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Is Asia and the Pacific ready for the global climate stage?

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Is Asia and the Pacific ready for the global climate stage?
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The Wikipedia article on the 2015 “Paris Agreement” says that “Negotiations in Paris took place over a two week span, and continued throughout the three final nights.[10]” and that:

The negotiations almost failed because of a single word when the US legal team realised at the last minute that “shall” had been approved, rather than “should”, meaning that developed countries would have been legally obliged to cut emissions: the French solved the problem by changing it as a “typographical error”.[13] [That statement — that France instead of America raised the objection to “shall” — is false. Actually, it was the chief American negotiator, Todd Stern, who labelled it that and demanded it to be eliminated from the text.] At the conclusion of COP21 (the 21st meeting of the Conference of the Parties), on 12 December 2015, the final wording of the Paris Agreement was adopted by consensus by the 195 UNFCCC participating member states and the European Union.[14] Nicaragua indicated they had wanted to object to the adoption as they denounced the weakness of the Agreement, but were not given a chance.[15][16] In the Agreement the members promised to reduce their carbon output “as soon as possible” and to do their best to keep global warming “to well below 2 degrees C” (3.6 °F).[17]

U.S President Barack Obama announced on 12 December 2015 that 

In my first inaugural address, I committed this country to the tireless task of combating climate change and protecting this planet for future generations. 

Two weeks ago, in Paris, I said before the world that we needed a strong global agreement to accomplish this goal — an enduring agreement that reduces global carbon pollution and sets the world on a course to a low-carbon future. 

A few hours ago, we succeeded.  We came together around the strong agreement the world needed.  We met the moment.

I want to commend President Hollande and Secretary General Ban for their leadership and for hosting such a successful summit, and French Foreign Minister Laurent Fabius for presiding with patience and resolve.  And I want to give a special thanks to Secretary John Kerry, my Senior Advisor Brian Deese, our chief negotiator Todd Stern, and everyone on their teams for their outstanding work and for making America proud.

It was nothing but theater, to fool the public. It succeeded in doing that.

Here is how Britain’s Guardian,  under the headline “How a ‘typo’ nearly derailed the Paris climate deal”, phrased the matter: this Agreement was

confirmed by US secretary of state, John Kerry, that the US had objected to Article 4.4 on page 21 of the 31-page final agreement. US government lawyers had found, it was said to their horror, that they had unwittingly approved a vital word which could make the difference between rich countries being legally obliged to cut emissions rather than just having to try to: “shall” rather than “should”.

Here is global law firm Norton Rose Fulbright on the significance of the two words:

This article requires developed countries to undertake economy-wide absolute emission reduction targets but developing countries to only “continue to enhance” their mitigation efforts. In the draft that was presented for adoption there were two critical words – “shall” and “should”. The expression “shall” applied to the developed countries’ obligation and the word “should” applied to the developing countries’ obligation.

There was a crisis.

According to some, it had always been intended that both rich and poor countries should have the same obligation, namely “should”, not “shall”. This was of huge importance to the US especially, which, it said, would have had difficulty signing up to any legally binding obligation to implement its reduction target.

One reporter, at the time, Lisa Friedman, of Climate Wire, said that when “the Americans spotted the ‘shall’, word began to spread that the United States had a problem.” It was the Obama-appointed chief U.S. negotiator, Todd Stern, who noticed the word, called it “a clerical error,” and demanded that it be replaced by the legally empty “should.” It wasn’t the French Government that raised the objection and gutted the text, but, instead, Obama’s negotiator, who did this gutting of the text.

In other words: the U.S., which had contributed far more to creating climate-change than had any other single country, and which had reaped the vast economic benefits from all of that fossil-fuels burning, was demanding that the poor countries, which were only beginning to industrialize, must be obligated just as much as the U.S. would be obligated, to reduce fossil-fuels-burning, or else the U.S. wouldn’t sign the Agreement — and neither would its allies, such as France. 

In order to understand Obama’s motive in this, one must understand his motive in a certain key phrase that he used throughout his Presidency but which was downplayed by the press and therefore never attracted the public’s attention as it should have done.

