If we are to have a hope of understanding that future we must discover the place and its people by its own terms. These are the terms of Gabo himself.

About the Author

John Marinus, who also contributes to our Editor’s Heroes section, is a freelance writer based in the Netherlands.


The European Conundrum

The European Union is an interesting project that – once logic is duly applied – must end up with the foundation of a United States of Europe (USE). Strangely enough, very few of the union’s citizens actually want to live in such a sovereign construct. Opinion polls time and again attest to the plain fact that most inhabitants of European nation states cling to their national identities and see their neighbours as, well, utterly foreign, strange and even incomprehensible.

While we all get along jolly well in Europe since the conclusion of our last spat some 69 ago, scratch the surface a little and a xenophobe – mostly of the moderate and thus fairly innocuous kind – will invariably appear incanting the many stereotypical deficiencies of other nations: The Spanish talk too loud; the Italians talk too much and employ arms and hands while doing so; the Finns and Swedes talk too little; the French talk with too much pomp; the Germans talk with too much authority; the Dutch talk a lingo that is neither here nor there, while the Belgians talk in too many tongues altogether.

Until a few years ago, a Dutch family driving towards the sun for its annual four week vacation would not cross the border without a few sacks of Bintje potatoes and other home-grown culinary delights and necessities. The cuisine south of the border was not to be trusted and any sampling would surely result in rather embarrassing emergencies.

“Without some form of integration and mutual dependency, Europe will, before long, revisit its turbulent past.”

Now that the EU has expanded from its humble beginning as the European Coal and Steel Community (1951) to include all of 28 members, covering a geographical area of well over 4.3 million km2, there is more foreignness than ever before. Vastly increased intra-union travel, instant communications, and common legislation have taken the edge off the nationalists’ objections but have not succeeded in moulding a European identity. In fact, there simply is no “European feeling”, nor is there likely to ever be one.

Once cooperation was set in motion in 1951, there was no stopping it. In fact, the process is self-perpetuating: Increased cooperation between nations inevitably gives rise to the need for further integration and, eventually, the full merger of sovereign countries.

Take free trade: The disappearance of tariff walls promptly lead countries to further selfish national interests via cumbersome regulations. This, in turn, necessitated a streamlining of codes and rules. Once product and safety guidelines were harmonised, governments started to manipulate their currencies in order to gain a competitive advantage.

The distortions to free trade thus caused, eventually brought the much-maligned euro into existence. The common currency has now given rise to a call for fiscal integration which, given time, will impose a shared economic and financial policy. Once that is in place, states will have little left to do and may very well wither away.

However, while these processes are taking place, the cacophony of national identities will not disappear. It doesn’t demand exceptional powers of prescience to predict that at some point nations will want to slam on the brakes and reassert their sovereign powers. This is already happening now in the UK, The Netherlands, Hungary, and France.

The trouble with this is that European integration is a process that either moves forward or breaks. At best, the pace of integration can be slowed down a bit. It cannot be stopped altogether without falling apart into 28 national bits and pieces.

So, it’s either the United States of Europe or nothing at all. The latter option is fraught with dangers, as much as the former is: A conundrum if ever there was one.

European nations are not very skilled at living together in peaceful harmony. In fact, Europeans are a warring bunch. Without some form of integration and mutual dependency, Europe will, before long, revisit its turbulent past. However, the alternative – a United States of Europe – is a pipedream. Europe lacks a shared history other than one tainted by violence and lacks a common identity. The European Union speaks in 24 languages and its many administrative and legislative organs are stages where 28 different mentalities clash on a daily basis resulting in policy compromises that satisfy no one.

The European conundrum has no real outcome. Still the countries of the continent are condemned to get along one way or the other. The European project may be doomed to failure as national identities reclaim their primacy. The only hope is that when they do, as they eventually must, we have all become too civilised to wage war. There is always hope, right?


Back to Africa – Chibwe Masabo Henry: The Diaspora as a Driver of Development

Having medical doctors, specialists, nurses and other healthcare workers readily available to take charge in case of illness may be the norm in many developed countries; it still is much the exception elsewhere on the globe. Countless lives are lost or ruined simply because no medical personnel were available to help patients overcome often relatively simple ailments. In many emerging countries, politicians enjoy cutting ribbons at newly built hospitals and health centres but often neglect to provide funding for proper staffing. The shrinking aid budgets have not improved the situation.

Contrast this to the many thousands of highly trained African medical professionals who were lured overseas by attractive salaries but often yearn to return home if only they could. This is where Diaspora for African Development (DfAD) steps in to help remedy the situation. DfAD is an initiative of Chibwe Masabo Henry from Zambia who is also involved with the global Enough Food for Everyone campaign. Mrs Masabo Henry is convinced that Africa’s social and economic development can be significantly boosted by tapping into the wealth of knowledge and experience of the continent’s diaspora.

