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Climate change and global challenges

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Climate Change Problem: an Emerging Threat to Global Security
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The whole world has been severely affected by climate change and the Covid-19 epidemic. The natural character of the whole world has also changed due to the rise in global temperature. Given the current situation, all the people of the world are in a state of panic about the horrors of the coronavirus. The world has been devastated by hundreds of disasters since the 1960s. More than 50 million people have become destitute. Many people have died. And most of the disasters are accompanied by constant climate change.

In 2020, 4 crore people became homeless due to deteriorating weather and climate change. At the same time, the adverse effects of the weather are becoming more extreme due to climate change from this year. This year it will break the record and stand at 5 crore. Many people have to leave their country. This number is double the current refugee population in the world. Not just any particular country or people, people all over the world are facing the harmful effects of climate change. Especially in the last 20 years, this effect has spread from Asia, Europe, Africa to the Americas.

Increasing use of fossil fuels is warming the weather, forcing more people to flee their homes due to unexpected floods or storms. Besides, factors like crop damage and drought are also making this trend more evident. Politicians in rich countries are fearful of increasing pressure on their country’s infrastructure due to the influx of environmental refugees from other countries.

Carbon emissions play the biggest role in climate change. Low-income countries are also deprived of 100 billion a year in promised compensation for carbon emissions. Asia has the highest number of people displaced due to environmental reasons. In countries such as China, India, Bangladesh, Vietnam, the Philippines and Indonesia, millions of people live in low-lying coastal areas or in delta-adjacent areas. More and more people are at risk of flooding due to population growth and urbanization, and the rapid rise in sea level is being added to this.

People have already witnessed extreme weather, drought or heavy rains, cyclones.  That is to say, the destructive form of climate and nature is gradually becoming manifest. Mankind is being blamed for this hostile behavior of nature. People are taking care of nature in many ways. Rivers are being occupied and the mountains are being cut indiscriminately. Houses are being built on agricultural land. In this way, oppression on nature is going on in various ways, due to which nature is becoming hostile. We are ruining all our own achievements. As a result, there has been severe inflammation.

The world’s population is constantly growing. There is no end to the discussion and criticism about population growth. It is time to take stock of what new steps can be taken or how human suffering can be reduced. With the increase in population, new problems have been added. It may seem unbelievable but it is true that every day around 25,000 people in the world die due to eating habits and malnutrition. In addition, the world is facing many adverse reactions including shortage of potable water, air toxicity, depletion of resources, housing problems and the destruction of the Ozone layer.

At the root of this is population growth. The temperature in the capital Dhaka has risen due to rapid population growth. A study has identified 25 high-risk areas in Dhaka as a result of rising temperatures. These areas have been named ‘Hit Island’. The performance of the people of this area is decreasing day by day with the increase of various diseases.

Assistance is needed to increase the capacity of CVF countries to deal with the dual threat of epidemics and disasters, especially those affected by the increased frequency of climate-related disasters. Climate-risk countries contribute the least to global greenhouse gas emissions, but they suffer the most. 2021 is a very important year for climate issues as the United States returns to the Paris Agreement. The COP-26 conference on climate change in Scotland next November is expected to yield some good results on climate change. The main goal of COP-26 is to address the impact of climate change and to educate the world about its harmful effects. Bangladesh has also participated in this climate change prevention project.

In ancient times there was a close relationship between man and nature. Ever since man came in contact with civilization, he has learned to strike at nature. Over time, man began to wreak havoc on nature. The problem of environmental pollution is increasing day by day. The trees were not spared from the victims of cruelty. As a result, fear is constantly concentrated in our habitable world. We look for different ways to get rid of it. But if we let nature be like that, we would not have to suffer this consequence in our lifetime.

Blinded by the fascination of speed, people have cut down the forest and set up houses, sometimes they have driven away the animals there. In recent times, mountains are being cut down and forests are being cleared somewhere. Deforestation is endangering the lives of many people. Even though the seasons are changing, these incidents add to our anxiety. But trees can be very resistant to prevent global warming. If the environment does not survive, the problems of the world will intensify. Animals, human beings will face loss of everything. The main reason is the indifference of the people.

 A closer look reveals that this apathy has a significant effect on the depraved market economy. Rivers, hills, soils, forests are all instruments of income growth in the eyes of that market. In order to earn income from these sources, natural resources are being destroyed, centuries-old trees are losing their lives or the source of the boundless beauty of nature is being endangered. In the past, there was a connection between man and nature, which is why in many places forests have survived because those who grew up in contact with plants can realize the contact with nature by finding ways to do the necessary work without harming the plants.

Climate change is responsible for recent disasters. We have to fight hard to save the world from increasing global warming. World leaders must take strong action, including global initiatives, to leave a sustainable future for the next generation. The international community has a special responsibility to assist countries at risk of climate change in their adaptation and mitigation efforts.

