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INSIDE G7 › CHARLEVOIX TOURISM Nature, Culture, Flavours › Blockchain Technology Combating Illicit Finance › Artificial Intelligence The Miracle and the Menace
Setting new standards Sustainability is at the heart of everything we do at AkzoNobel. It’s vital for the future of our company, our society and our planet. We have a passion for paint which drives our innovation and helps people to overcome the challenges they face every day. Whether we’re developing paint that keeps buildings cooler or coatings that make the shipping industry more efficient, we’re always striving to embrace a more sustainable way of working. That’s why we’ve been top of the Dow Jones Sustainability Index for five out of the last six years. And we’ll continue to use our ambition and imagination to deal more efficiently with the world’s limited resources. Because sustainability is clearly good for business.
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Celebrating 21 years of Publishing the Renowned G7 Global Briefing Report
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INSIDE G7 › CHARLEVOIX TOURISM Nature, Culture, Flavours › Blockchain Technology Combating Illicit Finance › Artificial Intelligence The Miracle and the Menace
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Branded Stories 06 14 20 30 36 38 42 46 54 57 74 80 82 100 112 122 125 140 142
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AkzoNobel Les Hôtels Nouvelle-France Tourisme Charlevoix Generali Global Assistance The Cat Company Inc CPA of Canada The Ungasan Resort Vertiqul DSX Inc Rivetz Taiwan Civil Government Soneva Generali Global Assistance TRACIT Solisco Diplomatic Courier Velux Canada CAPP DIT-gov.uk Tourisme Charlevoix
CEO & Founder: Chris Atkins President of EMEA: Tyrone Eastman Sales Executives: Ray Baker Veronique Madsen Phil Cook Anthony Leigh Jones Page 10/11 Justin Trudeau Prime Minister of Canada Page 12 Jacques Lévesque General Manager, Tourisme Charlevoix Page 18 Régis Labeaume Mayor of Québec City Page 19 Philippe Couillard Premier of Québec Page 22 Ana C.Rold Editor's Note Page 24 Chris Atkins Publisher's Note
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G7 Executive Talk Series Branded Story / AkzoNobel Authored by: Pamela Phua
Smart Facades for a Sustainable Future
What are some of the most pressing challenges that we face today? ccording to the United Nations (UN) Chronicle, energy consumption and pollution are two critical issues faced by urban communities, which account for half of the humanity or 3.5 billion people. About 60 to 80 % of the world’s energy, which is a dominant contributor to climate change, is consumed by cities. The air quality in cities has deteriorated to such an alarming level that about 92% of the world’s population breathe unsafe air and more than 7 million die annually, according to World Health Organization (WHO).
What can we do to change the situation? In the “2030 Agenda for Sustainable Development”, United Nation has established 17 Sustainable Development Goals with a comprehensive list of targets to be achieved by 2030. Individual countries are expected 06 ❙ g20g7.com
to take ownership and establish national framework to implement the actions. As a leading global paints and coatings company with a strong commitment to sustainability, AkzoNobel supports these goals, which is in line with our purpose to create everyday essentials to make people’s lives more liveable and inspiring. We have been at the top of the Dow Jones Sustainability Index rankings for the fifth time in six years. At AkzoNobel, we believe that we can address some of these challenges with the innovative solutions that we have developed. With a focus on India and China, we highlight the major problems faced by these two populous countries and the solutions that we can offer. India While India’s economy continues to expand at the world’s fastest growth rate of about 7.5% annually, millions of its citizens are
exposed to increasingly unhealthy air. The latest air quality report from the WHO in May 2018 has announced that the world’s top 10 most polluted cities all reside in India. Residents in India’s capital, New Delhi, which has been ranked the sixth most polluted, are taking the brunt of the health crisis due to vehicle emissions and burning of crops and woods. The air has become so smoggy and severely toxic that Delhi’s government had to declare public health emergency and school closure last year. It also unveiled 26 new programmes with a budget of US$ 8.2 billion to clean its air with such initiatives as electric buses and vehicles, tree planting, switching from coal-fired to electric or gas ovens. How can AkzoNobel help Indian cities combat pollution? We have developed an air-cleansing paint based on photocatalytic technology that can degrade major
THE AIR QUALITY IN CITIES HAS DETERIORATED TO SUCH AN ALARMING LEVEL THAT ABOUT 92% OF THE WORLD’S POPULATION BREATHE UNSAFE AIR AND MORE THAN 7 MILLION DIE ANNUALLY, ACCORDING TO WORLD HEALTH ORGANIZATION (WHO).
atmospheric pollutants like nitrogen oxides and sulphur oxides. These gases not only pose health implications themselves but also contribute to the formation of PM2.5 particulate matter that can penetrate deep into lungs and bloodstream causing diseases such as stroke, heart disease, lung cancer and respiratory infections. With sunlight exposure and moisture, our paint will generate radicals that can decompose these pollutants. A large-scale field trial is currently being planned to quantify the efficacy of our paint in improving the air quality in Delhi. To help improve air quality in India through reduction of the emission of volatile organic compounds (VOC), we have launched our strategic programme called Waterway. Our aim is to drive the transition of solvent-based products currently offered in our portfolio for wood care and metal care applications to water-based products with equally
high quality and performance. We can help to mitigate soil pollution in India by controlling the release of biocide used in our paints. Biocide is a film preservative added within the regulatory compliant amount in an exterior paint to help protect building facades against the growth of fungus and algae, which is especially important for tropical and subtropical climates in India. Conventional types of biocide may not be able to release effectively from the paint over its lifetime and they may also be washed off by rain and can contaminate the soil. Encapsulating the biocide allows for its controlled release at its optimum level, therefore safeguarding our paint for better durability in terms of film protection while minimizing the environmental impact due to soil pollution. Our researchers also continuously strive to explore biocide-free or low-biocide solutions.
Public urination has been a major issue in India. The Government has launched a nationwide campaign called “Swachh Bharat Abhiyan” to promote public cleanliness. To address this problem, we have developed a superhydrophobic coating with extreme liquid repellency that can protect walls by resisting the adhesion of urine, spit and other stains. Our product will be able to help transform and maintain cleanliness of many cities and towns across India, thus providing the communities with more liveable neighbourhoods and inspiring surroundings. China According to the International Energy Agency (IEA), China has surpassed the United States as the world’s biggest energy consumer in 2009. This has definitely taken a toll on air quality due to China’s predominantly coal-based energy production.› Charlevoix. Canada 2018 ❙ 07
G7 Executive Talk Series Branded Story / AkzoNobel
› Key major economic zones such as Beijing and Shanghai have been marred with pollution and notorious thick choking smog in recent years. In China, buildings account for a large part of China’s energy consumption. In order to promote building energy conservation, the Chinese government has developed a sophisticated policy system in recent years. These include building energy codes which state the minimum standards for the energy efficiency of building components such as envelope; heating, ventilation, air conditioning (HVAC), and the power system. These codes are mandatory for residential and commercial buildings in urban areas, and voluntary for rural residential buildings but are promoted through incentives. How is AkzoNobel going to contribute positively to better the country’s energy efficiency and adapt in this storm of policy changes? We approach this by providing solutions for suppressing heat outflow in
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winter with our Thermal Insulation Decorative Board systems and reducing the heat gain in the building in summer through our Keep Cool offerings. Thermal Insulation Decorative Boards are prefabricated boards constructed in the factory setting where the insulation and decoration layers are assembled together. These boards are made with a controlled quality unlike the traditional Exterior Insulation and Finish Systems (EIFS) which are highly subjected to the reliability and quality of workmanship. They can be easily secured on the exterior façade of a building just like a jigsaw puzzle with a smart system of bracket and screws. The system also incorporates Air-vent plug to prevent moisture built-up that leads to cracking and peeling issues we see in traditional insulation systems. Factory fabrications also allow us access to a much wider technology platform such as UV-curing systems and sol-gel processes, which would have been
prohibitive to use in conventional exterior wall paint. This solution essentially allows us to provide a better and higher quality alternative to building insulation and hence effective energy management. Another contribution from AkzoNobel concerns the energy savings brought about by specialised coatings. Other than improving our existing Keep Cool offerings to chase the ever tighter standards, we have also extended our Keep Cool offerings to Texture products in China. Keep Cool coatings reflect heat by reflecting in Infra-Red (IR) and Near Infra-Red (NIR) radiation of the solar energy. This is achieved by careful pigment management and the use of special IRreflective pigments. With less heat built-up on the building façade and less heat transfer to the inside of a building, less energy is then required to maintain a comfortable temperature. Based on the simulation results from external parties, energy savings are quite substantial.
Beyond Innovation: People Proposing true and sustainable technical solutions is one aspect of our contribution. We also firmly believe in improving everyday life through our Corporate Social Responsibility. Giving back to communities is deeply rooted in AkzoNobel’s culture. Our Human Cities initiative is our commitment to regenerating and energizing urban communities across the world. We use our products and expertise to help cities deliver a stronger sense of community purpose, pride and happiness. For instance our global “Let’s Colour” program has been revitalizing urban areas all over the world, with almost 70 million people benefiting from 2000 projects and 12000 volunteers. The 100th mural of the 100 ‘Let’s Colour Walls of Connection’, created by AkzoNobel and global peace movement MasterPeace, took place last November in a school in Badshahpur in India. The project transformed the lives of more than 5,000 children by getting them back to school and ensuring they continue their education and improve their grades. AkzoNobel has also partnered with SOS Children’s Village to train the next generation of painters and drive local economic growth through painting training and business development knowledge, thus contributing employability of young people coming from a difficult background. This successful partnership has been rolled out in countries like Brazil, Nigeria, South Africa, Indonesia, and will be extended to up to 10 countries such as India in 2018. ■
GIVING BACK TO COMMUNITIES IS DEEPLY ROOTED IN AKZONOBEL’S CULTURE. OUR HUMAN CITIES INITIATIVE IS OUR COMMITMENT TO REGENERATING AND ENERGIZING URBAN COMMUNITIES ACROSS THE WORLD.
Pamela Phua has more than 20 years’ experience in Research, Development and Innovation (RD&I) in the coatings industry. In her current role as Director of RD&I for AkzoNobel, she drives new technology development and product implementation across the South East, South Asia and Middle East regions. Ms Phua was instrumental in setting up the global research and laboratory operations for AkzoNobel Decorative Paints (Global Exterior Wallpaint Expertise Group) in 2011. In her global capacity, Ms Phua implements the functional and product innovation strategy for Exterior Wallpaint. She spearheads the RD&I functional excellence, standards and capability and the efficient delivery of processes as the approved Standards & Processes across the globe. Her efforts enabled AkzoNobel’s businesses to roll out new products and services across the region in a fast and coordinated manner, supported by an agile supply chain, efficient sourcing and robust quality control. Some leading innovations launched by Ms Phua and her team included interior and exterior emulsion paints such as Dulux Weathershield Powerflexx, Dulux Pentalite, Dulux Wash & Wear / Easyclean, and Dulux Catylac / Inspire. Her expertise and experience has been instrumental in the setting up of industry standards in Singapore. She is the Technical Chairperson for the Singapore Paint Industry Association and a committee member in the Chemical Standards Council of Singapore. She has helped to set up several Singapore Standards, including SS345, SS150, SS500 and SS494. She is an industry consultant to regulatory bodies such as Spring Singapore, Singapore Green Label, the Housing and Development Board, Singapore Green Building Council, National Environment Agency and the Singapore Institute of Architects. She is also an A*Star certified auditor for accredited testing laboratories in Singapore. Pamela took part in various series of United Nation Climate Change Conferences, last being COP23 in Germany Bonn in 2017 where she shared innovative solutions to combat challenges around Climate change and contributing to developing smart cities for better tomorrow. Contact: Pamela Phua T : +65 90279663 E : firstname.lastname@example.org
Charlevoix. Canada 2018 ❙ 09
G7 Executive Talk Series Official Letter
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G7 Executive Talk Series Welcome
Jacques Lévesque General Manager, Tourisme Charlevoix
Tourisme Charlevoix is proud that the 2018 G7 Summit is taking place in its region. This event holds global significance and will bring substantial benefits to Charlevoix. It represents a golden opportunity to showcase Charlevoix as a destination with a fascinating history, from the effects of an ancient meteorite’s impact to the region’s 200-year legacy as a major vacation hotspot. When it comes to welcoming guests, Charlevoix’s know-how and traditions date back generations, to when the Manoir Richelieu first became a destination for well-heeled North American travellers. Even U.S President William Howard Taft was fond of the region, describing it as “like drinking champagne without the
morning headache.” Once again, we are laying out the red carpet for world leaders, our legendary hospitality on full display. Nestled between river and mountain, Charlevoix invites visitors to discover its unique geography and be inspired by its magnificent natural setting. There is a special energy in the air, which might owe something to the meteorite that struck here over 400 million years ago! This makes Charlevoix an ideal place to nurture creativity and cultivate new ideas – it is the perfect location for an event of this magnitude. Charlevoix is also a hub of innovation. Our local farmers, artisans and chefs have earned an enviable reputation for their original, high-quality products. And our passionate entrepreneurs have
THERE IS A SPECIAL ENERGY IN THE AIR, WHICH MIGHT OWE SOMETHING TO THE METEORITE THAT STRUCK HERE OVER 400 MILLION YEARS AGO! 12 ❙ g20g7.com
spearheaded a number of impressive sustainable development initiatives. The 2018 G7 Summit will forever be remembered as an historic gathering that shone a spotlight on our region’s innovative capacity, sustainable development projects, women-led initiatives, artistic talents and culinary expertise–all with that irresistible Charlevoix charm!
Jacques Lévesque General Manager Tourisme Charlevoix
G7 Executive Talk Series Branded Story / Charlevoix
Welcome to Charlevoix!
© Tourisme Charlevoix, Steve Deschênes
harlevoix is like no place else on earth, with its breathtaking mountain vistas, unique natural habitats and fascinating history that is intimately linked with the majestic St. Lawrence River. Boasting an exceptional terroir, the region’s charming villages are home to a people with a singular fondness for the good life. Everything sets Charlevoix apart – even its climate! From sea to taiga, an extraordinary experience awaits you at the heart of the Charlevoix Biosphere Reserve. Petite-Rivière-Saint-François – the gateway to Charlevoix This village is nestled along a narrow six-kilometre strip of land between the St. Lawrence River and the mountains. Dating back to 1675, Petite-Rivière-Saint-François is the site of the region’s first modern-day settlement. Without a doubt, this is the best place to start your trip. For nature lovers, it’s hard to beat the Massif de Charlevoix, which boasts the
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highest vertical drop east of the Canadian Rockies. Here, winter enthusiasts have a wide range of outdoor activities to choose from, including the famous sled run! The explorer in you will love the Sentier des Caps trails, a main feature of Petite-Rivière. Once the snow falls, the hiking paths transform into a winter paradise of frosted fir trees, offering snowshoers and cross-country skiers extraordinary panoramic views. Baie-Saint-Paul – at your service Baie-Saint-Paul is a destination in and of itself. Beautifully integrated with its natural environment, this remarkable city is sure to impress you with its brightly coloured centennial homes and undeniable charm. Amazingly, this town of 7,000 inhabitants was named the Cultural Capital of Canada in 2007! But it won’t take you long to understand why: to use a current buzz phrase, Baie-Saint-Paul is the archetypal organic city, whose history, heritage and architecture
are all perfectly in tune with its surroundings. Baie-Saint-Paul has many more painters, sculptors and artisans than one might expect for its size. But there’s a good reason for this: the city offers the perfect environment to pursue a creative calling. Its natural setting, inspiring landscapes and exceptional quality of light are a magnet for artists – so much so that Saint-Jean-Baptiste Street now boasts the highest concentration of art galleries in the country. These establishments vie with each other in an art scene that goes well beyond pictorial representations of the surrounding nature. In fact, it was here that Cirque du Soleil was born in 1982 as a group of street performers, known then as the Club de talons hauts (high heels club). Strolling through the city centre, visitors can admire public art works as they sample the wares of regional chocolate makers and explore unique local shops such as the Shamâne soap boutique and Charlevoix Pure Laine weavers. Here, creativity reigns supreme!
© Rêves d’automne - Festival de peinture
BAIE-SAINT-PAUL IS A DESTINATION IN AND OF ITSELF. BEAUTIFULLY INTEGRATED WITH ITS NATURAL ENVIRONMENT, THIS REMARKABLE CITY IS SURE TO IMPRESS YOU WITH ITS BRIGHTLY COLOURED CENTENNIAL HOMES AND UNDENIABLE CHARM.
© Tourisme Charlevoix, Caroline Perron
Baie-Saint-Paul has been so successful in fanning the flames of art that it has become a de facto cultural capital. The Museum of Contemporary Art organizes internationally renowned exhibitions and events, including the popular Symposium of Contemporary Art, which each year showcases 12 visual artists and their creative processes. Among BaieSaint Paul’s many cultural events, you won’t want to miss Le Festif! music festival and the dazzling celebration of colour that is the Rêves d’automne painting festival.
mountain, peak and valley, rock and vegetation. It’s hard to resist the call of the mountaintops as they recede ever farther into the distance. But just how far can you go? As far as your feet – and hiking boots – will take you! In summer or winter, you can continue your adventure along one of Québec’s most beautiful natural paths, the legendary Traversée de Charlevoix. This 105-kilometre trail between Saint-Urbain and Mont Grand-Fonds offers the ultimate backcountry experience.
Mountain Road Get ready for a few surprises and some friendly encounters as you discover the food producers along the top of routes 138 and 381. Here you’ll find an abundance of local products with which to build your own picnic basket or simply enjoy along the drive! Mountain Road’s elevation offers some of the best views of Charlevoix’s breathtaking landscapes. You’ll be astonished by the surreal interplay between river and
St. Lawrence Route This road is a bit easy to miss the first time, but once you discover it you’ll readily find your way back! The St. Lawrence Route’s appeal lies in its unique mix of familiar comforts and unexpected surprises. You can take a mere 40 minutes to drive the short (and sometimes bumpy!) 58 kilometres from Baie-Saint-Paul to La Malbaie, enjoying spectacular river views along the way. But if you opt for a more leisurely pace, that’s when
the magic happens! Don’t let its unassuming name fool you: the celebrated St. Lawrence Route is considered one of the most beautiful and panoramic roads in eastern North America. Route 362 could also be called the “Cultural Highway”. With each mile, you’ll travel deeper into the fascinating history, know-how and traditions of the farming communities that are still shaping the region today. Be sure to stop in the village of Saint-Joseph-de-la-Rive, a true cultural gem. Then, follow the road to the ferry and take a ride to the Isle-aux-Coudres, where you can sample cider at Vergers Pedneault or explore the famous flour mills. If you decide to stay on the mainland, drop by the Papeterie Saint-Gilles for some handcrafted paper products, or spend an afternoon at the Charlevoix Maritime Museum and tour its schooners and shipyard. Saint-Irénée – picturesque by nature It’s impossible not to stop at Saint-Irénée’s famous Jetée des Capelans pier, with its eye-catching red buoy and anchor embedded in the ground. During the winter holidays, the site becomes aglow with a captivating display of multi-coloured lights. Once you’ve crossed the railway tracks, there’s nothing separating you from the St. Lawrence. Winter visitors can catch sight of immense ships travelling up and down the river beyond the cape, against the backdrop of an Arctic-hued lunar landscape. During the summer, Saint-Irénée’s sandy beach is one of the most beautiful and popular in Québec – and you can even go horseback riding! Charlevoix loves its beaches, and Route 362 passes alongside many notable examples as it follows the shoreline all the way to Cap-aux-Oies. La Malbaie – so much to offer La Malbaie is the perfect jumping-off place for the region, with water and mountain activities within reach all year long. From here, you can easily arrange for a tour of Hautes-Gorges-de-la-Rivière-Malbaie Park by snowmobile or dog sled, or hit the slopes and trails at Mont Grand-Fonds ski resort. But it’s La Malbaie’s hotel and entertainment offerings that are its true calling card. The Fairmont Le Manoir Richelieu is worth the trip alone, with four restaurants featuring locally sourced products, an indoor/outdoor spa and a multi-award-winning 27-hole golf course. Speaking of restaurants, the area’s Flavour Trail offers foodies the ultimate farm-to-table experience. › Charlevoix. Canada 2018 ❙ 15
G7 Executive Talk Series Branded Story / Charlevoix
© Fairmont Le Manoir Richelieu
› The Trail includes four inns between Saint-Irénée and Cap-à-l’Aigle, in addition to the Manoir Richelieu itself. There is no shortage of opportunities to indulge your inner gourmet in and around La Malbaie! No visit to La Malbaie would be complete without a trip to the famous casino. It’s much more than your typical gambling establishment, offering a wide variety of shows, concerts and activities that perfectly complement the local scene. One of the casino’s must-see events – and no doubt the most spectacular – is Ode à l’hiver (ode to winter), a music and fireworks extravaganza set against the backdrop of the beautiful Pointe-au-Pic wharf. From river to sea Once you pass La Malbaie, the St. Lawrence slowly starts to surrender to the Atlantic 16 ❙ g20g7.com
© Tourisme Charlevoix, Caroline Perron
Ocean. The air suddenly changes, becoming more and more saturated with sea spray, and on windy days you can even taste the salt on your lips! Port-au-Persil – pure magic The Association des plus beaux villages du Québec (Most Beautiful Villages of Québec) has four members in Charlevoix; of these, Saint-Siméon and Port-au-Persil hamlet are arguably the most stunning. Head up the road to check out the donkeys at the Ferme de l’Âne du Saint-Laurent. Keep an eye out here for one of the most beautiful views of the St. Lawrence! A short drive later, you’ll find yourself crossing a small stream, signalling your arrival at Port-au-Persil. In summer and winter alike, visitors flock to the pier to admire the white McLaren Chapel and the colourful houses that dot the cove. Words
can’t describe the feelings evoked by the beautiful views on display here, where the river meets the horizon. The effect is even more striking in winter, when the sun breaks through the wind-swept snow clouds and mist rolls over the jagged ice on the frozen St. Lawrence. Baie-des-Rochers – a well-kept secret Located directly across from Île aux Lièvres, Saint-Siméon is also the gateway to the beautiful Baie-des-Rochers Park. This municipal park offers three exceptional hiking paths, including the Anse de Sable trail which starts where the road ends at Baie-des-Rochers’ quay. Then again, you might choose to arrive by water instead, following a two-day kayak trip from Cap-àl’Aigle. Baie-des-Rochers offers the adventure of a lifetime. Here, you’re at the edge of the
IF YOU OPT FOR A MORE LEISURELY PACE, THAT’S WHEN THE MAGIC HAPPENS! DON’T LET ITS UNASSUMINGNAME FOOL YOU: THE CELEBRATED ST. LAWRENCE ROUTE IS CONSIDERED ONE OF THE MOST BEAUTIFUL AND PANORAMIC ROADS IN EASTERN NORTH AMERICA.
Saguenay-St. Lawrence Marine Park, so chances are good you’ll cross paths with a few seals – and maybe even a whale! Baie-Sainte-Catherine – a calm retreat The most striking thing about Baie SaintCatherine is its utter tranquility. Located in the heart of the Saguenay-St. Lawrence Marine Park, it’s the last village before the ferry to Tadoussac and, further east, the mythical North Shore. Here, the marine biodiversity is unlike anywhere else on the planet. And exploring the waters of the St. Lawrence and the Marine Park is the best way to discover it. You have a wide range of options to choose from: if you prefer to remain above water, you can go kayaking, take a Zodiac, or board a whalewatching boat. But if you’re feeling more adventurous, you can try diving in the
unique, cold saltwater environment of the St. Lawrence Estuary and Saguenay Fjord. Isle-aux-Coudres – full of surprises There’s something fascinating about Isle-auxCoudres. Although this tiny island appears rather peaceful at first glance, it plays host to a dizzying array of sports and cultural events, gastronomical experiences and holiday activities. Upon disembarking from the Saint-Josephde-la-Rive ferry, there are two things you should know. First, the islanders’ nickname – Marsouins – pays homage to their beluga fishing heritage. Second, it’s possible to explore the 23-kilometre island entirely on a bike. But by the time you leave, you’ll have made many more discoveries along the way. The island has not one but two economuseums, both of which bear the
imprint of the surrounding terroir and reflect the rich local history. The first museum is not far from the pier as you arrive and can be visited on foot or bicycle; this is the Cidrerie et Vergers Pedneault, where you can go apple picking in season. The second, the Moulins de l’Isle-aux-Coudres, immerses visitors in the world of milling and traditional flour-making. After visiting these two must-see attractions, be sure to leave room for pie at the Boulangerie Bouchard, where the signature pâté croche (a savoury meat turnover) will no doubt tempt your taste buds. Isle-aux-Coudres offers a number of beautiful walks with exceptional panoramic views of the St. Lawrence. A good example can be found at the Parc de la Roche à Caya (Caya’s Rock), which features an interpretation trail that takes visitors alongside a series of beaches and sand bars. At Pointe-de-l’Islet, you can clamber over the coastal granitic rocks at low tide amid refreshing sea spray. Don’t be surprised if you see a few large, multi-coloured sails zigzagging across the sky – Isle-aux-Coudres is one of Québec’s most popular kitesurfing destinations. In winter, the main event is still La Grande Traversée, a thrilling canoe race across the ice between Isle-aux-Coudres and Saint-Joseph-de-la-Rive. The road back As you cross back to the mainland, take some time to enjoy the exceptional view of Mount Éboulements, the site of an ancient meteorite impact that shaped the region some 400 million years ago. By all measures an historic event – just like the 2018 G7 Summit. Although your visit to Charlevoix may be winding down, the memories you’ve made will last a lifetime, as will the desire to come back again! ■ Charlevoix. Canada 2018 ❙ 17
G7 Executive Talk Series Welcome / Bienvenue
Régis Labeaume Mayor of Québec City Maire de Québec
It is with tremendous pride that I welcome you to Québec City on the occasion of the G7 Summit that is being held in our beautiful region. The cradle of French-speaking civilization in North America, and a world heritage treasure, our city will provide you with a setting conducive to dialogue and reflection throughout this prestigious gathering.
A place of welcome and encounters for more than 400 years, Québec City will inspire you through its distinctive accent and its rich cultural heritage. Nestled between the river and the mountains, a world of flavours, colours and discoveries awaits you. Our city is recognized as an incomparable tourism destination, and will charm you with its artistic flair, its generous nature and its penchant for fine dining.
Whatever the season or occasion, every visit to our capital city brings the promise of a renewed experience. Welcome!
Régis Labeaume Mayor of Québec City
A PLACE OF WELCOME AND ENCOUNTERS FOR MORE THAN 400 YEARS, QUÉBEC CITY WILL INSPIRE YOU THROUGH ITS DISTINCTIVE ACCENT AND ITS RICH CULTURAL HERITAGE. C’est avec une immense fierté que je vous souhaite la bienvenue à Québec à l’occasion de la tenue du Sommet du G7 dans notre magnifique région. Berceau de la francophonie en Amérique du Nord, joyau du patrimoine mondial, notre ville vous offrira un cadre propice à la réflexion et au dialogue tout au long de ce prestigieux rendez-vous.
Terre d’accueil et de rencontre depuis plus de 400 ans, Québec vous inspirera par son accent distinctif et son riche héritage culturel. Entre fleuve et montagnes, un monde de saveurs, de couleurs et de découvertes vous y attend. Reconnue comme une destination touristique incomparable, notre ville vous offre son visage artistique, sa nature généreuse et son petit côté gourmand.