DfAD actively engages African expat professionals, associations, businesses, and communities to help deliver sustainable progress. “Many of the skilled people who left the continent were trained here at great expense. Countries such as Canada and the UK have drained Africa of many thousands of physicians. These are precisely the people we need to come back. In order to do so, we must create the right conditions and this is what DfAD aims to do.”

Mrs Masabo Henry emphasises that if the current situation endures, over one billion people worldwide will never see a health worker: “Whereas Africa bears 24% of the world’s disease burden, the continent has only 3% of the world’s health workers. For North America these numbers are inverted. There, 37% of all global health professionals deal with barely 10% of the global disease burden.”

DfAD has enjoyed some success in creating awareness in the UK of the issue. Recently, the high commission of Zambia in the UK launched an ambitious drive to register all Zambian health workers in its jurisdiction. The aim is to find areas of cooperation that could, in time, benefit healthcare in Zambia. The high commission is organising events with a view to rallying expat health professionals to its cause.

“It is not just about convincing these workers to return home. Some may not want to do that yet, but most are willing to lend their expertise to further healthcare programmes and help train new professionals.” Mrs Masabo Henry’s Diaspora for African development also runs comprehensive programmes aimed at influencing decision-making processes in both home and host countries, furthering education through engaging with the diaspora, and helping small business owners gain a toe or foothold in Africa.


The Euro - A Paradox Checks Into Hotel California

It could have been conceived a bit more thoughtfully, but as a project the European common currency is not altogether farfetched or indeed destined for failure. The euro was specifically created to offer an alternative to the erstwhile all-mighty US dollar as the world’s reserve currency. At the time, Europe’s leaders still entertained visions of grandeur for the continent and were able to muster the courage to pursue their ambitions.

However, be careful what you wish for. Being the issuer of the world’s reserve currency is not necessarily a blessing. It brings the dreaded Triffin Paradox into play.

Belgian-American economist Robert Triffin (1911-1993) identified a conflict of interest between desirable domestic and international monetary policies faced by any country whose legal tender is being used as the world’s reserve currency.

In order to satisfy the international demand for its currency, the US must be willing to supply the dollars required. This implies running a significant current account deficit. Domestically, the US economy would be much better served by a current account surplus.

A Paradox Explained

The Triffin Paradox was the principal cause of the demise of the Bretton Woods Era. By the early 1960s the US dollar – still on the gold standard – had become seriously overvalued. The Marshall Plan, cold war military spending, and rising imports all conspired against monetary prudence, resulting in a gaping current account deficit.

The US government tackled the issue by restricting the amount of dollars in circulation through budget cuts. It also raised interest rates in an attempt to encourage the repatriation of as many dollars as possible.

“To make matters worse, these politicians also forgot – conveniently or otherwise – to include any provisions for a euro exit should a member state fail to properly adapt to the common currency.”

US monetary policy swung from one side of the Triffin Paradox to the other, and back again, until President Richard Nixon in 1971 surprised both friend and foe by taking the dollar off the gold standard, effectively scrapping Bretton Woods by recognising that the US was no longer able to maintain anywhere near the required levels of gold reserves and trade surpluses.

There is no known solution to the dilemma first identified by Robert Triffin – it is impossible to run a current account deficit and surplus simultaneously.

For all its woes, the new-fangled euro has so far been spared a brush with the Triffin Paradox. Only about a quarter of the world’s allocated monetary reserves are currently euro denominated as opposed to 61.2% for the US dollar. This allows Europe to run sizeable current account surpluses which in turn bolster confidence in the currency’s strength. These surpluses also explain why the euro has significantly appreciated in value against the US dollar since its introduction.

A Neat Set of Tools

A current account balance expressed in solid black numbers offers central bankers an exceedingly nice and effective toolset with which to implement policy. For one, it allows them to keep interest rates low since there is absolutely no need to lure overseas deposits back home to plug any gaps. Low interest rates also make up for any loss in competitiveness suffered by a strong currency’s resistance to devaluation. The cherry on the top is, of course, the fact current account surpluses significantly contribute to a nation’s wealth.

Rather than trying to push the euro into the top-spot as the world’s reserve currency of choice, policymakers at the European Central Bank (ECB) in Frankfurt and elsewhere in the union could do worse than concentrate on the ironing-out of the many design flaws that plague the euro. It is not so much the international reputation of the euro that needs the ECB’s attention, as it is the domestic trouble the common currency causes.

With the benefit of hindsight it is rather easy to state that the euro should initially have been adopted by only a handful of EU members. As it happened, the politicians in charge of the euro project at the turn of the century opted for a silly the-more-the-merrier approach using creative bookkeeping techniques to justify the inclusion of even the most fiscally unsound member states.

