Connect with us


Before the Storm – Reflections on COP26



Spread the love

Glasgow must be a turning point in our efforts – not because of what happens there, but because of what we do differently the day after everyone goes home, argues Simon Zadek.

As we head for Glasgow – either literally or in our efforts, hearts and minds – the ideas and words of three superb intellectuals come to mind. 

First up is Barbara Tuchman, whose wonderful book, ‘The March of Folly‘, entertains us with case after case of great leaders throughout history making unnecessary errors with catastrophic consequences.

Second is Jared Diamond, who in ‘Collapse‘ provides us with glorious historical illustrations of why societies fall apart, not least because their elite can externalise the pain onto the shoulders of others, or else find out too late that they too have to pay the price.

Third, digging back further in time is the philosopher Erich Fromm, who in his ‘Sane Society’ argues convincingly that the more technologically and intellectually advanced a society becomes, the more it risks falling into collective insanity, marked by the automation of our lives – and with it war.

These three voices illuminate the most obvious observation of our time. That everyone knows what needs to be done and the implications of not doing it, and yet the odds of those who lead us, who have most power, doing the right thing, is vanishingly small.

In case you missed the memo, look no further than the Bangladesh Prime Minister’s recent op-ed in the Financial Times. Paraphrasing ruthlessly, Sheikha Hasina makes the shocking but self-evident point that if we do not advance far more ambitious climate action, part of Bangladesh’s 165 million population will be without water, and the other part under it.

And if, for many, Bangladesh seems ‘too far away to count’, look no further for a taster of what is to come for the world’s wealthiest communities than recent storms, floods, and energy & food price hikes.

Such outcomes are, said simply, our collective choice, including the financial community. As a recent UNEP report highlights, we continue to increase our investment in the bad stuff, with $300 billion in new funds channelled towards fossil fuel activities since the beginning of the Covid-19 pandemic — more than the global investment in clean energy.

Achieving meaningful collective action is a matter of broad-based solidarity between the parties, notably those who have, and those who have less. As Elizabeth Mrema, the Executive Director of the Conference on Biological Diversity, pointed out on the eve of the Kunming COP15 Summit on nature, such big deals are unlikely if wealthier people cannot even provide poorer people with the Covid vaccines they so desperately need.

“If we do not advance far more ambitious climate action, part of Bangladesh’s 165 million population will be without water, and the other part under it”

My observations are not a counsel of despair, and frankly I am fed up with those who accuse folks who point out the obvious as being ‘too negative’. No one, least of all me, would dismiss the efforts of so many extraordinary people trying to make a climate difference, including many friends, colleagues and partners. But that notwithstanding, what we are doing is too little, too late, and as such might even be an unintended distraction from much-needed disruption.

We must hope and push for the best, but plan for the more likely worst. What we hope for from Glasgow is ramped up government commitments to reduce emissions, more spend on mitigation, and to ensure a just, if painful, transition.

The surround sound needed is an extraordinary upsurge in ambitious commitments by the business community and the wider public.

I have no doubt we will get some of this, thanks to the heroic efforts of many. But most probable is that we emerge from Glasgow with some laudable but underwhelming commitments, and a few more climate dollars that will be more than absorbed by developing countries’ ballooning Covid-linked debt repayments to, well yes, richer countries and the financial community.

Business, including finance, will be very visible, vocal and supportive, but actual asset allocation tells a different, darker story. So what might be the ‘so what’ of this self-evident critique of the state of play. I want to offer five possible building blocks for a more aggressive post-Glasgow world.

First, whilst continuing to act ambitiously in reducing emissions, we need a new political narrative that places far more emphasis on practical planning for a very different world, rejecting the fake ‘win-win’ narrative that ‘we can make the transition without pain and loss’.

Second, we need to face the fact that climate and nature-related risk pricing and disclosure will deliver way too little in reallocating private capital to invest in a liveable world for all. We need to embrace the uncomfortable truth long spoken by Global Witness and now many others that we need to make it impossible as well as immoral to invest in ways that are sustaining our journey into an unliveable world.

Third, we need to ensure that the 500-plus public development banks owned by us through our governments, with their cumulative balance sheet of $11.5 trillion and accounting for 10% of global investment, are directed by their government shareholders on our behalf to deliver net zero and nature positive by 2030, or else close their doors, as recommended in a recent F4B report.

Fourth, we need the world of public finance, amounting to $25 trillion-plus a year, to be rapidly and transparently aligned with net zero and nature positive outcomes, to have larger and more visible allocations to invest in radical adaptation, and to demonstrate compliance through transaction-level transparency.