TERRE D’ACCUEIL ET DE RENCONTRE DEPUIS PLUS DE 400 ANS, QUÉBEC VOUS INSPIRERA PAR SON ACCENT DISTINCTIF ET SON RICHE HÉRITAGE CULTUREL. 18 ❙ g20g7.com
Peu importe la saison ou l’occasion, chaque séjour dans la capitale porte la promesse d’une expérience renouvelée. Bienvenue!
Régis Labeaume Maire de Québec
A Word from the Premier / Mot du PM
Philippe Couillard Premier of Quebec Premier ministre du Québec
Now that Canada is chairing the G7, it is a pleasure for Québec to welcome the leaders of the member countries and the guests, as well as their delegations, to La Malbaie, at the heart of the Charlevoix region. During the Summit, you will have the opportunity to discover the attractions and the breathtaking landscapes of Québec as well as the vitality and dynamic nature of its economy. Over the past few years, our economic situation has progressed considerably. We have nearly reached full employment, and our GDP grew by two points between 2015 and 2017. The growth of our hourly wage is at one of the highest levels in Canada, particularly among women. This favourable situation can be attributed, on the one hand, to our priority of maintaining
balanced public finances and for controlling the public debt, and on the other, to our ability to stimulate innovation and investment in all our regions. Owing to this context, we have the means to better assist our children in moving toward success, and to better train them in order that we may be sure of filling the jobs of the future, with a view to sustainable development. This climate of trust also enables us to strengthen our position, both within Canada and on the world stage. With a strong network of 29 official delegations abroad, every day we demonstrate that Québec can face the great challenges of the 21st century and promote its interests at the international level. We played a front-line role in the adoption of the CETA. Our interventions led to the recognition of the role of federated
states and regions in the Paris Agreement on climate change. We held an international conference on radicalization and an international symposium on food security and nutrition in the era of climate change, in collaboration with UNESCO. These are a few examples that show that we in Québec form a united, prosperous and open nation that is proud of its language and its culture, and is concerned about strengthening its presence and its commitment toward its partners. I wish you all a most cordial welcome among us, and hope that you will enjoy discovering the rich treasures of Québec!
Alors que le Canada assume la présidence du G7, c’est un plaisir pour le Québec d’accueillir les dirigeants des pays membres et invités ainsi que leurs délégations à La Malbaie, au cœur de la région de Charlevoix. Durant le Sommet, vous aurez la chance de découvrir les attraits et les paysages à couper le souffle qu’offre le Québec ainsi que la vitalité et le dynamisme de son économie. Au cours des dernières années, notre situation économique a beaucoup évolué. Nous avons presque atteint le plein emploi et le PIB a grimpé de deux points entre 2015 et 2017. La croissance du salaire horaire au Québec est l’une des plus fortes au Canada, en particulier chez les femmes. Cette situation favorable est attribuable, d’une part, à notre souci de maintenir des finances publiques équilibrées et d’assurer
un contrôle efficace de la dette et, d’autre part, à notre capacité à stimuler l’innovation et les investissements dans toutes nos régions. Grâce à ce contexte, nous avons les moyens de mieux accompagner nos jeunes vers la réussite et de mieux les former pour nous assurer de combler les emplois de l’avenir dans une perspective de développement durable. Ce climat de confiance nous permet également de prendre pleinement notre place au Canada et dans le monde. Forts d’un réseau de 29 délégations et représentations à l’étranger, nous démontrons, chaque jour, que le Québec peut relever les grands défis du 21e siècle et promouvoir ses intérêts à l’échelle internationale. Nous avons été un acteur de premier plan dans l’adoption de l’AECG. Nos interventions ont permis la reconnaissance du rôle des États fédérés
et des régions dans l’Accord de Paris sur les changements climatiques. Nous avons tenu une conférence internationale sur la radicalisation et un colloque international sur la sécurité alimentaire et la nutrition à l’heure des changements climatiques en collaboration avec l’UNESCO. Ce sont quelques exemples qui démontrent que nous formons, au Québec, une nation unie, prospère et ouverte, fière de sa langue et de sa culture et soucieuse d’accroître sa présence et son engagement auprès de ses partenaires. Je vous souhaite à toutes et à tous la plus cordiale des bienvenues chez nous et espère que vous prendrez plaisir à découvrir les richesses dont regorge notre Québec!
Philippe Couillard Premier of Quebec
Philippe Couillard Premier ministre du Québec
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G7 Executive Talk Series Branded Story / VIA Rail Canada
Leading Canadians Towards a More Sustainable Future
einventing intercity passenger transportation in Canada for the good of the economy, the population and the environment—such is the challenge of our transformation at VIA Rail and the basis of our vision to be a smarter way to move people. Our growth, particularly in recent years, shows that conditions are now more than ever in our favour to meet this challenge. And, as always, our dedicated employees are the architects. More and more Canadians are seeing the value of passenger rail service as an accessible alternative to their cars and are making the wise choice to travel by train. The sustained growth of ridership across all our routes, which nears 16% since 2014, is clear proof of this. And our transformation and renewal plan aimed at leading Canadians towards a more sustainable future is progressing. Thanks to funding from the Government of Canada, the renovation of our current fleet and the acquisition of a new fleet of modern trains for the busiest corridor are a reality, and the
studies and analyses for construction of dedicated passenger rail tracks, which we call High Frequency Rail (HFR), are underway. VIA Rail has reached new heights, owing to its solid roots and its renewed vision to offer a safe and sustainable transportation option Canada-wide. We are now at a pivotal moment; passenger rail has been called upon to stimulate inclusive growth by providing universal accessibility, creating jobs, boosting the economy and serving as an economic, social and environmentally-friendly link between hundreds of communities. We are determined to promote this shared project: to keep Canada at the top of the list of the best countries in which to live. Yes, the future is on board. ■
Yves Desjardins-Siciliano President and Chief Executive Officer VIA Rail Canada
Mener les Canadiens vers un avenir plus durable
éinventer le transport voyageurs au Canada. Pour le bien de l’économie du pays et de sa population, et aussi pour celui de l’environnement. Voilà le pari de notre transformation et le fondement de notre vision chez VIA Rail, qui consiste à être une voie sensée pour les voyageurs. Notre croissance, particulièrement dans les années récentes, témoigne d’une conjoncture plus que favorable pour y arriver. Et nos employés dévoués en sont, comme toujours, les artisans. De plus en plus de Canadiens reconnaissent la valeur du rail passagers comme solution de rechange accessible et abordable à leur voiture et font le choix judicieux de voyager en train. La croissance soutenue de l’achalandage sur l’ensemble de nos trajets,
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soit près de 16 % depuis 2014, le démontre ouvertement. Et notre plan de transformation et de modernisation visant à mener les Canadiens vers un avenir plus durable avance. Grâce aux fonds accordés par le gouvernement du Canada, la rénovation de notre flotte actuelle et l’acquisition d’une nouvelle flotte de trains modernes pour le corridor le plus achalandé sont réalité et les études et analyses en vue de la construction de voies dédiées pour les passagers, que nous appelons train à grande fréquence (TGF) sont en cours. VIA Rail est à son apogée, grâce à ses solides racines et à sa vision renouvelée d’offrir une option de transport sécuritaire et durable partout au pays. Le moment est charnière. Le train passagers est appelé à
devenir un initiateur de croissance inclusive en offrant l’accessibilité universelle, en créant des emplois, en stimulant l’économie et en reliant entre elles des centaines de communautés aux plans économique, social et écologique. Nous sommes déterminés à promouvoir le projet collectif auquel nous participons tous: garder le Canada au sommet de la liste des pays où il fait le mieux vivre. Oui, l’avenir est à bord. ■
Yves Desjardins-Siciliano Président et chef de la direction VIA Rail Canada
The future is on board
L’avenir est à bord
With an increasing number of passengers and modernization projects such as updating to a more energy-efficient fleet, VIA Rail now has an even stronger desire and commitment to transform itself and lead Canadians towards a more sustainable future.
Animée par l’augmentation du nombre de passagers et par ses projets de modernisation tels que l’ajout d’une flotte avec une meilleure efficacité énergétique, plus que jamais, VIA Rail s’engage et se transforme pour mener les Canadiens vers un avenir plus durable.
REDUCING THE CARBON FOOTPRINT OF TRANSPORT IN CANADA • 261,357 tons of CO2 avoided by our passengers in 2017 by choosing the train as their mode of transport • 34% reduction in GHG emissions since 2005
RÉDUIRE L’EMPREINTE ÉCOLOGIQUE DU TRANSPORT AU CANADA • 261 357 tonnes de CO2 évitées par nos passagers en 2017 en choisissant le train comme leur mode de transport • 34 % de réduction des émissions de GES depuis 2005
BRINGING CANADIANS TOGETHER • Connecting 4.4 million travellers and more than 400 communities in 2017 • $162M invested in improving accessibility to our services
RAPPROCHER LES COMMUNAUTÉS CANADIENNES • 4,4 millions de voyageurs et plus de 400 communautés reliés en 2017 • 162 millions $ investis pour rendre nos services plus accessibles
STIMULATING THE ECONOMY • $364M for purchased services, materials and fuel to 2,818 suppliers, 94% of which are Canadianbased companies
The VIA logo is a trademark owned by VIA Rail Canada Inc.
STIMULER L’ÉCONOMIE • 364 millions $ pour l’achat de services, de matériel et de carburant auprès de 2 818 fournisseurs, dont 94 % sont des entreprises établies au Canada Le logo VIA est une marque de commerce propriété de VIA Rail Canada inc.
G7 Executive Talk Series Editor’s Note
Ana C. Rold Editor-in-Chief
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It has been exactly eight years since we were in Canada for a G Summit. In 2010, our team covered two back-to-back important events: the G8 Summit in Muskoka and the G20 Summit in Toronto. At the time, a commentator for our publication described the end of the G8 Muskoka Summit as such: “The Muskoka G8 Summit is likely to be the last G8, a victim of the financial crisis and a global shift eastward as the G20 becomes the premier global economic forum.” A bold prediction, given that the G8 had been a mega event attracting more than 5,000 members of the media, civil society, and business leaders. And hundreds of thousands of activists. The end of the G8 did come, but not quite how it was predicted. It wasn’t usurped by the even larger G20, but rather renamed for the ousting of one of its members, Russia, four years later. There was a time when great powers attended large congresses and turned the course of history (think Treaty of Westphalia and the Paris Economic Conference). But those days seemed over (although one may argue that the upcoming U.S.-North Korea Summit to be held on June 12 in Singapore, is an example of the kind of summitry that rivals history). As political scientist Ian Bremmer coined it famously in his book Every Nation for Itself: Winners and Losers in a G-Zero World (2012), in a G-Zero world, there is a deficit of global leadership and no grand nation wants to shoulder all the responsibilities of such leadership alone. It’s true. Recent shifts towards isolationist politics and differences in approach to economy and society have made any consensus difficult to reach. But there is no platform more prominent than the G7, a forum within which the world’s top donor countries send their highest-ranking leaders to discuss how best to approach the world’s biggest challenges. The G7 was initially created in 1975 as a setting within which non-Communist nations could address the numerous economic concerns spurred by the Cold War. While the G7 today represents almost half of the global GDP (46%), it is met with criticism regarding its ability to actually solve the world’s monetary issues as well as its failure to include emerging markets in its decision-making. But with a focus on sustainable finance and long-term prosperity, especially in regards to how the economy can contribute to the environment in beneficial and socially conscious ways, Canada’s goal for the G7 this year is to work with leaders to help solve the economic and environmental issues within Canada—and from there, figure out how to scale this knowledge to the rest of the world. It is perhaps in this way that the G7 can regain its ability to better solve international issues, by bringing international attention to each other’s domestic issues. Whether or not the G7 brings about the historic solutions our world needs, one thing is clear: power abhors vacuum. If the U.S. and others renounce their historic roles; others will ill in. The challenges our world faces are collective and they are of extraordinary proportions; we need a revival of the age of grand summitry to get through them. If power and wealth (and problems) are truly shifting around the world, the coordination for solutions will become more necessary than ever.
G7 Executive Talk Series Publisher’s Note
Chris Atkins Publisher and Founder Cat Company, Inc.
It has been exactly 21 years since CAT Company produced the very first G7 Summit publication. In 1997, our work earned us the trust of the host government and since then we have been honored to be the go-to publisher and consultant for host governments of the G7 and the G20 Summits for 21 years in a row. For over two decades our company’s own history and legacy is tied to these most important of global leadership gatherings. As we reflect on the past two decades and more, I wish to express my heartfelt thanks to the Canadian G7 Host Committee as well as the Canadian government for their collaboration. This is the third time that our team is working with Canada to produce a world-class publication for the G7 Summit and we are very proud and grateful for our association with the Host Committee. And we are most grateful for the acknowledgment the CAT Company and our online platform G20G7.com has received. In the past two decades our company has grown and expanded exponentially. Our portfolio of publications, which also includes the leading editions for the G20 Leaders’ Summit and B20 Summit respectively, have been recognized globally. Our company’s mission has been and continues to be to educate the global community on the most vital topics affecting our society and the agenda and leaders at the G7, G20 Leaders & G20 business summits. Through our award-winning Executive Talk Series global briefing report, we have created an unprecedented opportunity for private sector leaders to have a voice at these summits even when they don’t have a physical seat at the table. In closing, I would to thank our team of editors and writers and all of our knowledge partners over the years, especially the International Chamber of Commerce, Eurochambers, the IOE, Tracit.org and many others. I would also like to thank all of our sponsors and advertisers who have entrusted us with their advertising budgets; and special thanks to DSX, Inc. which has been with us for 15 years. We owe a great deal of where we are today to your trust, support, and business. We look forward to the upcoming G20 Leaders and G20 Business Summits this year; The CAT Company has been chosen yet again to be the official publisher of the G20 Business Summit in Buenos Aires, Argentina. I will look forward to hearing from you and it would be an honor to work with you.
Here’s to the next 21 years together... and counting!
OUR COMPANY’S MISSION HAS BEEN AND CONTINUES TO BE TO EDUCATE THE GLOBAL COMMUNITY ON THE MOST VITAL TOPICS AFFECTING OUR SOCIETY AND THE AGENDA AND LEADERS AT THE G7, G20 LEADERS & G20 BUSINESS SUMMITS.
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Celebrating 21 years of Publishing the Renowned G7 Global Briefing Report
April 10th 2018 The CAT Company Salt lake City Utah 84124
Dear Mr Atkins,
official B20 lusively publish the ina. T Company to exc enos Aires, Argent to appoint The CA Bu re in t asu mi ple at Sum gre It is our the 2018 B20 s’ publication for der Lea and ess Busin ke it fully available event and will ma publication at the ” attendance. int in “Pr r be l you wil y onl s who We will distribute government leader int”. leaders, media and content of the “Pr the on ee agr to CEOs, business l and Business 20 wil vided The CAT Company l” publication pro ution of the “digita agements. the extensive distrib eng iate dia rec me app ial we soc , Additionally tnerships and any’s knowledge par via the CAT Comp Argentina. lication on the B20 place the digital pub h Twitter t committee will also tforms and will promote it throug hos 8 201 B20 The dia pla various social me info website, and e and Facebook. another informativ h you to produce collaboration wit l sfu ces suc a to We look forward lication. B20 Business pub Sincerely
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G7 Executive Talk Series B20 Summit Argentina 2018
The Business Community Works on Recommendations for the G20
Daniel Funes de Rioja, B20 Chair
Carolina Castro, Executive Sherpa
Fernando Landa, Policy Sherpa
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everal years have passed since the Business 20 (B20) community gathered for the first time in order to make an assessment and provide the G20 leaders with constructive, consistent and effective policy proposals. Although various recommendations and constructive policies have been set forth, the world’s main economic and social problems remain an unresolved challenge. The B20 group has not only become a beacon for innovative and clear views on how these challenges may be approached; it also plays a crucial role in building resilience and advocacy within G20 communities. The Argentine cycle was inaugurated in November 2017 and is chaired by Daniel Funes de Rioja, responsible for leading the process and setting the main guidelines. The B20 Chair is seconded by a Co-Chair group, constituted by the presidents of the main Argentinean chambers, namely: the Industrial Argentina Union (UIA), the Argentinean Banks Association (ADEBA), the Buenos Aires Stock Exchange (BCBA), the Argentinean Chamber of Commerce and Services (CACS), the Argentinean Chamber of Construction (CAMARCO) and the Argentinean Rural Society (SRA). It also has two sherpas: Carolina Castro, the Executive Sherpa, responsible for the operational management of the B20, the organization of the events, and general communication and advocacy; and Fernando Landa, Policy Sherpa, responsible for providing basic orientation for the B20 recommendations and overseeing the process of preparing policy papers. The B20 works with taskforces (TFs) of business representatives from the entire G20 and guest countries, which after several months of discussions turn over its policy recommendations to the G20. The members of the TFs are senior representatives of businesses, associations and organizations. Each TF has a Chair who presides over its sessions, guides the drafting of policy papers and presents the TF’s recommendations in public and political forums. Each chair may be assisted by several Co-Chairs. Chairs and Co-Chairs are appointed by the B20 residency;
they are leading business figures from the entire G20, such as CEOs, supervisory board members and association principals. The main objectives of the TFs are: ■ Define the initial topics. Take into consideration the global challenges and priorities defined by the G20 and identify further areas where G20 action is needed. ■ Reconcile different positions. Build a solid consensus amongst business leaders, international organizations and civil society on what the approach will be. ■ Generate recommendations. Draft policy papers addressed to the G20 with concrete policy proposals and calls to action. The taskforces for the Argentine cycle are eight and include: ■ Trade and Investment. Comprising a comprehensive approach to the construction of an inclusive, fair and balanced international Trade and Investment system for the 21st century. ■ Energy, Resource Efficiency and Sustainability. Climate change is a threat to development that poses increasing risks to societies, economies, and ecosystems. Tackling climate impacts through adaptation strategies and building resilient societies will help to achieve the Sustainable Development Goals. ■ Financing Growth and Infrastructure. Infrastructure is a fundamental driver for economic growth. We will seek a business consensus on practical recommendations to close the persistent infrastructure gap. We also need to discuss regulatory coherence and innovative financial instruments to achieve a sustainable GDP growth. ■ Digital Economy and Industry 4.0. A revolution underpinned by artificial intelligence and other technologies is already underway and will redefine the economy. Along with digital economy, these innovations can become engines of growth and inclusion if we bridge technological divides in a socially sustainable and responsible way. ■ Employment and Education. In a new evolving scenario where employability
B20 Summit Argentina 2018
is key, it is necessary to develop inclusive policies that help people enter the labor market through innovative educational systems, within the framework of a new technological revolution. Sustainable Food System. In an era marked by volatility and uncertainty, the world prepares to feed an increasingly growing population on a declining resource base. Nutrition security and global food production are ongoing concerns. Integrity and Compliance. Corruption triggers inequality, undermines sustainable development and has a corrosive impact on growth. Countries need to be united to collect and share information in order to prevent, detect and crack down on corruption. We face a global problem that requires a global solution. SMEs Development. SMEs are the backbone of economies around the world, they generate about 50 to 70 percent of jobs and income, they foster creativity and they enable comprehensive market innovations. Yet they face some structural constraints that call for special attention.
1,200 registered members representing more than 1,000 companies that employ 35 million people. 34% of SMEs and 27% women. 26 task force meetings, held in Buenos Aires, Bariloche, Mar del Plata, Bilbao, Geneva, Washington DC and Paris. 32 teleconferences, 32 side events and over 3,500 attendees. The numbers are record for every previous cycle. The B20’s trademark is the development
of consensus-based concrete policy proposals from the private sector with the objective of generating more and better jobs, sustained growth and development. A crucial step to ensure the recommendations delivered are taken into consideration by the G20 leaders is to provide a strong, flexible and comprehensive advocacy strategy. This is why the B20 Argentina has constituted a High-Level International Business Advocacy Caucus comprising business leaders, CEOs and other chief executives from the most prominent enterprises around the world. Additionally, local businessmen and women form the Argentine Business Leaders Forum, a prime phase and opportunity for the local business community to increase their participation in the B20 taskforces and to elevate the regional voice in the global governance. Furthermore, the B20 relies on international business organizations and networks to participate as Network Partners. They are a fundamental part of our outreach efforts and their aim is to provide essential support by contributing their expertise and engaging their broad international constituency in B20 activities, as well as disseminating recommendations. We have a crucial role as private initiative to play at the G20 process. We have a voice with our recommendations to influence the content of the final declaration of the G20 and we have the hope that the conclusions could be implemented as public policies in all the G20 countries. ■
THE B20 WORKS WITH TASKFORCES (TFS) OF BUSINESS REPRESENTATIVES FROM THE ENTIRE G20 AND GUEST COUNTRIES, WHICH AFTER SEVERAL MONTHS OF DISCUSSIONS TURN OVER ITS POLICY RECOMMENDATIONS TO THE G20. THE MEMBERS OF THE TFS ARE SENIOR REPRESENTATIVES OF BUSINESSES, ASSOCIATIONS AND ORGANIZATIONS.
G7 Executive Talk Series Climate Change Authored by: Jacqueline Christ
How Climate Change Has Destroyed Belize’s Coral Reefs and Economy Over the course of just four years, the second largest barrier reef system in the world has endured severe damage that could jeopardize its existence in the future.
ver the course of just four years, the second largest barrier reef system in the world has endured severe damage that could jeopardize its existence in the future. The Mesoamerican Barrier Reef, which is located between the Yucatan Peninsula from Mexico to Belize, holds both a sublime coral reefs and a fragile coral reef system. Due to elevated temperatures, caused by climate change, much of the reef environments have been transformed from vibrant to dull as massive coral bleaching has devastated the reef’s wildlife. Particularly in Belize, bleaching has become extremely severe, according to a recent report from the World Heritage Organization. Within the Belize barrier reef system, the bleaching stress level catapulted from a 1.7 level between 1985-2014 to a 3 severe level in 2014-2017. Given the fact that bleaching nearly doubled within three years, Belize is under serious threat. The Belize coral reef system not only is a global beauty; it also fuels Belize’s tourism industry. Without the reefs, Belize’s economy could crumble. The tourism industry in Belize makes up more than 38% of the country’s total gross domestic product, according to a report from
EVEN THOUGH MANY OF THE SOLUTIONS INCLUDE REGULATIONS THAT COULD COST BELIZE PROFITS IN TOURISM AND EXPORTS IN THE SHORT RUN, THE COUNTRY WILL BENEFIT IN THE LONG RUN. 28 ❙ g20g7.com
the World Travel and Tourism Council. The industry also overwhelms the job market—fueling 50,000 jobs or 34% of the total employment. With more coastal tourism, the several cayes and keys that hold reef environments are areas that have lots of visitors—particularly Ambergris Cay, Lighthouse key, and Glover’s reef. The reefs ultimately affect the livelihood of the local people that use tours of the reef communities to sustain their lives. The rising temperatures in the Mesoamerican barrier reef have been matched with rising sea levels and the loss of growth of wildlife. The effect of rising sea levels and ocean erosion adapted the islands in Glover’s reef and threatened the ability for tourism to be conducted there. Zoe Dagan, dive master at Glover’s reef and coral reef educator, said that not only has the shoreline decreased, but the bleaching events underwater have not recovered. Dagan said that “over the past 2-4 years, the bleaching events tend to be more extreme and they tend to last for a longer duration. You’ll see more corals bleaching, and bleaching that lasts longer and that can be very harmful to the reefs.” The reason behind the change lies in the sustained high water temperature. Dagan said that “reefs generally are resilient, which means that they can recover once the temperatures cool off. A bleached reef doesn’t necessarily mean death but a bleached reef has a compromised immune system which means that it susceptible to different types of diseases. So, when you have more extensive bleaching events and bleaching events that last longer, you see a lower recovery rate.” Although the Mesoamerican barrier reef is protected as a World Heritage site, the entire
area has still been affected. According to the 2017 Caribbean Marine Climate Change Report Card, the impacts of climate change on the region have a social cost affecting the quality of life of people living in the Caribbean. With escalated temperatures, the monetary cost of inaction is also extremely high. In the total Caribbean area, the cost of inaction is 21.7% of the 2004 GDP by 2100. Specifically in Belize, the report found that much of the damage that the reef communities experience can in fact transfer to a water quality problem within inland areas. The report found that “Belize and offshore cays and atolls are very vulnerable to the projected acceleration in sea-level rise. Wave overtopping and wash-over can be expected to become more frequent, which will degrade fresh groundwater resources.”
According to the UN report Belize and Climate Change: Costs of Inaction, climate change can lead to the extinction of species and escalation of “stress factors.” In particular, the damage that climate change inflicts on the coral reefs and mangroves exasperates the damage caused by pollution and coastal development. The study found that coral reef mortality relates to a 3 Celsius surge in the global mean temperature. In addition, “a conservative temperature increase of 1-2 degrees Celsius would cause regions between 20-30 degrees North to experience “sustained warming that falls within the lethal limits of most reef-building coral species.”’ The report highlighted several proposed solutions, including better monitoring of aquaculture and water quality, regulating
the fishery industry, and preserving water. In reality, the government of Belize has created similar initiatives to preserve the coral reefs. In Belize’s Nationally Determined Contribution to the Paris agreement, the country committed to reducing the amount of waste that is dumped into the ocean, preserving natural resources, promoting sustainable tourism practices, and regulating industries that develop on the country’s coastline. Belize also supported the global mission to reduce the global average temperature increase to 1.5 degrees Celsius. Even though many of the solutions include regulations that could cost Belize profits in tourism and exports in the short run, the country will benefit in the long run. In the Costs of Inaction report, the study found that “while the necessary actions to reduce global
greenhouse gas emissions or protect against climate-related impacts will most certainly have significant costs, doing nothing about climate change will have immense costs.” With entire communities of people and precious wildlife at stake, the need for action on climate change in Belize and the greater Caribbean area is necessary. With the Mesoamerican Barrier reef—the second largest in the world—threatened, there needs to be action before it’s too late. ■
Jacqueline Christ is a Contributor to Diplomatic Courier Magazine.