Barack Obama repeatedly referred to the United States as being the only indispensable nation — that all others are “dispensable” — such as when President Obama addressed America’s future military leaders, at West Point, on 28 May 2014, by telling them:

The United States is and remains the one indispensable nation. That has been true for the century passed and it will be true for the century to come. … Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums. … It will be your generation’s task to respond to this new world.

He was telling the military that America’s economic competition, against the BRICS nations, is a key matter for America’s military, and not only for America’s private corporations; that U.S. taxpayers fund America’s military at least partially in order to impose the wills and extend the wealth of the stockholders in America’s corporations abroad; and that the countries against which America is in economic competition are “dispensable” but America “is and remains the one indispensable nation.” This, supposedly, also authorizes America’s weapons and troops to fight against countries whose “governments seek a greater say in global forums.” In other words: Stop the growing economies from growing faster than America’s. There is another name for the American Government’s supremacist ideology. This term is “fascism.”

It is natural that a person who wants to keep America on top by all means including by keeping down the nations that are rising would be viscerally opposed to the original draft’s application of “should” to the poor countries while applying “shall” to the rich ones — especially to the one nation (America) that alone had contributed more than a quarter of all of the greenhouse gases that have been added to the global atmosphere since the year 1850 — the effective start of the industrial revolution.

So, Obama’s representatives demanded that the word “should” would apply not only to the poor countries (as in the original draft) but to the rich countries, including the U.S. — and Obama got his way, at the very close of the conference, in order to have the PR benefit of seeming, to the gullible throughout the world, to be in favor of halting global warming. It was pure PR (for Obama, and also for leaders of the other highly-developed countries; and, thus, global warming won’t be affected, at all, by the Paris Climate Agreement, nor by the other, similarly insincere, mouthings by billionaire-financed ‘environmentalist’ ‘charities’. It is all theater.

However, this does not mean that there is no possible way that humans might be able to  halt and to undo the catastrophic harm and terminal danger that we have perpetrated upon the biosphere. There might be such a way, but it has nothing to do with any international agreements, and it also has nothing directly to do with suppressing the consumption of fossil fuels, but it is instead entirely focused upon outlawing the purchase of investments in fossil-fuels-extraction corporations such as ExxonMobil.

The way to stop global warming (if it still can be stopped) is to ban purchases of stocks and of bonds — i.e., of all forms of investment securities (corporate shares and even loans being made to the corporation) — of enterprises that extract from the ground (land or else underwater) fossil fuels: coal, oil, and/or gas.

For examples: in 2017, the world’s largest fossil-fuels extractors were, in order: 1. Saudi Aramco (Saudi Arabia billionaires); 2. Chevron (U.S. billionaires); 3. Gazprom (Russia billionaires); 4. ExxonMobil (U.S. billionaires); 5. National Iranian Oil Co. (Iran billionaires); 6. BP (UK billionaires); 7. Shell (Netherlands billionaires); 8. Coal India (India billionaires); 9. PEMEX (Mexico billionaires); 10. Petroleos de Venezuela (Venezuela billionaires); 11. PetroChina/CNPC (China billionaires); and 12. Peabody Energy (U.S. billionaires). (NOTE: U.S. billionaires, allied with Saudi, UK, Netherlands, and India, billionaires, are trying to absorb, into their team, Russia, Iran, Mexico, Venezuela, and China, each of which latter nations had actually nationalized their fossil fuels, so that those nations’ Government, instead of any billionaires, would own those assets, in the name of all of the given nation’s residents. Though Russia ended its side of the Cold War in 1991, the U.S.-and-allied side of the Cold War secretly continued, and continues, today. Consequently, the U.S.-led team failed to achieve total conquest of the Russia-led team, and is now increasingly trying to do that: achieve total global hegemony, so that the entire world will be controlled only by U.S.-and-allied billionaires. This explains a lot of today’s international relations.)  All fossil-fuels extractors compete ferociously, as producers of a basic global commodity, but the proposal that is being made here will affect all of them and all countries, even if it is done by only one country.

