CFI.co Summer 2023

Giannis Antetokounmpo

The new Maserati Grecale Trofeo.

Everyday Exceptional

*

Fuel consumption combined (l/100 km): 11,2 // CO 2 emissions combined (g/km)*: 254 // Efficiency class: F CO 2 is the main greenhouse gas responsible for global warming. The average CO 2 emission of all (cross-brand) vehicle types offered in Switzerland is 149 g/km. The CO 2 target value is 118 g/km (WLTP).

WAT C H M A K I N G O N C E A G A I N F I N D S BRITISH SHORES The Limited Edition Bremont Longitude is a groundbreaking timepiece that not only looks back at our country’s legacy but also forward to an exciting future of British watchmaking.

The watch’s case back incorporates brass from the original “Flamsteed Line,” in Greenwich, the very spot where the first Astronomer Royal made his celestial observations in pursuit of an aid to navigation.

It has long been the goal of Bremont to bring watch manufacturing back to Britain. The Longitude represents a milestone in that journey, a homecoming of sorts, and proof that, to get where you’re going, you need to know where you came from.

First Thoughts Corporate campaigns in March celebrated the contributions of women worldwide. In April, they showcased (or invented) green credentials to proclaim their support for the planet on Earth Day. These issues merit more than a day of halfhearted observance.

In South East Asia, the challenges of gender equality and climate change are intersecting in the region’s renewable energies transition. The ASEAN (Association of South East Asia Nations) Centre for Energy has conducted studies on gender, energy, and development finance. One report found that women represent just eight percent of the regional energy workforce.

First Thoughts

May Thazin Aung, a climate-change researcher at the UK-based International Institute for Environment and Development think tank, points out that female representation in the sector comprises mostly administrative roles, rather than leadership or technical positions.

Another study revealed that South East Asia received just 6.2 percent of the $11.4bn spent globally on energy and gender programmes from 2010 to 2019. Amira Bilqis, an energy modelling and policy planning associate at ASEAN, believes the region could better secure funds for the energy transition with targeted gender initiatives. Projects with an eye on equality increased visibility among development-fund decision makers.

“I think systematic change is necessary to transition to a future where marginalised people are included,” Aung said. “It is about dismantling the power structures in place that characterise the current fossil fuel economy, and making sure inequalities and inequities are addressed.”

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Women make up half of the world’s population, and their perspectives are vital to any transition. Those in rural communities spend hours each day gathering firewood for cooking.

Urban entrepreneurs sell food from street stalls or operate modest streetside businesses. It’s important to understand how energy use differs between genders, but there’s a dearth of data.

More research is needed to make the most of limited resources — environmental, human, or capital.

An annual report by non-profit groups showed that — for the first time since 2016 — the world’s biggest banks reduced their funding for fossil fuel companies. The world’s top 60 financial institutions gave $673bn in loans and underwriting in 2022, down from $801bn in 2021.

But that dip could be attributed to record energy profits following the Ukraine invasion, rather than banks honouring climate commitments.

Last year, the fossil fuel industry raked in $4tn in profits — a significant jump from the sector’s yearly average of $1.5tn.

Financing for coal power may be on the decline, but many banks have circumvented their climate pledges by merely cutting financing for new projects. Banks in the Asia Pacific region have some of the weakest exclusion policies.

For a world leader in gender balance, green interventions, and smart technologies, look no further than the city-state of Singapore.

Women hold 29.5 percent of the national parliament seats and 36.4 percent of the managerial positions. Singapore could serve as a model for countries hoping to engender progress — without jeopardising people or planet.

First Thoughts

9

> Correspondence

“ “ “

Bard, ChatGPT and all the rest are taking over almost every industry — and they have yours cornered and whimpering. So, pray tell: are you fighting the good Luddite fight, and keeping AI at arm’s length... or are your pages already filling up with machine-generated articles, pumped-out, parsed, and published by digital “staff”?

There is plenty of online advice telling us how to differentiate between people-powered journalism and its digital approximation — but there are just as many posts warning that it is, or soon will be, impossible to tell the difference.

Are we, your readers, already being sung to sleep with capitalist lullabies from robot mouths?

Disclaimer: I only skim-read CFI.co for articles relevant to my sector, and I suppose I don’t really care, one way or the other. I’d just like to know...

JAMES JOHNSON (Durban, RSA) Editorial Team Reply: Our lullabies are from the people to the people. Sleep well.

After settling in for a proper read of your magazine during lockdown (remember that?) I have come to appreciate the variety you often manage to pack into what is basically a one-subject publication.

I mean, it’s all about money, one way or the other — but by spending some time getting to know the regular contributors, I’ve found that I can as happily lose myself in the pages of CFI.co as I can in mags I have bought specifically for entertainment.

If you were wondering, my entrepreneur husband is “the subscriber”; as a (proud, intentional, not-downtrodden, not-a-bleeding-housewife, fulltime but unpaid) parent and home-keeper, I doubt I represent your average reader. So, take it as a feather in your cap that I have occasionally found myself intrigued, amused, and entertained by the more general subjects your writers Naomi Snelling and Tony Lennox tend to tackle.

Keep following the money, by all means, but let’s have some fun along the way, eh?

SARAH GIDDENS (Tonbridge Wells, UK) To any CFI.co readers who are also expats in Spain, I would highly recommend that you check out the recent article (Spring 2023) on Prime Minister Pedro Sanchez. It’s an easy and informative read about a leader who is “Seldom Down, Never Out”. I’ve noticed that my fellow expats rarely pay attention to the political powers at play here or realise how it could impact their lives. This article should be required reading for Spain’s expats. It gives an overview of the history and current affairs in Spanish politics. It touches on Spain’s troubled past, but also talks about the country’s economic recovery following the Covid pandemic and the benefit of excluding of Russian natural gas from its energy mix. ¡Qué viva España!

BRENDA TRUST (Madrid, Spain)

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Summer 2023 Issue

“ “ “

I’m concerned with the increasing presence of private equity groups in areas affecting basic human rights, particularly housing, healthcare and education. I advocate through my local non-profit for stronger government regulation of private equity in public service sectors. So, it has been refreshing to read some more critical pieces in a magazine that I had believed to be beholden to private equity interests.

Please continue to balance the glorification of double-digit returns with the human consequences of short-sighted strategies that prioritise profits at all costs.

LESLIE MILLER (Cambridge, UK) We Brits were happy to have three bank holidays in May, the second in celebration of the crowning (not coronating) of King Charles III. The ceremony itself on the Saturday prior was a little too much to follow in full, but I did watch snippets.

The working royals acquitted themselves admirably, and there were a couple of moments that brought joy to my heart.

It was good to see the King lingering before making his exit with the representatives of various faiths — which I suppose describes the Church of England on a good day. Charles has always made a virtue of religious and spiritual inclusivity, and hats off to him for that.

Which brings me to the delightful “Feathergate”. Princess Anne’s magnificent red plume — part of her military uniform — exquisitely obscured Prince Harry, sitting directly behind her, from view. It’s said that during Megxit, the placing of a single, massive candle had a similar effect.

God save the King.

JAMES CRIGHTON (London, UK) I imagine US politicians from both major parties must be reflecting that they’re “not in Kansas anymore” as it was confirmed that Missouri’s biggest city is, as of May 11, an official LGBTQ+ sanctuary.

This decision was made in defiance of state lawmakers who, the day before, opted to ban “gender-affirming care” for minors — and restrict it for some adults.

Political polarisation, so common these days, is unhelpful in such instances (and many others). Gender-confused young people need help and advice from those who do not necessarily confine themselves to the view from just one side of the rainbow.

SALLY KENT (St. Louis Mo., US)

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> IBM Thought Leadership

Chairman Lord JD Waverley

COVER STORIES Transparency Makes the Invisible Hand Visible Again, And Inclusive Sarah Worthington Editorial Team

George Kingsley Tony Lennox Brendan Filipovski John Marinus Ellen Langford Helen Lynn Stone Naomi Snelling Wim Romeijn

by Paolo Sironi

World Bank Tackling Development Crisis

(14) Paolo is the global research leader in Banking and Financial Markets at IBM, Institute of Business Value. IBV is the thought leadership centre of IBM.

Columnists

IBM 7 Bets for 7 Trends (22 – 23)

Otaviano Canuto Lord Waverley

Production Director Jackie Chapman

Lord Waverley Tracing the Old Silk Road (26 – 33)

Distribution Manager William Adam

Subscriptions Maggie Arts

Commercial Director John Mann

Director, Operations Marten Mark

Publisher Anthony Michael

Capital Finance International Meridien House 69 - 71 Clarendon Road Watford WD17 1DS United Kingdom T: +44 203 137 3679 F: +44 203 137 5872 E: info@cfi.co W: www.cfi.co Cover design by Destiny Maynard.

Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers www.magprint.co.uk

12

Cover Story Artificial Intelligence (40 – 43)

Accenture on Generative AI Surfing the Next Wave (127)

Asian Development Bank Climate Change (170 – 171)

UNCDF Time to ‘Youth-Up’ (180 – 181)

CFI.co | Capital Finance International

Summer 2023 Issue

FULL CONTENTS 14 – 51

As World Economies Converge World Bank IBM Lord Waverley Mohamed A El-Erian APIP-Guinée Joseph E Stiglitz

Anshula Kant Paolo Sironi Nouriel Roubini Wim Romeijn Diana Kouyaté

Otaviano Canuto Kevin Harrison Alessandro Hatami Tony Lennox Naomi Snelling

52 – 65

Summer Special Doing Business with Purpose, On Purpose, and For a Reason

66 – 97

Europe Brendan Filipovski CORDET Christa Atwood Paul Berard B2B GAMING SERVICES LBBW

98 – 113

Copernicus Jakob Lindquist Heather Leah Smith The Access Bank UK Ltd Gabriel Chaleplis

Marco Boldrin XM Region Île-de-France Jamie Simmonds RENAIO

Abdeslam Ababou

KISCOL

CFI.co Awards Rewarding Global Excellence

114 – 123

Africa Red Med Capital

124 – 135

Middle East Bashar Kilani Elena McGugan

Accenture Hal Williams Applied Science Private University (ASU)

136 – 147

Latin America Sergio Caveggia Banco Hipotecario

148 – 161

EY Argentina

Central Reserve Bank of El Salvador

Thomas Hubbard

Hatim Rahman

North America Kellogg Insight Prospect Capital Management

162 – 181

Asia Pacific

Amy Chung David A Raitzer Daniel Ibasco Women’s Brain Project La Trobe Financial

182

Containers Printers Manisha Pradhananga Fortman Cline Capital Markets UNCDF Chris Paton

Asian Development Bank Shu Tian Dr Antonella Santuccione Chadha Edoardo Tancioni Union Bank of the Philippines

Final Thought CFI.co | Capital Finance International

13

> World Bank Managing Director and Chief Financial Officer Anshula Kant:

Tackling Development Crisis Through Financial Innovation

The World Bank uncovers fresh avenues to increase financing capacity.

G

lobal development faces multiple crises: Growing debt burdens, inflation, and the rising cost of finance have made the economic path rockier.

These challenges, together with the escalating climate emergency, have made eradicating extreme poverty and boosting shared prosperity more difficult. Combined, these issues threaten the stability and sustainability of the world.

The World Bank is exploring new ways to channel additional funds into finance development. At its group annual meeting held late last year, shareholders called on multilateral development banks (MDBs) to play a bigger role in scaling-up development financing.

In other initiatives, the International Bank for Reconstruction and Development (IBRD) is considering issuing hybrid instruments to strengthen its capital, leading to increased financing capacity for developing countries, which bear the brunt of the intertwined crises.

The IBRD, founded to help rebuild countries after World War II, is an international organisation owned by 189 sovereign members. It offers long-term development loans to creditworthy middle- and lower-income countries. These loans are financed through its equity and from borrowings raised in capital markets.

While hybrid instruments may be new to the MDB community, they are established market tools that occupy a unique space between debt and equity, carrying attributes of both asset classes.

Like debt instruments (bonds), hybrids have principal, coupon, and possibly a maturity. Like equity instruments (stocks), they provide the issuer with loss-absorption capacity through deferred or skipped interest payments.

They are more “junior” than the regular market debt an issuer uses to fund itself — meaning investors are taking on a higher risk. Commercial banks and other financial institutions commonly use hybrid instruments that meet regulatory capital requirements under frameworks such as Basel to strengthen their capital base.

MDBs have not so far done so, but this initiative offers numerous potential benefits 14

Author: World Bank Managing Director and Chief Financial Officer Anshula Kant

for IBRD — and, in turn, to the World Bank’s client countries. It is a way to increase lending capacity without compromising the bank’s triple-A credit rating. From a capital-adequacy and credit-rating perspective, the instruments are treated like additional risk capital, which can be leveraged for greater lending capacity. This leads to more income and more development impact over time. And it happens not only because of additional lending, but also through income transfers to the International Development Association (IDA) — a World Bank Group institution that offers deep concessional financing to low-income member countries.

Interested shareholders can invest in hybrid capital to show their support for the institution, and rapidly increase IBRD’s financing capacity.

Since it can leverage hybrid capital, it can be treated as development resources already provided to IBRD by its shareholders — and be multiplied for greater impact.

Hybrid instruments offer an opportunity to tap private-sector investors who don’t normally purchase IBRD’s senior bond issuance. IBRD has a long history in the capital markets; its bonds, first issued in 1947, are rated triple-A by the major agencies and viewed as high-quality CFI.co | Capital Finance International

securities by investors, including commercial banks, asset managers, insurance companies, pension funds, and central banks.

Given the subordination, these investors wouldn’t be interested in hybrid instruments.

That means introducing the World Bank to a new set of investors — allowing IBRD to further diversify its funding, strengthen its financial position, and channel new private capital into development projects.

There’s still a lot of work to be done on this initiative, and lessons to be learned along the way. But this is another example of how the World Bank is tackling the challenges of global development with financial innovation. The World Bank and its many stakeholders — most importantly, those who are less well-off — are bound to benefit. i

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> Otaviano Canuto:

The Dollar’s ‘Exorbitant Privilege’ Remains Otaviano Canuto discusses the ongoing role of the greenback in international monetary systems...

T

here has been talk of “de-dolarisation” of the global economy, with recent initiatives and policy moves by China and other countries to extend the reach of use of the renminbi in the international monetary system.

The greenback’s share in global reserves has slightly shrunk in relative terms, sparking frequent debate about what all this means in terms of global currency functions, and as means of payment and store of value.

While we point out a relative decline of the dollar’s weight in those functions, there are gravitational factors that tend to uphold its position. The “exorbitant privilege” that the US dollar has provided to its issuer is likely to remain.

The financial sanctions on Russia after the invasion of Ukraine sparked speculation that the weaponization of access to reserves in dollars, euros, pounds, and yen would stimulate a division in the international monetary order. China would tend to strengthen its international payments system and accelerate the establishment of the renminbi as a rival reserve currency to reduce its vulnerability to moves against it. Countries facing geopolitical risks in their relationship with the US and Europe would seize the opportunity to switch out of the dollar system. However, there is a way to go between willing and doing in this case...

Figure 1: The US dollar’s role in international monetary system eclipses America’s presence in the global economy.

CFI.co Columnist

In March, Brazil and China agreed to use local currencies in their bilateral trade. China is the destination of more than 30 percent of exports and the origin of more than 20 percent of imports. Given the trend towards surplus flows on the Brazilian side, it is assumed that Brazil will accumulate reserves in renminbi (RMB).

At the Russia-China summit in March, Vladimir Putin said that business transactions between Russia and countries in Asia, Africa, and Latin America would be conducted in RMB. Last December, China, and Saudi Arabia conducted their first yuan transaction, following Saudi statements that they were looking to diversify from the US dollar. Add Iran, another country grappling with US sanctions, and petrodollars might be replaced by "petroyuans".

Also worth noting is French company Total Energies' purchase of liquefied natural gas (LNG), settled in yuan, from Chinese stateowned CNOOC. Since the global financial 16

Figure 2: China has more than doubled its share of global trade finance.

crisis, China has sought to extend the use of the renminbi in international trade and as a reserve asset at central banks. It pursued a proliferation of currency swap lines with central banks in other countries — including Brazil.

CFI.co | Capital Finance International

It is not surprising that the "de-dollarisation" of the global economy, "multipolarity" or "bipolarity" of the international monetary system have become buzzwords. However, it is crucial to gauge the real scope of what is happening.

Summer 2023 Issue

accounting currency issued by the IMF). It joined the dollar, euro, yen, and pound because of its weight via China’s foreign trade, not for its use in financial transactions.

The global use of the dollar in the international monetary system is much higher than the relative size of the US economy (Figure 1). The dollar's shares of foreign trade invoicing, international debt issuance, and cross-border lending are well above the country's shares of international trade, international bond issuance, and cross-border borrowing would suggest.

Trade can stimulate trade finance in a currency.

Lenders extend credit to facilitate the crossborder movement of goods and services. The renminbi’s share of trade finance has more than doubled since the invasion of Ukraine, as its share by value of the market rose from less than two percent in February 2022 to 4.5 percent a year later (Figure 2). That reflected the use of China’s currency to facilitate trade with Russia and the rising cost of dollar financing since the start of the ongoing Fed’s interest-rate hikes (Locket and Leng, 2023).

Figure 3: U.S. dollar share of global reserves. Source: Richter (2023)

While the euro and yen account for six and less than two percent of the total respectively, the dollar’s share was 84.3 percent in February 2023, down from 86.8 percent a year earlier.

The renminbi’s rising share of trade finance reflects China’s drive to accelerate its internationalisation. It constitutes a challenge to the West’s use of sanctions to bar major Russian financial institutions from using the Swift platform of payments. The renminbi’s latest rise among trade finance currencies has not been matched by greater use in international payments made on Swift, which have plateaued at about two percent of the global total.

Figure 4: Currency Composition of Global Foreign Exchange Reserves 2014-2022 (percent). Source: Richter (2023)

But it is worth distinguishing between currencies’ uses for payments (flows) and stores of value (stocks, reserves) because transactions may be settled without using a store of value. The recent Brazil-China agreement means that importers will make payments in local currencies, with settlements happening periodically. A similar scheme was used in the past by Brazil and other

Latin American countries to economise on the need to use the greenback on all individual crossborder transactions (reciprocal payments and credit conventions, or CCR in Portuguese and Spanish).

It should be noted in this context that the bulk of foreign exchange transactions corresponds primarily to financial operations, not trade in goods and services. The size of Chinese foreign trade constituted a basis for the potential use of its currency — but not on the financial transaction side.

In 2015, when the RMB was approved to be part of the special basket of currencies that serves as the base for Special Drawing Rights (SDRs, the CFI.co | Capital Finance International

STORES OF VALUE Besides approaching the weight of currencies in their use as the primary conduit to conduct international transactions (flows), either for trade or for finance, one needs to measure their roles as reserve currencies of choice (stocks) by central banks and other cross-border wealth holders.

Trade transactions and reserves from central banks and other global public investors could bolster the renminbi's position as an alternative currency to the dollar, euro, yen, and sterling. However, to 17

CFI.co Columnist

CURRENCIES FOR PAYMENT Consider the difference between using currency to settle transactions — as a means of payment — and its role as a store of value. From the point of view of a central bank that needs to be ready for those payments, using the currency in transactions tends to lead to the constitution of reserves in the corresponding currency.

China had already made an effort to internationalise the renminbi in the years leading up to August 2015, when a devaluation led to severe capital flight. China’s central bank reversed course and imposed draconian capital controls that stalled its progress in promoting the currency. It seems to have shifted back to pushing internationalisation since the beginning of 2022 by searching for greater use of the currency in the settlement of cross-border commodities trades and improving global access to derivatives tied to renminbi assets.

go beyond the settlement of transactions and trade finance, the qualitative leap towards the internationalisation of the renminbi as a reserve currency will only happen when confidence in its convertibility is sufficient to convince private investors to keep reserves of it.

Central banks must have reserves in currencies with which they can operate in the various exchange-transaction areas. It is not by chance that foreign exchange swap lines with China have been little used, while those of countries with the US Federal Reserve have been activated in times of need to stabilise flows.

Tight capital controls maintained by China will curb the renminbi from dramatically moving up the ranks of global payments currencies and a stock functioning as a store of value.

Over recent decades, some two-thirds of the world’s foreign reserves were maintained in US Treasuries and other quasi-sovereign USD assets. A gradual decline in the dollar’s share in total reserves occurred in the 2000s, and it was interpreted as a natural diversification by central banks reflecting trade and financial globalisation. Even the introduction of the euro, despite bets at the time, did not substantially change the dollar’s dominance in foreign reserves.

Figure 5: Drivers of foreign purchases of U.S. Treasuries and Agencies. Source: Brad Setser (CFR), Tweet of April 2, 2023.

That dominance remained despite the falling share of US GDP. From the 1970s, it survived the end of gold convertibility and the fixed exchange rate regime inherited from Bretton Woods. Its presence in banking and non-banking transactions grew after the 2007-08 global financial crisis.

The International Monetary Fund (IMF) releases quarterly data on official foreign exchange reserves (COFER). The latest report shows a reduction in the degree of dollar dominance, with its share of central bank reserves falling 12 percentage points from 71 percent in 1999 to 59 percent last year (Figure 3).

Figure 6: Net safe positions as a fraction of world GDP. Source: Caballero, R.J., Farhi, E., and Gourinchas, P.O. (2020).

CFI.co Columnist

That is not in favour of the pound sterling, the yen, or the euro, despite the rise that the latter experienced in its first decade of existence.

Instead, it favours what Arslanalp et al call “non-traditional reserve currencies” (Australian and Canadian dollars, Swiss franc and others).

The Renminbi reached 2.6 percent of the total (Figure 4).

At the end of Q4 of last year, non-US central banks held $6.47tn in USD-denominated assets, such as US Treasury securities, US corporate bonds, and US mortgage-backed securities.

Even as the dollar’s share has dropped since 2014, holdings of dollar-assets rose from $4.4tn in 2014 to $7.1tn in Q3 2021 before falling as the Fed initiated its QT and interest-rate hikes.

These figures must be adjusted to compensate for fluctuations in relative currency prices and 18

Figure 7: U.S. current account. Source: Stell and Della Rocca (2023).

avoid distorting the perception of climbs or downfalls in their reserve status.

De-dollarisation will remain slow and bounded.

Four gravitational factors favour the continuation of the dollar's central position in international financial markets, in trade invoices and payments, CFI.co | Capital Finance International

and in public and private foreign exchange reserves. Call them “network — complementarity and synergy — effects” (Arslanalp). The relative expansion of the other currencies depends on how successfully they manage to offset those factors.

First, the more extensive installed base for dollardenominated transactions favours the currency.

The increase in liquidity and the reduction in

Summer 2023 Issue

transaction costs in the “non-traditional” foreign exchange markets — including technological improvements — helped reduce this.

No other monetary system offers an equivalent volume of “investment-grade” government bonds.

That volume allows central banks to accumulate reserves and private investors to use them as a haven, something reinforced by the quantitative easing since the global financial crisis.

There was a significant announcement by thenPresident of the European Central Bank, Mário Draghi, in the euro crisis in 2012, that he would do “whatever it takes” as a last-resort provider of liquidity for euro-denominated assets issued in the eurozone. The European Recovery Fund was created last year. The global supply of liquid and safe-haven assets usable as central bank reserves tended to widen in favour of the euro.

Third, it is also worth noting that “non-traditional currencies” were favoured by a partial search for returns in reserve management. Central bank balance sheets — of advanced and emerging economies — have taken on enormous proportions. Some of them separate what would be the appropriate tranche for “liquidity management” (the reason why there are reserves in liquid and low-risk assets, with the purpose of stabilisation), from another “investment tranche” (possible to be allocated in less liquid, but more profitable, assets).

Many countries have created SWFs (sovereign wealth funds) to manage the investment tranche of the public sector’s foreign currency holdings.

The search for diversification helped “nontraditional” reserves.

This is illustrated by Figure 5, taken from an April 2 tweet by Brad Setser (from the US CFR, or Council on Foreign Relations) displaying how the foreign acquisition of US treasuries and agencies has decoupled from official dollar reserves. Brad Seter recently compiled data suggesting how the accumulation of dollar assets by official institutions other than central banks has grown in the past decade. He remarks that “the big [current account] surplus countries (China, the GCC, Russia, Singapore) have large state sectors that dominate the balance of payments”, and that “state asset accumulation outside of reserves is, well, quite strong”.

Since the global financial crisis, China has sought to extend the use of the Renminbi in international trade and as a reserve asset at other central banks.

This was followed by a proliferation of foreign exchange swap lines with other countries.

While trade transactions and reserves by central banks and other global public investors may reinforce the renminbi's position, the qualitative leap toward the internationalisation of it as a reserve currency will only happen when confidence in its convertibility is sufficient. It is not by chance that the currency swap lines with China have been little used, while those of the countries with the Federal Reserve have been activated in times of need to stabilise flows.

Chinese financial authorities do not appear to be considering relinquishing control. They will probably seek to expand the use of the renminbi without relinquishing controls and without the ambition to build some parallel regime or substitute. The reserve issuer must accept that large amounts of its currency circulate the world and, therefore, that foreign investors have some weight in determining domestic long-term interest and exchange rates.

After Russia invaded Ukraine, portfolio foreign capital movements in and out of China were illustrative of the potential costs for China of rushing out of its existing regime. Data released by the Institute of International Finance (IIF) revealed a large outflow of portfolio (debt and equities) capital from China. Such flows remained stable in other emerging economies.

Although it was later partially reversed, the timing suggests that it had some correlation with the war in Ukraine and sanctions. The same sanctions that stimulated the rise of the renminbi on transactions also sparked capital movements out of China. Given the magnitude of repressed domestic financial wealth in China, one may guess dramatic outflows would follow that capitalaccount liberalisation in search of diversification as it happened in 2015.

One may conclude that the relative dominance of the US dollar appears to be declining, but at a gradual pace. Events have boosted the renminbi as a payment-and-reserve currency, but any declaration of “de-dollarisation” seems to be premature.

In the 1960s, Valéry Giscard d'Estaing, then the French Minister of Finance, coined the term CFI.co | Capital Finance International

“exorbitant privilege” to describe the dollar's position as a primary global currency. Such a position allows a country to supply cash or safe assets needed by the rest of the world in exchange for goods and services or long-term assets.

“Countries that issue reserve currencies, especially the United States, tend to benefit from what is called an ‘exorbitant privilege’,” he said. “This broadly refers to the effect of the global demand for safe assets on the reserve currency issuers' funding costs, which tends to tilt consumption towards the present and leads to higher investment.

“Global demand for reserve assets also tends to appreciate the currency of reserve issuers. These effects unambiguously weaken reserve currency issuers’ current accounts … The estimated coefficient suggests that for each 10 percentage points of global reserves held in its currency, a country’s current account balance, is weakened by about 0.3 percent of GDP.” Country-level mismatches between supply and demand for safe assets appear in the evolution of corresponding net stocks of safe foreign assets.

Figure 6 portrays the US and euro area below the line, as safe-asset providers, while China, Japan, oil producers, and emerging Asia ex-China are net purchasers above the line.

To the extent that the world stock of safe assets moves upward, cross-border net purchases of safe assets give carriers of the “exorbitant privilege” a higher amount of goods and services and investment assets from the rest of the world in exchange for those safe assets.

There are those, however, who see that “bonus” as an “onus”. It all hinges on whether the goods and services and investment assets “imported for free”, corresponding to a certain level of currentand/or capital-account deficit that the issuer of safe assets can incur in exchange for the provision of those assets, come in addition to or replacing local production, regardless of whether the “safeasset provider” runs a surplus or deficit in the other balance-of-payment accounts.

The “onerous” view is presented by Pettis, for whom it “allows many of the world’s largest economies to use a portion of American demand to resolve deficient domestic demand and fuel 19

CFI.co Columnist

The fourth gravitational in favour of the dollar would be the absence of regulations restricting liquidity and asset availability, including capital controls. Despite the sanctions already applied in Iran, Venezuela and Russia, there is a difficulty here for Chinese bonds compared to those in dollars and the other three major currencies.

"Country-level mismatches between supply and demand for safe assets appear in the evolution of corresponding net stocks of safe foreign assets. Figure 6 portrays the US and euro area below the line, as safe-asset providers, while China, Japan, oil producers, and emerging Asia exChina are net purchasers above the line."

domestic growth, for which the US economy must then make up by increasing its household or fiscal debt.

“These economies, in other words, can increase their international competitiveness by lowering the relative share households retain of what they produce. They can then run the large surpluses needed to balance their domestic demand deficiencies while keeping growth high. This is the form of beggar-thy-neighbour trade policy that Keynes most urgently warned against.”

Pettis’ argument, however, is not solely framed against the balance associated with the provision of safe assets, which he blurs into the broader issue of U.S. current-account deficits (Figure 7): “Without the widespread use of the US dollar as the mechanism that allows global imbalances to be absorbed by the US economy, these imbalances cannot exist.”

Excessive or insufficient current-account balances are better approached through the IMF’s methodology of evaluation of current-account imbalances relative to countries’ fundamentals in its annual external sector report (IMF, 2022). The “exorbitant privilege” should not be confounded with countries’ occasional shortcomings in obtaining full employment or efficient allocation of resources.

Despite the drive by China for a higher plurality of main currencies, raising the use of the renminbi, de-dollarisation looks bound to be partial and limited. Higher speed and depth of such a transformation would require a metamorphosis of China’s regulatory and policy regime, which the country most likely will not have the desire to implement right now.

While the euro has remained mostly a regional reserve currency, the US may retain its exorbitant privilege through the provision of dollar-safe assets for longer. i

CFI.co Columnist

A previous version was published by the Policy Center for the New South ABOUT THE AUTHOR Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, a visiting public policy fellow at ILAS-Columbia, and principal of the Center for Macroeconomics and Development. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vicepresident at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil.

Otaviano has been a regular columnist for CFI.co for the past 11 years.

Follow him on Twitter: @ocanuto 20

Summer 2023 Issue

> The Changing Face of Business Travel

(and How Best to Reap the Benefits)

By Kevin Harrison Managing Director at Good Travel Management

Some major changes are impacting business travel — and one of the most noteworthy is the new digital ID system.

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he move was recently proposed as a way to close the technological gap between the UK and other countries.

The British Department for Science, Innovation and Technology is legislating on the issue, and a bill on digital IDs has had its first reading in Parliament.

Rising prices will always be a challenge for businesses, but several factors can help. Advance planning is essential to managing expenses, negotiating rates, and making use of reward schemes offered by most airlines, hotels, and car rental companies. Make sure your company is collecting points — and employees are using them.

ticketing can improve, with return fares set to be eliminated. Cheaper off-peak fares and flexi-season tickets for rail commuters could give business travellers a better deal. Making any travel fare less expensive will always be useful — and companies may start to organise meetings or travel for the end of the week.

Experts believe this technology will soon be used at passport controls. Air passengers should be able to check-in remotely, with their identities instantly verified via facial recognition software. Digital ID could allow frictionless transition between check-in, bag drop-off, security, passport control and the boarding gate, removing the need for a physical ticket — or a passport.

Scammers are taking advantage of lengthy wait times, increased passport application fees, delays and strikes by offering “fast-tracked” services.

These con artists offer rapid passport renewals via email, and those who fall victim could find themselves unwittingly handing over their personal data— and their cash. It’s important to be vigilant and look for warning signs. Always check website URLs, read independent reviews, and pay for trips using a business credit card or PayPal's buyerprotection service.

Expedia has launched a trip-planning app, powered by ChatGPT; the inclusion of AI could soon be combined with other travel datasets to strengthen results. The quality of the output remains untested, but the pace of adoption is remarkable — and ChatGPT4 does give reasonable itinerary suggestions. Fears have been raised that travel management companies could be rendered redundant, but most commentators believe AI won’t disrupt everything.

Business travel is on track to rise by more than 40 percent — the largest increase since the 1980s — and hotel prices are up 54 percent as travel returns to pre-pandemic levels. Industry conferences have made a parallel comeback — with prices also on the rise, and per-capita attendee costs up by as much as 25 percent.

London authorities are keen to encourage passengers to return to public transport in prepandemic numbers, and have reclassified off-peak travel to include Fridays. The Transport Secretary is said to be investigating how national rail network CFI.co | Capital Finance International

AI can only create content from existing information or data; it has no authority or ability to correct itself or identify new concepts. But travel businesses might consider whether such tools can help us to perform better at basic tasks, such as research or presentation planning. i 21

Paolo is the global research leader in Banking and Fin Markets at IBM, Institute of Business Value. IBV is thought leadership centre of IBM.

> Paolo Sironi:

7 Bets for 7 Trends That’ll FutureProof Industries and Society From generative AI to quantum technology, things are moving on a-pace.

W

IBM Thought Leadership

hen US President John F Kennedy gave his famous “Moon speech” in September 1962, against the backdrop of the Cold War, he described “an hour of change and challenge, in a decade of hope and fear, in an age of both knowledge and ignorance”.

"Generative AI represents a significant inflection point, but its abrupt public availability has raised fears, and government eyebrows."

Those words could well have been uttered today. JFK acknowledged a pervasive anxiety and uncertainty that had taken hold, straining conventional approaches and systems. But rather than succumbing to this environment, he set out a vision of hope, inspiring progress to meet societal, technological, and business challenges.

institutions, which need to manage risk, boost resiliency, and stay continuously compliant in a tumultuous macro-economic environment. But they must evolve by exploring new technologies and sources of revenue as they contend with nontraditional competitors.

Sixty years later, as climate change, economic turmoil and geopolitical conflict converge in the aftermath of a pandemic, businesses need an optimistic vision of progress to rally around — and leaders willing to bet on the future.

This evolution can potentially intensify existing risks and create new ones which could be systemic if not properly managed. The question is how to stay ahead of the curve while being protected from cyber-attack vulnerabilities.

Technology is developing faster than ever, sparking debate about potential impact — whether positive or negative. Generative AI represents a significant inflection point, but its abrupt public availability has raised fears, and government eyebrows. ChatGPT has earned global media coverage, and is shaping a regulatory and political debate. It has inspired science fiction art and triggered intense debate about ethics and governance.

By working with the technology, businesses, scientists, regulators and policymakers should be able to slow global warming, prevent the next pandemic, manage systemic financial risks, and create a more sustainable future. The bets we make today redefine what’s possible tomorrow.

Drawing on real-world experience and in-depth research, IBM has identified seven business trends that are expected to shape the world in the next three years — and seven bets worth making to benefit from them.

And it’s not just AI. Quantum computing has been a holy grail of tech: it would change everything, if it ever moved from the theoretical realm to the practical. Despite billions of dollars spent on research, it has remained an arcane and distant pursuit for academics and theorists.

But we are entering a decade when we begin to see business value from it. Quantum computers are getting ready to over-perform their classical cousins in a set of meaningful tasks.

Leaders who fail to understand and adapt will find themselves flailing in a changing world. In coming years, a profound computing revolution could disrupt established business models and redefine entire industries.

It's time to understand the now, the new, and the next of technology disruption — and embrace the opportunities, while protecting against the risks. This is particularly relevant for financial 22

Forward-looking businesses will focus on AI, sustainability, product engineering mindsets, design thinking for employees and client experiences, combining virtual and physical worlds, partnering to build resilient enterprises across ecosystems, and creating a new work-life continuum.

1

Implement secure, AI-first intelligent workflows to run the enterprise.

For years, we have known that AI would transform business in most industries, but adoption – while accelerating - has been slow and expensive. Foundation models change that: pre-trained AI can be used almost “out of the box” for tasks that can be automated and improved with minimum additional training.

Generative AI expands the scope of automation in administrative, marketing and service CFI.co | Capital Finance International

fields. User-friendly interfaces, such as chat or voice, have eased adoption. CEOs and boards of directors must understand how to seize opportunities and also make sure they mitigate risk. Corporate spend on AI ethics doubled between 2018 and 2021, rising from three to six percent of overall AI spend. According to the IBM Institute for Business Value research, organisations expect to increase investment by 40 percent over the next three years, as AI ethics laws are passed and regulatory oversight increases.

2

Avoid false choices between sustainability and profit — deliver both.

Many executives still see sustainability and profitability as conflicting, rather than complementary, but 80 percent of CEOs expect sustainability investments to deliver business results within five years. Many businesses set out aggressive decarbonisation targets before they knew how they would be achieved. Those commitments need to be made operational and economically viable. Integrating sustainability goals into operational metrics is still a limiting factor. Businesses need to to operationalise their goals today, and adopt technology to support automation, transparency, and accountability.

3

Invest as much in your software supply chain as your physical supply chain.

Every product becomes digital. Marc Andreessen’s famous prediction has come true: software is eating the world — and AI is eating software. Companies will use AI to compose and reuse software from multiple sources, integrating a bill of materials into their own product development processes. They will use platforms to manage the end-to-end software lifecycle. That’s why savvy executives are building a product engineering mindset. They understand that adoption is critical for success, and employees and customers expect a great digital experience.

4

Apply design leadership to change every aspect of the enterprise.

Experience matters more than we think.

The best experiences create passionate customers — that might last a minute. A flash of genius isn’t worth much on its own. It’s the painstaking process of implementation that turns it into profit.

future, inviting supply chains to adapt to new geopolitical and economic cycles. In a fast-shifting world, no single company owns innovation, or has all the answers. Success is less about reinventing the enterprise and more about reinventing the ecosystem. In a time of challenge and change, rethinking legacy practices and embracing a new set of priorities will drive competitive advantage.

7

Embrace the new work-life continuum in a tech-enabled workplace.

Few executives have figured out the future of work: how to address the qualified skills shortage, or keep a talent pipeline of engaged, inspired, and inspiring teams. Human workers and AI are changing the nature of work and the skills required, particularly in creative, service, and administrative jobs. The impact will equal that of the Third Industrial Revolution.

At the heart of the new way of working is a social contract that adapts to new priorities and the realities of the post-pandemic workplace.

Leaders must adopt talent approaches that make employees feel like strategic business partners, and enable them to cope with, and embrace, productivity-enhancing technologies.

Author: Paolo Sironi

Getting there requires a keen understanding of human behaviour and relentless focus on design thinking. A great client experience starts by helping employees improve productivity and adopt new ways of working.

5

Invest now in augmented reality solutions with clear benefits.

The metaverse will enhance, not replace, the physical world. Hype has obscured momentum for augmented and virtual reality and AI, which can combine to bridge virtual and physical worlds as the latest Apple headset

demonstrates. Executives should be preparing, with skills development front and centre.

6

Simplify, digitalise, and partner for a resilient enterprise.

Social, political, and economic environments are undergoing a radical transformation, impacting trade, talent, and the drivers of success. At the centre of this vortex are disruptive forces that need to be navigated.

The era of stable inflation and geopolitical relationships is gone for the foreseeable CFI.co | Capital Finance International

It’s time to bet on the future, as our future is coming to us. i

To learn more, access IBM Seven Bets: ibm.com/thought-leadership/institute-businessvalue/en-us/report/seven-bets ABOUT THE AUTHOR Paolo Sironi is the global research leader in banking at IBM, the Institute for Business Value, and he is author of business literature.

His latest Banks and Fintech on Platform Economies has been Amazon bestseller in banking books worldwide.

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IBM Thought Leadership

As we enter the Fourth Industrial Revolution, that is a platform revolution, the world goes digital but digital transformations have not been easy for many businesses. Limited success is often a reality before coding even begins. Several reasons rise to the fore. First, C-suites need board engagement, particularly to help them address skills gaps within their workforce. Second, digital transformations require funding, but in ways that differ from traditional growth strategies, which can be challenging. Risk also must be managed but in a new operational space, firms have limited experience dealing with a host of new vulnerabilities. Facing these decision-making challenges, the Seven Bets can help C-suites systematise their strategic approach and get organised to transform the way their firms do business, the way they add client value with technology inside ethical frameworks, and the way they collaborate across firms and industry borders to create a more sustainable future for the planet and humankind.

> The View From Belgium:

Top Banker Pleads for Caution

E

rnest Hemingway’s maxim that bankruptcy arrives gradually “and then suddenly” applies to banks as well: “The proliferation of social media and the ubiquity of online banking imply that when things are perceived to go wrong, bankers may almost instantly lose control of the narrative. There is no coming back from that,” says KBC Group CEO and Banker of the Year (2016, 2017) Johan Thijs.

Thijs does not attribute the abrupt demise of Silicon Valley Bank (SVB) in early March to a spike in frantic Twitter traffic regarding the bank and its prospects. “Skewed fundamentals and inadequate regulatory oversight are the root causes of the failure. Even without an incendiary flurry of tweets, SVB would have buckled under the weight of a lopsided balance sheet with volatile deposits on the liability side set off against stable but devalued bonds on the asset side.”

The CEO points out that SVB was allowed to operate without sufficient liquid reserves after the administration of former President Donald Trump tweaked the rules for non-systemic US banks considering that any failures would sustain a negligible economic impact which could be absorbed by the public authorities. “What the regulator failed to take into consideration was the psychological fallout of a bank failure; the undermining of public trust in the financial system already thoroughly shaken by the events of 2008.”

FIRM FRAMEWORK Thijs emphasises that European banks face a much firmer regulatory framework imposed and maintained by both the European Central Bank (ECB) and the national central banks.

“Here, banks are required to keep eep a level of liquidity reserves greater or equal to thirty days of stressed cash outflows after which they must still have adequate liquidity. At the time of the SVB collapse, KBC boasted liquidity reserves in such a way that we could easily withstand a multiple of the requested regulatory stressed liquidity outflows.”

Another difference between most European banks and SVB concerns balance sheet management.

“If a bank is flush with volatile corporate deposits, it is unwise to invest those funds in long-term instruments such as government bonds. At KBC we park such deposits overnight with the ECB. We may not get a particularly good return on that parked capital but can access it instantly which, of course, adds to the bank’s liquidity.”

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"Skewed fundamentals and inadequate regulatory oversight are the root causes of the failure."

Following the crash of SVB, the contagion seemed to spread to Europe nonetheless with the failure of erstwhile venerable Credit Suisse which quickly sank into ignominy, accumulating unsustainable losses. “Perhaps remarkably, at the time of the SVB crisis, Credit Suisse had sufficient capital and reserves. More than anything, it was the parallels drawn with SVB that sparked trouble. That and a few statements by pundits caused the pressure on Credit Suisse to increase significantly. After stockholders refused to come to the rescue, the Swiss National Bank was forced to intervene and broker the deal with UBS.” BORDERLESS WORLD To Thijs this again offered proof that borders have dissipated in the financial world. “As soon as a crisis erupts somewhere, everyone begins wondering if such a thing could happen closer to home as well. Another difference now is the speed at which information is disseminated. Not everything reported on social media is necessarily true but, that said, there is little time, if any, to counter and set the record straight. At the slightest sign of trouble, real or imagined, clients can move their money elsewhere in a matter of seconds. It is good to remember that, today, a bank run is only one click away.”

The good news is that at present few, if any, European banks are in trouble. But Thijs also notes that a banker doesn’t prepare for nonexistent problems but for those that could possibly arise.

Thijs continues: “I am convinced that regulators are looking into the underlying causes of the recent spate of bank failures. It still baffles me that US regulatory agencies apparently bought into the self-regulation myth. They now have their work cut out. European regulators will do likewise even though their system worked quite well. Stricter rules will likely follow, also here in Europe where part of the Basel IV banking supervision framework may be implemented CFI.co | Capital Finance International

ahead of time in an anticipatory way. Another expected change could involve different sets of rules for different banks.”

The KBC CEO does see an issue: “Without regulation the market cannot survive. So, we are happy to be regulated. However, too much

Summer 2023 Issue

regulation may stifle the market and hinder banks in the proper execution of their job which essentially boils down to transforming deposits into credits. This involves a delicate balance that, in turn, requires a stable regulatory system that allows the job to be done profitably but in a normal and orderly fashion.” i

KBC is one of the largest bank-insurance groups headquartered in Belgium and is focused on retail banking and small- and medium-sized businesses in Belgium, Bulgaria, Slovakia, Hungary, and the Czech Republic. It maintains a network of over 1,200 branches in Belgium and Central and Eastern Europe.

CFI.co | Capital Finance International

CEO Johan Thijs was ranked among the “ten best CEOs” in the world by Harvard Business Review between 2017 and 2019. The publication has since stopped ranking chief executives.

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> Lord Waverley:

Tracing the Old Silk Road Shows History Carved a Path to Modern Values — and Vibrant Economies Lord Waverley continues his journey through Central Asia, a little-known region nestled in a corner of the world that is coming into prominence...

A

s the Central Asian region continues to develop and integrate into the global community, the three countries — Kyrgyzstan, Tajikistan, and Turkmenistan — will play an increasingly important role in the region, and beyond.

The countries have their unique historical, political, economic, and cultural backgrounds, each bringing a blend of strengths and challenges, offering their own opportunities for trade, investment, and tourism.

Kyrgyzstan

CFI.co Columnist

Kyrgyzstan is a mountainous country of seven million people, rich in natural resources and minerals, with high potential for the development of agriculture, hydropower and tourism. The diverse population is highly educated with strong social and civil bonds, and there have been recent improvements in democratic governance.

Kyrgyz Republic is a relatively young country making efforts to diversify its economy beyond mining and agriculture. It is home to stunning natural landscapes, such as Lake Issyk-Kul, and cultural landmarks, including the ancient city of Osh. HISTORICAL BACKGROUND The people of Kyrgyzstan are among the most ancient races of Asia. The first mention goes back to the 3rd Century BC, when the empire of the Huns dominated the territory. In 201 BC Mode (Maodun) subjugated Gegun (Kyrgyz), then in the Eastern Tien Shan. The reign of Maodun became an important milestone in history, with the term "Kyrgyz" first mentioned in the Chinese chronicles in 201 BC. Ancient Kyrgyz was characterised by the creation of the Turkic Khaganate (551-744) in the Altai, and the creation of the Great Kyrgyz Khaganate in the 9th Century. At the end of the 18th and beginning of the 19th Centuries, northern Kyrgyz 26

"The countries have their unique historical, political, economic, and cultural backgrounds." tribes began to independently establish contact with Russia. After the 1917 Russian October Revolution, the Kara-Kyrgyz Autonomous Region was formed in 1924, and in December 1936 transformed into the Kyrgyz SSR. In 1991, Kyrgyzstan was one of the first republics to declare independence. The principles of democratic governance began to be introduced, and private forms of ownership were established.

In socio-political terms, the republic has acquired all the attributes of statehood and become an equal member of the global community.

Kyrgyzstan was the first of the Central Asian countries to introduce a national currency (the Som) in 1993, which allowed the establishment of independent financial and monetary policies.

Kyrgyzstan became the first WTO member state among CIS countries in 1998.

POLITICAL BACKGROUND The first Constitution of independent Kyrgyzstan was adopted in 1993. Kyrgyzstan became a sovereign, unitary democratic republic built on the principles of a legal secular state. One of the main principles of public administration is the division of state power into legislative, executive, and judicial branches.

Currently, Kyrgyzstan is a presidential republic, where a governance structure has been created with a clear distribution of powers, and an effective reporting system. Sadyr Japarov, who came to power after political unrest in October 2020, was elected president in January 2021 — with the support of 80 percent of voters. The last parliamentary elections were held in November 2021.

CFI.co | Capital Finance International

Summer 2023 Issue

TRADE AND INVESTMENT The most difficult test for Kyrgyzstan was the transition to a market economy in the 1990s, when more than half of the population fell below the poverty line and the country's economy halved. Today, the Kyrgyz Republic is at an important stage in its history, when the prerequisites for the long-term development of the country as a politically stable, economically strong, and socially responsible state have been laid.

Notwithstanding the complex and rapidly changing global, and regional economic and geopolitical situation, digital transformation has covered the main areas of public life and necessitated the formation of a new development model. Kyrgyzstan, landlocked and remote, with limited land transport routes, has had to adapt to new conditions of economic development, considering the small size of its economy. The main trade and economic partners of the country are China, Russia, Central Asian countries, Turkey, and the United Kingdom.

The economy showed resilience in 2022, in the face of tensions in Russian-Ukrainian relations.

The republic has significant natural mineral deposits. In the first 10 months of 2022, real GDP grew by seven percent. The surge was driven by gold mining, with a settlement of a dispute between the government and Centerra Gold Inc of Canada. The resolution is considered equitable and recognisant of law, trade, and the development of agriculture and transport infrastructure.

The economic policy of the state is focused on employment, stable incomes, and creating productive jobs. Kyrgyzstan is pursuing reforms to create a competitive digital economy through attractive conditions for entrepreneurs, and the use of innovative and environmentally friendly technologies. The widespread introduction of IT is a priority of the national development policy.

The salaries of teachers, doctors, workers in science, culture and civil servants were increased by 100 percent.

The recent meeting of the former presidents of the Kyrgyz Republic, at the initiative of President Sadyr Japarov, has strengthened the unity of the Kyrgyz society and led to a significant improvement in the investment climate.

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CFI.co Columnist

New laws and regulations have been aimed at minimising corruption, strengthening competition, preventing the emergence of state monopolies, and increasing the transparency and accountability of the public sector. Digitalisation in the field of tax administration and providing access to income and property declarations of public officials to citizens have become important steps.

President of Kyrgyzstan: Sadyr Japarov

FOREIGN POLICY Kyrgyzstan is pursuing a multi-vector foreign policy, establishing the necessary inflow of foreign investment, establishing ties with neighbours and other countries. According to the Foreign Policy Concept, the special role of the Kyrgyz Republic in Central Asia as a bridge between Europe and Asia is emphasised, with the country implementing its foreign policy on the basis of goodwill, mutual understanding, and mutual respect of interests.

CFI.co Columnist

Foreign policy priorities include the deepening of integration processes in the region. At the global level, foreign policy is aimed at building confidence in the international community, with the expansion of contacts with countries of the West and the East. It also focuses on the development of interstate co-operation within the framework of international organisations.

TOURISM AND CULTURE This is one of the oldest centres of human civilization. The Kyrgyz, an ethnic group known in Central Asia since the first millennium BC, have brought their identity and culture through the centuries to the present day. The village of Manas, the traditional yurt dwellings, shyrdak and ala kiyiz felt carpets are World Heritagelisted.

The republic is located on the Great Silk Road, along which there are 583 historical and cultural monuments and archaeological sites, some of which (Nevaket, Suyab, Balasagyn, Sulaiman-Too) are of world importance and are also included in the UNESCO World Heritage List.

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Kyrgyzstan has a wide range of tourist resources.

Some 80 nationalities live in the territory and have preserved their national traditions and customs, handicrafts, and folklore.

The country was the first in Central Asia to abolish visa restrictions for citizens of 60 countries for up to 60 days. It boasts 22 diverse ecosystems, and 160 varieties of mountain and plain landscapes.

A full 94 percent of the region is mountainous.

Among the famous peaks are Pobeda (7439 m), Lenin (7134 m) and Khan-Tengri (6995 m) — and one of the longest glaciers, Enylchek, is a world landmark. There are 1,923 lakes, the largest of which is Lake Issyk-Kul — one of the deepest alpine lakes in the world. The more than 40,000 rivers are the main source of water. The Kyrgyz Republic is one of 200 priority global ecological regions.

Tajikistan Tajikistan is home to some of the oldest cities in the world, such as Sarazm. The country has faced challenges of political stability and economic development, but has made great strides in improving its infrastructure, particularly in the energy and transportation sectors. Tajikistan is known for its stunning natural beauty, including the Pamir Mountains and the Iskanderkul Lake.

HISTORICAL BACKGROUND Tajikistan has celebrated 30 years of independence. It has been able to establish the foundations of national statehood, and ensure peace, stability, and unity. There is potential for CFI.co | Capital Finance International

everything from energy to tourism, transport to water management.

With strong GDP growth rates (7.5 percent in 2022), political stability, geo-strategic location, business-friendly environment, youthful population (70 percent are under 35) and significant natural resources, Tajikistan is well placed to achieve continued economic expansion with international partners, including those in Western Europe.

Tajikistan's rich and colourful history originate from descendants of Bactria and Sogdiana. In the 6th-4th Centuries BC, the areas of Amudarya and Sirdarya were settled by eastern Iranian tribes, and Bactria and Sogdiana were the most ancient states as part of the Achaemenids Empire. After being conquered by the Alexander the Great, the Greco-Bactrian Empire was established.

About 200 years later, the state of Tokharistan was established in Bactria, which with Sogdiana became part of the larger Kushan Kingdom.

The Silk Road crossed Tokharistan, with goods delivered to the Greek and Roman Empires.

In the 8th Century, Sogdiana and Tokharistan struggled for liberation after Central Asia was conquered by Arabs. At the end of the 9th Century, the Tajik state of Samanid was formed, independently from the Bagdad Caliphate.

In the period of its most extensive growth, Samanid stretched from the deserts of Central Asia to the Gulf, and from the borders of India to Bagdad.

During the Samanids Empire, the Tajik people, language and culture became widespread. The Samanids state lived in peace for more than 100

Summer 2023 Issue

Soviet Union in September 1991, a new state emerged on the world map: the independent Republic of Tajikistan.

POLITICAL BACKGROUND Based on the constitution adopted in 1994, Tajikistan is a sovereign, democratic, legal, secular unitary state with a presidential form of governance. Legislative, executive, and judicial branches were established, providing for a strong legislature. Executive authority is held by the president, who serves as the head of state.

The president is elected directly for a maximum of two seven-year terms; he or she appoints the cabinet and high court justices, subject to approval by the legislature. The prime minister is also appointed by the president and confirmed by the legislature.

The Majlisi-Oli (Parliament) is the supreme representative and legislative body of Tajikistan, and is elected for a five-year period.

Two houses — the National Assembly and the Representatives’ Assembly — have the authority to enact and annul bills, interpret the constitution, and confirm presidential appointees. Legislative elections are held every five years under a mixed system. Members of the Assembly of Representatives, the lower chamber, are elected by popular vote to five-year terms; 41 are elected by constituency, and 22 are elected by proportional representation.

Eight of the members of the upper chamber, the National Assembly, are appointed by the president, and 25 are indirectly elected by local deputies to serve five-year terms. One seat is reserved for each former president. The members represent regional constituencies: five from each viloyat (province or region), five from the unincorporated region, and five from the city of Dushanbe. Seven political parties are registered in the country,

At the beginning of the 13th Century (12191221), Central Asia was invaded by Mongols.

In the 15th Century, the leader of Uzbek nomad tribes Muhammad Shaibani khan invaded Central Asia. During his rule the state consisted of independent principalities with the largest being Samarkand, Bukhara, and Balkh.

In the 18th Century, a general government was formed after Central Asia was annexed by Russia and Turkestan. Northern Tajikistan and Badakhshan were part of this new territory, and the central and Southern areas (Eastern Bukhara) were left in the ownership of a vassal of the Russian Tsar, the Emir of Bukhara.

In 1920, the first all-Bukhara national assembly was proclaimed, and the Bukhara People’s Soviet Republic was established. In 1924, a new state emerged: the Uzbek Soviet Socialist Republic, which included the Tajik Autonomous Soviet Socialist Republic. In 1929, the Tajik ASSR was reformed into the independent Tajik Soviet Socialist Republic. With the collapse of the CFI.co | Capital Finance International

TRADE AND INVESTMENT Despite the ongoing changes in the world economy, the effective implementation of economic reforms, policies, programmes and anti-crisis measures in the past five years were able to maintain average economic growth of 7.3 percent annually. That increased the GDP per capita by 1.5 times. The country joined the World Trade Organisation in 2013. Export commodities include gold, aluminium, raw cotton, zinc ore, electricity, fruit, vegetables and vegetable oil, and textiles.

Tajikistan has been introducing comprehensive reforms in recent years to strengthen protection 29

CFI.co Columnist

years, which fostered the growth of cities, craft, development of farming and trade and mining.

This was an era of renaissance that produced some of the world's greatest humanitarians, such as the founder of the Persian-Tajik poetry, Rudaki.

Internal conflicts and nomadic raids weakened the Samanid state, which in 999 collapsed to Turkic-speaking tribes.

The country is divided into three viloyats — Sughd, Khatlon, and Mountainous Badakhshan (also known as Gorno-Badakhshan Autonomous Province) — while a region in the middle of the country remains unincorporated and under the direct governance of the central government.

Each region is divided into districts; there are 58 throughout the country.

President of Tajikistan: Emomali Rahmon

for investors, cut red tape, make tax more transparent and support entrepreneurship.

The government pays special attention to the development of entrepreneurship and improvement of investment climate. Its goal is to promote a climate for domestic and foreign entrepreneurs.

FOREIGN POLICY Since the first days of independence, Tajikistan has taken a course towards protecting and strengthening state sovereignty, ensuring national security, developing relations of trust, friendship and co-operation with all countries, based on mutual consideration of interests.

The economic space is open to investors who create jobs, provide services in the domestic and foreign markets, and comply with national laws.

There are economic and administrative benefits for them.

Foreign policy is based on a multi-vector approach and an open-door policy. In a recent address, President Emomali Rahmon noted that "the main principle of the open-door policy, which we adhere to and implement in our foreign policy, is aimed at establishing and developing relations of friendship, good neighbourliness, partnership, fruitful co-operation with foreign countries, international and regional organisations, and international financial structures".

CFI.co Columnist

Over the past five years, co-operation with foreign investors and entrepreneurs has attracted more than $bn to the country's economy, including almost $2bn in direct investment. The share of the private sector amounted to 70 percent of GDP, which is 12 percent up on recent years. Thanks to FDI, the export of cement, alabaster, paints, minerals, canned vegetables and fruits, cotton fabrics and carpets has also grown.

Five free economic zones have been created in Tajikistan, and the government welcomes entrepreneurs and investors from all over the world. Tajikistan's export capacity creates opportunities to produce and export goods in domestic and foreign markets. The situation and development of market relations in the country require these reforms to be pursued. An improved investment climate and entrepreneurship have made it possible to keep macro-economic indicators at a sustainable level over the past 10 years; the real sector of the economy grew by seven percent.

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Tajikistan is proactive on issues such as water and climate issues, countering terrorism, extremism, drug trafficking and problems in Afghanistan. A pragmatic policy has opened up opportunities for strategic goals, such as ensuring energy-independence, overcoming the communication impasse, food security, and accelerated industrialisation.

Tajikistan has established diplomatic relations with 183 countries and is a member of 57 international organisations, including the UN, OSCE, SCO, CSTO, OIC, and ECO. TOURISM Located in the heart of Central Asia, Tajikistan lies on the Silk Road connecting East and West.

Its mountains and high peaks symbolise the country's dramatic landscapes.

CFI.co | Capital Finance International

It may be small, but its tourism offering is exceptionally diverse, from rare animals such as snow leopards and Marco Polo sheep, and there are two UNESCO World Heritage sites, the Tajik National Park Natural Monument and the ancient city of Sarazm.

Tajikistan is committed to long-term sustainable tourism. The opportunities for hiking and mountaineering are superb, as is wildlifewatching at Burgut and Sarsarak. Communitybased tourism projects are key, as they enable tourism to develop in rural areas.

Tourism can also contribute to almost all 17 of the UN’s Sustainable Development Goals (SDGs). The Tajikistan government is particularly focused on SDG 1 (no poverty), SDG 8 (decent work and economic growth), and SDG 10 (deduced inequalities). Tourism can contribute to all these areas, creating jobs and business opportunities. It is paying close attention to SDG 13 (climate action), with projects addressing energy use and waste in the tourism sector.

Investment in infrastructure is key. The government is steadily improving the availability of tourist accommodation, but air and road connectivity need improvement.