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G7 Executive Talk Series Branded Story / CPA Canada
Building Trust through Climate Action
rust forms the bedrock of our society and economy. It is essential for rational discourse and evidencebased decision-making in the public interest. With the proliferation of fake news, media distrust and increased demands for transparency, public and private sector institutions need to focus on building and maintaining trust with their stakeholders. During Canada’s 2018 G7 Presidency, Canada has an opportunity to build trust and lead on a number of themes through the lens of climate change. An inclusive and just transition to a resilient low-carbon economy requires investing in growth that works for everyone and preparing for jobs of the future. Combatting climate change can create new economic opportunities and jobs for Canadians if efforts are supported by thoughtful and well-informed policies that consider a broad range of stakeholders. However, trust across the G7 countries is in decline. According to the 2018 Edelman rust Barometer, all G7 nations fell into the category of “Distrusters” on the Trust Index 2018, with less than 50% of the general population trusting their country’s institutions. The Edelman Trust Barometer is a 28-market index that tracks the level of trust in institutions annually for the past 18 years. This year, the United States experienced a record-breaking drop in public trust. Falling by nine points to the bottom quartile of the 30 ❙ g20g7.com
index, it was the steepest decline in US since the survey’s inception. Society’s expectations of corporate leaders are evolving. Nearly 7 in 10 respondents say that building trust is the top priority for CEOs and nearly two-thirds say they want CEOs to take the lead on policy change instead of waiting for government. In order to encourage behavioural shifts in our society, climate change actions must focus on relevant facts and evidence. Canadian Perspective As a signatory to the Paris Agreement, Canada needs to work harder to achieve greenhouse gas emission reduction targets of 30% below 2005 levels by 2030. Further, there is an opportunity to build a nationwide strategy to adapt to the impacts of climate change. In March 2018, Canada’s auditors general issued a collaborative report on Perspectives on Climate Change Action in Canada – an unprecedented effort to work together to examine government responses to a critically important issue. According to the auditors general, “the impacts of a warming climate and extreme weather events are already being felt in Canada and are forecast to become more severe and more frequent… Beyond environmental and physical impacts, climate change is also expected to have significant
economic and social impacts.” Their findings noted more than half of governments did not have greenhouse gas emission reduction targets, and most governments had not fully assessed climate risk, nor developed adaptation plans. This is concerning for a country like Canada. The rate of warming in Canada is about twice the global rate – a 2 degree Celsius increase (the goal of the Paris Agreement) translates into a 3 or 4 degree Celsius increase for Canada. Canada is already experiencing roughly 2 degrees Celsius of average temperature rise and an increase in extreme weather events causing record-breaking economic losses according to the Insurance Bureau of Canada. The time for climate action is now and trust will be the foundation for effective collaboration. Public & Private Sector Collaboration Climate change continues to be one of the top global risks identified by the World Economic Forum in its 2018 Global Risks Report. Climate-related risks will amplify over time due to their linkage with other global risks such as resource scarcity, increasing energy demand and large-scale involuntary migration. With a world population forecasted to reach almost 10 billion people by 2050, we must collaborate and be innovative in our response to climate change. It is not the sole responsibility of government to address climate issues – it is a shared responsibility among government, business and consumers. According to Mission 2020, led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), $1 trillion in annual investment in climate action is needed to meet the goals of the Paris Agreement and about 80% will come from the private sector. Transparency and the Role of Business Global business leaders and investors recognize climate change as a business issue. The impacts of climate change are ubiquitous, extending across markets and borders. Climate-related risk is systemic and its impacts can be direct and indirect. The importance of mitigating and adapting to climate change cannot be understated due to the economic value at stake. According to the US-based Sustainability Accounting Standards Board (SASB), 93% of US equities
It is not the sole responsibility of government to address climate issues – it is a shared responsibility among government, business and consumers. According to Mission 2020, led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), $1 trillion in annual investment in climate action is needed to meet the goals of the Paris Agreement and about 80% will come from the private sector. Transparency and the Role of Business Global business leaders and investors recognize climate change as a business issue. The impacts of climate change are ubiquitous, extending across markets and borders. Climate-related risk is systemic and its impacts can be direct and indirect. The importance of mitigating and adapting to climate change cannot be understated due to the economic value at stake. According to the US-based Sustainability Accounting Standards Board (SASB), 93% of US equities are facing material risks due to climate change, representing 72 of 79 industries researched. To enable the efficient allocation of capital by the investment community, businesses must enhance their disclosure of climate-related financial information. The Task Force on Climate-related Financial Disclosures (TCFD), established by Mark Carney and chaired by Michael Bloomberg, is a strong example of climate change as a financial issue. Recognizing that unpriced climate risks could impact global financial stability, companies with a combined market capitalization of $6.3 trillion USD are publicly committing to supporting the TCFD recommendations and improving their climate-related disclosures. Disclosure is an important focus area for the private sector given its strong potential to influence behavioural change. After all, what gets measured gets managed. Investors are incorporating climate change considerations into their investment decisions. Companies are utilizing this information to set strategy, manage risks and make better decisions for their business’ long-term future. Ultimately, senior executives and Boards of Directors are responsible for executing and overseeing the company’s strategic response to climate change issues. It is essential that business leaders set a strong tone at the top for taking meaningful action on climate change
Gordon Beal, CPA, CA, M.Ed. Vice President - Research Guidance and Support, Chartered Professional Accountants Canada (CPA Canada) Gord oversees a team of senior professionals who conduct technical research and produce guidance and thought leadership resources to help shape the future of the CPA profession. Areas of focus include strategy, risk and performance management; external reporting and audit; and corporate oversight and governance. Climate change and other sustainability issues, along with the impact of emerging technologies, are core elements of this work. Gord leads CPA Canada’s strategy on climate change and the role of CPAs in creating sustainable enterprises. Since 2013, he has been a member of Canada’s National Climate Change Adaptation Platform Plenary and is a member of the National Assessment Advisory Committee on Canada in a Changing Climate. Gord is also on the Board of Directors for the Clean Air Partnership, a Toronto based not for profit organization focused on advancing the implementation of actions to foster low-carbon, resilient communities. Prior to CPA Canada Gord has over 15 years of experience in senior roles in Canada’s manufacturing and construction sectors, professional audit and advisory services, in addition to a senior training and development role in the Ontario Ministry of Finance. Gord is a CPA, CA and has a Masters in Education that focused on the role of leadership in organizational learning and adaptation.
and that their boards are knowledgeable and actively engaged in creating a strategy that addresses climate risk. Private sector companies that incorporate climate change into strategy will be well-positioned to take advantage of new opportunities. Bold action is needed in today’s business planning cycles to realize the opportunities in tomorrow’s economy. Companies must follow through with climate commitments with the full support of their executive team and Board of Directors. Role of Accountants Transparency is essential in maintaining and building trust in our institutions as we work together in combatting climate change. Accountants add substance and evidence to the climate change conversation – an essential ingredient to building trust with stakeholders. Accountants act as trusted advisors to public and private sectors. As governments and businesses move to set targets to achieve Canada’s climate change goals, reporting on progress over time is an essential part of the process. By establishing internal controls and processes, they can enable accountability by ensuring the reliable measurement and reporting of climate-related information. Accountants in leadership positions excel at translating data and information into actionable insights for strategic decision-making. This information is useful to senior executives
and Boards of Directors in setting targets and measuring performance over time. It is also useful to investors allocating capital in alignment with their climate change investment strategies. However, they cannot do it alone. Accountants must work with other disciplines and across functions. Climate change requires an interdisciplinary and integrated response. We have an opportunity to establish global best practices here in Canada. In order to do this, we must build capacity to bridge the gap between plans to address climate change and the tangible actions required to achieve real progress on this burning issue. ›
AS A SIGNATORY TO THE PARIS AGREEMENT, CANADA NEEDS TO WORK HARDER TO ACHIEVE GREENHOUSE GAS EMISSION REDUCTION TARGETS OF 30% BELOW 2005 LEVELS BY 2030. Charlevoix. Canada 2018 ❙ 31
G7 Executive Talk Series Branded Story / CPA Canada
› Role of Consumers Consumers also have a role to play. The largest single threat to the ecology and biodiversity of the planet in the decades to come will be global climate disruption due to the buildup of human-generated greenhouse gases in the atmosphere. Carbon is tied to consumption and we continue to consume more resources. As our population grows, so will consumption. We must educate, and encourage consumer awareness that will lead to individual actions. Time to Act is Now We are in this together. A just transition to a resilient low-carbon economy requires informed and holistic decision making that leaves no Canadian behind. It is our shared responsibility to build and maintain public trust in the economic shift toward a more sustainable world. In doing so, we must: ■ Recognize and act on the need for public and private sector collaboration ■ Enhance climate-related financial disclosures for improved decisionmaking and transparency ■ Demonstrate bold private sector climate change action and leadership ■ Leverage a broad range of subject matter expertise, including professional accountants ■ Build capacity through education and training opportunities With trust, transparency and coordinated climate action, we can make a significant shift in our stewardship of the planet. ■ 32 ❙ g20g7.com
Gigi Dawe LL.M Director – Corporate Oversight and Governance, Research Guidance and Support – CPA Canada Gigi Dawe leads the Corporate Oversight and Governance department at the Chartered Professional Accountants of Canada (CPA Canada). As such, she oversees CPA Canada’s development of influential, thought leading resources and events that improve board performance. Gigi launched the governance discipline at CPA Canada to facilitate enhanced board and executive response to market demands. Her history includes consulting in organizational development in a variety of industries. Gigi is a board member of Youthdale Treatment Centres. She is also on the International Corporate Governance Network’s Corporate Board Governance Committee, sits on the advisory board of Women Get on Board and of Simon Fraser University’s Next Generation Governance Project. She is a past board member of Active Healthy Kids Canada and Family Daycare Services Toronto. Gigi is a member of the National Association of Corporate Directors, the Institute of Corporate Directors, and the International Corporate Governance Network. Gigi obtained a Master of Laws at Osgoode Hall Law School. She teaches Corporate Responsibility and Ethics in the Masters of Financial Accountability program at York University.
Sarah Keyes, CPA, CA Principal – Strategy, Risk and Performance, Research Guidance and Support – CPA Canada Sarah Keyes is a Principal at Chartered Professional Accountants of Canada (CPA Canada). She develops research and thought leadership on climate change issues and the implications for business decision-making, reporting and corporate governance. Prior to CPA Canada, Sarah worked as a Senior Auditor in the mining and extractives sector at PricewaterhouseCoopers and as a Senior Energy Consultant at MNP. She is a member of the Energy and Economics Working Groups as part of Canada’s Climate Change Adaptation Platform convened by Natural Resources Canada. Sarah is certified in ISO 14064-3: Greenhouse Gas Verification and Validation. She is a Chartered Professional Accountant, Chartered Accountant (CPA, CA) registered in Ontario. Sarah also holds a Bachelor of Commerce in Accounting with distinction from McGill University.
Helping businesses navigate climate change
Chartered Professional Accountants (CPAs) can help your organization make more informed decisions — and increase resilience — in the face of climate change. How? By identifying climate-related risks and opportunities. By estimating financial impacts and performing scenario analyses. By advising on long-term business performance. Need a strategic response to climate change? Enlist a CPA. FIND OUT MORE AT cpacanada.ca/ClimateChange 17-0683
G7 Executive Talk Series Global Health Authored by: Emily Foecke Munden
The World Is Dangerously Unprepared for the Rise of “Superbugs” Approximately 700,000 people per year die from drug-resistant infections, or “superbugs.” That number could rise to 10 million deaths annually by 2050 if nothing is done.
icrobiologists estimate that approximately 700,000 people per year die from drug-resistant infections, or “superbugs.” That number could rise to 10 million deaths annually— more people than currently die each year from cancer—by 2050 if nothing is done. Just last month, the transnational spread of a superbug strain of malaria through Southeast Asia was reported in the Lancet Infectious Diseases journal. Ominously, the Lancet reports that the main malaria parasite along the border of Cambodia and Thailand has become resistant to almost all cures. Financial incentives and leadership from rich country governments and philanthropic organizations are urgently needed to catalyze collective action, including improving international monitoring to catch clusters of resistant strains early, limiting the use of antibiotics as growth supplements in livestock, decreasing provider overprescribing of drugs, improving patient adherence to treatment regimens, and increasing the development of new drugs. However, as long as global leaders continue to do nothing, the world remains dangerously unprepared for the rise of superbugs. Low-income countries experience the most serious threat from superbugs, which are usually drug-resistant strains of malaria,
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MALARIA AND TUBERCULOSIS PREDOMINANTLY AFFECT DEVELOPING COUNTRIES AND DO NOT OFFER A STRONG FINANCIAL INCENTIVE FOR DRUG DEVELOPMENT BECAUSE PATIENTS ARE USUALLY TOO POOR TO PAY FOR THEM. bacterial infections, and tuberculosis. These countries are already constrained by generally weak health infrastructure, a critical shortage in health workforce numbers, and inadequate health funding. They offer a fertile environment for drug resistance to emerge and strengthen. This has international consequences, since microbes don’t recognize borders. One of the most chilling dangers of the unchecked proliferation of drug resistance is the loss of antibiotics to treat bacterial infections in anyone, in any country. For example, routine surgery becomes incredibly dangerous without antibiotics, and common infections like gonorrhea (which the World Health Organization warns may soon be untreatable) spiral into serious and permanent health problems. Rich countries not only equally experience the effects of drug resistance, but are just as culpable for the rise of superbugs. The governments and philanthropies with the resources and leadership capacity to address harmful practices at home and abroad must invest in action. For instance, one of the driving factors of antibiotic resistance is the overprescribing of antibiotics. In the United States, 50 percent of antibiotic use in humans is estimated to be unnecessary. Research in developing countries has found that up to a third of drug prescriptions are inappropriate or unnecessary, and drugs to treat infectious disease are among the most frequently prescribed medicines. Cracking down on over-prescription of drugs is therefore one critical way to fight back against the emergence of superbug strains. One of the best ways to limit overprescribing drugs is to expand educational programs for prescribers. Standard treatment guidelines help address the problem of inappropriate prescription, dispensing, and selling of drugs. Studies in both the United States and developing countries have shown that educational programs for prescribers have reduced unjustified prescribing for infectious disease by 5 to 20 percent.
Another solution ripe for global action is research and development of new drugs. Researchers have not identified a new class of antibiotic medicine since 1987. The primary reason is that infectious diseases with resistant strains have a poor return on investment for pharmaceutical companies. Malaria and tuberculosis predominantly affect developing countries and do not offer a strong financial incentive for drug development because patients are usually too poor to pay for them. Additionally, compared to drugs with longterm treatment times for chronic illnesses, antibiotics are only taken for a short period of time until they cure their target disease. Rich country governments and philanthropies can do much more to address this market failure through push and pull incentive programs. “Push” incentives provide direct financing for the development of new drugs, while “pull” incentives create a financial prize for successful new drug development, unlinking profits from sales. Funders can use these mechanisms to lower the cost of and de-risk drug development and reward successful development of desired drug families. As the startlingly rapid spread of an almost totally drug-resistant strain of malaria in Southeast Asia illustrates, the threat of superbugs is already here and will continue to worsen in the face of inaction. We have no fast fixes for drug resistance. Solutions like developing new drugs, constructing global surveillance systems, and educating providers will take years. It’s imperative we invest in them now. ■
Emily Foecke Munden is the International Development Fellow at Young Professionals in Foreign Policy (YPFP). She is also a Research Assistant with the Center for Global Development in Washington, DC. Emily earned her Master of International Affairs in 2016 from the University of CaliforniaSan Diego, where she concentrated on international development policy.
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G7 Executive Talk Series
9 - 11 OCTOBER 2018
SAVE THE DATE: 9-11 October, Bali. Indonesia will host the 2018 IMF/World Bank Annual Meetings. In conjunction with the Annual Meetings, the Indonesian government will host the “Tri Hita Karana Forum on Sustainable Development” to explore how Blended Finance and Innovation can drive Better Business and a Better World . The Tri Hita Karana Forum is a high-level global event which was first launched at the APEC Summit in Bali in 2013. The Forum has been endorsed by the President of Indonesia.
Scan QR code to watch Blended Finance video
Indonesia is a global leader for the Sustainable Development Goals (SDGs). As the fourth largest emerging economy, Indonesia is a major driver of sustainable development, catalysing investment for high impact, SDG-related projects including urban infrastructure and sustainable land use.
The 2018 Tri Hita Karana Forum on Sustainable Development is co-organised by the Government of Indonesia with the United in Diversity Foundation (UID), the International Chamber of Commerce (ICC), the Business and Sustainable Development Commission’s Blended Finance Taskforce, and the United Nation’s Sustainable Development Solutions Network (SDSN). The World Bank Group, the IMF, the China Development Bank, the World Economic Forum, the OECD, the Milken Institute, and the Tsinghua University are also key partners for this event. Convened with the theme “Blended Finance and Innovation for Better Business Better World”, the 2018 Tri Hita Karana Forum on Sustainable Development serves as a timely platform and driver to mobilise largescale capital for the SDGs, including through the use of blended finance. These solutions will not only be applicable in Indonesia, but also for other emerging markets. The Forum will also link innovation and technological breakthroughs to help put the SDGs in reach for populations in developing countries. 36 ❙ g20g7.com
Become a Champion of the Blended Finance Taskforce Action Programme Mobilising private capital for the SDGs
“Mobilising private capital for the SDGs at scale”
Mobilisation Provide a clear, ambitious proposition on MDB/DFI mobilisation targets in line with the requirements of the Paris Agreement and the SDGs.
Blended finance vehicles / instruments Double capacity for long-term FX hedging instrumentsto support deepening of local capital markets; profile existing blended finance vehicles to support scale up.
Investor Club Form a high ambition club of institutional investors and asset managers, willing to commit to sustainable infrastructure targets (e.g. 2% by 2020 and 5% by 2025).
Private intermediaries and incubators for pipeline Work with investment platforms, incubators and foundations to seed new blended finance intermediaries (e.g. 20 by 2020) to drive project pipeline and ensure innovation as well as scale, especially in frontier markets.
Regulatory Disincentives Support the launch of a standardised development guarantee and accelerate amendment to financial regulations (e.g. Solvency II and Basel III) which currently disincentivise investment in emerging markets and infrastructure.
Investment for priority sectors Dramatically scale private investment for resilient cities, sustainable land-use (+ ocean plastic, energy access) by developing blended finance strategies for high-impact sectors.
Infrastructure data Drive greater access to data on infrastructure performance (including historical MDB/DFI data) as a public good to help build infrastructure as an asset class.
Blended finance capacity in developing countries Create a network of blended finance funds and initiatives to share knowledge and build capacity to drive sustainable growth and deliver the Paris agreement and the SDGs.
The seventeen SDGs outline a comprehensive agenda to tackle many of the challenges the world is facing, from climate change to extreme poverty, from education to healthcare quality. Based on current levels of investment from public and private sources, there will be an annual funding gap of $2-3 trillion each year for the next 10 to 15 years. Bridging this gap will require a more catalytic use of public and philanthropic funds to mobilise largescale commercial investment for SDG-oriented projects and initiatives. The Tri Hita Karana Forum will explore opportunities to use tools like blended finance and innovative technologies to attract private investment and drive sustainable development in emerging markets and offer concrete actions to address major investment challenges for the SDGs in Indonesia across a range of sectors including renewable energy, resilient cities, sustainable land use, connectivity, education and institutional capacity. The Tri Hita Karana Forum will attract a broad range of leading delegates, speakers and industry experts from across the world. It offers all participants the opportunity for intimate and outcome-oriented discussions and a meaningful exchange of ideas to drive action and investment.
THK Forum Steering Committee Paul Polman Chief Executive Officer Unilever
THK Forum Steering Committee Christiana Figueres Former Executive Secretary UNFCCC and Founding Partner, Global Optimism
Jeffrey Sachs Director SDSN Director Center For Sustainable Development, Columbia University, USA Special Advisor to the UN Secretary-General
Qiu Yong President of Tsinghua University
Anousheh Ansari Astronaut Co-Founder and Chief Executive Officer of Prodea Systems Vision Circle and Board member of the X Prize Foundation
Charlotte Petri Gornitzka Chair of the Development Assistance Committee (DAC) OECD
IMF-WB Meeting National Chairman Minister Luhut Panjaitan Coordinating Minister of Maritime Affairs Republic of Indonesia
THK Forum Co-chair Mari Pangestu President, United in Diversity Foundation UN SDSN Leadership Council Professor of University of Indonesia
Places are limited. Please email email@example.com to register your interest.
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G7 Executive Talk Series Branded Story / International Trademark Association
Governments and Business Need to Work Together to Support Trademarks
rademarks play a crucial role in today’s globalized economy, as businesses increasingly trade across borders, marketers become more sophisticated in the ways in which they communicate, and consumers grow more aware of brands. In fact, trademarks are the most popular form of intellectual property (IP) rights worldwide: According to the most recent figures compiled by the World Intellectual Property Organization (WIPO) and published in World Intellectual Property Indicators 2017, there were an estimated seven million trademark applications filed worldwide in 2016, an increase of 16.3 percent compared to the previous year and 300 percent more than the number filed in 2001 The total number of active trademark registrations around the world exceeded 39 million in 2016.
Readers will readily bring to mind global brands, owned by large corporations that depend on trademarks to protect their names, logos, product configurations, or packaging shapes, but it is worth remembering that many trademarks are owned by small and medium-sized enterprises that do not yet have the same global reach. Moreover, trademarks can be tools for companies in established markets as well as those in emerging markets. For example, each year since 2010, China has accounted for between 50 percent and 85 percent of annual growth in trademark applications, according to the World Intellectual Property Indicators report. China leads the list of the top 20 trademark offices based on trademark class applications— a list that also includes India, Iran, Vietnam, Brazil, Mexico, and Turkey.
THE VALUE OF TRADEMARKS: ASEAN REGION Trademark-Intensive Industries Significantly Impact Economies Indonesia, Malaysia, the Philippines, Singapore, and Thailand
Gross Domestic Product
Trademark-intensive industries generate
The direct contribution of trademark-intensive industries equals
27%–60% of exports
17%–50% of GDP
of workers are employed in trademark-intensive industries
Trademarks promote freedom of choice and enable consumers to make quick, confident, and safe purchasing decisions. Source: © 2017 International Trademark Association, The Economic Contribution of Trademark-Intensive Industries. The figures are based on national survey data, national accounts data, and World Bank and OECD sources calculated by Frontier Economics. The International Trademark Association (INTA) is the global association of trademark owners and professionals dedicated to supporting trademarks and related IP in order to protect consumers and to promote fair and effective commerce. Members include more than 7,000 trademark owners, professionals, and academics from more than 190 countries. Founded in 1878, INTA is headquartered in New York City, with offices in Brussels, Santiago, Shanghai, Singapore, and Washington, D.C., and representatives in Geneva and New Delhi. www.inta.org
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Vital role of trademark rights As these figures indicate, trademarks are playing a progressively more critical role in business. A trademark represents a guarantee to consumers that they are going to receive the goods or services they expect and that the customer experience will be familiar. This is increasingly important in a world where people trade and travel across borders, and order goods and services online. The owners of trademark rights bear the primary responsibility for registering, maintaining, and upholding these important rights. But in today’s globalized world, trademarks face new or growing threats— dilution, counterfeits, online abuse, and brand restrictions, to name a few. In this environment, government officials and legislators have an important role to play in providing a clear legislative and regulatory framework, making available appropriate remedies against trademark abuse, and promoting common legal standards— harmonization—between different jurisdictions. There are many welcome initiatives in this regard. For example, WIPO offers centralized registration systems for trademarks, industrial designs, and patents. For trademarks, the Madrid System allows protection in one jurisdiction to be extended to up to 116 countries, including many of the world’s biggest markets, with relatively minimal cost and administrative burden. In 2017, the number of applications under the Madrid System grew for the eighth successive year, reaching 56,400—an annual increase of five percent. On a practical level, there are many examples of cooperation between trademark offices. The world’s five largest trademark and design offices (covering China, the European Union, Japan, South Korea, and the United States) regularly exchange information, hold joint meetings, and collaborate on research projects under what is known as the TM5 framework. Organizations such as Europol and the World Customs Organization promote cooperation in enforcement, while the Internet Corporation for Assigned Names and Numbers (ICANN) has developed tools to tackle the serious challenges arising from cybersquatting and domain name abuse. But there is room for much more to be done, particularly as the business world faces new and accelerating challenges.
THE VALUE OF TRADEMARKS
Intellectual property (IP)-intensive industries—including trademark-intensive industries—contribute to trade, economic growth, and employment worldwide ASEAN countries included in study: Indonesia, Malaysia, Philippines, Singapore, and Thailand Latin American countries included in study: Chile, Colombia, Panama, Peru, and Mexico
Exports: Increased contributions to international trade IP-intensive industries
(includes trademark-intensive industries)
90% $15 out of $100
Why should governments play a role in supporting trademark rights? Governments have a clear and growing interest in creating a favourable environment for the protection and enforcement of trademark rights Studies have consistently shown that trademark rights support jobs, promote growth, and contribute to gross domestic product (GDP). A 2016 report published by the European Union Intellectual Property Office and the European Patent Office found that trademark-intensive industries in Europe employed more than 65 million people directly and indirectly (30.3 percent of the workforce) and contributed E4.8 trillion to GDP (36 percent of total EU GDP). [A similar study by the United States Patent and Trademark Office (USPTO) in 2016 found that trademark-intensive industries in the United States accounted for 23.7 million jobs and 34.9 percent of GDP with US $6.1 trillion in value added in 2014. The impact of trademarks is not, however, limited to developed economies. In fact, recent studies have emphasised the critical role that trademark rights play in emerging markets. In August 2017, INTA published a study on the economic contribution of trademark-intensive industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand, to coincide with the 50th anniversary of the Association of Southeast Asian Nations (ASEAN). Across the five countries, the direct contribution of trademark-intensive industries to GDP varied between 17 percent and 50 percent, indirect contribution to GDP ranged from 40 percent to 60 percent, and the share of the workforce working in trademark-intensive industries ranged from 13 percent to 29 percent of total employment. Trademark-intensive industries also contributed between 27 percent and 60 percent of each country’s share of exports. A study conducted jointly by INTA and the Inter-American Intellectual Property Association (ASIPI) and published last year, looked at five Latin American countries (Chile, Colombia, Mexico, Panama, and Peru) and concluded that trademark-intensive industries generate 18.5 million jobs and US $2,390 in revenue per person per year, contributing between 10 percent and 21 percent to GDP. For every US $100 of exports, US $15 corresponds to trademark-intensive products.›
Latin America2 Chile, Colombia, Mexico, Panama, and Peru
Indonesia, Malaysia, the Philippines, Singapore, and Thailand
Gross Domestic Product: Contribution to economic growth on a global scale IP-intensive industries
(includes trademark-intensive industries)
Latin America Chile, Colombia, Mexico, Panama, and Peru
Indonesia, Malaysia, the Philippines, Singapore, and Thailand
Employment: Contribution to job growth across sectors IP-intensive industries
STUDIES HAVE CONSISTENTLY SHOWN THAT TRADEMARK RIGHTS SUPPORT JOBS, PROMOTE GROWTH, AND CONTRIBUTE TO GROSS DOMESTIC PRODUCT (GDP).
(includes trademark-intensive industries)
45.5 million jobs
Chile, Colombia, Mexico, Panama, and Peru
46 million jobs
Indonesia, Malaysia, the Philippines, Singapore, and Thailand
Latin America 18.5 million jobs
Trademarks promote freedom of choice and enable consumers to make quick, confident, and safe purchasing decisions. Sources:
European Union Intellectual Property Office, Intellectual Property Rights Intensive Industries and Economic Performance in the EU, October 2016 U.S. Patent and Trademark Office, Intellectual Property and the U.S. Economy: 2016 Update INTA and Frontier Economics, The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand, September 2017 Inter-American Association of Intellectual Property (ASIPI) and INTA, Trademarks in Latin America, December 2016
Notes: 1. Intellectual Property Rights Intensive Industries and Economic Performance in the EU, and The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand attribute exports in the form of percentages 2. Intellectual Property and the U.S. Economy: 2016 Update, and Trademarks in Latin America attribute exports in USD increments 3. This figure reflects direct contribution to GDP, as indicated in The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand, whereas other reports referenced here do not distinguish between direct and indirect contributions. 4. Intellectual Property and the U.S. Economy: 2016 Update and Intellectual Property Rights Intensive Industries and Economic Performance in the EU reflect direct and indirect contributions to employment from IP-intensive industries, whereas other reports referenced herein do not make the distinction between direct and indirect contributions to employment.