It needs to be outlawed (in some major country, perhaps even just one) in order to save our planet. Here’s how and why doing that in even just a single country might save the planet (this is a bit long and complicated, but avoiding global catastrophe is worth the trouble, so, you might find it worth your while to read this):

These companies exist in order to discover, extract, refine, and market, fossil fuels, in order for these fuels to be burned — but those activities are killing this planet. Buying stock in, and lending money to, these firms doesn’t purchase their products, but it does incentivize all phases of these firms’ operations, including the discovery of yet more fields of oil, gas, and coal, to add yet more to their existing fossil-fuel reserves, all of which are discovered in order to be burned. Unless these companies’ stock-values are driven down to near zero and also no investor will be lending to them, all such operations will continue, and the Earth will therefore surely die from the resulting over-accumulation of global-warming gases, and increasing build-up of heat (the “greenhouse-effect”), from that burning.

To purchase stock in a fossil-fuel extractor — such as ExxonMobil or BP — or to buy their bonds or otherwise lend to them, is to invest in or fund that corporation’s employment of fossil-fuel explorers to discover new sources of oil, gas, or coal, to drill, and ultimately burn. Such newly discovered reserves are excess inventories that must never be burnt if this planet is to avoid becoming uninhabitable. But these firms nonetheless continue to employ people to find additional new places to drill, above and beyond the ones that they already own — which existing inventories are already so enormous as to vastly exceed what can be burnt without destroying the Earth many times over. To buy the stock in such corporations (or else lend to them) is consequently to fund the killing of our planet. It’s to fund an enormous crime, and should be treated as such. To invest in these companies should be treated as a massive crime. 

The only people who will suffer from outlawing the purchase of stock in, and lending to, fossil-fuel extractors, are individuals who are already invested in those corporations. Since we’ve already got vastly excessive known reserves of fossil fuels, discovering yet more such reserves is nothing else than the biggest imaginable crime against all future-existing people, who can’t defend themselves against these activities that are being done today. Only our government, today, can possibly protect future people, and it will be to blame if it fails to do so. The single most effective way it can do this, its supreme obligation, is to criminalize the purchase of stock in fossil-fuels extractors, and to bar loans to them. Here’s why (and please follow this closely now):

The IMF says that “To limit the increase in global temperature to 2 degrees Celsius — the more conservative of the goals agreed to by governments at the 2015 climate change talks in Paris — more than two-thirds of current known reserves, let alone those yet to be discovered (see Table 1), must remain in the ground (IEA 2012).” Obviously, then, what the oil and gas and coal companies are doing by continuing exploration is utterly idiotic from an economic standpoint — it’s adding yet more to what already are called “unburnable reserves.” Thus, waiting yet longer for a technological breakthrough, such as fossil-fuels corporations have always promised will happen but nobody has ever actually delivered (and such as is exemplified here), is doomed, because if and when such a real breakthrough would occur, we’d already be too late, and the uncontrollably spiraling and accelerating feedback-loops would already be out of control even if they weren’t uncontrollable back then. We’d simply be racing, then, to catch up with — and to get ahead of — an even faster rise in global temperatures than existed at that previous time. Things get exponentially worse with each and every year of delay. Consequently, something sudden, sharp, and decisive, must happen immediately, and it can happen only by a fundamental change becoming instituted in our laws, not in our technology. The solution, if  it comes, will come from government, and not even possibly come from industry (technological breakthroughs). For governments to instead wait, and to hope for a “technological breakthrough,” is simply for our planet to die. It’s to doom this planet. It’s to abandon the government’s obligation to the future (its supreme obligation). The reason why is that what’s difficult to achieve now (preventing the murder of our planet), will soon be impossible to achieve.

On 13 November 2019, the International Energy Agency reported that “the momentum behind clean energy is insufficient to offset the effects of an expanding global economy and growing population,” and “The world urgently needs to put a laser-like focus on bringing down global emissions. This calls for a grand coalition encompassing governments, investors, companies and everyone else who is committed to tackling climate change.” Obviously, we are all heading the world straight to catastrophe. Drastic action is needed, and it must happen now — not in some indefinite future. But the IEA was wrong to endorse “calls for a grand coalition encompassing governments, investors, companies and everyone else,” which is the gradual approach, which is doomed to fail. And it also requires agreement, which might not come, and compromises, which might make the result ineffective. 