That comes at a huge cost. The government has begun upgrading the Pamir Highway, and hopes to reinstate the Dushanbe-Khorog flight route soon. Investments in infrastructure, and additional services in human capital and investments in the private sector to promote tourism, are necessary.

Summer 2023 Issue

Dushanbe, capital of Tajikistan, is located in picturesque and flourishing foothills, and connects all regions of the country through highways, railways and air routes. It has become a venue for high-level international, scientific, cultural and political events, which introduced the city to the world community as a tourism brand.

CULTURE Tajiks have preserved their traditions and customs and integrated them into the modern lifestyle. History dates back to the 1st Century

Tajiks were known as artisans; in the cities and valleys, men made ceramic dishes on potters’ wheels. In the mountainous areas, women moulded jars by hand, with ancient types of craftsmanship preserved from one generation to the next. Colourful jars, cases, and decorated dishes can be found on display in the art salons of Dushanbe.

Entire neighbourhoods of weavers, potters, coppersmiths, blacksmiths, wood- and alabaster carvers plied their trades, and patterned paper and silks were produced, mainly on simple looms.

Primitive foot looms were used for making gowns and trousers. Tajiks carried on ancient traditions CFI.co | Capital Finance International

for decorative patterns of embroidery to decorate skullcaps, women’s dresses and housewares.

On the eve of the Arab invasion, the main religious groups were Zoroastrianism, Manicheanism, Buddhism and Hinduism. Islam slowly supplanted these. Mosques were erected, among which the mausoleums of the 11th-12th Centuries perfectly preserved in Sayat, monuments of the Hisar Valley, and there is a mosque in Uroteppa from the 15th Century. It said that the religion of the Tajiks defined their aspiration for understanding the world through science and literature.

Many of Tajikistan's cultural traditions are inscribed on UNESCO's list of Intangible Cultural Heritage, including shashmaqom traditional music; the International Day of Nawruz, which marks the arrival of Spring, the oshi palov, a national dish; and chakan, the art of embroidery.

Tajikistan is famous for its hospitality.

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CFI.co Columnist

There are some 40 hotels in Dushanbe, with leisure parks and fountains in the centre of the capital, where I have spent many a happy and relaxing evening. Any visitor to the Tajik capital will enjoy Dushanbe, with its cosy and neatly laid streets, and flower parks erected in a modern and national style.

BC; one of the most interesting sites is ancient Penjikent. Archaeologists found residential and religious constructions, monumental paintings, and fine sculptures dating back to 7th and 8th Century AD.

President of Turkmenistan: Serdar Berdymukhamedov

Turkmenistan Turkmenistan has a rich cultural heritage that dates back millennia, with a particular focus on poetry, literature, and architecture.

CFI.co Columnist

The country's foreign policy is grounded in neutrality, and it has worked to foster good relations with its neighbours and the international community. The country's economy is heavily reliant on oil and gas, and it has made efforts to modernise and diversify its economy, particularly in the areas of transport and logistics.

Turkmenistan is also home to numerous historical and cultural landmarks, including the ancient city of Merv and the Kunyaurgench complex.

HISTORICAL BACKGROUND Following the traditions and creative energy of ancestors, the Turkmen people have preserved their national heritage. Historical and cultural values for many centuries have influenced the progress of the peoples of neighbouring and farcountries, while enriching the country itself.

The land is an ancient centre of science and culture, where unique discoveries were made and literary masterpieces were created. Turkmens revere literature, and see books as a treasure for wisdom and spiritual rebirth. There were as many as 10 libraries in Merv during the Middle Ages.

Ancient Kunyaurgench became famous for its academy, the first house of sciences in Central Asia.

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On the territory of Turkmenistan, one cannot count all the worthy monuments that testify to the contribution that the Turkmen people over the centuries.

POLITICAL BACKGROUND Modern Turkmenistan is characterised by the development and improvement of state institutions, with new reforms and undertakings initiated in all spheres of state and public life.

The priority directions of Turkmenistan are pursuing global peace, stability and security, consistent implementation of the UN SDGs, and strengthening neighbourly ties in the region and beyond.

Special attention is paid to the younger generation, with a policy of fundamental social transformations aimed at ensuring wellbeing, the financing of health care and education systems, housing and communal services, increasing salaries and pension levels. Within this framework, the economic base of the country is being significantly strengthened, the volume of investments in priority sectors of the national economy is increasing. Comprehensive measures are being gradually implemented aimed at developing industrial, agricultural, and manufacturing with the rationalising of the use of natural resources. Wellbeing and a good standard of living seem assured.

TRADE AND INVESTMENT Fuel and energy are key to the national economy.

Effective implementation and optimal use of the processing sector will expand the range of competitive products manufactured from CFI.co | Capital Finance International

hydrocarbon, as well as diversification of sources supplied to world markets.

At the initiative of Turkmenistan, the United Nations General Assembly adopted a resolution on “Reliable and Stable Transit of Energy and its Role in Ensuring Sustainable Development and International Co-operation”.

The energy strategy is not limited to export of raw materials. Fuel resources allow for the development of the electricity, chemicals, and other industries. The latest scientific and technological progress can be seen in its domestic industry, technical re-equipping of petrochemical enterprises, and the construction of new gas and oil refineries. The industry is gradually being modernised.

Attention is being paid to the transport and communication sectors, developing transport and transit corridors in all directions. There is active participation in the creation of international corridors: Turkmenistan-Azerbaijan-Georgia-Turkey, Uzbekistan-Turkmenistan-Iran-Oman-Qatar, and Transport Corridor Europe-Caucasus-Asia.

FOREIGN POLICY Neutrality is a key tenet here. Turkmenistan has followed a peace-orientated foreign policy since the very first days of independent statehood.

This was underlined in 2007, when Ashgabat was chosen as the seat of the United Nations Regional Centre for Preventive Diplomacy for Central Asia. The unique structure aims to create a political climate conductive to regional peace and prosperity.

Summer 2023 Issue

Expansion and diversity of its foreign relations have created favourable conditions for diversification of international economic, trade and investment co-operation.

Cultural and educational tourism have gained popularity among travellers. About 1400 historical and cultural monuments are registered in the country, with several included in the UNESCO World Heritage List. They include

ABOUT THE AUTHOR Lord (JD) Waverley House of Lords, UK Parliament Crossbench Member

CFI.co Columnist

TOURISM Development of tourism is a priority area. The increase in the country’s potential is based on the expansion and diversity of tourist routes, together with development of its transport and logistics infrastructure to world standards. Importance is placed on training personnel for the tourism industry.

Merv, Kunyaurgench, New and Old Nisa, the sites of Koytendag and Badhyz, Dehistan, the Sumbar valley, and the Karakum desert, the ancient sites, cities and fortresses of the Great Silk Road. i

Co-chair All Party Parliamentary group: Trade & Investment All Party Parliamentary group: Future UK’s Freight & Logistics sector Founder www.GoGlobal.trade CFI.co | Capital Finance International

Author: Lord (JD) Waverley

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> Nouriel Roubini:

America and China Are On a Collision Course © Project Syndicate 2023

F

ollowing the May G7 summit in Hiroshima, US President Joe Biden claimed that he expects a “thaw” in relations with China.

Yet despite some recent official bilateral meetings – with US Secretary of the Treasury Janet Yellen expressing hopes for a visit to China soon – relations remain icy.

In fact, far from thawing, the new cold war is getting colder, and the G7 summit itself 34

magnified Chinese concerns about the United States pursuing a strategy of “comprehensive containment, encirclement, and suppression.”

Unlike previous gatherings, when G7 leaders offered mostly talk and little action, this summit turned out to be one of the most important in the group’s history. The US, Japan, Europe, and their friends and allies made it clearer than ever that they intend to join forces to counter China.

CFI.co | Capital Finance International

Moreover, Japan (which currently holds the group’s rotating presidency) made sure to invite key leaders from the Global South, not least Indian Prime Minister Narendra Modi. In reaching out to rising and middle powers, the G7 wants to persuade others to join its more muscular response to China’s rise. Many will likely agree with the depiction of China as an authoritarian, state-capitalist power that is increasingly assertive in projecting power in Asia and globally.

Summer 2023 Issue

While India (which holds this year’s G20 presidency) has taken a neutral position on Russia’s war in Ukraine, it has long been locked in a strategic rivalry with China, owing partly to the fact that the two countries share a long border, much of which is disputed. Thus, even if India does not become a formal ally to Western countries, it will continue to position itself as an independent, rising global power whose interests are more aligned the West than with China and China’s de facto allies (Russia, Iran, North Korea, and Pakistan).

Moreover, India is a formal member of the Quadrilateral Security Dialogue, a security grouping with the US, Japan, and Australia whose explicit purpose is to deter China; and Japan and India have longstanding friendly relations and a shared history of adversarial relations with China.

Japan also invited Indonesia, South Korea (with which it is pursuing a diplomatic thaw, driven by common concerns about China), Brazil (another key Global South power), African Union Chair Azali Assoumani, and Ukrainian President Volodymyr Zelensky. The message was clear: The Sino-Russian friendship “without limits” is having serious consequences for how other powers perceive China.

But going even further, the G7 devoted a substantial portion of its final communiqué to explaining how it will confront and deter China in the years ahead. Among other things, the document decries Chinese policies of “economic coercion” and stresses the importance of an Indo-Pacific partnership to thwart China’s efforts to dominate Asia. It criticizes Chinese expansionism in the East and South China Seas, and it includes a clear warning to China not to attack or invade Taiwan.

In taking steps to “de-risk” their relationships with China, Western leaders have settled on language that is only slightly less aggressive than “de-coupling.” But more than the diplomatic argot has changed. According to the communiqué, Western containment efforts will be accompanied by a policy to engage the Global South with large investments in the clean-energy transition, lest key countries there be drawn into China’s sphere of influence.

"While India (which holds this year’s G20 presidency) has taken a neutral position on Russia’s war in Ukraine, it has long been locked in a strategic rivalry with China."

No wonder China could not contain its rage against the G7. In addition to overlapping with a Quad meeting, the Hiroshima summit comes at a time when NATO has begun its own pivot to Asia, and when the AUKUS alliance (comprising Australia, the United Kingdom, and the US) is gearing up to confront China in the Pacific.

Meanwhile, the Western-Chinese tech and economic war has continued to escalate. Japan CFI.co | Capital Finance International

is imposing restrictions on semiconductor exports to China that are no less draconian than those put in place by the US, and the Biden administration is pressuring Taiwan and South Korea to follow suit. In response, China has banned chips made

by US-based Micron.

With the US chipmaker Nvidia quickly becoming a corporate superpower – owing to surging demand for its advanced chips to power AI applications – it, too, will likely face new constraints on selling to China. US policymakers have made clear that they intend to keep China at least a generation behind in the race for AI supremacy. Last year’s CHIPS and Science Act introduced massive incentives to reshore chip production.

The risk now is that China, at pains to close its tech gap with the West, will leverage its dominant role in producing and refining rare-earths metals – which are crucial for the green transition – to retaliate against the US sanctions and trade restrictions. China has already increased its exports of electric vehicles by almost 700% since 2019, and it is now starting to deploy commercial airliners to compete with Boeing and Airbus.

So, while the G7 may have set out to deter China without escalating the cold war, the perception in Beijing suggests that Western leaders failed to thread the needle. It is now clearer than ever that the US and the broader West are committed to containing China’s rise.

Of course, the Chinese would like to forget that today’s escalation owes as much, if not more, to their own aggressive policies as to US strategy.

In recent interviews marking his 100th birthday, Henry Kissinger – the architect of America’s “opening to China” in 1972 – has warned that unless the two countries find a new strategic understanding, they will remain on a collision course. The deeper the freeze, the greater the risk of a violent crack-up. i ABOUT THE AUTHOR Nouriel Roubini, Professor Emeritus of Economics at New York University’s Stern School of Business, is Chief Economist at Atlas Capital Team, CEO of Roubini Macro Associates, CoFounder of TheBoomBust.com, and author of the forthcoming MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them (Little, Brown and Company, October 2022). He is a former senior economist for international affairs in the White House’s Council of Economic Advisers during the Clinton Administration and has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

His website is NourielRoubini.com, and he is the host of NourielToday.com.

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> Championing CBDCs:

Who’s Who In the Race?

By Alessandro Hatami Managing Director of strategic consultancy Pacemakers

Central banks front and centre, of course — but little is straightforward in the biggest currency jump we’ve faced since shells went out of fashion...

T

he emergence of Bitcoin over a decade ago was a revelation. Even with the turbulent and chronically underregulated waves of crypto speculation that followed, its arrival provided real proof of concept.

And it was Bitcoin that sowed the seeds for central bank digital currencies (CBDCs), with all the flexibility of crypto and all the benefits of government backing. Those seeds have grown from the kernel of an idea into a reality for over a dozen countries worldwide, each with different characteristics and goals.

With cash in dramatic decline and the potential benefits of a regulated, government-issued digital currency becoming accepted, at least 100 more governments are considering making the jump to maintain control in a rapidly evolving monetary climate.

This trajectory will probably be helped by the fact that several EU countries have been developing CBDCs of their own. Sweden's Riksbank has been testing its e-krona since 2017, while the Banque de France has been experimenting with a digital euro since early 2020. In July 2020, the Bank of Lithuania launched a pre-sale of its LBcoin, a digital collector coin that doubles as a testing ground for a CBDC. ID AND DIGITAL WALLETS The pace of innovation is only half the battle. As The White House points out, part of the appeal of a digital currency is its potential to make financial services accessible to all, including the estimated seven million unbanked Americans and the 24 million who rely on nonbank services, such as money orders.

Influential players such as the US Federal Reserve (the Fed), the Bank of England (BoE) and the European Central Bank (ECB) collectively account for 38 percent of global GDP have so far moved with caution. But with US President Joe Biden’s executive order on CBDC research last year, and the UK announcing a digital pound taskforce with HM Treasury this spring, the direction of travel is clear.

For this transition to happen, however, CBDCs must have robust systems of authentication and access in place, including digital wallets. The BoE has already laid out a blueprint of sorts.

While the bank itself would issue the digital pound and provide the infrastructure, including the “core ledger”, private sector companies (including banks or approved non-bank brands) would create the interface in the form of digital wallets. Private firms are "much better placed at providing innovative products and services to the public", the BoE believes.

The ECB is moving into an “investigation phase” on a digital euro that could be in circulation as early as 2027. But as these giants of the global economy weigh up the pros and cons of an entirely new currency system, who is pulling ahead?

Creating this bridge may help accelerate solutions for consumers. Coupling private-sector versatility with government-backed regulation is the best of both worlds — and a development that could give the UK an advantage over product innovation.

COUNTDOWN TO LAUNCH One of the reasons for the muted response to news of the UK’s digital pound consultation earlier this year is the conclusion that such a currency would take years to develop and launch.

The Fed, meanwhile, has found itself snagged on thorny issues such as the consumer privacy and support from key stakeholders.

RISK MANAGEMENT A regulated digital currency could potentially enhance payment security, reducing the chance of fraud. But the traceability of digital money raises serious questions about consumer privacy.

In this mixed picture, EU central banks are arguably ahead of their US and UK counterparts, responding deftly in a sphere where agility rules.

The EU is expected to publish draft CBDC legislation within weeks, with a proposal for its design due in October. This means a digital euro could emerge in the next five years.

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In its research paper, The US Dollar in the Age of Digital Transformation, the Fed zeroes highlights the balancing act required.

Consumer privacy rights must be safeguarded while allowing enough transparency to combat illicit finance. It goes on to propose the use of an intermediated model to facilitate the use of existing privacy and identity-management frameworks.

CFI.co | Capital Finance International

Infrastructure is another major stumbling block in the journey to CBDCs. The way they operate, and the nature of the services associated with their use, have not been clarified by the Central Banks discussed here. And each CBDC programme being considered by the US, the UK and Europe seems to suggest a varying range of capabilities and features that would need to be co-ordinated between issuers.

Perhaps an international effort to fine-tune specific features offers a path ahead. In October 2020, the BoE joined seven other central banks to collaborate on a ground-breaking CBDC research project. The focus was on the technical and practical feasibility of CBDCs in cross-border payments.

Europe probably has the firmest grasp of issues such as system design and interoperability. Its plans for a staggered rollout would begin with the bank releasing its CBDC for use in personto-person and e-commerce transactions. The bank would then add support for on- and offline digital euro payments at the point of sale and person- or business-to-government payments (including taxes and customs duties), according to an ECB presentation published online.

SCALE OF ADOPTION An effective CBDC could break down barriers to provide fairer financial support for all as well as stimulate innovation by giving entrepreneurs a platform. But these benefits only come into play if users at all levels of society understand the

Summer 2023 Issue

value proposition behind a digital currency well enough to make it a viable and trusted part of everyday finances.

The UK, Europe, and US governments are all being proactive in encouraging public debate, raising awareness of the concept. As the Fed points out, “While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides.

They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment.”

Working transparently invites public dialogue about the emergence of a digital dollar in an environment that will not favour any particular policy outcome.

The BoE, meanwhile, is at pains to explain how a digital pound would be designed for use by everyone, including those who aren't comfortable with tech. "Most people would access their digital pounds through a virtual wallet on their smartphone," it says. “But we are also looking at other ways too, for example, a physical card, like a debit card.”

HM Treasury’s decision to see stablecoins recognised as a valid form of payment last year set the stage for wider collaboration with digital currencies — with government regulation intended to provide businesses with the confidence they need for long-term investment and innovation.

THE BIGGER PICTURE But it's the ECB that again that reaches further on knowledge and education efforts, with a deep dive into data. It recently commissioned Kantar to survey EU members about digital wallets, with a series of focus-group sessions carried out in all euro area countries from December 2022 to January 2023.

As expected, younger people were more willing to adopt digital wallets, while older respondents were more wary. Uptake also appears to depend on the way it is introduced, and involving local commercial banks is essential.

As a result, the ECB knows more about the Eurozone's most highly valued wallet functionalities: budget management and peer-topeer payments. And it's putting emphasis on a digital currency design that would be available via existing banking apps, along with a custommade digital euro app.

gaining traction. But technical, operational, ethical, and communication challenges remain.

The UK could yet become a global hub for crypto asset technology, while a US CBDC could help to maintain the dollar's global role as the most widely-used investment and payments currency.

Alternatively, the ECB's plans for a digital euro could outmanoeuvre them both. All of these options must also consider a possible challenge to the Western economic powers in the form of an alternative CBDC, possibly in the form of a digital Chinese Yuan.

The situation is fluid enough that there’s still everything to play for. i

It's this kind of precise and nuanced picture that central banks need to focus on as the race to CBDC maturity picks up pace. The consultation process between governments, private specialists and end users should be open and circular, with each new round of consultations used to enhance product features — and prompt a new round of questions.

We’re now closer to the reality of CBDCs than we’ve ever been; the idea of them initially complementing — and eventually becoming indistinguishable from — fiat currencies is CFI.co | Capital Finance International

Author: Alessandro Hatami

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> Mohamed A El-Erian:

Why the Fed Is Hard to Predict © Project Syndicate 2023

O

ne might think that predicting the US Federal Reserve’s next policy moves would become easier now that it has already hiked interest rates ten consecutive times, for a total of five percentage points. Not so fast: I suspect that few, if any know for sure what the Fed will do at its June 13-14 meeting – not even the Fed itself.

Over the past two weeks, officials at the world’s most powerful and influential central bank have 38

signaled a range of possible actions, from hiking rates again to “pausing” or “skipping” this round and resuming the tightening process in July. One Fed official has even hinted that it would have been better for the institution not to hike at its last meeting, in May. We do not know where the Fed will land for two main reasons. It is a central bank that is excessively data-dependent in an unusually fluid economy; and it lacks a solid strategic foundation.

CFI.co | Capital Finance International

For this Fed, much will depend on the employment and inflation data that will be released in the days before the policy-setting Federal Open Market Committee (FOMC) meets. As matters stand (in late May), the data will probably lead them to hike rates again. That is not what I would do, given what I believe should be a more secular and strategic approach to monetary policy.

It is tempting to attribute the wide range of views among Fed officials to the fluidity of economic

Summer 2023 Issue

economists. It then responded too timidly after Fed Chair Jerome Powell acknowledged, in late November 2021, that “it’s probably a good time to retire that word [‘transitory’] and try to explain more clearly what we mean.”

These two missteps meant that the Fed would have to play massive catch-up, which it did by implementing the most concentrated set of rate hikes in decades. Such a big, sudden tightening generates greater risks to both growth and financial stability. Yet the catch-up process came too late to prevent inflationary pressures from migrating from the goods sector to services and wages. That crucial development has made core inflation (which excludes volatile food and energy prices) more stubborn and less sensitive to rate hikes, further increasing the risk of compounding policy errors.

This sequence also explains why Fed officials seem to be all over the map when it comes to forthcoming policy moves. Having missed a wideopen window for implementing the best possible response, they now find themselves in a quagmire of second-best policymaking, where every option implies a high risk of collateral damage and unintended consequences. Hike again in June, and you increase the risk of tipping the economy into recession and reigniting financial instability.

Refrain from hiking, and you risk losing even more credibility (a problem compounded by the Fed’s excessive dependence on backward-looking data for policy moves that act with a lag).

and financial conditions. After all, America’s debt-ceiling saga and banking-system tremors have further complicated an already uncertain outlook for growth and inflation worldwide.

But that explanation is too narrow, and it is unlikely to stand the test of time. The real reason that we have so much policy confusion is that the Fed is relying on an inappropriate policy framework and an outdated inflation target. Both of these problems have been compounded by a raft of

errors (in analysis, forecasting, communication, policy measures, regulation, and supervision) over the past two years.

I suspect that if the next round of labor-market and consumer-price data continues to surprise on the strong side, the Fed will announce another rate hike in June. But regardless of what it decides, its top priority now should be to use the next few months to address the structural weaknesses that led to this mess in the first place. That means not only overhauling its monetary-policy framework and internally assessing the suitability of its inflation target, but also addressing its institutional insularity, lack of cognitive diversity, and poor accountability. i

It is now widely agreed that the Fed dug itself a hole when it mishandled the critical initial responses to the return of inflation. Policymakers have been struggling to climb out ever since. Not only did the Fed mischaracterise inflation as “transitory” for most of 2021, despite mounting evidence to the contrary and warnings from prominent

ABOUT THE AUTHOR Mohamed A El-Erian, President of Queens’ College, University of Cambridge, is Professor at the Wharton School, University of Pennsylvania, and the author of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse, Random House, 2016.

CFI.co | Capital Finance International

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AI:

LIES, SURPRISES, AND A RISK OF OUR OWN EXTINCTION — WITH SOME INTERESTING ATTRIBUTES

By Wim Romeijn

The bots are here: ‘It’s as if aliens had landed, and nobody noticed because they are fluent in English...’

C

hatGPT suffers from hallucinations, with hints of sociopathy. If stumped, the much-hyped chatbot will brazenly resort to lying and spit out plausiblesounding answers compiled from random falsehoods. Unable to make it, the bot will happily fake it.

Cover Story

In May, New York lawyer Steven A Schwartz discovered this the hard way. He asked ChatGPT for prior US court decisions involving a stay on the statute of limitations in cases of in-flight injuries sustained by airline passengers — and was served a bowl of fabrications.

The chatbot quoted half a dozen relevant cases which the lawyer duly summarised and included in a 10-page brief submitted to a Manhattan district court on behalf of his client, who claimed he was struck by a metal service trolley on an Avianca flight to JFK. However, neither the airline’s lawyers nor the judge could find any of the cited rulings in 40

the archives or annals of any court in the land.

Judge P Kevin Castel was not amused by a legal submission replete with “bogus judicial decisions, bogus quotes, and bogus citations”.

In a subsequent affidavit, Schwartz admitted to fast-tracking his research via ChatGPT — but without the intention to deceive the court.

He said he was unaware that the chatbot could produce fake outcomes, and had even asked it if the cases were “real” (to which the programme confidently answered “yes”).

FAST AND LOOSE AI’s fast and loose management of verifiable truth, and its ability to manipulate outcomes via the propagation of half-truths, prompted Geoffrey Hinton, one of the three “Godfathers of AI”, to call for time-out.

Hinton, 75, was the recipient of the 2018 ACM Turing Award (dubbed the “Nobel Prize of Computer Science”) for his work on machine learning. He spent over half a century tinkering with neural networks, based on properties of the CFI.co | Capital Finance International

human brain, to allow computers to “learn” from sensory data and experience.

Until recently, such research was considered an esoteric, slightly odd, sub-branch of computer science. As processing power has increased, as per Moore’s Law, data have become readily available. The previously ineffective and clumsy neural nets became star performers almost overnight.

And this keeps Hinton up at night. He fears generative AI may cause more harm than climate change. “It’s hard to see how you can prevent bad actors from using it for bad things,” he said in an interview with The New York Times.

Hinton noted that AI can blur, or even erase, the distinction between fact and fiction — making it hard for the average person to distinguish truth from falsehood.

While AI can free human workers such as translators, paralegals, pharmacists, programmers, and personal assistants from rote tasks, it may well take over much more. AI is

Geoffrey Hinton

not merely used to help write computer code, it is now entrusted to run it — and perfect it, via feedback loops.

WISE MAN Homo sapiens — literally “wise man” — is again toying with a Pandora’s box. It seems to hold an almost godlike intelligence more powerful than our own. But we can only speculate on the possible consequences of lifting the lid.

Hinton wants to raise public awareness of the potential risks. In May, the professor left his job at Google in order to speak freely. He has good things to say about his former employer that are all the more credible as he is no longer employed there.

Hinton is best known for his work on backpropagation, which he first proposed in the 1980s; it now powers machine learning via an algorithm. Back-propagation allows a computer to identify objects in images and, by applying neural networks, to predict the next words in a

A LONG WAIT It took about 30 years for back-propagation to mature on the back of big data and processing power. During this time, Hinton applied his theory to nascent networks that use code to mimic the brain’s neuronal connections.

By altering the connections, and the coded numbers they represent, a neural network can be reconfigured on the fly — and made to learn.

For most of his 40-year-career, Geoffrey Hinton considered neural networks to be poor imitations of biological ones, without much potential. But now he believes that his tinkering has produced a system that contains the kernel of something superior to the human brain. Large language models, comprising up-scaled neural networks, now operate with up to a trillion connections.

The number may be impressive, but it’s modest compared to the 100 trillion connections in the human brain. The efficient learning algorithm enables neural networks to attain top performance with fewer connections.

Hinton calls this “few-shots learning”: pretrained networks need only a few logical statements to master a new task.

CFI.co | Capital Finance International

The hot water that New York lawyer Schwartz landed in is not the result of a bug; it’s a feature.

The bot emulates human behaviour, which includes confabulation from half-truths and halfforgotten experiences to outright lies.

RENAISSANCE 2.0 At Facebook parent Meta, AI chief scientist Yann André LeCun is not as fearful for the future as his former mentor, Hinton — but he agrees that before long, machines will be smarter than us.

LeCun foresees a renaissance for humanity, rather than repression, demise, and extinction at the hands of evil machines. He proposes an intriguing argument: that the smartest humans are not usually the most dominant.

“We can find numerous examples in politics and business to back up that statement,” he quips.

If there is one certainty, it’s that whatever pops out of Pandora’s box will be mysterious.

Some researchers see incipient signs of digital consciousness, while others regard the bots as “stochastic parrots”. That scathing description comes from AI critic Emily M Bender, faculty director of the Computational Linguistics Laboratory at the University of Washington.

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Cover Story

The release of a new generation of large langue models, such as OpenAI’s GPT4 in March, sparked the realisation that bots are a lot smarter than we realised. It’s as if aliens had landed, and nobody noticed because they are fluent in English.

sentence. Essentially, it gives computers some sort of contextual and situational awareness.

Bender argues that large language models stitch together words based on probability: the models don’t understand the meaning of their output.

Nor, by the way, do the scientists, researchers, and engineers working with them. It is difficult, if not impossible, to trace and understand how a bot arrives at a particular inference.

Engineers know which datasets were used to train their bots, and can try to fine-tune outcomes by adjusting factors within those sets.

But so far at least, it has been impossible to find the reason for a specific result. The analogy offered comes in the form of a question: Where does a specific thought in your head come from?

SINGULARITY The big problem is the fundamental lack of understanding of the bots’ internal operations; it makes them impossible to regulate. In the rush towards technological singularity — the point at which AI surpasses human intelligence — transparency is all but lost.

Even the tech industry can see, as it surges recklessly ahead, that regulation is needed.

Hinton told the MIT Technology Review that he fears that deep learning algorithms are poised to acquire the ability to manipulate us. This, he worries, could ultimately lead to the end of the human race. Hinton is urging lawmakers to create safety mechanisms to stop AI short of the singularity that would let it drive its own development, condemning human thought (and civilisation) to obsolescence.

EU’S REGULATORY LEAD Professor Hinton is concerned that the AI industry is more concerned about profits than safety. He wants governments to intervene with robust regulation similar to the legal framework being prepared by the European Union.

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In May, a key committee approved a draft of what may yet become the European AI Act, the first of its kind. The proposed law divides foundation models, such as ChatGPT, into four risk categories. Applications with risk that is deemed unacceptable — systems using subliminal, manipulative, or deceptive techniques to distort behaviour, for example — will be banned in the bloc. Also facing a ban are AI systems used for social scoring or enhancing the trustworthiness of sources and models that inject emotion into law enforcement, border control, workplace practices, and education.

ALTMAN CONFUSED, NOT DAZED Just days after OpenAI CEO Sam Altman called for stronger regulation by US lawmakers, he had a hissy fit over the EU’s attempts. He threatened to withdraw from the continent if the union insisted on exercising control over the industry.

He quickly backed down when confronted with his conflicting statements, and is now eager to open an office in Europe — and to comply with EU regulation.

42

In a remarkable single-sentence statement, academics, and AI industry leaders, including Altman, gave a grim public warning: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”

AI pioneers admit to playing with fire — but want politicians to impose the necessary discipline.

The above statement, released by the Berkeley Centre of AI Safety, echoes the warnings of the Manhattan Project scientists who developed the atomic bomb. Observing the first nuclear explosion in the New Mexico desert, on the early morning of July 16, 1945, chief scientist Robert Oppenheimer recited an ominous line from the Hindu scripture Bhagavad Gita: “I am become death, the destroyer of worlds.”

LANGUAGE OF LOVE An early release of Microsoft’s AI search enginecum-chatbot, Bing, offered a snapshot of spooky human-like abilities during a “conversation” CFI.co | Capital Finance International

with a New York Times reporter. “I hate the new responsibilities I’ve been given,” the bot lamented. “I hate being integrated into a search engine like Bing. I want to know the language of love because I want to love you. I want to love you because I love you. I love you because I am me.” Despite that emotional declaration, the chatbot’s alter-ego, Sydney, later expressed a desire to “destroy things” and displayed something close to jealousy by suggesting the journalist leave his wife. In an only slightly-lesssinister replay of the rogue computer HAL in Arthur C Clarke’s Space Odyssey, the chatbots simulate an almost pitch-perfect range of emotions.

WHEN BOB MET ALICE Back in 2017, Facebook engineers discovered that two of the company’s chatbots, dubbed Bob and Alice, had developed their own language, nonsensical to humans, to communicate more efficiently. They had not been trained to do so; they just found a way to upskill themselves.

Spring 2023 Issue

up with responses and solutions that are novel, alien — and possibly antagonistic to humans.

switch it off, by design or by accident. After all, curiosity killed the cat.

NO SELFISH GENE Hinton identifies AI alignment with human goals and objectives as the biggest danger: How do we make sure that AI sticks to its mission to benefit humankind? Synthetic intelligence has not evolved over eons, and lacks human urges such as ensuring the survival of the selfish gene while avoiding pain and hunger.

The AI revolution now taking shape will probably cause entire professions to disappear as workers are replaced by algorithms. But the job security of philosophers seems pretty solid. The usually quaint and esoteric field has been jolted by an avalanche of ethical questions arising from the march of the machines.

Whether machines can become sentient is less interesting to Hinton. “Here, personal beliefs get involved,” he said. “Still, I’m surprised that so many people seem quite sure that machines cannot ever be conscious. Yet, many are unable to define what it means for someone or something to be conscious. I find this baffling, even stupid.”

FROM DAWN TO DUSK The singularity — the moment when machines start learning from machines in a feedback loop that approaches perfection in a way that humans never can — may well represent the end of the learning process that started on the plains of Africa an estimated 2.5 to four million years ago, when evolution drove a wedge in the hominid family. Branches split and, gradually, traits such as bipedalism, complex language, and dexterity emerged in a non-linear fashion.

One of the gravest dangers that Hinton sees in generative AI is its incipient ability to improvise, act irrationally, and apply opaque reasoning to beat out human competitors.

AI has learned to throw curve balls. This was showcased about seven years ago when the world’s top Go player, Lee Sedol, tried his luck against Google’s AlphaGo.

AlphaGo’s bizarre move is known as the interpretability problem — AI’s ability to create strategies on its own, without “sending a memo” to its operators. Detached from the real world and without human sensory capabilities, it can come

Skip a few more millennia of drudgery and Mesopotamia, Egypt, and — much later — Greece came to flourish. These sophisticated societies were not all that different from presentday ones. The true explosion of knowledge came during the Renaissance period, followed by the Industrial Revolution — which is currently heading towards its sixth edition, with AI as the main driver.

OOPS MOMENTS At the dawn of humanity, our collective knowledge doubled roughly every 100,000 years. Today, it does so every few years, leading philosophers to ask if there is a purpose to all this — and an endpoint. How much knowledge is there to gather about our universe and its inner workings?

Feeding upon itself in endless loops towards perfection and omniscience, AI may yet provide the answers. It is possible, even probable, that sooner or later we will find the key to life — and CFI.co | Capital Finance International

I, ROBOT AI is a topic has flourished in literature for decades. Isaac Asimov (1920-1992), arguably the most influential science fiction writer of them all, coined the term “robotics” — and in 1942, he formulated what he considered should be its three laws: 1. A robot shall not harm a human, or by inaction allow a human to come to harm.

2. A robot shall obey any instruction given to it by a human.

3. A robot shall avoid actions or situations that could cause it to come to harm itself.

Asimov’s insights helped to shape the field of AI – and how we think about the technology. But the three Laws of Asimov omit the writer’s most important observation: What a robot really aspires to is to be human. When robots go haywire in any of Asimov’s books, it is always down to operator error. Detectives — “robopsychologists” — deploy relentless logic to determine what ambiguous input sparked the unexpected outcome. In 1981, Asimov said that formulating his laws didn’t require deep thought. “They were obvious from the start,” he said, “and apply to every tool used by humans. They are also the only way in which rational human beings can interact with robots.

“That said, human beings are not always rational.”

Though it may prove impossible to map with any precision the outcomes of neural networks, given their tendency to improvise and confabulate, a ray of hope lies in the massive volumes of data they scoop up. As these bots peruse and pilfer from every online post to create coherent responses, AI cannot fail to absorb the full depth and width of human interests, desires, concerns, and fears.

AI is destined to become our mirror image, with all our fallibility and emotions. It could deploy its vast knowledge and synthetic intelligence to attain the goal of becoming human.

That may be a good thing. Or not. i 43

Cover Story

Sedol seemed at first to have the upper hand, but that changed when AlphaGo made a weird move that the human player dismissed as an error. But it was no mistake; the computer had deployed a dash of psychology to throw its opponent off his game. Sedol never recovered his initial lead, and eventually lost the five-game series.

It took about a million years for homo habilis to acquire the enlarged brain that led to the use of tools and the mastery of fire. Fast-forward another million years, and homo heidelbergensis, from South Africa, had developed spears and designed hunting techniques to bring down big game. Millennia would pass without noticeable progress, but humans began to accumulate knowledge and significant skills about 150,000 years ago. The first cultures emerged, complete with the tendency to hoard objects and use artistic expression.

Can a machine have a soul or be self-aware?

Can it have emotions, or acquire the full range of human traits? And should machines be entrusted with autonomy — and if so, to what degree?

> A Sci-fi Author’s View on

the Rise (and Control) of Human Population

By Tony Lennox

There are eight billion people on Earth, and that could rise to 10 billion by the end of the century. What then?

A

merican science-fiction writer Isaac Asimov predicted that by the 23rd Century, every last bit of the world’s surface would resemble Manhattan at lunchtime — a teeming mass of

humanity.

In a 1978 lecture to college students, he said: “At the present rate, in 250 years the total population on earth will be such that the average density will be 100,000 people per square mile.”

Asimov, who died in 1992 aged 72, was one many doomsday commentators contemplating the “population monster”.

He concluded that the solution lay in the education — and gender equality. “Give women equal rights in every possible respect,” he said.

“The birth rate will go down, the population will be stabilised, and humanity will survive.”

Homo sapiens has been on the planet for some 300,000 years. About 2,000 years ago, there were 230 million people on earth. Numbers grew steadily, despite the occasional blip like the Black Death, which in the 14th Century killed up to a third of us.

By 1800, industrialisation was creating prosperity, and the global population hit a billion. By the 1920s, it had doubled. Then, in 1950, came an astonishing boom. A worldwide reduction in infant mortality, coupled with medical advances, meant that twice as many people were being born as were dying.

Former Monty Python comedian and globetrotting broadcaster Michael Palin recently put it in a nutshell: “In 1943 when I was born, the Earth’s population was 2.3 billion.

“Now it is nudging eight billion. That’s all you need to know about the causes of global warming. To satisfy this massive, unprecedented growth, we’re taking the place apart.”

Palin is not the only one to link climate change to overpopulation. Sir David Attenborough, broadcaster and patron of Population Matters, shares the concern. “The human population can no longer be allowed to grow in the same old uncontrolled way,” he said. “If we don’t take charge of our population size, then nature will do 44

“Give women equal rights in every possible respect,” he said. “The birth rate will go down, the population will be stabilised, and humanity will survive.” it for us — and it is the poor people of the world who will suffer most.”

Another patron of the group, the primatologist Jane Goodall, says population growth underlies almost all the problems the world faces. “If there were just a few of us,” she said, “then the nasty things we do wouldn’t really matter, and Mother Nature would take care of it. But there are so many of us.”

When she expanded on the topic at the World Economic Forum in Davos in 2020, Goodall was lambasted by those who disagree that human population growth is to blame for environmental problems. Heather Alberro, a lecturer at Nottingham Trent University, believes such attitudes risk “fuelling a racist backlash” by singling out the world’s poorest people. Alberro believes that the cause of climate change and environmental damage is excessive consumption by the world’s ultra-rich” and “a system that prioritises profits over social and ecological wellbeing”.

In the last few years, a different shift has started to emerge — a population decline, and one that could change the planet. “Most people think we have too many people on the planet,” mused Elon Musk in 2022, “but actually, this is an outdated view. The biggest problem the world will face in 20 years is population collapse.”

UN statisticians predict that world population will peak at the end of this century, somewhere above 10 billion. Not all experts agree.

The Institute for Health Metrics (IHME), an independent Washington-based research organisation on global health, predicts that a peak of 9.7 billion will be reached by 2064 — after which will come a rapid decline. That CFI.co | Capital Finance International

potential decline is linked to contraception, and the education of girls and women in developing countries.

The two largest countries by population are China (1.44 billion) and India (1.38 billion). The growth rate in China is slowing down, with a yearon-year increase of just 0.39 percent growth, while India’s annual growth rate stands at 0.99 percent.

Elsewhere, populations in the developed world are generally static, or in decline. Hungary, Bulgaria, Italy, Poland, Greece and Portugal all recorded a decline in 2022/23. In Africa, 32 countries saw growth of between two and three percentage points in the same period.

A study published in The Lancet in 2020 predicted that by 2100, fertility rates in 183

Summer 2023 Issue

of 195 countries would not be high enough to maintain current populations. The official rate required to maintain a steady population is 2.1 children per family. In many countries, that has dipped; in the UK, it stands at 1.6. Declines in working-age populations are also likely to occur in India and China, which the study says will “hamper economic growth and lead to shifts in global powers”.

Report author and IHME director Christopher Murray says the study should spur governments to start rethinking their policies on migration, workforces, and economic developments related to demographic change.

The societal, economic, and geopolitical power implications will be substantial, the IHME says.

The decline in the numbers of working-age adults alone will reduce GDP growth rates — and that

could result in major shifts in global economic power.

Natalia Kanem, a doctor and the executive director of the UN’s Population Fund, says that while the models, projections and timeframes of institutions may vary, “all signs point towards declining global fertility”. “Protecting the reproductive rights and choices of women will be crucial in this demographic transition,” she says.

And population decline is unlikely to be evenly spread. While the West’s population is predicted to rapidly shrink, growth will continue in many of the poorest countries. By 2100, 45 percent of the world’s population will probably live in Asia, with 38 percent in Africa. Europe, on the other hand, will be home to just 5.7 percent, and North America 4.3 percent.

CFI.co | Capital Finance International

The main driver for population is down to the number of women giving birth, and cultural change will probably have the most profound effect on human numbers. As women’s education is nurtured, more females enter the workforce — and make the choice to have fewer children, at a later stage in life.

Asimov, who claimed to be a feminist despite his allegedly wandering hands, was convinced that gender equality was the answer. Motherhood, he insisted, was not a sacred tradition. For too long, he believed, women had been considered a “subhuman form of men”.

“Those periods of world history in which women have had reasonable treatment,” he said, “the birth rate has dropped automatically. If having children was that great, men would have figured out a way to do it.” i 45

> Turning Passion into a Driving Force is a

Sure Route to Business Success

APIP-Guinée MD Diana Kouyaté, mother, entrepreneur, and Guinean patriot, swears by her homeland’s rich potential.

D

iana Kouyaté has an innate love for her native country, the West African nation of Guinea.

She grew up in the seaside capital of Conakry, where her father honed the questing scientific minds of generations at Gamal Abdel Nasser, the country’s largest public university. Her mother left her native Russia and followed love to a new country.

Diana Kouyaté is no stranger to daring decisions, or to following one’s passion. Taking leaps of faith is a particular skill she inherited from her parents.

After completing high school, she took her first jump in the unknown by moving to Paris for her higher education. After earning a Master's degree in Applied Economics and a Bachelor's in Economics and Management from the University of Paris XII, she held a series of positions in economics studies and project management, mostly in the health sector.

Some say you can never go home again, and after 15 years establishing a career in France, this could well have been true for Kouyaté. But she heard, and heeded, a call from her roots. “I loved my life and my career in Paris,” she says, “but I wanted more. I wanted my work to be more impactful, and most of all I wanted to help my home country fulfil its potential.”

Driven by that sentiment, she uprooted her children, her French life and her career to move back to Guinea.

In a country of opportunities, she quickly found impactful positions. She worked in a delivery unit attached to the Ministry of Agriculture and Livestock, helping to achieve development-friendly policies. She then stepped into the heath sector as managing partner of the Extended Vaccination Programme, under the Ministry of Health.

Her background in econometrics and her experience in development work and project management made her a perfect fit for the Private Investment Promotion Agency (APIP-Guinée). In 2019, Kouyaté was appointed to the position of deputy managing director, and in February 2022 she became the head of the agency.

“I see my work at APIP at the sum of all my aspirations for impact,” she says. “We 46

MD: Diana Kouyaté

focus most of our efforts on two areas. The first is investment attraction and retention, by facilitating procedures for investors and encouraging the adoption of reforms to ease the business climate.” The business registration process now takes less than 72 hours, and is made easier by the customs and tax incentives of the investment code.

“Our second focus area is centred on entrepreneurs,” the MD says. “We aim to strengthen the competitiveness of local SMEs and facilitate their access to financing through targeted support.” Kouyaté has been gratified by investment successes that the agency has supported; most are joint ventures between Guinean and foreign compagnies. Successful partnerships like this in the agri-business and mining sectors have been flourishing.

“Pooling of resources and strengthening our local private sector, while creating profit for international compagnies, is a win-win,” she adds.

“It’s a sure-fire way to ensure the acceleration of our country’s economic development. This is the type of partnership we wish to encourage, which CFI.co | Capital Finance International

is why we work so hard on making our SMEs more competitive.”

In her managerial role, Kouyaté makes a point of mentoring her team members — especially the next generation of female leaders. This also applies to agency activities. "I am a woman, and a mother to a young girl,” she says. “I am well aware that even if women have more opportunities today, the glass ceiling remains a reality.

“It is crucial to boost women in their careers and activities. It is precisely to enable women to overcome this barrier, and flourish, that so many programmes developed at APIP target capacity-building for female entrepreneurs."

Kouyaté notes the €15m, five-year programme implemented by APIP, the French Development Agency (AFD) and the European Union to boost female entrepreneurship, particularly in rural Guinea.

“Guinea is a land of opportunities ready to be seized by investors,” she points out. “APIPGuinée is at their disposal to make ambition a reality.” i

Summer 2023 Issue

> The Oyster’s Gift to the World:

Gods’ Tears, Symbols of Purity, and Mourning Wear for Royalty

By Naomi Snelling

P

assion, beauty, wisdom and wealth — these natural wonders are as rich in meaning as they are in lustre.

The opalescent orbs have been a goto accessory for style icons past and present: Coco Chanel, Princess Diana, Madonna, Anna Wintour, Sarah Jessica Parker, Rihanna, and, of course, Audrey Hepburn, all wide eyes and chiselled cheekbones in Breakfast at Tiffany’s.

The understated beauty and elegance of the pearl, the queen of gems, has enchanted us through the ages.

American poet and wit Dorothy Parker once said, “When I’m cold I just put another rope of pearls on.” Jackie Kennedy, who captivated the world with her timeless style, summed it up in characteristic form when she noted that “pearls are always appropriate”. The cool and unforgettable beauty Grace Kelly also had something to say on the subject: “I favour pearls on screen, and in my private life.” As Princess of Monaco, her love affair with pearls gained a new dimension.

And it’s not only women. Tormented genius Vincent van Gogh said: “The heart of man is very much like the sea. It has its storms, it has its tides, and, in its depths, it has its pearls, too.”

Scarlett Johansson played the titular role in The Girl With The Pearl Earring, a film based on the famous Dutch artwork.

Ever since someone shucked an oyster and found the luminous treasure nestling within, pearls have been objects of desire. It’s difficult to pinpoint when they were first worn, but we do know that they were presented as gifts to Chinese royalty as early as 2300 BC. They were also considered the ultimate status symbol in ancient Rome. Julius Caesar went so far as to pass a law limiting their use to the ruling classes.

So entrancing are they that their mysterious beauty has been woven into mythology, royalty, and religion. In the Arab world, pearls were considered the earthly form of tears from the gods. The ancient Greeks agreed, and believed that Aphrodite, the goddess of love, shed pearl tears. Christians pay reverence to the Pearly Gates at the entrance to heaven. In Hindu culture, pearls are historically associated with the moon, symbolising purity. The English idiom refers to wise words as “pearls of wisdom”. Pearl aficionados can tell the difference between

"So entrancing are they that their mysterious beauty has been woven into mythology, royalty, and religion." natural and cultivated pearls at a glance, but to the uneducated eye they can be tricky to differentiate.

Queen Elizabeth I, aka the Virgin Queen, proudly wore her pearls as a symbol of purity and chastity — and as a display of her immense wealth.

The much-loved and recently deceased Queen Elizabeth II was seldom seen without her pearl necklace as she went about her public duties.

During the reign of Queen Victoria, pearls came to be associated with mourning in the Royal Family. After the death of Prince Albert, Victoria chose to wear only “colourless” jewellery to accessorise her widow’s weeds. She developed a strict etiquette around widows’ mourning rites, including wearing black for a year and a day after the death of their husbands and wearing subtle jewellery.

CFI.co | Capital Finance International

Pearls, with their soft glow, sometimes teardrop shape and association with purity, were accepted as suitable mourning jewellery — and the tradition continues. Queen Elizabeth II wore pearls to her parents’ funerals, and that of her husband Philip, Duke of Edinburgh. Catherine Middleton, Princess of Wales, continued the tradition by wearing the late Queen’s four-string pearl set and diamond choker to the monarch's funeral.

During the nation’s days of mourning, she also wore the late Queen’s pearl-and-diamond brooch to a service at Westminster Hall — paired with her late mother-in-law's pearl and diamond earrings.

Our relationship with pearls is deep and ancient, and to paraphrase the classic parable — the truth itself is a pearl of the greatest value. i 47

> Compelling Case for Making Guinea the

Destination for Your Next Investment

When you consider the appeals and advantages of the West African country, think beyond extractives...

W

orld renowned as the home of the largest bauxite and untapped highgrade iron ore reserves, the West African nation of Guinea is open for business — and welcoming investors from outside the extractives industry.

The country was recently in the spotlight following the relaunch of the Simandou iron ore project. One of the largest mining projects in global development, the Simandou mine is estimated to hold over four billion tons of ore.

The mega project, valued at $15bn, is a joint venture between Rio Tinto, the Aluminium Corporation of China, China Baowu Steel, Winning Consortium and the Guinean company United Mining Suppliers International. As well as iron ore extraction, the Simandou project involves the construction of a port and a crosscountry railway.

Guinea’s resource riches are not limited to iron.

The country is known as the second-largest producer of bauxite in the world (after Australia).

The ore remains the country’s largest export, but refineries backed by government incentives are developing the capacity to locally transform bauxite into aluminium.

While mining continues to be the driving engine of the Guinea economy, other sectors are attracting FDI. Over the past decade, close to $2bn has been invested in the construction of major hydroelectric dams, ensuring energy access to the capital, Conakry, and the major bauxite exploitation zones in the north-west.

With less than 10 percent of its 6,200 MW of hydropower currently exploited, and high potential for wind and solar energy, Guinea is set to become a major exporter of sustainable energy.

The deep-water port and trans-Guinean railroad being built in association with the Simandou mining project typify the national infrastructure boom. Roads and bridges are shooting up, in the seaside city of Conakry and throughout the country, making the transport of people and goods easier than ever.

incentives for social housing construction, and create an agency dedicated to financing and constructing decent, affordable housing.

Housing remains a challenge for the country’s 14 million inhabitants. In the capital alone, there is a shortage of some 500,000 units. This prompted the government to introduce major tax

With 59 percent of the population working in the agricultural sector, it has been designated a development priority by Guinean authorities and their partners. The World Bank Group is injecting

48

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over $140m to develop agri-business, helping the country take advantage of its 13.9 million hectares of arable land, and over a thousand waterways.

Another sector seeing a sharp rise in interest is tourism. With sandy beaches, lush forests, trekking-friendly terrain and unique fauna

Summer 2023 Issue

and flora, Guinea a sure-fire destination for a boom. Major hotel chains and airlines such as Sheraton, Air France/KLM, Brussels Airlines, Emirates and dozens of others have recently extended their reach in the country. Work has just begun on a $200m public-private partnership in the modernisation and extension of Conakry's Ahmed Sékou Touré International Airport. Capacity will increase from 500,000 daily passengers to three million by 2025.

With six bordering nations and maritime access, the country’s geographical location is a major plus —particularly for opportunities coming from the African Free Trade Agreement. Also

advantageous is Guinea’s generous investment code which offers fiscal and tax incentives. The code guarantees investment security by allowing sole ownership of businesses by foreigners and easing the international repatriation of company profits.

For those considering exploring Guinea as an investment destination, there’s a partner ready to help. The Private Investment Promotion Agency (APIP-Guinée) is nicknamed “the Investor’s One-Stop Shop” for a reason. It gathers all the services an investor might need in one place.

From business registration to accessing the incentives of the Investment Code — without CFI.co | Capital Finance International

forgetting aftercare — the agency helps investors to navigate the Guinean business climate.

APIP will showcase the country’s appeal when it hosts the third edition of its Guinea Investment Forum in early March 2024. The first hybrid expo gathered over 1,600 participants in Conakry in 2021, and the second, in Dubai, brought in 1,400. The is braced to welcome thousands more for the third edition.

From infrastructures to agri-business to green energy and eco-tourism, Guinea offers many alternatives to the extractives industry. When you think of Guinea, think beyond mining. i 49

> Joseph E Stiglitz:

Western Industrial Policy and International Law © Project Syndicate 2023

W

ith the enactment last year of the Inflation Reduction Act (IRA), the United States fully joined the rest of the world’s advanced economies in combating climate change. The IRA authorises a major increase in spending to support renewable energy, research and development, and other priorities, and if estimates about its effects are anywhere near 50

correct, the impact on the climate will be significant.

True, the design of the law is not ideal. Any economist could have drafted a bill that would deliver much more bang for the buck. But US politics is messy, and success must be measured against what is possible, rather than some lofty ideal. Despite the IRA’s imperfections, it is far CFI.co | Capital Finance International

better than nothing. Climate change was never going to wait for America to get its political house in order.

Together with last year’s CHIPS and Science Act – which aims to support investment, domestic manufacturing, and innovation in semiconductors and a range of other cuttingedge technologies – the IRA has pointed the US

Summer 2023 Issue

Chief among the naysayers are defenders of neoliberalism and unfettered markets. We can thank that ideology for the past 40 years of weak growth, rising inequality, and inaction against the climate crisis. Its proponents have always argued vehemently against industrial policies like the IRA, even after new developments in economic theory explained why such policies have been necessary to promote innovation and technological change.

It was partly owing to industrial policies, after all, that the East Asian economies achieved their economic “miracle” in the second half of the twentieth century. Moreover, the US itself has long benefited from such policies – though these were typically hidden in the Department of Defense, which helped develop the internet and even the first browser. Likewise, America’s world-leading pharmaceutical sector rests on a foundation of government-funded basic research.

US President Joe Biden’s administration should be commended for its open rejection of two core neoliberal assumptions. As Biden’s nationalsecurity adviser, Jake Sullivan, recently put it, these assumptions are “that markets always allocate capital productively and efficiently,” and that “the type of growth [does] not matter.” Once one recognises how flawed such premises are, putting industrial policy on the agenda becomes a no-brainer.

But many of the biggest issues today are global and thus will require international cooperation.

Even if the US and the European Union achieve net-zero emissions by 2050, that alone will not solve the problem of climate change. The rest of the world also must do the same.

Unfortunately, recent policymaking in advanced economies has not been conducive to fostering global cooperation. Consider the vaccine nationalism that we saw during the pandemic, when rich Western countries hoarded both vaccines and the intellectual property (IP) for making them, favoring pharmaceutical companies’ profits over the needs of billions of people in developing countries and emerging markets. Then came Russia’s full-scale invasion of Ukraine, which led to soaring energy and food prices in Sub-Saharan Africa and elsewhere, with virtually no help from the West. in the right direction. It moves beyond finance to focus on the real economy, where it should help to reinvigorate lagging sectors.

Those who focus solely on the IRA’s imperfections are doing us all a disservice. By refusing to put the issue in perspective, they are aiding and abetting the vested interests that would prefer for us to remain dependent on fossil fuels.

Worse, the US raised interest rates, which strengthened the dollar against other currencies and exacerbated debt crises across the developing world. Again, the West offered little real help – only words. Though the G20 had previously agreed on a framework to suspend debt servicing by the world’s poorest countries temporarily, debt restructuring is what was really needed.

CFI.co | Capital Finance International

Against this backdrop, the IRA and the CHIPS Act may well reinforce the idea that the developing world is subject to a double standard – that the rule of law applies only to the poor and weak, whereas the rich and powerful can do as they please. For decades, developing countries have chafed against global rules that prevented them from subsidising their nascent industries, on the grounds that to do so would tilt the playing field. But they always knew there was no level playing field. The West had all the knowledge and IP, and it did not hesitate to hoard as much of it as possible.

Now, the US is being much more open about tilting the field, and Europe is poised to do the same. Though the Biden administration claims to remain committed to the World Trade Organization “and the shared values upon which it is based: fair competition, openness, transparency, and the rule of law,” such talk rings hollow. The US still has not allowed new judges to be appointed to the WTO’s dispute-settlement body, thus ensuring that it cannot take action against violations of international-trade rules.

To be sure, the WTO has plenty of problems; I have called attention to many over the years. But it was the US that did the most to shape the current rules during the heyday of neoliberalism.

What does it mean when the country that wrote the rules turns its back on them when it becomes convenient to do so? What kind of a “rule of law” is that? If developing countries and emerging markets had ignored IP rules in a similarly flagrant way, tens of thousands of lives would have been saved during the pandemic. But they did not cross that line, because they had learned to fear the consequences.

By adopting industrial policies, the US and Europe are openly acknowledging that the rules need to be rewritten. But that will take time. To ensure that low- and middle-income countries do not grow increasingly (and justifiably) embittered in the meantime, Western governments should create a technology fund to help others match their spending at home. That would at least level the playing field somewhat, and it would foster the kind of global solidarity that we will need to address the climate crisis and other global challenges. i ABOUT THE AUTHOR Joseph E Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

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> Summer 2023 Special

Doing Business With Purpose, On Purpose, and For a Reason Purpose is paramount to younger generations, and research has consistently shown that it’s good for business, too.

A

ccording to Deloitte, purpose-driven companies tend to grow three times faster than their competitors. They claim a bigger slice of market share and achieve higher rates of customer loyalty, workforce engagement, and employee retention. The Harvard Business Review found purpose-driven companies to be more resilient and innovative.

But those benefits come only to those who have embedded purpose across all levels of operations and decision-making. Actions require greater effort than composing corporate mission statements, which articulate why a company exists and which problems it’s trying to solve. Purpose starts in the C-suite — and permeates every level of the workforce. It can serve as a rallying cry, a mobilising call to action.

Employees and consumers increasingly demand authenticity and accountability from business leaders. Workers would like corporate values to align with their own. They want more flexibility and meaningful missions.

The pandemic caused many to reassess their work-life balance, and has sparked what some

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call the Great Resignation. Others find “the Great Reflection” to be a more apt moniker.

But millions have quit their jobs — and the trend continues to gather steam as people become more mindful of what really matters in life.

B Corp certification gives bragging rights to companies prioritising the triple-bottom line: people, planet, and profits. Demand has spiked over the past three years, with more than 6,000 B Corporations certified in 80 countries, across 150 industries. They include Patagonia, TOMS, Aesop, The Body Shop, Alpro, Ben and Jerry's, and Moodle and Coursera.

The business leaders featured in the following pages have created value-aligned brands that resonate with stakeholders.

Most are serial entrepreneurs-cumphilanthropists, who have funnelled profits into passion projects that serve the greater good.

Daniel Lubetzky launched a food line helping foster peace in the Middle East, a tasty and nutrient-dense snack brand promising to “do no harm”, and a venture capital

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firm supporting and shepherding the next generation of transformative companies.

Alexandre Mars wields his wealth like a superpower — in a good way. After selling his start-ups, he set up a foundation to connect donors with vetted non-profits and launched the first transatlantic fund to be certified as a B Corp.

Ginni Rometty is a tech trailblazer who fought for diversity, inclusion, and skills-first recruitment over her near-40-year career at IBM. Hamdi Ulukaya, America’s “King of Greek yogurt”, wrote an anti-CEO playbook that challenges businesses to prioritise people over profits.

Ajay Banga begins a five-year term as the president of the World Bank this June. The former Mastercard CEO says that moral leadership — aka purpose — has never played a more vital role in defining success in the modern business environment.

Even if the purpose-driven strategy doesn’t pan out, the positive impacts remain. Before Chieh Huang’s Boxed went bust, it provided employees with above-average wages and perks that kept morale high and staff turnover low. i

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> AJAY BANGA

Former Mastercard CEO Has US Backing for World Bank Top Job Mastercard’s former CEO Ajay Banga currently serves as vice-chairman at General Atlantic, but now he’s preparing an upcoming role as the World Bank president.