The International Trademark Association (INTA) is the global association of trademark owners and professionals dedicated to supporting trademarks and related IP in order to protect consumers and to promote fair and effective commerce. Members include more than 7,000 trademark owners, professionals, and academics from more than 190 countries. Founded in 1878, INTA is headquartered in New York City, with offices in Brussels, Santiago, Shanghai, Singapore, and Washington, D.C., and representatives in Geneva and New Delhi. www.inta.org
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G7 Executive Talk Series Branded Story / International Trademark Association
› Impressive though these figures are, they would be even higher but for the damage caused by counterfeiting and piracy. Research has consistently shown that the sale of counterfeit goods around the world harms company profits and reputation, reduces tax revenues, and costs jobs. The most recent report commissioned by the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (ICC BASCAP) and INTA found that “the scale of counterfeiting and piracy globally is large, that it has grown since previous estimates, and that this growth is expected to continue.” The report estimated that the value of international and domestic trade in counterfeit and pirated goods, including digital piracy, will reach between US $1.9 trillion and US $2.81 trillion by 2022. This equates to economic losses of US $1.54 trillion to US $1.87 trillion, and job losses of 4.2 million to 5.4 million. What can governments do? There are a number of meaningful actions that governments can take to improve the global environment for trademark rights, providing greater business certainty and improved customer experiences while contributing to economic growth. 40 ❙ g20g7.com
EFFECTIVE TRADEMARK PROTECTION IS VITAL TO ENSURE THAT THESE BENEFITS ARE REALIZED, AND THAT CUSTOMERS ARE GETTING THE GOODS AND SERVICES THEY EXPECT WHEN THEY SEE A FAMILIAR NAME, LOGO, OR PACKAGING.
First, trademark harmonization can help to create consistency and clarity of rights. INTA has long supported efforts towards harmonization, such as the Madrid System. Recent accessions to the System, including by Indonesia, Mexico, and Thailand, are very welcome. It is particularly positive that all the ASEAN member states are committed to joining Madrid. Second, cooperation on a practical level—both between public and private sectors and between official bodies—helps
to reduce obstacles to effective trademark protection and enforcement. Examples of this include the development of IT tools, databases, and training. Such efforts can be undertaken while respecting the differences in national laws and the independence of official agencies. Third, further research is needed on the impact of trademarks and IP rights on brand equity and brand value. While much work has been done on this in recent years, there is considerable scope for further study, and the INTA Board recently established a Brand Value Special Task Force to provide a set of recommendations and actions on this topic. Fourth, any legislation that impacts brand owners’ rights to use their trademarks should be carefully evaluated. For example, laws requiring plain packaging or other brand restrictions for tobacco products, food, alcohol, pharmaceuticals, or any other goods or services, must consider protection of IP rights alongside other public policy factors, such as their impact on public health. Fifth, when significant political or economic changes are underway or anticipated, full consideration should be given to the impact of these changes on existing and future IP rights. For example, the changes resulting from Brexit raise many fundamental
THE ECONOMIC IMPACTS OF COUNTERFEITING AND PIRACY 2013
Value of counterfeit and pirated goods.
US $1.13 trillion €882.6 billion
US $2.81 trillion €2,194.7 billion
Displacement of legitimate economic activity.
US $597 billion €449.6 billion
US $1,244 billion €936.8 billion
Wider economic and social costs.
US $898 billion €676.2 billion
US $1,870 billion €1,408.2 billion
Source: The Economic Impacts Of Counterfeiting And Piracy, A Report prepared for BASCAP and INTA by Frontier Economics. All figures reflected here have been provided by Frontier Economics.
questions regarding EU trademarks and registered Community designs in the United Kingdom, as well ae s other IP issues. In November 2017, the INTA Board of Directors published a position paper emphasizing that the Brexit negotiations should be guided by the “general principles of minimum disruption, minimum cost, and maximum retention of rights.” These principles are vital for businesses, consumers, and legal practitioners. Sixth, new obstacles to trademark protection and enforcement must be addressed. In particular, the threat of brand abuse on the Internet, social media, and mobile communication must be monitored and dealt with. In this context, INTA is concerned about changes to the availability of domain name registration data through the WHOIS system, caused by the uncertainties surrounding the new privacy obligations in the European General Data Protection Regulation (GDPR). This threatens the vast majority of the information used today to conduct trademark enforcement investigations, to send cease and desist letters, and to prepare complaints. ICANN has proposed an Interim Compliance Model that includes contemplates a limited amount of publicly available information with the rest
behind a layered access model the required accreditation. A workable accreditation system is unlikely to be ready for many months. Governments, law enforcement, and regulatory agencies in many countries recognize the vital role played by WHOIS and may be able to help preserve parts of the current system and put in place effective mechanisms for the future. Given the importance of this issue and the May 25, 2018 effective date of the GDPR, urgent action to address this issue is required. Action could include ongoing dialog and obtaining clarification from data protection authorities about the impact of the GDPR on WHOIS; working with government representatives and law enforcement agencies seeking to preserve as much of the open, accessible WHOIS as possible; building an agreed accreditation system and WHOIS Purpose Statement that satisfies the requirements of GDPR; and raising concerns about the proposed interim model directly with ICANN. There are instances of governments, professional associations, and businesses working effectively together to promote knowledge and education of trademarks—and more would be welcome. A few examples of this are the Congressional Trademark Caucus in the United States, which supports the role
trademarks play in the economy by holding briefings, taking testimony from organizations such as INTA, and providing education; an IP awareness and education campaign initiated by the government of India as part of its National IPR Policy and carried out with assistance from INTA to educate school children; and INTA’s own Unreal Campaign, which involves collaboration with brand professionals and educational institutions to raise awareness among teens of the value of IP and the dangers of counterfeit goods and service. Widespread benefits The globalization of commerce, the development of free trade agreements, and the growing use of cyberspace for buying and selling products and services offer enormous benefits to today’s ever more sophisticated consumers. Effective trademark protection is vital to ensure that these benefits are realized, and that customers are getting the goods and services they expect when they see a familiar name, logo, or packaging. If the right policies and strategies are adopted and followed, these benefits will also extend to innovative businesses and to society more generally. This is something that can be achieved if governments, trademark owners, consumer groups, and others all work together. ■ Charlevoix. Canada 2018 ❙ 41
G7 Executive Talk Series Branded Story / TRACIT Authored by: Louis Bonnier
Illicit trade: A Global Threat to Development, Economic Growth and Security
llicit trade is a major and growing policy challenge worldwide. From smuggling, counterfeiting and tax evasion, to the illegal sale or possession of goods, services, humans and wildlife, governments are losing billions in tax revenues, legitimate businesses are undermined, and consumers are exposed to poorly made and unregulated products. The World Economic Forum estimated the value of illicit trade and transnational criminal activities at 8% to 15% of global GDP in 2014.1 With estimations of various illicit activities running upward of $3 trillion; these figures rival the GDP of some G7 countries.2 Illicit trade has a particularly debilitating effect on legitimate business, in terms of lost market share, slower growth, damage to business infrastructure, reputational harm and rising supply chain compliance, security and insurance costs. For governments, illicit trade has an extensive destabilizing impact on global security due to its central role in facilitating transnational organized crime and illegal flows of money, people and products across borders. This in turn undermines the rule of law, giving rise to a hostile business environment that discourages investment. In addition to distorting markets and draining public revenues, illicit trade undermines society’s efforts to achieve the United Nations’ Sustainable Development Goals (SDGs) with negative impacts on consumers, workers and the environment.
The world needs sustained G7 stewardship Representing the world’s seven most industrialized economies, the G7 has shown leadership in curbing several illicit trade issues. At the 2006 St. Petersburg Summit, Leaders agreed to strengthen individual and collective efforts to combat piracy and counterfeiting,3 and six years later at Camp David they underscored the role that high standards for Intellectual Property Protection (IPR) and enforcement have in combatting illicit trade in pharmaceuticals.4 At their 2013 Lough Erne Summit, Leaders affirmed commitments against the illicit trade in endangered wildlife species, corruption, transnational organized crime and human trafficking.5 They also expressed their commitment to support responsible, conflictfree sourcing of minerals and precious stones. The 2015 Lübeck Foreign Ministers’ Statement on Maritime Security,6 and the subsequent 2016 Hiroshima Statement,7 also saw the G7 42 ❙ g20g7.com
pledge to step up efforts to prevent illegal, unreported and unregulated (IUU) fishing. And at the 2016 Ise-Shima Summit, Leaders pledged to tackle illegal logging8. These initial steps and commitments address significant areas of illicit trade and admirably demonstrate the clout of G7 Leaders to address major, cross-border socio-economic challenges. Nonetheless, there is a pressing need for sustained G7 leadership to address the persistent and multiplying threat of illicit trade to economic growth and prosperity. While globalization has brought with it many benefits, the massive volumes of international trade and the proliferation of supply chain nodes have increased complexities and vulnerabilities to the benefit of transnational organized crime. Here are some astonishing facts: According to the OECD, international trade in counterfeit and pirated goods has grown from $250 billion annually in 2008, to more than $461 billion in 2013, an increase of more than 80% in less than 5 years. Counterfeit goods now represent more than 2.5% of world trade – including 5% of all imports into the European Union.9 ■ The growth of illicit digital trade of copyrighted works – not included in the OECD figure – constitutes a significant portion of the value of global illicit trade.10 The value of digital piracy in music, movies and software in 2015 alone was estimated to more than $200 Billion.11 ■ After years of decline, illegal logging is on the rise again.12 ■ Incidents of human trafficking in U.S. rose by 36% in 201613,with an estimated 25 million people globally trapped in forced labor according to the International Labor Organization (ILO) and the Walk Free Foundation.14 ■ It is estimated that $133 billion of oil and fuels are illegally stolen, adulterated, or defrauded from legitimate petroleum companies every year15, with equally significant losses to governments through subsidy abuse and tax evasion16. ■ The global illicit trade in tobacco has grown to more than $35 billion annually,17 causing substantial tax losses and providing a major source of financing for organized crime.18 ■ Food fraud in the form of EconomicallyMotivated Adulteration (EMA) robs the global food industry of an estimated ■
ILLICIT TRADE HAS A PARTICULARLY DEBILITATING EFFECT ON LEGITIMATE BUSINESS, IN TERMS OF LOST MARKET SHARE, SLOWER GROWTH, DAMAGE TO BUSINESS INFRASTRUCTURE, REPUTATIONAL HARM AND RISING SUPPLY CHAIN COMPLIANCE, SECURITY AND INSURANCE COSTS.
$30-40 billion each year, undermining economic growth and costing jobs, with potentially disastrous effects on the health and well-being of consumers.19 The spread of ineffective, illegal pesticides further compounds risks to sustainable food systems. And the introduction of mislabeled, unregulated, and unidentified substances and chemicals poses risks to workers, consumers, animal consumption and broader ecosystems.
Meanwhile, the world faces new threats and new actors, including cybercrimes, violent extremism and the exploitation and misuse of digital marketplaces and social media networks. Illicit trade undermines sustainable development Illicit trade – in all its forms – undermines the collective effort to achieve the UN SDGs and stands in direct juxtaposition to the 2030 Agenda for Sustainable Development. In some cases, illicit trade undermines achievement of the macro-economic and societal goals. For instance, the crowding-out effect of illicit trade drains revenue and growth potential from the legal economy and robs governments of taxable income that can be used for development (SDG 1 & SDG 8). Illicit trading provides a substantial portion
of the incomes of organized criminals and terrorists groups (SDG 16). All forms of illicit trade rape natural resources (SDG 14 & 15) and ultimately dupe consumers or unknowing intermediaries into false purchases (SDG 12). In other cases, illicit trade acutely undermines the achievement of specific SDGs. IUU fishing depletes coastal regions’ food supply (SDG 2) and prevents the sustainable management and protection of oceans (SDG 14); illicit trade in pharmaceuticals threatens the health and safety of consumers (SDG 3); and the presence of human trafficking and forced labor in global supply chains strikes at the core of human decency and our shared moral values (SDG 8). ›
SDG 1: SDG 2: SDG 3: SDG 8: SDG 12:
End poverty Zero hunger Good health and well-being Decent work and economic growth Responsible consumption and production SDG 14: Life below water SDG 15: Life on land SDG 16: Peace, justice and strong institutions
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G7 Executive Talk Series Branded Story / TRACIT
› Given the G7’s recurring commitment to the 2030 Agenda, these threats compel the G7 to amplify its attention to the problem and to press for implementation and enforcement of all its standing declarations against illicit trade. Without concurrent efforts to combat all forms of illicit trade – and the associated corruption and organized crime – the global community will not be able to achieve the overarching sustainable development goals to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity. Fighting illicit trade must therefore be seen not only as a global responsibility of G7 leaders, but also recognized as a prerequisite to achieve the UN SDGs. Spotlight on improving integrity in Customs and free trade zones Breaches of integrity in global supply chains, especially in border control, present significant non-tariff barriers to trade that hamper economic growth and trade performance. Recent figures from the OECD show that improving integrity policies in customs alone has the potential to reduce trade costs by 0.5% and 1.1%.20 Breaches in integrity in customs also contribute strongly to facilitating illicit trade: Customs officers are on the front-line conducting inspections and detecting and seizing illicit goods. If this role is compromised, the system fails and enables opportunities for illegal trade, criminal activity, illegal financial flows and trafficking in products and persons. Promoting integrity in customs can therefore generate dual benefits of reducing trade costs and mitigating flows of illicit trade, delivering significant benefits to the world trade system and economic development at large. The misuse of transshipment points in cargo routings, especially through Free Trade Zones (FTZ), represents another challenge. Deceptive transshipment practices, mislabeling and fraudulent invoices allow illegal traders to bypass sanctions, trade tariffs and regulations by obfuscating the identity of the country of origin or the illicit nature of the goods. Unrestricted regimes for transshipment and transit of goods through FTZs contribute to a wide range of illicit activities, including money laundering, organized criminal activity in illegal wildlife trade, tobacco smuggling, fraud, and counterfeiting and piracy of products. OECD research shows that an additional FTZ within an economy is associated with a 5.9% increase in the value of exported counterfeit and pirated 44 ❙ g20g7.com
BREACHES OF INTEGRITY IN GLOBAL SUPPLY CHAINS, ESPECIALLY IN BORDER CONTROL, PRESENT SIGNIFICANT NON-TARIFF BARRIERS TO TRADE THAT HAMPER ECONOMIC GROWTH AND TRADE PERFORMANCE.
goods on average. Enhancing transparency in FTZs is an important measure to reduce trafficking vulnerabilities and strengthen the integrity of global supply chains. The Charlevoix Summit represents an opportunity for G7 Leaders to collectively underscore the importance of clean international trade by driving the process towards better integrity in customs and improved transparency of FTZs. A unified business response to illicit trade The transnational problem of illicit trade has clearly grown well beyond the capabilities of individual governments. What is needed is a sustained, holistic and coordinated response by governments to address the multifaceted nature of this threat. Equally important is the recognition that the private sector can be an important partner in the fight against the unfettered flow of fake and harmful goods across borders.21 Consequently, any long-term solutions to the threat of illicit trade will depend on sustained collaboration between governments and private sector partners. Business can contribute by continuing to develop technical solutions that protect the integrity of supply chain, and share intelligence, data, resources and measures that effectively control illicit activity. And business is willing to work with partners to convene stakeholders, improve awareness, expand the knowledge base, and energize the global dialogue.
Governments, however, need to improve regulatory structures, set deterrent penalties, rationalize tax policies, strengthen capacity for more effective enforcement, and educate consumers. This is a matter of urgency and G7 government efforts to fight illicit trade should be considered investments that pay tangible dividends to economic development and global security. The Transnational Alliance to Combat Illicit Trade (www.TRACIT.org) is responding to this challenge by leading business engagement with national governments and intergovernmental organizations to ensure that private sector experience is properly integrated into rules and regulations that will govern illicit trade. TRACIT represents companies and organizations that have a shared commitment to combatting illicit trade and ensuring the integrity of supply chains. Addressing illegal trade – whether that be smuggling of alcohol, illegal logging, counterfeit pesticides or petroleum theft and trafficking in persons – presents common challenges for a growing number of industries. All stakeholders have an interest in stamping out illicit trade; and all benefit from collective action. In this regard, business offers its support to the G7 to advance implementation of its many commitments from past Summits. And, we suggest that Charlevoix presents a timely
opportunity for Leaders to elevate priority attention to illicit trade and work with business to address associated threats to safety, security, cybersecurity, natural resources and economic development. ■ Louis Bonnier is an experienced public policy specialist and international business advocate. Prior to joining TRACIT, he served as Senior Policy Adviser to the International Chamber of Commerce’s G20 CEO Advisory Group, where he crafted business policy positions and helped companies navigate engagement with G20 Leaders through the B20 Summit process. He was also principal author of the annual ICC G20 Business Scorecard, a seminal report evaluating G20 performance against international business policy priorities. Louis also served on ICC’s Business Action to Stop Counterfeiting and Piracy initiative, where he provided strategic policy advise on how to strengthen international engagement and advocacy on Intellectual Property (IP) protection and enforcement. His portfolio focused primarily on strengthening business engagement with key global governance bodies, including G20, BRICS, ASEAN and OECD. Louis holds a Master degree in Law from Stockholm University. Contact: firstname.lastname@example.org
1 WEF. (2015). State of the Illicit Economy. Briefing Papers, October 2015. Cologne/Geneva: World Economic Forum. Retrieved from http://www3.weforum.org/docs/WEF_State_of_the_Illicit_Economy_2015_2.pdf 2 CNBC. (2017, July 3). The illicit economy could be as big as a G7 country: Pro. CNBC. Retrieved from https://www.cnbc.com/video/2017/07/03/the-illicit-economy-could-be-as-big-as-a-g7-country-pro.html 3 G8. (2006). Combating IPR Piracy and Counterfeiting. Retrieved from http://www.mofa.go.jp/policy/economy/summit/2006/ipr.html 4 G8. (2012). Camp David Declaration. Retrieved from https://obamawhitehouse.archives.gov/the-press-office/2012/05/19/ camp-david-declaration, para 9. 5 G8. (2013). Lough Erne Leaders Communique. Retrieved from https://assets.publishing.service.gov.uk/government/ uploads/system/uploads/attachment_data/file/207771/Lough_Erne_2013_G8_Leaders_Communique.pdf, para 40 6 G7. (2015). G7 Foreign Ministers’ Declaration on Maritime Security Lübeck. Retrieved from http://www.mofa.go.jp/files/000076378.pdf, para 9. 7 G7. (2016). G7 Foreign Ministers’ Statement on Maritime Security Hiroshima. Retrieved from http://www.mofa.go.jp/files/000147444.pdf 8 G7. (2016, 27 May). Ise-Shima Leaders’ Declaration G7 Ise-Shima Summit. Retrieved from http://www.mofa.go.jp/files/000160266.pdf 9 OECD/EUIPO (2016), Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact, OECD Publishing, Paris. Retrieved from http://dx.doi.org/10.1787/9789264252653-en. 10 TERA Consultants. (2010). Building a Digital Economy: The Importance of Saving Jobs in the EU’s Creative Industries. Paris: TERA Consultants. Retrieved from https://euipo.europa.eu/ohimportal/documents/11370/71142/Building+a+Digital+Economy,+the+ importance+of+saving+jobs+in+the+EUs+creative+industries 11 Frontier Economics. (2016). The Economic Impacts of Counterfeiting and Piracy. n.p.: Frontier Economics. Retrieved from https://www.inta.org/communications/documents/2017_frontier_report.pdf 12 Hoare, A. (2015). Tackling Illegal Logging and the Related Trade What Progress and Where Next? London: Chatham House. Retrieved from https://www.chathamhouse.org/sites/files/chathamhouse/publications/research/20150715IllegalLoggingHoareFinal.pdf ; Biderman, R and Nogueron, R. (2016, December 9). Brazilian Government Announces 29 Percent Rise in Deforestation in 2016. World Resources Institute. Retrieved from http://www.wri.org/blog/2016/12/brazilian-government-announces-29-percent-rise-deforestation-2016; Plumer, B. (2015, March 2). Deforestation in Brazil is rising again — after years of decline. Vox. Retrieved from https://www.vox.com/2015/3/2/8134115/deforestation-brazil-increasing 13 Cone, A. (2017, February 5). Report: Human trafficking in U.S. rose 35.7 percent in one year. UPI. Retrieved from https://www.upi.com/Report-Human-trafficking-in-US-rose-357-percent-in-one-year/5571486328579/ 14 Kelly, A. (2017, September 19). Latest figures reveal more than 40 million people are living in slavery. The Guardian. Retrieved from https://www.theguardian.com/global-development/2017/sep/19/latest-figures-reveal-more-than-40-million-people-are-living-in-slavery 15 Desjardins, J. (2017, May 7). Fuel theft is a big problem. Business Insider. Retrieved from http://www.businessinsider.com/ fuel-theft-is-a-big-problem-2017-5 16 Scott, A. (2016). How Chemistry is Helping Defeat Fuel Fraud. Chemical & Engineering News, 94(5), pp. 20 – 21. 17 Euromonitor International. (2018). Illicit Trade in Tobacco Products. London: Euromonitor International. Retrieved from http://www.euromonitor.com/illicit-trade-in-tobacco-products/report 18 Michalopoulos, S. (2017, February 7). EU anti-fraud official: Tobacco smuggling is ‘major source’ of organized crime. EURACTIV.com. Retrieved from https://www.euractiv.com/section/trade-society/interview/olaf-official-tobacco-smuggling-major-source-for-organised-crime/ 19 PWC (2016). Fighting $40bn food fraud to protect food supply. Press release. Retrieved from https://press.pwc.com/News-releases/ fighting--40bn-food-fraud-to-protect-food-supply/s/44fd6210-10f7-46c7-8431-e55983286e22 20 OECD. (2017). Integrity in customs: taking stock of good practices. Paris: OECD Publishing. Retrieved from http://www.oecd.org/gov/ethics/G20-integrity-in-customs-taking-stock-of-good-practices.pdf 21 OECD. (2018). Governance frameworks to counter illicit trade. Paris: OECD Publishing. Retrieved from http://www.oecd.org/gov/governance-frameworks-to-counter-illicit-trade-9789264291652-en.htm
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G7 Executive Talk Series Branded Story / The Ungasan Clifftop Resort
The Ungasan Clifftop Resort: Exclusivity Up High
mpressively perched high up on the cliffs of Bali’s Bukit peninsula, The Ungasan Clifftop Resort is an exclusive, all-villa destination on the Island of the Gods. A true masterpiece of boundary-pushing design, this cliff-edge resort teeters 50 metres high above the Indian Ocean, fronted by a spectacular collection of architecturally designed villas. Comprised of 7 five-bedroom villas, The Ungasan is widely recognised as Bali’s most iconic clifftop resort. Panoramic views of vast ocean meet the absolute luxury of The Ungasan’s five-bedroom abodes, where spectacular infinity pools appear to defy gravity as they stretch out toward the distant horizon. Each five-bedroom villa is set among 2,500 square-metres of manicured gardens, boasting 30 metres of stunning clifftop frontage that’s
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fringed by stylish lounges and pavilions. These expansive outdoor living spaces seamlessly merge with contemporary, open-plan interiors, where five-star luxuries like al-fresco bathtubs and lounge terraces continue to blur the lines between indoor and outdoor living. With privacy and exclusivity at the resort’s core, The Ungasan prides itself on its in-villa experiences, ensuring every guest lives life to the absolute fullest without stepping outside of their own private villa if they so choose. In-villa indulgences range from five-star spa treatments in the comfort of open-air gardens, to gourmet dining experiences like group barbecues and poolside bites for celebratory occasions. The gourmet offerings at The Ungasan Clifftop Resort have been expertly crafted
by acclaimed Australian chef James Viles, owner of the two-hatted Biota Dining in Bowral, New South Wales. This awardwinning chef has brought a wealth of international and local knowledge to The Ungasan’s world-class culinary offerings, particularly within the resort’s in-villa dining experiences, like the daily Morning Harvest breakfast offering and the optional in-villa Biota BBQ. Delivered fresh each day from The Ungasan Kitchen direct to the villas, every guest is treated to the Morning Harvest breakfast spread - a bountiful array of the finest homemade confectionery, pastries, conserves, spreads, cheeses and tropical fruits. Guests can also arrange the exceptional in-villa Biota BBQ; an optional dining experience ideal for clifftop get- togethers or special occasions,
whereby fresh local produce is barbecued poolside and served up in utmost seclusion, overlooking the spectacular panorama. Chef James Viles is also responsible for the refined cuisine at the resort’s signature restaurant, Selatan, serving a refined menu of pan-Asian cuisine. Yet perhaps his most famed culinary contribution at The Ungasan can be found on the seaside-inspired menu of Sundays Beach Club – the resort’s very own beachfront destination. Beautifully hidden at the bottom of the cliffs and tucked away in a pristine white sand bay, Sundays Beach Club is the beating heart of The Ungasan. This multi awardwinning destination has helped shine an international light on the resort’s five-star offerings, drawing in a global audience of luxury aficionados and sun worshippers alike who share a mutual appreciation for private, beachfront hedonism. Whilst Sundays Beach Club is open to the general public, villa guests staying at The Ungasan can enjoy complimentary VIP access to the beach club, including a breathtaking decent down the rugged cliff-face on the
THE GOURMET OFFERINGS AT THE UNGASAN CLIFFTOP RESORT HAVE BEEN EXPERTLY CRAFTED BY ACCLAIMED AUSTRALIAN CHEF JAMES VILES, OWNER OF THE TWO-HATTED BIOTA DINING IN BOWRAL, NEW SOUTH WALES.
resort’s own inclinator. As this open-air carriage reaches the powdery white sands, a sun-soaked day of beachfront extravagance awaits, from bespoke cocktails and sophisticated cuisine from Chef James Viles, to the fully -staffed sunbeds, water- sport attractions and evening bonfires that burn as the sun sets. Complementing The Ungasan’s exclusive experiences and five-star destinations, is the resort’s Balinese hospitality. Centred around a “service from the heart” concept, the passionate team of private butlers and service staff are dedicated to curating a personalised experience for every guest. Be it a special family celebration, a corporate event or a
romantic couple’s escape, Bali’s most stunning clifftop resort is wholeheartedly complemented by exemplary service, firmly positioning The Ungasan at the forefront of Bali’s hospitality industry. ■
The Ungasan Clifftop Resort theungasan.com +62 811 942 1110 email@example.com Jalan Pantai Selatan Gau, Ungasan 80362 Bali, Indonesia
Charlevoix. Canada 2018 ❙ 47
G7 Executive Talk Series LEAD FEATURE
Women and Finance Authored by: Ana C. Rold
To Survive, Cryptocurrencies Ne Despite promising growth cryptocurrency is experiencing many issues the technology sector has already struggled with for years—the gender gap.
ith blockchain technology set to disrupt both the technological and economic world in major ways, cryptocurrency—with Bitcoin leading the pack—may very well become the catalyst by which the digital world transforms real world markets. In fact, a 16-fold increase in value in the last year alone topping out at over $19,500 per Bitcoin demonstrates the frenzied growth the cryptocurrency sector is currently experiencing. Despite this promising growth, however, cryptocurrency is also experiencing many issues the technology sector has struggled with for years, most specifically—the gender gap.