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BUSINESS & ECONOMY

Inquiry on General Babangida’s Involvement in Conventional Banking despite Introduction of Islamic Finance in Nigeria

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Dear Editor,

I hope this letter finds you well. I am writing to express my curiosity and seek clarification on a matter that has caught my attention, specifically pertaining to General Babangida’s involvement in the conventional banking industry despite his role in introducing Islamic finance during the financial reforms of his military government in Nigeria. Vide your special article commemorating his 81st Birthday published in your esteemed news website: https://focus.afrief.org/trending/a-salutary-tribute-to-general-ibrahim-badamasi-babangida-architect-of-islamic-finance-in-nigeria/

It is indeed noteworthy that General Ibrahim Babangida played a pivotal role in shaping the economic landscape of Nigeria by introducing Islamic finance principles. It is fascinating to witness the implementation of Islamic finance in Nigeria, as it promotes principles that align with religious and ethical values. General Babangida’s efforts to introduce this form of finance were undoubtedly commendable, reflecting his commitment to establishing an alternative financial system that adheres to Islamic principles.

However, recent observations suggest his active participation in the conventional banking sector in Nigeria. Certainly, it is intriguing to see General Babangida’s continued involvement in the conventional banking industry, which operates under different principles. While some may argue that his involvement in both sectors is simply a matter of personal choice, it raises questions about the compatibility of his actions with the ideals and principles of Islamic finance. While the former is interest driven, the latter prohibits interest related transactions completely.

I wonder if General Babangida has ever publicly addressed this matter or explained his reasoning behind being active in both sectors. It would be enlightening to hear his perspective on how he reconciles his involvement in conventional banking with his efforts towards promoting Islamic finance. This has raised questions in my mind and perhaps in the minds of others as well.

I am keen to understand the rationale behind General Babangida’s dual engagement in both Islamic finance and conventional banking. Does this reflect a strategic approach to diversify Nigeria’s financial sector, or are there specific reasons behind his involvement in conventional banking despite advocating for Islamic finance principles?

Additionally, it would be interesting to explore the potential impact of his dual involvement on the perception and growth of Islamic finance in Nigeria. Does his presence in the conventional banking industry hinder the progress of Islamic finance, or does it have the potential to bridge the gap between the two sectors?

I believe that delving into these questions could provide valuable insights and generate constructive discussions within the Islamic finance community in Nigeria. By shedding light on General Babangida’s dual involvement and the potential implications, we can further enhance our understanding of the challenges and opportunities faced by the Islamic economy in our country.

Thank you for considering my questions, and I look forward to reading more about this topic in your esteemed Focus on Islamic Economy.

Sincerely,

 

Abba Musa Mamman Lagos

Kaduna


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BUSINESS & ECONOMY

10 Megatrends Shaping the World in 2024

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The report, “Navigating Megatrends Shaping Our Future in 2024”, was launched during the first day of the World Governments Summit (WGS) 2024, being held under the theme “Shaping Future Governments” from 12th-14th February in Dubai. The report examines the indicators that shape these megatrends, supported by evidence from today as well as future expectations. These trends inform decision-makers and foresight experts about various sectors and the potential opportunities in each.

Khalfan Belhoul, CEO of Dubai Future Foundation, said, “This report has been launched in line with DFF’s efforts to identify and communicate those trends with the most potential to shape opportunities and strengthen local and international partnerships to overcome current and future challenges.”

“The challenges that face us on our journey to the future require that we are agile enough to be able to adapt to rapid change. It is vital we pay attention to the signals we detect – only then can we be prepared to overcome challenges and seize opportunities. The World Governments Summit provides a platform for discussing these challenges and exploring the opportunities.”

Materials revolution

New types of materials will create a shift in the industry, with solutions based on artificial intelligence (AI) such as biopolymers, biorefineries, and chemical recycling paving the way. These solutions will facilitate the development of new biological and novel materials that could rival plastics.

Boundless Multidimensional Data

Enabled by developments such as 5G and 6G in addition to advanced connectivity, the availability of raw data will vastly increase. The Internet of Things (IoT) will continue being deployed in healthcare, agriculture, and smart cities, especially in the Middle East.

Technological Vulnerabilities

The cybersecurity sector will boom amid a sharp rise in smart home devices and wearable tech. According to a report by Allianz, the annual cost of ransomware is projected to reach around $265 billion by 2031. Meanwhile, the debate on the future of decentralised finance will continue.

Energy Boundaries

Advances in tech and the growing demand for energy will drive the pursuit of alternative sources of energy. Novel materials and machine intelligence will enhance current sources of energy, including their distribution around the world – and in space.

Saving Ecosystems

Approaches to conservation will be more interdisciplinary and future-focused, taking into account both societal and environmental factors. Driven by resource scarcity, climate change, and shifts in social values, environmental impact management will become increasingly holistic.