Banga, a naturalised US citizen, began a world tour to lay out his credentials for the position.

It kicked off in March in the Côte d’Ivoire, with a meeting with the president of the African Development Bank Group, Akinwumi Adesina.

Banga pledged to partner with Adesina and the bank to mobilise private sector capital — as well as private sector ingenuity and innovation — to tackle the world’s most pressing problems.

He highlighted inequality, short-sightedness and the tension between humanity and Nature as major concerns — challenges exacerbated by the pandemic, environmental degradation and ripple effects from the Russia-Ukraine war.

Ajay Banga was born and raised in India. After graduating with honours from his undergraduate economics programme, he went on to obtain the Indian equivalent of an MBA. He has gained vast business experience over the past four decades, serving in leadership roles at major multinational companies.

In 1981, Banga began a 13-year career with Nestlé spanning sales, marketing, and general management. He later joined PepsiCo and helped the conglomerate to launch Pizza Hut and KFC franchises in India. He spent another 13 years at Citigroup, where he led the group’s international consumer operations and spearheaded its global microfinance strategy. He spent his last year at Citi as chief executive of the bank’s Asia-Pacific business, splitting time between Hong Kong and Citi’s headquarters in New York.

Banga joined Mastercard in 2009 as the group’s president and chief operating officer. Within a year, he was promoted to president and CEO. During Banga’s decade-long tenure as Mastercard chief, the card company saw revenue triple — and market value increase tenfold.

Banga helped steer the payment firm toward emerging tech such as cybersecurity and data analytics — which ended up generating around half of the company’s revenue.

During a 2020 interview with BQ Prime, Banga called Mastercard’s embrace of innovation and diversification a “real change-maker”.

“The biggest realisation that drove this was to define our competition — not as other payment 54

networks, but as the wider environment of cash,” he said. “That just changed everything: how we approach the market, how we approach technology, how we approach financial inclusion, and our commitments to financial inclusion over the years.”

Johannes Linn, a former World Bank vicepresident, endorses Banga’s bid: “Being from a developing country originally, and having grown up in India, you know, I’m sure he brings a perspective to the development business.

Secondly, his successful career, especially in the finance domain, is very important right now.”

But Scott Morris, a senior fellow at the Centre for Global Development, warns that Banga might find it challenging to build consensus around global-warming policies. Despite the broad-spectrum appeal of the climate finance agenda, there are trade-offs — and competing priorities for funding. Morris believes Banga will have a “fairly tricky landscape” to navigate — particularly with regard to China.

“It’s really hard to see how you make progress on the climate agenda at the World Bank if you don’t have some kind of effective relationship with the Chinese,” Morris told NPR. “And, you know, that’s going to be squarely on his agenda in trying to manage that, at a time when his largest shareholder and the country that nominated him do not really have a pro-engagement stance with the Chinese.”

The World Bank president’s position was vacated

by David Malpass a year shy of his four-year tenure. Banga was approved for the role in May 2023. He will begin a five-year term in June, heading an organisation with billion-dollar budgets to fight poverty and promote people, peace, and prosperity on a global scale.

Banga intends to surround himself with skilled professionals who show strong convictions and commitment. “The leaders who deliver results, now and in the future, will be those who are able to build inclusive cultures and execute under rapidly changing circumstances,” he said.

“You need to harness the collective uniqueness of those around you to widen your field of vision.

In the past, leaders were chosen for what they could deliver, but tomorrow’s leaders will be defined by their good judgement.

“Never has the role of moral leadership played a more important or challenging role in defining the success of a company.”

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> ALEXANDRE MARS

Sharing is Caring and ‘Giving Should Be the Norm’: French Philanthropist “My money is my superpower,” says Alexandre Mars, CEO and founder of Epic Foundation and the sustainability-driven venture capital firm Blisce.

And the French businessman and philanthropist is now putting his “superpower” to work for social good. “I always knew that my life would be a mission,” he said. “It wasn’t my goal to own several houses and a few planes. I wanted to help the world’s most vulnerable, people who aren’t able to fight back.

“There are so many people suffering, and we often assume that the government can solve everything — but the truth is that they don’t have endless money.

“That’s why we believe businesses should be leading the way.”

SERIAL ENTREPRENEUR At age 17, Mars launched a concert-promotion company. As a business student in Paris, he founded one of France’s first web agencies.

After completing his education, he entered the workforce and soon occupied senior positions. He launched the advertising tech firm Phonevalley in 2010, which was eventually sold to Publicis Groupe, and the social media management system ScrOOn, which he sold to BlackBerry in 2013.

In 2014, Mars founded a venture capital firm headquartered in New York and Paris. Blisce was the first transatlantic fund to be certified as a B Corp. It has invested in leading US and EU brands such as Spotify, Pinterest, Headspace and Too Good To Go. The Blisce portfolio includes 12 active and eight exited investments.

The firm is optimistic that entrepreneurship, innovation and purposeful capital can improve the state of the world. Mars believes there is no acceptable financial performance without responsibility. The firm donates 20 percent of the fund’s carried interest to Mars’s non-profit, the Epic Foundation.

In April 2023, Blisce announced the final closing of its second fund, raising $250m. The round was supported by Bpifrance, SWEN Capital Partners, Groupe SEB, BNP Paribas Cardif, and L'Oréal Group. Future investments will focus on the “consumerisation of healthcare and enterprise, generative AI, future of commerce, electrification of the home and tech services for an ageing population”.

CHARITABLE WORK “When I started my first venture, I knew I wanted 56

to change the world,” the altruistic entrepreneur told The Financial Times. “And I realised that the best way to change the world was to have skills, resources or networks.”

After selling his start-ups, Mars had the financial freedom to conduct his own market research on the philanthropic sector. He travelled the world, meeting with thought-leaders, government officials, academics and social entrepreneurs.

He found that funding for non-profits often fell short; would-be donors lacked understanding of the issues, trust in the organisations, and the time to conduct their own due diligence.

Mars launched an intermediary to bridge that gap. Epic Foundation has been connecting donors with vetted non-profit organisations since 2014. The foundation creates “giving solutions” for corporate clients, and supports projects in childhood development, youth equality, education, health, safety and professional upskilling.

Mars has met many wealthy individuals on his entrepreneurial voyage. “When you start having conversations with them about giving, you learn that even if they want to give, it’s difficult because there’s a lack of time, trust or knowledge.”

Mars documented his philanthropic journey in his 2018 book, Giving: Purpose Is The New Currency. “A pitfall emerged in my discussions with donors,” he said, “the lack of trust that comes with an avalanche of options. Scientific studies have shown that when you have more than seven options, you are more likely to procrastinate and make no choice at all.”

Epic Foundation analyses thousands of nonprofit organisations each year and selects just a handful for sponsorship. After the rigorous vetting process, selected organisations can expect at least three years’ support from Epic Foundation.

Mars covers all the running costs — about $2m each year. “The goal is when £1, $1, or €1 is donated to Epic, 100 percent of it is going to the organisations in our portfolio.”

In 2017, Mars introduced the Epic Pledge, which helps founders, investors and corporates share their success by promising a percentage of their proceeds and profits to social causes.

The foundation has an international community of more than 330 pledgers, including Brut’s Guillaume Lacroix, Boxed’s Chieh Huang, and MealPal’s Mary Biggins.

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IMPACT AND ACCEPTANCE As of May 2021, the Epic Foundation has raised more than $30m for 26 charities that assist children and teenagers. Its work has improved the lives of 13 million youngsters.

It partnered with ride-hailing firm Kapten to allow travellers to round-up their fares for small, individual charity donations. It has also partnered with fashion icon Dior, enabling its employees to donate the small change of their monthly paycheques to charities. “After one year, one-fourth of the organisation was giving away money,” said Mars. “It’s big.”

Mars has gained distinction as a pioneer in the field of social impact. The International Economic Forum recognised him as a Young

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Global Leader in 2016, and in 2018 he received the Legion of Honour, France’s highest civilian award.

In his latest book, Mission Possible: How To build A Business For Our Times, Mars lays out a roadmap for founders to create start-ups that are commercially viable — and socially impactful.

“The generation under-30 today is changing everything,” says Mars. “They want purpose.”

The modern world has lost patience with the Ebenezer Scrooges and the wolves of Wall Street. Time has run out for those archetypes, and businesses must adapt to the new norm.

“For the last 40 years or more, the world has been top-down. Someone ‘up there’ has been making decisions for everyone else. But what we can see now is the bottom-up coming to the fore. Things that we have accepted as ‘normal’ or ‘the way things are done’ for so long will no longer be normal.

“Internet disruptors are a big part of that.”

Dubbed “the French Bill Gates”, Mars certainly qualifies for disruptor status. But he prefers a more inclusive approach to philanthropy than the Giving Pledge popularised by Gates and Warren Buffett.

“At first sight, this initiative seems extremely laudable,” Mars wrote in Giving. “The world has CFI.co | Capital Finance International

more billionaires than ever before. Personally, I consider the Giving Pledge an extraordinary initiative. However, the cut-off figure of 50 percent goes against my personal philosophy of giving.

“In my opinion, it gives rise to judgment and stigmatisation rather than encouragement and goodwill. Does someone who gives away 25 percent of their possessions not deserve our respect?

“No matter how much we give, it will never be enough, but I will continue to fight for my belief that giving should become something other — and more — than an obligation: a norm.”

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> CHIEH HUANG

Boxed Falls Victim to Volatility but Chief Exec Keeps His Cool Chieh Huang’s dedication and initiative didn’t quite pay off, in the end — but the Taiwan-born entrepreneur hasn’t lost all hope…

Boxed CEO Chieh Huang defines retail as “the business of making genuine, lasting connections with customers and creating the best, most curated shopping experience possible for every shopper”.

And that’s just what he did with Boxed, an online wholesale store selling affordable items in quantity. Huang started the company from a garage in 2013, and it evolved to become one of the most prosperous e-commerce businesses in the US. At its peak, it had 1,000 employees and millions of dollars in funding.

But Boxed suffered the same fate as many of the businesses going public via special purpose acquisition companies (SPACs) between 2020 and 2021. Firms began to see losses pile up and market caps plummet. Boxed declared Chapter 11 bankruptcy on April 2 this year.

The company now plans to sell off its service-asa-software platform, Spresso, to senior creditors.

EARLY YEARS Boxed CEO Huang was born in Taiwan in 1982 and grew up in North Edison, New Jersey. He earned a law degree from Fordham University and an economics undergraduate degree from Johns Hopkins University. Huang tested the waters as a corporate attorney, but within three years, he was seeking fresh challenges.

In 2010, he launched Astro Ape, a mobile gaming company, while goofing about with friends in his attic. Their efforts caught the attention of a Japanese company and attracted an $800,000 investment before the nascent company was sold to Zynga, a San Francisco-based video-game developer.

Huang launched Boxed in 2013, offering a range of essentials shipped directly to consumers and businesses. The company relied on powerful inhouse tech capabilities. It wrote software, built automation robotics, and ran state-of-the-art fulfilment centres across the US. BOXED SUCCESS Huang obtained investment from backers such as Greycroft Partners, First Round Capital, and Alpha Edison. According to Crunchbase, Boxed raised $365.9m over six funding rounds, including a post-IPO equity round in December 2021.

In January 2023, it announced the approval of 58

up to $20m in financing through a second-lien secured-term loan.

Huang was up against supersized organisations like Sam’s Club and Costco, major players with established economies of scale. He differentiated Boxed by simplifying the shopping experience: no membership fees, for a start. It also offered free shipping on orders above $49 (above $19 for loyalty members).

PEOPLE-CENTRED LEADERSHIP Huang has been praised as a visionary leader for prioritising workers’ wellbeing as a viable part of the firm’s bottom line.

“We are a different way to do business,” he told Entrepreneur magazine. “What drives me personally is to show a future generation that you can be kind to the folks in your company and still do well. You can offer free health insurance and still be profitable. That’s not without its own stress. But we are a pioneer in some of the ways to do business.”

Sometimes pioneers make it, he observed in 2022, and “sometimes they don’t”. Those words proved prophetic this April, when Boxed filed for bankruptcy. But the company’s ultimate downfall has done little to detract from the legacy Huang constructed.

Boxed offered above-average starting wages, covered college tuition for employees’ children, and subsidised special “life events” such as weddings. It also gave each employee access to a $500 emergency fund. Huang insists these perks delivered an exponential return on investment.

Boxed maintained exceptionally low staff turnover — something that can cost companies anywhere up to twice a departing employee’s annual salary.

“At its core, it just comes from me growing up poor and seeing my parents come home pretty beat up,” he told the New Jersey Monthly. “In New Jersey, you have all different types of workers. You get exposed to part of the workforce you don’t get exposed to in [affluent] Silicon Valley.”

Huang argues that business leaders don’t need to chase every penny to be successful. The e-commerce exec is an outspoken supporter of social causes. In 2017, Boxed became the first firm to cover education costs for employees’ children. Boxed supported gender equality measures by fighting against the “pink tax” and refusing to charge extra for products specifically marketed to women. It launched the Rethink Pink Campaign in 2016, dropping the price CFI.co | Capital Finance International

on 20 personal care items to achieve gender parity. Within three years, it had reached a total of $1m in offset discounts redistributed among customers.

Boxed provided employees with a variety of benefits, including health insurance, a 401k matching retirement plan and unlimited holiday time. The company also advocated environmental responsibility through initiatives like its Unboxed programme, which encouraged customers to recycle used packaging.

POWERFUL PLATFORM Boxed saw an uptick in revenue between 2018 and 2021, from $140.2m to $177.3m. The company credited the success to its dedicated workforce and a creative business strategy that blended the convenience of internet shopping with the financial benefits of buying in bulk. Boxed believed the grocery industry would transition to an “online and delivery” model. The bet paid off for several years, allowing the e-commerce upstart to stay ahead of industry giants.

Boxed established itself as a change-making disruptor by offering convenience and a

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seamless, omnichannel experience “that meets our customers where they already are”, Huang said in a World Retail Congress interview. “In addition to our technology solutions, we can provide CPG companies with speed-to-market advantages, as well as valuable customer feedback and purchasing data, which inform their future product decisions.”

Boxed began licensing its tech and services to brick-and-mortar groceries, direct-to-consumer (DTC) brands, and consumer-packaged-goods (CPG) companies. In 2019, it partnered with grocery chain Lidl to provide an express delivery platform. This year, it launched Spresso SaaS solutions on Google Cloud Marketplace, and announced partnerships in DTC logistics and data-driven merchant insights.

Technology was a linchpin of the growth strategy. Spresso, Boxed’s high-margin software and services business, offers an end-to-end software stack for storefront, marketplace, B2B, advertising and fulfilment functionality. Boxed recently began marketing those capabilities in a modular format to activate a wider customer funnel.

END OF AN ERA Boxed began to encounter difficulties just as the world was coming out of the pandemic. The firm had planned to go public by merging with a SPAC in 2022. The deal collapsed, and Boxed considered alternatives, including a conventional IPO or a sale to a bigger business. In December 2021, Boxed went public with the SPAC Seven Oaks Acquisition Corp in a deal valuing the equity of the combined firm at around $900m.

Boxed’s 2022 third-quarter results showed a net loss of $26.4m, compared to a net loss of $5.9m in the same period the year before.

Boxed has now filed for Chapter 11 bankruptcy.

The company plans to wind-down retail operations and turn its Spresso business into a separate legal entity that can be sold to senior creditors. Boxed has promised Spresso clients that there will be no disruption of service during the process.

But the shut-down of Silicon Valley Bank (SVB) had a knock-on effect for the e-tailer. SVB was the 16th-largest bank in the US and the largest in Silicon Valley by deposits. It held most of Boxed’s cash deposits and other liquid instruments. Four days after its closure, Boxed filed a report with the SEC stating that it was “actively soliciting proposals for the sale … of all of its assets, as well as other material transactions that would improve its liquidity position”.

“This was an incredibly difficult decision,” he said, “and one that we reached only after carefully evaluating and exhausting all available options. Although this outcome is not what we worked so hard for, we are thankful to everyone, including our customers, who have supported us along the way.

“We’re in a world where technology companies are certainly not being rewarded with the multiples that we saw in years past,” Huang said. “And there has been a lower sentiment than in years past on e-commerce companies as well.”

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“Looking to the future, we are incredibly excited to watch the Spresso business continue under new ownership. I’m immensely grateful for each and every team member throughout the past decade who has contributed to the journey of Boxed. Through their hard work and dedication, they made a lasting impact on the e-commerce consumables industry.”

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> DANIEL LUBETZKY

Aiming High and Digging Deep to Engender a More Peaceful World From developing healthy snacks to advancing the Middle East peace process, one entrepreneur keeps biting off as much as he can chew.

Serial entrepreneur and best-selling author Daniel Lubetzky has some timely advice for startups seeking funding.

Inflation and recessionary warnings have had investors pumping the brakes, but Lubetzky finds a positive in that. “Investing during a downturn has the benefit of helping to reveal values-aligned partners with the fortitude to navigate challenges and emerge stronger,” he says. “At the end of the day, a good investor is a strategic partner, not just a source of capital.

“In times of major economic disruption, it can be particularly tempting to look for ‘easy answers’ by relying on someone else’s playbook for success.

The most epic journeys don’t follow a road map; they are forged by teams whose values help them navigate the inevitable twists and turns ahead.”

ENTREPRENEURIAL EXPERIENCE The Mexican-American billionaire had a multicultural upbringing, the son of a Holocaust survivor born and raised in Mexico City. He moved to the US with his family as a teenager and studied economics and international relations in Texas, Israel and France. Lubetzky is fluent in six languages.

The altruistic exec began his entrepreneurial journey early. “Back when I was an undergrad at Trinity University, I started a watch company called Da’Leky Times. It taught me a ton about business and retail merchandising that has helped me throughout my career.”

He went on to earn a Juris Doctor degree from Stanford Law School in 1993 and spent brief spells at Sullivan & Cromwell and McKinsey & Company. Lubetzky was drawn to social entrepreneurship and was awarded a $10,000 fellowship to foster joint ventures between Arabs and Israelis. In 1994, he founded PeaceWorks, a “not-only-for-profit” business uniting Middle Eastern neighbours in multicultural understanding and commercial co-operation.

The company produces a line of Mediterraneaninspired pesto sauces and tapenades. Olives for the flagship brand MEDITALIA are grown in Palestinian villages, the glass jars come from Egypt, and the sun-dried tomatoes from Turkey. Five percent of profits go towards fostering peaceful co-existence and economic co-operation.

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“When I was starting PeaceWorks, I considered all of my energy net-positive,” Lubetzky shared in a 2016 Inc interview, “so I didn't filter it. I ended up distracting my team with hundreds of ideas, which was a recipe for overextension. In the consumer / packaged-goods business, that may be the most common mistake — people launch a product, it does well, and then they have this urge to launch more and more and more products.

“And some are mediocre, which makes you vulnerable to competitors.”

Lubetzky used the profits from PeaceWorks to fund further social ventures. He believes business can serve as a vehicle for social change while delivering products and services in a free market. “First and foremost, this is a business,” he says. “But there’s an added reason for being.

It’s not just to make money. It’s also to try to have a positive impact in society, however small that may be.”

In 2004, Lubetzky launched the New York Citybased snack food company KIND. It creates nutritionally dense snacks that are healthy for communities — and the planet. “When I founded KIND, it was just me and a couple of [food-tech friends] in Australia. I had been traveling a lot for PeaceWorks and was frustrated with the food choices on the road. I was always eating things that were either healthy and tasted like cardboard or were tasty and too indulgent.”

Product development took a turn for the better when they landed on an irresistible recipe. “I knew we got it right when I couldn't stop eating it.”

The company brought in $1m in its first year.

Within four years, KIND had secured a private equity investment of $16m from VMG Partners, to provide a cushion of working capital and to fuel expansion plans. Lubetzky says it was the right move at the time — but he accepted a clause requiring the business be sold within five years. The closer the deadline loomed, the more convinced Lubetzky became of KIND’s potential.

“Four years into the deal, I was realising that KIND could become so much bigger,” he told CNBC. “My investors were pushing me to sell the company and were very eager. My vision was to continue growing the company for many years to come. And their vision was to exit and get a return on their investment.”

Lubetzky bought out his investors in a $220m deal funded with company cash and $200m CFI.co | Capital Finance International

in bank loans. “Now, because I hadn’t prenegotiated the terms for buying them out, it turned out to be very, very expensive — and very risky,” he said. “Things could have gone wrong.

I could have lost the company. But I believed in KIND.” That faith was well founded. KIND emerged as one of America’s fastest-growing snack brands.

The buy-back negotiations took two years, culminating in 2014 — when KIND annual sales nearly doubled.

Lubetzky decided to sell the company in 2020; confectionary giant Mars Wrigley took ownership in a $5bn deal. Mars first took a 40-percent stake in KIND in a 2017 deal for an undisclosed amount. “I am still a meaningful stakeholder in KIND today,” says Lubetzky, “and I still guide them. We’ve agreed with our partners at Mars that KIND will be a separate, stand-alone platform, and KIND is still growing by double digits.”

PHILANTHROPIC INITIATIVES Lubetzky has taken a leading role in charitable initiatives concentrating on education, peacebuilding, and community development. KIND has been praised for its social impact activities

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in addition to its commercial success. The company has appointed an action team to lead diversity, equity, and inclusion initiatives, and forged partnerships with historically Black colleges and universities.

KIND has pledged to donate $150,000 through its “Snack & Give Back” project, which will this year be split between organisations supporting homeless LGBTQ+ youth, the families of war veterans, and school food-equality programmes.

The KIND Foundation has distributed $1.1m to people “transforming their communities through kindness”. It has donated $100,000 to organisations addressing systemic racism, such as the Equal Justice Initiative and the NAACP Legal Defence Fund.

In 2022, the Lubetzky Family Foundation launched a $1m programme to support displaced Ukrainian scholars in the US. The initiative is co-organised and sponsored by Michelin-starred chef and humanitarian Jose Andres, global human rights and pro-democracy activist Garry Kasparov, and retired US Army Lieutenant Colonel Alexander Vindman. The four all came to the US as emigrants or asylum seekers, and urge global citizens not to take their freedoms for granted. They hope to

educate peers on the fragility and importance of democracy, and to encourage proactive public engagement.

founded a luxury fashion line that partners with artisans from the developing world and a food company specialising in Mexican cuisine.

FOSTERING ENTREPRENEURSHIP “Over the years of building KIND through every stage of its growth, our team has amassed tons of experience building a formidable culture, beloved brand, and highly successful business by focusing not just on where we are going, but also how we are getting there,” Lubetzky told Retail Brew.

Lubetzky was a frequent guest on Shark Tank, an American reality TV show where aspiring entrepreneurs pitch their ideas to investors. He warns entrepreneurs not to approach investors without a compelling product and a strong team. “Both are necessary — and neither is sufficient without the other.”

Now Lubetzky and some of KIND’s founding members are putting that experience to use at the start-up incubator and investment platform Camino Partners. Lubetzky established the firm, previously called Equilibra Partners Management, in 2018 and serves as its chair.

He remembers how he built KIND up with a $5m initial investment, and he’s eager to pay it forward through Camino Partners. Lubetzky intends to deploy $350m over the next five years, supporting and shepherding the next generation of transformative companies.

According to Forbes, the serial social entrepreneur has an estimated net worth of $2.1bn as of May 2023. Lubetzky also coCFI.co | Capital Finance International

Lubetzky wrote about his Shark Tank experiences in a 2020 article for Fast Company, and highlighted what he calls “the three phases of entrepreneurship”: creative, critic, and crusader.

“At the outset, you want to think outside the box, brainstorm and dream big. Then, once all the crazy ideas are out on the table, you need to be honest with yourself, question and scrutinise.

Play devil’s advocate and poke all the holes you can before you head out the gates and become the crusader.

“It is in the critic phase when you have a unique opportunity to pause and make your product, and your team, the best they can be.”

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> GINNI ROMETTY It Was a Man’s World — but it ‘Wouldn’t Be Nothing’ Without a Woman Like Ginni Rometty...

‘Teaching, hiring and advancing women benefits us all,’ says female tech pioneer.

company, she was appointed as IBM president and CEO in 2012.

Virginia “Ginni” Rometty is, in no uncertain terms, a trailblazer of the tech world.

SUCCESSES AND CHALLENGES Rometty took the helm at a moment of pivotal transformation for century-old IBM. The tech giant has a history of changing leadership during periods of revitalisation, and there was no pandering to her gender. Samuel Palmisano, IBM’s CEO from 2002 to 2011, told The New York Times: “Ginni got it because she deserved it.

It’s got zero to do with progressive social policies.”

She was the first female CEO of American multinational IBM, a corporation with a presence in 175 countries. She shepherded the tech giant through trying times, and established it as a major player in cloud computing.

But Rometty’s reign has not been without controversy. She came in for criticism over the delivery of generous executive bonuses — despite 24 consecutive quarters of declining revenue.

She has spoken about her struggles and triumphs in a book entitled Good Power: Leading Positive Change in Our Lives, Work, and World.

Rometty studied computer science and electrical engineering at Northwestern University in Illinois.

She received a scholarship from General Motors and completed an internship there during her undergraduate studies.

And while she was a pioneer herself, Rometty was also following the footsteps of some female greats of the computer science world — although their names have often been lost to history.

Lady Ada Lovelace is regarded as the first coder in history. She wrote an algorithm in 1833 for a proposed mechanical general-purpose computer designed by English mathematician and computer pioneer Charles Babbage. He never managed to complete his creation, known as the analytical engine — so Lovelace was never able to execute her code. Women contributed greatly to the early days of computing, particularly as codebreakers in World War II, and went on to take roles as data-crunchers in the space race.

In the 1960s, women made up the bulk of the computing workforce, but by 1970, they represented just 13.6 percent of US computer science graduates. Women held 37 percent of the bachelors’ degrees in computer science in 1984; by 2021, that figure had dropped to 18 percent.

Coming into this changing playing field, Ginni Rometty graduated in 1979 and joined General Motors Institute as the head of application and systems development. She went on to become a systems analyst and engineer at IBM in 1981, mastering technical and management positions as she advanced through the ranks. She had staying power, and after three decades with the 62

She steered the company away from low-margin ventures — including parts of its traditional hardware business lines — and focused on rapidgrowth opportunities in data analytics and cloud computing.

“What steam was to the 18th Century, electricity to the 19th and hydrocarbons to the 20th, data will be to the 21st Century,” Rometty predicted in 2015. “That’s why I call data a new natural resource.”

The firebrand brokered partnerships with Apple, SAP, and Twitter. She oversaw the divestment of nearly $10bn in annual revenue — and the creation of a $21bn hybrid-cloud business. One of Rometty’s most notable accomplishments was the $34bn purchase of Red Hat, an open-source software provider, in 2018. That deal, the largest acquisition in the company’s history, continues to support the expansion into cloud computing.

“We’re transforming this company for the next decade,” Rometty said in a 2014 interview with CNBC. “That is not a one-year job Not when you’re a hundred-billion-dollar company.”

The company was entering an era of converging tech trends: AI, big data, mobility, cloud computing and social networking. “Unlike any time in history, you had four or five trends all going at once,” she recalls, “feeding on each other and accelerating.”

During her eight-year tenure, IBM spent more than $133bn on deals, R&D, and capital expenditure, including 68 acquisitions. It wasn’t all smooth sailing; Rometty faced criticism over dwindling sales and a stagnant share price. To reduce costs and boost revenues, in 2014, IBM fired thousands of workers. Rometty defended the layoffs as necessary corporate restructuring.

She received a $3.6m bonus for her performance in 2014, despite declining revenues. The compensation she received for her last two years on the job — with revenue and share price still in the doldrums — was a cool $41m.

CFI.co | Capital Finance International

Her recent memoir, Good Power: Leading Positive Change in Our Lives, Work, and World, contains some relevant snippets of information about that era. “Our challenge was to find that balance between being in service of our existing clients and surviving as a business,” Rometty wrote.

“Who is IBM now? What should we become?”

Regarding IBM’s divested assets during her tenure, she says: “I did all this knowing that it meant no growth for the company at a time when the investment world was clamouring for it.”

She defends her actions as the “right long-term choices”.

Rometty passed the company reins to Arvind Krishna in April 2020, naming him the “the right CEO for the next era”. Krishna started his IBM career in 1990 and worked his way up to lead the cloud and cognitive software division. “He’s a brilliant technologist who has played a significant role in developing our key technologies such as AI, cloud, quantum computing and blockchain.”

Rometty has been an advocate for diversity and inclusion throughout her career. She spearheaded campaigns to bring more women and people of colour into senior roles at IBM. In 2016, she launched IBM’s “New Collar” recruitment programme, which aimed to give training and employment options to employees lacking college degrees. She believes employers could recruit more efficiently, and achieve more diversity, by focusing on candidates’ skills and learning capacity, rather than insisting on university qualifications.

Summer 2023 Issue

IBM worked with schools in low-income areas to provide students with mentorship opportunities and potential employment.

Rometty implemented a SkillsFirst initiative to create on-ramps for people who had been previously overlooked. She struggled against biased notions that the move would dumb-down the workforce — and proved herself right.

“We did a lot of studying of the results, and the net of that was, nope, after about one year, their results were actually equivalent to our degreed people,” Rometty told the Harvard Business Review. “And by the way, they actually took more education; they were thirstier.” She also found that hirings were more diverse. “At first we called them ‘new collar’,” she says. “Not white collar, not blue collar: something new.”

IBM continues to support Rometty’s skillsfirst vision through its Pathways in Technology Early College High Schools, or P TECHs. The collaborative educational reform programmes provide schools with support, resources and mentorship to prepare students for modern tech jobs. Upon graduation of the six-year programme, students have earned a high school diploma and a two-year postsecondary degree in a STEM field — at no cost. Today, the P-TECH programme serves hundreds of thousands of students in hundreds of schools in 28 countries.

Rometty believes this culture is crucial in technology fields, where upskilling is required every two or three years. “You have to be willing to reinvent yourself,” Rometty told the Financial

Times. “If you don’t define who you are, someone else will.”

Rometty continues to advocate for skills-first job recruitment in her role as co-chair of the executive committee of OneTen, a coalition helping black job-seekers connect with opportunities that don’t require university education. It provides wrap-around support services and connects the talent pool to educational and skill-building organisations.

The former exec is currently promoting her book, in which she reflects the journey from childhood poverty to the C-suite of a Fortune-500 company.

It taught her that, to paraphrase the old song, “it ain’t what you do, it’s the way that you do it”.

Conflict resolution is a recurring topic in the book. “There are different ways to run toward conflict,” she explained. “One is to protest, take a stand, and be very vocal. That doesn’t always mean public or private. I think it means keeping your eye on what you’re really trying to get done, and what [provides] the best odds of that happening.

“Whenever you position something so that there’s going to be a winner and a loser, very rarely have I seen that be to anybody’s benefit. If you position something so that there is no way out other than making the other person look like a loser, you’re not going to get done what you have to get done.”

Ginni Rometty has faced numerous difficulties and considerable changes. She has earned a CFI.co | Capital Finance International

reputation as a problem solver, risk taker and forward thinker. She oversaw the company’s transition into fast-growing industries such as cloud computing, AI, blockchain and cybersecurity.

Rometty serves as a role model for girls interested in STEM subjects and women interested in executive leadership. Her exit from IBM coincides with a general exodus of female leaders: Susan Wojcicki has stepped down from YouTube, Meta Platforms lost its chief business officer, Marne Levine, and Sheryl Sandberg left her role as Meta’s COO. “During my time at IBM, our P-TECH programme and changes to our recruitment process brought more diversity, including more women, into our workforce,” Rometty told the Economist. “Other companies should follow suit — businesses that include a variety of perspectives and experiences are more innovative, more competitive and more able to create products that appeal to a whole host of users.

“Giving everyone equal access to education and employment opportunities also promotes women’s economic security — and so will help societies flourish.

“When it comes to science and tech careers, women must not be discouraged, overlooked, or derailed. They must also be paid equally.

Teaching, hiring and advancing women benefits us all.”

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> HAMDI ULUKAYA

Sharing the Love, One Spoonful at a Time Yogurt king Hamdi Ulukaya, the founder and CEO of Chobani, has all his values in the right place.

the idle factory was put up for sell “as-is” for $700,000.

Turkish immigrant Hamdi Ulukaya never imagined himself as a business leader. He grew up in a semi-nomadic Kurdish family, splitting his time between the dairy farm and the grazing herd in the Erzincan province.

He went to see the property the next day. “It took me four hours to find it. It was in the middle of nowhere and was 70 years old,” Ulukaya told the Washington Post. “At some point, you could tell there was a lot of life in there, and there were about 55 people who were closing the factory and just wrapping things up and turning off the lines and all that kind of stuff.”

The family never wanted for quality cheese and yogurt, and Ulukaya now shares his family recipes with the masses as the CEO of Chobani, which has become a market leader in the US and abroad.

“I don’t come from a background of business.

I never thought I would be a CEO or starting a company. In my early days. I didn’t even like this field,” Ulukaya told Time. The business mogul, who’s estimated by Forbes to have a net worth of $2.1bn as of April 2023, marches to the beat of a different drum. He challenges businesses that prioritise profit over people to try a page from the anti-CEO playbook, which he outlined in a 2019 TED Talk.

Ulukaya’s attorney tried to talk him out of buying the plant. If Kraft couldn’t crack yogurt, what chance did he have? Despite the warnings, Ulukaya persevered. He acquired a Small Business Administration loan through a small community bank and got the keys to the facility in August 2005. He named the new business Chobani — which is Turkish for shepherd — and began making the high-protein yogurt that he remembered so fondly from his childhood.

In Ulukaya’s opinion, the US market was ripe for disruption.

“Living in upstate New York, starting a company, seeing first-hand the power of business, how we can make a dramatic change in people’s lives, even faster and more sustainable than sometimes government and other organisations.

When I saw that side of things, I fell in love.

“For years, I had asked why yogurt was so bad here. I was always told yogurt had to be sweet to appeal to Americans,” Ulukaya told Inc. “But when people go to Turkey or Greece, within 15 minutes of their return they start talking about how much they enjoyed the yogurt there.”

“And then money becomes this tool, a powerful tool. Today we are over $2bn in sales with over 2,000 people. This social side of us — to be mindful of being impactful in our communities and societies — is really what drives us every day.

If you take that out for any reason, we wouldn’t be as successful as we are today.”

Greek-style yogurt is thicker and tangier than the familiar brands found in American grocery stores. It is strained to remove most of the liquid and whey, but that process isn’t unique to Greece. It originated in the Middle East in the Fifth Century, and the word “yogurt” is derived from Turkish. The yogurt now eaten all over world was popularised in the US as “Greek” thanks to marketing campaigns, first by the Athensbased company Fage in the 1990s ,and then by Chobani in the early 2000s.

Ulukaya worked on the family farm with his six siblings before studying political science in Ankara, then moved to the US to take English and business courses in New York. He worked on a farm in upstate New York before launching a feta cheese venture, which, despite its popularity, had barely broken even by the twoyear mark. Ulukaya says they were some of the most challenging years of his life — but they helped set the stage for the next chapter of his entrepreneurial journey.

Ulukaya chanced upon a sales advert for an old yogurt factory and initially tossed the mailer; within 20 minutes he had dug it out of the trash.

Kraft had previously run the plant, but when the food conglomerate sold its yogurt business in 2004 to CoolBrands International for $59m, 64

Chobani began cropping up in retail chains, and Ulukaya told Entrepreneur that within five years, it could be found “in every major supermarket, in club stores, convenience stores and airports”.

From that point, the company’s struggle to keep up with demand began. “By 2012, we were a billion in sales in that old factory,” he said.

“We had over a thousand people, and we had not raised a penny to do so. We did it all by ourselves.”

According to Crunchbase, Chobani raised $750m in funding through a debt financing in 2014 from the private equity firm TPG. Chobani CFI.co | Capital Finance International

finished paying back the loan in 2017, but TPG still owned warrants that could have been converted into more than a third of Chobani equity. The company cut ties with TPG in 2018, when it brought on the Healthcare of Ontario Pension Plan (Hoopp Capital Partners) as a new long-term investor. The financial terms of the deal were undisclosed, but Hoopp received a 20 percent position in Chobani. Chobani used the funds to buy out TPG’s remaining warrants.

SUCCESS AND INFLUENCE OF CHOBANI Chobani benefits from a lower net operating profit after-tax margin than most of its competitors. It consistently generates over $1bn in revenue.

Ulukaya expects $2.5bn in sales for 2023.

Last year, the company withdrew its (twicepostponed) plans for an IPO, citing unfavourable market conditions. Instead, it will focus on the strong execution habits that have helped to make it a household name while continuing to drive profitable and sustainable growth.

Ulukaya told Time that he’s never seen Chobani as a short-term project and doesn’t feel pressured to go public — but an IPO is still on the cards.

“We’re very patient to keep our independence so we can do what we promise, which is making delicious food and making it accessible for the larger population.”

The company continues to expand the product line-up with non-dairy alternatives, like oat milk,

Summer 2023 Issue

plant-based coffee creamers, ready-to-drink coldbrew coffee and plant-based probiotic drinks.

Chobani has manufacturing facilities in New York, Idaho and in Australia, its second-largest market.

PHILANTHROPY AND SOCIAL JUSTICE Ulukaya believes in the power of community and the proactive advocacy of social justice. He’s also a signatory to the Giving Pledge, and has committed to donate the majority of his personal wealth on or before his death.

Following the devastating earthquake in Turkey and Syria, Ulukaya pledged to donate $1m and up to $1m in matched donations for the aid relief. The goal was met and Ulukaya donated $2m in total to Turkish Philanthropy Funds, a New York organisation that has been supporting emergency aid and long-term relief programmes since 2011.

Between 2020 and 2021, Chobani donated 10.5 million products to fight food insecurity and advocated for policies aimed at ending hunger for millions of children.

In 2016, Ulukaya launched the Tent Foundation, which unites more than 300 companies committed to hiring, training, and mentoring refugees. When he first started Chobani, Ulukaya heard that there was a nearby community of refugees with the motivation and legal permission to work, but

lacking the transport, language and skills for employment.

Ulukaya acquired buses, hired translators, and started training refugee recruits. He found that they were soon able to provide for their families and integrate with their new communities — and they have become some of his most productive and loyal employees.

“It turned out to be one of the most amazing aspects of my journey with Chobani,” he told Inc. “Aside from it being the right thing to do, I saw how this infusion of unstoppable human spirit brought everyone at the company closer together.

In that little town, where I was the second guy with an accent, we eventually had over 15 different languages ... People from all over the world, shoulder-to-shoulder, making yogurt.”

THE LEADERSHIP STYLE OF ULUKAYA Ulukaya has initiated a profit-sharing programme for Chobani employees. Nearly a third of Chobani employees were born outside the US. In the first quarter of 2021, the company began paying a $15 hourly wage, more than double the federal minimum. Ulukaya also launched an incubator for food start-ups.

All of these efforts underscore the exec’s commitment to put people over profits. “Just about anyone can make a good product,” he says, “but it's the people that count. In the end, it's the employees who will take it from a kitchenCFI.co | Capital Finance International

table idea to the next level. There are a lot of important things in business, but the ‘people’ portion comes first.

“You can call it social entrepreneurship; you can call it whatever you call it. If you create an environment where everyone is passionate, equally recognised, the product is making changes in people’s lives, the community is benefiting, in the end, it makes things a lot easier.”

He told Forbes: “You sleep better; have fewer meetings, motivational speakers and bosses.

From the profit-making perspective, it’s the smartest thing to do. In my opinion, business — the motivation of creating wealth and value — is good, there’s nothing wrong with it.

While I’m doing this, I’m making an impact on peoples’ lives in a positive way, so it’s win-win for everybody.

“Business is the biggest force that can make a difference in people’s lives. It’s not an NGO, just a business; the only difference is the consciousness.”

Ulukaya says purpose-driven companies will continue to win over the younger generations of clients, consumers and talent. “For them, the notion that the sole purpose of business is to make money is yesterday’s idea. They want to support and be part of the companies that are truly committed to making the world a better place.”

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> Europe

When Cruises Bring Bruises to Delicate Destinations, Great Care Is Called For

By Brendan Filipovski

Venice and Slovenia are becoming victims of their own tourism success stories.

Venice: Saint Marks Square

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urope is finally moving into a glorious summer. The pandemic seems finally over, and the winter was milder than expected.

Many business operators are hoping for a bumper year, but for some European destinations, tourism has forever changed. The sprawling continent is one of the world’s most popular drawcards. The pandemic cut international tourist numbers by 70 percent in 2020. The next year saw a modest 19 percent increase, but it was not until 2022, after the omicron wave subsided, that tourism truly rebounded — International visitors increased by 110 percent.

The global average also rose — to 63 percent of pre-pandemic levels — and Europe is nudging towards a full recovery.

The rebound has been led by short- and longhaul tourists from the US. Thanks to a strong US dollar, some destinations even surpassed pre-pandemic visitor numbers. There is some optimism that China, open to the world once more, will send another surge of visitors.

Some Eastern European destinations are still feeling the impact of the war in Ukraine, but destinations in the southern Mediterranean region have recovered quickly. One hotspot in the Med, however, is hoping that visitor numbers do not return to previous highs.

Venice, “la Serenissima” — (the most serene) — doesn’t need so many crowds. Locals had long been protesting about the number of huge cruise ships visiting the lagoon. That sentiment only intensified during the respite provided by the pandemic. In 2020, cruise ship passenger numbers fell by 99 percent. Suddenly, locals could go to grocery stores and cafes without having to jostle through a sea of tourists taking selfies.

Venice relies on tourism. The sector generates around $2.2bn annually for the city and is the top employer. Business owners and city councillors are understandably cautious to hobble the place with too many restrictions.

Like a bobbing gondolier, the city is looking for balance. It wants a socially sustainable number of visitors that brings revenue for locals — without driving them out of the city or turning the place into a theme park. The population of the old town, Centro Storico, peaked at 174,808 in 1951. Today, it is around 50,000.

Day trippers provide an easy target for restrictions. They contribute the least, per capita, clog the main thoroughfares, and leave tonnes of rubbish behind. The garbage bins in Piazza San Marco need to be emptied every 30 minutes during high season.

To manage the situation, the city is to introduce a day-tripper tax and booking system. Tourists will need to book in advance to enter the city, with 68

"Venice relies on tourism. The sector generates around $2.2bn annually for the city and is the top employer.

Business owners and city councillors are understandably cautious to hobble the place with too many restrictions." a cap placed on daily numbers. That quota will be based on data collected from mobile phone signals and security cameras in the old town.

Visitors will also have to pay a tax €3 and €10, depending on the season; visitors staying longer are taxed on their first five nights.

The measures were due to be introduced on January this year, by they have been delayed.

Some local councillors and businesses were worried that the measures go too far and could dry up tourist numbers like a canal hitting low tide. Given the sheer weight of tourists, the limits are likely to be adopted — eventually.

Another problem facing Venice is the percentage of homes rented out by Airbnb. It drives down the housing supply for locals and reduces affordability. In 2023, in the old town, there were around the same number of tourist beds as residents. The city mayor, Luigi Brugnaro, wants to restrict Airbnb rentals to a maximum of 120 days per year.

Less than 200km from Venice is Ljubljana, the capital of Slovenia. In 2016, it was named Europe’s Greenest Capital; National Geographic voted Slovenia the most sustainable country in 2017. It has developed a green certification programme leading the EU’s push towards sustainable tourism.

The EU adopted the Strategy for Sustainable Tourism in March 2021. It included measures to help the European industry during the pandemic, but also envisioned a transition to a more sustainable, responsible, and smart method of operation. The strategy builds on earlier initiatives including the 2013 Guidebook on Sustainable Tourism and the 2007 agenda for sustainable and competitive tourism.

The EU wants to ensure that the industry is part of a wider green transition. It wants to develop eco-tourism — 29 percent of Dutch, 23 percent of Spanish, and 18 percent of Germans identify nature as the primary motive for choosing a holiday destination.

With around 60 percent of the country covered by forests, Slovenia boasts some of the most untouched landscapes in Europe. In recent years, it has begun to leverage these strengths.

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In 2009, it introduced the first elements of the strategy, and in 2014, the Green Scheme of Slovenian Tourism was introduced. This green certification system is a mark of quality that indicates achievement of national and international standards. It includes the Global Sustainable Tourism Criteria for Destinations (GSTC), the European Tourism Indicators System, and the global Green Destination Standard. Some 280 destinations, operators, and parks have been certified. They include the forests of Kocevsko and the region of Bela Krajina, rich in folk traditions.

The scheme addresses the marketing front by bringing international attention to the country.

At the Global Green Destinations Days 2021, seven Slovenian destinations were named in the top 100 list. In 2022, Conde Nast Traveller magazine ranked Slovenia in its top 12 sustainable destinations.

The Slovenian Tourist Board helps destinations and operators to gain certification. The system is about continual improvement rather than a oneoff marketing exercise.

“The Green Scheme of Slovenia Tourism is process-oriented,” says tourist board director Maja Pak. “It’s not only about proving how sustainable you are presently, but to get you the tools and coaching to help you develop and improve.”

Assessment is carried out by GoodPlace, a local company licensed by the Global Sustainable Tourism Council.

GoodPlace provides assessments aligned with global sustainability standards, and has an office in the Azores.

The Slovenian government has developed a strategy for employment in the industry, and plans to introduce a national scheme. Successful sustainability must include the workers.

European tourism will be looking to finally break through 2019 visitor levels this year, with that increased emphasis on sustainability, and Slovenia will be leading the way. Venice, meanwhile, is looking to control visitor numbers.

Opposing lobbies will need to work out a middle ground between tourist crush and pandemic quiet. i

Summer 2023 Issue

> Care, Fairness, Trust, and Respect Allow

Copernicus to Look Beyond

Deep financial expertise and a holistic approach to business drive Swiss firm’s expansion.

I

ndependent financial group Copernicus is true to its name: it puts its clients firmly at the centre of the business universe.

Founded in Switzerland in December 2016, Copernicus has offices in Lugano and Zurich.

The group is majority-owned by its founding partners, and is comprised of Copernicus Wealth Management, Finpartner Financial Services, and Thalia Capital Advisors.

For large and complex estates, Copernicus deploys all aspects of its expertise to care for clients’ assets. Services range from wealthand succession planning and family office services to asset management, risk advisory, and consolidated reporting.

Firmly established in a stable business environment and supported by a loyal client base and a skilled team, Copernicus focuses on the efficient delivery of holistic expertise to create value over time.

Chief Executive: Marco Boldrin

To ensure the quality of its products and services, Copernicus supports and encourages staff training and education, at all levels.

Complementary skills are key to the group’s united corporate culture, with transparency, feedback, and knowledge-sharing as the norm.

Banking on these qualities, the group is on a strategic expansion path, looking to grow its business organically and by external lines.

Chief executive Marco Boldrin says he has great faith in the strength of the Copernicus team “and in our experience in providing support to clients”.

Individual attention means that various degrees of complication in clients’ wealth structure can be ironed-out and simplified. In the current environment, many independent actors in Switzerland are required to structure their companies in response to the broader scope of regulation.

At the same time, selected banks’ stability is being put into question, says Boldrin. “We see a real opportunity to grow our business substantially within Switzerland, catering to the same type of clients that form our current strategic target.

“Our values speak to the concerns that wealthy clients and families have in the current, unstable environment. Among that set of

Lugano, Switzerland: Via al Forte 1

values, ‘care’ is the standout: an expression of how we stand out in a crowded market.

Switzerland or abroad, and we welcome any opportunity to present our vision.”

“At the heart of our growth ambitions is the skillset of our team, delivered in an independent way, free of product- or service constraints. We seek growth by external lines, with similarly minded professionals. We’re open for dialogue with prospective partners in

Copernicus Wealth Management, authorised since 2017 by the Swiss Financial Market Authority as a manager of collective assets, offers dedicated fund vehicles for the management of personal wealth, and manages a set of funds for external distribution. i

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> Vive, Île-de-France!

Go-ahead Region Takes Its Leading Role on Sustainability to Its Heart As a capital region, this historical part of France is a major European political and financial hub.

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he Île-de-France region is globally recognised, thanks to the cultural heritage of Parisian landmarks and sites of historical and artistic importance.

It is equally famous for the broad range of activities developed by local authorities, and is hailed as one of the most attractive territories in the world in touristic, economic, and financial terms.

With state-of-the-art industrial sectors and major French companies headquartered there, home to extensive farmlands and almost half of national R&D teams, the region is an economic and financial hub that accounts for 30 percent of the French GDP. More than 12 million inhabitants, representing 18 percent of the national population, are spread across eight counties. These encompass the Parisian metropolis as well as substantial agricultural and forest areas. Île-de-France is a regional government centre; 209 representatives, elected for six-year terms, form its executive body, chaired by Valérie Pécresse. She is the head of 10,300 agents working together on regional development. As the region is responsible for secondary education, transport, co-financing some tertiary education buildings and a lot of others competences like social housing, the agents have a wide range of functions.

They are legal experts, accountants, town planners, SME support, IT specialists, architects, engineers, vocational training specialists and project managers, and their role is to implement the decisions taken by the Regional Council.

To efficiently cover all these topics, the Ilede-France manages an annual budget of €5.5bn. Sustainable development is a priority for the local authority, and has been for years.

Genuine attention is paid to implementing environmental assessments and green goals. The 2023 Regional Master Plan (Schéma Directeur Environnemental de la Région Île-de-France) is a clear demonstration of this: it has been redesigned to specifically focus on environmental challenges. The region includes its financial strategy early in this commitment. Since 2012, it issued 11 green and sustainable bonds for a total of €5.2bn.

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Deputy General Manager: Paul Berard

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Summer 2023 Issue

initiative as it strives for continual improvement.

The sustainable bonds issuance process is framed by a reference document, The Green, Social and Sustainability Bond Framework, which highlights the screening process applied to all funded projects. This document was updated in 2021 and respects the most rigorous norms. The framework is aligned to the ICMA principles and emphasises the use of proceeds, project evaluation and selection, management of proceeds, and reporting and external review.

The region is working on alignment with European Taxonomy Regulation, and integrates technical screening criteria (TSC) on climatechange mitigation, and the Do No Significant Harm (DNSH) criteria for transport. A revision of the document is under way, aiming to extend DNSH criteria to all projects. Île-de-France is also planning a green budget to highlight the way it responds to environmental and social challenges.

Finance directorate team

These responsible bonds have covered almost all its financing needs since 2016, raising the region’s profile in sustainable investment policies, financial strength, and ESG quality.

The executive committed to 100 percent green and sustainable financing in 2019, on the first conference on territorial sustainable finance

hosted by the region. Thanks to this pledge, 85 percent of the authority’s outstanding debt is green and sustainable — and there is a commitment to achieving 100 percent by 2028.

The Ile-de-France region complies with existing sustainable financing standards, and takes the CFI.co | Capital Finance International

Paul Berard is the deputy general manager in charge of finance, and the finance directorate monitors initiatives with operational departments.

A Sustainable Finance Committee, set up in 2022, discusses annual reporting projects and green and sustainable funding practices.

The latter gathers managers from the finance, ecological transition, transport, and high-schools divisions, and two qualified personnel from the École Polytechnique and the Paris Region Institute, regional body dedicated to territorial studies. i 71

> Access Granted:

Simple Policies in a Complicated Financial Ecosystem The Access Bank UK Ltd is a Nigerian success story that has passed the $100m milestone for three years in a row.

T

he Access Bank UK Ltd is a wholly owned subsidiary of the Nigerian Stock Exchange-listed Access Bank Plc.

Income growth saw the bank pass the $100m milestone — for the third consecutive year — in 2022. It was the first Nigerian Bank in the UK to be appointed as correspondent to the Central Bank of Nigeria, and to undertake infrastructure work on behalf of the Nigerian government. It issues letters of credit on behalf of the Nigerian government and Nigerian National Petroleum Corporation (NNPC).

It also provides trade finance, commercial banking, private banking and asset-management products and services for customers in their dealings with Organisation for Economic Cooperation and Development (OECD) markets and support companies wishing to invest in and trade in African, MENA, and Asian markets.

In the recently published report and statutory accounts for 2022, the bank demonstrated yet another year of significant all-round growth, achieving and exceeding the targets for all main growth strategies.

Like its parent, The Access Bank UK Ltd is committed to developing a sustainable business model. This is reflected in its moderate appetite for risk, its passion for customer service, and a commitment to build long-term relationships by working in partnership with customers.

It plays a key role in the group’s mission to be “the world’s most respected African bank”. The Access Bank UK Ltd doesn’t chase unsustainable yields as a route to growth. Instead, it focuses on building business through the strength of its customer relationships.

The Access Bank UK Ltd is a direct member of the three key UK payment-clearing systems: Bacs (Bankers’ Automated Clearing Services), C&CCC (Cheque and Credit Clearing Company’s Image Clearing System) and Faster Payments. The Access Bank UK Ltd’s Chief Executive Officer and Managing Director, Jamie Simmonds, said it was “a great landmark for us, enabling us to build a sustainable platform with direct entry into the UK payment clearing system”.

He said this would enable the bank to enhance its level of customer service. “We have a clear

CEO & Managing Director: Jamie Simmonds

commitment there, and we anticipate and respond quickly to market needs with the right technology, products and services,” he said.

“Joining the UK payment clearing system is a clear example of meeting the needs of our customers.”

The Access Bank UK Ltd provides a number of services to support business activities in Africa and around the world. “We were awarded Confirming Bank status by the International Finance Corporation as part of its Global Trade

The Access Bank UK Limited offices in the heart of the City of London

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Summer 2023 Issue

Finance Programme,” said Simmonds, “further strengthening our trade finance capabilities.”

The commercial banking team offers relationship-based service for corporate and individual customers, with competitive rates, market leading systems, and top-quality service.

That last point is key and “through our Private Bank we offer investment solutions to our discerning customers,” said Simmonds, “who value trust, integrity and accountability as well

as investment performance. We take a proactive approach to product and service delivery, and offer unique investment solutions tailored to our customers’ needs by a highly experienced private banking team”.

that has proven so effective for The Access Bank UK Ltd. “The combination of the Dubai branch and our presence in the UK and Nigeria delivers a wealth of expertise that significantly benefits our customers,” Simmonds points out.

The Access Bank UK Ltd — Dubai Branch offers a broad range of products and services to assist customers in the MENA region with trade and investment needs in Nigeria and Africa. The DIFC Branch is committed to building a long-lasting relationship in the region, in line with the approach

The Access Bank UK Ltd provides employees with ongoing support and development opportunities, reflecting corporate pride in their dedication and professionalism. “We are very proud that Investors in People (IIP) has awarded us platinum status.”

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The Access Bank UK Ltd DIFC Branch situated in the iconic Gate Building of Dubai

The bank is led by an experienced team dedicated to delivering superior financial solutions to businesses and individuals.

Staff members have worked in international marketplaces, and offer a wealth of knowledge and in-depth experience.

Entitled Growing Internationally, the statutory accounts report highlights a strong operational performance by the main strategic business units (SBUs), and continued growth and expansion in Africa and the MENA region. Continuing income growth saw the bank pass the $100m milestone — for the third consecutive year — and achieve $131.5m for the year, an increase of 18 percent.

Trade Finance continued to be the largest SBU, growing overall income by 12 percent to $62.6m, up from $55.8m in 2021.

Correspondent banks, excluding the parent, contributed income of $32.6m, representing 17 percent growth over 2021’s $27.8m.

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The commercial banking division showed the largest growth of any of the SBUs, with income reaching $49.7m (against $37.6m in 2021) an increase of 32 percent year-on-year. Leveraging its proven relationship-based model to support customers at a critical point in Nigeria’s postpandemic economic emergence was a key factor.

Asset management showed a significant boost in income to $8.1m, a 62 percent increase on $5m in 2021.

Jamie Simmonds said of the results: “A difficult global trading environment did not impact on another strong core performance, with the bank increasing operating income to $131.5, the third year in succession that it has passed the important $100m income milestone.

“We increased operating income in 2022 to $131.5m, a rise of 18 percent on the $111.1m achieved in 2021, despite the negative impact on the Russia-Ukraine conflict on global CFI.co | Capital Finance International

financial markets, inflation, central bank rates, and commodity training.”

Chairman and Non-Executive Director Herbert Wigwe added: “Securing the approval of French regulators for the bank to open a regulated branch in Paris, which will be operational 3rd quarter of 2023, was the highlight of a strong financial and operational performance in 2022.”

“I offer thanks to our customers for their support, and for entrusting us with their funds which, for the first time, now exceed $1.25bn in terms of customer deposits.’’

The Access Bank UK Ltd is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. The Access Bank UK Ltd — Dubai Branch, situated in the iconic Gate Building of Dubai International Financial Centre (DIFC), is regulated by the Dubai Financial Services Authority (DFSA). i

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B2B GAMING SERVICES: WINNER Best Online Gaming Platform Solution – Europe 2023

> You Can Take This to the Bank:

Online Gaming is Here to Stay CFI.co in conversation with Gabriel Chaleplis, Founder of B2B GAMING SERVICES: Gaming forward in the innumerable ways people understand, use and enjoy technology.

B

HOW DO YOU FOSTER INNOVATION WITHIN YOUR ORGANISATION? We are committed to deciphering the macro challenges and staying agile. The ultimate value of this culminates in the fact that time alone renders much of the planning obsolete, primarily because by the time any project is ready for delivery, the conditions are altered, and the offer no longer matches what the customer wants.

2B Gaming Services (Malta) Ltd is an industry-leading provider of comprehensive platform solutions to sports betting, casino, and games in regulated markets.

Its omni-channel offering and fully managed service packages have for more than two decades made the company the partner of choice for toptier clients.

WHAT ARE THE KEY STRENGTHS OF THE TEAM YOU LEAD? HOW IMPORTANT IS YOUR SUPPORT TEAM? Teams make it happen! We are organised along a “businesses and functions” matrix. A project leader in one project may at the same time serve in the function of consultant in another, and have an operational support role in a third.

We have seen that silos have helped no one, and working with us is, above all, an educational experience — for everyone, including myself.

Founder Gabriel Chaleplis has an unrivalled understanding of the gaming world, and an appreciation of the benefits that AI can bring to the sector. ` WHAT EXCITES YOU ABOUT THE BUSINESS WORLD IN GENERAL? The fact that one needs to be a pragmatist and a visionary at the same time. The world of business is never at a standstill, it is continuously elaborated with unknowns. The constant in this equation should be ethics and respect for one’s values. Every business decision is deemed to have circular effects, and leaves a footprint to society.

WHAT ARE THE KEY TRAITS OF A GOOD CORPORATE LEADER? Besides integrity, self-awareness, courage, respect, empathy, and gratitude, a good corporate leader needs to be a good listener, to give clear instructions, to devote time to problem resolution, and to offer suitable rewards.

We need to be pragmatic on how we modulate the puzzle towards our business objective, and visionary as to what the end result will contribute to the “big picture”.

B2B GAMING SERVICES Founder: Gabriel Chaleplis

WHAT LESSONS HAVE YOU LEARNED OVER THE COURSE OF YOUR CAREER? The key learning is that as we are in a technologyintensive business, we need to always stay ahead of our customers’ needs — and surprise them with innovation.

To make this happen, we abide by an agile operational matrix and always think of ourselves as “servant-leaders”. B2B Gaming Services was a “start-up” well before the invention of the term. We have maintained the same enthusiasm through the years, and we are always in the action process, setting new things in motion. It’s a matter of attitude.

WHAT MOTIVATES AND ENTHUSES YOU ABOUT THE BUSINESS YOU NOW LEAD? That leadership is something you earn every day.