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While Bitcoin users largely remain anonymous, Coin Dance analytics estimates that an overwhelming 95% of users are male, with only 5% female engagement. Why is there such a heavy imbalance between men and women within the cryptocurrency sector? What will happen to the cryptocurrency industry if this gender imbalance continues? And perhaps most importantly, what can be done to attract more women to this important field? First gaining popularity on male-leaning websites such as Reddit and 4Chan and amongst other groups dominated by men such as PC gamers and the cyberpunk community, cryptocurrency began as a hobby that only the technologically savvy initially found interest in. ›
Women and Finance
ed to Embrace a Female Future
IN ORDER TO TRULY UNDERSTAND WHETHER OR NOT CRYPTOCURRENCY WILL BE WORTH THE RISK, IT IS IMPERATIVE THAT MORE WOMEN BECOME INVOLVED AS BOTH INVESTORS AND USERS. Charlevoix. Canada 2018 ❙ 51
G7 Executive Talk Series Women and Finance
ULTIMATELY, WHILE CRYPTOCURRENCY IS PRESENTLY QUITE MALE, WOMEN FROM AROUND THE WORLD ARE WORKING HARD TO TURN THIS BOYS’ CLUB INTO A VIABLE, GLOBAL, LEGITIMATE AND INCLUSIVE CURRENCY.
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› Because of this early wave of men, Bitcoin and other cryptocurrencies had initially earned themselves a “geeky male” stereotype that may have dissuaded those from outside these niche groups—most notably women—from finding interest in the new technology. Since gaining mainstream popularity, however, the stereotype has begun to dissipate as more investors and businesses become interested in the provocative idea of a currency unregulated by any central authority—and yet, women continue to remain strikingly absent in the cryptocurrency investment scene. The behavioral psychology theory that men tend to take more risks than women is one popular explanation for this colossal gender gap in cryptocurrency (rooted in the common belief that men are more likely to take physical and financial risks). However, this willingness towards risk-taking isn’t necessarily a positive attribute. While risk-taking can end in high success, studies show that the form of risk-taking many men ascribe to can actually make them more
predisposed to investing in bubbles—or in other words, if there is a notable absence of women in certain investments, it could mean the investment will not lead to any financial pay-offs in the long run. In order to truly understand whether or not cryptocurrency will be worth the risk, it is imperative that more women become involved as both investors and users. First and foremost, if Bitcoin and other cryptocurrencies do end up stabilizing and becoming major worldwide currencies, half of the population missing from this industry will mean a decrease in the potential value of the currency in the future. Second, from a behavioral psychology point-of-view, experts argue that women possess the kind of qualities that could help assess and mitigate risks associated with uncertain investments like Bitcoin—this includes the theory that women are better communicators than men, and therefore would be able to better communicate with fellow investors on the viability of the cryptocurrency market, their analyses for any potential problems, and
Women and Finance
how best to proceed forward in a more group-oriented way. There is good news—while the gender gap remains large, women have slowly but surely begun to fill it in. With the relatively recent advent of Initial Coin Offerings (ICOs)—which is the means by which funds are raised for a new cryptocurrency venture, similar to Initial Public Offerings (IPOs)— women are seeing a new promising avenue by which to enter the cryptocurrency game. In fact, in 2017, four of the 30 largest ICOs were led by women, with two of these women-led ICOs among the biggest initial offerings ever. Similarly, Coinbase Inc. reports that 46% of their hires in 2017 were women or employees of diverse ethnicities, and many other startup ventures and currency exchanges are beginning to report higher numbers of female hires as well. While the increasing number of females in cryptocurrency is encouraging, nevertheless there is much work needed to be done to make cryptocurrency and blockchain technologies—and Silicon Valley as a
whole—much more inclusive at a faster rate. Fortunately, there are several ways in which the cryptocurrency industry can become more attractive and welcoming to women. First, increasing efforts to expose more young girls to technological fields such as cryptography, coding, and other computer-based skills has the ability to not only help increase female participation in blockchain and cryptocurrency industries in the future, but also the technology sector as a whole. Similarly, increasing financial and business literacy in young girls is extremely beneficial in providing young women with the skills needed to enter any investment or finance pathway they desire, including cryptocurrency. Second, introducing Bitcoin technologies to more female-inclusive industries—such as using Bitcoin to purchase items from an online retail store, or using it in conjunction with social media—would also increase interest in women from around the world. And last, spotlighting women in important positions within the cryptocurrency industry would not only have the ability to
provide role models for any women interested in entering the market, but also demonstrate to men in the industry that there are in fact women present within the industry—and they are already making major waves. Ultimately, while cryptocurrency is presently quite male, women from around the world are working hard to turn this boys’ club into a viable, global, legitimate and inclusive currency. Cryptocurrency’s ability to shape the world economy can only happen with the inclusion of women. ■
Ana C. Rold is Founder and CEO of Diplomatic Courier, a Global Affairs Media Network and the Editor-in-Chief of the G7, G20, and B20 Summit magazines. She teaches political science courses at Northeastern University and is the Host of The World in 2050–A Forum About Our Future. To engage with her on this article follow her on Twitter @ACRold.
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G7 Executive Talk Series Branded Story / CryptoTradia
ryptoTradia is a team of dedicated researchers, analysts, traders, writers and technicians, devoted towards keeping up to date with the crypto industry and bringing the best education for crypto tradia members and the crypto world. Investing in the crypto industry can be very risky. This is what CryptoTradia aims to solve by utilizing the knowledge, wisdom and expertise of a dedicated crypto team. The Three Pillars of CryptoTradia CryptoTradia offers 3 main features to its members: 1. Signals Members of CryptoTradia get unlimited access to premium signals on investing
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opportunities. Our dedicated team of cryptocurrency researchers sort through thousands of cryptocurrencies, carefully examining, investigating and researching them to bring you the best. 2. Pre-sale Deals Being a member of CryptoTradia gives you unlimited access to exclusive content. There are several methods to earn through the cryptocurrency industry, some including pre-sale deals. These are fund raising rounds before the public ICO starts. In a lot of these cases, the investors who join in the pre-sale rounds enjoy exclusive discounts on top of the regular ICO discounts. They also have a guaranteed investment in the project unlike ICO investors who have a chance of missing
out on investing in the project entirely due to the hard cap being reached quick. CryptoTradia offers its members to join in with these exclusive pre-sale deals to turn a profitable investment opportunity into an even more profitable one. 3. CryptoTradia’s Portfolio (Coming later 2018) CryptoTradia is also an ideal solution for the type of investor who doesn’t have time to spend on research and doing quality trades. With CryptoTradia’s portfolio, members can invest and see their money grow by using our dedicated team who execute trades on a frequent basis. The portfolio is transparent and can be seen at any time by investors of this portfolio.
CRYPTOTRADIA EXPECTS OVER 95% OF THESE PROJECTS TO FAIL. CT FOCUSES ON THE OTHER 5% THAT WILL LAST AND ENDURE THE TEST OF TIME.
Who is behind CryptoTradia? We have spoken with the founder of CryptoTradia, Timon Idzinga. What got you into the crypto world? How did you discover Bitcoin? I found out by an article back in 2013. Didn’t realize the disruptive factor of this technology back then. It was 2014 when I really started to jump in Bitcoin and other cryptocurrencies. What does CryptoTradia bring to the crypto industry? One of the main issues I found was the big amount of shady, scam-like projects that would make you lose money very easily, very quickly. A lot of new investors would make the mistake of jumping into these coins hoping to make a quick buck. After a while of investing I surrounded myself with expert traders from traditional industries like stocks and Forex. The methods used in those industries can be applied when investing in cryptocurrencies. I combined the expertise of these individuals and that’s when CryptoTradia was born. CryptoTradia supplies quality information u wouldn’t often find on the free, public forums or groups.It’s not always about finding the right investments but also timing when to take profits from current investments. I remember in 2017 I convinced one of my close friends to immediately take profits on a project after I found out the developers had a big disagreement which would reflect in the charts of that coin. He ended up taking out most of his money and a couple days later the coin fell a staggering 35%. He owes me a beer now for sure! What do you think the future of blockchain looks like? The future of Blockchain looks very bright. I like to call this technology Internet 2.0. It can be applied in pretty much every industry.
It’s more secure, transparent and most importantly, decentralized. We will see a significant growth of the use of blockchain the coming years. Many, many companies are working behind the scenes on enhancing their business model with blockchain and/or tokenization. FUD and FOMO are often widespread, how does CryptoTradia work with these constant market fears? FUD and FOMO are very real in this industry and are real factors to take into consideration when building your portfolio. Due to this being a new industry some investments can grow significantly in a short amount of time which induces FOMO with a lot of new investors. Look at Bitcoin at the end of 2017. A huge price increase resulted in a lot of new investors quickly jumping into bitcoin to ‘avoid missing the boat’. Most of those people are now at a loss on that investment. The team behind CryptoTradia are aware of these risks. Whenever we look at investments, we use FUD and FOMO to our advantage. If there is a widespread FUD prices are generally way down and gives us time to find a good buy price. Once a coin hits a high level of FOMO as we seen with Bitcoin it’s a sign price might collapse very soon. “If everyone is jumping in, it’s time to sell.” CryptoTradia has been known to have a team of dedicated crypto specialists, what keeps your team motivated? The team is motivated because every single member of CryptoTradia means the industry is growing. The more progress flowing into this industry, the greater it grows. Our team focuses on the growth, studying and researching to its core. It’s a means to boost adoption and also protect new investors from falling for scams. Members of the CT team have also lost significant amounts of money
on sophisticated scams and want to protect others for doing the same. Tell us more about your team. The team is constantly growing, we have a strict policy on taking on new members to work with the team. They need to show significant knowledge on the topic and besides that they need to deliver information to us exclusively, so we can check quality and see if their content would be safe for CryptoTradians to work with. We run checks on the person, understanding their natures and intent, which at CryptoTradia, is dedicated towards not only self-profit but the benefit of all individuals connected to our community. With the fiat dollar depreciating, would you recommend crypto in the longrun? I recommend cryptocurrencies to everyone. Will the dollar disappear? Longterm that might happen. There are more and more crypto projects aiming to make it easy to pay for things. Why? A lot of cryptocurrency enthusiasts like the idea of the government not having control on the currency any more. It doesn’t matter if either the government creates the currencies or it would be a currency like BTC. Even just a digital version of the USD is an improvement for many things. No more fake notes, everything is transparent, and every transaction is on the blockchain forever. Several hedge funds, banks, have all gained interest in crypto. How do you see this playing out? Not just banks or hedge funds but several large companies have stepped in as early as 2013 with researching how they can ‘upgrade’ or ‘enhance’ their business model using › Charlevoix. Canada 2018 ❙ 55
G7 Executive Talk Series Branded Story / CryptoTradia
› blockchain. Some banks and hedge funds are slowly starting to invest into the existing cryptocurrencies such as ETH, NEO, XRP which results in some very profitable investment opportunities. This big players often negotiate great buy in prices for new projects that interest them. You see a lot of new projects never reaching ICO stage or with just a low cap that fills up within hours. Private pre-sales are being done more frequently. Hedge funds and VC’s most of the times contribute the required funds for a project to start. ICO’s are merely used as a marketing scheme to attract the general public. This is also why we help CryptoTradians to join in with pre-sale deals, so they have the best rates without having to invest a certain minimum which could be as high as $1m. Many traders and investors are prone to much disinformation, how will CryptoTradia make a difference? Unlike a lot of big groups and communities there are A LOT of people pushing their own project or their own investments and make it sound like the greatest thing. While in the end they just want everyone to jump in so they gain a significant return on investment. This is why we only allow information from our specifically-niche-acquired team within CryptoTradia. Of course you can discuss these articles with fellow CryptoTradians within our website but we won’t allow people with hidden agendas to promote their own projects or projects they are significantly affiliated with. What do you think makes a successful crypto investor? A successful crypto investor is one that is in for the longterm. They should have a wide spread portfolio in different projects that all have very strong fundamentals and must not be scared of significant drops in value of the market. To be successful, you have to look at the cryptocurrency market with a helicopter view where it is now, and where it will move next. One trap new investors fall for is cryptocurrencies that aren’t enhancing a specific business but are merely created for the sake of using new technology. The successful investor has a trusted source of constant information by people he can trust. We increase chances of becoming a successful investor for people who join CryptoTradia. After all the CT team is investing based on the same intelligence as we share with our members! ■ 56 ❙ g20g7.com
One well respected member of the CryptoTradia team has been working hard on supplying a book on cryptocurrencies. Giving the reader a ‘helicopter’ view of the world of crypto. A small part of the valuable content: Bitcoin, The Crypto Revolution and Its Future A CryptoTradia Series “FUD and FOMO are strategical tools used mostly by big pockets (whal es), hedge funds, governments, banks, militaries, secret intelligences and agencies, and non-thinking-masses who pass the fear down the line without a second thought of what they’re even doing. These tools are used to either bring the price down and skyrocket it upwards.” “Trading is no different. You are in a game. There are times when you will come out, guns blazing, locking profits left and right. Then there are times you simply do not know and have no choice but to wait, and finally, there are times when you will lose.” “What matters is – what is, exactly as it is, free from bias and exaggeration in either direction of good and bad, neutrally. Only through the discovery of truth can you make the necessary efforts to make your dreams into reality. Likewise, in crypto, your ability to sort the truth from the untruth will allow you to properly plan and execute your operations.” “Those that can give you the right information should become a part of your sources and they should be well kept.” “There are sources of information that are neutral, truthful and honest, but they are rare. Exceptions do indeed exist and your ability to discover them is of extreme importance in a world that utilizes disinformation.” Bitcoin, The Crypto Revolution and Its Future by Jedi Reach
Branded Story / WAVESWORLD
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WAVES WORLD BELIEVES IN GIVING BACK TO THE COMMUNITY. THAT IS WHY WE WILL BE FORMING THE WAVES WORLD FOUNDATION. IT WILL FOCUS ON INTEGRATION OF BLOCKCHAIN TECHNOLOGY INTO CHARITABLE GIVING.
But that’s not all. Here at Waves World we have a variety of premium features planned. Holders of the Waves World Token will have several options for spending. Soon you may purchase gifts from the Waves World Gift Shop. Do you have your own blockchain project? Waves World Token can be used for our marketing program. Other planned features include Custom Token Airdrops via the Waves World Node. Waves World believes in giving back to the community. That is why we will be forming the Waves World Foundation. It will focus on integration of blockchain technology into charitable giving. 10% of all proceeds from the Waves World Brand will be donated to worthwhile non-profits. We also offer our own Cryptocurrency News Site at BitLiveWire.com. It features all the latest insights and information you need to be a successful crypto participant. Learn about everything from the current state of the crypto craze to price analysis to the growing Ethereum. Check out WavesWorld.io and get ready for the release of our Waves World Token in June. Take advantage of our very popular FREE Cyptocurrency Converter and Blog with fascinating discussions. Use our Token Faucet and follow us on Social Media. Our Waves Platform Cryptocurrency Club on Facebook is a great place to meet other investors, learn more about Waves Platform, and have a fascinating time among people who share your interests. ■ Visit now: https://www.facebook.com/groups/ WavesPlatformCC/ Charlevoix. Canada 2018 ❙ 57
G7 Executive Talk Series LEAD FEATURE
Illicit Finance Authored by: Amanda H. Zeidan
How Blockchain Technology is Changing the Game of Illicit Finance To constrict state-sponsored terrorism, states must improve their use of the tools such as blockchain technology that can identify and stop illicit payments.
o constrict state-sponsored terrorism, states must improve their use of the tools developed to identify and stop illicit payments. Fortunately, a regulatory paradigm shift is taking place in the field of financial technology that has the potential to allow states to do just that. Innovations such as blockchain offer an opportunity to verify political will among partners without incurring political costs. Blockchain is a kind of ledger businesses use to track credits and debits; it serves as a data warehouse of transactions for institutions and companies. In other words, through a series of mathematical formulas, blockchains record who owns what and when. It is the inherent consensus function of a blockchain that creates an agreement among users on order of transactions. In turn, this avoids double-spending and fraud all without needing a third-party, like a bank, to regulate. Notably, in regards to users who don’t trust one another, the distribution of data in a blockchain creates reassurance among regulators and law-enforcement agencies because they allow the instantaneous identification of discrepancies in the record of transactions and verification of users. A blockchain is essentially just the use of a public decentralized ledger, where everybody can see any transfer going back as far as they want. A financial institution could look at all the transfers associated with a particular account and determine if any came from illegitimate or suspicious
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BLOCKCHAIN IS A KIND OF LEDGER BUSINESSES USE TO TRACK CREDITS AND DEBITS; IT SERVES AS A DATA WAREHOUSE OF TRANSACTIONS FOR INSTITUTIONS AND COMPANIES. IN OTHER WORDS, THROUGH A SERIES OF MATHEMATICAL FORMULAS, BLOCKCHAINS RECORD WHO OWNS WHAT AND WHEN. sources, or trace all subsequent transfers leading out of an account to figure out where money goes. This would be a godsend for anti-money laundering/illicit financing compliance—far better than the current system where the money is transferred into or out of your account, but you have no idea where it came from or where it is going. In the creepy world of cryptocurrency, this helps build trust, because you can verify that the person who is promising to pay you a bitcoin has actually received that bitcoin through a previous transfer and has not transferred it to somebody else. The United States needs its partners to take concerns about illicit finance seriously. Usually the authenticity of a partner state’s intent is obvious within an alliance—from
the steps being taken by the government, the type of support it receives to combat terrorist financing, and what it does with that help. However, though policy design receives significant attention, far less emphasis goes to the enforcement of these policies, which often fail to live up to multilateral standards. Confronting the Issues There are two issues when applying a compliance-focused blockchain: identifying the accounts for which money is transferred into and out of, and convincing companies to use blockchain technology. Regarding the first issue, a compliancefocused blockchain would have to make clear who controlled each of the accounts into and out of which funds could be
transferred. This is in contrast to Bitcoin, where all of the accounts are anonymous. In other words, it wouldn’t help you combat money laundering/illicit finance if you knew that account 9234598023 transferred $3,000 to account 432345950 on 9/18/2017. Both 9234598023 and 432345950 could be terrorists, for all you know. Instead, you would have to have a way for 432345950 to publicly register as, say, HSBC. It would require some sort of central registering agency, similar to what we see in social media The second issue poses the question: why would companies use compliancefocused blockchain? Sure, it is good for stopping illicit financing, but that’s in the government’s interest, not the banks’. In the 1990s, NSA created a bunch of encryption technology with backdoors if they ever needed to get in, and then tried to get companies to use it, but failed. There was no reason for anybody to use government technology, because it really just served the government’s purposes and they could just use commercial encryption technology instead. To avoid this in the future, an incentive structure that encourages financial institutions to use compliance-focused blockchain would need to be implemented. This can be done because, technically, agencies like the DOJ, OFAC, and FinCen have the power to go after a company for almost any money laundering or sanctionable activity—in other words, even if you didn’t actually know that you were lending money to an Iranian bank or processing payments for terrorists, they can go after you. DOJ, OFAC, and FinCen use this power to promise leniency in exchange for compliance programs. Taking this one step further, these agencies could use this power to mandate use of blockchain, especially in countries where there is a lot of risk doing business with a country labeled as high-risk and corrupt. So, for example, DOJ, OFAC, and FinCen could leverage compliance by leveling with companies who are dealing with the burden of compliance while simultaneously conducting business with companies labeled high risk because of corruption schemes. Agencies could offer legal relief by essentially saying, “We realize it is easy to accidentally do business with somebody on the SSI or SDN list. But, we won’t prosecute you if you only process payments from these countries through the compliance blockchain account.” Because of the verification procedure
set forth above, the agencies could be sure that all the payments passing through a blockchain were clean, and so they could feel comfortable making this promise of non-enforcement to banks, etc. Implementing Blockchains More explicitly put, blockchains are a cutting-edge tool for implementing foreign policy for two reasons. First, in multilateral agreements where allies need to verify trust among partners, a shared ledger verifies political will without the need to expend leverage by one nation on another. Even if users don’t trust one another, the ongoing verification of transactions deters one user’s ability to act in contradiction. Second, blockchain makes fewer obstacles to implementing foreign policy effectively and cuts out middlemen. A blockchain is a great ledger—unhackable, resilient, permanent—but any ledger is only as good as the parties’ willingness to use it for all their transactions and to put true and correct and complete data into it. Otherwise, it’s an awesome ledger for only those transactions a particular party wants other parties to see (which does not include all those other transactions that party, including a government, doesn’t want other parties to see). So, the issue is not the technology, and financial technology (Fintech) specifically, it’s the will to adopt it and use, and the mechanisms for ensuring that there is no “dark web” of financial data being purposefully kept off the blockchain. Only a wide breadth of partners can audit illicit transactions, and Fintech should not be undervalued in an increasingly commercial regulatory environment. When government officials benefit from illicit activities, as happens in some countries, it contributes to providing terrorists a stable consumer base and allows terrorist financing to be the status quo. Blockchain is one way to account for and constrain this. In the absence of strong tools to prevent illicit finance, enforcement efforts are cosmetic at best. ■
Amanda H. Zeidan is a former Allen W. and Allen M. Dulles Graduate Fellow at Georgetown University, where she studied business and finance, and a former YPFP Middle East Fellow. She currently works for the U.S. State Department. Her opinions are independent of the United States government.
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G7 Executive Talk Series LEAD FEATURE
Women in STEM Authored by: Dr. Carol O’Donnell
Empowering Women through the WiSTEM2D Initiative: A Public Private Partnership If we want to solve the skills gap in STEM, the public and private sectors across the globe—including governments—have to work together to support women on their path to persist in STEM careers.
his past year I served as an outside advisor on a recently released Pew Research Study. This survey, conducted in 2017 and released in January 2018, used a nationally representative sample from the United States to understand the issues facing women in the science, technology, engineering, and mathematics (STEM) workforce. One of the key findings of the report is that while there has been an increased number of women earning degrees and working in the STEM industry, women and men are often at odds over workplace equity. The perceived inequities are especially common among women in jobs who work mostly with men. In addition, the study showed that women in STEM see more gender disparities at work, especially in computer science jobs, in majority-male workplaces, or in jobs that require postgraduate degrees. Global statistics are similar. While the study showed that over one-half of women in STEM jobs have said that they have been discriminated against at work, this feeling is not limited to STEM jobs (the same number of women said this in non-STEM jobs). However, women in STEM positions do feel isolated, are treated as if they are incompetent, believe they have been passed over for more important assignments, denied a promotion, or earned less than men doing the same job.
The study also found that the representation of women in STEM jobs varies widely, with most women in healthrelated jobs and fewer women in engineering and computer science jobs. This statistic is particularly important since the STEM workforce is growing, particularly among computer occupations. And while the share of women in the life sciences, physical sciences, and even engineering has grown (with the latter only growing from 12 percent to 14 percent since 1990), it has gone down for computer science jobs since 1990 (from 32 percent to only 25 percent). Unfortunately, degrees earned do not always translate to job stability. Even if women receive degrees in their field they are not persisting. Women represented 57 percent of all college students in 2013, yet only 29 percent of the science and engineering workforce. Fewer women than men who majored in computer science actually work in computer jobs. Although women have nearly attained equality with men in several formerly male-dominated fields, they remain underrepresented in the fields of STEM. One psychological study argued that one important reason for this discrepancy is that STEM careers are often perceived as less likely than careers in other fields to fulfill communal goals (e.g., working with or
helping other people). The authors believed that such perceptions disproportionately affect women’s career decisions because STEM careers, relative to other careers, were perceived to impede communal goals, even when controlling for past experience and self-efficacy in science and mathematics. Men, however, preferred positions that are “agentic”—offering agency such as power, position, or pay. Yet women who do secure STEM positions find that they are still earning less than 80 cents on every dollar a man earns and 73 percent of the salary of men with professional and doctoral degrees. The role of STEM education Most Americans say that K-12 (ages 5-18) public schools do a good job teaching basics, and preparing students for college. Yet, few Americans give high marks to K-12 education generally and K-12 STEM education specifically. Most Americans see a range of problems in K-12 STEM education including: parents are not involved in supporting schools, students are not willing to excel and lack interest in learning, too much emphasis on state standards, teachers don’t emphasize practical uses of ever day life learning, teachers don’t have up to date curriculum, and teachers don’t use experiential methods of learning to help students think critically and solve ›
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G7 Executive Talk Series Women in STEM
› real-world problems. In order to fulfill he skills gap that we face as a nation, many Americans say that STEM education should be emphasized more in K-12, with a particular emphasis on educating girls and others who are typically underrepresented in STEM fields. The InterAcademy Partnership (IAP) Science Education Programme (SEP), on which I serve, is trying to solve this same problem on a global scale. According to the U.S. Bureau of Labor Statistics, 74 percent of new jobs by 2022 will require computing skills, yet only 40 percent of schools in the US teach computer programming. Our changing world is STEM-dependent. Whether we are learning about population growth, the telecom industry, or global market economies. Each of these areas means that our future workforce will depend on STEM skills, whether we are identifying problems, thinking critically about ways to solve those problems, collecting data, analyzing data, drawing conclusions, communicating findings to others, and applying these findings to new situations. We need to ensure that our K-12 students today are given opportunities in the classroom to behave like scientists, engineers, technologists, mathematicians, manufacturers and designers and to become scientifically literate citizens. Research on the importance of studentteacher demographic match shows that students matched to teachers or mentors who look like them are more willing to perform better on standardized tests and face more favorable teacher perceptions. By increasing the number of STEM teachers and classroom volunteer scientists, engineers, or technologists who are female, we can inspire 62 ❙ g20g7.com
more girls to ultimately enter the STEM workforce. Young girls must be given the opportunity to see themselves in their STEM teachers, classroom volunteers, and other mentors who serve them. Public Private Partnerships In today’s economy a high-quality education is a “prerequisite for success”. Students have to not only master the basics, but become critical thinkers, problem identifiers, and problem solvers. Competitive advantage depends on whether a nation’s students are scientifically literate. As a result, interest has grown in “public-private partnerships” and other forms of multi-stakeholder initiatives as ways to leverage global resources and talents to address education. There are three common components of a public-private partnership. First, it is an arrangement between public and private sectors to deliver infrastructure or services normally provided by the public sector alone. Second, it is characterized by shared goals, a division of responsibilities, continuous public-private dialogues, and supportive policy and institutional framework. Finally, the partnership must go beyond business concerns and extend into all policy areas, including education, health, arts, and culture. Although collaborations between corporations and NGOs are not a new phenomenon, there is a call for both an increase in the number of collaborations as well as an increase in the scale of these efforts. For example, in partnership with Johnson & Johnson (J&J)—a company founded in part by eight trailblazing women more than a century ago and today remains committed
to igniting the power of women to improve human and societal health—three NonGovernmental Organizations (NGOs) (the Smithsonian Science Education Center, Junior Achievement, and FHI360) are working together to help girls of all ages across the globe to stay on the STEM track through the Women in Science, Technology, Engineering, Math, Manufacturing & Design (WiSTEM2D) initiative. The J&J WiSTEM2D Youth Pillar program is aimed at engaging girls between the ages of 5 and 18 across the world through initiatives designed to spark interest in STEM at a young age. Together, we are leveraging the talent and experiences across the private sector provided by employee volunteers to engage young girls in hands-on career-focused STEM2D experiential learning activities developed by the NGOs. Young girls are working directly with female and male employees in STEM2D fields with the hope of sparking their interest and curiosity in the field. To date, after two years of activity, this public private partnership has reached over 50,000 girls (and boys) by engaging their interest in science, technology, engineering and math, manufacturing and design in all aspects of their lives. Ultimately, with the help of two other pillars, we are putting an emphasis on STEM careers, building a pipeline from the early teens through higher education and into the workforce. We are taking concrete steps to support young people, particularly girls, of all ages to pursue STEM through the WiSTEM2D program. While many view these statistics as a “Women in STEM” crisis, we see this as a tremendous opportunity. If we want to solve the skills gap in STEM, the public and private sectors across the globe—including governments—have to work together to engage more young girls (and boys) in active STEM2D learning and support them on their path to persist in STEM careers. ■
As Director of Smithsonian Science Education Center, Dr. O’Donnell is responsible for all operational activities and planning for the unit. With nearly a decade of experience at the U.S. Department of Education and 20+ years of science teaching in K-16 classrooms, Carol has expertise in education policy, professional development, cognition and student learning, curriculum development, and education research.