I have reached out to Carbon Tracker, the organization that encourages investors to disinvest from fossil fuels. Their leader, Mark Campanale, declined my request for them to endorse my proposal. He endorses instead “a new fossil fuel non-proliferation treaty supported by movements calling to leave fossil fuels in the ground.” When I responded that it’s vastly more difficult, for states (individual governments) to mutually pass, into their respective nation’s laws, a treaty amongst themselves (since it requires unanimity amongst all of them instituting into each one of their legal systems exactly that same law), than it is for any state ON ITS OWN to institute a law (such as I propose), he still wasn’t interested. I asked him why he wasn’t. He said “I’ve chosen a different strategy for my organization.” I answered: “All that I am seeking from you is an ENDORSEMENT. I am not asking you to change your ‘strategy’ (even if you really ought to ADD this new strategy to your existing one).” He replied simply by terminating communication with me and saying, without explanation, “We don’t always agree.”

Here is that “treaty supported by movements calling to leave fossil fuels in the ground”. As you can see there, it was posted in 2012, and as of now (nine years later) it has been signed by 8 individuals, no nations (and not even by any organizations). Mark Campanale isn’t among these 8.

Carbon Tracker is secretive of the identities, and size of donations, of its donors, but its website does make clear that it’s a UK organization that has designed itself so as to be as beneficial for tax-write-offs to U.S. billionaire donors as possible, and “Our UK organisation has an Equivalency Determination (‘ED’) which allows it to be recognised by the IRS as a 501(c)3 US Public Charity.  We have held the ED since February 2016 and is maintained annually by NGO Source on behalf of our major US donors.” In short: it’s part of the U.S.-led team of billionaires. Perhaps this organization’s actual function is that (since the nations that have nationalized their fossil fuels haven’t yet been able to be taken over as outright colonies or vassal-states controlled by the U.S.-led group) the residents inside those outside countries will be paying the price (in reduced Government-services, etc.) from a gradual transition to a ‘reduced carbon’ world. (Everybody but those billionaires will be paying the price.) This mythical aim, of a ‘reduced-carbon’ ‘transition’, would then be a veiled means of gradually impoverishing the residents in those nations, until, ultimately, those people there will support a coup, which will place U.S.-and-allied billionaires in charge of their Government (such as happened in Ukraine in 2014). This appears to be their policy regarding Venezuela, Iran, and several other countries. If it is additionally influencing the ‘transition to a low-carbon economy’, then it’s actually blocking the needed change in this case (which isn’t, at all, change that’s of the gradual type, but is, instead, necessarily decisive, and sudden, if it is to happen at all). However, Carbon Tracker is hardly unique in being controlled by U.S.-and-allied billionaires, and there are, also, many other ways to employ the gradual approach — an approach which is doomed to fail on this matter. A few other of these delaying-tactics will also be discussed here.

Some environmental organizations recommend instead improving labelling laws and informing consumers on how they can cut their energy-usages (such as here), but even if that works, such changes, in consumers’ behaviors, are no more effective against climate-change than would be their using buckets to lower the ocean-level in order to prevent it from overflowing and flooding the land. What’s actually needed is a huge jolt to the system itself, immediately. Only systemic thinking can solve such a problem.

Making such a change — outlawing the purchase of stock in, and prohibiting loans to, fossil-fuel extractors — would impact enormously the stock-prices of all fossil fuels corporations throughout the world, even if it’s done only in this country. It would quickly force all of the fossil-fuel extractors to eliminate their exploration teams and to increase their dividend payouts, just in order to be able to be “the last man standing” when they do all go out of business — which then would occur fairly soon. Also: it would cause non-fossil-energy stock-prices to soar, and this influx of cash into renewable-energy investing would cause their R&D also to soar, which would increasingly reduce costs of the energy they supply. It would transform the world, fairly quickly, and very systematically. And all of this would happen without taxpayers needing to pay tens or hundreds of trillions of dollars, or for governments to sign onto any new treaties. And if additional nations copy that first one, then the crash in market-values of all fossil-fuels corporations will be even faster, and even steeper.