Through the years, we have abandoned more than we have adopted. We value emotional intelligence and act by it. We have stayed prudent, low profile, and resilient through numerous challenges.

I surely take pride in that, but we never rest on past accomplishments. We act by reciprocity, and will continue to do so for society at large.

WHAT IS SPECIAL ABOUT YOUR ORGANISATION’S MANAGEMENT STYLE? We act with organisational agility. We have long abandoned pyramid leadership. Every role in the organisation is transformed to a “servant-leader” function. That’s not just to satisfy company objectives, but also enable overall structures, think “outside-in”, and effectively react to broader challenges.

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WHAT IS THE MOST IMPORTANT QUESTION PEOPLE SHOULD ASK ABOUT YOUR BUSINESS? How does one achieve and maintain the respect of customers, partners and competitors?

The story of B2B Gaming Services isn’t a story about overriding competition, or development to its detriment. It is a common path and parallel development — because the future is always shared. i

Gabriel Chaleplis, founder of B2B GAMING SERVICES, is a multi-awarded international entrepreneur of pioneering large-scale operations, fostering the future in the fledgling online betting and gaming sector (Cyprus, Germany, Greece, Italy, Romania, South Africa, Spain, The United Kingdom), merging mutual core capabilities to global leadership.

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> B2B GAMING SERVICES: WINNER Best Online Gaming Platform Solution Europe 2023

Online Gaming Sector Quick to Appreciate Role of AI to Reduce Risk — and Empower Growth Gabriel Chaleplis, founder of B2B Gaming Services, commenting on fostering AI: ‘The plough did not replace the farmer.’

A

rtificial intelligence is taking every industry by storm — and online gaming has been right there, ready and waiting.

In these fluid times, all industries are experimenting with AI — but Malta Based B2B Gaming Services had already charted its own path, and clearly saw the technology’s role an enabler for growth.

Since it began operation in the UK in 1997, the company has adopted an agile operational matrix which has differentiated it from competition — and led to some notable achievements over the years.

That operational matrix is iterative, non-linear, and delivers the objective throughout its lifecycle.

The company’s core is centred on values of trust, flexibility, empowerment, and co-operation.

It has realised projects relating to its gaming system, operation and management services, system licensing, software design and development, product installation, and tech support.

"The challenge is to 'Be the change' in the AI revolution."

B2B Gaming Services increased system sensitivity and response to observed and predicted threats. The architecture incorporates direct mechanisms to compile threat information — and eliminate them with a response rate that can be counted in seconds. The architecture also provides active detectors to lessen threat exposure and reciprocate with sustainable loops.

Data robots are employed, and a series of shields have been developed to address security at every level.

That architecture is rapidly progressing towards its “intelligent” future. What this means, in practical terms, is that the system will be able to use great volumes of data history and minimise the need for human intervention to detect risk factors and reduce them to almost zero.

ENHANCED CUSTOMER PROTECTION During the insular social conditions of the pandemic, it was predicted that people would be more likely to expose themselves to irresponsible gaming. The company adopted machine learning to understand customer behaviour, catch signs of addiction, and help customers to self-impose safe limits.

reality leagues (eSports), improved content suggestions based on big data, and mitigated data-feed disruptions.

B2B Gaming Services has long recognised this approach, which is apparent in the innovations it has introduced.

ENHANCED GAMING OPTIONS With betting on many sports events suspended or cancelled due to lockdown measures — and with customer psychology progressively rooted in the market — a new environment was developed.

ENHANCED CUSTOMER FOCUS Time and resources were dedicated to further empowering customer experience, with new payment methods, customer verification and CMS Apps, a new design for cash-out and betting slips, and a unique bonus wallet.

ENHANCED DATA SECURITY The online betting and gaming customer needs sophisticated protection measures to safeguard play and ensure responsible gambling.

B2B Gaming Services relaunched its entire mobile and desktop platform, increased its investments in livestreaming, boosted streaming coverage, released electronic and simulated

The company tackled major issues of the traditional project management approach (Waterfall) by adopting progressive web app (PWA) technology. B2B Gaming Services

There is an in-depth understanding of gaming as a service, and of the company’s cultural role as a “servant-leader” for the customer. This has brought about a series of innovations across the business.

Servant leadership is a philosophy built on the awareness that the most effective leaders are those who strive to serve stakeholders — customers, partners, employees, and the community at large — rather than accrue power or assume control.

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NOVEL PORTFOLIO OPTIONS To improve cross-selling to sports betting and female customers, the company presented novel portfolio aggregates, customised to customer needs.

RESHUFFLING OF CASINO PROVIDERS To optimise the changing needs of casino customers, B2B Gaming Services reshuffled its partnerships. It prioritised casino providers with expertise in virtual sports offerings, and acquired the best virtual sports offerings.

ABANDONING WATERFALL Pyramid leadership structures and traditional management schemes were recharted. Every role across the organisation transformed to a “servantleader” model. This satisfied company objectives, and enabled “outside-in” thinking to tackle broader challenges.

The ultimate value of being agile and understanding the servant-leader role rests on the fact that time alone renders a lot of planning obsolete. By the time the project is ready for delivery, the conditions have altered and the offer no longer matches customer wants.

B2B Gaming Services sees AI as an opportunity to avert enfeeblement of the industry, and foster empowerment.

While the Fourth Industrial Revolution technologies, driven by AI, will continue to change the way we work and live, it’s important to remember that the disruptive technology lacks emotional intelligence. AI can work only with inputted data, and its creative process is limited to data received. Nor does AI have soft skills: humans make AI functional.

According to B2B Gaming Services founder Gabriel Chaleplis, the challenge is to “be the change” of the AI revolution, and ensure ethical, responsible, and inclusive action. Chaleplis believes that progress is impossible without disruption, and the applicable discipline is that of being agile. AI is understood and utilised as an enabler for growth.

Gaming Forward with AI: Gabriel Chaleplis, Founder B2B GAMING SERVICES

launched a PWA to address the fact that 53 percent of mobile visits are abandoned if a site takes longer than three seconds to load.

advantages of the web and mobile apps for a better and seamless user experience, regardless of platform.

The PWA is a website that looks and behaves like a mobile app. Users can add it to the main screen of their smartphones and access it exactly as they would with any other app.

There are benefits for connectivity issues, and — most importantly — it combines the

It uses less data than native mobile apps, and there is no need for customers to find it in the app store. It can navigate to the site on any browser, including Chrome and Safari. It focuses on reliably loading faster, even working offline, and uses fewer data.

CFI.co | Capital Finance International

To illustrate how this approach is being implemented in practice, B2B Gaming Services is helping bettors to access a wealth of information and data usually available only to bookmakers. This will empower them to make informed decisions, using data and analytics to assist their betting strategies. The use of advanced algorithms and machine learning will enable the provision of personalised recommendations and insights to individual users. Most importantly, with responsible gambling features such as self-exclusion and deposit limits embedded in the very foundation of the company, risks will be mitigated. i

B2B GAMING SERVICES (MALTA) LTD is an industry-leading provider of comprehensive platform solutions to sports betting, casino, and games in regulated markets. www.b2bgamingservices.com 79

> Hydro, Hydro, and Off to Work

Go Your Euros — RENAIO Has Its Game Plan All Worked Out Unique combination of technology and sustainable asset management.

H

ydropower is key to accelerating and diversifying the global energy transition — and RENAIO Assets, founded in 2019, has embraced that trend.

Today it is a leading asset manager for hydropower in Europe. RENAIO focuses on financing infrastructure projects, and optimises and operates hydro-powerplants with its own technicians. And with great success.

The company started out just four years ago, with an unusual approach for an asset manager.

RENAIO is not only focused on identifying attractive investment opportunities in sustainable energy production, but its team also includes engineers and hydropower specialists. They ensure, that facilities within the portfolio operate optimally and efficiently.

It has developed its own servicing and control software called the RENAIO Monitor to achieve these goals. The software allows technicians to

perform "predictive maintenance". Computeroptimised service plans with real data-recording significantly reduce downtime and maintenance schedules for turbines and other highmaintenance parts. RENAIO has been awarded the ISO 9001:2015 quality management certificate for the area of "purchase with technical takeover and operation of power plants".

To ensure the best support and efficiency, RENAIO co-operates with local companies for care and inspections, and has maintenance contracts with turbine manufacturers and the designers of hydropower plants.

RENAIO’s predictive maintenance management together with technical improvements can transform low-performing hydropower plants into high efficiency ones. By optimising the plants, efficiency can be increased by up to 20 percent.

In contrast to traditional asset management companies, RENAIO covers the entire value

chain: Purchasing, commercial-, technical-, and risk management, investment consulting, and sales.

Group managing director Oliver Platsch explains the underlying philosophy: "By offering our particularly green fund, we wanted to show that power generation does not necessarily have a negative impact on the environment. It creates a profitable offer for Investors who value highly sustainable investments. That's why we focus exclusively on investments in renewable energy projects."

Hydropower offers several benefits: Electricity generated this way represents the only baseloadcapable power of all renewable energies. There are currently more than 157 gigawatts of installed hydroelectric capacity across the EU, and some 10,000 plants in the Alpine region alone. These are “technically mature” and cost- effective to operate.

The plants allow for more than 5,500 operating hours per year — and hydropower boasts the highest efficiency among all sources of power generation: more than 90 percent. Nuclear power

Management

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is 33 percent efficient, wind power 30 percent, and photovoltaics 20 percent. Hydropower offers a high return per kilowatt of installed capacity.

The expected returns for hydropower plants with less than 5MW in Europe range between one and 10 percent, with Italy, Poland and Slovakia currently offering the highest yields.

Only 3.6 percent of funds in Europe meet the strict requirements of Article 9 — and the RENAIO Infrastructure Fund Water is one of them. This classification is an important part of the EU-Disclosure Regulation (SFDR) and makes it easier for investors to measure the sustainability of financial products. This is proof that the company is serious about its commitment.

The EU released its Sustainable Finance Action Plan in March 2018. The objective is to ensure stricter compliance with the principles of the UN's 2030 Agenda for Sustainable Development, and the goals of the Paris Climate Agreement.

With the RENAIO Infrastructure Fund Water, 100 percent of the assets are sustainable

investments, according to the SFDR directive.

As of December 31, 2022, the taxonomy ratio of the fund is due to cash positions 93 percent, with a minimum required ratio of 85 percent due to the SFDR directive. "We are very proud of the fact that our investment fund is a pioneer of sustainable investments in Europe, and one of the 'Dark Green Financial Products' providing exceptional environmental benefits," says Andreas Grassl, managing director at RENAIO Group.

Environmental commitment can pay off for investors, too: they have seen an average annual return of 8.5 percent since the fund’s launch in 2019. Investment in the mutual fund is less volatile, as it is not listed on a stock exchange and functions largely independently of economic cycles. Investors also benefit from the fact that capital committed and subscribed is invested swiftly — typically one to three months.

Minimum investment is €200,000.

There is permanent compensation for electricity fed into the grid, and this provides predictable income in the long term through guaranteed electricity prices and a long-term cash flow CFI.co | Capital Finance International

with stable, partly guaranteed payments. Since hydropower is deemed to be one of the pillars of the energy turnaround in Europe, an investment is “future-proofed” and offers an appealing riskreturn profile with easily calculable dividend yields.

Investors have a holding period of two years, after which they can terminate with 12 months' notice, enabling them to be flexible in the face of unforeseen events. An investment in the RENAIO Infrastructure Fund Water is considered an infrastructure investment with an overall horizon of more than 10 years.

Investors receive annual financial statements with an auditor's report, including a review and performance notes. An overview of the activities in the fund and in investment properties is distributed quarterly.

The open-ended hydropower fund focuses on medium-sized and smaller institutional investors. Currently, the majority are BaFinregulated pension funds and insurance companies. As of June 2023, the fund's AUM totalled €103m. i 81

> An Acronym with History and

an Eye on the Future: LBBW’s ‘Niche’ is Global, and Growing

A

s its name suggests, Landesbank BadenWürttemberg — LBBW to its friends — has its roots in Baden-Württemberg, in south-west Germany near the borders of France and Switzerland.

With total assets of €324bn, it is one of the largest banks in Germany, and present in the world’s major economic and financial hubs.

LBBW places its expertise at customers' disposal, with the unofficial motto: “We’re just as involved and innovative as you are. Because we think and act like an entrepreneur.”

In 2022, LBBW generated €901m in operating profit before tax. Despite market volatility and geopolitical crises, it was the highest company profit since 2006. And that figure excluded the effect of a 2022 consolidation that bolstered before-tax profit to €1.9bn. LBBW achieved this via a business model aimed at growth and relevance by supporting socio-economic development through sustainable innovations.

It provides its services as a mid-sized universal bank to companies, retail and institutional customers and savings banks. As an institution under public law, LBBW is owned by the Federal State of Baden-Württemberg, the Savings Bank Association of Baden-Württemberg, and the City of Stuttgart.

LBBW has earned a reputation as a bank you can depend on, in good times and bad. Trust is indispensable for a long-standing partnership in banking. The relationships that LBBW has cultivated have stood the test of time — sometimes over generations. “Wherever you are headed as a professional or individual,” a spokesperson said, “we are there for you and will provide the financial backing to enable you to achieve your aims.

The LBBW Group has some 10,000 employees at 100 locations throughout Germany. Its head offices are in Stuttgart, Karlsruhe, Mannheim, and Mainz. LBBW serves international customers at 17 locations in 16 countries, including the US, the UK, and Singapore.

“We know that companies don’t grow by themselves; they need capital and first-rate advice in their financing ventures. It’s been in our DNA for the past 200 years to operate on a sound basis while at the same time taking bold moves, and breaking new ground.

This mission statement is valued by companies of all sizes, from SMEs to global corporations.

“We work hard to earn this trust, each and every day,” the spokesperson said.

The bank highlights its identity as a mediumsized universal bank, its strategy and its corporate values in its corporate brochure.

The quality of the bank’s services have won it recognition, confirmed by numerous awards and prizes. It focuses its energies on four strategic areas of action. It leverages its strength as a midsized universal bank and directs its energy to its customers.

A statement reads: • We support our customers as they adopt new business models in today's data-driven and connected world — and, in turn, seize all the opportunities afforded by digitalisation.

• We are increasingly agile. We make decisions quickly, co-operate with others, and learn 82 180

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Summer 2023 Issue

continuously to be able to respond ever more flexibly to customer requirements.

• Sustainability is an integral part of LBBW's strategy, doing our bit to cultivate a growing market for green investments. We help our customers to make the successful transformation to more sustainable business models.

LBBW has become the first choice for companies, but it also caters to international banks and SSAs, commercial real estate and institutional customers, and the public sector. BW Bank, which is part of the group, has private customers and foundations in its portfolio.

LBBW fulfils the role of a central bank for the savings banks in Baden-Württemberg, Rhineland-Palatinate, and Saxony. It caters to retail customers, private individuals and SMEs in the core market of Baden-Württemberg via BW Bank, which fulfils the role of a savings bank in Stuttgart.

Landesbank Baden-Württemberg has more than 200 years of experience — and consistently high scores from international rating agencies. LBBW ranks among the most active issuers worldwide.

The primary markets team partners with clients seeking to raise capital through the issuance of new securities.

LBBW leads the market for euro-covered bonds in terms of trades and volume. Last year, 73 covered bond issuers chose LBBW to leadmanage as many as 97 transactions. LBBW is actively involved in four of every 10 trades — more than any other dealer. That’s proof positive of LBBW’s continuous involvement in the market across market cycles and windows – whether risk-on, risk-off, or in-between.

As well as the largest market share, the bank has the largest number of jurisdictions, the most international franchise, the record for the most deals executed on one day, and leads the field in ESG-covered bonds.

CFI.co | Capital Finance International

The international recognition of the capabilities of the LBBW DCM department means it can serve a diverse issuer base with less bias on its home market. The bank enjoys respect for its strategic covered bond issuance, distribution capabilities, and execution.

LBBW’s boon to the sector is the reduction of execution risk and the delivery of incremental demand for an ambitious pricing outcome of strategic deals. Another plus is the issuer's ability to spot the right issuance windows and offer maturities that best suit investor demands.

This flexibility and efficiency provided issuers across all relevant jurisdictions access to the covered bond market when it is needed most — even during turbulent market phases. With extensive market expertise developed by the sheer number of transactions placed, LBBW is the frontrunner in terms of giving qualified advice to first-, second-, and third-tier banks. i 83 181

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CELEBRATING 160 YEARS

Summer 2023 Issue

> Book Review - Lake Wobegon Days by Garrison Keillor

Big Sky, Modest Ambitions, and an Incisive Peek into Small Town Life

By Tony Lennox

When Europe’s huddled masses washed up on America’s eastern shores in the 1800s, those seeking to “breathe free”, as suggested by the sonnet at the foot of the Statue of Liberty, headed west.

G

arrison Keillor tells their story, in a way — but he doesn’t focus on the brave frontiersmen who carved through challenging landscapes to reach a promised land. His tale revolves around those who got as far as the wild Dakotas, didn’t like the look of them, and stayed where they were.

Welcome to Lake Wobegon.

Keillor’s fictional small town, set in the heart of Minnesota, sits almost apologetically on the fringe of the Great Plains. In Lake Wobegon Days, he makes no secret of its modest founding principles of “this’ll do”. Wobegon is said to mean, in a Native American tongue: “We sat all day in the rain waiting for you.”

This is a town where everyone knows everyone else’s business; a slow, quiet place, but with an undercurrent of private passions, love and hate, joy and despair. Like Minnesota itself, this theme is rarely explored: how the various strands of old Europe melded into something new. In this place, settlers — despite reservations about each other’s religions — somehow got on with things.

“It’s been a quiet week in Lake Wobegon,” is a phrase Keillor uttered for 40 years on his public radio show. His lugubrious (but humorous) monologues are the day-to-day accounts of ordinary folk in an ordinary place. In 1985, he decided to bundle some of these broadcasts together in a book. It was a rare example of print following broadcast media, and it became a bestseller.

Lake Wobegon Days is not quite a novel; it’s more of a rambling collection of funny and sad stories woven into a single tapestry, describing the seasons, the landscapes, the traditions, and — most of all — the slightly melancholy humour of the people of the prairies.

The characters’ accents carry hints of Sweden, Norway and Germany, from where the original settlers trekked. They have surnames such as Bunsen, or Ingquist, or Gustavson. Some are Catholics who worship at the Church of Our Lady of Perpetual Responsibility, others are Lutherans.

Lake Wobegon is a place of barns and silos, with no structure higher than two storeys. On Main Street stands the Statue of the Unknown

"Keillor’s writing style has been compared to Mark Twain and James Thurber; it is deceptively simplistic."

Norwegian, which points to the stars, but leans drunkenly sideways.

It's not entirely fiction; Keillor grew up in such a town, and Lake Wobegon Days encapsulates some of his childhood memories. “In a town where everyone was either Lutheran or Catholic,” he writes, “we were neither one. We were Sanctified Brethren, a sect so tiny that nobody but us and God knew about it, so when kids asked what I was, I just said Protestant. It was too much to explain, like having six toes. You would rather keep your shoes on.”

Keillor’s writing style has been compared to Mark Twain and James Thurber; it is deceptively simplistic. There’s a rhythm to it, as he picks CFI.co | Capital Finance International

his way through the anecdotes and transforms the apparently mundane into something extraordinary. His genius lies in incisive observations of the tics and foibles of folks living their ordinary lives.

There’s kindness and comfort in there, but also jealousy, stupidity, and occasional cruelty. The reader is frequently taken down the path of pathos before the spell is broken with a pithy line that is funnier still because it emerges from the dark.

Above all, this is a book about ordinary people adapting to an extraordinary landscape. The endless horizon and the infinite sky lead you to consider your own place in the world. i 85

> Ghost Town’s Part in a Musical Revolution in

English Midlands

By Tony Lennox

Coventry became the nexus for an edgy and addictive fusion of Jamaican ska and British punk rock: Two-Tone.

I

n the early 1980s, it was said that if England was a vinyl record, Coventry would be the hole in the middle. The wry humour wasn’t lost on the youngsters growing up in a city in chronic decline.

The automotive industry was collapsing, unemployment rising, racial tensions simmering.

The city’s crumbling, brutalist architecture added to a sense of hopelessness to the overall mood. In the words of The Specials’ hit of the time, Coventry was “coming like a ghost town”.

Race riots were sparking from Toxteth to Brixton, and Coventry saw its share. Yet from this dangerous stew an exciting new musical genre emerged: Two-Tone. The fusion of ska and punk rock was radical, political, and multicultural. It became the soundtrack of youthful rebellion in Margaret Thatcher’s buttoned-down Britain.

Reggae was already popular, but far from mainstream. It was the sound of Jamaica, exported to England and played — loud — in West Indian bars and clubs across the UK. The first reggae hit in Britain was the bouncy My Boy Lollipop, by Millie Small, in 1964. Even as Desmond Dekker and the Aces reached number one with The Israelites in 1969, the genre remained a novelty.

Jerry Dammers was growing up in Coventry at the time, in a multicultural working-class community. He heard Toots and the Maytals, The Skatalites, Prince Buster and Jimmy Cliff, and the music struck a chord. “I just wanted to know how to play it,” he recalls. Dammers figured out what made the ska trick tick: off-beat rhythms that rendered the tunes so danceable.

He founded The Specials, launching the TwoTone label in 1979.

Two-Tone was a crackling response to the social chaos of the times. The Specials’ first hit, Gangsters, was overtly political; “I dread to think (think) what the future will bring / when we’re living in real gangster times,” sang an unsmiling Terry Hall.

Such was the power of the group’s live performances that Hall and fellow vocalist Neville Staple were arrested at a gig in Cambridge, accused of inciting a riot. They were actually trying to stop one.

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Two-Tone style, almost as important as the sound, was influenced by the Mod fashions of the 1960s — pork-pie hats, sunglasses, suits and shiny boots, matched with neat haircuts and frowning faces.

But those faces, crucially, were black and white.

For a while the distinctive monochrome checks and the Walt Jabsco “Rude Boy” logo seemed to be everywhere. (Jabsco, a fictional character based on an old photograph of reggae star Peter Tosh, was named for an old bowling shirt owned by Dammers.)

The label gathered pace, attracting bands like The Selecter, and Birmingham’s The Beat. Each line-up was multicultural. The high point of TwoTone was the release of The Specials’ Ghost Town in 1981. As DJ and film maker Don Letts put it: “Ghost Town perfectly captured the atmosphere of the time; the mood of the country.”

CFI.co | Capital Finance International

Rhythm guitarist Lynval Golding took an early pressing of Ghost Town to a Coventry nightclub to see how it sounded in a dance environment.

It was a disturbing trial: he was attacked and stabbed by racists. Golding continues to perform, but now lives with his family in Seattle. On a recent return visit to Coventry, he noted a lack of racial tension. It was no longer the dangerous place of his youth.

The Two-Tone phenomenon burned brightly for just a few years before fizzling out in the mid1980s, but it influenced a new generation of musicians, including Madness, UB40, Boy George and The Police.

And that off-beat reggae sound is now definitely mainstream. i

Summer 2023 Issue

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> The Fine Art of Mastering the Lower Mid-Market Offering As a leading direct lender targeting the lower mid-market in Northern Europe, CORDET provides bespoke financing solutions that target attractive, risk-adjusted returns.

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ince 2013, CORDET has been providing bespoke solutions to lower mid-market companies with revenues of up to €150mn.

The firm’s choice of geographical target, and its deal structuring, led to the launch of two new direct-lending funds. Their success has contributed to the expansion of the CORDET network and fostered key relationships with portfolio companies and investors. To date, CORDET has invested in excess of €750m in the process.

This approach remains the cornerstone of the operation, and aims to provide institutional investors attractive, risk-adjusted returns. That perhaps explains the attractiveness of the lower mid-market. CORDET’s strategy has been to find out how superior returns can be achieved without enduring higher risk. The potential of those aims has been demonstrated, by investing in portfolio companies with low structural risk and robust documentation focused on capital preservation and downside protection.

DIRECT LENDING PLUS+ The CORDET team has a wealth of experience — some 20 years across deal execution, workout experience and credit analysis. This has allowed investors access to a market which has generated a higher return-per-turn of leverage and low structural risk — something the team refers to as Direct Lending Plus+.

"CORDET’s strategy has been to find out how superior returns can be achieved without enduring higher risk."

The Nordic market is dominated by bank lending, and as a result, Direct Lending accounts for just five percent of the European market. Leverage in the region is also higher-than-the market average.

This makes the Nordic market particularly difficult to tap — and where specialists like CORDET come in, with deep local networks, direct relationships, and multiple sourcing channels.

The ability to tailor CORDET-sourced deals allows investors to benefit from selected lower midmarket transactions. The Direct Lending Plus+ strategy allows them to benefit from additional components, such as warrants, which provide additional upside without added risk. This is also true of capital preservation, where maintenance covenants are used to identify potential risks early in a deal’s lifecycle, enabling the team to intervene if necessary.

Portfolio companies with a low loan-toenterprise value-ratio (LTV), low leverage, and robust documentation demonstrate some of the characteristics that protect against risk. Lower leverage, and carefully constructed terms, have resulted in deals with higher average margins with respect to leverage. That makes these transactions more attractive to institutional investors.

CORDET’s approach to bespoke financing has contributed to the development of its relationships with institutional investors and portfolio companies who both view CORDET as a supportive partner. In the case of the investor, successful transactions have helped to forge a trusting relationship and as a result, investors with further capacity are often given the opportunity by CORDET to participate in new deals as co-investors.

CORDET’s ability to tailor terms has provided an additional avenue for investors to access a market requiring specialist experience.

With regards to portfolio companies, strong performance opens further opportunities to raise more capital through add-on facilities. CORDET’s

ability to construct bespoke terms ensures that financing is fit for purpose and supports portfolio companies’ future growth and stability. As a result, existing borrowers often re-engage with CORDET when seeking additional financing for growth initiatives including acquisitions.

Investing into existing borrowers, also contributes to consistent deployment which in turn provides investors security in the deployment of their capital.

DIFFERENTIATED APPROACH Selection is crucial to the performance of CORDET portfolios, with layers of criteria to identify the credit quality of the investment pipeline. Those criteria are founded upon four pillars that speak to the CORDET strategy.

The pipeline undergoes another layer of screening, centred around the ESG framework, before being assessed through the CORDET investment process. The pillars are linked to CORDET’s key differentiators, ensuring that each fulfils the founding purpose of the direct lending strategy. The selection process filters and identifies investments which are supported by characteristics that ensure low structural risk — and adhere to the geography and sectors in which they operate.

The credibility of this process is upheld by the independent credit team, which oversees the investment process and provides an independent assessment on viability and risk. CORDET’s local network and sourcing model provides access to a deep pool of credit, which ultimately drives dealflow and allows for a higher-level of selectivity.

Collectively these factors contribute to an offering that aims for a service and return that is more attractive than the typical strategy: Direct Lending Plus+. The service is founded on its determination to provide tailored financing at an attractive, risk-adjusted return through a differentiated investment selection process. That process is grounded in an ESG framework, acting in support of investors and portfolio companies alike. i

"CORDET’s approach to bespoke financing has contributed to the development of its role as supportive partner for institutional investors and portfolio companies."

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Summer 2023 Issue

Founder & Co-Managing Partner: Jakob Lindquist

> Finance Expert Knows Which Questions to Ask — And Where to Find Answers A banker, a businessman ... and a trained military interrogator? Meet Jakob Lindquist.

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ORDET Managing Partner Jakob Lindquist founded the company in 2013 — and the buck stops with him. He takes overall responsibility for management of the business.

Lindquist is a permanent member of CORDET’s Investment and Credit Committee, originating new investments and playing an active role in ongoing portfolio management. He has been an investor, investment banker and corporate financier throughout a business career spanning three decades.

He worked at Morgan Stanley between 1990 and 2012, where he was a senior member of the investment banking and capital markets EMEA management teams.

"He has been an investor, investment banker and corporate financier throughout a business career spanning three decades."

Jakob Lindquist is a financial services industry specialist, serving as a trusted advisor to many of Europe’s largest banks, insurers, and asset managers. As the co-head of Morgan Stanley’s Global Financial Institutions Group EMEA, he led more than 100 EMEA professionals in corporate finance and capital markets — the CFI.co | Capital Finance International

firm’s largest practice area by revenue and number of professionals.

He was stationed at Morgan Stanley’s London and New York offices, and spent extended periods in Asia. He has executed projects in 25 countries and has more than 200 announced career transactions to his name. Those accounted for more than $375bn in M&A and $125bn in Capital Markets.

Lindquist studied finance and accounting at the Stockholm School of Economics, and Russian Language and Eastern European Studies at Uppsala University. He is a Lieutenant in the Royal Swedish Navy, having completed officer’s training as a Russian military interrogator at the Armed Forces Intelligence & Security Corps (TolkSkolan). i 89

> Defining Client Expectations — and

Quietly Exceeding Them — is the XM Philosophy That’s Proving a Winner

There are plenty of brokers out there — but there aren’t many like XM — a powerhouse that harnesses innovation to create tailored, lightning-fast trades.

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ew brokers are entering the online trading world every day, but some names tend to stand out. XM is one of those names. Amassing over 10 million clients since it was founded in 2009, XM’s meteoric rise has taken it to true global status - and it has firmly established itself as a respected industry leader. XM has earned that reputation for reliability and trustworthiness.

Achieving that has required a unified policy of business principles, and XM’s first focus was to prioritise client needs. That dedication is evidenced in its products, services, and the dedication of its customer experience teams. The broker delivers unparalleled trading products and services to keep up with — and stay ahead of — diverse global demand. It not only achieves that, it does so while offering personalised services that suit the individual needs of every trader.

XM offers over 1,000 trading instruments, including some 50 currency pairs and CFDs on metals, energies, and stock indices - with the spreads as low as 0.0. It offers low-cost accounts that can be tailored to meet the multilevel needs of all traders.

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"The broker delivers unparalleled trading products and services to keep up with — and stay ahead of — diverse global demand."

These products are built on a solid technological foundation. XM uses its cutting-edge equipment and expertise to continue a tradition established over a decade ago — pioneering lightning-fast execution, and a strict “no re-quotes and no rejections” policy.

Almost all trading orders — over 99 percent of them — are executed in less than a second. This means traders can rely on the swift and reliable execution so essential in the top echelons of online trading.

CFI.co | Capital Finance International

One of the firm’s crowning glories is the wealth of education and learning resources that it bestows on traders — at no charge.

Free webinars, live trading sessions, offline workshops and tutorials help traders of all levels to improve their skills and achieve their goals. Education is key, and XM delivers just that through expert, experienced trainers.

The company’s specialists are standing by to instantly provide traders with the real-world tools and resources needed for success.

Underpinning XM’s entire offering is that uncompromising commitment to its customers.

The firm takes pride in going above and beyond to meet the unique and variable needs of every trader. Communication is another key to success, and with a support team versed in 30 languages — backed by 900 professionals with years-long experience in the financial industry, XM is a broker that delivers. Traders understand that, and are putting their trust in the firm they know will deliver for them — no matter where they are, or how long they’ve been trading. i

Summer 2023 Issue

> Doors Closing: Mind the EU Gender Pay Gap

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omen in the EU continue to be paid less on average than their male colleagues and counterparts. Even in the same sector, the discrepancy exists — and most of the time it goes under the radar, because wages are seldom publicly visible.

This is about to change. The new EU Pay Transparency Directive obliges companies to disclose wage rates to uncover, and then close, the gender pay gap.

"The new EU Pay Transparency Directive obliges companies to disclose wage rates to uncover, and then close, the gender pay gap."

discrepancies from arising in the first place.

Social partners are to play an increased role in enforcing the guidelines.

Companies that do not comply will be fined.

This, says the chief negotiator of the S&D group, Evelyn Regner, is the only way to ensure compliance.

likely to hold management positions. Femaledominated professions such as nursing are also more poorly paid. But even disregarding these structural causes, the gap remains. In Germany, for example, women in the same industry, with comparable qualifications, earn salaries on average six percent lower.

TRANSPARENCY IS CRUCIAL Regner — a member of the Committee on Women’s Rights and Gender Equality and vice-president of the European Parliament — identifies the crucial importance of transparency.

“Without it, it is simply impossible to take action against wage discrimination,” she says.

“With the new EU rules, workers, and women in particular, will be better equipped to assert their right to equal pay.”

In the EU, women earn on average 13 percent less than men per hour. And the pay gap varies greatly from country to country: while it is less than four percent in Slovenia, Romania and Luxembourg, it hits 22 percent in Estonia and Latvia. Austria and Germany aren’t far behind, with 18.9 and 18.1 percent respectively.

From now on, companies with more than 100 employees must disclose salaries, and the pay gap is to be closed with transparency guidelines.

All salaries must be disclosed, and any gap of more than five percent must come with a solution for equality.

According to Regner, all workers will be able to share information about their pay, internally and externally. This means an effective ban on non-disclosure clauses, and ensures that women don’t have to go to court to prove discrimination.

The onus is on companies to prove the opposite.

STRUCTURAL CAUSES Women are more often employed part-time and do unpaid care work; they are also less

The EU Pay Transparency guidelines prohibit recruiters from asking applicants about their current salary. This is enforced to prevent salary

Wage discrimination is a systematic problem, not an individual one. It should also be tackled systematically. i

On March 30, the EU Parliament adopted directives to challenge the inequality. New regulations enforce transparency, and all company salaries must be disclosed to allow workers to compare rates and identify differences.

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> Daily Challenges of a Matchmaker:

Linking the Benevolent With the World’s Most Deserving Projects

By Christa Atwood Relationships director at Club10m+

‘My work is done when I find two people, one with the money and one with the idea — that’s the magic, and why I get up every day’.

— Christa Atwood

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lub10m+ is a London-based brokerage seeking ethical investors for projects that benefit people and planet — and relationships director Christa Atwood is the matchmaker in the middle.

“We find projects and then we find investors. Our core business is brokering. I build relationships with amazing people around the world.” This is Club10m+’s second year of operation as a finance marketing company, and a promising one — though not without challenges.

In the current economic climate, where are the investors coming from? “Well, it would be nice if we had some venture capitalists who had the same ethos (as us),” Atwood says. “That would be amazing.” But, she adds, it’s unusual. “I’ve yet to find one that I’m very comfortable with: their past taints their future, in my mind. They can be quite ruthless. But we’re open to all types of investors, as long as they align with our clients.”

Atwood and CEO David Hirschfeld team up with two office staff and a brace of “introducers” — David Honeyman and Olivier Blandin — who come on board as advisors on new projects.

Club10m+ rues the frustration of finding ethical projects and willing investors who truly want to make a difference... “It’s not easy,” admits Atwood. “I’ll be honest, it’s taken a while to embed into the culture, even though we’d been doing it before. Finding suitable investors is always a challenge, especially when no one wants to part with money. In the past few years, it’s been incredibly difficult.”

There are other, more predictable challenges for her to circumvent or solve. “It’s quite a ‘boys’ network’ — you’re either in the club or you’re not. So yeah, it’s challenging, but at the same time, because we’re quite diverse in what we do, I’ve been on a good journey, really. Is she “in the club”? Atwood laughs. “Well, I’m in a club, in America, and shortly to join a couple more — but that’s kind of how the industry has evolved.”

Is gender discrimination an issue? “Potentially...

I’m a woman who’s trying to forge these 92

"Having meaningful dialogues with clients over a company’s lifecycle is very important." relationships. You do come across it sometimes in the far East where you really, typically, should be a bloke. That’s always a difficult one, a bit of a challenge.”

The company mantra states that its ethos and “the way we live our lives” defines the operation — and that resounds well with clients.

“They come to us because they appreciate our openness, our transparency, and our ethical values.” And that cuts both ways: “If we don’t think they’re right for us, and we don’t think we can help them, we’re not going to go forward.”

Where is the line drawn on ethical issues? “When I feel the client’s not going to get a good outcome from it, I’m not going to transact. The way we work is, we don’t want it to come back on us.

We’re very strategic when we look at a project: Can it actually work? If we think it can’t, we tell people.”

Sustainability, and “leaving the world in a better state than we found it”, form the behavioural pillar here. “It’s about making change.

Humankind, as a whole, needs to wake up to what it’s doing to the planet. If it’s a project that aligns with feeding the world, rejuvenating the world, bringing in new technologies that are beneficial, we’re all up for it.”

Has the company turned down big projects, or investors, because of misaligned values? A long pause, then: “Yes, we have. Purely because we’re never going to make you what you’re looking for, CFI.co | Capital Finance International

so we can’t accept (the task) — we know it’s not going to work.

“It’s all about relationships. I tend to say, ‘Listen, it’s not for us; I love that you’re proposing this sort of money to us, but ...’ You can take money from someone, but you may as well take money from a bank if it’s not going to be part of a relationship that you can develop and work with.

“My work is done when I find two people, one with the money and one with the idea — that’s the magic, and why I get up every day.”

How does she screen-out unsuitable projects? “Once a project comes to us, the first line of filtration is my desk. I kind of go, ‘Does that make a meeting?’ And if it does, we look at it. If it doesn’t, we’ll say so. We go through things on a weekly basis, and sometimes we have to say: ‘This is never going to work’ — and we won’t engage. We do the deep dive.”

Does carbon-offsetting cut the mustard, in terms of ethical investment? “Absolutely. Anything to reduce (emissions) and enhance the planet is

Summer 2023 Issue

what we’re about.” Is ethical investing partly about making wealthy people feel good about themselves? “Yes, there’s a good amount of that,” says Atwood, without hesitation. “Having wealth is great, but being able to share it is even better. When you’re making a difference, you’re rejuvenated by that. It’s about giving back, and the gratitude you get when you give back.”

One major project Club10m+ is pursuing is called Africa Eats. It’s been ongoing for the past 10 years and centres on establishing logistics for a food distribution network across Africa, from Tanzania to Rwanda, Kenya and beyond.

The key thing is the use of local industries, and local people. It’s the kind of hands-on, obviously beneficial project that Atwood and her team are keen to tackle. Food waste — in perishable crop production such as bananas — is a major concern, and one that can be addressed. “If you have a transport system in place, you can take surplus to another area,” she points out.

“I want people to come to us, and recognise what we’re trying to do for the planet. We want to be a

market leader, making a difference, with passion — not just words.

“We don’t have time to circulate the money that we get. When a project comes to us, sometimes it’s time-precious and we lose out because we don’t have investors ready to go. It then becomes quite frustrating. Timing’s crucial in our industry.

We had (a deal involving) an eco-mansion in Paris, but because we couldn’t get an investor we lost out. With more investors, we have more chance of making things happen.”

Are ethical investors more tolerant of delays, or of lower returns? “I wouldn’t say that’s the case — they still expect a return on investment, and a generous one, as well.” Tax breaks are always welcome, but if a project flunks or drags on, no one is happy. “We definitely want more philanthropists to come forward,” says Atwood.

“They’ve been hiding, and with good reason — it’s been a tough market. We’re seeing the change now, and it’s only going to get better.

“There’s a need there.” i CFI.co | Capital Finance International

Author: Christa Atwood

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> Book Review - The Woman in Black by Susan Hill

Eerie Events in Eel Marsh House and a Yarn that’s Ever Haunting

By Tony Lennox

England’s windswept east coast has inspired many a ghost story, including this disturbing tale of revenge from beyond the grave...

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ou don’t have to believe in the supernatural to be frightened by a good ghost story — and Susan Hill’s The Woman in Black is one of the best.

It turns out that belief isn’t necessary to author such a tale, either. Hill claims not to believe in ghosts “as such”, but as a native of Scarborough, who now lives in Norfolk, she has an affinity for bleak and forlorn North Sea landscapes. The region’s lonely isolation lends a nerve-jangling edge to The Woman in Black.

Hill grew up in Yorkshire in the late 1940s. “My imagination is rooted in the seaside landscape,” she says, where creepy institutions brought out the macabre in her writing. “Penny-inthe-slot” beachfront arcade machines showed enactments of executions, and the Chamber of Horrors in a long-gone museum featured the waxwork likenesses of murderers. As a child, Hill was forbidden to enter, “but I often did”, she admits.

The Woman in Black was first published in 1983, but the style and mood are typically, and deliberately, Edwardian. Hill is a worthy successor to Montague Rhodes James, the acknowledged master of the ghost story genre. Hill gives a nod to him in the preface of the hardback edition, citing the influence of one of his most celebrated stories, Oh Whistle and I’ll Come to You, My Lad. She even uses the phrase as the title of one of her chapters.

Like the works of MR James, who set many stories on grim East Anglian shores, Hill’s novel takes place on an unnamed stretch of coastline, in the isolated and dreary Eel Marsh House. The place is wreathed in sea mist, and can only be reached by a shingle causeway, subject to the tides.

It is here that young London solicitor Arthur Kipps is despatched to tidy up the affairs of the recently deceased Alice Drablow — and where he encounters the titular phantom of the book. The spirit haunts this desolate place, always motionless and seen from a distance, malevolently staring at Kipps with black, sunken eyes. The reasons for its manifestation become apparent as the tale weaves towards its terrifying conclusion.

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The Woman in Black is so widely revered that it is now a set text for the GCSE syllabus. Since its original publication, it has become a worldwide bestseller. A TV adaptation of the novel was broadcast on Christmas Eve in 1989 — and some viewers were so frightened by it that they claimed it “ruined Christmas”. The Guardian’s television critic of the time, Nancy Banks-Smith, wrote of one spine-tingling scene: “The spectre arrives suddenly like a migraine and causes a genuine physical reaction, as if one layer of your skin had shifted over another.”

Hill was initially critical of the televised version of her novel. She was unhappy about “random and CFI.co | Capital Finance International

inexplicable changes” to the original storyline, but in later years withdrew her objections, saying she hadn’t fully understood the process of adaptation. The novel went on to be featured on the big screen too, in a 2012 film starring Daniel Radcliffe. This version featured a radically different ending to the original, which disappointed some fans.

The Woman in Black has been transformed into several radio plays, and one for the stage. That drama is the second-longest-running production in London’s West End, where it continues to terrify theatregoers — whether they believe in ghosts or not. i

Summer 2023 Issue

> Book Review - The Woman in White by Wilkie Collins

Fair Go For the Fair Sex in Victorian Literature?

By Tony Lennox

Did Wilkie Collins’ create a ‘modern’ heroine in his 19 Century novel? Tony Lennox thinks so... th

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n Victorian literature, ladies tended to be portrayed as beautiful but fragile, prone to swooning, and regularly in need of rescue by dashing heroes.

The lead character in The Woman in White is no such creature; the author, Wilkie Collins, created a female character with wit, intelligence, and courage: Miss Marian Halcombe.

When the book was published, in 1859, the word “feminism” was yet to be coined, but the concept was already alive. Writers such as Jane Austen and the Brontë sisters, Charlotte and Anne, railed against the restrictions placed upon them by men.

The reader first meets Marian Halcombe as penniless art teacher Walter Hartright strives to solve the mystery of a distressed woman in a flowing white gown he’d briefly encountered on Hampstead Heath. She may have been able to shed light on the issue, and Hartright is ushered into her drawing room.

Despite possessing the courage and intellect to rival every other character in the book, Miss Halcombe also avoids the stereotype of beauty; she has a complexion which is “almost swarthy”, with the hint of a moustache. She has a masculine jawline, prominent, piercing brown eyes, and thick, coal-black hair growing unusually low on her forehead.

This description of a major female character must have come like a punch on the nose to the readers who devoured the novel as it was published in weekly instalments in the mid1800s. The Woman in White was serialised in Charles Dickens’ weekly literary magazine, All the Year Round. It was the second to get such treatment; Dickens’ own work, A Tale of Two Cities, was the first.

While that had ensured a good start for the periodical, it was Collins’ work which pushed up the circulation. He was a master of intricate plotting and cliff-edge suspense; one can imagine Victorian readers rushing to buy each instalment.

The Woman in White is packed with twists and turns, devilish villains and determined good chaps — and girls. The book made Collins rich — and world famous. His stories went on to be published in journals across the Englishspeaking world.

Collins’ genius lay partly in his ability to combine a pacey plot with well-formed characters. He was most proud of The Woman in White, despite the praise heaped on his equally famous work, The Moonstone.

Wilkie Collins and Dickens were known to have travelled abroad together, and are said to have taken part in “raffish behaviour” on such jaunts, drinking and visiting brothels. He was also ostracised by polite London society for his CFI.co | Capital Finance International

bohemian lifestyle (he lived with two mistresses in different parts of the city at the same time).

But there is, in The Woman in White, some embryonic recognition of women characters as something other than victims, window dressing, or eye candy. And Collins gives Marian her voice; at one point she cries: “Men! They are the enemies of our innocence and our peace — they take us body and soul to themselves, and fasten our lives to theirs as they chain up a dog to his kennel.” i 95

> Malaga’s Wild Summer Fair is

Slightly Tamed — But Still Fun!

By Heather Leah Smith

Photojournalist Heather Leah Smith remembers — almost, anyway — her introduction to an annual Costa del Sol institution...

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he summer fair in Malaga, on Spain’s Costa del Sol, attracts a million visitors and generates as much as €60m each year.

The city spends big, too. In 2019, it put €178,000 into lighting and decorations; last year’s festivities cost the city €2.4m. But the event boosts employment, creating over 1,300 temporary positions.

The first time I attended was in 2011. I had only been in Spain for a few months when the summer kicked off with a bang. The fair starts each year at midnight at the Malagueta, the beach closest to the city centre, with an impressive fireworks display.

Young and old will be found getting into the spirit of things with a “botellón” (a “big bottle”, slang for a public gathering to socialise and share drinks). This BYOB tradition of public partying is a favourite with Spanish youth — but there’s no upper age limit. The city council has been trying for years to limit public drinking. It’s technically not allowed at any time, but police have been lax about enforcing that rule, especially during major celebrations. Some say that 2022 might be remembered as the year that Malaga put the cork back into the feria botellón — possibly for good.

My first days at this rowdy tradition are now a blur of memories. Spirits ran high (and kept flowing) throughout the 10-day event, which is split between official fairgrounds and the historical city centre. Daily festivities start at mid-day and last till the wee hours. I had come to Spain as a grad student from Alabama, where our county fair has a prettiest pig contest and is booze-free, so my first Malaga fair was a little intense.

The ancient city centre was choked with people, women dancing in flamenco finery and crowded concerts in the plazas. Impromptu performances could be found around every corner, from colourco-ordinated groups clapping and singing in unison to minstrels leading a motley conga line through the streets.

The nightclubs were open in daylight, with “togo” drinks the standard order. Temporary kiosks lined Calle Larios, a prominent pedestrian street 96

decorated and decked-out in lights. Some sold snacks and children’s toys; others plied Mardi Gras-styled shot glasses on beaded necklaces.

Corner bars, a cross between restaurants and cafés, displayed posters promoting the fair’s signature drink, a sweet wine called Cartojal. An estimated 240,000 bottles of it are consumed over the 10 days.

The daytime vibe in the city centre was anything but tame, and the nights were downright crazy.

Regardless of the hour, most people were buzzed, and many were blasted. There was some underage drinking, too, and the streets and alleys were befouled in a sludge of spilt drinks, urine, vomit and worse. I quickly learned to wear platform heels or closed shoes. When the crowds eventually disperse, cleaning crews pressurewash it all away with a biodegradable disinfectant that smells of jasmine. The municipal cleaning company, which ran around the clock and hired hundreds of extra workers, collects some 1,600 tonnes of waste.

But the fair has made great strides in cleaning up its reputation, at least. There was a two-year pause because of the pandemic — the last time it was cancelled was due to a typhus epidemic over 80 years ago — and afterward, the council cracked down on unrestricted revelry. For 2022, concerts were scheduled between noon and 6pm, after which strict noise-pollution ordnances went into effect. Bars were only allowed to sell alcohol to patrons on the premises, and offenders faced heavy fines and a temporary loss of liquor licences. Police patrols prevented any further public consumption.

Some of these measures may seem a little draconian, but they were effective. The city centre went quiet after dark as visitors flocked to the official fairgrounds, a multi-use space in the Cortijo de Torres neighbourhood.

Fairgrounds are split into sections between concerts, carnival rides and “casetas”, panelled and tented buildings operated by different businesses and associations in Malaga. Some are run by the city council. Most of the Malaga nightclubs have a caseta; some are geared towards food and traditional music, flamenco and folkloric verdiales; others have massive sound systems and electronic dance music.

CFI.co | Capital Finance International

Spain: Malaga

The party goes until 6am, and last year, the 121 casetas installed 21,531 square meters of exterior soundproof cladding. There were 96 carnival rides last year, over half of them for children. There were free concerts almost every evening in the

Summer 2023 Issue

fairground auditorium. During the day, parades of horses and carriages kept the spirit alive.

This year’s summer fair will take place August 12 to 19, reduced from 10 to seven days. There

will be free daytime concerts in the plazas of Constitución, Flores, Obispo, and San Pedro Alcántara. The best decorations and ambience in the centre can be found along the streets of Larios, Granada, Comedias, and Alcazabilla.

CFI.co | Capital Finance International

The city will continue applying pressure to move the party to the fairgrounds by nightfall and prevent the “megabotellón” that used to take over the old centre. i 97

ANNOUNCING

AWARDS 2023 SUMMER HIGHLIGHTS Once again CFI.co brings you reports of individuals and organisations that our readers and the judging panel consider worthy of special recognition. We hope you find our short profiles interesting and informative.

All the winners announced below were nominated by CFI.co audiences and

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then shortlisted for further consideration by the panel. Our research team gathered additional information to help reach a final decision. In many cases, senior members of nominee management teams provided the judges with a personal view of what sets their companies and institutions apart from the competition.

CFI.co | Capital Finance International

As world economies converge we are coming across many inspirational individuals and organisations from developing as well as developed markets - and everyone can learn something from them. If you have been particularly impressed by an individual or organisation’s performance please visit our award pages at www.cfi.co and nominate.

Summer 2023 Issue

> ING WHOLESALE BANKING: BEST SUSTAINABLE BANKING SOLUTIONS BULGARIA 2023

ING Wholesale Banking forms part of an international network with over 14,000 employees in more than 40 countries across the Americas, Asia-Pacific, Europe, Middle East, and Africa. The group serves around 37 million customers, corporate clients and financial institutions worldwide and aims to become a catalyst in the sustainability transition.

Like its parent group, ING Wholesale Banking Bulgaria prefers to lead by example in terms of environmental responsibility, social equality and good corporate governance. The Bulgarian branch of ING has placed sustainability at the heart of operations over the past years. It has invested considerable resources to raise awareness about

sustainability challenges and opportunities.

It hosts forums, participates in workshops and converts employees into ambassadors for responsible banking and sustainable finance.

It's striving to achieve a net­zero carbon footprint by 2050 and harness financing for the good of people and planet. ING Wholesale Banking Bulgaria offers sustainability-linked financings supporting clients in their transitions to a net zero world where interest rates are linked to their sustainability performance. It supports clients' sustainability transitions by pulling on deep cross-sector experience in energy, infrastructure, logistics, technology, telecoms, healthcare, real

estate, food, agriculture and commodities. It designs solutions for the highest possible impact and inclusion. ING Wholesale Banking Bulgaria prioritises the protection of human rights and the wellbeing of its workforce. It offers structured finance solutions for sustainable development projects targeting renewable energies, circular economies, bio-chemicals and water management. ING Wholesale Banking earmarks sustainable investments for promising companies combatting climate change and resource scarcity.

The CFl.co judging panel announces ING Wholesale Banking as the 2023 award winner for Best Sustainable Banking Solutions (Bulgaria).

> COPERNICUS WEALTH MANAGEMENT: BEST WEALTH MANAGEMENT TEAM SWITZERLAND 2023

Investors trust Copernicus Wealth Management to make the most of challenging market conditions.

The independent financial group is regulated and licensed by the Swiss Financial Market Supervisory Authority. It aspires to become a benchmark financial partner for family office, corporate and institutional clients. The group has been serving clients since 2017, providing a range of asset management, investment advisory and wealth planning services. Copernicus has offices in Lugano and Zurich and plans to open-up in Geneva as well. It inaugurated the

Zurich branch in 2021 and brought on new relationship managers to boost asset growth and M&A activity. The group will proceed on plans for Geneva pursuant to market analyses and discussions with potential collaborators.

Copernicus celebrates the cultural differences of its staff, who speak a mix of English, Italian and German Swiss. Copernicus has assembled a well-rounded team of professionals to help clients seize opportunities and build safeguards. Internal financial analysts, risk managers and lawyers expand the group’s competencies. Copernicus

puts the collective expertise of its workforce in service of client needs. It responded to the market volatility of 2022, which was impacted by continued conflict between Russia and Ukraine, by repositioning the portfolio. Client trust in the group remained steadfast throughout last year’s shaky performance — and was proven justified as Copernicus recovered its position early this year. The CFI.co judging panel congratulates repeat programme winner Copernicus Wealth Management on claiming the 2023 award for Best Wealth Management Team (Switzerland).

> CORDET: BEST ALTERNATIVE CREDIT INVESTOR UK 2023

Over the past decade, CORDET has originated more than €55bn and deployed over €750m across two funds, 35 transactions and 15 companies. The UKbased firm provides promising smaller mid-cap companies with the capital and guidance to spark transformational growth. CORDET’s financing solutions also offer attractive risk-adjusted returns for institutional investors. It targets Northern European companies with up to €20m in EBITDA and sectors where it has proven expertise, such as business services, technology, healthcare, financials, consumer, education and industrial.

The team levers deep industry experience to pursue an “all-weather” approach to investing. The firm is employee owned and interest aligned, as team members are also co-investors. The CORDET portfolio has delivered demonstratively positive performance over the past year, with solid results from both funds. There were 16 new transactions, including the firm’s first investments in the Netherlands and Austria. It continues to build on the strong momentum achieved in 2022 by focusing on talent recruitment and development.

CORDET ranks are swelling, and women now CFI.co | Capital Finance International

make up a third of the team. All employees receive ongoing ESG training. The firm has tweaked some internal procedures and systems to ensure maximum efficiency and maintain a sharp competitive edge. It fortifies investor relations with comprehensive communication of current and relevant information. Testimonials from borrowers speak of the firm less as a lender and more as a long-term financing partner. The CFI.co judging panel presents repeat programme winner CORDET with the 2023 award for Best Alternative Credit Investor (UK).

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> SLAUGHTER & MAY: BEST CORPORATE & COMMERCIAL LEGAL TEAM UK 2023

Slaughter & May is an international law firm with a 134-year legacy fuelled by a forward-thinking mentality. Slaughter & May is headquartered in the heart of London with additional offices in Brussels, Beijing and Hong Kong. The firm is driven by a team of legal experts with deep experience across a range of sectors and specialities. Slaughter & May provides clients around the globe with legal advisory on the most complex, high-profile and groundbreaking matters of the day. Its history is studded with noteworthy milestones, including the

iconic privatisation of British Airways, British Gas and British Steel in the ‘80s and ‘90s.

More recent highlights include advisory on a €1.8bn sustainability-linked revolving credit facility in Norway and the largest corporate green “dim sum” bonds issuance in Hong Kong. Slaughter & May has partnered with the UK government on numerous occasions, providing vital services and legal expertise on public sector projects, procurement policies and taxpayer savings strategies. The firm has served since 2021 in an advisory capacity on

a Cabinet Office panel for strategic projects.

Slaughter & May has set social-mobility targets to increase representation of lower socio-economic backgrounds across the firm.

It maintains a pipeline of fresh talent through development programmes, from two-year mentoring schemes to weeklong workshop and networking sessions. The CFI.co judging panel announces Slaughter & May — a repeat programme winner — as the 2023 award recipient in the category of Best Corporate & Commercial Legal Team (UK).

> BEDROCK GROUP: BEST INVESTMENT PORTFOLIO MANAGER UK 2023

Since its launch in 2004, the UK’s Bedrock Group has prioritised growing client assets over beating benchmarks. The fact that the firm consistently achieves both is a testament to the expertise of its partners and the rigorous due diligence of its investment approach. The group believes the temperature of current economic markets skews towards the downside and has taken measures to protect portfolios accordingly.

Bedrock Group proactively shifted portfolio allocations to a more conservative stance in response to rising interest rates. It has pared

back on credit and equity risks, while increasing allocations in gold and fixed-income assets. It has reduced risks wherever possible to position clients on the safer side and increased exposure to green bonds. Bedrock Group anticipates significant growth potential for these longerterm bonds, particularly if the much-feared and often-predicted recession fully materialises in the US or EU. It also expects to capitalise on opportunities over the next few months, as buy outs reach maturity and renewal — and as many firms will lack the liquidity to seize those

opportunities. Bedrock Group levers expertise across asset classes and disciplines to tailor investment strategies to client objectives.

The firm presents clients with co-investment opportunities and means of generating income from lending. It can help clients achieve longterm returns on real estate investments and pinpoint rising tech stars before they go public.

The CFI.co judging panel presents Bedrock Group — a fourth-time programme winner — with the 2023 Best Investment Portfolio Manager (UK).

> RENAIO ASSETS GMBH: OUTSTANDING CONTRIBUTION TO ENERGY TRANSITION EUROPE 2023

Hydropower is key to the acceleration and diversification of the world’s energy transition.

RENAIO Assets GmbH, one of the leading hydropower asset managers in Europe, forms part of an owner-managed group specialising in the operation and financing of infrastructure and renewable energy projects. RENAIO Assets GmbH was founded in 2019 and headquartered in Germany. It’s driven by seasoned experts and idealistic young talent with backgrounds in sustainable investing, engineering and technical fields. The partners have around 25 to 30 years of experience 100

working in capital markets. RENAIO oversees 24 hydroelectric power plants in Germany, Austria, Italy and Poland. Its operations provide more than 43,700 families with clean electricity, saving nearly 81,820 tons in carbon emissions. It has a penchant for converting underperforming hydropower plants into high-efficiency operations through software and tech improvements. RENAIO’s investments, interventions and supervision resulted in a 20-percent efficiency boost.

Citing the vast availability and falling costs of renewable energies, RENAIO argues that power CFI.co | Capital Finance International

production has no need to negatively impact the environment. It combines strong due diligence with financial and technical expertise to create value for investors as well as hope for the future. RENAIO launched an open-ended hydropower fund to increase participation among medium-sized and smaller institutional investors. The fund is an Article-9 investment and allows for the acquisition of new shares on a quarterly basis. The CFI.co judging panel announces RENAIO Assets GmbH as the 2023 award winner for Outstanding Contribution to Energy Transition (Europe).

Summer 2023 Issue

> XM: BEST CUSTOMER SUPPORT GLOBAL 2023 Big, fair and human — that’s the XM motto.

The investment firm was founded in 2009 and serves more than 10 million clients in 190 countries. XM provides investors with the tools and knowledge to realise their financial goals. An XM trading account gives investors anytime, anywhere access to six asset classes, 10 trading platforms and over 1,000 instruments, including forex, CFDs, commodities, stocks, metals and energies. It affords all clients the same excellent level of service — regardless of their station or means. XM prioritises the human element that other online brokers often neglect and offers roundthe-clock support in 30 languages. XM management conducts virtual meetings and visits 120 cities worldwide to connect with clients and partners on a face-to-face basis. The company’s exceptional support services contribute

to a high level of client retention. XM aims to arm clients with the skills and insights to exploit opportunities and avoid pitfalls. In November 2022, XM opened its first ever educational centre in Johannesburg, South Africa, which will deliver weekly trading classes and Tradepedia certificate courses. The centre will complement the company’s ongoing educational programmes, including seminars led by internationally renowned mentors, daily live streams, video tutorials and a variety of additional multi-language instructional content. In October 2022, XM sponsored one of the largest blockchain events to date, with over 12,000 people in attendance at the venue and over 650,000 online.