G7 Executive Talk Series Artificial Intelligence Authored by: L. Y. Pratt
Artificial Intelligence: The Miracle and the Menace AI’s risks are as large as its potential benefits. How can they be avoided?
rtificial Intelligence (AI) may well be the most powerful technology of the 21st century, helping to solve humanity’s most complex unsolved problems: environmental, social, and more. Yet sceptics believe that AI’s risks are as large as its potential benefits. How can they be avoided? And why isn’t the most powerful technology being used more widely today to solve the world’s greatest “wicked” problems? Great technological advances are often a double-edged sword. A backlash follows an initial “honeymoon period”. Unintended consequences that were not immediately obvious during the technology’s infancy become more apparent, and may even overwhelm the initial, benefits. A historical example is the cotton gin, which led indirectly to the U.S. Civil War. The challenge is to iron out the rough edges while preserving the benefits. We have been living through a great technological revolution, driven by the ever-increasing capabilities of information systems, and convergence with communications technology. The byproduct is the widespread availability of unimaginably vast amounts of data. Yet data value is latent at best, unless we have some way to make sense of it. This is where AI fits in: it processes data to produce insights. Yet, today, the “AI honeymoon” is coming to an end, experiencing the first waves of widely recognized unintended consequences. Gathering and analyzing data is, in its way, a new kind of “microscope”, providing insights into human behavior, science, medicine, and more. For instance, a Target grocery store can now famously determine if a girl is pregnant before her parents find out. And the recent controversy around the exploitation of Facebook’s microtargeting capabilities to propagate fake news, with impacts on elections worldwide, raises the prospect that democratic outcomes will be undermined by AI-driven voter-manipulation campaigns. Some even predict that AI poses an existential threat to humanity. So how can we avoid the negatives of AI while maximizing its benefits? Here are some guidelines: Understand that AI today is limited. By far, the majority of successful AI scenarios involve a single “link”. “Here’s a picture of a city street, what does it show?”, “Here’s Joe’s Amazon browsing and purchasing history,
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GREAT TECHNOLOGICAL ADVANCES ARE OFTEN A DOUBLE-EDGED SWORD. A BACKLASH FOLLOWS AN INITIAL “HONEYMOON PERIOD”. UNINTENDED CONSEQUENCES THAT WERE NOT IMMEDIATELY OBVIOUS DURING THE TECHNOLOGY’S INFANCY BECOME MORE APPARENT, AND MAY EVEN OVERWHELM THE INITIAL, BENEFITS.
what new product will Joe he want next?”, “Here’s a voter, what issues are they most interested in?”, “Here’s information about a medical device, when will it fail”? Know that AI is subject to dangerous biases. What if, for example, an AI system were to identify that persons of a certain ethnicity were more prone to violence, and therefore should not be allowed into certain housing projects? This may have nothing to do with the real traits of any particular ethnic group, but rather with unseen idiosyncrasies in the training data. But, the AI system can’t tell the difference. The pattern here is insidious: the correlation between race and violence may be well-established in a given data set, but that doesn’t mean that race is the causative factor for the violence: the cause could be historical events that happen to correlate with race. AI systems do not “understand” the world. They don’t find causal connections, only correlations in the data they are presented with. The solution to endemic violence isn’t found by excluding persons of a certain race, but rather by removing the underlying factors that have disproportionately affected people of a certain race. To do this, the near-term future of AI is to map causal links to form a chain from actions to outcomes, and to show how two correlating things may not cause each other “If I invest $X in police and $Y in the legal system, how will that impact crime?”, “If I visit voters in this neighborhood, how much will that help my candidate to be elected?” And multi-link thinking is essential to solving the next set of hard problems in a complex world. More often than not, these links involve
“soft” factors, like attitude, empathy, morale, hope, and fear. These chains of events often contain loops that build on each other, in “vicious” and “virtuous” cycles, as shown below. For instance: “Money invested in policing and legal services lead to increased trust in the government, which leads to decreased preemptive violence, which leads to social stability, which leads to business investment, which increases the tax base, which gives us more money for policing and legal services.”, “As more and more of our workforce in this area is sick, they are less able to work, decreasing the tax base, and reducing our ability to invest in health care.” AI alone is not able to determine how these cause-and-effect chains fit together. That requires human expertise, in a hybrid “augmented intelligence” scenario. Data today is pervasive, and AI helps brings value to it. “Multi-link” AI—called Decision Intelligence (DI)—solves the hard AI problems. To reap the greatest benefit from AI, while avoiding its negatives, we need to evolve beyond inward-facing, single-link systems, and use technology to model, as well, the complex causal systems in which they function. ■
A 35-year AI veteran, Pratt is Chief Scientist at Quantellia, which builds AI/DI systems worldwide, and is cofounder at winworks. ai, which bridges candidates to their constituents. Pratt was recently recognized as an outstanding Woman Innovator and is known for her pioneering work on transfer learning and decision intelligence.
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G7 Executive Talk Series AI and National Security Authored by: Bailey Piazza
Machine Militaries: The Future of Artificial Intelligence and National Security With global superpowers forging the path, Artificial Intelligence (AI) is fueling the automated arms race. While still young in its development, AI has transformed the international landscape of security innovation.
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AI and National Security
ith global superpowers forging the path, Artificial Intelligence (AI) is fueling the automated arms race. While still young in its development, AI has transformed the international landscape of security innovation. Russia’s military modernization program triggered heavy investment in the automation of its armed forces. The United States Department of Defense inaugurated the Algorithmic Warfare Cross-Functional Team in April 2017 to advance AI technologies in the software of machine weaponry. China released a “new generation of Artificial Intelligence development plan” detailing the government’s thirteen-year strategy to “become the major Artificial Intelligence innovation center in the world.” It is no secret that AI has changed the course of national security as we know it. Machine Militaries In the future, humans will delegate its most dangerous, war-fighting tasks to autonomous technology. While we already see the replacement of humans by machines in life-threatening situations, like Explosive Ordinance Device (EOD) robots detecting and disabling IEDs, or Improvised Explosive Devices, humans are still in control of the situation by maneuvering the robot and making the decisions. However, AI will eventually transform military forces. Autonomous weapons, vehicles, aircrafts and drones will catalyze a shift from manned to unmanned combat missions. The greater reliance on cyber weapons combined with their rapid development and availability will grant smaller nations and non-state actors with less powerful militaries the ability to defend and demand interests while also carrying greater weight in influencing international policies. AI will also be critical in the future of cyber security. Countries will use AI to assess and monitor vulnerabilities in computer systems, continually detecting threats and reinforcing strong cyber defense. Cyber offense will also experience a significant improvement by AI. Nations armed with complex AI cyber weapons, like a machine learning Advanced Persistent Threat (APT) cyber attack, will quickly hunt system weaknesses and execute bespoke hacking and attack campaigns. Ultimately, Artificial Intelligence will usher in an age where military superiority carries no relation to population or economic might.
Artificial Intelligence as National Intelligence The continued development of Artificial Intelligence will significantly impact the way countries collect, analyze, and even generate intelligence. According to a study by Dell EMC Corporation, the data produced by the digital universe will double every three years. Intelligence analysts scouring this infinite sea of information eventually will be aided, or more likely replaced, by AI machinery. The capabilities of AI in intelligence collection and analysis will be unmatched by human potential, like the ability to photograph and analyze Earth’s surface |daily, examining every square foot of the planet every twenty-four hours. AI-aided surveillance will also mean the end of guerilla warfare as terrorist groups or other threatening organizations struggle to leave an invisible digital footprint. Machine learning will offer nations the ability to derive and process unstructured sensor data, amplifying the amount of data captured via Signals Intelligence (SIGINT) and Electronic Intelligence (ELINT). AI will also grant countries the capacity to make hyper-realistic propaganda or execute social engineering schemes, similar to Russia’s social media interference in the 2017 presidential elections. AI-equipped countries will use face and voice mapping, recognition, and editing to create digital puppets. These life-like portrayals of world leaders, diplomats, citizens, etc. spouting engineered messages will continue to make news media indistinguishable from the truth. Lastly, a far greater reliance on cyber in national security will make protecting and collecting sensitive intelligence dramatically more critical. Actors could launch intricate cyber attacks, aiming to hack, damage, collect, and/or sell government secrets and national safety. Automated Economies Artificial Intelligence will thoroughly transform economies as projectors of power. In the future, AI technology will accelerate global innovation and productivity. Scientists from all fields will research, develop, test, and accurately assess hypotheses at a fraction of the time consumed today in the identical process. Machine learning algorithms and mechanical simulations will automatically produce designs, optimizing existing products and creating entirely new inventions.
AI-AIDED SURVEILLANCE WILL ALSO MEAN THE END OF GUERILLA WARFARE AS TERRORIST GROUPS OR OTHER THREATENING ORGANIZATIONS STRUGGLE TO LEAVE AN INVISIBLE DIGITAL FOOTPRINT. Innovation will flourish and a plethora of highest-quality devices will pour into the markets, making technology more accessible and increasing computer literacy nationwide. However, as AI spreads deeper roots into national economies, it will force other jobs out of existence, making thousands of occupations obsolete. Humans will not be able to compete with their computerized opposition. If the future of AI continues down this path, technology will reduce the demand for low-skill labor and obstruct opportunities to retrain, posing devastating consequences to countries’ economies and societies. ■
Bailey Piazza is a Contributor to Diplomatic Courier Magazine.
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G7 Executive Talk Series Bitcoin Authored by: Ana C. Rold
Bitcoin’s Meteoric Rise and the Future of All Industries The wide variety of applications that blockchain and cryptography possess are endless and ultimately bode well for the future of all industries.
018 marks nearly ten years since the creation of Bitcoin, the most popular form of cryptocurrency to have emerged from blockchain technologies. While terms like “Bitcoin,” “cryptocurrency” and “blockchain” were once found only in niche cyberpunk communities, the meteoric rise of Bitcoin in the past year—worth less than one thousand dollars at the beginning of 2017 but topping out at nearly $20,000 by the end of December—has led to not only mainstream fervor surrounding the provocative new form of currency, but also legitimate interest from businesses and investors. Worth over $150 billion as of March 2018 (and once worth over $325 billion just a short few months ago), many are convinced the cryptocurrency industry could hold the answer to several of the problems that have plagued financial institutions for decades. But this optimism often leaves out one crucial aspect of Bitcoin: the volatility that comes with the experimental new territory.
NOT BACKED BY REALWORLD ASSETS SUCH AS GOLD NOR PROTECTED BY ANY CENTRAL AUTHORITY OR REGULATIONS, BITCOIN’S RISING VALUE HAS BEEN BASED LARGELY ON HYPE, WORD OF MOUTH AND SPECULATION. 68 ❙ g20g7.com
Despite its popularity, relatively few people understand how Bitcoin actually works. While Bitcoin and other forms of cryptocurrency didn’t begin to enter mainstream until around 2013, Bitcoin was debuted several years earlier in 2009, by an unknown person or group known simply as Satoshi Nakamoto. Initially gaining popularity amongst technology-focused hobbyists and groups who distrusted centralized governments and banks, Bitcoin began to gain traction as it slowly rose in value, taking off in 2017 before seeing immense fluctuation towards the end of the year. This fluctuation and volatility can be partly attributed to Bitcoin and other cryptocurrencies’ lack of a centralized authority, relying instead on blockchain technology—which is essentially the use of online ledgers written upon by multiple parties (referred to as “miners”) to record each and every transaction ever created—in order to keep track of the who, when, and how of each cryptocurrency transaction. When partnered with cryptography—which can be used to create unique digital keys for each individual Bitcoin to secure its authenticity—blockchain has the ability to create a peer-to-peer system in which authority is decentralized, users can remain anonymous, and the authenticity of each piece of cryptocurrency can be secured. Despite Bitcoin’s lucrative journey thus far, however, several concerns have arisen surrounding its effectiveness and whether or not Bitcoin and other cryptocurrencies can be viewed as legitimate forms of currency moving forward. For example, because the digital currency industry is so new, issues with efficiency have yet to be addressed, with Bitcoin transaction fees currently costing $19 to process in 10 minutes, or $3 if a trader is willing to wait 24 hours. Even more concerning, the limited computing capacity of Bitcoin’s peer-to-peer network makes it so that even with an immense increase in the volume of hardware being used to record Bitcoin transactions in the blockchain, Bitcoin’s network can still only handle 3.3 transactions per second, and doesn’t appear to be speeding up anytime soon. When compared to mega-currency organizations such as Visa—which can process 3,674 transactions per second—it has become apparent that it is the very peer-to-peer nature that Bitcoin was founded upon that is beginning to create barriers to scaling the currency.
Even if Bitcoin were to increase in efficiency, other more social-centered issues such as the gender inequality found within the Bitcoin industry and amongst those investing in cryptocurrency could aggravate many of the gender-related issues we see today, such as the under-representation of women in business and finance. Similarly, the anonymity associated with Bitcoin and its early dealings with illegal circles such as the Silk Road have also created cause for concern surrounding its potential use for illicit activities. India’s central bank, for example, argues that cryptocurrencies like Bitcoin have a strong likelihood of being used as a channel for money laundering and the financing of terrorists; similarly, countries like South Korea are considering regulating or outright banning cryptocurrency due to its association with cyber crime. In most western nations, however, countries like the United States and the United Kingdom are showing more concern towards the potential bubble-like nature of Bitcoin that is showing signs of bursting in the near future—and unlike other financial bubbles in the past, Bitcoin doesn’t have a central authority to protect investors. And perhaps one of the biggest concerns countries and investors alike have with Bitcoin is its speculative nature. Not backed by real-world assets such as gold nor protected by any central authority or regulations, Bitcoin’s rising value has been based largely on hype, word of mouth and speculation. Speculative investors, having seen the continuous rise and fall of the currency in a short span of time, have taken this opportunity to buy significant amounts of the volatile currency; meanwhile, early backers have continued to sit on their Bitcoins in hopes of selling it for a higher price later, and the high demand and short supply of the cryptocurrency has not only reinforced the inflation of prices, but also slowed down the miners’ ability to mine new Bitcoins—meaning that while demand continues to rise, the supply of Bitcoin is slowly coming to a halt, and the Bitcoin industry may eventually crash due to pressure. In the end, while Bitcoin itself is rife with issues surrounding its experimental nature, the blockchain technology and cryptography behind it poses several potential opportunities in both the finance and technology sectors. With cryptography, for example, banks and other financial organizations can look into protecting the authenticity of people’s
BITCOIN BEGAN TO GAIN TRACTION AS IT SLOWLY ROSE IN VALUE, TAKING OFF IN 2017 BEFORE SEEING IMMENSE FLUCTUATION TOWARDS THE END OF THE YEAR. transactions and bank accounts more securely; and with the blockchain, nearly all industries can use the new technology in innovative ways, from supply chain management to quality assurance to smart contracts and even voting. Therefore, while Bitcoin itself will most likely crash unless major changes to the industry are made, the wide variety of applications that blockchain and cryptography possess are endless and ultimately bode well for not only the financial and technological sectors, but for the future of all industries. ■
Ana C. Rold is Founder and CEO of Diplomatic Courier, a Global Affairs Media Network and the Editor-in-Chief of the G7, G20, and B20 Summit magazines. She teaches political science courses at Northeastern University and is the Host of The World in 2050–A Forum About Our Future. To engage with her on this article follow her on Twitter @ACRold.
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G7 Executive Talk Series Digital Diplomacy Authored by: Ana C. Rold
Reshaping Diplomacy for the Digital Age Revolutionary advances in artificial intelligence, virtual and augmented reality and the Internet of Things are beginning to open new avenues into even more interactive public diplomacy campaigns, as well as connect digital diplomacy to the physical realm.
e live in an era of mind-bogglingly easy global connectivity the likes of which has never before been experienced. Thanks to information and communication technologies (ICTs) such as the internet and social media, state leaders and non-state actors are now able to connect with each other, with their citizens, and with people from other countries in a powerful and direct way. This allows for real-time communication and the opening of new dimensions in diplomacy, such as the ability to solve social problems and mediate relations with foreign states. It is easy to see how digital diplomacy as a new discipline— despite the obvious challenges it faces—
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has revolutionized public discourse in the 21st century. Leaders now talk directly to their people. So, what does this mean for the future of public diplomacy? While there are many definitions of digital diplomacy, at its core digital diplomacy is simply the use of social media and other new technologies as a tool to further the aims of traditional diplomacy. In this way, states and state actors can use social media platforms— such as Twitter, Facebook, YouTube, Instagram, Periscope, and Snapchat—to communicate and disseminate ideas to their constituents, foreign peoples, other state actors and non-governmental organizations, as well as further the aims of public policy
and manage the spread of information and knowledge and their own “social media brand”. Nations can use digital diplomacy not only as a means by which to communicate their ideas but also as a way to help citizens through the coordination of disaster response efforts, for example, such as Belgium’s Twitter account @CrisiscenterBE, which is used specifically to communicate with citizens on potential terrorist attacks and natural disasters as they unfold in real time. Similarly, digital diplomacy can be used as a means to overcome traditional limits of diplomacy and bring about social change, such as the Virtual Embassy Iran, which
was launched by the U.S. State Department in order to facilitate interactions between the U.S. and Iranian citizens due to a lack of traditional communication lines between the two. Ultimately, digital diplomacy is not a new form of diplomacy—it is traditional diplomacy with a new toolset. A recent Twiplomacy Study found that there are currently 178 countries—or a whopping 92 percent of all UN member states—that are represented by heads of state and foreign ministers on Twitter, with a grand total of 356 million followers between these accounts. In fact, the study found that out of all social media platforms, heads of state and government had the biggest presence on
Twitter with a total of 856 official accounts, with Facebook and Instagram as the second and third most popular platforms, respectively. Unsurprisingly, U.S. President Donald Trump’s often-controversial Twitter account (@RealDonaldTrump) is the most followed world leader in 2017 with over 45 million followers, followed by Narendra Modi, Prime Minister of India (@NarendraModi, 37.5 million followers) and Pope Francis (@Pontifex, 33 million followers). The number of followers a leader enjoys does not necessarily translate into effective digital diplomacy strategies. For example, while President Trump may have the most Twitter followers, he follows very few other world leaders and has little engagement with his followers. The European Union’s External Action Service (@EU_EEAS) and the Foreign Ministry of Russia (@MFA_Russia), on the other hand, are mutually connected to 128 and 127 other world leaders and government institutions, respectively, while 95 percent of tweets the government of The Netherlands (@Rijksoverheid) and the government of Nepal (@Hello_Sarkar) send out are direct replies to their followers. Indeed, these Twitter accounts and more demonstrate that engagement is crucial to effective digital diplomacy. For example, tagging Twitter users in pictures, a method used by the Russian Foreign ministry and the French government, is an effective way to ensure that relevant stakeholders are notified about important issues and have the ability to increase engagement surrounding the issue, either through retweets or replies. Conversely, diplomats can also use social media to connect to non-state actors, such as Israel’s frequent use of direct message campaigns to connect to key influencers and request certain tweets to be amplified by these followers, in addition to their #IsraelRetweetedMe campaign, which asks followers to discuss Israel in a positive light in order to be retweeted by Israel’s official Twitter accounts and spotlight these specific Twitter users. Despite the opportunities digital diplomacy presents, there are also major challenges to be dealt with, key among them: contesting realities. During the beginning stages of the Crimean crisis, for example, Russian digital diplomacy accounts denied the presence of Russian troops in Ukraine—while the United States digital diplomacy accounts argued the opposite. Similarly, the simultaneous insistence by Russian Twitter accounts that
DESPITE THE OPPORTUNITIES DIGITAL DIPLOMACY PRESENTS, THERE ARE ALSO MAJOR CHALLENGES TO BE DEALT WITH, KEY AMONG THEM: CONTESTING REALITIES.
Aleppo has been liberated while UK Twitter accounts argued that Aleppo remained in a state of emergency has led to confusion on both sides and a decrease in trust by followers of both accounts. This confusion, perpetuated by real-time rapid spread of misinformation and the creation of conflicting realities, demonstrates the very mechanisms that make digital diplomacy so successful also have the potential to stifle and block off authentic communication. While many challenges exist due to the novelty of digital diplomacy—former U.S. President Barack Obama was the first leader to create an official presidential Twitter account as recently as 2007—the possibilities of digital diplomacy have only just begun. In addition to social media, revolutionary advances in artificial intelligence, virtual and augmented reality and the Internet of Things are beginning to open new avenues into even more interactive public diplomacy campaigns, as well as connect digital diplomacy to the physical realm. Indeed, crude AI systems such as chat-bots are already being implemented in an effort to assist with registration processes, visa applications and legal aid for refugees, and Internet of Things capabilities such as satellite remote sensing have been able to aid the World Health Organization and other diplomats in analyzing and implementing strategies for natural crises and disasters, such as the Ebola outbreak in 2014. ■
Ana C. Rold is Founder and CEO of Diplomatic Courier, a Global Affairs Media Network and the Editor-in-Chief of the G7, G20, and B20 Summit magazines. She teaches political science courses at Northeastern University and is the Host of The World in 2050–A Forum About Our Future. To engage with her on this article follow her on Twitter @ACRold.
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G7 Executive Talk Series Branded Story / Rivetz
Cybersecurity: Success Within Reach
s the G7 leaders gather to exchange ideas, how to protect democracy and their citizens from cyber attacks will certainly be a hot topic. Governments around the world need to protect national secrets while safeguarding the personal data of their vast workforces. For instance, the U.S. Department of Defense has 3.2 million employees – making it the largest employer in the world. When it comes to cybersecurity, there have been far more failures than successes to date. The U.S. government fell victim to the largest data breach in the country’s history not so long ago. The Office of Personnel Management is, more or less, the human resources department for the federal government, as they oversee the legal details of hiring, promotions, benefits and pensions for millions. The data breach began with the attackers stealing the agency’s master list of credentials: usernames and passwords. They used these credentials to access the system and implant malware to steal
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sensitive information. The attack compromised data from background checks on current, former and prospective federal employees. Information included applicants’ personal finances, past substance abuse, psychiatric care and other troublesome personal details. In addition, 4.2 million past and present employees’ personnel files were put at risk, along with 5.6 million images of employees’ fingerprints. The attack raised deep concerns about government security, and inflicted irreparable damage to agency’s reputation. Quite simply put, the present system of password security has failed. New, devicecentric solutions using the blockchain offer the greatest defense against increasingly sophisticated cyber attacks. Perhaps the greatest vulnerability in the password-based system is the user, who often chooses weak passwords or re-uses them on multiple accounts. Probably the biggest reason is that we just don’t like passwords.
More than 80 percent of us would find it convenient if we never had to use passwords again, according to a Rivetz-commissioned survey of 1,000 U.S. adults. Even if we were better about our password creation and use, hackers still wouldn’t have too difficult a time overcoming that security layer. Many security firms are experimenting with blockchain solutions, but Rivetz has a holistic approach that offers tremendous promise. The company combines the Trusted Execution Environment (TEE) already built into the hardware of billions of devices with the immutable record-keeping of blockchain technology to eliminate our reliance on usernames and passwords. Blockchain is a distributed ledger technology that employs a network of peers and cryptographic algorithms to ensure the ledger cannot be altered. Each transaction in the ledger is signed with a private key that gives the signer governance over that transaction, for whatever purpose.
RIVETZ TECHNOLOGY PROVIDES HARDWARE-LEVEL SECURITY BY FURNISHING DEVELOPERS WITH ACCESS TO THE TRUSTED EXECUTION ENVIRONMENT. THE TEE IS AN EMBEDDED, ISOLATED AND MEASURED COMPUTER ENVIRONMENT SEPARATE FROM THE OPERATING SYSTEM. That purpose could be to transfer funds or record arbitrary data. While the blockchain is immutable and censorship-resistant, the biggest challenge in decentralized cybersecurity remains that there is no way to prove any individual transaction was what the user intended. If an attacker steals your private key and conducts a transaction, there is no way to prove that the attacker – and not you – intended the transaction. At the present moment, we do not store evidence of whether a user intended and conducted the transaction that’s recorded on the blockchain. A transaction with proof of provenance or intent is much more valuable than one without such controls. As we continue to improve the information stored on the blockchain, the value of that information increases. Rivetz dramatically increases the quality of that data by ensuring the information recorded was intended by the user – this is called attestation. Without attestation, the blockchain could become
a database of untrue information that could never be deleted. Rivetz accomplishes attestation by ensuring a user’s devices are in a “known” condition by performing regular health checks and recording each device’s integrity on the blockchain, so future health checks can be compared against that baseline. This establishes that those devices have not been maliciously – or accidentally – altered. A “known” condition means that the device hardware is in the same state as when it was last tested. Any factor out of place is a red flag indicating that an attacker may have compromised the device since its last recorded condition. The immutability of past health checks guarantees that Rivetz can detect if someone’s tampered with your device. Rivetz technology provides hardware-level security by furnishing developers with access to the Trusted Execution Environment. The TEE is an embedded, isolated and measured computer environment separate from the
operating system. The problem is, most applications don’t take advantage of the TEE because it isn’t simple to access – developers don’t have the tools to utilize it, and also often lack the understanding of its value for providing security to users. By provisioning digital transactions through the TEE, Rivetz assures the user’s private keys cannot be altered or stolen if malware were to infect the operating system. By keeping the keys in the hardware, they remain safe from malware or viruses that may affect the device’s software. Attested transactions that are recorded on the blockchain provide governance and auditability. The TEE is what connects a human and their intents with the blockchain (and, for that matter, with the rest of the digital world). Conducting and attesting those transactions isn’t free, however. That’s where the Rivetz’s cybersecurity utility token, the RvT, comes in to provide the mechanism to leverage the resources in that ecosystem. › Charlevoix. Canada 2018 ❙ 75
G7 Executive Talk Series Branded Story / Rivetz
INSTEAD OF HAVING TO TYPE IN A USERNAME AND PASSWORD INTO EACH APP, RIVETZ TECHNOLOGY WOULD ALLOW YOUR APP TO GENERATE A KEY AND ENCRYPTION WITHIN THE DEVICE THAT PAIRS YOU WITH THE WEB SERVICE.