Hotel California

To make matters worse, these politicians also forgot – conveniently or otherwise – to include any provisions for a euro exit should a member state fail to properly adapt to the common currency. EU countries that fail to comply with the fiscal dictates as laid down in the 1992 Maastricht Treaty may expect punishment in the form of fines and other administrative sanctions. Moreover, punishment of unruly members is meted out quite arbitrarily.

Once an EU member state has adopted the euro, it has checked into Hotel California: “You can check out any time you like, but you can never leave.” Euro countries cannot get rid of the currency other than by renouncing their membership of the union. No country, and especially not one troubled by economics woes, can seriously consider shutting itself off from a 505 million-strong market. Thus, Greece, Spain and Portugal – to name but a few – are condemned to the euro on pains of reverting back to their rather unenvious pre-EU existence.

Rather than rushing through a banking union, fiscal union, transfer union or any other half-baked plan aimed at averaging out the EU’s internal differences, the EU’s leaders should implement a much more pragmatic monetary policy that answers the concerns of voters across the union, accepts the lessons history teaches, and allows struggling nations a shot at monetary redemption.
Instead of clinging to the mistaken notion that there is no way back for any country once contaminated by the euro, policymakers would be wise to accept that some – such as Greece – are just not ready for it. However hard the authorities in Brussels, Frankfurt and Athens may try, Greece will not become a sun-bathed version of Germany anytime soon. In fact, it requires no faculty for prescience to predict that the Greek will suffer long and hard before being confronted by the obvious: It is not going to work.

Accepting the Inevitable

Why then not accept the inevitable and allow Greece to revert to its drachma which the country may then happily devalue to a point where both the trade and current account balances revert to surpluses? When faced with the consequences of their traditionally rather loose monetary policy, the Greek have always allowed the drachma to slide. And they are most assuredly not the only ones to have done so.

Even France habitually solved its many recurring issues – lagging productivity and a rather feeble level of international competitiveness – by depreciating the franc. When faced with the burst of a real estate bubble in 1992, even the Swedes – usually rather annoyingly vociferous when it comes to their supposed collective superiority – had to jack up interest rates to over 500% annually in a failed and foolish attempt to protect the kronor from implosion.

The currency slipped anyway; banks tumbled and fell left, right and centre; GDP contracted by over 5%; and their economic model – previously hailed as being close to perfect – crumbled and was unceremoniously dumped. In the end, devaluation saved the day just as it did in France, Italy, Spain, Portugal, and Greece.

In fact only a select few EU countries have been able to get ahead without falling prey to the easy cop-out of devaluation. Germany, The Netherlands and Finland spring to mind. Others like Belgium, Denmark, Austria, and quite possibly Hungary and the Baltic states, have been able to keep currency devaluations limited to within the bounds of reason. Members of both these groups would have been the natural candidates for a monetary experiment as far-reaching as the euro aims to be.

Removing the Cornerstone

As it is, the euro has been made into a cornerstone of the EU edifice. This must be undone. The common currency is to be an option for those member states that can afford it. The euro is not to be the imposition it is today.

For all their eloquence and high-mindedness, those in the pro-euro camp fail to realise that the project, due to its very nature, will drive a wedge between the countries of Northern and Southern Europe. This the continent can do without.

The brinkmanship of the pro-euro faction is entirely unwarranted and rather selfish to boot. In order to protect their access to the lucrative markets of Mediterranean Europe, countries geared for export and trade such as The Netherlands and Germany dread the day they are shut off from these avid consumers via devaluation. A severely weakened drachma would work wonders for Greece but would also make Dutch and German products and services prohibitively expensive to Greek consumers.

The Greek, however, must be allowed to do what’s in the best interest of their country and society. Right now, that best interest calls for an easy and quick fix as can only be delivered by a sharp devaluation of the means of exchange. Once the financial waters have calmed and the economy is humming again, European know-it-alls may of course dispense sound advice and apply gentle prodding to guide the country towards a more fiscally prudent lifestyle that – once attained – could very well lead to the painless adaption of a strong common currency.

It is the Greek who are most in the spotlight due to the severity of the crisis their country is being made to suffer. Their plight, however, differs but little from that of the Spanish, Portuguese, Irish, and Italians.

Interestingly enough, support for the euro is fairly high in the countries hurting the most from the monetary straightjacket imposed by Brussels. Elsewhere in the union, eurosceptics are riding the wave of popular discontent over bailout packages and plans for further EU integration and amalgamation.

Vox Populi

Whereas the Mediterranean countries have clearly shown a willingness to learn and adapt, the more monetarily prudent northern member states are reluctant teachers. In the end nobody is either happy or satisfied, making the union squeak and burst at the seams. The proposed patches – yet further integration, i.e. more of the same – run counter to public opinion in most northern member states, precisely the ones asked to foot the bill.