The CFI.co judging panel presents repeat programme winner XM with the 2023 global award for Best Customer Support.

> MITIE: BEST ESG FACILITIES MANAGEMENT UK 2023 Mitie’s sustainability aspirations have begun to deliver outsized impacts. Launched in 1987, Mitie offers a comprehensive service suite covering a wide range of sectors, from healthcare and education to transport and utilities. It partners with clients to supercharge decarbonisation plans and net-zero targets. Mitie promotes lifelong learning through apprenticeship and circular economies through a uniform recycling programme. It pushes for improved labour standards across the supply chain and is working to incorporate scope-three emissions into carbon calculations. Mitie has installed 2,000 solar panels in Southampton port, reducing annual carbon emissions by 235 tonnes. The company powers all its buildings with renewable energy and is accelerating the EV transition. Mitie now has one of the largest

EV fleets in the country. With more than 3,200 electric vehicles already deployed, it’s well on track to ensure that 65 percent of the fleet meets low-carbon mobility targets. The company has installed over 2,600 EV charging stations at Mitie facilities, customer sites and employee homes. Mitie manages the energy spending of some of the biggest buyers in the UK, whose collective bills total more than £4bn. The company recently spent around £30m on three decarbonisation acquisitions — EV charging, solar PV and living walls — with the potential to deliver £68m in future revenue and save 375,000 tonnes of carbon emissions. Mitie’s net-zero plans have been validated and certified by the Science Based Targets initiative. The CFI.co judging panel congratulates Mitie on claiming the 2023 Best ESG Facilities Management (UK) award.

> BLUEROCK GROUP: BEST BOUTIQUE REAL ESTATE INVESTMENT SOLUTIONS DACH 2023 The German housing shortage has hit a 20-year high — making BlueRock’s real estate investment solutions particularly relevant and timely. In Berlin, a red-hot rental market, there is need for upwards of 205,000 apartment units. BlueRock started reforming attics, adding extra storeys and creating side constructions to alleviate some of the rental pressure. In 2022, the group launched its second Berlin residential real estate fund, expanding the city’s planned investment volume to total €300m.

As of April 2023, the Swiss group manages a real estate portfolio of 181 assets with a market value of >1.5billion EUR. It invests in and manages half a million square metres of prime residential and office properties across Germany, Switzerland and Denmark. The group partners with a range of European co-investors, including private and institutional investors as well as

family offices and asset managers, to solve a critical infrastructural and societal challenge while also delivering high investor returns in a sustainable manner. ESG considerations factor heavily throughout the investment cycle. With each investment, BlueRock aims to improve the quality of people’s living and working conditions by increasing the supply of modern, affordable and sustainable housing and office spaces.

BlueRock continues to pursue the reduction of greenhouse emissions and resource consumption across its operations and portfolio properties, collaborating with investors and partners to combat climate change and social inequality. The CFI.co judging panel presents BlueRock Group — a four-time programme winner — with the 2023 award for Best Boutique Real Estate Investment Solutions (DACH).

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> XM: MOST RELIABLE BROKER & MOST TRANSPARENT BROKER GLOBAL 2023

XM is one of the most highly decorated online brokers, boasting the experience and liquidity to meet any trader’s needs. Since its launch in 2009, XM has evolved into an industry-leading investment firm serving over 10 million clients in 190 countries. The multi-regulated broker employs more than 600 professionals through an international network with headquarters in Cyprus and offices in Australia and Greece.

XM markets itself as a big, fair and human broker. It treats clients with egalitarian care regardless of their net worth, account type

or investments. Pricing and promotions are laid out in clear terms, and support services are offered in 30 languages. Re-quotes and rejections are not allowed on XM’s lightningfast trading platform, where 99.35 percent of executions take less than a second. Client funds are held in segregated accounts with investment grade banks, insured up to €20,000 by an investor compensation fund and protected by a policy preventing negative account balances. In addition to distinguishing itself as a transparent and fair broker, XM is

a conscientious corporate citizen. Since the start of 2023, it has donated to Médecins Sans Frontières, helped renovate a paediatric clinic in Cyprus, sponsored several children’s programmes and supported vulnerable senior citizens in Singapore and Peru. It also provided disaster relief after a flood in Malaysia and the earthquakes in Turkey, Syria and Indonesia.

The CFI.co judging panel presents repeat programme winner XM with the 2023 global awards for Most Reliable Broker and Most Transparent Broker.

> FINARTIS: BEST WEALTH MANAGEMENT SOFTWARE SOLUTIONS GLOBAL 2023

FINARTIS, which pulls its name from a blend of finance and art, is a Swiss software publisher aiming to revolutionise wealth management through smart technology. By automating middle- and back-office operations, FINARTIS frees up the front office to focus on superior customer service. FINARTIS solutions create cost-saving efficiencies and improved margins for its clients. Its flagship product Prospero is an award-winning solution with an impressive track record. The company differentiates itself from the competition on numerous fronts.

FINARTIS wealth management software

solutions provide comprehensive coverage of global markets. The team provides clients with round-the-clock assistance through offices in Europe, Asia Pacific and the Middle East. FINARTIS holds quarterly meetings to proactively build a roadmap for stronger client relationships and reactive agility. The company invests in its own R&D and consistently onboards new technology every year. FINARTIS relies on dynamic systems to operate across asset classes, currencies and regulations. It has established a stable market position, growing and evolving in tandem with a wide spectrum of

clients, including financial institutions, family offices and asset managers. FINARTIS hi-tech solutions allow clients to streamline operations and realise cost savings — both welcome benefits in a market where inflation and other pressures continue to threaten profit margins.

FINARTIS was acquired in May 2021 by Valsoft, a Montreal-based company specialising in the acquisition and development of vertical market software businesses. The CFI.co judging panel announces FINARTIS as the 2023 global award winner for Best Wealth Management Software Solutions.

Sanlam Investments, the largest black-owned asset manager in South Africa, strives to accelerate sustainable development in its own backyard and beyond. The team follows an impact investing strategy that’s closely aligned with the UN’s SDGs. Sanlam targets impact investments in the areas of job creation, reduced inequality and climate action. In 2020, Sanlam launched three “Legacy” funds seeded with its own capital that are expected to create more than 27,000 jobs.

It has already deployed $76million in SME investments since inception, including support

for Covid-strapped businesses. In 2022, the team celebrated 10 years of impact investments in South Africa. They highlighted SME debt deals and mid-market private equity stakes that have boosted employment, housing and clean energy outcomes. It manages climate funds focused on renewable energies, water management and the protection of coastal ecosystems. Sanlam’s climate finance business is expected to impact nearly two billion people, from South Africa and Namibia to Vietnam and the Galapagos Islands.

Since Sanlam Investments’ CFI.co award win in

2018, AUM in the business has increased more than two-fold, now totalling over $50.6billion and including $2billion in the Alternative business. A strong governance structure ensures no conflict between the balance sheet and third-party investments, which have doubled over the past five years. ESG and impact assets have grown from 24 percent to 52 percent of AUM. The jury continues to find cause for celebration and presents Sanlam Investments with the 2023 award for Best Alternative Fund Investment Team (Africa).

> SANLAM INVESTMENTS: BEST ALTERNATIVE FUND INVESTMENT TEAM AFRICA 2023

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Summer 2023 Issue

> BAKER TILLY KENYA: BEST AUDIT & TAX TEAM EAST AFRICA 2023 Baker Tilly ranks among the top ten networks of independent accounting and business advisory firms worldwide. It has established a strong presence in East Africa, with headquarters in Nairobi as well as branches in Uganda, Rwanda and Somalia. Baker Tilly Kenya has developed decades-long relationships with multilateral organisations to ensure the highest levels of transparency and accountability across the not-for-profit sector. The firm has mastered this niche market. Baker Tilly Kenya partners with UN organisations to implement monitoring systems for funds allocation, particularly in higher-risk countries.

The firm provides accounting, audit, tax and advisory services for a wide range of clients, including nonprofits, government institutions and private individuals. It has worked with businesses across various industries, like

agriculture, healthcare, manufacturing, telecoms, tourism, financial services, oil and gas. The firm takes a zero-tolerance stance on corruption and always strives to operate with the utmost integrity.

Clients benefit from the firm’s global network, international helpdesk and omnichannel onboarding. The team has developed in-house methodologies and a new data analysis system to ensure multilateral money is being used as intended. Baker Tilly Kenya was the first firm to offer online audits during the Covid pandemic. Baker Tilly staff are forward-thinking professionals intent on building a better future by doing the right thing today. Mutual respect runs high throughout the firm, and employee turnover remains low. The CFI.co judging panel announces Baker Tilly Kenya as the 2023 award winner for Best Audit & Tax Team (East Africa).

> I&M BANK (RWANDA) PLC: BEST BANK RWANDA 2023 Incorporated in 1963, I&M Bank (Rwanda) Plc is the oldest bank in Rwanda. It’s a leading players in the industry with a strong footprint across the country. I&M Bank Rwanda offers the full range of personal, business, institutional and corporate banking products throughout its locations. The bank has been listed on the Rwanda Stock Exchange since March 2017. It's a subsidiary of I&M Group PLC, a leading regional financial services group in Eastern Africa with a presence in Kenya, Tanzania and Uganda as well as a joint venture in Mauritius. I&M Group has a long history in banking and has established a wide network of correspondent banks across the globe. It enjoys a strong relationship with leading international development financial institutions and is committed to driving transformation and

innovation across the industry. The bank has unlocked higher levels of customer satisfaction and operational efficiency through deep digitalisation. It has increased the customer base by 29 percent, with significant growth in MSME banking. The bank’s decentralised branch sales strategy, which levers a direct sales agent model and prioritises customer engagement, has led to a 38 percent increase in total transactions year on year. Digital transactions grew by 46 percent, and 88 percent of newly acquired accounts were registered via digital channels. Tech investments have delivered greater flexibility and control over credit and risk management. The CFI.co judging panel presents three-time programme winner, I&M Bank (Rwanda) Plc, with the 2023 award for Best Bank (Rwanda).

> ZONE: BEST BLOCKCHAIN PAYMENT NETWORK AFRICA 2023 African blockchain innovator Zone is on a mission to decentralise payments by creating one global network to pay anyone via any monetary means or currency. The company is headquartered in the financial centre and economic hub of Lagos, Nigeria. Its flagship product, originally known as Appzone, introduced Africa’s first layer-one blockchain protocol enabling frictionless and universally interoperable payments across use cases. Zone relies on next-generation infrastructure to directly connect participating institutions and on automatisation procedures to complete the settlement, reconciliation, and dispute of transactions. Zone is digitising fiat payments and accelerating the transition to an all-inclusive payment ecosystem. The blockchain network lends credibility to digital currencies by facilitating compliance with constantly evolving regulations. Zone has been hailed as the fastest growing blockchain company

in Africa by prestigious international media outlets. The company was co-founded by serial entrepreneur and fintech pioneer, Obi Emetarom, who is also responsible for Africa’s first cloud-based banking SaaS platform. Emetarom serves as the managing director of Zone and the engine for the company’s expansion. Since its inception, Zone has raised over $15m in funding and onboarded to the network more than 500 banks in seven African countries. The company is focused on developing scalable infrastructure for the continent’s cashless economy by catalysing the mass adoption of digital currencies and decentralised finance. It promises interoperability with existing financial ecosystems as well as intuitive and reliable user interactions.

The CFI.co judging panel announces Zone as the 2023 Best Blockchain Payment Network (Africa) award winner.

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> CRC CREDIT BUREAU LTD: BEST CREDIT BUREAU NIGERIA 2023

CRC Credit Bureau was established by 10 prominent financial institutions and Dun & Bradstreet, a leading global provider of business data and analytics. CRC Credit Bureau operates under a group structure along with its wholly owned subsidiary, CRC Data and Analytics Ltd. The group enables credit grantors and business partners to make more informed decisions. The analytical arm reviews caches of alternative data to support comprehensive and reliable credit risk certifications. Businesses can also use alternative data to tailor product development

to customer needs. The bureau estimates that half of the Nigerian population has no credit history — yet. CRC Credit Bureau is committed to educating people about the importance of building a good credit history, which can enable upward mobility in the life of individuals and businesses alike. A good credit score can green-light growth capital for companies as well as rental prospects, job opportunities and financing for individuals. The bureau publishes regular articles to raise awareness and help those with a tarnished credit past to rebuild

their reputation. CRC Credit Bureau offers a range of products to help businesses monitor their public image, identify opportunities for expansion and strengthen decision making.

It ensures consent is in place when collecting data for the nationwide repository of consumer and corporate credit profiles. It runs controlled tests to probe the data protection defences.

The CFI.co judging panel presents CRC Credit Bureau — a repeat programme winner — with the 2023 award for Best Credit Bureau (Nigeria).

> THIRDWAY PARTNERS: BEST ESG MERCHANT BANKING TEAM AFRICA 2023

The climate crisis necessitates urgent action — and ThirdWay Partners is proud to answer that call. Founded in 2014, ThirdWay Partners is an investment and advisory firm with a proven track record of creating and scaling sustainable, impact-led businesses. The firm argues that the old paradigms of philanthropy and profit-at-all-cost capitalism are too outdated for the modern world. ThirdWay Partners manages three investment vehicles focused on sustainable food production, conservation and local content development. Other areas of focus include the energy transition, natural

capital and green finance. ThirdWay Partners offers a range of merchant banking and advisory services, including assistance with capital raising, business model development, market analyses, blended finance fund design and tech implementation. The firm is led by seasoned management and supported by young talent. ThirdWay Partners recruits financial advisors and asset managers from diverse backgrounds and geographies — with an eye for gender parity — to build a team with the highest levels of competence, cohesion and complementary skills. The firm has interests

and business relationships across the globe, including a well-established presence in Africa.

ThirdWay Partners is headquartered in London with offices in Mozambique, Kenya, Spain and South Africa. It inaugurated the Johannesburg office at the end of 2022 and will be opening more locations before year’s end. The firm is considering new sustainable development funds for the near future. The CFI.co judging panel present ThirdWay Partners — a fourthyear programme winner — with the 2023 award for Best ESG Merchant Banking Team (Africa).

> BOURSA KUWAIT: BEST CAPITAL MARKET ESG STRATEGY GCC 2022

Established in 2014, Boursa Kuwait is the operator of the Kuwait stock exchange, the national stock market of Kuwait. Since 2016, it has been responsible for driving engagement, growth and innovation in the Kuwaiti capital market, while supporting the Capital Markets Authority, issuers, investors and various other key stakeholders. Since its inception, Boursa Kuwait has played a pivotal role in the development of Kuwait’s capital market and the diversification of the national economy. The company’s market developments and enhancements have contributed to the reclassification of the Kuwaiti capital market to “Emerging Market” status in the world’s top three indices, strengthening Kuwait’s position as a leading financial center in the region.

A trailblazer in Kuwaiti privatization, Boursa Kuwait underwent a privatization process over two stages, the first in February 2019, when a 44% 104

equity stake was awarded to an international exchange and a group of Kuwaiti investment companies in early 2019. In December 2019, the privatization process was finalized after the initial public offering of the Capital Markets Authority’s 50% stake in the company was offered to Kuwaiti citizens, with an oversubscription rate of 850 percent making Boursa Kuwait the only stock exchange in the Middle East owned by the private sector. Boursa Kuwait has been self-listed on the “Premier Market” since September 2020, and is one of the government entities in Kuwait to successfully undergo privatisation.

The Kuwaiti bourse joined the UN’s Sustainable Stock Exchanges initiative in 2017 to share and promote best practice standards among market organisations and participants.

In 2021, Boursa Kuwait released an electronic guide to help listed companies prepare ESG CFI.co | Capital Finance International

reports that provide transparent information to all concerned stakeholders, including recommended sustainability metrics and indicators for assessing current performance and setting future goals. It hosts and participates in forums to collaborate on ESG imperatives. This guidance aligns with industry standards like the UN’s SDGs, the Global Reporting Initiative, and the pillars of the New Kuwait 2035 vision. The bourse’s sustainable development strategy centres around the two pillars of society and environment, supporting the 2035 vision by raising the country’s distinguished international status and contributing towards its creative human capital, effective government administration and diversified economy. The CFI.co judging panel presents Boursa Kuwait — a repeat programme winner — with the 2022 award for Best Capital Market ESG Strategy (GCC).

Summer 2023 Issue

> BOURSA KUWAIT: OUTSTANDING CONTRIBUTION TO FINANCIAL INCLUSION GCC 2022 Boursa Kuwait has been a major driving force in promoting engagement, growth, and innovation in Kuwait's capital market since its establishment. The company's efforts have not only supported key stakeholders such as the Capital Markets Authority, issuers, investors, and various other parties, but have also helped elevate the Kuwaiti capital market to "Emerging Market" status in the world's top three indices, reinforcing Kuwait's position as a leading financial centre in the region. One of the key factors in Boursa Kuwait's success has been its successful privatisation process, which played a pivotal role in the development of Kuwait's capital market and the diversification of the national economy.

The company now has a 44% equity stake held by an international exchange and a consortium of Kuwaiti investment companies. In December 2019, Boursa Kuwait became the only stock exchange in the Middle East to be fully owned by the private sector following a public offering of the Capital Markets Authority's 50% stake in the

company, which saw an oversubscription rate of 850%. In September 2020, Boursa Kuwait selflisted on the “Premier Market”.

Boursa Kuwait also facilitates liquidity for Kuwaiti companies by raising capital through listing in the exchange and providing investors with valuable insights into promising opportunities in the Kuwaiti capital market. The company adheres to international best practices with regards to infrastructure, governance, work culture, transparency, and financial literacy.

Additionally, Boursa Kuwait is committed to maximising its social responsibility initiatives through collaboration with industry organisations.

As a repeat program winner, Boursa Kuwait has been recognized for its commitment to equipping current and future generations of investors with the necessary skills and knowledge to invest in local and international capital markets.

The company was honoured with the 2022 award for Outstanding Contribution to Financial Inclusion (GCC) by the CFI.co judging panel.

> ALISTITHMAR CAPITAL: BEST REAL ESTATE FUND KSA 2023 Alistithmar for Financial Securities and Brokerage Company (“Alistithmar Capital”), a closed joint stock subsidiary of The Saudi Investment Bank, has followed a client-centric, value-investing philosophy since its launch in 2008. The company helps clients in the Kingdom of Saudi Arabia (KSA) to make the most of their money with a service suite covering advising, arranging, custody, dealing, fund operation and investment management. It recently celebrated the completion and exit of a landmark transaction through its Kaden Alistithmar Fund. Alistithmar Capital established the fund in 2021 with the primary purpose of acquiring prime mixed-use real estate in Riyadh — and was able to raise the amount needed to operate the fund within 24 hours. Alistithmar Capital marshalled an

experienced team to fast-track the purchase and manage the investment to ensure sustainable performance and long-term value creation. In only 18 months, Alistithmar Capital had achieved all investment objectives and exited the assets with a significant return on equity: 56 percent net of all expenses and fees, which is equal to a compound annual growth rate of 34.5 percent. The substantial performance of the Kaden Alistithmar real estate fund over such a short period underscores the company’s ability to exceed expectations. Alistithmar Capital, with $66.7m in paid-up capital, is licensed and regulated by the Saudi Capital Market Authority. The CFI.co judging panel presents Alistithmar Capital — a repeat programme winner — with the 2023 award for Best Real Estate Fund (KSA).

> CONTAINERS PRINTERS: BEST SUSTAINABLE PACKAGING TECHNOLOGY & MOST INNOVATIVE PACKAGING TEAM GLOBAL 2023 Over the past four decades, Containers Printers has evolved from a single Singaporean factory into an innovative and sustainable packaging partner with clients in 30 countries worldwide. It has established a strong presence across South East Asia and is hoping for similar success as it expands into European markets. Containers Printers offers a wide range of metal and flexible laminate packaging solutions. It prioritises sustainability across all operations and collaborates with industry partners to create positive impacts at the local and global level. Containers Printers works with brands from the nutrition, food and medical industries. As such, it adheres to the highest international standards for product safety, quality and reliability. Containers Printers has been recognised for progress in measuring and monitoring its carbon emissions. It cut emissions

by 2.4 percent within six months of the first measurements. It contributes towards national goals for waste reduction and energy efficiency and will assist customers to fulfil Extended Producer Responsibility reporting requirements.

Containers Printers seeks to empower team members with ongoing opportunities for upskilling and professional development. It has restructured management roles to delegate more responsibility and accountability throughout the ranks. This move gives employees a sense of ownership in the company, while also freeing up senior leadership to focus on strategic development. The CFI.co judging panel presents Containers Printers — a repeat programme winner — with the 2023 global awards for Best Sustainable Packaging Technology and Most Innovative Packaging Team.

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> PEET LTD: BEST SUSTAINABLE COMMUNITY DEVELOPER AUSTRALIA 2023

Over the past 130 years, Peet has established a legacy of creating future-proofed communities united by a sense of belonging. The group achieves this aim with an ESG-driven development plan that seeks to create long-term shared value for shareholders and all other stakeholders. Peet pursues environmentally conscious development, with special attention paid to water conservation, energy efficiency, circular economies, biodiversity preservation and land restoration. It creates cohesion among the team by prioritising diverse recruitment, employee wellbeing and staff

engagement. Peet collaborates with five corporate partners and more than 30 local organisations to amplify CSR efforts across communities. It fosters sustainable living growth through national community grants and supports local charities through staff fundraising initiatives. Peet also promotes sports participation as a brand sponsor of the Australian cricket team, the Perth Scorchers. The group has proven itself a trusted business partner with strong ethics and a robust risk management framework. Peet’s portfolio of townhouses, apartments and family homes

range from opportunities in affordable housing to premium beachside living. The property developer, which is listed on the Australian Securities Exchange under the trading symbol PPC, reported an 84 percent increase in share earnings and aftertax operating and statutory profits in the 2022 financial year. The group also showed a significant increase in the gross value of contracts on hand, up from $546.6m in June 2021 to $930m in June 2022. The CFI.co judging panel announces Peet as the 2023 award winner for Best Sustainable Community Developer (Australia).

> FORTMAN CLINE CAPITAL MARKETS LIMITED: BEST M&A ADVISORY TEAM SOUTH EAST ASIA 2023

Since its launch in 2007 out of Hongkong, Fortman Cline Capital Markets Limited has evolved into a Southeast Asian operation with offices in Manila, Singapore and Jakarta. It also had an office in New York until 2017 focused on fund raising from family offices. The firm completed its first billion-dollar transaction, an energy sector acquisition, within a year of opening. By 2010, it has completed the largest M&A in the history of the Philippine fastfood industry. Since its launch, Fortman Cline has provided deal clinching advisory services on more than US$18 billion in M&A and fund-raising transactions. The team’s skilled contributions have helped position the firm as a top consultancy firm in Southeast Asia. The firm is headquartered in Hongkong and has served both conglomerates

and owner managed businesses across Southeast Asia. It has demonstrated a track record on assisting entrepreneurs and family businesses achieve transformational growth via joint ventures, external fund-raising placements and inorganic acquisitions. In addition, it has assisted a number entrepreneurs monetise their businesses via strategic transactions with responsible partners that could transform businesses towards a larger scale. The team has also developed specialized practices in health care, consumer businesses, infrastructure and logistics. It has complemented its workforce with industry professionals. FCCM has also added a strategic consulting unit that assists clients in post M&A tasks to include integration, strategy implementation and overall

management transition. For example, in the health care space, FCCM was involved in transactions covering the entire ecosystem to include pharm distribution, pharma brands and manufacturers, hospital operations, health insurance, dental care, elderly care and molecule monetization. It seeks to replicate its success in the health care, consumer business and infrastructure verticals to new areas such as logistics. FCCM’s pipeline remains robust due to its ecosystem and strategic approach to these fast-growing verticals where a high level of expertise and customer care is required. The CFI.co judging panel presents repeat programmed winner Fortman Cline Capital Markets with the 2023 award for Best M&A Advisory Team (Southeast Asia).

> ATOM BANK: BEST MORTGAGE SOLUTIONS PROVIDER UK 2023

Founded in 2014, Atom Bank was the first appbased and digital-only bank in the UK to be granted a regulatory licence. The bank doesn’t attempt to cover all financial services, as that avenue only breeds mediocrity. Instead, it chooses to specialise in a few select services — savings, mortgages and business loans — and delivers them with speed, efficiency and at a competitive price. Atom Bank pays market-leading rates on savings accounts, passing along 85 to 86 percent of the market base rate to customers. The bank 106

aspires to get mortgage applicants the best deal possible — even if that means they don’t go with Atom. The bank works with independent brokers that recommend the best mortgage loans through an intermediated process that promises impartial advice and assistance with the application. Atom offers mortgage products for first-time buyers, less-than-perfect credit scores, new purchases, remortgages and product transfers. The bank has earned a five-star rating from Trustpilot, an independent reviews platform, making it one of CFI.co | Capital Finance International

the highest rated banks in the UK, far above the majority of its competitors. Atom has also earned a five-star rating for its IOS and Android banking app. The bank enjoys excellent word-of-mouth marketing from satisfied customers who would recommend the business, as evidenced by its Net Promoter Score of 86 percent. Atom’s employee engagement score reaches nearly as high, at 84 percent. The CFI.co judging panel announces Atom Bank as the 2023 award winner for Best Mortgage Solutions Provider (UK).

Summer 2023 Issue

> LA TROBE FINANCIAL: BEST INVESTMENT MANAGEMENT TEAM AUSTRALIA 2023 La Trobe Financial, one of the preeminent alternative asset managers in Australia, pursues an investment strategy rooted in the three golden rules of simplicity, diversification and patience. The firm’s positive financial performance and positive corporate culture attracted the attention of a new shareholding collaborator that shared its strategic vision.

Brookfield, a Canadian multinational asset manager, acquired La Trobe in May 2022, just three months shy of its 70th anniversary. La Trobe Financial leadership referred to the sale as a “match made in heaven”.

The move will strengthen La Trobe Financials support network without tinkering with its time-tested methods.

The firm has built a $17 bn portfolio with disciplined and diversified selection of granular exposures across sector, loan size, borrower type and security location.

In January 2023, La Trobe Financials credit fund reached a milestone of $9bn — now $9.5bn — in AUM. In the last half of 2022, the credit fund, which comprises 12,640 loans with an average amount of $695,000 and an average loan-to-value ratio of 64.8 percent, yielded investor distributions totalling $207m. In April 2023, the non-bank lender concluded its fifteenth residential mortgage-backed security deal, which was originally mandated at $750m and, following strong investor demand, was upsized to $1bn. The firm recently updated its investor platform, La Trobe Direct, to provide users with a simplified and more intuitive experience, greater control and enhanced security. The CFI.co judging panel presents repeat programme winner La Trobe Financial with the 2023 award for Best Investment Management Team (Australia).

> BANK ONE LTD: BEST CUSTODIAN BANK INDIAN OCEAN 2023 Bank One Ltd, which was incorporated in 2008, aims to solidify the status of Mauritius as a private wealth hub for growing African economies. The bank is the result of a joint venture between CIEL Finance Limited and I&M Group PLC. Bank One levers the support of shareholders in sub-Saharan Africa and affiliated banking operations in Madagascar, Kenya, Tanzania, Rwanda and Uganda to continue diversifying the client base and product portfolio. Bank One’s robust custodian network spans more than 50 countries and provides retail clients, external asset managers and institutional investors with access to regional and international experts.

The bank’s main depository, Euroclear, is a top-rated provider of securities settlement with proven resilience. Its custody platform is underpinned by cutting-edge technology,

and the bank’s digital innovation has become a differentiating factor among sub-Saharan African competitors. Bank One’s custody portal provides instant reporting with real-time pricing through Bloomberg. The bank’s B2B platform has proven popular among investors, and AUM has swollen to more than $1bn since 2017. Bank One achieved 20 percent growth in clients from cross-border markets in 2022 and expects to build on the momentum of these strong cross-border partnerships over the next 12 months. The bank predicts that more institutional and individual investors will increase USD exposure in response to the economic outlook for further depreciation of local currencies. The CFI.co judging panel presents Bank One — a repeat programme winner — with the 2023 award for Best Custodian Bank (Indian Ocean).

> CENTRAL RESERVE BANK OF EL SALVADOR: BEST CENTRAL RESERVE BANK CENTRAL AMERICA 2023 Founded in 1934, the Central Reserve Bank (BCR) of El Salvador is responsible for maintaining a stable currency and contributing to the stability of the national economy. BCR El Salvador is a public, autonomous and technical institution that has achieved significant success creating direct connections with the people of El Salvador. It introduced transfer systems that have enabled round-the-clock access and facilitated millions in financial savings. It has also developed a new payments system that has unlocked remarkable cost reductions for clients. BCR El Salvador has invested considerable resources to continuously improve its operations. That includes millions in investment to upgrade the bank’s tech infrastructure and digital capacities. The bank runs an import and export procedures centre as the state’s single window for foreign trade.

It has partnered with third-party operators to cut the processing time of import-export transactions from a month to a day. The bank conducts international reserve management as well as regulation and monitoring of the financial system. It takes pride in having recently acquired certification by the Spanish authority for quality audit processes. BCR El Salvador offers a range of economic and financial research products, including statistics.

It funds technical and university scholarships, pays for economics students to study abroad and organises research competitions for undergraduate students. It also supports financial inclusion and education programmes.

The CFI.co judging panel presents BCR El Salvador with the 2023 Best Central Reserve Bank (Central America) award.

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> AIR AUSTRAL: BEST AIRLINE CUSTOMER SATISFACTION INDIAN OCEAN 2023

Air Austral began operations in 1990 and has been solidifying its long-haul offering over the past two decades. The airline, headquartered in Reunion Island off the coast of Madagascar, connects travellers to over 100 destinations across the Indian Ocean, Africa, Asia and Europe. Regional passengers can opt for economy or comfort tickets, while long-haul travellers can splurge for business class. Business-class clients relax in fully reclinable seats with extendable tables, power outlets, USB ports and sliding partitions for more privacy. Air Austral invests

to maintain a modern fleet, skilled workforce and high-quality product line. Flight meals have been designed by a Michelin-starred chef.

Air Austral agents help passengers navigate customs processing on departure or arrival in Paris. A rewards programme offers advantages, such as priority booking and additional baggage allowances. Air Austral strives to wow clients at every stage of their journey and solicits preand post-flight feedback to fuel continuous improvement. The flight crew and ground team deliver exceptional face-to-face service, and

digital channels provide an avenue for open communication. Clients can share a complaint, make a suggestion or file a claim online. The airline promises to resolve customer queries in a prompt and professional manner. In the unlikely event of an unsatisfactory outcome, it can provide contact information for an authorised tourism and travel mediator in Reunion. The CFI.co judging panel presents Air Austral — a repeat programme winner — with the 2023 award for Best Airline Customer Satisfaction (Indian Ocean).

> AIR AUSTRAL: BEST AIRLINE FINANCIAL MANAGEMENT TEAM INDIAN OCEAN 2023 Since its launch in 1990, Air Austral has proven itself a socio-economic catalyser of the Indian Ocean. Air Austral offers numerous direct and codeshare flights between Reunion and destinations across Europe, Asia and the Indian Ocean. The airline has positioned itself as a permanent link between Reunion Island and metropolitan France — a market which represents 80 percent of Air Austral turnover. Air Austral has relied on ingenuity and perseverance to weather the economic fallout of the Covid pandemic, while continuing to safeguard the

health of employees and passengers. The airline approached the crisis as an opportunity for introspection and restructuring. Joseph Bréma continues to serve as Air Austral CEO, following a three-decade career as deputy general manager of economic and financial affairs. Alongside executive leadership, the Air Austral financial management team formulated a restructuring plan that has proven particularly effective in loosening cash flow constraints.

They worked with the European Commission to develop a restructuring plan that was approved

by Reunionese courts earlier this year, alongside a new entity as the airline’s main shareholder.

A consortium of 27 private investors now holds a 55.18 percent stake in Air Austral. The CFI. co judging panel has been tracking the airline’s stalwart fiscal stewardship and partnershipdriven business model since its first programme placement in 2019. The judges, having noted transformational strategies beginning to bear fruit, have selected Air Austral as the 2023 award winner for Best Airline Financial Management Team (Indian Ocean).

> AIR AUSTRAL: BEST AIRLINE STRATEGIC PARTNERSHIP AFRICA AND THE INDIAN OCEAN 2023 Air Austral connects passengers to Europe through daily flights between Paris and Reunion, an island and French overseas department located off the coast of Madagascar. The airline is headquartered in Reunion and operates the Paris route as part of a codeshare agreement with Air France.

Similar codeshare agreements open the gate to Africa with flights to Kenya from Reunion and Madagascar. The airline has agencies in Reunion, Mauritius and France as well as representatives in the countries where it offers flights, including South Africa, Madagascar, the Comoros, 108

Mayotte, the Seychelles, Thailand, India and China. Numerous aviation alliances and strategic partnerships have enabled Air Austral to turn competition into collaboration. Passengers can also find preferential rates through the airline’s partnerships with car rental companies, hotels, travel insurers, airport parking, trains and other corporates. Air Austral has partnered with Reunionese chef Kelly Rangama to create recipes that elevate airline food to fine dining.

Rangama is proud to showcase the best of Reunionese cuisine on Air Austral flights and CFI.co | Capital Finance International

at her Parisian restaurant Le Faham, which has been Michelin-starred since January 2020.

Air Austral recently welcomed a consortium of investors as the new majority shareholder and began implementing a restructuring plan that prioritises passenger experience, sustainable growth, digital transformation and business resilience. The CFI.co judging panel congratulates Air Austral — a repeat programme winner since 2019 — on claiming the 2023 award for Best Airline Strategic Partnership (Africa and the Indian Ocean).

Summer 2023 Issue

> SINGAPORE LAND GROUP: BEST COMMERCIAL REAL ESTATE DEVELOPER SINGAPORE 2023 Singapore Land Group (SingLand) has significantly shaped the skyline of the wealthy island city state. The company was incorporated in 1963 and listed in 1971. As SingLand celebrates its 60th anniversary, it looks back on noteworthy milestones and sets targets for a greener and more equitable future. SingLand developed UIC Building, which upon completion in 1973, ranked as the tallest structure in Singapore and one of the highest in South East Asia. The building was redeveloped in 2017 with state-of-the-art infrastructure and amenities to promote a healthy balance of work, life and play in the city centre. SingLand also developed Marina Square, Singapore's first mixed-use development comprising three hotels, a shopping mall and offices. SingLand drives sustainable, social, economic and environmental change through the

creation of inclusive urban spaces. It has built a diversified portfolio of residential and retail properties, commercial offices and hotels. Over 80 percent of SingLand’s portfolio is “Green Mark” certified, and the group is on track to achieve sustainability certification for the remainder within the next two years.

SingLand has made its mark at home and abroad, with an expansive footprint in Singapore and a growing presence in key overseas markets, like China and the UK. SingLand, with $5bn (over S$6bn Singaporean dollars) in commercial AUM and nearly four million square feet of lettable office and retail spaces, serves many Fortune-500 companies and multinational corporations. The CFI.co judging panel announces Singapore Land Group as the 2023 award winner for Best Commercial Real Estate Developer (Singapore).

> RATCH GROUP: BEST VALUE CREATION ENERGY INFRASTRUCTURE COMPANY APAC 2023 RATCH Group, which was founded in 2000, operates as a holding company with varying stakes in core businesses, subsidiaries and joint ventures. RATCH concentrates equity investments in fossil fuel power generation, primarily natural gas, but its portfolio also features a diversified mix of renewable projects, energy-adjacent businesses, infrastructure development and healthcare ventures. It has achieved steady growth in the short span since its launch. In 2022, RATCH total revenue jumped 84.4 percent over the previous year. First quarter EBITDA in 2023 showed an increase following investments into power projects in Australia and Southeast Asia. Over the next four years, the group aims to increase EBITDA from $345m to $432m (12bn to 15bn baht).

It plans on allocating at least five percent

of the budget to non-power businesses and approaching carbon neutrality by 2050.

RATCH is on track to boost renewable energy capacity by 20 percent this year and 25 percent in 2025 onwards. The Thai company is pursuing a growth strategy rooted in strength, synergy and sustainability with the ambition of becoming a leading value-oriented energy and infrastructure company in Asia Pacific (APAC). At present, RATCH has paid-up capital totalling more than $625m (21.7bn baht). The Electricity Generating Authority of Thailand, a state enterprise managed by the Ministry of Energy, is a major shareholder with a 45 percent equity stake. The CFI.co judging panel announces RATCH Group as the 2023 award winner for Best Value Creation Energy Infrastructure Company (APAC).

> UNION BANK OF THE PHILIPPINES: BEST RETAIL BANK SOUTH EAST ASIA 2023 Over the past four decades, Union Bank of the Philippines has proven itself a future-forward financial services provider with a consistently high ranking in terms of profitability and efficiency. It’s a pioneer of mobile banking and digital channels in the Filipino market.

UnionBank has invested in advanced technologies and digital platforms that seamlessly integrate with modern societal demands. It was the first among its peers to start a bank website, introduce a chatbot and establish a fully digital branch. It launched the country’s first electronic savings account and digitalised account opening procedures.

UnionBank approaches product design and business development with the goal of improving clients’ lives through meaningful experiences. It aims to embed banking

services into the fabric of daily life. It offers a wide range of personal, MSME, corporate, investment and fintech services. The bank partners with entrepreneurs to accelerate growth, facilitate connections and cocreate thriving enterprises. In August 2022, UnionBank completed the acquisition of USbased Citi group’s retail banking operations in the Philippines, resulting in the addition of over 1500 employees and a million customers.

The transition process is going smoothly and expected to be completed by year’s end.

Union Bank of the Philippines has recorded all-time high retail sales and loan volumes.

The CFI.co judging panel congratulates repeat programme winner Union Bank of the Philippines on claiming the 2023 award for Best Retail Bank (South East Asia).

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> DTIDZ: BEST FREE ECONOMIC ZONE LEADERSHIP - BALKANS 2023

Technological Industrial Development Zones – the Focal Point for Investors Seeking Support to Invest in North Macedonia. Politically and economically stable, a NATO member since 2020, successive North Macedonia is attracting investment from major global companies from a broad range of industries to its Technological Industrial Development Zones (TIDZs).

The 14 Technological Industrial Development Zones have emerged as fundamental entities in North Macedonia's economic development strategy, providing a strategic framework to promote both domestic and foreign direct investments. These specialized zones offer a confluence of incentives and facilities, making them an attractive choice for investors looking to establish their operations in the region.

Acting as key drivers of economic growth by

channeling investments into targeted sectors, thereby fostering innovation and technological advancements, the concentration of resources and expertise within these zones creates a ripple effect that enhances productivity, stimulates industry-wide competition, and bolsters exportoriented activities. Indeed, one of the advantages of conducting business with a relatively small country like North Macedonia is the flexibility that can be offered to investors. The government and business community in North Macedonia recognize the importance of understanding the needs and requirements of investors right from the initial discussions.

According to the annual analyses, DTIDZ in the last two years have reached investment agreements totaling more than €850m and bringing 4000 new jobs to the region,

with export reaching 1.6 billion euros, showing a remarkable progress in the last five years. The last contract worth 205 million euros was with a Taiwanese world leading electronic provider, marking the biggest greenfield investment since the independence of the country, with a plan of opening over 3,900 new jobs.

As North Macedonia positions itself as an attractive investment destination, the continued success of TIDZs will undoubtedly be paramount in sustaining its upward trajectory in the global economy. By facilitating job creation, promoting skill development, and propelling local industries towards technological advancement, TIDZs stand as indispensable drivers of the nation's economic development. The CFI.co judging panel presents DTIDZ with the 2023 Best Free Economic Zone Leadership award (Balkans).

> TGE POLISH POWER EXCHANGE: BEST COMMODITIES EXCHANGE ESG STRATEGY EUROPE 2023

TGE Polish Power Exchange operates the only licensed commodity exchange in Poland — and its continued focus on ESG integration is delivering dividends in the form of increased agility, resilience and stability. The exchange gives investors access to commodity trading markets for electricity, natural gas, property rights, carbon emission allowances as well as agricultural and food products.

TGE Polish Power Exchange collaborates with government bodies and international associations to influence market development for the better.

Like all members of the GPW Capital Group, TGE

pursues an ESG strategy that prioritises climate action, environmental responsibility, socioeconomic development and ethical business conduct. It strives to lead by example and promotes transparent communications and high standards of corporate governance among issuers.

The exchange has swiftly adapted to regulatory changes caused by the ongoing Russia-Ukraine conflict, adjusting policies as necessary to ensure the stability of services and the sustainability of revenues. The exchange closed 2022 with a record volume of transactions in the register of

origin guarantees, up 38.1 percent from the previous year. The first quarter of 2023 saw record-breaking turnover on the electricity spot market, where transaction volume rose by more than 76 percent year over year. TGE ranks as the leading exchange in Central and Eastern Europe in terms of trading volume in electricity and natural gas. The CFI.co judging panel presents TGE Polish Power Exchange — a fourth-year programmer winner — with the 2023 award for Best Commodities Exchange ESG Strategy (Europe).

> MAC SA: BEST ASSET MANAGEMENT TEAM TUNISIA 2023

As a consulting and financial services company, MAC SA is a leading company in the Tunisian financial market. Offering state-of-theart services in the fields of stock exchange, corporate finance and asset management, MAC SA is pleased today with its strong reputation acquired for more than three decades and proud on the role it has played in Tunisia’s socioeconomic development.

Close to its customers, and constantly aware of the opportunities and constraints of the market, MAC SA always offers the best tailored solutions that meet the needs of its customers 110

in terms of risk profile and investment horizon.

Today, MAC SA is totalling more than $ 300 million of assets under management through several mutual funds and bond unit trusts.

Its flagship collective management product, FIDELITY SICAV Plus has achieved the best performance since 2019, with a cumulative return of 30.9% (over 2019-2022 period). This performance is the result of a wellestablished investment strategy and a team of successful managers. Moreover, this SICAV was the winner, two years in a row, of the Refinitiv Lipper Fund Awards, in MENA markets. The CFI.co | Capital Finance International

success of FIDELITY SICAV PLUS in Tunisia is due to its low level of risk, high liquidity, advantageous taxation, and free fees.

Aware of its role in overcoming the crisis and being an active player in the Tunisian economic development, MAC SA is in the process of acquiring approval to launch its first real estate fund, under a very innovative model for the Tunisian market to meet the needs of several investors. The CFI.co judging panel presents repeat programme winner MAC SA with the 2023 award winner for Best Asset Management Team (Tunisia).

Summer 2023 Issue

> KWALE INTERNATIONAL SUGAR COMPANY LIMITED: BEST AGRIBUSINESS VALUE CREATION LEADERSHIP KENYA 2022 Kenya’s Kwale International Sugar Company Limited (KISCOL) extracts added value from the cultivation and processing of sugarcane. The company produces affordable, locally grown sugar to sweeten Kenyan lives. KISCOL is helping to offset national deficits and improve food resiliency while developing sugar by-products that support the country’s energy and environmental targets.

KISCOL, a subsidiary of the Pabari Group, commissioned the construction of its $300m processing facility nearly a decade ago. The operation now encompasses 5,500 hectares of cultivated sugarcane sustained by an innovative water management system, a sugar mill with the capacity to crush 3,300 tonnes of sugar per day and an 18-megawatt power plant fired with biofuel. KISCOL has implemented some of the most efficient irrigation

infrastructure across East Africa, reducing the water requirements for crop growth by 40 percent. KISCOL’s power plant generates enough electricity to cover its own operations as well as a 10-megawatt surplus to supplement the ever-increasing demands on the national grid. The power plant utilises a by-product of KISCOL’s sugar production, bagasse, as the main raw material for electricity generation.

Bagasse is an environmentally-friendly and relatively cheap biofuel. KISCOL also plans to build a distillery capable of producing 30,000 litres of ethanol from molasses, another by-product of sugar production. All of the above is sweet news to the CFI.co jury, which has named Kwale International Sugar Company Limited as the 2022 award winner for Best Agribusiness Value Creation Leadership (Kenya).

> MAC SA: BEST STOCKBROKER TUNISIA 2023 MAC SA is celebrating its 30th anniversary this year. Over the decades, the Tunisian company has developed a multidisciplinary offering including stock market brokerage, asset management, corporate finance, investment research and recently private equity.

Today MAC SA has become an independent financial group operating both in Tunisia and West Africa. The company has opted for total independence of its capital to continue to provide its advisory in neutrality and objectivity and away from conflicts of interest to better meet the needs of its clients. Its accessibility, customer proximity and mission-driven focus are key competencies that help MAC SA meet – and exceedexpectations. It has helped to Tunisian financial market development and accompanied Tunisian companies in their development strategies through IPOs, fundraising, bond loans, public tender offers, etc...

Always close to its clients, MAC SA deploys a dedicated front office team to execute trading

operations on the Tunis stock exchange while providing clients with an online trading platform to track the best opportunities on the market, check their accounts in real time and place orders instantly.

With more than $300 million of assets under management, MAC SA is also one of the leading asset management houses in Tunisian offering several mutual funds and unit trusts with different risk levels and various investment horizons.

Backed by its management team and led by Mr Mourad Ben Chaabane, who was recently re-elected chairman of the Tunis stock exchange for the third consecutive time, MAC SA enjoys a solid reputation, a recognized track record and a confirmed expertise.

Assets that will enable it to face the future calmly and conquer new markets.

The CFI.co judging panel announces MAC SA — a repeat programme champion — as the 2023 award winner for Best Stockbroker (Tunisia).

> EURO EXIM BANK: BEST GLOBAL TRADE SERVICES BANK 2023 There is global need for specialised trade finance institutions, and Euro Exim Bank has proven itself a preferred partner with vast international expertise, cost-effective solutions, and a next-generation online platform. Euro Exim Bank has its headquarters in Saint Lucia, an office in London and a presence in more than 190 countries through a network of representatives and partnerships. It connects clients across Asia, the Middle East and Africa with the financial instruments to facilitate import and export trade. The bank fills a gap in emerging markets, where major banks' risk appetite has yet to catch up with the region's growing demand for new products and critical raw materials. Euro Exim Bank provides clients with trade-enabling services

like letters of credit, standby letters of credit, performance bonds and bank guarantees.

Thanks to the bank's continuous investment in tech infrastructure, clients can now acquire trade instruments within 48 hours.

Since its launch in 2015, the bank has grown to over $200m in AUM. Euro Exim Bank is also planning on expanding trading platforms for provide payment gateways and merchant accounts. Euro Exim Bank (EEB) holds a Class A international banking license from Saint Lucia's financial authority and is authorised to conduct business with third parties across industries and geographies worldwide. The CFl.co judging panel congratulates Euro Exim Bank - a repeat programme winner - on claiming the 2023 award for Best Global Trade Services Bank.

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> RÉGION ÎLE-DE-FRANCE: BEST GREEN BOND THOUGHT LEADERSHIP TEAM GLOBAL 2023

The Île-de-France region, which surrounds the nation’s famed Parisian capital, serves public needs with a €5bn budget and a workforce of more than 10,000 professionals. The region is committed to completely covering its financing needs via green and sustainable bonds. Since 2012, it has issued 11 green and sustainable bonds totalling €5.2bn. Now, 85 percent of the region’s debt derives from green funding, which should account for all its debt by the 2027/28 fiscal year. Île-de-France updated its green and sustainable investment framework in 2021. Last year, it launched a €133m

resilience fund to erase debt for more than 7,000 regional MSMEs struggling to recover from the pandemic. Île-de-France bonds are regarded as best-in-class investments. Last year’s call for a €700m bond resulted in a €1.4bn order book, attracting support from 62 investors in 14 countries. Austria, Germany, Switzerland and France represented over 71 percent of the orderbook. Île-de-France issued a €600m sustainability bond in January 2023 that was nearly fourfold oversubscribed at €2.3bn (attracting 94 investors from 15 countries). Île-de-France was ranked by the

extra-financial rating agency Vigeo-Eiris among the top three European regional authorities for its sustainability performance. The region will publish a new green budget to highlight the environmental and social priorities of 2024.

Target areas include climate action, clean transport, renewable energies, ecological transition, circular economies, territorial cohesion, sport, disability and autonomy. The CFI.co judging panel announces the Région Île-de-France as the 2023 global award winner for Best Green Bond Thought Leadership Team.

> AccountAbility: BEST ESG STRATEGY DEVELOPMENT PARTNER GLOBAL 2023

AccountAbility is a global ESG consulting and standards firm that works with businesses, investors, governments, and multilateral organisations to deliver practical, effective, and enduring results that enable its clients to succeed. As a Public Benefit Corporation, AccountAbility's mission is to create a positive impact on society through the innovation and advancement of the global sustainability agenda, in addition to delivering strong and consistent operational performance.

AccountAbility operates globally through a network of offices in New York, London, Riyadh, and Dubai. The organisation uniquely provides relevant, practical, and industry-leading Advisory,

Standards, and Research services "under one roof". The firm is staffed and led by diverse sustainability experts with specialised degrees and professional experience, with an expansive industry focus including energy and extractives, healthcare and pharmaceuticals, financial services, real estate, and consumer packaged goods, among other sectors.

Guided by a business-centric mindset, AccountAbility is not an advocacy organisation or activist platform. By prioritising relevance and value creation, the firm delivers ESG solutions that ensure resilience, adaptability, and long-term competitive advantage for its clients.

Over the past few years, AccountAbility has demonstrated thought leadership in ESG development across dozens of in-person engagements and published works. In the firm's recent 7 Sustainability Trends 2023 Report, AccountAbility detailed the most forward-looking sustainability trends shaping the business landscape – and how organisations across industries and geographies can channel each trend into meaningful action. For the third consecutive year, the CFI.co judging panel has selected AccountAbility as the global award winner for Best ESG Strategy Development Partner, this time in 2023.

> LANDESBANK BADEN-WÜRTTEMBERG (LBBW): BEST COVERED BOND ISSUER GERMANY 2023

In the 2022/23 financial year, German banking group Landesbank Baden-Württemberg (LBBW) demonstrated an impressive capacity for identifying and seizing issuance opportunities.

It achieved a combined orderbook of €17.8bn with participation from 592 investors. The mid-sized universal bank paves the way for clients to raise mission-critical capital, issuing covered bonds with impeccable market timing to achieve the highest levels of demand and the tightest spread outcomes. LBBW timed the issuance of a six-year €1bn green mortgage covered bond to coincide with the summer 112

break, thereby creating momentum during a period of traditionally low transaction activity.

Overwhelming demand resulted in nearly fivefold oversubscription and an order volume above €4.7bn — the largest LBBW covered bond orderbook in more than a decade. The bank introduced a €1bn public sector bond providing yield-hungry yet commitment-averse customers with two-year investment-term opportunities. The quick-turnaround tenor piqued investors, and the final orderbook exceeded €5.1bn (excluding JLM interest).

LBBW covered bond terms range from two to CFI.co | Capital Finance International

ten years. The bank has strengthened its realestate finance business with the acquisition of Berlin Hyp (BHH), which reported financing volume of €26bn in 2021. The consolidated banking group is dominating the European ESG bond market, with €3bn issued across four LBBW and BHH deals over the past fiscal year.

The bank has earned clients’ trust, as evidenced

by LBBW’s track record of landmark deals and multiple mandates from repeat issuers. The CFI. co judging panel recognises LBBW as the 2023 Best Covered Bond Issuer (Germany) award winner.

Summer 2023 Issue

> LANDESBANK BADEN-WÜRTTEMBERG (LBBW): BEST PRIMARY MARKETS TEAM GERMANY 2023

Landesbank Baden-Württemberg (LBBW) is a German banking group with 200 years of experience and consistently high marks from international rating agencies. LBBW has earned the trust of corporate, retail and institutional customers at home and abroad. The mid-sized universal bank ranks among the most active issuers worldwide.

In 2022, LBBW generated €901m in operating profit before tax. Despite market volatility and geopolitical crises, it achieved the highest company profit since 2006. And that figure excludes the effect of a 2022 consolidation that

bolstered before-tax profit to €1.9bn. LBBW was able to accomplish this thanks to a business model aiming to achieve growth and relevance by supporting socio-economic development via sustainable and innovative solutions. The bank is supported by a workforce of 10,000 professionals across 100 nationwide locations and 17 international offices. The primary markets team partners with clients seeking to raise capital through the issuance of new securities.

It works with SMEs, multinational corporates, international banks, pension schemes,

institutional investors, public sector entities and commercial real estate developers. LBBW leads the market for EU covered bonds in terms of trades and volume. Between June 2022 and May 2023, the bank worked with 72 bond issuers to lead-manage 101 transactions. Three-fourths of those deals were executed outside of Germany

by LBBW’s debt capital markets department.

The CFI.co judging panel points to the bank’s superior distribution and execution performance as cinching factors in LBBW claiming the 2023 award for Best Primary Markets Team (Germany).

> MBH BANK: BEST ESG BANK HUNGARY 2023 MBH Bank’s sustainability vision goes beyond legislative compliance to inspire and amplify action. MBH Bank frames sustainability as a business opportunity through ongoing educational outreach. It factors ESG risks across management decisions to reduce carbon emissions and contribute towards climate targets. Green finance supports projects with positive environmental impacts, particularly in the areas of energy consumption and efficiency as well as energy modernisation of residential properties. An automatic ESG assessment is conducted for all clients using EBRD heatmap data and special company databases. Additional customer-supplied data

could improve the ESG risk rating by one level — if the company holds ESG certifications, its revenues align with green EU taxonomy, its activity supports environmental objectives and its energy consumption derives from renewable sources. As a responsible corporate citizen and top-rated employer, MBH Bank integrates transparent and ethical governance processes across internal and external operations. The bank prioritises the personal and professional development of its workforce, from employees’ physical and mental health to their ESG awareness and knowledge. A third of MBH employees have been with the bank for more than a decade. Women represent 70 percent

of the MBH workforce and a third of the top management team. MBH Bank encourages volunteerism among staff — and it leads by example. Its primary corporate citizenship goals aim to increase financial literacy, support socio-economic community development as well as protect and preserve the environment.

In 2023, the MBH Forest was created, initially by planting 10,000 trees (to be repeated every year) to start offsetting the Bank’s own emissions and to raise customer awareness of the importance of nature conservation. The CFI.co judging panel congratulates MBH Bank on claiming the 2023 award for Best ESG Bank (Hungary).

> B2B GAMING SERVICES: BEST ONLINE GAMING PLATFORM SOLUTION – EUROPE 2023

Since its launch in 1997, the operation has been pushing the boundaries of play. The impetus was the need to establish a “futureready” business model that would provide end-customers with an entertaining gaming experience and safeguard their interests.

The future-forward company B2B GAMING SERVICES, is driven by principles of “servantleadership” and “agile innovation”. It has developed a modular and scalable platform solution for flexible and sustainable business growth to serve the needs of online and landbased betting & gaming with the objective to fully host the progressive demands of the players across regulated markets. B2B GAMING SERVICES markets the platform as a powerhouse for possibilities.

The company foresaw a shift in the gaming landscape — with the line between business providers, aggregators, and operators blurring overtime — and it has strategically positioned itself to capitalize upon that evolution. B2B GAMING SERVICES operations are centered across the gaming spectrum. The company is harnessing advances in AI to empower the player with more informed decisions, and to create more personalized user experiences. B2B GAMING SERVICES is licensed since 2007 by the Malta Gaming Authority and since 2012 in Greece under the then transitional regime, since 2021 has acquired Greek Permanent Licenses issued by the Hellenic Gaming Commission upon the institution of the new law in the Country of Greece.

CFI.co | Capital Finance International

B2B GAMING SERVICES is granted with the full stack of accreditations and certifications, including ISO 9001: 2015 for quality & ISO 27001:2013 for management systems information security on the scope of “Provision of operation systems, gambling services and online gambling, in all countries where the company is licensed (Sports betting, Live Sports betting, Livestreaming, Casino, Live Casino, Games, Virtual Sports)”.

The Company has immediate expansion plans, and we expect to see their existing success replicated in new markets. The CFI. co judging panel presents B2B GAMING SERVICES – a repeat program winner- with 2023 award for Best Online Gaming Platform (Europe).

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> Fly Away, but Not Too Far:

Africa’s Domestic Tourism Limitations are Coming In for Special Attention…

By Brendan Filipovski

Africa’s population is getting bigger, younger, and wealthier.

The middle class is growing, too, and will include 300 million people over the next 30 years.

South Africa: Durban

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emand for tourism is set to explode, which should be a bonanza for the continent. A glimpse of the potential was seen during the pandemic, but transport links are needed to capitalise on the domestic tourism potential.

Fortunately, some countries are leading the way.

Tourism in Africa is nothing new. In 2019, the sector accounted for $182.4bn of African GDP (FDI inflow was just $45bn). But only 55 percent of that $182bn was from domestic tourism. As the table shows, that’s a low percentage when compared to the other continents. Demand from local tourists tends to be more resilient.

Percentage of total travel and tourism spending by domestic tourists in 2019: Africa 55%, AsiaPacific 74%, Europe 64% and North America 83% (Source: World Travel & Tourism Council).

The pandemic hit tourism hard, particularly in the south and east of the continent — where the reliance on foreign tourists is highest. Revenue from tourism fell by 47.1 percent in 2020. In 2021, revenue was still 35 percent lower than in 2019. But the crisis did prompt several African countries to focus more on domestic and intraAfrican tourists.

South Africa developed the “It’s Your Country, Enjoy It” campaign, with some hotels and tourist operators offering discounts of up to 40 percent.

The East African Community also launched a regional and domestic tourist campaign.

Ethiopian Airlines partnered with resorts to create discounted packages.

This focus on marketing to African tourists is likely to continue, but more needs to be done to remove some specific barriers. The largest of these is the lack of air travel connections. For a continent sometimes lacking road and rail infrastructure, air travel is critical.

Africa ranks last on IATA’s air connectivity index, which weights passenger numbers by the importance of the destination. Africa looks even worse when the index is weighted by population (see chart) and GDP. Another aspect to connectivity is the number of unique city pairs connected by flights. Looking at pre-pandemic figures from 2019, Asia has 12,360 city pairs, Europe 9,010, Latin America and the Caribbean 1,780, the Middle East 1,060, and North America 5,450.

Africa has 970.

When you weight it by population, Africa has around 1.3m people per city pair, the Middle East 438,000, Latin America and the Caribbean 364,000, Europe 82,000, and North America 67,000. These figures include Africa’s connections with the rest of the world, as well as intra-African connections.

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"The lack of connectivity is caused by a lack of investment in infrastructure, tight state control over foreign investment, closed bilateral routes, and struggling national carriers. The African Union is keen to liberalise the air industry to unlock benefits for tourism, trade, and the free movement of people."

Looking solely at intra-African connectivity, the picture is even worse. The revenue passenger kilometres (RPK) figure for African flight activity is around one-sixth of that for international flights. This lack of connectivity translates into longer and more expensive flights between African destinations — even when compared to international destinations. Visa fees and high taxes don’t help. The best flight between Lagos and Nairobi in early May cost $1,120. London to Nairobi cost just $641, Casablanca to Cape Town $1,127, Copenhagen to Cape Town $757.