› Together, the blockchain and the TEE make possible a streamlined approach to how our devices carry out transactions and connect to services via the Internet. The RvT was designed to do just that: create seamless and verifiable security controls for everything a device is instructed to do. The RvT is an
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ERC20 token managed on the Ethereum blockchain and provides a new economic mechanism for delivering automated deviceto-device payment for the consumption of cybersecurity services and delivery of software and service licenses. These tokens manage and compensate
internal and external cybersecurity controls enforced by the trusted execution capabilities of that device, providing a source of payment that is bound by the owner’s policy, assuring that only approved service providers are paid. The user sets the policy for how the token will execute your digital transactions – for example, the RvT token can ensure that you’re only accessing your bank account when you’re in certain geographic locations, or that your spouse needs to approve a withdrawal of more than $10,000. The RvT token seamlessly adds a crucial layer of protection to digital transactions and authentication across devices, brokering the relationships between devices and cloud services. This device-centric, blockchain-based cybersecurity model provides a safer and more seamless experience for mobile, IoT and the cloud. The present system is built with the mindset that we are a network of users with devices as an attribute. In reality, we are the opposite: we are a network of devices with users as an attribute. Our mobile phones are incredibly personal devices – they are practically extensions of ourselves. According Rivetz’s study, more than 92 percent of respondents always bring their smartphones with them when they leave home, citing a need to have their smartphone with them at all times. Our devices are so personal that more than 90 percent of respondents believe it’s important to be
able to prevent someone from accessing the content on their smartphone if it were lost. Almost everyone can relate that sense of panic when they think they’ve lost – or even forgotten – their smartphone. Our personal devices are essentially our digital identity, so we must build networks accordingly. In a world where mobile devices are an extension of the user, a user’s collection of devices comprise their digital identity. The vast majority of people do not access their online information and services from devices they don’t own. In fact, more than 71 percent of those surveyed by Rivetz feel like their data isn’t secure if they sign in on from devices they don’t own. People are so strongly connected to their smartphones that 64 percent of respondents were willing to allow a friend to borrow their car for 24 hours, but nearly the same number (60 percent) wouldn’t allow a friend to borrow their smartphone for the same length of time. The Rivetz device-centric model is structured so a user’s data can only be provisioned from their trusted devices. This model gives access to a user’s digital information and services from only their trusted devices, making it very difficult for nefarious parties to gain access. Simplicity is the key to mass adoption of this new device-centric model. Placing the onus on users to remember passwords is a major security vulnerability. We know that users don’t want to have to remember or create username and passwords; this gives governments, organizations and developers alike an opportunity to provide a new paradigm of service quality. Instead of having to type in a username and password into each app, Rivetz technology would allow your app to generate a key and encryption within the device that pairs you with the web service. All you have to do is log into your device, then the device wil know which services you belong to and grant you access – provided you’ve set a policy that allows you to use that service at that time. You won’t have to remember passwords for every service. The ease of this device-centric system can be likened to the way a mobile phone “roams” from network to network. When you make a call on your mobile device, you’re not asked to enter a username and password. Let’s say you’re making call while on a road trip; your mobile device will connect to different networks or “roam” in order to continue your call – it doesn’t disconnect your call and ask
you to log in every time it has to switch networks. Roaming has made it possible for you to have a seamless relationship across calls. Similarly, Rivetz allows users to “roam” to different web services carried out from your devices, allowing us to seamlessly interact across services and create a more
frictionless experience for users. As cyber attacks increase in frequency, sophistication and ferocity, governments are exploring new paradigms to combat these threats. A viable solution may already exist within the billions of devices we already own combined with the blockchain’s transformative capabilities. ■
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FROM RISK TO TRUST
A GATEWAY TO
meaningful experiences S
un, crystal clear water, swaying palm trees and sugary white sands—is available in abundance in the Dominican Republic’s Cap Cana. The exclusive community on the island’s easternmost tip has become legendary for beachfront beauty, and some of the most desirable resort experiences in the Caribbean today. The premier vantage point from which to enjoy the sweet seduction of Cap Cana is the Relais &
Châteaux property Eden Roc at Cap Cana, a collection of luxury suites in a dreamy setting. Surrounded by lush greenery, awe-inspiring panoramas, verdant gardens and lagoon-style pools, this resort is one of the most sought-after spots in the entire region. Discover a gateway to meaningful experiences, an intimate hideaway where senses are awakened, spirits are restored and celebrations are elevated.
EUROPEAN EUROPEAN GLAMOUR, GLAMOUR, CARIBBEAN CARIBBEAN SCENE: SCENE: THE THE SENSUAL SENSUAL ALLURE ALLURE OF OF A A TROPICAL TROPICAL ESCAPE ESCAPE At At Eden Eden Roc, Roc, the the very very private private and and posh posh accommodations accommodations are are at at the the heart heart of of the the resort’s resort’s fundamental fundamental promise promise to to its its visitors: visitors: cherished cherished intimacy intimacy for for all. all. Thirty-four Thirty-four luxurious, luxurious, stand-alone stand-alone suites suites feature feature vaulted vaulted ceilings, ceilings, floor-to-ceiling floor-to-ceiling windows windows and and generous generous interiors interiors in in addition addition of of the the twenty-six twenty-six oceanfront oceanfront suites suites and and their their romantic romantic beachside beachside settings. settings. Expansive Expansive verandas verandas or or patios patios and and private private
A AGASTRONOMIC GASTRONOMICJOURNEY JOURNEY European European glamour glamour with with aa Caribbean Caribbean twist: twist: that that phrase phrase not not only only captures captures the the spirit spirit of of the the hotel, hotel, but but of of its its signature signature fine fine dining dining restaurant, restaurant, Mediterraneo. Mediterraneo. Italian-born Italian-born Chef Chef Gianluca Gianluca Re Re Fraschini Fraschini calls calls on on his his travel travel and and cooking cooking experiences experiences in in Europe Europe to to provide provide authentic authentic flavors flavors and and an an exceptional exceptional dining dining experience experience combining combining Continental Continental techniques techniques with with the the freshest freshest Dominican Dominican produce produce and and seafood seafood to to create createsome someof ofthe thefinest finestfood foodin inthe theCaribbean. Caribbean.
pools pools extend extend the the living living spaces spaces and and complete complete the the tableau. tableau. When When it’s it’s time time to to leave leave the the beautiful beautiful digs, digs,aagolf golfcart cartisisat atyour yourdisposal. disposal. More More like like aa private private village village than than aa hotel, hotel, the the “European “Europeanglamour glamourwith withaaCaribbean Caribbeantwist” twist”resort resort has has facades facades painted painted in in vibrant vibrant colors colors inspired inspired by by Dominican Dominican country country houses. houses. The The architecture architecture incorporates incorporates traditional traditional elements elements and and influences. influences.
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Romantic Romantic dinners dinners can can also also be be enjoyed enjoyed in in the the Garden Garden of of Eden, Eden, Eden Eden Roc’s Roc’s lush lush natural natural grotto, grotto, or or in in the the cozy cozy wine wine cellar, cellar, (La (La Cava). Cava). For For these these occasions, occasions, allow allow Chef Chef Re Re Fraschini Fraschini to to tailor tailor aa special special menu menu just just for for you, you, with with wine wine pairing pairing from from Mediterraneo’s Mediterraneo’s master master sommelier. sommelier. To To dine dine at at La La Palapa Palapa at at the the Eden Eden Roc Roc Beach Beach Club Club isis to to be be surrounded surrounded by by 360-degree 360-degree views views of ofthe theCaribbean Caribbeanon onone oneside sideand andthe thepicturesque picturesque 18-hole 18-hole Punta Punta Espada Espada golf golf course course on on the the other. other. Here, Here,the thespotlight spotlightisison onseafood, seafood,and anddelectable delectable red red snapper snapper isis king. king. To To savor savor itit like like the the locals, locals, ask askfor forititboca bocachica chicastyle stylewith withaaside sideof ofplantains. plantains. The The oceanfront oceanfront BLUE BLUE Grill Grill ++ Bar Bar at at the the Eden Eden Roc Roc Beach Beach Club Club serves serves an an array array of of healthy, healthy, international international dishes. dishes. Lunch Lunch on on the the grill grill terrace terrace isis casual; casual; sample sample the the rustic rustic brick brick oven oven pizzas pizzas created created by by the the Neapolitan Neapolitan pizzaiolo. pizzaiolo.
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Its Its intensely intensely blue blue color color isis derived derived from from the the deeply deeply pigmented pigmented minerals minerals below. below. Named Named the the Best BestGolf GolfCourse Coursein inthe theCaribbean Caribbeanand andMexico, Mexico, intricate intricate layout layout of of the the Jack Jack Nicklaus Nicklaus Signature Signature Punta PuntaEspada, Espada,engages engagesgolfers golferswith with breathtaking breathtaking scenery scenery of of cliffs, cliffs, beaches beaches and and waterfalls, waterfalls, while while challenging challenging them them with with every every swing swing and and putt. putt. You’re You’realso alsosteps stepsfrom fromthe themarina marinaand andexcursions excursions to toscenic scenicSaona SaonaIsland Island(sail (sailin inyour yourprivate privateyacht yacht and andbring bringaachef chefalong alongto tocreate createaalobster lobsterlunch lunchon on your yourown own private privatebeach) beach)and andAltos AltosDe DeChavón, Chavón, aa replica replica of of aa 16th 16th century century medieval medieval Italian Italian artists’ artists’ village village with with an an archaeological archaeological museum. museum. History Historyaficionados aficionadoscan canalso alsovisit visitthe thewalled walledand and cobblestoned cobblestoned historic historic area, area, the the Zona Zona Colonial Colonial of ofSanto SantoDomingo Domingoone oneof ofthe theoldest oldestcities citiesin inthe the Americas Americas located located only only two-hours two-hours car car ride ride away away from from Eden Eden Roc Roc at at Cap Cap Cana. Cana. Admire Admire buildings buildings from from the the 1500s, 1500s, including including Cathedral Cathedral Santa Santa María María lala Menor, Menor, the the first first cathedral cathedral built built in in the the New New World. World. Fitting Fitting for for aa place place where where heavenly heavenly native native rum, rum, chocolate chocolate and and coffee coffee scent scent the the air. air. The The Dominican Dominican Republic Republic isis aa collection collection of of landscapes landscapesbegging beggingto tobe beexplored. explored.Discover Discoverthe the Dominican Dominican Republic Republic and and Caribbean Caribbean majestic majestic from from the the sky sky and and embark embark on on aa helicopter helicopter or or aa private private jet jet tour tour direction direction Caribbean Caribbean pristine pristine beaches beaches or or cascading cascading waterfalls. waterfalls. Unwind Unwind the the Eden EdenRoc Rocway. way.
G7 Executive Talk Series Branded Story / TCG Authored by: Neil Hare
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Taiwan Matters: The G7 Must Consider International Recognition, Increased Trade As all members of the G7 rethink and contemplate their trade relationships with each other and the world, it is important to remember that Taiwan matters, and should be prominently considered for enhanced commerce and international recognition.
s the United States, the United Kingdom, Japan and all members of the G7 rethink and contemplate their trade relationships with each other and the world, it is important to remember that Taiwan matters, and should be prominently considered for enhanced commerce and international recognition. The Asian region is a focal point for many top issues in the world today, most notably perhaps the denuclearization of North Korea, and the upcoming talks between U.S. President Donald Trump and Korean leader Kim Jong Un. Furthermore, almost everything in the region is seen through the lens of the Chinese and their role in negotiations with Pyongyang, as well as their trade relationship with the United States.
With recently announced tariffs on Chinese goods by the Trump Administration, and retaliatory tariffs by China, the stakes have gone up both economically and strategically. On April 18th China also engaged in war games in the Straight of Taiwan aimed at sending a message to Taiwan and its close U.S. ally. Therefore, the island nation of Taiwan, which is not recognized diplomatically by the G7 countries or any major world powers for that matter, sits right in the middle of a very high stakes poker game. And as in poker, bluffing can only take you so far. Having the best cards produces the winning hand. To that end, it’s important to look at what cards Taiwan holds – both economically and its stature as a trading partner. › Charlevoix. Canada 2018 ❙ 83
G7 Executive Talk Series Branded Story / TCG
› With a population of only 25 million people, Taiwan boasts the 11th largest economy in the world. According to the United States Trade Representative (USTR), Taiwan was the U.S.’s tenth largest goods trading partner in 2016, with $65.3 billion in total (two way) goods traded (the most current data available). Trade in services with Taiwan totaled $19.4 billion in 2016. Similarly trade between the European Union and Taiwan has increased more than eightfold over the past two decades. In 2011, Taiwan was the EU’s seventh largest trading partner in Asia. The top export categories in 2016 included machinery ($5.4 billion), aircraft ($3.2 billion), optical and medical instruments ($1.8 billion) and organic chemicals ($824 million). Taiwan also represented the United States’ 7th largest agricultural export market, with leading domestic export categories including soybeans, corn, beef, wheat and fruit. While the United States has a clear interest in a strong and independent Taiwan, all other
WHILE CHINA MAY CONSIDER TAIWAN AS PART OF ITS OWN NATION, THE INTERNATIONAL COMMUNITY, ESPECIALLY THE UNITED STATES, WILL NOT ALLOW CHINA TO INVADE OR ABSORB TAIWAN IN ANY MANNER.
G7 nations share a similar economic interest in this strategic ally. Despite these strong relationships, the international community still refuses to formally recognize Taiwan, and keeps it in a state of diplomatic limbo, where it has been since the early 1950’s. While China may consider Taiwan as part of its own nation, the international community, especially the United States, will not allow China to invade or absorb Taiwan in any manner. One major organization in Taiwan, the Taiwan Civil Government (TCG), calls for stronger economic ties with the United States, all G7 nations, and the international community. Led by Dr. Roger Lin, the TCG wants to build on these strong ties and trading relationships to enhance the stability of Taiwan and ensure lasting peace in the region. The recently enacted U.S. law “The Taiwan Travel Act”, opened the channels for greater U.S. involvement in Taiwan through more official travel between the island nation and U.S. government leaders. In addition, on April 19, four U.S. Senators, Republicans and Democrats including James Inhofe (R-OK) and Bob Menendez (D-NJ), introduced legislation calling for the Secretary of State to develop a strategy to help Taiwan regain observer status with the World Health Organization. The TCG supports these actions and looks forward to being an even more active participant in enhanced trade relations with the U.S. and the G7 nations. With over 70,000 members, including business leaders and representatives from all sectors of Taiwan’s community, the TCG seeks a diplomatically recognized Taiwan, and an even stronger relationship with the United States and the G7 nations. As politics, trade and diplomatic issues continue to heat up in that region, the world has a strong partner in the TCG and Taiwan. And, it matters. ■ Editor’s Note: This material is distributed by Global Vision Communications on behalf of the Taiwan Civil Government. Additional information is available at the Department of Justice, Washington, DC.
Neil Hare is President and CEO of Global Visions Communication, a Washington, DC-based PR and Marketing Agency. He is a writer, creative think tank and an expert on communications and business strategy.
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Trade with Taiwan Matters. So does international recognition. As the United States, the United Kingdom, Japan and all members of the G-7 rethink their trade relationships with each other and the world, it is important to remember that trade with Taiwan matters, as does international recognition. With over 70,000 members, including business leaders from all sectors, the Taiwan Civil Government (TCG) seeks a diplomatically recognized Taiwan with an even stronger relationship with the United States. As politics and foreign policy in Asia heat up, the world has a strong partner in the TCG and Taiwan. And, it matters.
TAIWANâ&#x20AC;&#x2122;S ECONOMY AND STATURE
USâ&#x20AC;&#x2122;s tenth largest goods trading partner with $65.3 billion in total goods traded.
11th largest economy in the world
Trade between Taiwan and the EU-28 reached US$ 48.8 billion in 2016, an increase by 5,0 % in comparison to 2015
Trade in services with Taiwan totaled $19.4 billion in 2016.
Materials distributed by Global Vision Communications on behalf of the Taiwan Civil Government. | Additional information is available at the Department of Justice, Washington, DC.
G7 Executive Talk Series Cybersecurity and Women Authored by: Heather Stratford
One of Cybersecurityâ&#x20AC;&#x2122;s Most Alarming Breaches: A Lack of Women The world is changing for both men and women and yet women are underrepresented in this critical area of our new economy.
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Cybersecurity and Women
he world is changing at an alarming rate because of rapid advancements in technology. And because technology is so powerful and pervasive, cybersecurity is an essential part of this new world. The world is changing for both men and women and yet women are underrepresented in this critical area of our new economy. The global economy is struggling under the cost of cybercrime, which reached $450 billion in 2017. Meanwhile, the shortage of trained cybersecurity professionals continues to grow because of increased demand and a skills-gap. Women are particularly needed in the field of Cybersecurity both from a numbers perspective as well as because of the unique and yet-to-be discovered ways which with they contribute to the industry. Women are needed to help fill the immediate needs, yet the number of women in the field has been shrinking since the 1980’s. This is a worldwide problem. For example, only 6% of women in Japan choose to enter Information and Communication Technologies as a field. The steady decrease of women in tech fields seems counterintuitive compared to the increasing numbers of women in other highly skilled industries. This is not to say that that other highly skilled professional categories
are not experiencing their own challenges. Female surgeons in the United States, for example, represent 19.2% of the overall surgical profession. From 1970 to 2008 the number of women surgeons has only increased by 7%. Some might find these numbers discouraging and indicative of our lack of progress. However, in the cybersecurity field, even this small percentage would be considered a significant and dramatic improvement. Currently, women in North America comprise 30% of the total workforce in computer technology. However, like surgeons, the percentage of women as cybersecurity professionals is much lower in comparison to the larger field of technology. Women represent only 11% of cybersecurity professionals worldwide. According to the Global Information Security Workforce Study women in this field represent 7% in Europe, 5% in the Middle East, 8% in Latin America, 9% in Africa, 10% in Asia, and 14% in North America. These small numbers underline the decrease of women in the computer science field in general. In 1984 about 37% of computer science majors in the U.S. were women. ›
THE GLOBAL ECONOMY IS STRUGGLING UNDER THE COST OF CYBERCRIME, WHICH REACHED $450 BILLION IN 2017. MEANWHILE, THE SHORTAGE OF TRAINED CYBERSECURITY PROFESSIONALS CONTINUES TO GROW BECAUSE OF INCREASED DEMAND AND A SKILLS-GAP. Charlevoix. Canada 2018 ❙ 87
G7 Executive Talk Series Cybersecurity and Women
› Today that number is around 18%. Since the advent of the personal computer, the number of women in technology has diminished considerably. These statistics by themselves are eye opening, but in conjunction with other population statistics, they point to a critical situation. In 1984, 37% of computer science majors were women, and a total of 15.7% of the female population of the United States possessed a bachelor’s degree or more. At the same time 22.9% of the U.S. male population had a bachelor’s or postgraduate degree. In 2017, the statistics changed to 34.6% of women and 33.7% of men having obtained at least a four-year degree. This means that while the numbers of women entering and graduating from higher education increased and eventually outpaced men since 1984, the number of women entering the workforce with a computer science degree declined. The inverse of this statistic occurred for the male population. The percentage of men in the population with at least a four-year degree did not accelerate at the same pace as women, but the percentage of men in computer science went up. Leaders in the IT industry, government, and society need to ask the question: why are women not a larger part of the industry and how do we include women in more aspects of cybersecurity, including having them occupy more C-level positions? Each nation has been addressing the lack of women in cybersecurity at different rates. Some more quickly than others. Women are increasing their representation across many other technical, highly skilled professions. Women outpaced men obtaining law degrees in 2016 and are continuing the trend in 2017. According to the Association of American Medical Colleges, in 2017 women outnumbered men entering medical school for the first time. And women are excelling in highly technical professional areas. Why haven’t the numbers for women in technology grown as well? We can go back in time and look at some factors that may have contributed to the trends. Computing was not always considered a male domain. Anyone who watched the 2017 Hollywood movie, “Hidden Figures”, understands that before computers, people, and often women did manual calculations. Often called human computers, in the NASA program, women were doing the calculations. Human computing at NASA was heavily 88 ❙ g20g7.com
WITH SO FEW WOMEN IN TECHNOLOGY THERE IS AN OBVIOUS LACK OF WOMEN IN POSITIONS TO MENTOR YOUNGER WOMEN ENTERING THE TECHNOLOGY ENVIRONMENT. weighted toward women because at the time it was considered beneath men. A turning point in attitude came in the 1980’s when personal computers were first being pushed into the market. Marketing was almost exclusively targeted to men and boys. If you enter “early computer advertising” in any search engine you will find images advertising the manliness of the new computer age. The entrance of the personal computer signals a distinct downturn in the number of women in the computer field. We see this cultural bias towards computers being a male industry as stated by National Public Radio:
“This idea that computers are for boys became a narrative. It became the story we told ourselves about the computing revolution. It helped define who geeks were, and it created techie culture. Movies like Weird Science, Revenge of the Nerds and War Games all came out in the ‘80s. And the plot summaries are almost interchangeable: awkward geek boy genius uses tech savvy to triumph over adversity and win the girl.” In the 1990’s a study by Jane Margolis of Carnegie Mellon found that families were more likely to buy personal computers for boys than girls—even if the girls in the family showed interest. Exposure to
Cybersecurity and Women
computers from a young age is a key component of a person’s aptitude for the subject. Introducing girls to technology and computers early and consistently will be a main strategy in closing the gap. Another study by Jane Margolis states: “Many male students report programming to be a source of extracurricular pleasure, having done it since they were young (38% of the men among our sample, compared to 10% of the women).” Advertising was targeted at the male demographic whether they were young or old. The original personal computers could do tasks and provide entertainment. They could provide word processing capabilities and data calculations, but more often than not, personal computers were provided as a source of entertainment with programs like “Pong”. As a result of this initial targeting of males in personal computing, more young men had early experience and access to computers.
One can speculate on the advantages of having early experiences with computers when entering into a course of study for computer science but in the words of an unidentified woman student at Carnegie Mellon: “I’m actually kind of discouraged now. Like I said before, there’s so many other people who know so much more than me, and they’re not even in computer science. I was talking to this one kid, and...oh my God! He knew more than I do. It was so... humiliating…But I feel like I’ll always be behind, and it’s discouraging.” With so few women in technology there is an obvious lack of women in positions to mentor younger women entering the technology environment. Women are outnumbered by men at the C-Level or executive level at the rate of 4 to 1 and 9 to 1 at the management level. According to the Executive Women’s Forum on Information Security, Risk Management & Privacy women are also more likely to experience discrimination. “Fifty-one percent of women in the cybersecurity industry in North America and Latin America have experienced some form of discrimination, compared to only 15 percent of men.” Though there is considerable speculation about what factors into a woman making the decision to pursue or drop a career in the field of technology and, by extension, cybersecurity; the 1990’s studies by Jane Margolis offers an intriguing possibility. In the previously mentioned 1990’s study Jane Margolis found that women and men are, in the main part, are attracted to computing for different reasons. Women want to do something with computers. Men want to discover how they work. “Forty-four percent of the women we interviewed, as compared to 9% of the male students, link their interest in computers to other arenas. These women emphasize the importance of having computing and their programs ‘do something’.” A typical quote from a man might include, “my mother bought me a computer back in Alabama when I was four years old and I have been playing video games on ever since. I often would sit and wonder, how did they do that in the game?” For women, the attraction to computing and technology is different: “How can it solve a problem?” A recent article in Nature about women in cybersecurity echoes Margolis’ study in this quote on how women in cybersecurity often feel. “Women in cybersecurity often
report working with an ‘old boys club’ of former intelligence and military officers. Job postings call for ‘ninjas’ and ‘cyberwarriors’. The language of cybersecurity reflects this ethos of defending networks against threats from intruders. By contrast, the concept of information security—centered on creating safe, effective systems and protecting humans who use them—describes the job better and is more widely appealing to diverse practitioners, including women.” This may, in part, explain another statistic. According to the 2017 Women in Cybersecurity Global Information Security Workforce study, “Among women who have advanced to (tech) management roles in organizations, it is not uncommon to see a wide variety of educational backgrounds. This contrasts with men, who overwhelmingly have engineering or computer science backgrounds.” Many women in areas such as medicine, business, or other fields are motivated to pursue a career in technology by what the computer can “do” to improve, streamline, and enhance the work they are doing. They start at “what can it do” and progress to “how”. In general, men start at “how” and progress to “what”. Neither approach is right or wrong, it is just different. And technology and cybersecurity need both perspectives. Jane Margolis’s study suggested that the way to get more women into technology was to structure classes with more upfront courses that focused on the context in which the coding would be used. Current bootcamps and curriculum often start with straight coding classes and progress to putting the coding in context. Perhaps the same would be effective in motivating, hiring, and retaining women in cybersecurity; by focusing on “creating safe, effective systems and protecting humans who use them.” That is, after all, the very mission of the cybersecurity profession. The largest breach in cybersecurity is the lack of women in the field. This is a global problem that will have global consequences if not addressed and resolved. ■
Heather Stratford, is CEO and Founder of Stronger International a cybersecurity firm based in the U.S. Contact: E. firstname.lastname@example.org W. stronger.tech
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G7 Executive Talk Series European Union Authored by: Corey Cooper
How Proposals for Reforming the European Union Could Backfire Paris, Berlin, and Brussels all agree that the European Union needs to work faster and smarter if it is to tackle present and future challenges. However, these political forces are not enough to drive reform in today’s European Union. In fact, they might make matters worse.
aris, Berlin, and Brussels all agree that the European Union needs to work faster and smarter if it is to tackle present and future challenges. French President Emmanuel Macron has effectively made reforming the European Union his raison d’être. But he is not waging this endeavor alone, having joined forces with German Chancellor Angela Merkel, who is finally coming out of grueling coalition talks, and European Commission President Jean-Claude Junker, who is as idealistic as ever in the final year of his term. This troika would typically be the perfect amalgamation for transforming the European Union, as was the case when François Mitterrand, Helmut 90 ❙ g20g7.com
Kohl, and Jacques Delors pushed the European project to some of its greatest feats. However, these political forces are not enough to drive reform in today’s European Union. In fact, they might make matters worse. Macron, Merkel, and Junker have each touted the importance of European reform in high profile speeches filled with lofty rhetoric and ambitious proposals. They have framed reform as the only way to address the rising tide of populism, lingering economic anxieties, and pressing security challenges. Most notably, Macron’s speech at the University of Sorbonne was a passionate plea for a Europe properly equipped to tackle globalization’s negative externalities. More
recently, Macron and Merkel, sometimes dubbed “Mercron,” were the dynamic duo at the World Economic Forum at Davos, where they made separate speeches with the same appeal for a more integrated Europe with greater agency to act in Europe and on the world stage. These calls for reform are not just about deeper policy integration, they are directed as institutional changes as well. Junker’s State of the Union speech last year was notable for proposing a single presidency, a European finance minister, and a broad call for “new floors to the European House.” Collectively, they have one theme: now is the time for more Europe. Not everyone on the European stage feels
TIME IS NOT A FRIEND TO THE ALREADY SHAKY POLITICAL SCENE FOR EUROPE’S MAINSTREAM POLITICAL PARTIES AND THE EXISTING CRACKS IN EUROPEAN COHESION.
the same way. Following Macron’s Sorbonne speech, Dutch Prime Minister Mark Rutte accused Macron of proposing a “federal Europe,” adding “Integration for integration’s sake will only harm public support for the European Union.” Far-right populism and Eurosceptism have not dissipated; in some ways they have metastasized. While 2017 may not have produced a President Le Pen or a Prime Minister Wilders or witness Merkel’s downfall, it did see populists make significant gains at the polls and in national parliaments, all at the expense of mainstream, pro-Europe parties. Reforms that grant more power to Brussels will fuel Eurosceptic narratives. There is also the European Union’s most pressing internal challenge: the erosion of liberal democracy in Central Europe. Poland and Hungary’s open defiance to the European Union threatens the European unity that would be necessary to push forward any significant reform agenda. Their challenge to Brussels is not a rising threat, but a real and present danger. Not only are political leaders there in vocal opposition to the spirit of the reforms, but they could, and mostly likely would, oppose these reform efforts in the European Council. A Franco-German push for reform will make the growing gap in European unity even wider. These reform proposals have serious merit, but they are not based in political reality. Brussels would need more power and resources to effectively confront the myriad of challenges and threats facing the European Union. The same is needed for the European Union to properly seize promising opportunities and harness its economic potential. At the same time, opponents of reform believe granting more power to Brussels will only exasperate bureaucratic ineptitude while stripping national governments of their sovereignty. Herein lies Europe’s paradox: the solution is in itself a
problem. It is the need for deeper integration versus the popular will for it. The European project has faced these realities before, but at no other time have the costs been so high and failure so certain. The pursuit of these reforms could backfire, causing a populist backlash in European electorates and greater defiance from Poland and Hungary, as well as any other allies they might garner as a result. The brand of reform being proposed would take time to actualize and produce tangible results. Time is not a friend to the already shaky political scene for Europe’s mainstream political parties and the existing cracks in European cohesion. Junker said in December, “There’s no better time to fix the roof than when the sun is shining.” In reality, the sky is partly cloudy at best and the roof needs more work than he thinks. The post-Brexit European Union will be a twenty-seven-member trade superpower with more than 500 million people. There is economic growth, falling unemployment, and historic strides recently in the realm of defense integration. Macron, Merkel, and Junker have articulated a detailed, enthusiastic vision for how they want to harness this potential. However, the future of the European project should not be herald in by a determined Franco-German agenda alone. European reform, from conception to fruition, should be a gradual, joint endeavor by all member states to make. The European Union will only succeed if reform is inclusive and democratic. If that is not the case, the result could be the rapid unraveling of the European Union. ■
Corey Cooper is a research associate in U.S. foreign policy at the Council on Foreign Relations. All views expressed in this piece are the author’s own.