As regards existing bonds and other debt-obligations from fossil-fuels extractors, each such corporation would need to establish its own policies regarding whether or not, and if so then how, to honor those obligations, since there would no longer be a market for them. Ending the market would not be equivalent to ending the obligations. The law would nullify the obligations, but the corporation’s opting to fulfill those obligations wouldn’t be illegal — it would merely be optional.

This would be a taking from individuals who have been investing in what the overwhelming majority of experts on global warming say are investments in a massive crime against future generations, and we are now in an emergency situation, which is more than merely a national emergency, a global one, so that such governmental action would not be merely advisable but urgently necessary and 100% in accord with the public welfare and also in accord with improving distributive justice.

The only way possible in order to avoid getting into the uncontrollable feedback-cycles (feedback-loops) that would set this planet racing toward becoming another Mars is to quickly bring a virtual end to the burning of fossil fuels. That can happen only  if fossil fuels become uneconomic. But common methods proposed for doing that, such as by imposing carbon taxes, would hit consumers directly (by adding a tax to what they buy), and thereby turn consumers into advocates for the fossil-fuel industries (advocates on the fossil-fuels-companies’ side, favoring elimination of that tax upon their products). In this key respect, such proposals are counterproductive, because they dis-incentivize the public to support opposition to fossil-fuel extraction. Such proposals are therefore politically unacceptable, especially in a democracy, where consumers have powerful political voice at the ballot-box. Any carbon tax would also anger the consuming public against environmentalists. Turning consumers into friends of the fossil-fuels extractors would be bad. What I am proposing is not like that, at all. Investors are a much smaller number of voters than are consumers. Everyone is a consumer, but only a relatively tiny number of people are specifically fossil-fuel investors. To terminate the freedom those investors have to sell their stock, by making illegal for anyone to buy  that stock, is the most practicable way to prevent global burnout (if it still can be prevented). This needs to be done right now.

How was slavery ended in the United States? It became illegal for anyone to own slaves — and the way that this was done is that it became illegal for anyone to buy a slave. The same needs to be done now in order to (possibly) avoid runaway global heat-up.

Once it’s done, those firms will go out of business. (First, these firms will increase their dividend-payouts to their stockholders while they lay off their explorers, but then they’ll cut their other costs, and then they’ll fold. But the objective isn’t that; it’s to make their products uneconomic to produce, market, and sell; and this will do that, even before all of those firms have become eliminated.) All of today’s existing economies-of-scale in the fossil-fuels-producing-and-marketing industries will then be gone, and will become replaced by new economies-of-scale that will rise sharply in non-carbon energy, as R&D there will be soaring, while the fossil-fuels producers fade out and fade away. 

This is the only realistically possible way to avoid global burnout. It must be done. And even some top executives in fossil-fuels extractors harbor personal hopes that it will be done. For example:

Shell CEO Says Governments, Not Firms, Are Failing on Climate Change

On Monday, 14 October 2019, Reuters headlined “Exclusive: No choice but to invest in oil, Shell CEO says” and reported:

Ben van Beurden expressed concern that some investors could ditch Shell, acknowledging that shares in the company were trading at a discount partly due to “societal risk”.

“I am afraid of that, to be honest,” he said.

“But I don’t think they will flee for the justified concern of stranded assets … (It is) the continued pressure on our sector, in some cases to the point of demonisation, that scares asset managers.”

“It is not at a scale that the alarm bells are ringing, but it is an unhealthy trend.”

Van Beurden put the onus for achieving a transformation to low-carbon economies on governments.

He didn’t suggest any specific policies which governments should take, but he did say “that not enough progress had been made to reach the Paris climate goal of limiting global warming to ‘well below’ 2 degrees Celsius above pre-industrial levels by the end of the century.” Furthermore:

Delaying implementation of the right climate policies could result in “knee-jerk” political responses that might be very disruptive to society, he said. “Let the air out of the balloon as soon as you can before the balloon actually bursts,” van Beurden said.