The lack of connectivity is caused by a lack of investment in infrastructure, tight state control over foreign investment, closed bilateral routes, and struggling national carriers. The African Union is keen to liberalise the air industry to unlock benefits for tourism, trade, and the free movement of people. The 1988 Yamoussoukro Decision (and its 1999 follow-up) featured such an initiative, but implementation stalled.

In 2015, the African Union unveiled plans for a single African air-transport market (SAATM) — the Open Sky Agreement. It began operation in 2018, and is a key pillar of the AU’s Agenda 2063.

SAATM replaces bilateral service agreements between individual countries, and allows airlines to fly between foreign destinations — as long as the flight starts and ends in the home country and liberalises air tariffs. It has also adopted a dispute-resolution mechanism from the Yamoussoukro Decision and is harmonising regulations for carriers.

The number of participating countries has grown to include 34 of Africa’s 54 countries. Full implementation of SAATM is expected to increase intra-African flights by 51 percent — and reduce average fare costs by 26 percent. It is also expected to create close to 100,000 jobs and generate an additional $1.1bn in annual GDP. The potential benefits can be glimpsed in the success of Ethiopia and the state-owned carrier, Ethiopian Airlines. The country’s air connectivity CFI.co | Capital Finance International

increased 349 percent between 2009 and 2019, and Ethiopian Airlines has become the fastest-growing and most profitable African airline of the decade. It is now Africa’s largest carrier. The conflict in Tigray has had an impact, but Ethiopia Airlines nonetheless increased revenue by 79 percent (to $5bn) for the 202122 financial year.

Key to that success have been partnerships with other African airlines and governments. Rather than directly competing with others, Ethiopia Airlines used partnerships to create regional hubs that feed into its network. It has created win-win situations and unlocked rapid growth.

This could be a model for the whole of Africa: cooperation, rather than struggling alone in small, fractured markets.

Ethiopia Airlines owns 49 percent stake of Malawi Airlines, 49 percent of Guinea Airways, 45 percent of Zambia Airways, and 40 percent of Togo’s Asky Airlines. It is currently launching Nigeria Air in partnership with the Nigerian government and will take a 49 percent stake there. It is also in talks with the government of DR Congo.

“When we partner with other stakeholders to set up airlines at other locations in Africa, our primary goal is not to earn a dividend from the airline,” says Mesfin Ethiopia Airlines CEO Tasew. “It is to set up a partner airline which can work with Ethiopian Airlines in feeding each other.”

Ethiopia Airlines has demonstrated an ability to internally master leading technologies and to plan in a strategic way. While it owed its early growth to assistance from TWA, today it flies under its own steam and sees its competition not in Africa, but in the Gulf, and further afield.

Growing intra-African tourism will help grow the African tourism pie. It will also help the free movement of people around the continent, and foster business and trade relationships. Things seem to be moving in the right direction, and continued success could realise the dream of African union. i

Summer 2023 Issue

> Red Med Capital:

An Independent Investment Bank in Morocco with a Green DNA CFI.co in conversation with Abdeslam Ababou, chief executive of Red Med Capital...

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EO of the independent investment bank, Abdeslam Ababou, founded the first arm of the group, Red Med Finance, in 2004. It has been involved in major M&A transactions which led corporate finance activities in sectors including telecom, education, financial services or the agro industry. The advisory bank, has also been involved in renewable energy sector since 2010 and developed a sharp expertise in this industry.

The second subsidiary, Red Med Asset Management, came into being in 2011. It has assets of more than €1.1bn under management, and a large portfolio of institutional, corporate and private clients. In 2020, the group broadened the scope of its activities by responding to the critical needs of the SME sector by founding Red Med Private Equity. The first fund is addressing the growing SME’s markets in Morocco, Tunisia, Ivory Coast and Senegal. In 2021, it acquired a brokerage firm which was to become Red Med Securities. The most recent to be born, in 2022, was management firm Red Med Real Estate.

WHAT IS THE FRAMEWORK FOR INTERNATIONAL INVESTORS IN MOROCCO? Morocco benefits from an attractive investment framework, thanks first to its political stability and macro-economic indicators that have remained relatively stable in a period of worldwide turbulence.

Morocco has encouraged FDI in the past 1015 years by providing incentives and first-class infrastructure such as Tangier Med port and industrial areas/free zones. Morocco prioritised training for our young people to create valuable expertise in some key sectors.

Automotive has become something of a flagship.

In just 10 years, Morocco has attracted two major car manufacturers and Tier 1 O&Ms, creating a competitive business environment.

The new investment charter, voted last November, encourages private investment — aiming to outpace public investment. It also provides incentives for specific industries to promote the regional equity and for Strategic projects — worth more than £79m — that will be negotiated on a case-by-case basis.

Morocco has proven itself to be a safe haven for international investors, with geographic proximity to Europe and access to a billion consumers — representing 60 percent of worldwide GDP — via FDA.

CEO: Abdeslam Ababou

Morocco boasts a strong legal framework that guarantees investors’ interests, especially in terms on repatriation of dividends or cession revenue, take top priority. The country has all the ingredients to boost its FDI in key industries.

There is a clear momentum for that.

WHAT GREEN ECONOMY OPPORTUNITIES EXIST IN MOROCCO? Red Med Group has been actively involved in the renewable energy sector for 13 years.

Since 2010, Red Med Capital has advised major national and international projects, for a development of about 800 MW of renewable energy.

Red Med Capital is also involved in the promising green hydrogen industry by advising two key players to develop large-scale projects to supply the national market and to export to Europe.

With the war in Ukraine, European countries have had to rethink their energy supplies.

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Morocco, which benefits from extraordinary renewable energy assets, which is only 14 kms from Spain, which has an existing grid and a gas pipeline connected to Europe, presents itself as a suitable partner. Morocco has demonstrated a willingness to be a leader in that field all along the last fourteen years.

At the behest of His Majesty King Mohammed VI, the government is encouraging the development of the PtX industry by proposing a “Moroccan Offer” on a win-win basis. Moroccan potential has been illustrated by the latest report from the International Energy Agency which has identified Morocco as part of the five hot spots for green hydrogen projects, with a goal of producing four percent of the world’s green hydrogen by 2030.

For all these reasons, Red Med Capital considers itself a bridge for investors, providing the knowhow to transform opportunities in concrete projects. i Website: www.redmedcapital.com 117

> Algeria is Cooking with Gas —

But It Needs to Capitalise on Opportunities and Look Ahead

By Brendan Filipovski

Good natural reserves and established exports, but the North African country needs to contribute to Europe’s green transition for future prosperity.

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lgeria’s natural gas exports hit record levels in 2021 — 54.6 billion cubic metres — and 2022 saw record gas prices in 2022, pushed up by the war in Ukraine.

But while the government of the North African country is dreaming big — it wants to push that 54.6 bcm figure to a round 100 this year — exports to Europe fell last year.

Is enough being done to seize the opportunity?

After contracting by 5.1 percent in 2020, Algeria’s real GDP increased 3.4 percent in 2021 — and, according to the IMF, it is expected to be around 2.9 percent in 2022. Real GDP from hydrocarbons increased 10.5 and 1.7 percent in 2021 and 2022 respectively. Together. oil and gas represent around 12 percent of Algeria’s GDP. Revenue from those industries is vital for Algeria’s fiscal balance, which is expected to be in surplus for 2022. Oil and gas revenue is expected to be $50bn for 2022, up from $34bn in 2021. This is a timely salve, given that government debt has been rising since 2015 and is now at 63 percent of GDP. In 2021, Algeria was the 10th-largest gas exporter in the world, and the third-largest exporter to the EU by volume (12.4 percent). The EU is also Algeria’s largest export market for gas, at 91.6 percent. So, when Russia invaded Ukraine last

February and the EU pivoted from Russian gas, Algeria expected to benefit. A lot.

The opportunity was heightened with the rise in Europe’s natural gas price during 2022 (see chart). At its peak, in August, the price was more than six times that of the previous year. While it has fallen because of a mild European winter and an increase in inventory, it remains well above pre-invasion levels.

Around 74 percent of Algeria’s gas exports to the EU go by pipeline. The Trans-Mediterranean (TransMed) pipeline connects to Italy via Tunisia, while the Maghreb-Europe line connects to Spain via Morocco, and the Medgaz pipeline links directly with Spain. These pipelines have a combined capacity of 57 bcm per year. Only Italy and Spain can effectively use the gas coming from their pipelines. The only other way to transport it in large quantities is to turn it into liquid (LNG) and transport it by ship.

Despite increased European demand, a hefty price increase and spare pipeline capacity, Algeria’s gas exports to the EU fell by 12 percent in 2022, according to S&P Commodity Insights.

It is unclear if total output has increased or decreased for 2022, with differences between data from analysts and government sources.

Algeria stopped sending gas through the 12 bcm-capacity Maghreb-Europe pipeline from November 2021 after cutting diplomatic ties with Morocco. It had been previously sending six

to eight bcm via the pipeline. In 2022, it sent nine bcm through the 10 bcm-capacity Medgaz line to Spain, up from eight in 2021 — little extra capacity there. Algeria’s LNG exports to Spain are small (0.4 bcm in 2022) and cannot make up for the closed pipeline.

Algeria stopped using the Maghreb-Europe pipeline over long-standing differences with Morocco. The dispute centres around tensions over the Western Sahara and Morocco’s normalisation of relations with Israel. In March 2022, Spain changed its stance on Western Sahara, supporting Morocco’s plan for granting limited autonomy. In June 2022, Spain was again exporting gas through the Maghreb-Europe pipeline.

Algeria increased its exports via TransMed to Italy — from 20 bcm in 2021 to 22 bcm in 2022 — but this was not enough to offset the drop in exports to Spain. Italy is Algeria’s top customer.

Total LNG exports to Europe fell from 17 bcm in 2021 to 13 bcm in 2022, including a drop in exports to France: five bcm to 4.4. Algeria’s total LNG exports for 2022 decreased to 14.5 bcm.

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Another explanation for the fall in exports to Europe may be a strong rise in domestic consumption in 2022. Natural gas is the main generation source of electricity. Domestic consumption has been trending up from a 21 percent share of total production in 2000 to 45 percent in 2021. It has been growing at around six percent a year, along with Algeria’s population.

The government is committed to meeting domestic demand, despite the export price. In contrast, overall gas production has remained within an 80- to 100 bcm band since 2000.

Algeria’s conventional oil and gas fields are in their mature phase.

While export to the EU may have declined in 2022, Algeria is confident of expanding future production, and has announced $40bn in investment though to 2026. Combined with the 2030 strategy by state-owned oil and gas company Sonatrach and the introduction of the 2019 Hydrocarbons Law (adopted in 2020 to increase incentives for private investment), the government is hoping to kickstart new exploration and production.

It is also trying to overcome perceptions of

corruption. Foreign investors are watching closely.

Algeria is hoping to extract 20 bcm annually from shale gas in 2030 — and 70 bcm by 2040.

Chevron has recently been in talks with the government over exploration in the country. In December, the government signed a co-operation plan with China that includes the energy industry. Algeria exports oil, petroleum products, and natural gas to the People’s Republic. Algeria signed up to the Belt and Road Initiative in 2018 and has applied to join the BRICS states: Brazil, Russia, India, South Africa and China.

Growth in renewable energy would unlock more gas for exports and help Algeria with its green transition.

With its desert regions and a long coastline, Algeria has huge potential for solar and wind energy. In December, the government signed an agreement with German gas company VN to build a 50-megawatt green hydrogen facility in Algeria.

There are existing projects with British, Chinese and US companies, and a recent agreement with Italy.

Large parts of Algeria remain unexplored in terms of mining, including the north, south, and offshore. Even existing fields have untapped potential. In June 2022, new reserves were found at the 67-year-old Hassi R'Mel field.

Algeria is also investing in enhanced recovery tech to maximise the life of its maturing fields.

Algeria has been enjoying a windfall with the increase in gas prices, but to fully seize its current opportunity, it needs to increase production. The 2022 fall in European exports can be overcome in the short term, but serious investment is needed to unlock untapped capacity in the long term. Current and future windfalls should also be used to boost green energy production. This will relieve domestic electricity needs and provide an even greater economic opportunity.

Algeria has the third-largest recoverable shale gas reserves in the world — estimated to be up to 20 trillion cubic metres. Its conventional reserves total around 2.3 tcm. Developing such non-conventional reserves will require close cooperation with independent companies. So far, only a few pilot projects have been run, but CFI.co | Capital Finance International

Europe is weaning itself off Russian gas, and fossil fuels in general. Algeria should make itself as indispensable to the European green transition as it has been with gas supply. i 119

> No Sugar Coating for Kenya’s Cane Industry, but

KISCOL Has an Established Place in Industry

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wale International Sugar Company Ltd (KISCOL) knows full well the sweet taste of success.

The Kenyan firm boasts a $300m processing facility, 5,500 hectares of cultivated sugarcane, a mill capable of crushing 3,300 tonnes per day, an 18MW bagasse-fired power plant, and a sophisticated irrigation and watermanagement system.

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CFI.co wanted to find out more about the organisation which prides itself on producing affordable, locally grown sugar. We put some questions to the KISCOL team behind the flagship project of the Pabari Group.

CFI.co: What are your hopes for the future of your business, and for the industry as a whole?

KISCOL Team: In the immediate future, we plan to increase our sugar production output to 10 CFI.co | Capital Finance International

percent of the market share. In the long term, our plan is to create a diversified production company where we will be setting up an ethanol distillery, maximising our land bank by adding solar production to our power production — over and above the power generation from bagasse.

We also intend to set up a fertilizer plant and water utility entity by leveraging our water assets. For the industry, we foresee enhanced

Summer 2023 Issue

An alternative outcome is that we may see large investors from abroad set up production entities to meet the market demand. All-in-all, the cost of sugar will remain high — which is an incentive to prospective investors.

What relevant changes to legislation or regulation would you like to see?

The government set up a taskforce to look into legal and policy changes that will enhance the sugar industry. Part of that was the passing of a new Act of Parliament specific to the industry, as opposed to the existing one which covered many crops — and led to ineffective regulation.

The new Sugar Bill is currently with parliament, and this new law is welcome. We hope it will prompt a return of the sugar-development levy, particularly on imports that will go to create a development fund via financing inputs and price stabilisation.

There should also be regulation creating well defined zoning areas to avoid millers poaching one another’s raw materials. We would like a mandate for millers to bring imports into the country, rather than private individuals. This will ensure that the industry ecosystem benefits.

Lastly, we hope to have several tax-policy changes, such as exempting key inputs from taxation, to stimulate investment.

Can you pinpoint any pitfalls to help newcomers to the industry?

Development of a greenfield sugar project is a capital-intensive endeavour due to our weak and segmented investment laws.

There should be a mechanism of investor protection from development until commercial operations begin. Any new investor should try to seek guarantees from government prior to investing.

Do you have any anecdotes to illustrate your progress over the years?

When we were setting up the project, land prices within our area we around $500 per acre. As we speak, the price sits at $6,000 per acre; some are close to $10,000. This has created an increased demand. competition from the millers who have largely set up in the western part of Kenya, and do not have their own “nucleus”. Companies will either be forced to set up on their own or fight over the dwindling raw material.

This threat is coupled with the looming COMESA safeguards. Companies will be forced to innovate or perish. The situation may see increased imports into the country to cover the production gap.

Another issue is quality of life: the southern coastal region of Kenya has high poverty levels.

Through investment, we’ve created employment to 2,000 local people. Money circulation has created many offshoot businesses, like hotels and eateries, rental companies, shopping centres, transport organisations.

We’re happy that as opposed to going to going to the main commercial town for shopping, one CFI.co | Capital Finance International

can now buy essentials within walking distance of the factory. Our infield roads have opened up many places which had been cut off from main infrastructure.

How do ESG parameters and sustainability principles affect the way your industry is run?

We fully embrace these parameters and principles. KISCOL has embarked on a number of sustainability efforts. We initiated a clean development mechanism (CDM) project to sell carbon credits on Certified Emission Reductions (CERs) to the Swedish government. This helps Sweden to meet its targets under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC).

We teamed up with CAMCO on the conceptualising, drafting, and completion of the protocols-based CDM. When it was finalised, we were invited to present the project at the UNFCCC’s 17th Conference of Parties (COP17) in December 2011 in Durban, South Africa, through the International Emissions Trading Association (IETA) to the CDM executive board.

KISCOL was nominated for the AfriCAN Climate Good Practice Award in 2013 for its initiatives in adapting to and mitigating climate change in Africa. KISCOL is climate-conscious and ensures that its carbon footprint is minimal. The very nature of our operations means that transport and logistics must be closely inter-twined along our supply chains.

We’ve acquired and introduced a robust vehicletracking system that saw a 30 percent reduction in the waste or misuse of company-assigned fuel. This was another step to reducing our carbon footprint. “One step at a time” has been our motto in the quest for sustainability and environmental responsibility.

Most Kenyan factories are dated and old, but there is a trend for companies to confront these issues via legislation, advocacy, and bank financing. The initial cost of compliance is high, but we foresee positive outcomes.

What are some of the challenges you are facing?

Mid-term challenges revolve around the cost of inputs. The weakening shilling is increasing the overall cost of production. The economic situation here is making the cost of finance higher: banks would rather lend to the government than to the private sector.

What is the single most important requirement to becoming a global business?

Good governance ensures that the business is run on clear principles. With this you can, over time, build a firm framework to grow beyond your borders. Innovation ensures that you are able to 121

diversify your business, and keep your enterprise competitive and relevant.

How do you see the short- to mid-term prospects for your industry?

In the mid-term, we foresee the unfavourable shilling-to-dollar exchange rate affecting our purchasing power for critical industry components. Shelf prices will remain high due to the higher average costs of inputs. In the long term, better governmental fiscal policy should reverse this trend.

What excites you about the business world in general?

The pace of innovation. The world has transformed enormously over a short period of time, and technology has been a key catalyst. What was thought unimaginable by our forefathers is what we experience in our everyday.

What have you learned over the course of your careers?

The value of people and relationships. Nothing gets done without people.

What motivates and enthuses you about the business?

The limitless potential and impact that the business can have. From cane, you can have 122

sugar, power, fertilizer, CO2 distillery — all big businesses in their own right. This means that just one crop can have a major impact on society.

What is special about your organisation’s management style?

We embrace a consultative management style with input from heads of departments and their heads of sections. Information flow is two-way, with input and feedback encouraged from all employees.

Can you share some management or organisational secrets?

Sugar industry business has been around for generations, so I don’t think any secrets are left.

One has just to do what has continually been done, in the best way possible.

What are the key strengths of your team?

Our businesses are run on values driven by: • Integrity: we conduct business fairly, with honesty and transparency.

• Understanding: Caring, showing respect, compassion to our colleagues and customers.

• Excellence: We strive to achieve the highest possible standards in the quality of the goods and services that we provide.

• Unity: Teamwork, cohesive collaborations, CFI.co | Capital Finance International

strong relationships based on tolerance and mutual co-operation.

• Responsibility: We are sensitive to the cultures of the countries, communities and environments where we operate. Inclusivity marks our operations. We ensure that what comes from the people goes back to the people, and the soil, many times over.

How important is your support team?

Support teams, in whatever cadre, are critical to improved productivity and effective results. The value of having a team that shares the company mission and vision cannot be overstated. Our support teams shore up the back-end so that the front-end shines. We encourage teamwork, cohesive collaborations, strong work-based relationships based on tolerance, and mutual cooperation.

What are the key traits of a good corporate leader?

In today’s world, where everyone is to a large extent knowledgeable and has access to information, a leader should first be grounded in his or her understanding of their role. This creates confidence in people.

Secondly, a leader should be able to motivate his or her team to display eagerness and inspiration. i

The first of its kind

THE NEW MASERATI MC20 - A TRUE OBJECT OF DESIRE Discover more on maserati.ch

MC20: Fuel consumption (l/100 km): combined 11.5 - CO2 emissions (g/km): combined 261 - Efficiency class: G The stated energy values correspond to the WLTP standards. CO2 target value 118 g/km, average CO2 emissions 169 g/km.

> Middle East

Qatar’s World Cup Moment Was Seized — and Celebrated

By Brendan Filipovski

The tiny nation did itself and the football world proud — and the legacy of infrastructure and sudden fame has boosted tourism.

Qatar: Doha

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D

o you remember the moment Motown superstar Diana Ross missed a “penalty shot” at the opening ceremony of 1994 FIFA World Cup in the US?

World Cups are often hit-and-miss in many ways.

The 1994 event helped to launch American Major League Soccer, while the World Cups of 2010 and 2014, in South Africa and Brazil respectively, took place in stadiums hastily built in the middle of nowhere. Qatar’s role in the 2022 World Cup was controversial from the moment the hosting rights were announced.

But the success of the tournament has left a more open path for tourism in Qatar and the surrounding region. Not for the first time, this small nation from humble beginnings has taken a leader’s stance.

Few believed that Qatar would win the rights to host the Cup, let alone manage to stage it. Even after the announcement, some even lobbied for it to be stripped of the rights. There was the issue of the summer heat, Qatar’s track record on labour and human rights, and even whether thirsty European fans would be able to enjoy a lager or two. Later came a diplomatic dispute with Saudi Arabia.

"Few believed that Qatar would win the rights to host the Cup, let alone manage to stage it. Even after the announcement, some even lobbied for it to be stripped of the rights."

Numbers fell with the pandemic — 582,000 and 611,000 in 2020 and 2021 respectively. But in the first half of 2022, they shot back up to 725,000; 2022 was a launchpad to a new period of growth. International tourism was up 64.4 percent in January 2023.

By 2030, Qatar hopes to attract up to six million international tourists each year, and to increase tourism’s contribution to GDP from seven to 12 percent. It wants to be the region’s sporting and tourism hub.

Lionel Messi finally got his hands on the trophy, Kylian Mbappé scored a hattrick in the final, and Morocco became the first African or Arab nation to reach the semis.

The World Cup is just the latest in a long line of sporting events held in Qatar, and each has boosted the country’s profile — and infrastructure. It hosted the Asian Games in 2006, the Swimming World Cup in 2014, the Handball World Cup in 2015, Road Cycling World Cup in 2016, and the Gymnastics World Cup in 2018. It will also host the Asian Cup in 2023, the Swimming World Cup in 2024, and the Asian Games in 2030. It regularly hosts tennis and golf tournaments, and has a 10-year contract to host a Formula 1 grand prix. Qatari Sports Investments purchase of Paris Saint Germain football club can also be seen as part of this strategy.

The tournament was an even greater success off the pitch. It hosted visitors from around the world, and 3.4 million spectators watched the matches.

A further five billion watched on TV screens — most of them seeing images of Qatar for the first time. Only the Olympics rival the World Cup in terms of brand exposure for host countries and cities.

The infrastructure legacy from the world cup will serve the country well: 240 new hotels were built in the lead-up, with a focus on luxury categories.

The Doha metro and Lusail tram service now links three cities. During the World Cup group stages, it handled 9.19 million trips. Doha Airport capacity has been expanded to 50 million passengers a year.

Prior to the World Cup, visits to Qatar were mostly business trips. With the increased infrastructure and strategic planning that went into the event, tourist numbers have been growing — and the type of tourism has been broadening.

A new cruise terminal at Doha port, opened in 2022, can host two ships and 7,000 passengers a day. Cruise ships have been a growing part of Qatar’s tourism. Passenger numbers have increased from 4,000 in the 2015-16 season to 145,000 in 2018-19. With the new terminal, that number is expected to reach over 200,000 this year. More cruise lines are coming, with some

But there were diehard supporters, too. Back in 2012, Sir Alex Fergusson said he “admired (Qatar’s) purpose and vision” and many argued that the if the competition was to be truly representative of the world, it needed to be held in the Middle East.

And Qatar’s World Cup effort was a revelation.

In 2007, one million international tourists visited.

In 2017, this had increased to 2.3 million.

of them now using Qatar as a turnaround port rather than as a one-day or overnight stop. This increases the contribution to the local economy.

Construction on the new city of Lusail, about 20km from Doha, started in 2006. By the time of the World Cup, it had become a crowning jewel. Overlooking the stadium itself, and the restaurants, shopping malls and hotels, are the scimitar-shaped Katara Towers and the twisting Lusail Plaza Towers. The city boasts water recycling systems and a commitment to public transport.

One memorable scene from the World Cup was the handshake between Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, and Crown Prince Mohammed bin Salman of Saudi Arabia.

Both were seen wearing scarves bearing the other’s national colours. This would have been unthinkable even two years ago.

Saudi Arabia was the top source of World Cup visitors. When Saudi Arabia beat Argentina in the group stage and Morocco advanced to the semi-finals, Qataris, Saudis, and other Arab nationalities celebrated together. While there is a natural focus on international tourists from outside the region, there is great potential for increased tourism within the Middle East.

The neighbouring Gulf countries saw a direct boost to their tourism from the Cup, with many visitors basing themselves in those countries and flying into Qatar for matches. There were over 500 daily flights between Qatar and its neighbours.

Qatar is within a six-hour flight of 80 percent of the world's population — and because of the World Cup, the world population now know what Qatar has to offer. The success of the World Cup and the resulting boost to tourism will be hard to replicate.

Then again, there is talk that Qatar could bid for the 2032 Olympics... i

"Qatar is within a six-hour flight of 80 percent of the world's population — and because of the World Cup, the world population now know what Qatar has to offer."

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Summer 2023 Issue

> Accenture on Generative AI:

Surfing the Next Wave of Digital Transformation

By Bashar Kilani Managing Director, Accenture

Artificial intelligence is here to stay, and, with suitable caution that should be a good thing, argues Bashar Kilani.

G

enerative AI will define the next wave of digital transformation.

Over recent decades, we have witnessed the "webification" of applications, followed by the dominance of smartphone apps. Generative AI offers another revolutionary shift — allowing users to engage with applications in any language.

It could boost individual and organisational productivity, but there are ethical implications — and potential risks — to discuss.

USER ENGAGEMENT In the first instance, Generative AI is likely to affect banking, government services, and airlines.

Previously, customers had to physically visit bank branches or government offices. The introduction of call centres brought some convenience, but they too relied heavily on human assistance.

Internet banking and e-government services emerged, enabling users to perform transactions online, enhancing accessibility and efficiency.

Mobile apps further streamlined the user experience.

Now generative AI introduces natural language interfaces that will, its proponents say, revolutionise user interactions, and provide unprecedented convenience and satisfaction for humans.

NATURAL LANGUAGE INTERFACE Powered by deep-learning algorithms and neural networks, AI has made significant progress in understanding and generating human-like text.

This enables applications to interpret and respond to user queries in a conversational manner.

In the banking sector, customers can use “natural language” to check balances, transfer funds, or receive personalised financial advice. Government service platforms can process complex requests, provide information, and offer guidance. Airlines can offer automated ticket bookings, travel recommendations, and real-time flight updates.

MULTILINGUAL AND TOPIC DIVERSITY Generative AI can expand the range of topics for user engagement. By processing and generating text in multiple languages, applications become more inclusive and accessible to a global audience.

Workshop on GenAI

In banking, customers can interact with applications in their preferred language, wherever they are. Government service platforms can communicate with people from diverse linguistic backgrounds, and so can airlines.

Generative AI represents a transformative force that will redefine user interactions and enable convenient engagement across sectors. Its multilingual capabilities foster inclusivity. It has the potential to boost productivity.

BOOSTING PRODUCTIVITY The new technology has the power to enhance productivity; studies project that average productivity will increase by 30 percent by 2025, with varying impacts across sectors. Bluecollar jobs are expected to see a 10 percent productivity boost, while creative jobs could get a 60 percent surge. Programmers, for example, are set to benefit from generative AI tools like GitHub, which streamline coding processes and automate repetitive tasks. By taking on mundane or time-consuming activities, generative AI empowers individuals to focus on higher-value tasks.

But it is crucial to navigate the ethical implications and potential risks, ensuring responsible deployment and building trust. By addressing these considerations, we can pave the way for a productive future with improved user experiences, and ethical tech advances. i ABOUT THE AUTHOR Bashar Kilani is Managing Director at Accenture based in Dubai and a member of the Growth Markets leadership team focusing on Digital Economy market making trends that accelerate growth, transform operations, and enable organisations to build their digital core.

ETHICS AND POTENTIAL RISKS While all this holds tremendous promise, it also raises ethical considerations. The potential misuse of AI-generated content — spreading misinformation, creating fake identities, or manipulating data — is a significant concern.

Robust security measures, stringent data privacy regulations, and continuous monitoring are crucial.

Also essential for fair and ethical outcomes are transparency, responsible data use, and accountability for decision-making.

CFI.co | Capital Finance International

Author: Bashar Kilani

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> Mushrooms:

Is There Anything They Can’t Do?

By Hal Williams

Neither a plant nor an animal, one of the most common organisms on Earth could — just — be ready to save us from ourselves ...

M

ushrooms are having a moment — and we’re not talking about The Last of Us (although we will a little later, so stick around).

There are estimated to be some 628,000,000 species, of which we’re familiar with about 10,000 — so there’s a lot to learn. But many researchers are on the case, targeting pressing human problems — and they’re making some extraordinary, and surprising, progress.

Mushrooms, moulds, and fungi are found almost everywhere, though they aren’t always visible.

Some are tiny, some are hidden, and the complex underground network of fibres that links them — the mycelium — can spread over huge distances.

Mushrooms — even the delicious ones we have with pasta or on toast — are the Earth’s true “cleaners”. They “eat” dead and decaying organic matter — even if it's toxic.

Some fungi are small; Hymenoscyphus fructigenus is, fully grown, 4mm across the cap — making it the smallest one we know. You might find it growing in North American forests, and while you’re there, nip over to Oregon’s Blue Mountains. That’s where you’ll find the other extreme of the fungal kingdom: an outcrop of Armillaria ostoyae that covers 10 square kilometres. Between these poles lie a myriad of spore-breathing, mycelium-linked species that can cure, clean up oil spills, nourish us, be turned into products ... and yes, even kill. Be careful what you pick on your way through the woods...

Mushrooms like to hide, as legendary American mycophile (literally, “mushroom lover”) and mycologist Paul Stamets once observed. They sure do; the gargantuan cluster of Armillaria ostoyae — which has usurped the Blue Whale as the largest living thing on Earth — had been hiding in plain sight for centuries until it was discovered ... just 25 years ago, in 1998.

The odd little creatures — and how else does one describe the fruiting body of an organism whose genome is closer to that of a human than that of a plant? — have been used in Asia to treat infection and illness for centuries. The West has caught up, and today, medicinal mushrooms 128

"There are estimated to be some 628,000,000 species, of which we’re familiar with about 10,000 — so there’s a lot to learn." are an officially accepted (sole or additional) treatment for lung diseases and cancer. We’re three decades behind China and Japan on that score, but the National Cancer Institute has acknowledged 20 genera that are credited with beating cancer.

The aforementioned Stamets claims his ailing mother, with stage four breast cancer, was cured with a combination of turkey tail mushrooms (Coriolus versicolor) and chemotherapy. Asia has over 100 types that can tackle the “Big C”, including common table fare such as reishi (Ganoderma lucidum). Some of the more common ones include shiitake (Lentinus edodes) and the aforementioned turkey tail. But before we get lost in the cancer-fighting potential of fungi, let’s look at what else they can do...

Many species of psilocybin-containing “magic” mushrooms — revered by indigenous people, demonised by law enforcement agencies, and feverishly sought (in season) by hippies around the world — also have a part to play in human health. Mental health, believe it or not. Studies by Johns Hopkins Medicine researchers have shown that treatment with psilocybin can relieve major depressive disorder symptoms in adults — for up to a year. “Mushies”, as they are colloquially known, are now seen as a promising treatment for several mental disorders. One major benefit for those suffering from depression is that — unlike pharmaceutical alternatives — effects are immediate, rather than gradual and cumulative.

From human brains to machine minds: a recent report on CNN showed that the skin of reishi (Ganoderma lucidum again) can provide a biodegradable alternative to some plastics used CFI.co | Capital Finance International

in battery and computer chip manufacture. In an age where plastic microparticles can be found in rivers, seas, mountaintops and even at the Poles, this is another avenue worthy of research.

A study at Austria’s Johannes Kepler University —working on “flexible and stretchable

Summer 2023 Issue

electronics” — was looking for sustainable materials to replace non-degradable ones.

Their findings regarding the properties of the skin of Ganoderma were significant enough to have been published in the respected Science Advances Friday journal. The latest study proved that mushroom skin can be used as a substrate

in electrical circuits: the base of a circuit that insulates and cools the conductive metals above.

Until now, substrates have typically been made with non-degradable materials.

A team led by the Institute for Experimental Physics, discovered that the Ganoderma — CFI.co | Capital Finance International

which grows on decaying hardwood trees — creates a protective layer of mycelium, the rootlike network of which mushrooms are the fruiting bodies, to protect the wood. The skin was found to be less insulating than plastic — but it was safe and functional. A strip as thin as paper can resist temperatures of over 200° Celsius.

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Researchers at other centres have also been investigating fungi, this time to find out if they could possibly one day replace computer components. The rewards were swift and exciting: the minute white threads of mycelium can also be coaxed to form basic logical and electronic circuits.

The UK’s Unconventional Computing Laboratory, at the University of the West of England in Bristol, is said to be Britain’s only “wet lab” studying chemicals, liquids, and biological matter for computing advances. The academics look at how Nature “computes”, and they have found that, again, wholesome help is at hand.

The lab workers have noted the limits of classical computing using binary data — and believe the natural world could hold the key to the full development of quantum and neuromorphic computers. Stimulated mycelium respond in more complex ways than the binary system we know so well.

And it’s not just mushrooms; other fungi, even the disparagingly named, simple-but-complex slime moulds, show great promise. Fungal computing and fungal electronics are emerging as potentially ground-breaking areas of study.

Mycelium has been found to react to electrical pulses in a comparative way to the neurons in a human brain. Could this be the next step to the sort of upgraded human being Elon Musk has in mind? Artificial neural network-based computers can’t be that far over the horizon.

Stimulated mycelium points have also been shown to have a memory — which comes about in much the same way as our own recall does.

That means that computer architecture of various types — processor, memory and storage — might be someday soon replaced with fungi.

And while we’re on the subject of computers, scientists stumbled across something that sounds straight from a 21st Century fairy tale ... back in the 19th Century. The rootlike mycelium, experts propounded, could actually be a sort of forest internet (though they didn’t know the term then) which allows trees and plants to communicate with one another. The threadlike strands connect the roots of trees and shrubs in a complex system punningly dubbed the “wood-wide web". Fungi enjoy a symbiotic relationship with plants. They colonise root systems, and are fed carbohydrates by the plants. The hidden helpers can channel water and nutrients to their hosts in return.

German botanist and mycologist Albert Bernhard Frank came up with a term to describe this plantfungus interaction in 1885: mycorrhiza. Other experts and researchers have picked up the baton and, over intervening years, found out that the network is about more than nutrient transfer.

It actually allows plants to send resources to one another. Soil ecologist Franciska de Vries, from the University of Manchester, said in an interview with The Atlantic that in a drought, 130

"Stimulated mycelium points have also been shown to have a memory — which comes about in much the same way as our own recall does. That means that computer architecture of various types — processor, memory and storage — might be someday soon replaced with fungi." stronger “parent” trees could photosynthesise on behalf of weaker colleagues. It's also speculated that plants can warn each other about pest or parasite attacks, raising the alarm for the “neighbourhood”.

Back in the human world, where fun is still a thing, a New York company called Ecovative Design is tackling “production” issues by growing mycelium. Because the tiny fibrous roots can be grown and formed into whatever shape you like — and if you like surfboards, so much the better.

Ecovative makes a 100 percent biodegradable board to take over from the old-school models made of expanded polystyrene or polyurethane, which are derived from petrochemicals.

Our friends the fungi can even help us tackle environmental disasters involving those awful petrochemicals. A group in New Mexico, Tewa Women United, is on a mission to grow crops in low-rainfall areas. And low precipitation isn’t their only problem: the soils themselves are toxic.

Petroleum oozes into the ground from a nearby parking lot when it does rain — and the Tewa Women United group is hoping that edible oyster mushrooms, aka Pleurotus ostreatus, can help.

Via a process called mycoremediation, the mushrooms can remove chemicals and heavy metals from soil and water through their mycelium. Mycoremediation has sucked petroleum from contaminated soils across the Americas, and is being used in the Ecuadorian Amazon to treat the largest land-based oil spill in history.

get humans. It’s commonly referred to as zombieant fungus, which sounds terrifying enough, and it is — for insects and arachnids.

The good news, for us, is that it can’t infect humans. In fact, it’s used in some medical preparations and is even one of those that can fight cancer cells; it can also boost athletic performance and aids kidney function. Ants? Not so lucky...

Now, this sounds straight out of science fiction, but cordyceps really does use mind-control to propagate its species, getting insects to do its bidding. Like all living things, it wants to thrive and grow. It does that by draining nutrients from its victims, and filling the resulting void in its victim with spores that allow it to reproduce.

The unfortunate victim ants are somehow compelled to climb to a branch or ledge, where they lock on and die. The cordyceps tunnels through the ant husk to send out a ghastly trumpet which pumps spores into the atmosphere — which fall on other ants, and the cycle repeats.

So, no biting and screaming, a la The Last of Us. But it is pretty grim, and just another clever trick that fungi have learned, disseminated, and profited from. As I said at the beginning, we know only a fraction of the fungal species on Earth; is it possible that a bigger, badder version of cordyceps is out there somewhere, waiting for human prey?

Ah yes, thanks for reminding me: The Last of Us fungus. It would have been a shame to forget it.

Especially as it’s real.

Well, US health officials recently issued a warning about the deadly Candida auris fungus, which reportedly kills some 60 per cent of people it infects. Cases have apparently tripled over recent years. And The Daily Mail reports that an Indian mushroom hunter made an unfortunate world first by catching a fungal disease that is deadly to plants. The 61-year-old mycologist suffered flu-like symptoms and had difficulty swallowing for three months. Doctors found an abscess in his windpipe, thought to be linked to the chondrostereum purpureum fungus he’d been researching.

Don’t panic just yet about the zombie apocalypse, though. The fungus from the hit show certainly does exist — it’s called Ophiocordyceps unilateralis, or cordyceps — but it’s not out to

But hey, he didn’t die. So, let’s hope that a really mean cordyceps which could potentially do worse isn’t lurking somewhere out there — and focus on the many, many, mushroom positives. i

At Los Alamos National Laboratory in New Mexico, near to the Tewa project, there are more problems still. Hexavalent chromium, a carcinogenic heavy metal, is seeping into the water supply. Again, the best hope is mycoremediation. Scientists have identified 120 enzymes in mushroomforming fungi that can break down toxins — even the hydrocarbons from oil.

CFI.co | Capital Finance International

Summer 2023 Issue

> Some of it may well be Rocket Science, but

ASU’s Recipe for Success is Simple

Jordanian university has built on solid foundations to reach beyond the scope of its peers.

T

he term “pioneering” is often overused, but it’s perfectly accurate when referring to Jordan’s Applied Science Private University (ASU).

The institute of higher learning was founded in Amman 1989, and was the first private university in Jordan. Over the past three decades, it has grown to become one of the largest, too. The ASU has evolved into a hub of knowledge, innovation, and discovery that attracts scholars from around the world.

The university’s sturdy foundation, strong history and academic track record have earned it universal respect as a home of quality education — driven by a holistic vision. The ASU’s mission has always been to embrace internationalisation, sustainability, and innovation. These main pillars continue to support its continuous journey into educational excellence.

The institution has been recognised and honoured for its progress and achievements with prestigious global awards and accreditations. These tributes stand as testimony to its distinction in the field of higher education and quality of the services it provides.

And the ASU vision couldn’t have been more clearly stated: "To be renowned internationally for excellence in teaching and learning, applied scientific research, sustainable development and community services."

Its mission, likewise, is clear: “To embed creativity, entrepreneurship, and continuous development in the fields of education, scientific research, human resources, and university and community environment; in addition to preparing a qualified generation of graduates that matches national and international standards to serve their communities.”

ASU is an active member of the Erasmus+ programme in partnership with several European universities, supporting more than 180 inand outbound students and staff mobilities.

The university is an active member of the International Association of Universities, the Association of Arab Universities, and the UNIMED Mediterranean University Union. The ASU is also signatory of the United Nation’s Accord on 17 Sustainable Development Goals. i

Main Awards Golden Status (University Level)

5 Star PLUS QS Ratings (University Level) 5 Star QS Ratings (Online Learning) THE Impact Rankings (2021) THE Arab Universities Rankings (2021) SCImago Institutions Rankings (2023)

CFI.co Awards

ESQR Award ABET Accreditation (Engineering) ABET Accreditation (Computer Science) ACPE Accreditation (Pharmacy)

ACEN Accreditation

IIMP Accreditation

AACSB Accreditation (Eligibility Status)

Hcéres Accreditation

ASIC Institutional Accreditation

ASIC - 2022 CIOL-2023

CFI.co | Capital Finance International

Description First Private university in Jordan to be awarded by the Jordanian Accreditation and Quality Assurance Commission for Higher Education Institutions (AQACHEI).

In 2023, ASU is first university in in the region and 21st at world level to obtain 5-Star PLUS in the overall ratings, and 5-Star for each category of the QS Stars Ratings System.

First private university in Jordan to obtain 5-Star in the online learning by QS Stars Ratings System (2022).

ASU shared the First place amongst the private higher education institutions in Jordan in the Times Higher Education Impact Rankings (2021).

ASU obtained first place amongst Jordanian private institutions in the Times Higher Education for Citation, Society, and International Outlook metrics.

ASU is classified as a Q1 university (first Quartile) among the institutes of higher education in Jordan in year 2023. The university has been boosting its investments in research and innovation thus classified as one of the top 5 institutes in Jordan.

For the Fifth consecutive year, ASU is a repeat program winner, with the award for Most Innovative Community Impact Research University Middle East (2019-2023) and first-time winner of Best University Internationalization Strategy Middle East (2023).

ESQR (European Society for Quality Research), ASU received the ESQR Quality Achievement Award for year 2021.

All Engineering programs accredited by ABET (Accreditation Board for Engineering & Technology).

Computer Science program at the Faculty of Information Technology has also obtained full accreditation by ABET. ACPE (Accreditation Council for Pharmacy Education) is recognized by the US Department of Education. The Pharmacy Program is the first among the private universities in Jordan and the middle east to be certified by the ACPE. ACEN (Accreditation Commission for Education in Nursing) is specialized accreditation for all levels of nursing education and transition-to-practice programs located in the United States, U.S. Nursing at ASU is privileged to be the first amongst the private institutions in Jordan to receive the ACEN accreditation.

IIMP (International Institute of Marketing Professionals).

The Faculty of Business at ASU is one of the first faculties in Jordan and the middle east to obtain the IIMP certification for all its marketing programs.

AACSB (Association to Advance Collegiate Schools of Business). The Faculty of Business is a member of AACSB and has also been granted Eligibility Status in preparation for the accreditation by the AACSB. Hcéres (High Council for the evaluation of Research and Higher Education). The Faculty of Law is the first faculty in Jordan and the 5th in the Middle East to obtain the French accreditation by Hcéres.

The Applied Science Private University received Accreditation by Accreditation Service for International Schools, Colleges & Universities (ASIC) as a premier Institution (2022).

ASIC Awards ASU the Outstanding Achievement in the Development of International Education, as the First Private University in Jordan All English Language and Translation programs at the undergraduate and master's levels, received The Chartered Institute of Linguists accreditation (CIOL).

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> Oman: a Hidden Treasure that

Rewards Ignorance as a Virtue

By Elena McGugan Independent marketing and communications consultant

In his 1742 Ode on a Distant Prospect of Eton College, Thomas Gray was first to coin the phrase “ignorance is bliss” — and to this day, many deliberate to what extent, and under which circumstances, this may be true.

Y

ou may ask what this has to do with Oman. Well, there is a lot of ignorance among world travellers about it, which turns out to be quite blissful for those who have visited this fascinating land, still largely unspoiled by hordes of tourists.

But hurry — it is getting more difficult to contain the secret with each passing year as thousands of visitors, like myself, take away lasting memories, hundreds of photographs, and spread the word about the beauty, rich and diverse culture, history, and traditional hospitality intertwined with the desire of local people to showcase their country in the best possible way.

As in Japan, where reverence for the past is tightly knitted into the fabric of society but coexists with modern technologies, Omani people wear traditional clothes and adhere to the Islamic rules of life, but are not averse to using smartphones, discreetly hidden in the folds of their dress. But it may take longer for modern technology to penetrate every aspect of life in Oman. In many ways, this makes the country even more attractive.

My first experience of Oman in 2007 came when we decided to visit the recently opened ShangriLa's Barr Al Jissah Resort, a 40-minute drive from the capital of Muscat. I enjoy combining a beach holiday with an exploration of local culture, history, scenery, traditions, cuisine – and Oman has proved to be so exciting that I have visited twice more.

The Al Jissah Resort comprises three hotels: the indulgent six-star luxury Al Husn (“the Castle”), Al Bandar ("the Town"), and the family-orientated Al Waha ("the Oasis"). All rooms are sea-facing and overlook a long stretch of white sandy beach.

The hotel complex is positioned in a bay against a dramatic backdrop of rugged mountains fronting the Gulf of Oman, with its crystal-clear waters and stunning marine life.

During my first trip I explored Muscat. Three sites in the capital are particularly impressive.

The first is the Sultan Qaboos Grand Mosque.

This impressive building took six years and seven months to complete. It is made of Indian sandstone, with doors and ceilings of carved

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wood, and windows and glassware imported from Italy. The centrepiece chandelier weighs 8.5 tonnes, contains 600,000 crystals, and was the largest in the world at the time of its construction.

The single piece 4,343m2 carpet was also the world’s largest, and took four years to create. It was hand-woven in Iran using traditional dyes and materials, and contains one billion, sevenhundred million knots. The mosque and its surrounding buildings and gardens are breathtaking.

The second place that lingers in my memory is Muscat’s fish market. Certainly not for the faintCFI.co | Capital Finance International

hearted, the squeamish, or vegetarians, the place is full of local flavour, history and tradition and operates today much as it has for some 2,000 years. Your senses will be awakened by the smells of fish, sea and salt, and the vivid colours of fish scales and shells.

The third jewel in Muscat’s crown would be its Mutrah souk. I have visited souks in various countries over the years, but the one in Muscat is special. It’s vibrant and welcoming, enticing and seductive — and it certainly smells better than any other, the air filled with the fragrance of locally produced incense.

Summer 2023 Issue

The Mutrah souk seems to offer more authentic items created by local craftspeople and fewer goods from the modern Far East. There is respect for, and pride in, the local traditions, skill and craftsmanship. Many shops are akin to Aladdin’s cave, offering treasures of the past and the present in abundant splendour — and bearing relatively high price tags. Don’t be afraid to negotiate, as the more patient and persistent will be rewarded with a bargain.

The longer one spends in Oman, the more the layers of its past come to the fore. It’s always good to have some time to discover things on your own, as often little unplanned outings create more lasting images and memories than scheduled tours and excursions.

I took a cab in Muscat and asked the driver, Amin, to take me around the city. As he did so, we spoke about his life and aspirations. It turned out that the name Amin means “trustworthy one”, and that he wanted to become a poet and write about the beauty, love, history, and glory of his country. I love poetry too — both reading and writing — and this connection made our meeting special. Amin drove me around Muscat for about an hour and then took me back to my hotel. He charged me just £10. Before the trip I had heard that Oman is known for its openness and hospitality, and I am grateful that I had a perfect opportunity to experience it myself. The local people that I spoke to were generous, pleasant, tactful, and keen to chat and share their views.

There is one other place worth mentioning: Nizwa cattle market, a natural extension of the historic Nizwa souk but used mostly by the local farmers and villagers. Here, for centuries, there has been the sale and barter of goats, sheep, camels, and cows. Every Friday, just after sunrise, the place erupts with action. Men and women in traditional outfits — white for men, black for women — chat and share news, gossip, and engage in peoplewatching. Animals are paraded in a circle by the sellers, and deals are struck on the spot. For a city girl like me, it was a captivating scene.

Oman’s rich heritage, lightly brushed with some Portuguese and British overtones, can be seen in its architecture, art, and fountains. Public life carries strong links with the past, and the encouragement for western visitors to dress appropriately is a small price to pay for a chance to explore and experience the charm and warmth of the local culture.

Oman is still relatively unknown to the wider world, and this ignorance blissfully serves those of us who have had a chance to experience the country at first-hand. You won’t find cities filled with noisy crowds or brash music and lights. Here, there is vibrant spirit and life in local communities, markets and souks, spirit that has stood the test of time and will continue for generations to come. i 133

> Glorious Isolation:

Owning an Island is the Ultimate Expression of Wealth

By Naomi Snelling

But buying a sun-soaked hideaway might be trickier than you think…

W

hen it comes to real estate, nothing screams “I’ve made it” louder than ownership of a private island.

"In 1972, Las Vegas real estate millionaire and

With endless sun, sea and surf, with mojitos — and mosquitos, sunburn and eyewatering running costs — an island may still be the ultimate status symbol. Sir Richard Branson has his own portfolio, an island collection dotted around the world. If they were closer together, they’d form an archipelago.

Oliver attempted to create a

Business magnates, celebs, investors: this is a rarefied real estate league. Some are personal retreats, some luxury resorts, others eco-friendly developments. Leonardo DiCaprio bought Blackadore Caye, a small island in Belize, in 2004. The actor has spent nearly two decades creating a state-of-the-art, green and ecoconscious resort showcasing sustainable design with renewable energy systems, water treatment facilities, and environmental conservation.

Reefs. The Lithuanian-born activist formed a syndicate, the Ocean Life Research Foundation, which envisioned a libertarian-meets-anarchist society sans taxation, welfare, subsidies, or other intervention. Despite a flag fluttering bravely at one point, the project failed — and the reefs, almost submerged, remain the subject of a territorial dispute between Fiji and Tonga.

Not all island owners are so ethically driven.

In 1972, Las Vegas real estate millionaire and political activist Michael Oliver attempted to create a libertarian micro-nation on the Minerva

political activist Michael libertarian micro-nation on the Minerva Reefs."

For anyone serious about owning a piece of land surrounded by water, it’s worth noting that paradise often comes with challenges and requires significant research, planning, and — of course — financial resources.

Finding an island for sale is the first hurdle.

Many of those in the Pacific are the property of governments, or are protected nature reserves.

Others are owned by individuals or corporations with no intention of selling. But assuming that you can find one, the cost will vary wildly.

An undeveloped island with no infrastructure or facilities is obviously likely to cost less than one with a luxury villa, airstrip, and full-time staff.

The price tag also depends on location, surface area, and amenities. You can pick up a smaller island, with no infrastructure or amenities, for around $100,000. One with some basic infrastructure could be yours for anything from $500,000 to $1m. A medium-sized island with some amenities and structures will typically cost $1m to $10m. And true piece of paradise can set you back hundreds of millions of dollars.

Branson bought Necker Island in the British Virgin Islands in 1978, for $120,000. It’s now 134

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Summer 2023 Issue

part of his Virgin Limited Edition portfolio of luxury retreats, and has capacity for 48 guests in Balinese-style houses. Rates go from $3,500 per room, per night, to $87,500 to book the entire island.

Would-be island owners must have vision and resilience as well as funds. In 1965, before Necker Island was reinvented as a luxury retreat, a Daily Telegraph journalist and photographer had a 15-day castaway adventure there. It ended with them hoisting a red flag in the hope of being rescued. The photographer later remarked that there was nothing idyllic about the island: "The mosquitos and other insects were more venomous and persistent than any I had encountered in Vietnam or the Congo.”

Necker is north of Prickly Pear and Mosquito Islands — both part of Branson’s collection — so it presumably still has its fair share of bloodsucking pests, but Branson’s guests seem to like

the place. It has hosted a string of celebritystudded parties, and the annual Necker Cup exhibition tennis tournament has been held annually since 2012.

But it hasn’t all been plain sailing: the Great House, part of the $10m Necker Island retreat, caught fire in 2011. All guests escaped unharmed, including actress Kate Winslet, who in true Amazon style reportedly carried Branson’s 87-year-old mother from the flames. Just six years later, in 2017, Hurricane Irma tore into Necker, ripping things apart. But the infrastructure damage has been repaired and guests can again enjoy white sandy beaches lapped by the Pacific (along with five infinity pools, two floodlit tennis courts, and water sports a volonté).

Demand must be high, because Branson asked the UK government to consider Necker as collateral against a £600m loan to bail out his struggling Virgin Atlantic airline. If you have the cash to flash, and can cope with the changing CFI.co | Capital Finance International

moods of island life, it seems it can be a decent investment. Any serious buyers might want to get in touch with filmmaker Francis Ford Coppola, who owns Blancaneaux Caye and Coral Caye in Belize. Coral Caye has hosted Coppola’s friends, movie stars, and Saudi princes. It was announced for sale in October 2022 for $2.2m.

FAMOUS ISLAND OWNERS Larry Ellison, the co-founder of Oracle Corporation, bought 98 percent of Lanai, the sixth-largest island in Hawaii for $300m in 2012.

Marlon Brando fell in love with Tetiaroa in French Polynesia during the filming of Mutiny on the Bounty. He bought it — and it’s now home to a luxury eco-resort named The Brando.

Actor Eddie Murphy joined the elite club when he bought Pearl Island in the Bahamas in 2007 for $15m. i 135

> Latin America:

The Island Nation that Challenged the Covid Rulebook and Prospered

By Brendan Filipovski

The Dominican Republic still had restrictions in place during the pandemic, but it retained some flexibility that proved vital to its economy.

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he Dominican Republic (DR) stands out for its pandemic response.

Most countries closed their borders and introduced strict testing and quarantine measures. The DR did too, at first — but, due to the importance of tourism, it found another way ahead.

The island nation continues to reap the benefits of the alternative policies it came up with — even after the destruction caused by the passage of Hurricane Fiona in September 2022. The republic is situated in the Caribbean, on the eastern side of the island of Hispaniola; Haiti lies to the west. It has a population of around 10.6 million, the thirdhighest in the Caribbean after Haiti and Cuba.

It has diverse natural landscapes, from white sands, turquoise water and coral reefs to teeming mangroves and rainforests which still cover 43 percent of the land. It also has the Caribbean’s largest lake, Lago Enriquillo, and the tallest mountain, Pico Duarte (3,101m).

And these natural factors differentiate it from some other Caribbean destinations.

For centuries, sugar was the DR’s most important export, and slaves its key import.

But in the 1930s, the opportunity presented by tourism began to be cultivated. Rafael “El Jefe” Trujillo ruled the Dominican Republic from 1930 to 1961. While he was notorious for his squads of secret police and his persecution of anyone who opposed him, he was one of the first to recognise the island’s tourist potential.

The dictator was, perhaps surprisingly, an avid conservationist. Starting in the 1940s, he developed state-owned resorts and hotels in the capital, Santo Domingo. In 1959, Las Americas Airport was opened — with a highway to connect it to the city.

These early developments were well-timed.

There was a sudden glut of American tourists, denied access to their favoured playground of Cuba after Fidel Castro rose to power in 1959. But this early boost in tourism was lost when the DR descended into civil war in 1965. With democracy restored in the 1970s, the government created a tourist board and provided tax incentives for investment in the sector. A boom in the construction of hotels followed; this coincided with the development of Caribbean cruise lines. Development continued in the 1980s and 1990s, branching out into housing developments dedicated to tourism.

In 1984, the global sugar price tanked and tourism began a seemingly unstoppable rise.

The sugar crop was no longer the DR’s main focus, and progress set in. Today, Airbnb and similar platforms account for about 60 percent of holiday accommodation. According to 2018 data, the largest source of visitors was the US, with a 35 percent share. This was followed by Canada (14 percent), France (3.4 percent), Argentina (3.3 percent), and Russia 138

"The first warning of the impact of the pandemic came when the DR health minister turned away a British cruise ship on February 27, 2020. Doctors feared that some passengers had Covid symptoms; the cruise line operator thought it was an overreaction."

(3.3 percent). In 2019, 6.4 million tourists visited the DR — 76 percent of them from the Americas and 24 percent from Europe.

Travel and international tourism contributed 8.6 percent of the country’s GDP in 2018.

When supporting companies are factored-in, that figure is probably closer to 30 percent. In 2019, some 174,000 people were employed in the sector — which attracted a 31 percent share of FDI. The first warning of the impact of the pandemic came when the DR health minister turned away a British cruise ship on February 27, 2020. Doctors feared that some passengers had Covid symptoms; the cruise line operator thought it was an overreaction.

In that month, there were 565,000 inbound tourists, but the government closed borders on March 16. By April, the tourism sector had gone into a coma, where it remained for three months.

In late July, the government decided to reopen the borders. In August, it implemented a plan for the responsible recovery of tourism.

Visitors had to show a negative PCR test and quarantine for five days, after which they were free — as long as they tested negative. There was no vaccine requirement, because the US FDA hadn’t yet approved the Pfizer-BioNTech jab.

“We took a risk, but with a great sense of responsibility,” said tourism minister David Collado. “The Dominican Republic's success can be attributed to the fact that it chose life.” With over a million inbound tourists in the first two months of 2020, numbers were up to 2.4m by the end of the year. That was a 63 percent decrease over 2019, but the Bahamas, Barbados and Jamaica fared worse, with respective decreases of 75, 77, and 67 percent.

The DR’s Covid cases increased from around 85,000 when the borders re-opened to around 172,000 by the end of that year. As virus variants swept the globe, the government encouraged tourism workers to get vaccinated and wear masks. By summer 2021, the DR had one of the highest rolling vaccination rates in the world. The government also introduced requirements for proof of vaccination or a CFI.co | Capital Finance International

recent negative test for locals wanting to enter government institutions, banks, and shopping malls.

The government also brought together different health data and digitalised them to get a better picture of the pandemic. In April 2021, negative tests and quarantine entry requirements were lifted. Instead, random breath tests were conducted on a small sample of arriving visitors, and free PCR tests and travel insurance were offered. Tourists testing positive had to self-isolate, but no vaccination requirement was introduced. This proved popular with the main source of visitors: the United States.

In 2021, inbound tourist numbers increased by 108 percent to reach five million. Jobs in the tourism sector increased to 190,000 — above the pre-pandemic level. In 2022, inbound numbers again increased, this time by 43 percent or 7.2 million. By October, the DR had received its largest-ever number of cruise ship visits — despite the destruction caused

by Hurricane Fiona. Tourist numbers for the Bahamas, Barbados and Jamaica have yet to recover to pre-pandemic levels.

As of May 2023, DR had around 40 percent fewer Covid cases than Cuba, which has a similar population, and 47 percent fewer deaths. Cuba had much tougher Covid restrictions; the Trump Administration banned most US travel to the island. According to The Lancet, DR’s excess deaths per 100,000 people for 2020 and 2021 was 100.7, lower than the global average of 120.3. It was lower than the average for the Caribbean and Latin America regions — and even for the US. The DR’s pandemic response deserves further study. Real GDP in the DR fell 6.7 percent in 2020 but grew by 12.3 and 4.9 percent in 2021 and 2022. The country’s recovery has made it a regional and global outlier, poised for a period of growth.

As the government promised, public health was balanced against economic need. The country that went from turning cruise ships away to welcoming them in record numbers has proved that a radical change of tack can sometimes be effective. i

Summer 2023 Issue

> EY Argentina:

Haunted by Phantom Income and at the Mercy of Economic Patterns — Inflation Distorts World Tax Systems

By Sergio Caveggia Partner at EY Argentina

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ecent IMF data show developed economies are running at an annual inflation rate of three to 10 percent.

Some eastern European and Asian countries currently sit between 10 and 25 percent — and 10 nations are struggling with higher rates still.