Borderless World – Fluid Economies

The world is witnessing a rise in unmediated transactions in finance, health, education, trade, services, and even space, which are blurring boundaries and creating more cross-border communities. Advances in communications, computing, and advanced machine intelligence will accelerate the creation of a borderless world that will change the way we work, live, and connect.

Digital Realities

The spread of 5G and 6G networks will enhance the applications of autonomous technologies and IoT. As quantum technologies become scalable and reliable, immersive experiences will become even more realistic.

Living with Autonomous Robots and Automation

Robotics and automation will increasingly be deployed across industries beyond automotive, manufacturing and supply chain logistics. This will provide opportunities for efficiency and innovation, although there will also be ethical challenges to address.

Future Humanity

New workplace norms will emerge, with people needing to adapt to non-traditional skill sets in areas such as digital literacy, communications, culture and sustainability.

Advanced Health and Nutrition

Accelerated progress in advanced machine intelligence, nano- and biotechnology, additive manufacturing, and IoT will transform health and nutrition, improving health and wellbeing for people of all ages. Technology will reduce, if not eradicate, some communicable and non-communicable diseases and enhance the sustainable use of and access to water and food.


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Africa’s New Online Foreign Exchange System will Enable Cross-border Payments in Local Currencies – what you need to know

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The high cost of making cross border payments on the African continent has driven governments on the continent to seek options of settling trade and other transactions in local currencies. This has given birth to the Pan-African Payment and Settlement System which was formally launched in Accra, Ghana, in January 2022.  Development economist Christopher Adam, who has studied the exchange rate policies of African countries, answers some key questions.

Why are African countries exposed in the international currency market?

Three main reasons. First, African economies are small and as such are highly dependent on trade with the rest of the world. Their exports are dominated by primary commodities including oil and gas, minerals and cash crop agriculture. On the import side, they purchase a whole range of goods – from essential commodities not produced at home such as fooddrugs and medicines, to capital goods and energy. A large proportion of these are sourced from China and other major economies of the global north. But because African countries are small relative to their trading partners they rarely have the power to determine the prices of imports and exports. They are “price takers” in world markets. And with world prices being set in the major reserve currencies of the world (the US dollar, euro, yen and renminbi), African countries are exposed to movements in these world prices. Second, “intra-African” trade is still a relatively small proportion of the total trade of African countries.

Finally, since African countries’ currencies mostly can’t be directly exchanged in international transactions, the dollar remains the most widely used currency in trade, even between African countries.

What’s required for the system to get off the ground?

The basic idea of the system is to be able to settle trade between African countries without having to use the US dollar.  There are two major challenges with that. First, intra-African trade accounts for less than 15% of Africa’s exports at present (although supporters of the African Continental Free Trade Area expect this to grow significantly over the coming decades). The African payment system therefore does not eliminate the role of the dollar (or other foreign currencies) in trade settlement entirely.

The second issue is that trade is not balanced between African countries. For example, Kenya exports goods of higher total value to Ethiopia than it imports from Ethiopia. If Ethiopia paid in its own currency, Kenya would end up with Ethiopian currency that it didn’t need. Some form of settlement currency that is acceptable to all is required – most likely the US dollar.

What are the challenges and potential risks?

Since trade rarely occurs instantaneously, some institution in the trade financing chain carries the exchange rate risk. Because of the gap between placing an order for imports and receiving them to sell in the local economy, there is a risk that the value of local currency will change relative to the currency in which the import is denominated.

In the “old” system, this risk is borne by the trader because everything is priced in dollars. The local currency value of the income from exports or the local currency cost of imports will change with movements between the local currency and the dollar, but the banks and those counterparts pricing in the dollar are protected.

Under the new system the same allocation of risk will remain in “external trade”. This currency risk is also present for intra-African trade.

An important question for the new African payment system is: who bears the exchange risk if one African currency depreciates relative to another? Should the importer carry the risk, or the exporter? Can and should the African payment system bear this risk of exchange rate movements itself? Where both currencies are volatile, traders might still prefer the relative stability of settlement through the US dollar.

The success of this system also depends on scale. The more trade settlement is routed through it, the easier it will be to settle in local currencies. Large currency imbalances will be less common. But until the system achieves this scale, the African payment system will need a strong balance sheet so that traders and participants can have confidence that settlement will be swift and risk free. It is unclear at the moment how this is to be achieved.

What is the best case scenario?

If the system can address the trade imbalance problem, provide clarity on risk management and reach scale, it could be very successful. But this is all going to be driven by underlying economic performance. Improved settlement will help but what is really driving this is the structure of trade. The more the economies of Africa can develop intra-African trade and the less dependent they are on extra-African trade, the less will be dollar dependence in trade. This growth in trade depends to some degree on trade settlement and trade financing but much more on production, consumption, trade policy and fiscal policy.

Christopher Adam is a Professor of Development Economics, University of Oxford


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