Fifth, we have to bite the political bullet and shift relative retail prices to disincentivise climate and nature-destructive consumption behavior, building compensatory payments to ease the pain for poorer citizens, and using behavioural ‘nudging’ techniques, such as those being taken forward by the Green Digital Finance Alliance-hosted alliance of mobile payment platforms, Each Action Counts.

Glasgow must be a turning point in our efforts, but not because of what happens there, but because of what we do differently the day after everyone goes home.

We need to celebrate what we achieve in the city that is ‘miles better‘. But equally, we need to be willing to let go of those efforts that are not commensurate with what needs to be achieved, and embrace a more radical agenda that aligns global finance with its core purpose of investing in the future we want and need.

Dr Simon Zadek is the Chair of Finance for Biodiversity (F4B).

Courtesy: Environmental Finance

Spread the love
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Here’s what Russia can offer Africa




Spread the love

By  Ivan Timofeev

What kind of world do we live in today? We are currently in transition between the unipolar system that existed for a brief moment after the end of the Cold War and the new multipolar reality on the horizon. Russia’s diplomatic service is among the main proponents of this course.

If we take a closer look at what is happening around us, we will see that the multipolar world in many ways is already taking shape. And the key to explaining how it is manifesting itself is to look at the concept from the perspective of different spheres, such as general life and the functioning of states and societies.

It is not just a question of security. There are also economic, demographic and investment issues. In discussions with our foreign colleagues, especially Westerners, I often hear skeptical voices telling me that Africa cannot be considered a pole of the world order, even in the long term.

After all, we are accustomed to associating this status with nuclear powers and large economies.  However, Africa is rapidly becoming such a pole. If we look at it from the perspective of the multidimensionality and diversity of the region, we see huge demographic potential and enormous prospects for economic growth. This is visible to experienced observers: Africanists know and study the region’s trends. But what has gone unnoticed by the general public is that African countries are slowly but surely addressing quality of life issues and building sustainable and highly functional state institutions.

In terms of economic growth, demography and stability, there is no doubt that the African continent and individual countries are rapidly moving towards claiming their own significant place in the new multipolar world.

It is no secret that relations between Russia and the West are currently in a deep crisis. When we discuss our relations with the countries of the African continent, this issue inevitably comes up. Africans often learn about us through Western intermediaries. And, of course, this narrative has deteriorated considerably over the past year and a half.

Yes, there are also the problems of economic sanctions, which frighten entrepreneurs and  make financial transactions more difficult. But we see another paradox. When Russia’s relations with the West were improving, our presence in Africa and our interest in the region were declining. In the 1990s and early 2000s, objectively speaking, we lost much of the advantages we had in our relations with the countries of the African continent.

Conversely, as our relations with the West declined, our interest in the continent increased. I wouldn’t say there’s any hard and fast correlation here, it’s just the way things are. Nevertheless, the crisis in relations with the West stimulates our movement to the South and to the East. The development of Russia’s relations with the countries of the African continent is becoming one of the priorities of the government. This means it will also attract the activity of civil society and business.

What can we offer Africa? Let us think of foreign policy as part of an investment portfolio. In an investment portfolio we can have stocks, bonds, currency. But every investment portfolio has some kind of insurance asset. It can be gold, it can be real estate, it can be a very reliable non-combustible asset. So Russia for African countries in their foreign policy investment portfolio is exactly that insurance asset. True, such an asset usually does not occupy a dominant position in the portfolio, but in the event of a crisis, it’s the asset that can save the investor.

This is the answer in a word: Russia can offer Africa sovereignty. I am talking about independent capabilities in the field of information security, artificial intelligence, military-technical cooperation and in the field of green technologies.

Russia is not asking for anything in return for this sovereignty. If we take the American discourse on democracy, we see that this has its own price. The democratic facade promoted by our Western partners becomes an object of “political hacking.” In other words, Russia is just sharing what it has learned with its friends on the African continent.

Of course, we have a lot of homework to do ourselves. This includes raising the standard of our African studies. We have brilliant schools such as RUDN University (Patrice Lumumba Peoples’ Friendship University of Russia), the Institute of African Studies, MGIMO, and the St Petersburg School of African Studies. But in the conditions of our turn to the South, there should be dozens of such schools, not just a few.

There is also work to be done in terms of the investment climate, comfortable education in Russia for students from Africa, and more flexible business opportunities.