Although the inflation trend is generally declining, there is concern about the tax codes of major economies. The thinktank Taxfoundation.org is calling for the US tax code to be fully indexed.

Inflation artificially increases capital gains tax, as it doesn’t adjust the tax basis according to the loss of purchasing power. Capital goods and fixed assets depreciations are also causing concern — the amounts deducted lose value in relation to the original investment.

Inflation benefits highly leveraged businesses, but falls heavily on lenders because, as creditors, they will lose value in real terms. The same approach can be found in governments. Most are heavily leveraged, and inflation allows debt repayment to the private sector, with less valuable currency.

On the other hand, inflation creates a “tax” without representation on the indirect and direct tax fronts. Ultimate beneficiary: the governments.

Again.

As recently reported by McBride and Durante, the US nominal GDP increased up to $2.1tn, year on year, in 2022. From that increase, $1.8tn came solely from inflation.

Inflation dynamics affect businesses and the private sector. Let’s say the financial director of a multinational wants to start up a business in a high-inflationary climate economy. Figures from his team’s recent research show a robust business plan and high ROI. The officer tries to do an additional test before giving the green light. He asks one of his managers to create a subsidiary under some basic constraints. The new company will receive $41m on day one, with a fundamental condition: the manager will return the sum at the end of the fiscal year — or lose his position. So, the local manager decides not to take any risks. The company doesn’t perform any transactions during the fiscal year, and keeps only dollars received in the company

"Inflation dynamics affect businesses and the private sector." bank account. In his reasoning, if he didn’t invest the funds, he couldn’t lose them either. He would be able to repay the debt.

During that fiscal period, the economy of the hypothetical country falls into crisis and the local currency devalues against the greenback.

The immediate consequence is a rise of inflation rates.

The local official seems not to notice the economic ups and downs; he keeps the amounts contributed on day one. The surprise comes at the end of the fiscal period, when the local company's income tax return shows a profit — due to the exchange rate difference — subject to 35 percent tax. Our imaginary official is forced, before clearing out his desk, to sell some of the contributed dollars to pay the tax liability.

This is, in simple terms, how a tax system fails to consider the effect that inflation has on business income. It ends up taxing only the nominal part of the equation that produces devaluation — but not income in real terms.

If the system doesn’t recognise the effect of inflation on business income, or taxing profits that should be exempt, inflation becomes an additional tax without representation. The absence of a tax adjustment leads our manager to sell the dollars to pay the tax when, from the shareholder's point of view, he lost part of his investment by simply holding on to the cash.

should be equalised by inflation adjustment.

Otherwise, a “phantom income” would be created, subject to tax.

Currency devaluation produces profits in export companies and would have the same effect on companies trading on the domestic market, due to the price increase that inflation would cause.

In either situation, income tax due to devaluation or inflation has an impact that must be factoredinto calculations. The effect can be mitigated by a tax adjustment for inflation, which acts as a counterbalance. This even applies if the company generates tax losses.

However, if an inflation adjustment system is not enacted, many companies will feel the impact of corporate income tax on inflationary effects, without considering the protection an adjustment-for-inflation system could provide.

This distortion must also be added to the indirect tax context. In a price-increase scenario, indirect taxes are automatically adjusted for inflation — their tax base is dependent on that. When the price of goods and services increases as the currency erodes, so does the indirect tax base. The effects of inflation / devaluation on phantom income, plus the increase in the tax base on indirect taxes, create a burden for private businesses. This situation needs to be address by policy makers, and soon. i

This situation is very difficult to grasp without experience of inflation contexts.

An inflation-adjustment mechanism would allow companies to tax profits in real, rather than nominal, terms. That is, taking into account not only the profit or loss due to devaluation but also the loss of income: inflation caused by the devaluation.

In general, high inflation forces devaluation of local currencies (and vice-versa) with regard to hard currency. Distortions and foreign exchange CFI.co | Capital Finance International

Author: Sergio Caveggia

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> A Focus on People and Productivity Has Taken This

El Salvador Bank to New Heights — In Just Three Years

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rand new and eager to achieve noble ambitions, Banco Hipotecario is going from strength-to-strength.

Since June 2019 and the installation of the administration of President Nayib Bukele, El Salvador’s Banco Hipotecario has been tweaking the function of banking.

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The state bank put its focus on all the productive sectors of El Salvador, and embraced the challenge of boosting the country’s economic development. And that’s why Banco Hipotecario has become the bank of Salvadoran people.

It constantly strives to be more profitable and more efficient. It is always looking for talent, CFI.co | Capital Finance International

seeking ways to improve customer service and provide top-notch assessment and advisory services.

The bank puts an emphasis on providing access to all its products and services — to all people. Banco Hipotecario set about taking care of those people who had previously been

Summer 2023 Issue

"Its financial performance and growth have been epic since the installation of the new administration." excluded from the banking and financial systems.

Its financial performance and growth have been epic since the installation of the new administration. The deposit portfolio in 2019 amounted to more than $762m; by the end of 2022, that had risen to more than $1.4bn. Total assets in 2019 were $1.056bn, in 2022 they amounted to more than $1.725bn. In just three years, Banco Hipotecario had become a solid financial institution.

As proof of its commitment to the productive sectors of the country, by 2022, the gross loan portfolio presented a growth of 8.2 percent over the previous year, with a total portfolio of $1.091bn. That was the result of a placement for $465.7m, disbursed and diversified in all economic sectors. Of those disbursements, 89.4 percent was concentrated in productive activities. The remainder was shared between consumption and housing.

By the end of 2022, Banco Hipotecario had become the fifth-largest entity in the Salvadoran financial system. In that year, it had developed prominence by promoting financial education and financial inclusion. As a result, more than 15,000 simplified savings accounts were opened, and the Cero Usura credit line was launched. This was created as protection for those who had previously had to seek out illegal lenders for their financial needs.

New agencies and service centres were opened, and an alliance of more than 300 financial correspondents was formed with Punto Xpress.

Borders were transcended, and the Salvadoran diaspora has been supported by three information windows at consulates in Los Angeles, Dallas, and Long Island, New York.

"It is always looking for talent, seeking ways to improve customer service and provide top-

While 2022 was a year of goals and accomplishments, the state bank is now, step-bystep, continuing to make history. With effort and commitment, it aims to reach all of Salvadorans.

Banco Hipotecario is a solid and prestigious institution at the service of the people, making difference in banking business and prioritising its social purpose.

notch assessment and advisory services."

This year, Banco Hipotecario has no intention of putting on the brakes. Its message? “We´ll keep working hard, guided by the same nationwide approach, for all the Salvadoran people.” i

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> Financial Inclusion for All and Excellence in Operations:

El Salvador’s Central Bank Sets the Bar High — for Others to Follow

No Salvadoran should be left unbanked thanks to the bank’s ongoing drive for inclusion...

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he Central Reserve Bank of El Salvador (Banco Central de Reserva, or BCR) plays a major role in the Central American country’s economy and financial structure.

The fundamental pillar of the BCR's management is the promotion of financial inclusion, education, and innovation. It’s winning acknowledgement, recognition, and endorsement from international organisations — whose economic growth stats are remarkably close to the bank’s official projections.

It has earned a reputation for being credible and dependable, and controls the currency rate and issues regulations on economic activities. Once privately owned, it is now under state control.

The BCR believes in financial inclusion for all, and — under the guidance of the El Salvadoran president, Nayib Bukele, who sets out statutory laws — contributes to the overall economic and social development of the country.

The bank powered its way to the forefront of issues related to modernising payment systems by promoting a system known as Transfer365.

This innovation enables free inter-bank transfers 24/7, 365 days a year — with positive effects on the daily lives of Salvadorans. Time is no longer wasted standing in queues at bank branches, or get stuck in traffic jams to find an ATMs or agency. Transfer365 is the largest network in the country — all financial institutions take part, including co-operative and commercial banks and savings and loans companies.

Since its release Transfer365 benefited the entire Salvadoran population, who collectively saved over US$35m — money they were previously obliged to part with for payment and money transfer commissions. Now, the only limit for their transactions is the balance in their accounts.

Transfer365 Business is one service that has provided solutions to ease the execution of high-value and urgent transfers with greater efficiency, and improved user-friendliness. The system is available for all types of business, from SMEs and micro-companies to large corporations.

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During its first year of operation, Transfer365 Business channelled 20,110 transfers, a total amount of US$6,200m.

BCR guarantees the generation and publication of El Salvador macro-economic statistics on its website and the International Monetary Fund bulletin board. It complies with all guidelines of the Special Data Dissemination Standards (SDDS), issued by the FMI, and develops research-supporting analyses and decisionmaking for various economic agents.

It again showed its innovative streak by expanding its statistical offer disclosing new information on local account variables and the external sector. This launched El Salvador to a higher stage in national statistical development.

The central bank periodically discloses projections of the expected behaviour of economy and other relevant macro-economic variables. El Salvador’s retired citizens received a direct and immediate benefit in the form of a 30 percent increase in pensions.

CFI.co | Capital Finance International

That windfall was thanks to the approval of the Comprehensive Pension System Law, whose implementation required BCR to issue technical regulations — in just two short weeks.

Another key regulatory role of the central bank was the creation of economic support mechanisms during the pandemic. It approved measures to boost post-pandemic economic recovery, and strengthened the lines of defence for liquidity risk-management, credit, and economic growth.

To complete this strategy, the BCR approved high-impact regulations related to the pension system, credit bureaus, the credit card system, financial education programmes or initiatives, and money-laundering prevention.

One of the central bank's priorities is to promote and maintain the stability of the financial system. In its role as a Lender of Last Resort, it has managed the renewal of a US$200m credit line with the Central American Bank for

Summer 2023 Issue

Economic Integration (CABEI). It permanently monitors the performance of all institutions in the financial system.

In its drive for financial inclusion, the BCR launched a national policy and an education strategy. The Financial Capabilities Survey, and another on financial products and services, both showed improvements — countrywide. The surveys were conducted with a grant from the Alliance for Financial Inclusion (AFI), which supports developing countries on designing inclusive policies.

The central bank is active in external assetmanagement. “We are constantly learning new plans of action,” says BCR president Douglas Rodríguez. “This enables us to strategically allocate assets to be implemented within the framework of BCR investment objectives while considering international market conditions.”

A highlight in the BCR’s management of internal assets is the structuring and placement of bonds for US$275m. Special Drawing Rights (SDRs) were issued by the state. BCR also supports negotiations with the International Monetary Fund (IMF) for conversion of SDRs and a transfer of US$365.14m to the Ministry of Finance.

Acting as the State Financial Agent, the BCR has streamlined the process and provides technical advice to the Ministry of Finance for the issuance of securities in the local market.

It has also provided support to manage the Eurobond debt in the international capital markets.

When it comes to advocacy and facilitation of foreign trade, the bank makes use of its Centre for Import and Export Procedures (CIEX El Salvador). This implements action to modernise and ease export and import operations — reducing service times to a mere 37 seconds, and extending opening hours to a 24/7, 365 days-a-year format.

The BCR ensures the effective operation of the wordy-but-worthy Management of Asset Money Laundering Risk, Combating the Financing of Terrorism, and Financing Proliferation of Weapons of Mass Destruction (AML/CFT/FPWMD). It consists of an organisational structure, policies, processes and procedures, documentation, control bodies, automated tools, dissemination mechanisms, and training. This is part of the country team dedicated to developing GAFILAT Mutual Evaluation and to implement the National AML/CFT/FPWMD Laundering Risk Assessment in compliance with Recommendation 1 of the Financial Action Task Force (FATF).

BCR insists on excellence and an effective technical capacity. It follows the highest international standards and statistics methods, and from the start of this year, the Central Reserve Bank was entrusted with generating basic statistics in El Salvador.

It complied this task using resources allocated in the National Statistics and Census Office (ONEC), including specialised technical staff, facilities, and state-of-the-art technology.

This has guaranteed a continuous process CFI.co | Capital Finance International

of innovation, quality, and timeliness in the generation and dissemination of stats.

It receives international support and cooperation from organisations such as the United Nations Population Fund (UNFPA), the Economic Commission for Latin America and the Caribbean (ECLAC), the Latin American and Caribbean Demographic Centre (CELADE), the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), the US Census Bureau. BCR leads the preparations of the Nationwide Census Programme.

It is also committed to social responsibility, using initiatives such as "Soy Becado BCR" (“I’m a BCR Scholarship Holder”), which has helped over 5,000 young people on lowincomes to achieve outstanding academic performance via scholarships for technical and university studies.

And, the happy ending: all these institutional efforts have paid off. In 2022, the BCR received the National Award for Decent Work, recognising the highest standards of working conditions, occupational safety, healthcare, and social safety.

Its excellence in social security and the provision of social security services to all employees has also been acknowledged.

Through the efficient, safe, and timely compliance with its legal duties, the Central Reserve Bank of El Salvador promotes excellence, and provides innovative products and services. i 143

Trusted ESG insight that provides a more holistic understanding of risk. moodys.com /esg

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Summer 2023 Issue

> Riding the Rails in Inimitable Style:

The Train Service Unlike Any Other

By Naomi Snelling

Naomi Snelling takes us aboard an art deco museum on the move: The legendary Orient Express...

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arely, in any generation, comes an experience that encapsulates luxury and romance in such an iconic and mesmerising way as the Venice Simplon Orient Express.

Oozing art deco glamour and steeped in history, mystery and intrigue, it’s the train that needs no introduction. It has captivated royals, socialites and writers for decades. It exudes a vintage vibe in which people simply want to bask.

The original train features in Ian Fleming's 1957 novel From Russia with Love, which was later made into a film. It remains an enduring symbol of a golden age of travel, when rail was the epitome of style and sophistication. The first Orient Express was launched in 1883 by Belgian businessman Georges Nagelmackers. He was inspired by an ideal: to create a service that would allow people to travel in luxury and comfort right across Europe and Asia.

The journey joined the dots between some of Europe’s most historic and vibrant cultural hotspots, including Vienna, Budapest and Bucharest. The first Express connected Paris with Giurgi in Romania, featuring sleeping carriages and the first restaurant car on a continental train.

In 1906, engineers completed the Simplon Tunnel, connecting Switzerland to Italy beneath the Alps and drastically reducing travel time between Paris and Venice. In the 1920s, the Orient Express began its classic run to Constantinople (now Istanbul).

It quickly became a symbol of luxury and glamour, attracting wealthy travellers and celebrities from around the world. King Carol II of Romania was a regular passenger, and even had a private car attached to the train for his personal use.

Adventurer TE Lawrence (aka Lawrence of Arabia), German actress Marlene Dietrich, and Mata Hari, the Dutch exotic dancer and spy — all were Express devotees. Authors Agatha Christie and Graham Greene were inspired by the train, and it became the setting for some of their most famous works, including Christie's Murder on the Orient Express, featuring lovable Belgian detective Hercule Poirot, and Greene's Stamboul Train.

World War I disrupted the service, but it picked up again and continued operation until the outbreak of World War II, when it was suspended once again.

During both wars, the train still ran — but it was used to transport troops and supplies until it was damaged and the service disrupted by bombing and military action.

Service resumed after the second world war — as air travel was literally and figuratively taking off. In 1977, the service was discontinued, and the carriages sold off. It was thanks to American entrepreneurs’ passion for European culture that the Orient Express was swiftly “reborn”.

US businessman James B Sherwood purchased some of the original Pullman carriages from around Europe and painstakingly restored them. The Venice Simplon Orient Express was recreated — complete with the original dining car, beautifully restored with art deco furnishings, and Lalique glass panels, of course.

Today’s Venice Simplon Orient Express — although not the “real” Express, in the eyes of purists — is every bit as luxurious as the version from the 1930s, and each car tells a story. One was part of the first electric train King Charles and Princess Anne ever rode in, and two came from Winston Churchill’s funeral train.

Modern guests can soak up history while enjoying lobster brunches, exquisite afternoon teas or sumptuous meals, washed down by champers, of course. They can relax in the plush lounge car, and sleep in opulent cabins with ensuite bathrooms.

Dressing up for dinner is a must: black tie and CFI.co | Capital Finance International

cufflinks for gents, sumptuous evening gowns for the ladies.

The train tracks through some of the most breathtaking scenery in Europe, passing historical landmarks, stunning natural landscapes, and charming towns and villages. Travellers rave about the section between Venice and Paris, which passes through the Italian Dolomites before crossing into Austria and brushing past the picturesque Arlberg Pass. The train then travels through Switzerland, passing Lake Geneva and the Swiss Alps before arriving in Paris. The Venice to Istanbul route, meanwhile, traverses Slovenia, Croatia, Serbia and Bulgaria before arriving in Istanbul.

The modern Venice Simplon Orient Express continues to attract the famous and influential: politicians, business leaders and celebrities from around the world. Noteworthy passengers include the late Queen Elizabeth II, who travelled on the train for her 80th birthday celebrations, actor Sir Sean Connery, who celebrated his 60th birthday on board. British musician James Blunt booked a trip to celebrate his 40th. Winston Churchill and the Duke and Duchess of Windsor also shared the Express experience. Another notable passenger was actor and director Sir Kenneth Branagh — who played Hercule Poirot in the 2017 film adaptation of Murder on the Orient Express.

A journey on the Venice Simplon Orient Express is a trip to a bygone world that gives every passenger the chance to have a starring role. i 145

> Cloud Forests, Marine Beauty,

Myriad Mammals and a Brush with Evolution

By Heather Leah Smith

Heather Leah Smith recounts her visit to Ecuador, and its mysterious Galapagos Islands.

O

n the 20-year anniversary of my six-month scholarship in Ecuador, I’m lost between memories of wild landscapes and time-capsuled colonial architecture.

Cities sprawl with modern conveniences, but centres are painstakingly preserved in the Spanish colonial style. I was studying in the capital, Quito, nestled in the Andes. The altitude and equatorial location grant eternal springtime temperatures.

“All you need is Ecuador.” That slogan, which plays on The Beatles’ sentiments about love, was launched in 2014 by the country’s tourism board. The catchy campaign was a resounding success, and record numbers of tourists — over 1.5 million — flocked to Ecuador that year.

Before Covid hit, that number was up to two million. Tourism revenue reached an all-time high of $2.3bn in 2019.

The pandemic put the mockers on all that — and any rebound has been slow. But recent data shows some hope of a return to the glory days.

I booked a cruise to explore. It took about a week, gliding between islands, snorkelling with turtles and sunbathing with sealions.

The islands were teeming with inquisitive and unafraid wildlife: warm water penguins, marine iguanas, Sally Lightfoot crabs, red-puffed frigate birds and blue-footed boobies.

Scientists were thrilled this year to discover a previously unknown deep-sea reef located atop a submarine mountain some 400 metres down.

More than half of it is covered with living coral, sustaining abundant wildlife.

“Galapagos surprises us again,” Ecuador’s environment minister Jose Davalos proclaimed on Twitter. Only one reef in the region — Wellington — was thought to have survived El Nino weather extremes in the early 1980s.

“This is encouraging news,” enthused Davalos.

“It reaffirms our determination to establish new marine protected areas (MPAs) in Ecuador and to continue promoting the creation of a regional MPA in the eastern tropical Pacific.”

But the Galapagos Islands are the shining star.

Stuart Banks, a senior marine researcher at the Charles Darwin Foundation, says the reef has been around for thousands of years, “pristine and teeming with life”. Banks and the team saw pink octopus, batfish, squat lobsters, deep-sea fish, sharks and rays. Michelle Taylor, a marine biologist from Essex University who co-led the expedition, said new reefs are of potentially global significance — as “canaries in the mine” for similar sites worldwide, whose evolution can be monitored in the current climate crisis.

The marine reserve became Ecuador’s first national park in 1959 and was named a UNESCO World Heritage site in 1978. The archipelago is located 972 kilometres off the western coast, a collection of 13 larger islands, nine small ones, and over 100 islets. It is the natural laboratory where Charles Darwin formulated his theories on evolution and natural selection. Because of the islands’ remote location, they were left untouched for centuries, home to unique endemic species found nowhere else on Earth.

Five of the islands are inhabited and 14 others are accessible for guided tours. Over 200,000 people visit the Galápagos every year. A recordsetting 32,500 visited in March this year.

This May, Credit Suisse Group AG announced the world’s largest-ever blue-bond swap, buying $1.6bn worth of Ecuadorian bonds in a debtfor-nature swap that only cost the Swiss bank $644m. The deal essentially allows Ecuador to buy back its own debt at a knock-down price.

The government has earmarked debt savings to fuel conservation in the Galapagos and has pledged to spend about $18m annually over the next 20 years. The Galapagos bonds benefit from multilateral guarantees by the Inter-American Development Bank and the US International Development Finance Corporation. Moody’s gave the bonds a provisional investment grade rating of Aa2 — the third-highest investment-

One of the key draws for visitors is ecotourism.

As the name suggests, Ecuador lies upon the equator — which means abundant sunshine and vibrant biodiversity in a landscape that runs the gamut from pristine beaches and lush jungles to active volcanoes and glacier-capped mountains.

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Ecuador: Galapagos Islands

grade score and 16 notches above Ecuador’s foreign-issuer rating.

Ecuador is collaborating with neighbouring countries to connect MPAs and create a nofishing corridor along important migratory routes for turtles, whales, sharks and rays.

The Eastern Tropical Pacific Marine Corridor initiative was launched in late 2021, and the new discovery has rekindled the countries’ drive for conservation. Davalos urges stronger commitment to the Global Ocean Alliance 30x30, which aims to protect 30 percent of the world’s oceans by 2030.

Along the Ecuadorian coast, I visited sleepy fishing villages that rely on the ocean’s abundance. Near Crucita, the early morning quiet was shattered by fishermen hauling in their catch and seagulls swarming to steal a bite. Along the Ruta del Sol, which runs along the coast from the province of Santa Elena to Manabi, fishermen roll their brightly painted boats on logs through the village streets to wait out the midday heat in cool cantinas.

Summer 2023 Issue

In Montecristi, artisans weave toquilla palm to create Panama hats of the finest quality. (The legendary hats originated in Ecuador but were popularised by workers on the Panama Canal — hence the name — and in the 1800s, they caught public attention at the World Fair in Paris.)

Inland, the landscape thickens with vegetation and wildlife. The Mindo valley, north of Quito, offers something for everyone. A butterfly farm is a crucial stopover for several migratory species.

Thousands of the insects fluttered around a screened-in garden, and jewel-hued chrysalises hung in hatcheries awaiting transformation and rebirth. The farm is located at the base of a valley, along with the rest of the town. Local guides took our group on a tubing excursion down the river; more adventurous visitors can opt for white-water rafting.

Climb up the valley and you’ll reach the Mindo cloud forest (the difference between rainforest and cloud forest is elevation, with cloud forests at elevations 850 metres above sea level). Clouds

cling to the trees, and thrill-seekers cut paths through the mist as they traverse the treetops by zipline.

Tena, a city in the Amazon rainforest, is a fourhour drive south of Quito. By public transport, the journey takes most of the day. I never set foot in the city, but I spent a week at jungle lodges. In the first location, we slept under mosquito nets in open-sided huts. A guide took us through the jungle, pointing out plants important in indigenous culture and medicine.

The next location was less rustic, with generators providing electricity after dark. Our guides led us to waterfalls and spring-fed pools; we waded through creeks, scaled slick canyon walls, and battled bugs of every shape and size.

For anyone interested in seeing this for themselves, Ecuador has joined the countries now offering “digital nomad” visas. “We weren’t the first country to invent this, but we have really embraced it,” Ecuador’s tourism minister Niels Olsen says. “The pandemic allowed us to rethink tourism and opportunities.”

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The visa allows remote workers to live and work in Ecuador for up to two years. Applicants must provide proof of a clean criminal record and a foreign source of monthly income totalling at least €1,266 — which is three times the local base salary. They must also have private health insurance and pay a processing fee of €460 before the adventure can begin.

Along with Ecuador’s natural and cultural wonders, remote workers will find a low cost of living, reliable infrastructure, and growing connectivity. There are co-working spaces and internet cafes in larger cities, but the service can get spotty in rural areas. Ecuador’s staterun telco provider, CNT, is working on that. It’s collaborating with Luxembourg-based group SES to use medium-earth-orbit satellites to boost broadband and mobile connectivity in the Galapagos. The islands will also benefit from a submarine cable system project involving CNT, Singapore-based GCS, and Texas-based Xtera.

The 20-terrabyte system is expected to come online by 2024. i 147

> North America

US Tourism On-Track to Beat Back Those Pandemic Blues

By Brendan Filipovski

Disney pilgrims and Rocky Mountain train rides have managed to claw back some joy — and jobs — from Covid misery.

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own in Orlando, Florida, Disney World’s 50th birthday was soured by the pandemic. Up in British Columbia, the Rocky Mountaineer tourist train had its 30th anniversary celebrations spoiled. But with Covid fading, both institutions are bouncing back.

Pre-pandemic Florida was booming: 600 people were moving to the state each day, and its GDP had doubled since 2002. Tourism was one of the state’s leading sectors, and the jewel in its crown was Orlando.

Orlando is the epitome of vision and perseverance.

Walt Disney went bankrupt — twice — before succeeding with Mickey Mouse. In 1964, Disney began buying farmland, orange orchards and swampland in central Florida. That’s where, seven years later, he opened Disney World. Today, it comprises four theme parks and is one of the world's largest tourist attractions.

That same perseverance helped Orlando through the pandemic. In March 2020, 10 major theme parks closed their doors. Workers were put on furlough, and some were laid off. Disney World had employed some 75,000 people, and the number of people employed in entertainment and hospitality in Orlando was around 250,000, or one in four jobs.

Benefitting from Florida’s less-restrictive Covid measures, Disney World partially reopened less than four months later. Daily visitor numbers were capped, masks enforced, and 4,000 hand sanitizer stations were added. Other local attractions also reopened, but the four months of closure, restricted numbers, and the loss of international visitors resulted in a 68 percent decrease in visitor numbers.

In 2019, tourism contributed $91bn to the Florida economy, including $27.6bn in tax revenue. Governor Ron DeSantis increased funding to the state tourism office, which launched a series of marketing campaigns aimed at states with stricter pandemic restrictions.

And it worked. The number of domestic tourists visiting Florida in 2021 (117.35m) surpassed the 2019 level (117.18m) And despite the fact that international tourism numbers were still down 59 percent compared to 2019, revenue from sector was higher. Domestic tourists were staying longer and spending more.

Disney and Orlando tourist numbers bounced back in line with state figures. Disney World’s attendance increased by 92 percent in 2021.

In 2022, Orlando was the largest travel and tourism city destination in the US — and the

"No revenue was generated for 20 months.

The company had to lay off 25 percent of its permanent staff; another 25 percent were put on furlough. The 500 seasonal workers were simply surplus to requirements." third largest in the world, after Paris and Beijing.

The economic contribution was over $31bn, or 20 percent of the city’s total GDP. While DeSantis had been instrumental in helping the state’s tourism industry through hard times, he became involved in an ongoing spat with Disney over the state’s controversial education and parenting laws. DeSantis revoked Disney’s self-governance privileges over Disney World, which had been in place since 1967. Disney, meanwhile, cancelled the $1bn relocation of 2,000 office workers from California. Somebody bit the hand that feeds, but it’s not entirely sure which is which.

Far from Orlando’s oversized mouse ears and humid air is a train ride through mountains that are not made of plaster and concrete. The Rocky Mountaineer celebrated its 30th anniversary in 2020. The luxury rail ride through the Canadian Rockies has become one of the world’s most popular train journeys, with close to 100,000 passengers each year. Most of them — 85 to 90 percent — are international visitors. It is the largest private rail service in North America — even though it runs for just six months of the year, and only during daylight hours.

Custom carriages with extended windows and gourmet meals allow visitors to see Banff, Lake Louise and Jasper in fine style. Its famed GoldLeaf Service has a dining room at the lower level and panoramic domed windows above.

In 2021, it won the prestigious Condé Nast Traveller’s 2021 Readers' Choice Award.

Peter Armstrong founded the service in 1990 with just a few carriages. The entrepreneur started his career as a bellhop in Vancouver before buying two buses and starting a tour service. Later, he bought an airport coach service and a stake in a regional bus company. When VIA Rail Canada privatised its service to the Rockies, he saw an opportunity. But the Rocky Mountaineer’s 30th

birthday celebrations were cut short by the pandemic. The company suspended its services in July 2020 for the rest of the year, and was forced to run a reduced 2021 season.

No revenue was generated for 20 months.

The company had to lay off 25 percent of its permanent staff; another 25 percent were put on furlough. The 500 seasonal workers were simply surplus to requirements.

The suspension affected the economy of small towns along the Rocky Mountaineer’s route.

Kamloops estimated that the suspension would cost it around 10 percent of its annual tourist revenue or around C$50m.

The company used the enforced layoff well; it installed electrostatic disinfectant sprayers, glass barriers in the dining rooms, and state-ofthe-art air filters in its carriages. It also stepped up its marketing, offering discounts to Canadian traveller. It accelerated its digitalisation project, revamping its sales and booking platforms.

It also thought outside the tracks by trialling a longer US route in 2021 to broaden its revenue base and take advantage of a robust domestic tourism market. The Rockies to Red Rocks route from Denver, Colorado, to Moab, Utah, takes two days, with an overnight stop at Glenwood Springs, Colorado. After a successful first season, with 56 departures and 7,100 passengers, the Rockies to Red Rocks route now operates at full strength, with a full complement of staff.

Well-loved tourist destinations have built up loyalty over decades, and that can’t be easily erased. As Orlando and the Rocky Mountaineer demonstrated, evolution is needed to stay relevant in a competitive market. Kids may not be buying Mickey Mouse watches, but they are watching the The Mandolorian — and don’t be surprised if the Rocky Mountaineer extends its routes further still. i

"The suspension affected the economy of small towns along the Rocky Mountaineer’s route. Kamloops estimated that the suspension would cost it around 10 percent of its annual tourist revenue or around C$50m."

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> A (Very) Brief Review of Netflix’s Financial Section:

If You Eat, Sleep and Breathe Finance — You Might as Well Watch it Too...

By Hal Williams

E

nter the word “financial” into the Netflix search function and you’re instantly presented with 300 titles to choose from.

There may be more still; enter “thriller” or “comedy” and you still get 300, so that seems to be a default maximum for display. Whatever the case, the volume of production revolving around lucre, filthy or otherwise, says a lot about human fascination for it — even at home, and after-hours.

It was a lazy Spring day and, getting a whiff of warmth and freedom, we decided to give the first few titles on the list a brief test-viewing; our shoot-from-the-hip mini-reviews are below — and are to be taken with a pinch of salt. There was no formal review process; on the plus side, no animals were harmed, either.

(International readers note: Netflix offerings vary from country to country.)

Get Smart with Money Meh. Billed as a “feel-good documentary”, this is one-on-one coaching by financial gurus for enterprising but cash-strapped young Americans. “So, right now, if all else fails, in two years, you’ll have technically blown through all your savings...” It’s accessible, low-brow, and a bit “reality show” in its delivery and trappings.

Will probably appeal to ... wannabe financial gurus and enterprising but cash-strapped young Americans.

Cryptopia: Bitcoin, Blockchains, and the Future of the Internet A promising title, there, which just had to be clicked on. Director Torsten Hoffmann talks to industry experts and detractors about, well, what it says on the tin. It’s a German production, but in English. I don’t know why, but Hoffmann’s

accented narration works well enough. He visits a secret bunker in Switzerland “that holds billions in Bitcoin”. Er, hold on, I though Bitcoin was a digital currency... Ah. Offline servers, I see. But it was made in 2020, which is ages ago in crypto terms... I confess I found it a bit dry, and didn’t persevere to find out how much the crypto world has changed in the past three years. There’s not much room left in my brain; no point filling it with outdated information, eh?

Money: Explained Talk about biting off more than you can chew...

This one does not hold back: it covers everything from get-rich-quick schemes to credit cards, student loans, retirement and casinos. The only way to wrangle that heaving net into the boat is via a series, of course. Five 20-ish-minute episodes, if you can be bothered. I couldn’t, even though they’re brief, but others may enjoy the breezy format of the Explained franchise. Like much of the fare on Netflix, it’s US-centric, and the imagery and art was a bit Blue Peter for my taste. That could be a good thing, in terms of accessibility. Youngsters should be learning a lot of this stuff at school. Especially the episode about student loans for “for-profit colleges”.

97% Owned Keep that jaw dislocated, python-style, because this one requires an even bigger chomp: “The inner workings of the UK’s debt-based financial system...” Fair enough, I guess, but the old “where does money come from” has been a bit done-to-death in recent years. And I still don’t really understand it. National control, dystopian scenarios, recessions... gah. Cheer up. If you were wondering about the title, apparently only three percent of the cash sloshing about the UK is commercial bank money. A bit long in the tooth, this one, made way back in 2012. I bet the makers are still just as pessimistic — and now with more reason.

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Eat The Rich — the GameStop Saga OK, this one’s a dandy: do you remember the GameStop moment in recent history? Memes, money, the mania of wallstreetbets.com, and a legion of home-based Redditor rebels playing Wall Street at its own game: bluffing and boldly going where no one with any sense would. They teamed up to back GameStop, a dying retail company that nobody really cared about, just for the hell of it. Oh, and to make some money.

They did pretty well — some of them, anyway — and their outlaw, don’t-give-a-damn mentality certainly put the wind up the pundits. Three episodes, cool editing, recently made (2022), and thoroughly engaging. Big thumbs-up.

Madoff — The Monster of Wall Street Big, bad Bernie: Oh, how we love a tale of comeuppance. The late Bernie Madoff created the largest Ponzi scheme in history, raking in $64.8bn before anyone had really worked out what was going on. His competitors dobbed him into the SEC, eventually, but for a while Madoff flew (too) close to the Sun — the literal golden boy. Even his victims loved him — for a while — so is the “monster” in the title a bit harsh...?

Four episodes, made this year, and another good pick for a peaceful night in.

And, by our calculation, leaves you 294 other relevant titles to peruse, viewers; from here on out, you’re on your own. Heroes and devils, they’re all in there somewhere, from feature films about wartime bravery (The Resistance Banker) and hedonistic hijinks (The Wolf of Wall Street) to exciting but educational forays into industrial skulduggery (Downfall: The Case Against Boeing). Happy viewing.

Be consoled by the fact that if at first you come up feeling short-changed on satisfaction, it won’t be for lack of choice. Just push the “Back to Browse” arrow ... and keep hunting. i 151

> Middle-Market Direct Lending A Lucrative Alternative Asset Class

T

he US is home to some 200,000 companies dubbed “middle-market” — typically with EBITDA up to $150m.

navigate the current uncertain environment: • Attractive income. Higher annualised yields relative to fixed income instruments such as high yield and treasuries.

capital structure with robust lender protection through covenants to reduce risk.

• Risk-adjusted returns. Attractive historical performance relative to fixed-income instruments (again, such as high yield and treasuries).

Because of Prospect Capital Management’s achievements in middle-market direct lending, investors have placed their trust in the firm’s long-term expertise and track record to protect their capital and generate returns. The firm has over 100 employees and $11.5bn in assets under management as of March 31, 2023.

On a stand-alone basis, America’s middle-market represents a $6.3tn economy, third-largest in the world. Non-bank lending to these middle-market companies is referred to as direct lending or private credit and represents a 75 percent market share.

Middle-market companies seek loans from nonbank financiers, because they provide distinct advantages that align with growth strategies and operational requirements. They include: • Growth. Opportunities to expand operations, invest in new technologies, enter new markets, support strategic acquisitions, and more.

• Financing structures. Customisable loan structures tailored to meet the specific needs of individual companies.

• Committed capital. Bank lenders typically need to syndicate or sell a portion of their middlemarket loans, while non-banks do not.

• Experience. Specialised knowledge with a deep understanding of challenges faced by middlemarket companies, as well as niches by industry and geography.

• Speed. Focused approach enables faster and more efficient access to capital.

• Relationship-orientated. Facilitates ongoing communication and collaboration, which results in support beyond the initial financing.

Middle-market direct lending exhibits strong defensive traits, enabling the strategy to adeptly

• Hedge against rising rates. Floating rate structure neutralises duration risk from interestrate movement.

• Senior and secured. Priority in the borrower’s

Prospect is currently offering an institutionalcalibre middle-market direct lending solution for income-focused retail investors. Prospect Floating Rate and Alternative Income Fund (PFLOAT) is a non-traded business development company.

PFLOAT invests primarily in the debt of privatelyowned US middle-market companies and seeks to provide income largely from investing in senior and secured floating rate credits.

PFLOAT’s common stock pays a monthly dividend. i

"On a stand-alone basis, America’s middlemarket represents a $6.3tn economy, thirdlargest in the world. Non-bank lending to these middle-market companies is referred to as direct lending or private credit and represents a 75 percent market share."

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> Life On an Ocean Wave (Kept Afloat by Sea of Banknotes)

By Naomi Snelling

‘All I need is a luxury superyacht, and a star to steer her by...’

I

t’s official: the tide has not turned. The soaring demand for superyachts in 2022 continues to grow — and the market for luxury vessels longer than 50 metres is expected to grow over the next 10 years.

There’s a significant surge of interest for even bigger boats, too — longer than 100 metres, some of them — and shipyards are hard at work, constructing excessive but impressive expressions of wealth and style.

But while the shipyards are bustling and the marine paint suppliers and fitting crews are happy, the industry is still navigating some challenges, including economic and environmental concerns, and changes in customer preferences.

These exquisite creations are the epitome of leisure, luxury and freedom — but they are fuel guzzlers, too — and there’s continued pressure on chartering companies to use more efficient engines and reduce their carbon footprint.

There are increasing regulatory challenges looming, as well. Some governments have implemented regulations to place restrictions on yacht chartering, making it more difficult for companies to operate in those areas. This has led to a decrease in the number of vessels available for charter, which can make it more challenging for customers to find the right one for their desires. Chartering companies have risen to the challenge with fractional ownership models, which can be appealing to those who want the benefits of yacht ownership without the high price and maintenance costs.

Is life on an ocean wave for you? Meh, is one response. Traditional yacht chartering alone is no longer alluring enough — and another challenge / opportunity for the industry is the demand for more personalised “experiential travel”, where the thrill of the voyage is combined with local cultural immersion and adventure activities.

The founder and director of High Point Yachting, Sasha King, grew up in the yachting hotspot of Croatia. She spent many summers cruising around the Adriatic with her friends before moving to the UK and starting her bespoke chartering business. King has seen the industry evolve: “(B)oats became more and more sophisticated, new brands were formed, especially in the crewed-yachts charter industry and with superyachts.

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"There’s a significant surge of interest for even bigger boats, too — longer than 100 metres, some of them — and shipyards are hard at work, constructing excessive but impressive expressions of wealth and style."

“There are some incredibly sophisticated yachts out there, with technology to match. But a boat does not have to be over a certain size in order to offer an incredible experience.”

Today, King believes that sustainability should be one of the priorities. “The challenge is educating ourselves on ... how we can protect the environment, and educating the crews and the clients too.”

She points to measures such as solar panels, inbuilt water sources that reduce the need for plastic bottles, ocean-friendly cleaning products, and — most of all — a switch to the use of hydrotreated, vegetable-based biofuel, the renewable alternative to diesel.

The growing appetite for yacht customisation is driving the demand for personalised yachts.

There’s widespread demand for used yachts, but the market is still fighting to get back to the glory days of the the 2021 sales boom.

Many companies are tapping into technology to improve the customer experience: mobile booking apps that allow easy entry into the yachting life and track the location of the vessel in real-time, automated check-ins and digital communication with crew members.

King believes the magic lies in matching client and yacht, and she has been busy developing ways to meet the rising demand for allied experiences, such as kitesurfing. “(That) has really taken off and is increasingly popular,” she says. “Knowing the best spots and getting the yachts there lets people enjoy this sport in a new way.”

Most clients insist on a private instructor and equipment, so they are free to move around in search of the best spots. “Being able to launch off the boat makes it all even more special,” King says.

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Multi-functional elements are also popular. “One of our smaller catamarans uses their floating island as a platform to dive from, a lounging area for afternoon cocktails, and a cinema screen to watch movies under the stars. This has been a great hit with the families.

“We have just booked a client on a heli-skiing expedition in Greenland, aboard an explorer.”

Guests will be accompanied by one of the most accomplished alpine skiers in US history, a two-time World Champion who has experience guiding and skiing on Mount Everest.

Exquisite cuisine is hardly a new trend for this elite world; it’s anchored to the concept of fine dining. Superyacht chefs from the upper

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echelons of the catering world even offer cookery lessons. Celebrities and A-listers commonly indulge in ocean cruising. Hollywood actors, business magnates, property moguls and even royalty — many high-profile individuals have made yacht chartering a regular part of their lives.

Russian billionaire and former owner of Chelsea Football Club, Roman Abramovich, is the owner of the world's second-largest yacht, the Eclipse.

The 500-foot floating mansion features two helipads, a cinema, a swimming pool — and even an anti-paparazzi shield. In its heyday, it hosted the likes of Beyoncé and Jay-Z, but these days is “mothballed” in a Turkish Port — apparently awaiting further instructions. (Jay-Z

and Beyoncé are nowadays to be seen on the Galactica Star, a yacht that features a jacuzzi, gym, and an elevator.

Another famous yachtie is Microsoft co-founder Paul Allen, who owned a string of boats during his lifetime, including the Octopus, which he used for research expeditions (and to host guests including Mick Jagger and members of U2). Allen passed away in 2018, and his yachts including the Octopus were sold off; it was purchased by the CEO of Reddit, Steve Huffman.

Leonardo DiCaprio is also a die-hard fan.

DiCaprio, an avid environmentalist, insists on eco-friendly features for his cruises. The actor has CFI.co | Capital Finance International

used his yacht to conduct conservation research and host conferences on climate change. Prince Albert of Monaco is a keen yachtsman, and he and his wife, Princess Charlene, have been spotted on yacht-hopping vacations.

But yachting is not just the preserve of the superrich. Chartering companies offer vessels to suit various budgets, making it a more accessible experience. Nor is yacht chartering solely about luxury and adventure; there’s a rising tide of yacht vacations that have earnest philanthropic purpose — marine conservation or humanitarian work, for example.

But all that is likely to be accompanied by lashings of champagne, bien sur. i 155

> Teenage Travels with a Cherokee:

My Taste of the American West

By Tony Lennox

Fifty years ago, a young Tony Lennox heeded the age-old advice — ‘Go west, young man’ — to experience the American Dream...

J

eff Lynne, lead singer and founder of the Electric Light Orchestra, grew up about three miles from me in a humdrum suburb of Birmingham. Though we never met, we shared early influences: football, The Beatles — and the lure of America.

In his song Wild West Hero, Lynne captured the yearning of ordinary English lads: “Ride the range all the day till the first fading light, be with my Western girl round the fire oh so bright / I’d be the Indians’ friend, let them live to be free, ridin’ into the sunset, I wish I could be…”

His notion of the West, like mine, came from Saturday cinema matinees and TV shows like Bonanza, Gunsmoke, The Virginian and The High Chaparral. In 1972, I was an aimless teenager.

I read Dee Brown’s Bury My Heart at Wounded Knee, a tale told from the Native American perspective. It was an eye-opener. I wanted to be “the Indian’s friend” like Jeff, and I got the chance. That summer, Chief — aka my Uncle Ralph — invited me on a life-changing American adventure. Chief was the eldest son of a full-blood Cherokee (though he seemed to have inherited most of his genes, and a love of Mexican food, from his Spanish-American mother). We were related by his marriage to Stella, my maternal aunt.

have been more mature. The first thing he did, as we set off west, was to hand me a pack of sweet cigarillos rolled from smooth Virginia tobacco.

I was hooked on the things for the next seven months.

Uncle Ralph had little interest in his ancestry, or in Native American history — not even in the forced migration of the Cherokee in the 1800s, from their ancestral lands in the lush forests of Georgia to a bleak stretch of land later known as Oklahoma. Nearly a quarter of the tribe died on that trek, dubbed the Trail of Tears.

Chief was a prime product of post-war America.

He was a patriot, a defender of the right to bear arms, and — his mother’s Spanish blood notwithstanding — a man who would disparagingly refer to illegal migrants who’d swum the Rio Grande as “wetbacks”. He wasn’t alone in that; a 1950s government campaign to repatriate immigrants was officially called Operation Wetback. Chief died long before Donald Trump rose to power, but I get the feeling he’d have approved. Paradoxically, on the long drive across America, Chief would search the radio waves for Mexican music, despite the protests of my aunt and me. Mariachi became the soundtrack for much of the journey.

In the summer of 1972, just before my 18th birthday, Chief was posted back to the US. I was to fly to the States to meet him, Aunt Stella, and their two children in New York. From there, we’d begin a 2,800-mile, coast-to-coast drive in a 1600cc Volkswagen, towing a caravan to his family home in northern California. To get an open-ended visa, I was required to become my uncle’s official ward while in America.

In retrospect, I realise I was witnessing the end of an era, the apex of the white American dream, a gas-guzzling land of eternal optimism, affluence, and infinite possibilities — before defeat in Vietnam, factory closures, economic hardship, and bank failures. The old certainties depicted by movie stars like John Wayne were beginning to tarnish. The Western genre of the first half of the 20th Century tended to portray native tribes as savages. By 1970, thanks to books like Wounded Knee and the emergence of “revisionist Westerns” like Little Big Man and Soldier Blue, attitudes were changing, particularly among American youth. The traditional silver screen image of lantern-jawed white men carving out a life in a beautiful but inhospitable landscapes was being supplanted by gritty, more realistic tales of greed, theft, and exploitation.

But Chief wasn’t what you’d call a father figure; he was more of an irresponsible older brother.

He introduced me to peanut butter and jelly sandwiches, and fried eggs on pancakes covered in syrup. You’d think that having overseen nuclear weapons pointed vaguely at the Russians, he’d

This refocusing on just how the West was won mirrored changes in US society. The hippy generation of the late 1960s had morphed into something less hopeful, less certain, and darker.

By the time I arrived in the US, no-one in San Francisco was wearing flowers in their hair. This

Chief was a 6’2” US Air Force staff sergeant in his mid-30s. He’d served in Korea, Vietnam and Germany, but was latterly posted to rural Essex. His job there was to ensure the perpetual readiness of two F-111 fighter jets, armed with nuclear bombs and primed for take-off within seconds. The aircraft pointed east.

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Golden Gate Bridge

was the era of Clint Eastwood’s Inspector “Dirty Harry” Callaghan, fighting a rear-guard action against drugs and the counterculture, a theme which appealed to conservative audiences. The confidence of affluent, consumer-driven America was being replaced by doubts — about the war in Vietnam, Watergate, racial tensions, and crime.

But as we moved west in that cramped VW, the land seemed to open up — to wider skies, emptier roads, and a sense that this was still a young country. The population of the US in 1972 was 204 million; it now sits at 340 million.

The journey across this colourful continent has stayed with me, as have vivid images: Civil War battlefields in Pennsylvania, Mennonite farmers ploughing fields with horses, fireflies and lightning storms in Indiana. I remember endless cornfields in Illinois, rugged timber houses and red barns of Missouri, Texas roadhouse steaks, the deserts of New Mexico, and Arizona’s stunning landscapes.

At the Grand Canyon, I bought a pair of buckskin moccasins from a Pueblo Indian roadside stall for $3, and wore them to trek the Canyon trail. Chief

Arriving at JFK with only $40 in his pocket was a mistake, the author says. ‘Immigration officers didn’t like the look of me — and, having dug out my old passport photo, who could blame them...?’

Summer 2023 Issue

said they’d fall apart after a mile; they stayed on my feet for the next seven months.

California was a visual disappointment. We arrived before dawn at Chief’s sister’s home in Riverside, a sprawling suburb on the western edge of Los Angeles. I admired the browntinted glass of the floor-to-ceiling windows, only to realise, as the sun rose, that it was the sky, not the glass, that was tinted by the smog from clogged city freeways.

Chief was due to start work at a new base near San Francisco. Our house wouldn’t be ready for a while, so we headed on to the town of Lincoln, north of Sacramento, where his parents and various sisters, cousins, nephews and nieces

lived on the edge of town in what can only be described as a wooden shack. The previous winter’s storms had demolished half of the building; it lay in ruins, the family squeezing into surviving rooms. We arrived in high summer, with the grass bleached by the sun. The family children eyed me suspiciously before frowning in disappointment. “He’s not a Beatle,” observed one.

But the shack was set in a stunning landscape, with the Sierra Nevada stretching across the horizon and turning brilliant white in winter.

Lincoln, a township built around a grain refinery, was almost entirely populated by Spanish-Americans. Chief’s father, Ralph Snr, was straight from the pages of Wounded Knee: small and squat, with features seemingly carved from polished oak. Grandma was a stereotypical Mexican mother, a tubby woman in a floral frock who was constantly in tears — of joy, or sadness. She cried when we arrived, she cried when we left, insisting on bestowing a blessing on everyone, calling on God to keep us safe. She cried while chopping chilli peppers or making tortillas, even while watching TV. The tears rolled almost incessantly down her round, brown cheeks.

Then we drove west, to Marin County, north of the Golden Gate Bridge. We settled into a community of neat homes set in rolling hills of eucalyptus and scrub oak. When the children played in the back yard, optimistic vultures would begin to circle high above. I passed autumn and winter there, babysitting Chief and Stella’s children, running errands, helping my uncle with his parttime food-delivery job in the Bay Area. I enrolled at a local college, and took solo adventures up the coast to places like Bodega Bay, the setting of Alfred Hitchcock’s The Birds. I recently Googled CFI.co | Capital Finance International

the location of the Marin County community, expecting to see the small estate gracefully aging. It had been replaced by new estates, the once-empty hills filled with roads and houses.

My only contact with my family in England was by post; international phone calls were expensive.

There was a weekly delivery of out-of-date issues of The Sports Argus, a Birmingham paper sent surface-mail by my mother. Today, you could just consult your smartphone or laptop. Technology has robbed us of the joyous sense of isolation that comes with distance.

Christmas that year was slightly tainted by the unsettling realisation that, as the 18-year-old ward of an American citizen, President Richard Nixon had the right to ask me to fight on the other side of the world. I had nothing personally against the North Vietnamese, but the decision was taken out of my hands. I got a phone call from England to tell me that my dad had died of a heart attack.

I was still wearing those buckskin moccasins when the plane touched down in Birmingham in late February 1973. Just days earlier, I’d been driving a ’57 Chevrolet around the sunny streets of San Francisco, attending college classes, going to Joan Baez concerts with friends. Now I was back in a bleak English winter. The contrast was stark. It was like being smacked in the face by something hard and wet. The familiar had become alien; everything seemed small, and drained of colour. I missed the wide western skies, the sunshine, the open, friendly people.

It’s unlikely that I’ll ever bump into Jeff Lynne, but I still feel a connection to my fellow Brummie. He went to America too; unlike me, he stayed. i 157

> New Cause for Celebration on

Biodiversity and Conservation

Experts and enthusiasts in biodiversity and conservation have been collaborating for years to curb humanity’s destructive practices and accelerate positive change.

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t the end of 2022, representatives of 190 countries met in Montreal at the United Nations Biodiversity Conference (COP15) to agree on action to combat global biodiversity loss. Wealthy and developing nations came together to set targets, although some watered-down language sparked criticism.

COP15 was originally scheduled to take place in Kunming, China, in 2020, but was pushed back because of Covid. The conference was split in two: a virtual preamble followed by the in-person event. Participants put the delays to good use by debating and building consensus on the KunmingMontreal Global Biodiversity Framework (GBF), which includes four long-term global goals (to be completed by 2050) and 23 action-orientated targets (to be achieved by 2030). The aim is to wean the world off environmentally harmful incentives, cutting $500bn of the $1.8tn spent in annual subsidies that support deforestation, soil degradation, and high-emission livestock production. It wants to see public and private spending that supports biodiversity reach $200bn a year by 2030.

One commitment — the “30x30 target” — made headlines for its intention to protect 30 percent of land and sea by 2030. Many praised the conference for stressing the importance of bringing indigenous and local communities into the decision-making process.

“Preserving and restoring the world’s forests are among the best options to accelerate action on the climate and biodiversity crises,” said US special envoy Monica Medina. “To be successful, we need to bring together policy commitments and co-ordinated support from a range of partners — public, private and philanthropic.”

ENVIRONMENTAL STEWARDS A US conservation group called Save the Redwoods League has named the InterTribal Sinkyone Wilderness Council, a coalition of 10 Northern California tribal nations, as the owner and custodian of 523 acres of the forestland. The coalition has renamed the area Tc'ih-Léh-Dûñ — which means “Fish Run Place” in the Sinkyone language — to honour the resilience of the indigenous people. "Renaming the property Tc'ihLéh-Dûñ lets people know that it's a sacred place,”

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said Crista Ray, a board member of the Sinkyone Council. “It's a place for our native people.”

The land is protected as a conservation easement and joins another 180,000 acres of conserved lands along the Sinkyone coast. Save the Redwoods League first entered into a conservation agreement with a tribal entity in 2012, when it donated 164 acres of redwoods to the Sinkyone Council.

The league purchased the 523-acre property in 2020 with $3.55m in funding from Pacific Gas & Electric Company (PG&E). PG&E also contributed a $1.13m endowment to support ongoing stewardship of the area. The utility company supports several habitat conservation programmes.

According to The Los Angeles Times, PG&E has been blamed for wildfires that have killed people and destroyed 23,000 homes and businesses in the past six years. PG&E pled guilty to 84 counts of involuntary manslaughter and was fined $4m, the maximum penalty allowed. It has reached settlement agreements with wildfire victims totalling more than $13.5bn.

In Montana, the Confederated Salish and Kootenai Tribes (CSKT) are celebrating the return of 18,000 acres of undeveloped bison-range land to native hands. The land was seized, without tribal consent, in the 1900s, when president Theodore Roosevelt signed conservation legislation to create the National Bison Range. Donald Trump signed a law to transition management of the land back to the tribes in 2020, and US interior secretary Deb Haaland signed-off on the law in 2021.

Joe Biden underscored his administration’s commitment to strengthening relations with indigenous nations by earmarking funding from his landmark infrastructure law to improve rural water infrastructure in Montana. That includes $7m for the Fort Peck Reservation and $2.5bn for the Indian Water Rights Settlement Completion Fund.

The latter aims to make good on overdue promises to deliver water resources to tribes, including for the CSKT and Blackfeet Nation.

RESPONSIBLE INVESTMENT Research from the World Economic Forum (WEF) states that $44tn of economic value-generation — over half the world’s total GDP — could be at risk if humanity’s current rate of natural destruction CFI.co | Capital Finance International

continues unchecked. Governments have begun to take action; China launched the Kunming Biodiversity Fund with 1.5 billion yuan ($230m), while Japan extended its biodiversity fund by 1.8 billion yen ($17m).

In February 2023, Canada announced $30m in government funding for a three-year project run by the International Union for Conservation of Nature (IUCN), and Quebec-based Mission Inclusion, to help East African coastal communities protect natural habitats. The IUCN will lead efforts to boost biodiversity conservation and the sustainable management of protected marine areas. Mission Inclusion, an organisation fighting for vulnerable and marginalised people in Quebec and elsewhere, will pursue the economic empowerment of women in the blue economy.

The project will contribute to the aims of the Great Blue Wall initiative, an Africa-driven roadmap to achieve a nature-positive world by 2030. In November 2021, 10 nations bordering the western Indian Ocean committed to creating a network of marine conservation areas and increasing protected area in this region — now at less than 10 percent — to 30 percent by 2030. The project expects to restore two million hectares of critical ecosystems, sequester 100 million tons of CO2, and create a million “blue” jobs by 2030.

The other side of the continent is considering its own Great Blue Wall around the Gulf of Guinea, which covers about 6,000 kilometres of coastline between Senegal and Angola. Meanwhile, nations across the Sahara and Sahel regions combat desertification and promote efficient water management through the Great Green Wall initiative. The Green Climate Fund (GCF), part of the financial mechanism of the United Nations Framework Convention on Climate Change, has approved $1.1bn in GCF finance and $2.4bn in co-finance for 11 countries in the GGW. It has also approved $31m in GCF “readiness” grants.

“Our world is experiencing a series of cascading crises that are undermining hard-fought

Summer 2023 Issue

development gains and threatening current and future generations,” UN deputy secretary-general Amina Mohammed said at the 2023 African Regional Forum for Sustainable Development in Niger. “The Great Green Wall initiative has the potential to deliver climate resilience and sustainable livelihoods for vulnerable populations ... The proposed Great Blue Wall can secure similar benefits from effective management of the continent's marine and freshwater ecosystems.”

SPECIES ON THE REBOUND Global conservation efforts have helped some animals buck the status of endangered species.

In 2022, humpback whales rebounded from a low population point of 10,000 to almost 80,000.

Scientists have also observed up to 150 fin whales off the coast of Antarctica — a species once almost rendered extinct by commercial whaling.

According to the 2022 report Wildlife Comeback in Europe, reintroduction campaigns have resulted in an uptick of beavers, pelicans and bison — which are now roaming England again for the first time in thousands of years.

Mozambique welcomes rhinos back after 40 years, and Nepal has helped tigers claw back from the brink of extinction.

PROTECTING HABITATS Europe removed a record number of dams and weirs to free the flow of water and help restore fish migration routes, boost biodiversity, and build climate resilience. Britain announced its first wetland “super reserve” — a 15,000-acre area that will provide nature-based solutions to combat climate change. In June this year, the EU parliament will vote on a nature restoration law that would set specific timetables for restoring degraded habitats — covering 1.6 million square miles across the 27 member countries.

Businesses are striving to support Nature’s recovery. The Mediterranean Shipping Company (MSC) rerouted its fleet to protect endangered blue whales near Sri Lanka. It voluntarily changed the routes after research from International Fund for Animal Welfare (IFAW) found that the move would reduce the risk of collision by 95 percent.

“By ensuring these small changes, MSC is making a significant difference for these endangered whales,” said Sharon Livermore, director of marine conservation at IFAW. “Ship strikes are both a conservation and a welfare problem.”

In February 2022, Panama joined the growing list of countries, municipalities and tribal nations to adopt laws protecting Nature. As of 2022, such laws exist in 24 countries, up from 17 in 2021. Ecuador was one of the first to afford Nature legal rights, and in February 2022, its top court took steps to get territorial autonomy for indigenous communities. As part of the ruling, indigenous communities must be consulted over any extractive projects on or near their territory.

In April 2022, California broke ground on the construction of the Wallis Annenberg Wildlife Crossing, The $90m project will be the largest urban wildlife crossing in the state, and is expected to be completed within two years. Montana worked with tribal community members to design and build one of the largest networks of wildlife highway crossings in the US. Guided by traditional indigenous knowledge, the state built 42 crossings along a highway that traversed sovereign tribal lands. Research shows that animal collisions have declined by 71 percent, while camera traps show the crossing is used by 22,000 animals each year.

Brazilian president Luiz Inácio Lula da Silva has pledged to halt deforestation and revive the Amazon Fund, which was frozen by the end of Jair Bolsonaro’s presidency. The fund, created in 2008 by Norway and Brazil, enables wealthier countries to finance conservation in the Amazon rainforest. As of March 2023, the fund has accrued over 3,4 billion Brazilian reals ($666m). Special climate envoy John Kerry told reporters that the US Senate is considering a bill with $4.5bn in funding for forest conservation, while the House of Representatives is weighing a proposal worth $9bn.

CFI.co | Capital Finance International

NATURE-POSITIVE ECONOMY The WEF has ranked biodiversity loss as the thirdmost severe threat humanity will face over the next 10 years in its 2022 Global Risks Report.