EU politicians need to pay much closer attention to what their voters are saying, instead of arguing that public opinion is ill-informed, motivated by emotion rather than fact, or just plain wrong. Europe – and indeed the euro project – deserves much better than to be guided by the arrogance of technocrats or those misguided souls intent on financial world domination.

Let the US deal with the contradictions of the Triffin Paradox and the many other issues arising from its status as the issuer of the world’s reserve currency. Europe has other business to attend to.


World Bank Group Commits US$ 5 Billion to Boost Electricity Generation in Six African Countries

The World Bank Group has committed $5 billion in new technical and financial support for energy projects in six African countries - Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania—which have partnered with President Obama’s Power Africa initiative.

Making the announcement on the second day of the 1st US-Africa Summit, World Bank Group President, Dr. Jim Yong Kim, said the new financial commitment was urgently needed to generate more electricity for the people of Africa, 600 million of whom have no access to electricity, despite the fact that Africa possesses some of the world’s largest hydropower, geothermal, wind and solar potential, as well as significant oil and natural gas reserves.

“We think that the U.S. Power Africa initiative will play an extremely important role in achieving the goal of providing electricity for Africa. So today I'm very pleased to announce that the World Bank Group, following President Obama's lead, will partner with Power Africa by committing $5 billion in direct financing, investment guarantees, and advisory services for project preparation in Power Africa's six initial partner countries, Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania. The U.S. Government and the World Bank Group are working now on specific tasks and milestones which could help to achieve one quarter of Power Africa's goal of generating 10,000 megawatts of new power in Sub Saharan Africa,” Kim said.

"We think that the U.S. Power Africa initiative will play an extremely important role in achieving the goal of providing electricity for Africa."

-  Dr. Jim Yong Kim, World Bank Group President

Africa’s power crisis forces families and communities to spend significant amounts of their income on costly and unhealthy forms of energy, such as diesel generators or wood for indoor cooking fires. Africa has vast hydropower potential but uses just 8 percent of this untapped water force. In comparison, Western Europe uses 85 percent of its available hydropower potential, which has contributed to their economic development and industrialization.

"Like Europe and the rest of the world, Africa deserves the same opportunity to exploit this green source of power to improve the lives and economic prospects of its people," said theWorld Bank’s Vice President for Africa, Makhtar Diop. "Beyond building up power generators, they must be connected to the market, which calls for regional cooperation to build the transmission network. We are working with African leaders and their development partners to create power pools in Africa’s East, West, Central, and Southern sub-regions. Those countries with abundant geothermal, gas, hydro, solar, and wind resources can feed their excess power supply into a common pool, while neighboring states with less energy and generation capacity can benefit from this integrated approach to delivering electricity to their people."


From Greece to Canada – George Delaportas: Big Dreams Need Big Country

George Delaportas is writing a new language and needs four years of research, and about EUR 80,000, to compile its dictionary and syntax. This young Greek entrepreneur, now at home in Vancouver, hopes that crowd-funding – and some chutzpa – will allow him to get the job done.

Barely 29, Mr Delaportas is much the quintessential geek. He crossed the ocean westward in order to link up with his peers and exchange ideas on esoteric programming languages with professors and visionaries at MIT (Massachusetts Institute of Technology) and other universities and research centres. Mr Delaportas is also an entrepreneur. He is the founder of Pandoo TEK, a Vancouver-based company dedicated to the research and development of web-based technologies.

The programming language Mr Delaportas is currently working on aims to offer a single framework that unites the wildly different hardware components used to deliver, for example, cloud-based services. The language, provisionally named ALPHA, also seeks to provide a bridge between different operating systems and other computer code sets. As such, ALPHA is being designed as a way to interconnect basically everything that is being driven by bits and bytes.

Mr Delaportas does not believe in patches or half-measures: Behind the scenes, ALPHA will streamline, and thus speed up, the incessant flow of information over the Internet.

Contrary to popular belief – and, perhaps, to their geeky appearance – IT developers are a passionate bunch, and Mr Delaportas is no exception to this rule. “The bigger the challenge, the greater the passion required to overcome it. This inner-drive is what gets things done and makes the magic happen.”

In his quest for über-connectivity there is little place for modesty: “At Pandoo TEK we don’t just invest in the future, we actually build it.” For Mr Delaportas, writing code comes naturally. He has been doing that for the past fifteen years – over half his life – and allows him to strive for perfection. “The holy grail of computer languages is to find the least words while doing the most. It has an element of elegance too. Well written code is a bit like a symphony in which there is not a single superfluous note.”

Greece was too small and distant a place for Mr Delaportas to develop his ideas and see them gain traction. He has no regrets moving to Canada where he is now surrounded by like-minded. He has colleagues from England, Holland, Bosnia, Serbia and many other countries. “We all came here for similar reasons, sharing the same idea: to get some ground-breaking IT work done and, in the process, possibly change the world a bit.”