Ivan Timofeev is RIAC Director of Programs, RIAC Member, Head of “Contemporary State” program at Valdai Discussion Club, RIAC member.

Spread the love
Continue Reading


Libya: What does the Future Hold?




Spread the love

The future of Libya is one of economic renewal and diversification. With political stability comes the promise of investment and intra-African trade.

Internal conflict has dogged Libya’s economy since the first civil war in 2011, triggered by the Arab Spring. And while recent years have seen the cultivation of hard-fought stability, no final settlement has been achieved. There are still multiple factions still vying to govern Libya. Yet, all seem interested in establishing peace and reinvesting in infrastructure as well as recovering from the Coronavirus pandemic.

Furthermore, as elections approach, all parties are willing to accept democracy, ratified by an external source. Certainly, the recent conflicts that have arisen in Libya have been comparatively minor and are usually solved in hours and days instead of months, with government officials arriving on the scene to facilitate open communication. Despite the difference in viewpoints, all parties are therefore committed to fostering a period of growth and prosperity, founded on democracy and peace.

Responding to global challenges

But Libya has also had to contend with evolving global challenges, such as the current war in Ukraine. The sanctions placed on Russia have impacted Libya’s agricultural sectors, resulting in a 10 to 20% shortfall in wheat and seed imports. This has been somewhat mitigated by both replacement imports of grain, minimising disruption, and by an increase in oil revenue. While Libya’s oil export capabilities remain below their peak, oil export prices have almost doubled since the beginning of the conflict, boosting revenue. This has allowed Libya to bridge the revenue gap it was experiencing within the oil sector. Meanwhile, the relative fiscal freedom afforded by the additional income has allowed necessary investments to be made into the country’s infrastructure, which is further aiding recovery.

Can Libya afford to rely on oil alone?

However, some headwinds are approaching. Europe is focusing on sustainable development and using renewable energy sources, in a bid to decrease carbon emissions and fossil fuel reliance, slowly reducing its use of hydrocarbons in favour of green energy. Given that the oil sector currently accounts for around 98% of Libyan Government revenues , decreasing European reliance on fossil fuels in the coming decades could pose a significant threat to Libya’s recovery.

Libya as a conduit for trade

Europe is not the only market for Libya’s oil, however. The country’s geographic and political links to a rapidly developing Africa mean that there will be demand for oil from the emerging and industrialising economies to the south. This trade with Africa is built on historically positive relationships, helped in part by Libya’s previous commitment to promoting African unity.

 Libya also has the potential to forge a key role in Arab-African trade, due to its membership to the Greater Arab Free Trade Area (GAFTA). Although the country is not a member of the African Continental Free Trade Area (AfCFTA), it offers a promising link between Africa and the Middle East. By maintaining positive relationships with both African and Middle Eastern nations, Libya can support and benefit from AfCFTA initiatives.

One such initiative is the drive to formalise undocumented cross-border trade, which is estimated by the African Import Export Bank at between 15% to 40% of all African trade . By formalising intracontinental trade, Libya can then support African nations in their bid to be viewed as viable trading partners with the rest of the globe, as well as reducing smuggling and stabilising trade routes. And by improving trade links between Africa and the Middle East, Libya can also act as a conduit for African and European trade, in part due to its entrepôt location.

Looking ahead

That said, a key focus for Libya’s future will be diversifying away from fossil fuels. Of course, oil will remain a staple for years to come. But the future cannot be ignored, and Libya needs to diversify. One sector on the rise is tourism, utilising its extensive coastline and rich cultural history. Further diversification is also possible via both agriculture and solar power. Infrastructure development will be important for both, with an urgent need to upgrade roads, railways, and ports.

As peace and stability become embedded, however, Libya can attract investment, particularly from Europe. These investments will need to be facilitated by specialist banks who will continue to support the Libyan economy as it develops. Indeed, FDI and diversification are the route to prolonged and sustainable growth in Libya. And in this respect, the prospects are promising.

Spread the love
Continue Reading


Europe’s Largest Gelatin Factory Opened




Spread the love

Industry and Technology Minister Mustafa Varank inaugurated the facility of “Halavet Gida”, the largest gelatin production capacity of Europe, in Gerede OSB. Minister Varank noted that with the new facility of Halavet Gida, Turkey will have a much larger share of world exports, and stated that they expect the factory’s 2021 turnover to exceed 80 million dollars and its total employment to over 180. Read more>>

Spread the love
Continue Reading


Copyright © 2023 Focus on Halal Economy | Powered by Africa Islamic Economic Foundation