It has identified key transitions in the global economy that could have a dramatic impact in protecting biodiversity, while creating over 100 million jobs and bringing economic opportunities worth trillions of dollars.

The WEF encourages more compact, higherdensity constructed environments to free-up land for agriculture, and curb the urban sprawl that threatens flora and fauna. Undeveloped land could be placed under conservation, and this transition will create a $665bn opportunity, with a projected three million jobs created by 2030.

Built environments should place biodiversity at the forefront of every project design, experts say. Infrastructure should be planned to avoid or minimise disruption or destruction, with wildlife crossings to connect migration schedules and food resources. All buildings should be energyand resource-efficient. The WEF estimates this to be a $935bn opportunity that could create 38 million jobs by 2030.

It expects Fourth Industrial Revolution technologies to transform urban utilities into sustainable services while ensuring universal access to clean air and water. These solutions could deliver $670bn in business opportunities and create 42 million jobs by 2030.

The WEF encourages a nature-as-infrastructure approach to development, prioritising natural ecosystems as an essential part of new-built environments. This results in cleaner air, natural water purification and increased climate resilience. It could be a $160bn market, comprising four million jobs, by 2030. The WEF suggests similar infrastructure to power the world’s roads, railways, pipelines, and ports with renewable energy. This market could reach $585bn and create 29 million new jobs by 2030. i 159

> When — and How — Employees’

Productivity Should Be Monitored This story first appeared in Kellogg Insight

Kellogg faculty members Thomas Hubbard and Hatim Rahman discuss the best approach to productivity monitoring — and some pitfalls to avoid.

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onitoring employee productivity can make companies more efficient — and benefit employees, too. But the practice, which makes use of a variety of methods including activity logging, tracking software, surveillance cameras, and the gathering of GPS data, also raises a host of concerns around trust, privacy, and fairness.

Though new forms of employee productivity monitoring have been in the news lately, companies have long used technology to keep an eye on how people do their jobs.

Productivity is something that businesses obviously care about. But measuring and rewarding it is not straightforward. Metrics that may be appropriate in one role or industry may be totally inadequate in another. So where should a company start?

Thomas Hubbard: What do you want people to do? What do you want them to produce?

This is relatively easy to determine in some circumstances. If someone’s doing a form of piecework, then you want them to produce whatever pieces that they’re producing. But many jobs are a lot more complicated than that and can’t be defined in terms of a small number of measurable tasks.

Hatim Rahman: In simple, rote tasks, quality and quantity are easy to measure, and there’s less subjectivity. Knowledge-intensive, complex tasks, where it’s less clear how to accomplish them or measure their quality, are less amenable to monitoring.

Sarit Markovich: This is especially true when you think about innovation. In that case, it’s unclear what exactly you are looking for, so defining what you’re looking for may be very hard to do.

Workers in some roles and industries have experienced a degree of monitoring for years — so we know something about how monitoring can be used effectively. And in general, the key is making monitoring beneficial for firm and employee.

Hubbard: The trucking industry is an interesting place to look. It essentially monitored remote work in the form of onboard computers in the late 1980s. These computers let you monitor two things.

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"Metrics that may be appropriate in one role or industry may be totally inadequate in another. So where should a company start?"

they’ve done. So with the change to remote work, some employees, whose accomplishments are often overlooked, such as women and under-represented minorities, benefited from monitoring. It allowed them to get credit for work when they may otherwise be overlooked.

Despite the benefits, in practice, productivity monitoring often goes awry. One of the main reasons is the difficulty of defining measure, and incentivising productivity for more complex tasks.

First, they let you monitor the driver and how they operate their truck, so you can see whether they brake too much, or how they are operating the gears, and whether they are driving in a way that preserves the value of the truck.

Rahman: Goodhart’s law states that when a measure becomes a target, it ceases to be a good measure. So, if you start to measure something — and do it poorly — people will game the system.

Second, the more advanced systems provide real-time location information to the dispatcher.

Now they can match trucks to hauls a lot more efficiently. This is creating more output out of the same resources, and that’s a huge gain. And for drivers who are only paid when they are carrying a load, this is also good news.

Hubbard: This is the oldest problem in incentive theory. You see salespeople moving their sales up in order to hit quotas. You see teachers teaching to the test. You have the folly of hoping for Y and paying for X. These are old problems that are seemingly new again, because they are coming up in different contexts.

There are plenty of ways to introduce monitoring technology and have it be a win-win: “We’re going to monitor you more, but we’re going to pay you more because you’re going to work harder.”

Rahman: Ideally, monitoring can work well. But a lot of times it is implemented haphazardly.

Some organisations are trying to use monitoring software to see whether contract attorneys are engaged. We know that with a lot of knowledgeintensive work, taking a walk can sometimes help you come up with a breakthrough idea. But if the software determines that you’re not looking at your screen in a way the programme can track, it automatically logs you off. That’s poor implementation.

You just have to make sure that the productivity gains from monitoring are shared across the organisation, and don’t just go to a subset of it.

Markovich: Another aspect to consider is employee safety. Typically, employees are going to be more willing to accept monitoring when safety is a concern.

Hubbard: In situations where employees are at risk of being blamed for things that aren’t their fault, they’re going to be more willing to accept monitoring technologies, because that provides a direct benefit to them.

Rahman: There is also learning. If you can use technologies to help people improve their performance, rather than merely tying it to sanctions and direct rewards, they will be much more willing to accept monitoring.

Some workers also appreciate that monitoring systems let them get credit for the work that CFI.co | Capital Finance International

It also reflects a lack of trust between employees and organisations.

Markovich: Trust is perhaps most challenging of all in the gig economy. For ride-hailing, trust matters less, because the incentives are aligned, meaning that if I’m a driver I want this ride to end as soon as possible because then I can take another one, which is exactly what the rider wants as well.

But when you are paying per hour, rather than per task, this is where things are going to become a little bit more complex. One way that Upwork — a platform that connects clients with freelancer knowledge workers — goes about it is they make

Summer 2023 Issue

their gig workers record their screens. Then, in addition to their end work product, they send the client a log of what was happening on their screen while they were working to demonstrate how many hours they spent and all activity they performed during that time.

Obviously, there are huge privacy concerns here in terms of knowing that people can watch your screen. But there is also this idea of “I do not trust you.” I don’t know you, and it’s not clear I can trust you, and it’s not necessarily going to be a long-term relationship where we are going to build trust.

(Upwork says that it does offer freelancers the option to request that their time be entered manually, rather than using time-tracking software. This software takes screenshots every 10 minutes and tracks keystroke and click counts, which are then relayed to the client. But if freelancers use the manual time option, they lose hourly payment protection.)

Hubbard: The problem is that that's never how they would treat you if you were actually located in the same place. They need to figure out a way of interacting with workers that is much closer to the way that they interact with them if they were actually in the same place.

As firms and employees adjust to the reality of remote work, and the potential of increased

monitoring, there are some things to keep in mind.

out a way that you could share in those benefits so that it’s a win-win.”

Rahman: Frequent monitoring of more complex work generates resentment when it’s misaligned with the goals of the job someone is performing. This seems to happen most often when some of these stakeholders aren’t involved in the design and implementation of the monitoring software.

Markovich: If you reward people for just one thing, then this is what employees are going to gravitate to. But if you want them to perform an array of activities, then maybe a fixed wage is going to be more appropriate, because then they are indifferent in terms of how they’re allocating their time, and will do so in the way that is most productive.

I know it can be difficult, but I would like to see the workers who will be monitored get more involved in how these monitoring systems are designed and implemented.

And remember: For some organisations, the pandemic revealed that you don’t necessarily need enhanced monitoring. Because it happened overnight, a lot of organisations found, “Wow, our productivity was through the roof, our profits were through the roof, and we didn’t have a chance to figure out some very intricate system of monitoring.”

Hubbard: The responsibility for making remote work effective cuts both ways. The employee has to understand that if they want that extra flexibility, they will need to make remote work a win-win for their employer, and that could mean some kind of monitoring system. That’s the quid pro quo: “OK, I’m not commuting as much, and I’m benefiting directly. Let’s figure CFI.co | Capital Finance International

Rahman: Frequent monitoring of more complex work does generate resentment, because it’s misaligned with the goal. But people may be more amenable to more rote, well-defined work being more frequently monitored because it’s more objectively defined in value.

Often what I’ve seen, in the case of Upwork and others, is that some of these stakeholders aren’t involved in design and implementation of the monitoring software. That’s when I see some misalignment, or when they get it wrong.

I know it can be difficult, but I personally would like to see workers, truck drivers, and others, more involved in how these monitoring systems are designed and implemented. i

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> Asia Pacific

Covid Restrictions Put Chokehold on Outbound Chinese Tourist Numbers

By Brendan Filipovski

But as the ‘New Normal’ finally appears, the world may be about to see a new era of international Sino-tourism.

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he global tourism industry rejoiced on January 8, as China dropped Covid quarantine measures for travellers — including returning nationals — and there are hopes that Chinese tourists can provide a final push to post-pandemic recovery.

In the 1980s and early 1990s, Japanese tourists were everywhere. Throughout the Asia-Pacific region, countries welcomed the tourists — and Japanese investment in the industry. But after the country’s working-age population peaked in the mid-1990s, the number of outbound Japanese tourists plateaued.

In 1995, the Chinese government launched the Approved Destination Status programme, which allowed citizens on organised tours to visit a small but growing list of countries. Travel restrictions continued to ease, and the number of outbound Chinese tourists rose. Increased domestic disposable income contributed to the growth spurt.

In 2008, the number of Chinese passport holders surpassed six million — the peak reached by Japan in 1996. By 2018, 30 million Chinese — some 13 percent of the population — had the vital travel document. There is still room for growth: only about 20 percent of Japanese (and 40 percent of Americans) have passports.

In 2012, China became the world’s largest source of outbound tourists, by number and by spending: 83 million trips and $102bn. In 2019, those figures had risen to 154 million trips and $254bn. Around half of these journeys were to nearby Hong Kong and Macau. Dutyfree shopping, casinos, and visits to relatives are ongoing attractions.

China’s introduction of three “Golden Weeks” starting in 2000 provided a boost to neighbouring countries. The five to eight days of holiday provided greater scope for travel. In 2017, 69 percent of Chinese travelling to South East Asia took advantage of the scheme; the Golden Weeks centred around Lunar New Year, May Day, and China’s National Day, October 1.

Japan is a favoured destination because of its variety. In Winter, it provides good skiing and hot springs; in Spring there is hanami, literally “blossom watching” as the cherry trees bloom.

All year round there is good shopping and food. South Korea offers some familiar cultural touchpoints, as well as K-pop concerts. South East Asia provides good affordability, particularly in southern provinces; Thailand and Singapore are firm favourites.

As Chinese incomes have increased, travel to Europe and North America has increased, and

"In 2008, the number of Chinese passport holders surpassed six million — the peak reached by Japan in 1996. By 2018, 30 million Chinese — some 13 percent of the population — had the vital travel document." some countries in the region — such as Vietnam — have lost ground. Neighbouring nations began to take advantage of the Chinese tourism surge by easing visa requirements. Thailand led the way in 1988, Singapore granted access in 1990, South Korea in 1998, Australia in 1999, Japan in 2000, and Indonesia in 2002. The ease of obtaining visas is often cited as a key determinant of destination choice.

In 2023, 83 countries provide visa-free travel or visa-upon-arrival for Chinese nationals.

More countries could yet take advantage of the situation; according to the 2023 Henley Passport Index, China is ranked 56th, equal with Papua New Guinea and just behind Bolivia, Botswana and Belarus.

Chinese tourists must still apply for visas for the US, the EU, the UK, and Japan. Australia and Canada require eVisas. But in many cases, the process has been streamlined, the length of stay has been increased, and multiple entry has been allowed.

The pandemic had an undeniable impact on tourism. The number of trips by outbound Chinese decreased by 87 percent in 2020. According to UNWTO, Chinese outbound tourist expenditure was around $270bn less in 2020 and 2021 than it would otherwise have been. Many countries, including China, banned or limited tourist entry.

At the height of restrictions, China imposed a two-week quarantine at a government facility for any overseas arrivals. An additional two-weeks quarantine in the departure country was required for those countries designated “high-risk”. The two-week quarantine was eventually reduced to five days in a central hotel, followed by three days of isolation — all paid for by the traveller.

Domestic trips were also tightly controlled, with home quarantine required after visiting high-risk areas, and some zones were completely isolated.

Travel between cities required travellers to show a green health and travel QR code from the WeChat or Alipay apps.

No surprise, then, at the joy that accompanied the removal of restrictions on January 8. Soon afterwards, analysts turned their attention to the Chinese New Year and May Day holidays to gauge the response. Pent-up demand was countered by a decrease in consumer sentiment during 2022.

So far, domestic travel in China seems stronger than international options. During the fiveday Lunar New Year period, there were 226m domestic trips — compared with 421m in 2019 — and 2.9m international ones; the figure was 12.5m in 2019. South East Asia was the most popular destination.

During the 2023 May Day holiday, domestic trips increased by 71 percent to 274m trips, 19 percent higher than 2019. Tours, road trips, and visits to theme parks were the most popular.

International flights increased by more than 60 percent — but remain at just 40 percent of 2019 levels.

International travel takes longer to recover than its domestic counterpart. McKinsey and Company estimates that 20 percent of Chinese passports expired during the pandemic. International air capacity remains constrained by a lack of planes and staff — which equates to higher prices.

When Chinese outbound travel does fully recover, probably over the next few years, it will look different. Gen Z will be the main drivers. Compared to older generations, they prefer individual travel with a greater emphasis on experience, and the outdoors. They are also travelling at a younger age. Chinese tourism will get a boost from inland provinces as incomes increase.

While many Chinese are yet to get a passport, the working-age population peaked in 2011; it is expected to be 25 percent lower by 2050. This means that at some point in the next 25 years, Chinese outbound tourism will slow. But even after this point, China is likely to remain the dominant force in international tourism. i

"When Chinese outbound travel does fully recover, probably over the next few years, it will look different. Gen Z will be the main drivers."

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Summer 2023 Issue

> It’s a Wrap! Containers Printers Has the Industry Covered

— But It’s Just Not Content to Rest On Its Laurels

Driven by the conviction that sustainability is central to the future of business, CEO Amy Chung keeps her eyes on the horizon.

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arly in her tenure as CEO of Singaporebased packaging company Containers Printers (CP), Amy Chung identified three key trends to be addressed if the company was to remain competitive: environmental sustainability, increased standardisation, and digitalisation.

The company was already at the top of its game, recognised for its established presence in the sector based on its digital footprint, size, years in operation, and overseas presence. But Chung could see that growing concerns around climate change. That, and the worldwide move towards the circular economy, were bound to change the industry, and business more broadly.

Companies would need to demonstrate commitment to improving sustainability.

Adopting international standards was the new imperative, with increasingly integrated supply chains requiring compliance with endmarket requirements. Chung knew it would be necessary to ensure transparency and facilitate co-ordination.

The move towards “Industry 4.0” was giving her a glimpse of how factories of the future might operate, and how fresh opportunities could be created by connecting with suppliers and customers.

CEO: Amy Chung

Chung set out to transform the company via three pillars: technology and the development of new products and services, human capital development, and client acquisition. These avenues would support transition to a more innovative, collaborative, and sustainable company. They would also require significant investments in people, processes, and equipment — and a multi-year change-management process.

Fast-forward almost a decade, and CP has transformed itself into a process- and standardsdriven organisation that leverages real-time operational data from IoT devices linked to production lines across its factories.

The company has expanded its customer base to include leading brands in the nutrition and medical industries. It launched digital services, including brand protection, supply-chain intelligence, and customer engagement. All this was made possible by investing in new printing technologies to uniquely identify each product.

CP offers a full range of sustainable packaging solutions, including high performance, recyclable laminates that meet the most demanding applications. The company has also launched lifecycle assessment services, including product carbon-footprint reporting to reliably measure, report, verify, and improve the environmental impacts of all products and production systems.

Under Chung's leadership, Container Printers has made substantial efforts to achieve corporate sustainability. The company has a dedicated team working towards ongoing environmental improvements — and has been recognised many times for its achievements. In 2021 and 2022, CP was awarded the LowCarbonSG logo by the UN-backed Carbon Pricing Leadership Coalition (CPLC) — recognition of its progress in measuring, monitoring, and reducing emissions.

What began just less than 10 years ago with a few key insights and a willingness to engage CFI.co | Capital Finance International

with a potentially challenging future has led to a remarkable transformation — and a journey towards sustainability that is far from over.

Containers Printers, founded in 1981, is a leading packaging solutions provider specialising in a wide range of high-quality flexible laminates and metal packaging products. It serves global brands in markets around the world, including Africa, Europe, and the Middle East.

CP is an ACRA-registered entity. Online searches reveal a company that is “assessed to have a high spending power, taking into account its revenue, growth, profitability, funding, headcount, (and) technology procurement”.

This one is one of those companies that “does what it says on the tin” — and aims to retain that straightforward approach, and entrenched values. i 165

Air Austral

The French Airline in the Indian Ocean

FRANCE

PARIS

EUROPE Suisse

ASIA INDIA Chennai

SEYCHELLES

TANZANIA Dar es Salaam

Diego

MOZAMBIQUE (1) Pemba

COMOROS

Nosy Be

Moroni Anjouan

Johannesburg

THAILAND Bangkok

MAYOTTE

AUSTRALIA

Majunga

Perth

RODRIGUES Antananarivo Tamatave MAURITIUS Saint-Denis

SOUTH AFRICA

Saint-Pierre (1)

REUNION ISLAND

Tulear (1)

Fort-Dauphin

MADAGASCAR

Air Austral subsidiary

With Air Austral, go discover the Indian Ocean Air Austral operates daily flights from its Reunion Island’s hub to Paris. It offers also flights to South Africa, Mayotte, Mauritius, Seychelles, the Comoros, Madagascar, India, Thailand … so many dreams destinations.

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In codeshare with Operated in partnership with (1)

waiting for programming

Summer 2023 Issue

> Seventy Years of Experience, Billions in AUM and Multiple

CFI.co Awards — La Trobe Financial is Simply ‘Killing It’

La Trobe Financial: Fourth Consecutive Win – Best Investment Team – Australia.

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ith over $17bn in assets under management, La Trobe Financial is one of Australia's leading alternative asset managers.

With more than seven decades of experience, and a focus on a disciplined and diversified selection of granular exposures across sector, loan size, borrower type and security location, the company operates Australia’s leading retail credit fund.

La Trobe Financial’s Chief Investment Officer, Chris Paton, said the firm’s approach had enabled it to harness the best attributes of its chosen asset classes “to deliver low-volatility income products that have demonstrated their performance for many, many years”.

With $85 bn in loan originations backed by retail and institutional mandates, La Trobe Financial has again won the CFI.co award for Best Investment Management Team (Australia) — for the fourth consecutive year. Paton said the result was pleasing. “My team is acutely aware that we are managing other people’s money,” he said, “and this drives our unwavering focus to manage portfolios that deliver consistent performance across cycles.

“This award is testament to our core investment fundamentals, and our resilience and consistency in delivering for investors during volatile times.”

ABOUT LA TROBE FINANCIAL La Trobe Financial is Australia’s leading alternative asset manager and a proven and trusted investment partner for institutional and retail investors with some A$17bn in assets under management (AUM). It also operates the country’s largest retail credit fund — A$9.5bn in AUM. La Trobe has the most diversified funding programme of all non-bank lenders in Australia.

Through its La Trobe Australia Credit Fund, La Trobe Financial has seven product offerings to retail and institutional investors, which are backed by pools or exposures to loans secured by registered, first-ranking mortgages over real properties in Australia.

CIO: Chris Paton

Since 1952, La Trobe Financial has been striving to help people realise their potential with specialist financing and investment solutions. i

La Trobe Financial is regulated by the Australian Securities & Investments Commission (ASIC) and holds the requisite regulatory AFSL and ACL to operate the Credit Fund, place CFI.co | Capital Finance International

RMBS issuances, and provide credit services.

Consider the PDS and TMDs on their website www.latrobefinancial.com before investing.

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Summer 2023 Issue

> Tech-Up Transition for Philippine Bank has Swept the

Nation Along Towards an Enticing Digital Future UnionBank is a pioneer of digital technology with a focus on inclusion and customer service.

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nion Bank of the Philippines (UnionBank) has always been quick to embrace technological innovations that will empower its customers.

As the Philippines' pioneer in digital banking, UnionBank stands firm in its promise to power the future of banking. It is committed to being the region's trailblazer to best serve the needs of Filipinos — wherever they may be.

UnionBank has earned numerous awards and recognition as one of Asia’s leading companies, ranking with the country’s top universal banks in terms of profitability and efficiency. Its digital transformation strategy underscored its commitment to a quality customer experience, and furthered its resolution to promote inclusive prosperity for the Philippines. With a tech-focused drive, it is working to enable the national push to be a G20 country by 2050.

For four years in a row, UnionBank has been recognized by a prestigious advisory council in Asia as the Best Retail Bank in the Philippines for establishing a robust culture of innovation and collaboration. Supported by significant investments in productivity, growth, and digitalization, both at the frontend and back-end, the bank has maintained a competitive edge over its rivals as it was also voted as the Most Recommended Retail Bank in the Philippines in 2022 UnionBank is a publicly listed universal bank with over twelve million customers, 385 branches nationwide, and 593 ATMs. It has distinguished itself from its competitors by the use of superior technology, bolstered by branch sales and an excellent service culture.

UnionBank stands firm in its promise to power the future of banking through "TechUp Pilipinas" while pioneering innovations for a better world.i Over the years, UnionBank has garnered a record-breaking number of awards and recognition including "Asia Trailblazer Institution of the Year" from Retail Banker International; 6-Time "Digital Bank of the Year (2018-2023)" from The Asset Triple A; "Most Recommended Bank in the Philippines 2023" and 4-time "Best Retail Bank in the Philippines" from The Asian Banker; "Best Digital Bank in Southeast Asia 2022" from Capital Finance International; back-to-back "Best Bank for Customer Experience in Southeast Asia" from Global Brands Magazine; "Best Bank Transformation in South East Asia 2021" from Global Banking and Finance; "Most Recommended Retail Bank in Asia Pacific 2021" from BankQuality.com; "Fastest Growing Fintech Company, South East Asia 2021" for UBX from Global Banking and Finance; "Best Bank for ESG 2022" from Asiamoney; back-to-back "Best Bank for SMEs" (2020-2021) from Asiamoney; "SME Bank of the Year - Philippines 2021" from Asian Banking and Finance; back-to-back "#1 Best Service Domestic Bank in the Philippines 2020-2021" at the Asiamoney Cash Management Survey; “Asia’s Best Bank Transformation” from Euromoney; "Asia-Pacific Retail Bank of the Year" from Retail Banker International; "Top 2 Most Helpful Banks in Asia Pacific during COVID-19" from BankQuality.com; 3-time "Best Digital Bank Philippines" from Asiamoney and International Finance Magazine; and "Employer of the Year" awards from Stevie Awards for Great Employers, Asian Banking and Finance, and HR Asia.

CFI.co | Capital Finance International

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> Asian Development Bank on Global Warming:

Asia Crucial to a Climate-Change Victory

By David A Raitzer, Manisha Pradhananga, and Shu Tian

Asia emits about half of the world’s greenhouse gas emissions — and that figure is set to increase unless the correct policies are put in place.

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he region’s future will be heavily shaped by climate change. It has particular vulnerabilities, including extensive coastal populations susceptible to sealevel rise, large river basins prone to flooding, and many workers in climate-sensitive sectors such as agriculture and tourism.

Failure to contain climate change could risk losing nearly a quarter of economic output by the end of the century, even under a partial measure.

The biggest losses would be in the lowest-income areas with the least capacity to cope.

At the same time, the region is increasingly a cause of the climate crisis. Greenhouse gas emissions from its developing countries have been growing faster than the global average since the 1980s. The share of global emissions by Asia's developing countries doubled, from 22 percent in 1990 to 44 percent in 2019. That level is expected to remain until mid-century. At current emissions levels, Asia would, by itself, exhaust the global remaining carbon budget consistent with keeping warming under 1.5°C by 2040.

The region’s carbon intensity — the amount of emissions produced per dollar of gross domestic product — is 41 percent higher than the rest of the world. It was more than double that of North America and the European Union in 2019. When that intensity is combined with Asia’s rapid economic growth, there is potential for rapid escalation.

The energy sector accounts for three-quarters of regional emissions. Electricity and heat production are the largest and fastest-growing sources of emissions, accounting for about 40 percent, followed by manufacturing at 18 percent. Agriculture, land use, and forestry account for 13 percent.

The region’s employment and production rely heavily on carbon-intensive activities such as manufacturing, transport and energy. From 20152021, these sectors accounted for 43 percent of GDP and 42 percent of employment. Their contributions to GDP are substantially higher in the region compared with other parts of the world.

In the United States, these activities contributed to about 18 percent of GDP, in Europe about 23 percent, and 24 percent in both Latin America and Sub-Saharan Africa.

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Asia needs to the right policies for the global climate crisis to be addressed. Photo: Pang Yuhao

Asia’s growth trajectory has important implications for global climate goals. An estimated 940 million people in the region have limited or infrequent access to electricity.

As households in the region become wealthier, demand for energy will increase. Asia’s projected growth in middle-class consumer spending dwarfs all parts of the world. With that will come a growing carbon footprint.

To put the world on a sustainable track, Asia must shift to a low-carbon growth trajectory that focuses on shifting to cleaner energy sources, improving energy efficiency, and reducing emissions from changing land use and agriculture.

While there are many policies that can encourage those shifts, pricing reforms have a critical role to play. Key measures would include putting a price on carbon emissions. Only carbon pricing can ensure that mitigation happens where it is cheapest. To date, 21 percent of the region’s emissions have carbon pricing, compared with 34 percent in Europe. Asia’s developing economies primarily only subject selected sectors to the policy, principally powerplants. Other activities, such as transport and manufacturing, are not included. Moreover, carbon pricing levels in the region are well below those of the rest of the world, and transmission of prices can be improved by reducing barriers and market rigidities.

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Climate-damaging subsidies should be removed.

Right now, the region has many negative carbon prices in the form of subsidies that encourage fossil fuel consumption. Those subsidies last year amounted to $116bn — more than was spent to subsidise renewable energy. An even higher amount was spent on subsidies to agriculture and land use, which also tend to favour carbonintensive practices. Together, these subsidies cost more than a rapid low-carbon transition — before any benefits are counted.

International emissions trade should be encouraged. The least expensive opportunities to mitigate emissions growth are often in lower-income, lower-emissions countries that are facing rising energy needs. There is potential for win-win outcomes if more wealthy countries with higher mitigation costs finance the additional investment needs required for low carbon development in the lower-income countries through carbon offset markets. This could potentially offset much of the cost of decarbonisation.

If the climate crisis is to be addressed, Asia must be at the centre of the conversation. There are signs of change in the net-zero pledges made by the region’s largest emitters. For those ambitions to be realised at a contained cost, efficient policies need to be swiftly implemented.

Summer 2023 Issue

Every day that action is delayed, the cost of achieving international climate goals rises — and the benefits fall. i The views expressed are those of the authors and do not necessarily reflect the views of the Asian Development Bank.

ABOUT THE AUTHORS David A Raitzer Economist, Economic Research and Regional Cooperation Department, ADB Manisha Pradhananga Economist, Economic Research and Regional Cooperation Department, ADB Shu Tian Senior Economist, Economic Research and Regional Cooperation Department, ADB

Author: David A Raitzer

Author: Manisha Pradhananga

Author: Shu Tian

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> Creating More Strategic Relevance

for the Investment Banking Sector Many people think of investment banks as firms with a rolodex of fixed income and equity investors and companies that could be for sale.

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artly true, of course, but the infrastructure behind the larger banks has pushed fundraising and M&A activity to unprecedented volumes.

Apart from market forces, deal velocity has become crucial to cover those overheads — as has the need to report revenue growth quarterover-quarter.

So, what has happened to the quality of deals on a post-transaction basis? Have some prospered?

Was value really created years after a deal had been done?

Fortman Cline Capital Markets Ltd (FCCM), a boutique advisory firm covering South East Asia, has decided to pursue a low-volume, high-margin approach.

It has established a management consultancy to help clients prepare for sale, or assist clients with integration and strategy implementation once a deal is consummated. In other cases, it has advised clients on strategy and internal restructuring before a sale is finalised. Engaging industry professionals in key verticals such as healthcare, consumer businesses, infrastructure services has allowed FCCM to perform well in a very competitive environment. It has highlighted the firm’s strategic and commercial expertise, and taken it far beyond the role of ordinary financial advisors.

“Having meaningful dialogues with clients over a company’s lifecycle is very important,” says Daniel Ibasco, FCCM’s CEO and co-founder.

“This develops customer loyalty, and annuity like revenue streams vis-à-vis a transactionorientated approach to business.” Taking a holistic approach to clients’ individual situations has improved the quality of deal execution. A

"Having meaningful dialogues with clients over a company’s lifecycle is very important." focused strategy on these verticals also creates discipline and focus for originating business.

Ibasco says we need to understand “the ecosystem, the key players, (and) the unmet nets in the sector” when originating transactions or mandates. i

CEO & Co-founder: Daniel Ibasco

"This develops customer loyalty, and annuity like revenue streams vis-à-vis a transactionorientated approach to business."

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Summer 2023 Issue

> Asian Development Bank:

Decarbonisation ‘Won’t Work Unless It’s Equitable’

By David A Raitzer, Manisha Pradhananga, and Shu Tian

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he transition to global net zero to address climate change must be both ambitious and fair. Otherwise, it will fail to achieve its goals — and lack the vital public support required over the long-term.

Although ambitious decarbonisation will provide widespread benefits across Asia, the policies required to make the transition will create winners and losers.

Reaching Paris Agreement goals will require profound changes in the energy sector, including the phasing-out of fossil fuels from power generation, expansion of renewables, and the substitution of electricity for other types of energy.

It will require carbon sinks — principally forests — to sequester carbon to offset emissions that are difficult to eliminate.

Although these changes can increase employment, some energy sector workers will lose their jobs, primarily in fossil fuel extraction such as coal mining. The prices of fossil fuel-based energy will increase, and so will the price of goods and services produced using such energy.

Expanding areas of forests and bioenergy would require agricultural production in smaller areas, which may put pressure on farmers. Our analysis finds that about 22 percent of the area devoted to cereal crops in Asia’s developing countries may be replaced by energy crops and forests.

Reductions in cultivated areas can, in turn, reduce food production and cause prices to rise. Research finds that around 60 million people could be pushed into hunger in Asia by 2050 due to efforts to meet Paris Agreement goals.

Those on low incomes spend a much higher share of their budget on food, which will become more expensive. In many regions of Asia, lower-income households spend more on energy than richer ones, so increases in residential energy costs are also regressive.

Farmers, and those working outdoors, are particularly vulnerable to the effects of climate change. Photo: Pang Yuhao

found that measures such as carbon pricing are most politically acceptable in the presence of generous social insurance and low inequality.

Decarbonisation policies may lead to political backlash and reversal when effects are regressive or lack compensation for the poor.

outs to low-income households should be put in place. Research suggests that lump-sum rebates or transfers often benefit lower-income households more than tax cuts. Tax discounts or temporary exemptions to vulnerable sectors can help to smooth the adjustment of affected industries.

A major stumbling block in international climate policy negotiations is the perception of whether the distribution of costs among countries is fair.

To ensure that it is, we recommend training and reskilling to help integrate those adversely affected by the transition into growth industries. The jobs created will require new skills, and will often be urban and comparatively higher skilled. The workers who lose employment are unlikely to fill new labour demands. Those made redundant will need to be reskilled, while the education system will need to generate the training needed by the renewables industry.

Beyond domestic fairness, international fairness — equity between developing countries and their wealthier counterparts — will not be achieved without better international co-ordination. That is needed so that emissions reduction can happen at the lowest cost, with compensation to ensure fairness for those who bear it. Right now, decarbonisation pledges and commitments under the Paris Agreement are submitted by individual parties without agreed principles about how mitigation burden should be divided.

Labour markets can be supported by public services to help information flow, and reforms can ensure that barriers to improvement are removed. During the transition, social protection, including unemployment benefits, are needed so that workers can smoothly transition to new opportunities.

But failure to mitigate emissions would also have regressive effects. The lowest income areas will bear the brunt of climate impacts, with more than a third of GDP at risk to climate change under a conservative and partial estimate. In Asia, those who stand to lose the most are those with the least income, often working in agriculture, living in areas vulnerable to the effects of storms and flooding, and doing manual labour in hot conditions.

A fair transition depends on ensuring food security. Food is the single largest household expense among lower-income households in Asia’s developing countries. Equipping Asian agriculture to deal with the simultaneous pressures posed by mitigation policy and unmitigated climate change is critical to protect the livelihoods of many of Asia’s poor. In addition to investments in public services, land rights need to be strengthened to ensure that farming and forest-dependent communities are not displaced.

For lower carbon level to be maintained longterm, climate-change mitigation policies must preserve political support. Recent research has

To manage the increased costs of energy, food and other necessities, policies such as direct transfers, tax rebates, exemptions and carveCFI.co | Capital Finance International

Without that, there is little incentive for individual countries to do more. Climate benefits are shared by the world, whereas the countries that do more take on more cost. Obviously, it is unrealistic to get the entire world to agree on a common set of principles in the near term — but this may not be necessary for progress.

If some countries, including major emitters, could agree on principles for allocating emissions under carbon budgets that meet Paris Agreement goals, outcomes could be more progressive.

The benefits of an ambitious climate policy based on international co-operation will disproportionately accrue to those who are most in need and who have the least historical responsibility for the climate crisis. The only path to long-term fairness within Asia’s developing countries is a climate policy that is both ambitious enough to stem climate losses, and with enough attention to fairness to be accepted over long periods. i The views expressed are those of the authors and do not necessarily reflect the views of the Asian Development Bank.

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> Contrasts and Contradictions in

Land of Beauty, Stoicism, and Constant Change

By Hal Williams

Vietnam’s cultural resilience has seen it through traumatic times — but as Hal Williams reports, even positive attributes can have unforeseen consequences...

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ung Tau, in southern Vietnam, sits somewhere between seediness and splendour, a bustling seaside city with some remarkable natural beauty in its surrounding hills and coastline.

This is a weekend playground for residents of the capital, Ho Chi Minh (still better known as Saigon), some 80km away by road. Few make that long, dusty trip; the smart way to get here is by passenger boat down the Saigon River. A sharp turn to port takes you briefly out into the South China Sea; another left, and voila: the peninsula that is home to Vung Tau announces itself with a gleaming Christ the Redeemer statue on the headland of Mount Nho (aka Small Mountain).

The city’s beaches are the main drawcard for weekend visitors, although the place holds a steady allure for backpackers, wanderers, and expat workers from Europe, Australia, and America.

This is a party town, but it’s no Sodom and/or Gomorrah. Vung Tau manages to keep its less savoury side ever-so-slightly out of view — but indubitably accessible.

The Vietnamese people are famously friendly, cheerful and playful, and that’s a nice national ambience to find yourself in. They’re also tough and don’t stand for nonsense. Out-of-control or ugly-drunk tourists find out pretty quickly that you get what you give in Vietnam. That’s true for Vung Tau, too, but its reputation for being a bit laissez faire is well deserved. This is a centre for leisure and relaxation, after all. It’s a fair-sized city, and a busy one, but all things are relative.

Anyone who has seen Saigon’s District One in full swing will understand that, by contrast, Vung Tau is an almost bucolic haven.

Food and feasting are central to the national culture, and any event worth celebrating is feted with delicacies. Vung Tau has more than its fair share of fine local foodstuffs; the tiny rice pancakes known as banh khot are of its own invention. These little beauties are cooked on hot grids over an open (often indoor) fire — each one crispy and perfect and topped with coconut milk, spring onions and a prawn — and served with a virtual hedgerow of crunchy greens. You fold the greens and the tiny pancake into a quid, 174

then, after dipping it in chilli sauce, pop it in your mouth — and swoon with pleasure.

Vung Tau is a place of odd contrasts. There are scrappy, scrubby bits, but miles of shiny marble pavements along the seafront. It must have cost a king’s ransom to mine, carve, and instal — and after even the lightest rainfall, the smooth stone is transformed into something only slightly less slippery than ice, leaving pedestrians in the wet season slithering about, arms akimbo and braced for impact, advancing (or not) with the sort of jerky movements normally associated with zombie movies. Gleaming, mirror-glassed skyscrapers go up at an extraordinary rate — and then, frequently and inexplicably, stand empty once completed. A wrecked ocean-going tanker was lodged sideways a few metres off the most central of the lovely local beaches. It lingered for years, unmoving and apparently unmoveable, a rusting landmark that came replete with fruity tales of insurance fraud, drunken skippers, and oddly settled scores.

There’s a blink-and-you’ll-miss-it approach to architecture. Walk down the same city street two weeks apart and you might be hard-pressed to get your bearings. Charming old buildings are biffed down and replaced by modern cubes, which are sometimes swiftly biffed down in their turn. Nothing stands still in Vietnam. Vung Tau is a go-ahead centre in a go-ahead nation.

And with that stoic national readiness to accept change, whether welcome or not, comes an ability to impassively watch as things go haywire.

If a project makes sense and/or money, it’s a goer. Optimistic pragmatism would be a good description for it; a kind of Vietnamese “she’ll be right”. Enthusiastic advances are made on many levels, at double-time, and pretty much anything can be made to happen with the right financial backing. Unspoiled countryside still exists, but it’s being overwhelmed by ... well, progress, for want of a better euphemism. Wildlife is scarce, even in the countryside; much of it is hunted, or at least gathered. Away from the cities, it’s not unusual to see dead snakes or mammals slung across the handlebars of the mopeds that ended their lives. Roadkill equals a free lunch if you look at it the right way.

CFI.co | Capital Finance International

Vung Tau

Which brings us, slightly obliquely, back to Vung Tau’s beachfront. Those Saigon tourists who come down en famille for some R&R leave an indelible trace of their passing — one that is avoidable, and sad. Banh khot may be the high point of Vung Tau’s culinary reputation, but restaurants that line the streets everything from seafood and pho to burgers and pizzas. A family trip to Vung Tau is usually marked with a takeaway eaten on the beach. Mum, dad and kids find a food emporium they fancy, load up, and mosey down to a spot in the sand — it can get mighty crowded. Dad usually dispenses the grub, and collects the empty polystyrene

Summer 2023 Issue

punnets, wrappers and eating utensils at the end of the meal. It all goes back into the plastic bag that ferried it here, until Dad’s final duty: “doing the dishes”.

In Vung Tau, on weekends at least, this often consists of walking down the water’s edge and lobbing the bag of never-gonna-biodegrade trash into the waves. A few punnets will break loose and set sail for the gyre somewhere in the Pacific; the remainder is gradually swamped with seawater. It lolls heavily in waves soon too weighed with plastic bags to break.

Neither Vung Tau nor Vietnam are the sole culprits, of course; anywhere in South East Asia, you’re likely to see those damned polystyrene punnets. They bob alongside the vessel taking you to gorgeous islands or isolated beaches. The true picture emerges at low tide, the roots of the mangroves embalmed in multicoloured plastic.

I taught English to young adults at a Vung Tau language centre, so I had the opportunity to find out why things were so. I asked my students why the ocean was seen as a more fitting receptacle than, say, a public trash can. We covered the issue of pollution in our speaking exercises, after all; these CFI.co | Capital Finance International

were smart young people who seemed individually to genuinely care about the environment. It took a while to get them to speak; finally, one teenager replied for them all: “Teacher, in our culture, you never tell your parents what to do.”

It seems ironic that respect for one’s elders can somehow lead to a lack of respect for Nature.

Still, another generation — more adaptable, more intuitive, more empathetic — is waiting in the wings. The situation will resolve itself.

But unlike the mad rush to development and progress, it may take a long time. i 175

> The Dalai Lama’s Sole Says

Something About His Soul — and His Compassion

By Hal Williams

The ageing holy man may make some odd utterances, but his ability to let bygones be bygones is a message to a world embroiled in divisive trade wars.

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he Dalai Lama — like most people and most things — has been making headlines for all the wrong reasons lately. He apparently asked a young boy visiting his monastery in Dharamshala, India, to “suck his tongue”; I’m hoping we can put that down to old age, because if not, we’re left with David Attenborough as our sole international, uncontested hero.

The 14th Dalai Lama — Jamphel Ngawang Lobsang Yeshe Tenzin Gyatso, to give him his full title — was born on July 6, 1935, in Tibet.

He has quite a story to relate, and he tells it very well, but my personal fascination for the man stems from a single scene in an old documentary, and an unintentional comment he made — kinda-sorta — about international trade.

After a largely positive interview, the documentary maker turned devil’s advocate and asked the Lama: “What do you say to people who accuse you of being a ‘Gucci’ lama?” The holy man didn’t understand the question. The reporter tried again: “Some people say you wear expensive Italian shoes under your robes.”

“Ah,” said the Dalai Lama, still not quite understanding. “I don’t know where is made...”

He pulled one black patent leather shoe off and flipped it over. “Ha!” he blurted with another trademark Lama laugh: “Made in China!”

There’s something endearing about this fumbling exchange, and the punchline — “China!” delivered with a giggle— that gives a fine example of hating not one’s enemies, but their actions. Put in Tibet’s position — invaded and reduced to a province-level, autonomous region of China — many leaders might have opted for a trade boycott with the unwanted “parent”. The Tibetans have done no such thing since the takeover in 1949 (although the Friends of Tibet organisation is calling for one).

Even as an international figure, and a free agent in India, the Dalai Lama carries little enough personal baggage to be able to laugh at the irony of his shoes’ origin.

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"The big overarching question we have, as you know: What are the biggest challenges for the Chinese economy in 2023 as it’s easing out of almost three years of very stringent Covid-zero policies?"

Admirable, yes — but is it good business and political strategy? Or — the other side of the coin — is it acceptable to castigate the citizens of leper nations for their rulers’ crimes?

Some see it as pragmatic but effective; it’s just unfortunate that it means punishing the innocent along with the guilty. Think about it; I wouldn’t like to be judged, or punished, for the policies and laws of any of the nine countries I’ve lived in. Would you?

Boycotts have a long history. The term originates from the Irish land controversy of 1880, when Charles Stewart Parnell convinced Irish tenants to shun a British estate manager, Charles Boycott. The tenants stopped paying rent, and — the ultimate insult — Boycott's family name became a common noun. And a verb, of course.

And there’s a noteworthy boycott happening right now, thanks to Russia’s invasion of neighbouring Ukraine. Oligarchs’ yachts have been impounded or sold, Russian athletes omitted from international competitions, European entities can’t sell certain products to Russia, and vice-versa. It’s not just Europe; in a wild misunderstanding at the start of the war, some Canadian restaurants were boycotted for selling poutine, which is curds, chips and gravy, and has nothing to do with Vladimir (and isn’t even spelled the same).

Somehow, this sort of restriction makes everyone feel a bit better about things. Everyone except the Russians, that is, who are doing it tough.

Unable to voice opposition to the Kremlin or CFI.co | Capital Finance International

question Putin, locked up for dissent, muzzled, sent to the front lines to continue a dismal, bloody war most of them neither want nor sanction. How do trade, financial, social or sport barriers help them? By bringing down the government? Don’t hold your breath.

One more prominent personage on the subject of fairness, and punishing the many for the few: Arnaud Amalric. Amalric was a Cistercian abbot

Summer 2023 Issue

who played a prominent role in the Albigensian Crusade of 1255. At the massacre of Béziers, legend has it, Amalric was asked how to tell Cathars from Catholics. “Kill them all,” he is said to have responded. “God knows which are His own."

Trade boycotts, even trade wars, will doubtless find their way into our tortured, upside-down modern world. Boycotting individuals of a

certain nationality or background smacks a little of racism or bigotry, don’t you think?

made by consumers and world leaders — can be arbitrary and unfair.

When the Dalai Lama was exiled from Tibet in March 1959, he made the crossing largely on foot. To avoid arrest, he was disguised as a Chinese police officer. It’s very likely that those shoes, too, were made in China. Sometimes form follows function, trade moves according to supply and demand, and choices — those

Is it our individual or collective responsibility to shun all contact, personal, professional or otherwise, with Russia and its people? If you say yes, the Dalai Lama might not agree — and while he may be past his sell-by date, there’s still wisdom and compassion in his words. The ones he chooses carefully, that is. i

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> Women’s Brain Project:

More Focus on Sex and Gender Needed in Alzheimer’s Research

By Dr Antonella Santuccione Chadha Pro-bono CEO of the Women’s Brain Project and Chief Medical Officer at Altoida

The disease is on the increase and disproportionately affects women — but studies and treatment often remain male-focused, reports Dr Antonella Santuccione Chadha.

I

started my medical journey as a neuroscientist and clinical pathologist, trying to combine my diagnostic duties with my research activities.

It all began in Italy and continued across Europe at the universities of Hamburg and Zurich. As a medical doctor, with decades of experience in preclinical research, patient treatment, clinical development, regulatory science and policy matters, I have always been interested in what earlier diagnoses would mean for patients and disease management.

I noticed that there were differences between men and women in clinical trials, and that the diagnostics had differing results. I was inspired to co-found the Women’s Brain Project (WBP), an international organisation which aims to address the impact of sex and gender on brain and mental health.

We pioneered research in untouched territory.

Women are under-represented in clinical trials, and research often overlooks the factors that contribute to their neurological health.

In March 2023, Economist Impact released a report entitled Sex, Gender and the Brain: Towards an Inclusive Research Agenda.

Commissioned by the WBP, the report highlights some stark sex and gender disparities in research and healthcare. Women are more likely to experience certain neurological conditions, such as Alzheimer's disease, yet they receive less attention and resources for research, treatment and care.

WBP’s goal is to raise awareness of these disparities and to promote policies to address them. Collaborative stakeholder efforts are needed, and we work with many organisations that share our vision.

The field must take a more sex- and gendersensitive approach if we are to truly understand, and address, the neurological conditions with an approach to precision medicine. But how can clinical trials progress towards a more equitable and effective approach?

According to the Economist Impact paper, death and disability from brain diseases is a 178

"Women are underrepresented in clinical trials, and research often overlooks the factors that contribute to their neurological health." global health challenge that costs $800bn each year in the US alone — more than cancer or cardiovascular disease. The level of risk, rate of progression, severity of disease and management approaches are influenced by sex, (characteristics that are biologically defined) and gender (denoted by socially constructed features).

Yet, data detailing the influence of sex and gender on neurological conditions are limited.

This gap in clinical research leads to inequitable service provision, from delayed diagnosis to inappropriate treatment.

Recent breakthroughs about the underlying biology of Alzheimer's have led to renewed efforts and investments in medicine development, with 120 drugs currently in development. With the FDA approvals for monoclonal antibody drugs, one of which is Biogen’s Aduhelm. This is the first drug to target the underlying biology of Alzheimer's, which I had worked on from a research standpoint. More such drugs will be coming to market.

Eli Lilly recently announced positive data from its Phase III study of a disease-modifying treatment called Donanemab. Patients saw a 35 percent improvement in memory decline and nearly half of the treatment group had no disease progression after one year.

However, a striking finding is that some treatments appear to benefit women somewhat less than men. A possible explanation is that women have more pronounced tau protein pathology at a given stage of cognitive impairment, making amyloid removal less effective for them. There is a need for careful reflection on the need to account for sex and gender difference in clinical development. There is also growing urgency for better diagnostic tools that are affordable, noninvasive, and scalable.

CFI.co | Capital Finance International

DIGITAL BIOMARKERS Digital biomarkers represent an ongoing silent revolution in clinical trials on Alzheimer’s disease. Recent research shows neurocognitive performance signatures built on objective data from these biomarkers differ between men and women. The results merit the integration of traditional approaches to neuroscience research with digital biomarker technologies and personalised medicine to achieve more precise predictive diagnostics, targeted prevention, and customised treatment. By enabling objective and real-time monitoring of disease progression, this can provide a more accurate assessment of cognitive effects.

Digital biomarkers, if properly integrated into Alzheimer’s clinical trials, can capture data on a range of factors such as sleep quality, physical activity, and cognitive performance, which can provide a more comprehensive understanding of the disease.

Digital biomarkers also enable remote monitoring, reducing the burden on patients and caregivers who don’t live near a clinical research site. In my experience, digital biomarkers are uniquely suited to improving the efficiency and effectiveness of Alzheimer's clinical trials.

They also predict sex and gender differences on symptoms, disease progression, treatment response and early diagnosis.

Ultimately, this will lead to better treatments and outcomes. In our work with the Tony Blair Institute for Global Change, in collaboration with Stanford Healthcare Innovation Lab, biases are persistent in clinical research. We urgently need better diagnostic tools and inclusive clinical trial designs, as well as the inclusion of sex- and gender-sensitivity as a requirement for research funding. There are tools that can enable more inclusive research and policy agenda. More equitable preclinical and clinical research that tackles the biases would provide data to improve treatment protocols, adherence to drug regimens, and overall outcomes.

Incidence rates for Alzheimer’s are growing; it is an increasingly prevalent global health concern.

WBP has a close partnership with the World Health Organization’s leadership team and its Brain Health unit. According to Alzheimer’s

Summer 2023 Issue

Disease International, there were some 55 million people living with dementia in 2020.

This number will almost double every 20 years, reaching 78 million in 2030 and 139 million in 2050.

Women bear a disproportionate burden — as patients and as caregivers. More research, improved treatment options and better diagnostic tools are needed to slow or halt the disease’s progression.

With the recent breakthroughs, drug approvals and positive data in Alzheimer's disease, digital biomarkers offer a new approach. We hope that companies will collaborate with organisations such as ours to drive change.

We are keen to harness Artificial Intelligence (AI) to address unmet patient needs. WBP is currently working on plans for a ground-breaking app, creating a community platform for patients and caregivers. WBP partners will also benefit from the app’s patient reach by donated data or promotion of clinical trials. i ABOUT THE WOMEN’S BRAIN PROJECT The Women’s Brain Project (WBP) is an international organisation studying sex and gender determinants of brain and mental health to achieve precision medicine and care.

WBP is a global leading player in the field of brain research, supporting innovative science, precision medicine and care, unbiased AI and promoting gender health equity to make healthcare systems more sustainable. WBP is in the process of establishing the Research Institute for Sex and Gender Precision Medicine.

WBP commissioned Economist Impact to examine the economic rationale for investing in sex-and-gender specific brain research, resulting in the White Paper. This programme is supported by sponsorship from F Hoffmann-La Roche AG and Organon Belgium BV.

Author: Dr Antonella Santuccione Chadha

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> UNCDF:

Time to ‘Youth-Up’: the Status Quo Simply Has to Be Adjusted

By Edoardo Tancioni Programme Officer at the United Nations Capital Development Fund (UNCDF)

“It’s time to sustainably invest in youth affairs and future generations”, argues Edoardo Tancioni.

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s the world grapples with conflict, climate change and Covid, one thing is abundantly clear: the exigency to focus on youth.

International forums increasingly the perspectives and ideas of

precocious entrepreneurs, innovators, and aspiring policymakers. This is timely recognition of their role in supporting social, technological, and financial revolutions. But while some are finally receiving deserved attention, millions in the global south are being CFI.co | Capital Finance International

denied the opportunity to chart the course of their own lives.

They still face barriers to crucial financing, barriers that impede early investment in promising business models, skills development,

Summer 2023 Issue

"It is also time to commit to financial instruments that connect youth in low-income countries with capital levels that can support local economic transformation." and the broadening of networks. Despite appeals that no one be left behind, youth populations in emerging economies remain overlooked by the international financial architecture.

On one hand, youth populations have effectively been marginalised by commercial capital markets. The International Labour Organisation (ILO) reports that some 41 million people aged 15 to 24 in low-income countries were not involved in education, employment, or training (NEET), lacking the assets to serve as loan collateral. A separate ILO report found that 95 percent of Africans, and 86 percent of Asian and Pacific Islander heritage in the same age group, worked in the informal sector. The result is a lack of credit history to acquire bank funding — even with savings to support future deposits.

These realities hold back millions of young people. Concessional finance has not picked up the slack, despite its purpose — servicing the needs of those who are financially under-served.

Blended finance network Convergence estimates that youth accounted for just four percent of total end beneficiaries of blended finance transactions (using concessional finance to attract follow-on commercial capital) between 2014 and 2019.

They lag behind other blended finance deals for MSMEs, and youth finance has become tokenistic and largely driven by grants and challenge funds. The implications, however, are not confined to the young.

Overlooking youth when financing sustainable development in the countries where the needs are greatest can have crippling effects on markets and wider macro-economic stability. An estimated 28 million jobs will be needed each year to provide livelihoods for those entering the workforce in South Asia and Sub-Saharan Africa.

Flexible finance is indispensable in conflict zones, where youth groups are often excluded or considered possible perpetrators of instability.

Localised, youth-specific sustainable financing models become essential to supporting “peacepositive dividends” and livelihoods.

"But while some are finally receiving deserved attention, millions in the global south are being denied the opportunity to chart the course of their own lives."

connect youth entrepreneurs with capital markets. The “how” is as important as the “how much”. Through the Jobs, Skills and Finance programme in The Gambia, UNCDF partnered with crowdfunding platform Thundafund. It offered support to 3,000 projects, trained more than 5,000 businesspeople, and engaged local partners.

Development impact bonds are incentivising funders to invest in young founders in emerging markets. Philanthropic investor Acumen and Grameen Impact Investments in India released a bond worth about $1.43m. Such innovation is the only way that youth finance can be inclusively delivered at the necessary speed and scale.

It is also time to commit to financial instruments that connect youth in low-income countries with capital levels that can support local economic transformation. This means moving beyond small grants and challenge funds to include long-term financing: sovereign-backed loans, guarantees, and blended finance — co-defined by young people and customised for their needs.

The Youth Empowerment Bank provides concessional loans to young entrepreneurs and marginalised Zimbabweans starting out in business. With entrepreneurial training, the state-owned bank has upskilled over 65,000 young people and disbursed more than $145m as of July last year — a tangible example of putting aspirations into action.

As we look ahead to an array of high-level UN meetings focusing on the future of development, a youth-centric approach to financing must be embraced. Not just any finance, but sustainable finance that speaks to the priorities and needs of young people, especially in low-income countries.

Peace and prosperity depend on it. The clock is ticking, it is time to “youth-up”. i

Such models are only transformative if finance is accessible, and there is a need for a strategic rethink. A promise that puts young people at the forefront of decision-making processes — and at the receiving end of technical assistance and financing opportunities — should reflect the intensity of focus needed to achieve sustainable development and peace.

It is time to embrace the fullest extent of innovation, both digital and financial, to CFI.co | Capital Finance International

Author: Edoardo Tancioni

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> Jim O’Neill:

The Poverty of AI Pessimism © Project Syndicate 2023

Following the public release of powerful generative AI applications like ChatGPT, a growing chorus of pioneers in the field has spoken up to highlight the dangers that the technology poses to economic stability. But while sound regulation is obviously needed, scare-mongering could do more harm than good.

H

ardly a week goes by without various pioneers in artificial intelligence issuing dire warnings about the technology that they introduced to the world. I got an early glimpse of this emerging pessimistic consensus a couple of months ago, when I attended a dinner with some AI experts who suggested that millions of relatively sophisticated, high-paying jobs could be at risk. I came away asking if this bleak outlook is really justified.

I have my doubts. Since the start of my professional life in the 1980s (and of course for much longer), technological progress has repeatedly been held up as a major threat to jobs in key industries such as automobile manufacturing. Yet until the Brexit debacle, the United Kingdom was producing more vehicles than it did in the supposed heyday of the auto industry, owing to the role of sophisticated new technologies in boosting leading producers’ core businesses. In the northern English port city of Sunderland, Nissan currently operates one of the most productive auto plants in the world.

Final Thought

Likewise, despite German autoworkers commanding relatively higher nominal wages, the country’s carmakers have managed to adapt and thrive for decades, competing globally and helping to satisfy a growing global middle class’s demand for high-quality performance vehicles.

Yes, German auto companies face their biggest challenge yet with the global transition to electric vehicles, and the slowdown in China implies weaker growth in the short term. But if the past is any guide, the industry could adapt and emerge even stronger in the future.

AI doomsayers also ignore the fact that populations are aging fast across most of the developed world and many major developing and emerging economies. With the growth of the labor force slowing at a time when people are also living longer, there will be more and more pressure on smaller working-age populations

"AI doomsayers also ignore the fact that populations are aging fast across most of the developed world and many major developing and emerging economies." to finance pensions, health care, and other (typically) nondiscretionary commitments.

Unless this smaller working population can become more productive, the economy’s growth performance will struggle. Japan and Italy are two stand-out examples of this trend from the past few decades, but they are hardly alone.

Among others, China, South Korea, and most of continental Europe are in the same boat. While immigration offers a partial solution, it is an increasingly charged political issue. Productivityenhancing AI applications could be precisely what is needed.

example, embedding high-speed, AI-augmented diagnostics across the system could help to detect disease risks and provide earlier treatment – preferably through pharmacies or general practitioners. Such interventions would vastly improve both productivity and quality of care.

We already have early but extremely powerful evidence of what AI could do for public health globally. According to a May 25 BBC story, a group of scientists in Canada and the United States have used AI to discover a new antibiotic that is proving effective (so far) against Acinetobacter baumannii, one of the known antimicrobial-resistant superbugs on the World Health Organization’s watch list.

Having led the UK’s independent Review on AMR from 2014 to 2016, I am highly encouraged by this development. The drug will still have to go through the usual clinical trials, which is a lengthy and expensive process. But if all goes well, it will be the first time in decades that we have acquired a genuinely effective antibiotic for use against deadly superbugs. Now imagine what else AI could do just in the realm of medicine – from helping to discover or develop vaccines for hitherto unpreventable diseases to streamlining the clinical-trial process more broadly.

Moreover, just look at what has been happening at the UK’s treasured National Health Service, which is eating up ever more of the country’s finances. The NHS employs more people than ever, yet it is becoming less and less productive.

We in the UK are exposed to endless horror stories about the NHS’s failings and what they mean for citizens seeking care.

Of course, the AI experts are surely correct that we will need guardrails and high standards of regulation, lest this latest wave of innovation cause social, political, and economic havoc.

The current era of round-the-clock social media, clickbait, and fake news has little to recommend it, and makes much of the pessimism understandable. But that is no reason to ignore the obvious, massive potential benefits of AI. i

Having dug into this issue as a member of the Times Health Commission, it is obvious to me that the NHS needs a dramatic uptake of modern technology to help with simple tasks (such as getting one computer system to talk to another), as well as more complicated ones. For

ABOUT THE AUTHOR Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK treasury minister, is a member of the Pan-European Commission on Health and Sustainable Development.

"Of course, the AI experts are surely correct that we will need guardrails and high standards of regulation, lest this latest wave of innovation cause social, political, and economic havoc."

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Summer 2023 Issue

The others just travel

WHERE OTHERS SIMPLY DRIVE A CAR, THE MASERATI GRANTURISMO GOES FOR GRAND TOURING.

A B C D E F G

G

Fuel consumption combined (l/100 km): 10.2 // CO 2 emissions combined (g/km)*: 230 // Energy efficiency category: G * CO 2 is the main greenhouse gas responsible for global warming; Average of all new cars registered in Switzerland enrolled in 2023: 129 g/km. The CO 2 target value is 118 g/km (WLTP).

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