He is, in a sense, trapped, as the head of one of the world’s largest fossil-fuel extractors. He doesn’t want to be “demonised,” but he is professionally answering to — and obligated to serve — investors who are still profiting from destroying the world. Though he acknowledges that consumers cannot initiate the necessary policy-change, and that investors aren’t yet; and though he doesn’t want government to do anything which “might be very disruptive to society,” he does want governments to “Let the air out of the balloon as soon as you can before the balloon actually bursts,” and he’s therefore contemplating — and is even advising — that governments must do the job now, and not wait around any longer to take the necessary decisive action. 

Here’s what that type of governmental action would be (and unlike the Paris Climate Agreement, it doesn’t require an international consensus — which doesn’t actually exist among the nations).

Why is this the ONLY way? No other proposals can even possibly work: 

The concept of “bridge fuels,” such as methane as being a substitute for petroleum, is a propaganda device (another delaying-tactic) by the fossil-fuels industry and its agents, in order to slow the decline of those industries. For example, on 16 November 2019, Oil Price Dot Com headlined “Why Banning Fossil Fuel Investment Is A Huge Mistake”, and Cyril Widdershoven, a long-time writer for and consultant to fossil-fuel corporations, argued against an effort by the European Investment Bank to “put more pressure on all parties to phase out gas, oil and coal projects.” Widdershoven’s argument is that “experts seem to agree that the best way to target lower CO2 emissions in the EU is to substitute oil and coal power generation in Eastern Europe with natural gas.” He says, “Even in the most optimistic projections, renewable energy options, such as wind or solar, are not going to be able to counter the need for power generation capacity. If the EIB blocks a soft energy transition via natural gas, the Paris Agreement will almost certainly fail.” 

The unstated “experts” that Widdershoven cited are, like himself, hirees of the fossil-fuels industries. Furthermore, this go-slow approach is already recognized by the IMF and IEA to be doomed to fail at avoiding global burnout.

Furthermore — and this is perhaps the most important fact of all — government-support has largely been responsible for the success of fossil-fuel corporations (especially now for natural gas), and, if fully replaced by government-support going instead to non-fossil-fuel corporations, there will then be a skyrocketing increase in R&D in those non-fossil-fuel technologies, which skyrocketing R&D, there, is desperately needed, if any realistic hope is to exist, at all, of avoiding global burn-out. 

On 17 December 2019, I had sent this argument (emailed, under the “Subject” line of “Here is the way to avoid happening again what just happened in Madrid:”) to the:

Dear EU Climate Commissioners:

Re: 

He [Timmermans] said right wing countries like Canada, the USA and Brazil were preventing the EU from reiterating the Paris Agreement requirements in the COP conclusions.

What is needed is a method which (unlike international agreement on carbon-trading credits) won’t require agreement among nations, which are too corrupt to take the necessary collective action to avert catastrophe. Here’s the solution which could be implemented by, say, the EU, or even just by Germany, or just by India, or just by China, alone, if not by any of the far-right countries (such as U.S. and Brazil), which action, taken by any one of them, would create the necessary cascading-effect among all nations, that could transform the world and perhaps save the future (and please do follow closely the argument here, and click onto any link here wherever you might have any questions, because this is a truly new idea, and every part of it is fully documented here):

Then came the argument that I’ve just presented. On 8 April 2020, I received back a reply that was full of the usual platitudes and said “Europe will continue to lead the global low-carbon transition we have agreed. I hope on your continued support for reaching the common climate objectives.”

I also emailed the entire argument to all of the lawyers on the staffs of all of the billionaires-funded ‘nonprofits’ or ‘charities’ that are active supposedly against global warming, and not a single one of those persons even responded, at all.

I also contacted both of my U.S. Senators and communicated with the Senator’s specialist staffer on environmental issues. One of them never replied, but the other said that outlawing purchases of investments in something might be “unconstitutional.” I asked how that could even possibly true, because narcotic drugs are illegal to purchase, and many other types of purchases also are illegal in America. The staffer never replied.

In other words: the entire ‘movement’ against global warming is controlled by the same tiny fraction of the global population who own the stocks and bonds that are invested in and control the fossil-fuels-extraction corporations, the same group of people who donate most of the money to the political campaigns of America’s successful politicians. 

The entire ‘movement’ against global warming is fraudulent. It’s not ONLY the Paris Climate Agreement that’s fraudulent.

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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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BUSINESS & ECONOMY

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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