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G7 Executive Talk Series Electric Vehicles Authored by: Caroline Holmund
Will the U.S. Miss the EV Revolution? It’s clear that demand for EVs will only increase in the coming years, marking a fundamental shift in the global market.
n 2017, more than half of new cars sold in Norway were electric or hybrid, making it the first country globally to reach this landmark. In total, 52.1% of the new car sales in the country met these requirements, up from 40.2% a year earlier. While a historic moment for the fight against fossil fuels, don’t hold your breath for more countries to follow anytime soon. Oslo used careful market manipulation to achieve this goal. While Norway is one of the most expensive places in the world to purchase a new car, incentives and large tax breaks for Electric Vehicles (EVs)—such as not paying import tax and VAT and parking for free—have made them a no brainer for many consumers. Norway is also uniquely positioned to promote electric vehicles in terms of its natural resources. The country has a sizeable hydropower reservoir capacity of 85 terawatt (TWh), and 98% of its energy already comes from renewable sources. While Norway is undoubtedly ahead of its peers when it comes to the adoption of EVs, other countries are planning to follow in its
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footsteps and promote electric cars—even if the road will be long. The UK, for example, has indicated that it will seek to ban the sale of diesel and gas fueled cars by the end of 2040. China, the world’s largest auto market, has announced as well its intent to end “production and sales of traditional energy vehicles.” It’s clear that demand for EVs will only increase in the coming years, marking a fundamental shift in the global market. What’s more, this market shift towards eco-friendly vehicles won’t just be about cars, but also what they are made of, meaning that greater emphasis on the sustainability for carmakers’ supply chains is inevitable. In December 2017, for example, 10 of the world’s largest car manufacturers, including BMW and Volkswagen, met in Brussels and pledged to address the myriad ethical and environmental issues around their use of raw materials. This means that commodity producers, from the aluminum industry to copper producers will be placed under increased scrutiny.
For some companies, this is not unwelcomed. Norwegian aluminum producer Norsk Hydro is already offering two new aluminum alloys marketed as “certified low carbon”, one of which is made from at least 75% recycled aluminum. Likewise, Russian aluminum producer Rusal uses Siberian hydropower plants to power its smelters. The result is a CO2 footprint of just 4 tons per ton of aluminum produced, a figure three times lower than the industry average of 12t. By 2020, Rusal plans to power all its smelting plants by hydroelectricity, up from 90% currently. But globally, not all countries and producers are recognizing the likely seismic impact this industry trend will have and how crucial low-carbon aluminum will be to the EV story. Just look no further than the United States. It’s true that U.S. car manufacturers are slowly coming around to the idea that electric vehicles are here to stay. General Motors plans to introduce two more EV models over the next 18 months, and 20 within six years. Ford has formed a dedicated division to help direct investments towards
WHILE NORWAY IS ONE OF THE MOST EXPENSIVE PLACES IN THE WORLD TO PURCHASE A NEW CAR, INCENTIVES AND LARGE TAX BREAKS FOR ELECTRIC VEHICLES (EVS)—SUCH AS NOT PAYING IMPORT TAX AND VAT AND PARKING FOR FREE—HAVE MADE THEM A NO BRAINER FOR MANY CONSUMERS.
EVs. But Washington, however, is showing a remarkably shortsighted approach to making sure that its producers stay competitive on the increasingly crowded EV market. To begin with, the Trump administration’s fixation with fossil fuels, and coal in particular, will only harm the shift to EVs. While burning less fuel to power cars, the U.S. will end up burning more coal to power the recharging stations, thereby offsetting CO2 emissions from tailpipe to smokestack. Vehicles are already America’s biggest carbon dioxide source, as their emissions have increased by 2% year on year. Next, Trump and the Environment Protection Agency are not just keen on tearing up vehicle emissions standards, but are also putting carmakers access to aluminum—a material key for reducing the weight and fuel consumption of cars—at risk. America’s aluminum industry is in dire straits due to Chinese oversupply, which has depressed global aluminum prices. In retaliation, Trump has proposed tariffs on Chinese steel and aluminum imports and
has started Section 232 investigations on the effects of imports on national security. But even if it was meant to protect American aluminum producers, not even the industry was entirely happy. In fact, the industry itself urged Washington that any remedy should be “designed to specifically address Chinese overcapacity and its effects, while avoiding unintended consequences for U.S. production and jobs.” This is an important point, as Section 232 investigations can place a global moratorium on the imports of aluminum, leaving many U.S. aluminum producers that have moved abroad or depend on imports of raw material out in the cold. First, tariffs would interrupt the free-trade flows required to fulfill American aluminum demand fueled by car producers and other sectors. Second, given U.S. dependence on aluminum imports for its industries, the tariffs will impact other global aluminum producers as well. Put simply, in punishing China, the U.S. is punishing many of its global suppliers. Examples range from Rusal and Norsk
Hydro to Rio Tinto, Canada’s largest aluminum producer. Canada accounts for more than half of U.S. aluminum imports, and Rio Tinto possesses a deeply integrated supply chain across North America. The company sends 75% of its smelter output across the border, but, fearing business losses and negative effects on the North American manufacturing base, pressed for a negotiated solution to the impasse with Beijing at a Congressional hearing in June 2017. However, whether Trump will heed these lessons remains to be seen. Making the wrong moves will greatly impede the U.S.’ ability to react to a changing automobile market increasingly conscious of environmental effects—and building coal power plants and slapping tariffs are definitely not the road to Norway. ■
Caroline Holmund is a Contributor to Diplomatic Courier Magazine.
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G7 Executive Talk Series Artificial Intelligence Authored by: Winona Roylance
Governing the Ascent of Artificial Intelligence At the recent IMF/World Bank Spring Meetings Editor-in-Chief Ana C. Rold interviewed world expert Nicolas Economou, Chief Executive of H5, on the governance of AI and the framework by which societies should delegate decisions to machines in an effort to mitigate the impact of risks as we move forward.
s the Fourth Industrial Revolution continues to see technology advance at unprecedented rates, it can be argued that it is artificial intelligence that is moving at the fastest pace—and perhaps with the most promise. Indeed, while artificial intelligence seems like a technology of the distant future, it is in fact already disrupting every facet of life, from law to warfare to the very concept of what it means to be human. At the recent IMF/World Bank Spring Meetings—specifically, the IMF’s New Economy Forum—Nicolas Economou, Chairman and Chief Executive of H5, argued that due to the rapid transformations artificial intelligence is beginning to create, it is absolutely critical that we begin discussing the governance of AI and the framework by which societies should delegate decisions to machines in an effort to mitigate the impact of risks as we move forward—lest we begin to see the beginnings of a dystopian-like future. Moderated by Diplomatic Courier’s own Ana C. Rold, here are the key takeaways. There is a plethora of definitions of artificial intelligence. Artificial intelligence today is broadly defined as big data-driven, massively computerized, machine learningcentric algorithmic systems. However, such definitions fail to account for unexpected sources of innovation and also remain inaccessible to the ordinary citizen. Therefore, it may be preferable to define artificial intelligence in simpler terms as the science and engineering of intelligent systems. Despite these working definitions, however, it is most likely futile that we’ll come to an all-agreed definition of AI anytime soon. After all, we still don’t have a settled definition of human intelligence after 3,000 years of scientific and philosophical debates. The more important question is what artificial intelligence is NOT. Rather than focusing on the complexity of what AI is, it may be more useful to keep in mind what it is not. AI does not have empathy—it cannot mourn a deceased family member, for example. AI cannot feel nostalgia about its childhood, dream about its future, or feel any of the joys and sorrows that are so central to the human experience. Therefore, it is important to remember that while artificial intelligence may be many things, it is not artificial humanity—a crucial aspect to take into consideration when thinking about how to govern AI.
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There are different types of artificial intelligence. While the AI of today can be extremely well suited to certain discrete tasks—such as playing chess—modern AI’s inability to intuitively solve a range of versatile problems makes it unlikely that artificial intelligence will reach a level of cognition similar to human intelligence anytime soon. Artificial general intelligence (AGI) will most likely not be realized in the foreseeable future, but more narrow forms of AI will continue to evolve at a rapid pace, with progressively less human supervision. The Fourth Industrial Revolution is different in many ways from past industrial revolutions. While the Fourth Industrial Revolution is similar to past revolutions in its system-wide impact and universal disruption of power, there are many new challenges we must also face. There is a difference in magnitude and velocity. During the First Industrial Revolution, there were approximately one billion people alive; in the 1970’s, that number increased to around three billion. Today there are seven billion people worldwide, with artificial intelligence set to affect them all in immense ways. More importantly, the speed at which this transformation is happening is unprecedented, with McKinsey predicting that by 2030, 30% of the workforce in the developed world will need to adjust to new or different types of work due to the Fourth Industrial Revolution. The tolerance for violence is different. During the First Industrial Revolution, the distress and disruption caused by dramatic changes in the manufacturing process brought about a great deal of suffering—most of which society was able to tolerate. Today, societies’ tolerance for violence is far lower, which raises considerable public policy and public order questions in how citizens may respond to radical change. The Fourth Industrial Revolution will force us to reevaluate our very nature. While prior industrial revolutions forced us to reexamine our relationship to work and how society is organized, the advent of artificial intelligence will confront us instead with our very conception of what it means to be human. The risks and opportunities associated with artificial intelligence are intertwined. While there is much fear over the inherent
risks of artificial intelligence, these risks mirror groundbreaking opportunities for the future of humanity. It is this high stakes intertwining of risks and opportunities that make AI governance so important. Already, AI is being used in the court system. In the legal system, for example, in a recent case in Wisconsin, a judge relied in part on a black box algorithm to determine the length of the sentence for a person who committed a crime. The defendant was denied the right to examine the algorithm. An AI algorithm was thus used to determine the length of a sentence, without any review of its decision-making pathways, any scientific evidence of its effectiveness, or any evidence that anyone in the courtroom was competent to understand it. This example illustrates the risks of AI adoption in the absence of norms. But one can envision the sound deployment of AI in the legal system to facilitate access to justice and to produce more consistent system-wide outcomes. There are opportunities and risks in “social” artificial intelligence. Studies in psychology have revealed that humans interact with human-like machines much the same way they interact with humans, which has numerous potential benefits in providing care for children, the elderly and the socially isolated, and for education. However, this same mechanism carries risks as well, and we should ask questions of what kind of values, perspectives and political alignments such artificial intelligence would carry that could affect the people they interact with, but also our democratic institutions. We need to begin discussing how we should approach the governance of artificial intelligence. An effective, adaptable and legitimate framework for the governance of AI is indispensable. The goal of governing artificial intelligence, explained Economou, is precisely to prevent the possibility that AI governs us. AI must remain an instrument in the hands of humans for the benefit of humans. In order to build a framework, we need to address important questions first. First, to what extend should societies delegate to machines decisions that affect people? What central values should artificial intelligence be advancing? What principles, ethical values, public policy recommendations,
technical standards and codes of practice should a framework that governs AI entail? And what methodology should be used to go about creating this framework? Creating a consensus AI governance framework is challenging, but our experience governing human intelligence can help. AI brings up some entirely new ethical challenges, in particular the surrender of human agency to non-ethical agents. Even so, in developing a governance framework for AI, we can learn a lot from three thousand years of experience in governing human intelligence. Many of the principles, laws, norms, regulations, codes of practice, and even international agreements we have applied to “HI” can translate to the governance of AI. There is a lack of international cooperation. While there is tremendously good research surrounding AI both at the national and international levels, international cooperation on governance of AI is insufficient. Some emerging endeavors in this respect are laudable, including the IEEE Global Initiative on Ethics of Autonomous and Intelligent Systems, the Dubai Global Governance of AI Roundtable, President Macron’s proposal for an IPCC for AI, as well as the emergence of international think tanks such as The Future Society, which are exclusively focused on addressing the governance of AI. ■ Charlevoix. Canada 2018 ❙ 95
G7 Executive Talk Series Cybersecurity Authored by: Sean McGuffin
The Dangers of Using State-Sanctioned Hackers Government cooperation with cybercriminals is a reality we are already living with and one that is extremely dangerous for international norms.
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he string of large-scale data breaches in recent years—from Yahoo to Equifax— demonstrates the alarming threat posed by cyber-crime and espionage; a threat made all the more serious when considering the election interference in France and the United States. Yet, while it’s generally understood that both criminals and foreign intelligence agencies carry out attacks such as these, there is something that is less known: the ways in which these two groups have begun working together, and how dangerous it would be to allow this precedent to set. The Russian Federal Security Service (FSB) has developed a bad reputation for partnerships of this kind by protecting, recruiting, and pressing into service hackers who it then uses to carry out online attacks. According to cyber-security expert Jeffrey Carr, “Russian hackers who are caught are given the choice to work for the FSB or go to jail. The FSB also has some on contract hire.” This prognosis matches the story of Dmitry A. Artimovich, who was arrested in 2013 for creating spamming programs. While awaiting trial for cyber-crimes in Moscow, Artimovich said he was offered a way to avoid trial all together if he was willing to work for the government. Former U.S. Secretary of Homeland Security Michael Chertoff, commenting on cyber-security, even said that “the Russians are pretty much No. 1 in terms of using criminal organizations as partners.” This policy may seem odd, but it has its advantages. For states that lack the funding or other necessities, using criminals may be the best way to build their cyber capabilities. As one expert put it, “there’s no Silicon Valley in Russia.” Cyber criminals are already experienced at hacking into secured systems and folding them into the state’s cyber forces can provide states sanctioned cyber-attacks with a useful veil of plausible deniability. Additionally, enlisted cyber-criminals are cheap, constantly testing their skills against new counter measures, and can act as a useful auxiliary force. The hackers on the other hand gain protection from prosecution or extradition. These advantages may seem appealing, but one should consider the possible ramifications. One of the advantages of using hackers as proxies is plausible deniability and the anonymity it can provide, but this can cut both ways. Once a state is known for using proxies and hackers to wage its cyber campaigns, this advantage can lose much of its potency, and a state could possibly even
THE RUSSIAN FEDERAL SECURITY SERVICE (FSB) HAS DEVELOPED A BAD REPUTATION FOR PARTNERSHIPS OF THIS KIND BY PROTECTING, RECRUITING, AND PRESSING INTO SERVICE HACKERS WHO IT THEN USES TO CARRY OUT ONLINE ATTACKS.
be accused of performing cyber-attacks it had no part in due in part to this reputation. This flows into another issue—assigning culpability. If a hacker is under government protection, then that government could and should be considered responsible for their actions, regardless of whether it ordered an attack or not, and the hackers are considered state actors. This policy stance had already been seen in action when the United States sanctioned Russia for its interference in the 2016 presidential election. It was notable because the sanctions targeted key individuals in leadership roles and the hackers themselves. This was a good example of holding states accountable for their actions but should be applied more broadly by all states when credibly faced with this type of threat. Another issue to consider is the possibility of retaliation. This could become very serious if a major cyber-attack is launched, for instance on a power plant like the one in western Ukraine, and another state decides to respond with an action of its own. Any retaliation is unlikely to remain solely in the cyber space, but rather affect other aspects of the “real world,” and could turn very ugly if lives or critical infrastructure are harmed. The room for misunderstanding is wide, the possibility of an attack being misattributed is too high, and the norms for how to respond to cyber-attacks are still being set. All of these factors become worse when quasigovernment hackers are involved.
As seen with the U.S. sanctions against Russia, action carried out in cyber-space can spill out into the “real world” because cyber-space is becoming an integral part of our modern system as any other part of the real world. When faced with these kinds of threats, policy makers should increasingly disregard the cyber-theater the attack is carried out in and look solely at the repercussions of the attack. In essence, when responding, treat the threat as if computers weren’t even involved. Government cooperation with cybercriminals is a reality we are already living with. As one expert said, “It would be no surprise if there are links, and it would be a great surprise if there were no links.” Cyber-space is only going to grow in importance, and as such the danger and uncertainty created when governments partner with cyber-criminals is too great to allow. While norms are still being set, it’s important that states come to an understanding on how they will treat their cyber-security. ■
Sean McGuffin is Fellowship Editor at Young Professionals in Foreign Policy (YPFP) and currently works at a large consulting firm. He graduated from Old Dominion University and previously served as a research intern at the Hudson Institute, where he provided research on cyber-security policy, among other topics.
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G7 Executive Talk Series Branded Story / Liechtenstein Bankers Association Authored by: Simon Tribelhorn
A New Era: More Digital and More Sustainable Digitalisation and sustainability are currently dominating public debate and will transform the landscape in financial services matters dramatically. We are clearly at the beginning of a new wave of globalisation where cooperation across industries, generations and physical borders will be key in order to overcome the challenges at stake.
igitalisation is one of the hottest topics nowadays for politicians, the media, companies and the general public. Customers are used to long data availability at all times. Their needs have completely changed as the new digital world has emerged. Already in the past, technology has been a key driver in the financial services sector for decades but digitalization based on new technologies such as cloud computing, big data analytics, artificial intelligence (AI), Distributed Ledger Technology (DLT) including blockchain, offers new dimensions and opportunities that could foster radical change in the financial sector. It is universally agreed that digitalisation will revolutionize the finance world, breaking up value chains and totally altering business models. Digitalisation holds tremendous potential for many financial service providers for increasing efficiency, improving customer relationships and turning services into a customer experience. Regulators are struggling to keep up with the torrid pace of developments. The European Commission has responded to calls to fill the current regulatory gap. Its Fintech action plan published in March this year sets out a range of measures aiming to encourage and simplify the emergence of new solutions and to enable innovative business models to scale up, while increasing cyber-resilience, preserving the integrity of the financial system and helping the financial sector cope with the dramatic change and manage risks. “Values” regain significance The other equally highly important issue increasingly occupying the financial sector industry is sustainability. Our society is facing major challenges from an environmental, social, technological and political perspective. After the Paris Climate Agreement and the United Nations’ adoption of the Sustainable Development Goals (SDGs) in 2015 and its 17 goals for sustainable development the discussion on sustainability undoubtedly took on a new dimension. With the SDGs for the first time, combating poverty and sustainable development have been combined in a single agenda. It aims to achieve an all-round improvement of the future of our planet. “No one shall be left behind,” emphasised the UN Secretary-General Ban Ki-moon. The holistic dimension of this sustainability approach shows that new ways of thinking and acting are urgently necessary - a compromise between sustainability
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and development. In this context and nearly in parallel with the FinTech Action Plan, the European Commission presented its strategy for a more sustainable financial system, outlining the need for roughly 180 billion euros in additional investment in the EU alone to meet the agreed climate targets. PWC has estimated the global annual investment required to meet the SDGs at a hefty 7 trillion US dollars. However, the true test is yet to come – implementation. The UN can only achieve these goals if all play their part: states, businesses, local communities, each individual. Governments are currently only spending one-seventh of this amount, most of which will have to come from the private sector. To overcome the diverse challenges be it in social or ecological matters, we not only need a strong political system, but also businesses which act sustainably and make their own contribution with structural changes and technological innovations. We must all fulfill our responsibilities to a sustainable future. In this process, the financial sector has significant responsibilities, and an important role in the necessary transformation and when allocating capital. A question of allocation The mobilisation of private wealth is crucially important for reaching the sustainability goals. According to Deutsche Bank, the global wealth of private households amounted to a total of USD 250 trillion in 2015. Juxtaposed with this figure, the Brookings Institution expects that USD 5 to 7 trillion will be needed each year to finance the SDGs. The assets managed worldwide by institutional investors such as pension schemes, investment funds, insurers, etc, are about USD 83 trillion according to OECD estimates. Both investments of private wealth and investments by institutional investors tend to have a long-term orientation, as do the sustainability goals themselves. Both could accordingly be employed worldwide to end hunger, ensure education, promote health, secure access to affordable and clean energy, support innovation and infrastructure projects, and fund climate protection. Sufficient capital is available; it is merely a question of the right allocation. The majority of institutional investors are convinced that sustainable investments increase risk-adjusted yield. Sustainable investments are increasingly important for private investors. However, there are still
constraints preventing relevant investment entities and private investors from integrating sustainability factors in their investment decision-making. In order to further disseminate sustainable investments, we need to raise awareness and acceptance of the fact that environmental and social returns do not mean renouncing economic returns. This erroneous belief is still rooted in the minds of investors and product providers – even though numerous studies have shown that sustainable investments even lead to better financial returns in the long run. Next-Gen plays an important role Considering that 460 billionaires will be leaving some 2.1 trillion in wealth to the next generation within the next 20 years, it is clear that the evolution of financial sector toward greater sustainability requires great responsibility, not only on the part of financial intermediaries as creators and brokers of sustainable investment products but also among ‘high-net worth individuals’ (HNWIs), particularly of the younger generation. For that generation is less motivated by material wealth, being more driven by values and interest in changing the environment and society for the better. It is the same generation for whom use of digital technologies is a matter of course in everyday life. Digitalisation and sustainability are thus more than just trends, they are issue complexes which the financial firms absolutely have to come to grips with to survive in the marketplace in the longer term. Neither is more pertinent than the other, for both will be substantially determining the industry agenda over the next several years. This demonstrates that there is a need for action, information and education. The financial industry plays an essential role in this regard. It is apparent that to overcome these obstacles leadership at the top of every financial institution is needed, driving the change and accepting responsibility – for ourselves and for future generations. The ongoing digitalisation opens up new opportunities to tackle all these issues, be it having correct data available, everywhere at anytime, be it new educational tools and working models, but also to reach out to new generation clients via innovative channels. Seize doesn’t matter The example of Liechtenstein – a financial centre in the heart of Europe with an international orientation – shows that
THE MOBILISATION OF PRIVATE WEALTH IS CRUCIALLY IMPORTANT FOR REACHING THE SUSTAINABILITY GOALS. ACCORDING TO DEUTSCHE BANK, THE GLOBAL WEALTH OF PRIVATE HOUSEHOLDS AMOUNTED TO A TOTAL OF USD 250 TRILLION IN 2015.
small national economies can make an important contribution to reaching the SDGs, as well as to stability and sustainability in general. With its 38,000 inhabitants, Liechtenstein offers the institutional framework for sustainable development: economic growth at a high level, low CO2 emissions, fast unbureaucratic channels to allow capable and adaptable behaviour. With these indicators alone, Liechtenstein has an advantage over larger economies in terms of initiating and realising sustainability. With its balanced, debt-free national budget and a AAA country rating Liechtenstein is one of the most stable global countries. The country has proven to be a reliable partner to the international community over the years. This can be seen in its participation in exchange of information, effective measures against money laundering and terrorist financing, and implementation of international regulations. All this demonstrates that Liechtenstein is a small country that acts sustainably. With more than 1,300 non-profit foundations and many years of experience and expertise in wealth management, the Liechtenstein financial centre has the ideal preconditions for accepting a significant role in the responsible investments of assets and thus to serve as an important bridge between investors who want to invest their money in a meaningful way and the existing financing gap for sustainable investment. ■
Simon Tribelhorn, is CEO of the Liechtenstein Bankers Association.
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G7 Executive Talk Series Digitization Authored by: Carsten Lexa
Challenges of Digitization N and How to Master Them The changes coming in the next two decades are unstoppable. What will help us navigate and own the future will be our positive attitude in accepting and owning the innovations that will transform every industry that touches our society.
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eedless to say, digitization will completely change the way we live. These changes will confront us all— nations, businesses, people—with tremendous challenges. How can we master these challenges? Let´s first have a look at a few areas that will change dramatically and then explore the mindset that is needed to master the challenges. Owning a car is no longer important Let’s first look at the area “Mobility/ Transport”. For many people, owning a
car is extremely important and a car is a very valuable asset. Or at least it has been for so many years. On closer inspection, however, keeping a car permanently is a costly and not very sensible thing—over 80% of the driven routes are under 5km long and most of the time the car is not moved but it is parked somewhere. If you talk to young people in Berlin, for example, you can see that they are no longer interested in their own car. A car is rented on demand (of course, with an app that not only performs the rental process, but also acts as a “key” to the car), used and then left somewhere. Owning a car has become unnecessary for them. What challenges arise? For example, one can ask the question for whom car manufacturers produce cars if nobody wants them anymore. On the other hand, the question arises, how to get to a vehicle when you need it, when it is no longer in your own garage. And finally, it would be worth considering who is taking care of the vehicles that are scattered all over a city and have to be maintained, supplied with gasoline and oil and repaired if damaged. All knowledge is available online Then let’s look at the area “knowledge transfer/education”. It used to be simple: the teacher, professor or instructor was the one who had the knowledge and passed it on to the students. He was the one who set the structure of learning and the process of acquiring knowledge. But this is the past. In fact, teachers are no longer needed for the pure transfer of knowledge. Anyone who wants to know anything can get knowledge via the Internet - whether directly through a simple Google or YouTube search (then of course one should know what he is looking for) or through university’s “Open Education” programs or via platforms such as Khan Academy or Udemy. The knowledge of the world is available free of charge and with the help of software based on artificial intelligence the teaching of knowledge can be adapted to the needs of the learner and structured according to his abilities. The challenges here are manifold. If knowledge is available everywhere and all the time, why do universities charge high tuition fees? How do educational institutions deal with the problem that students are often better acquainted with technological tools than teachers? And do students still have to be physically present in a teaching facility to absorb knowledge, and if not, how does the transfer of knowledge happen?
The world of money without banks The last area to be mentioned here is the area of financial transactions. In the past, banks were the linchpin for all transactions to be carried out. In particular, an account with a bank was required as a starting point and transactions required some time. Today, however, money can be sent via an email address or via apps in seconds. And while classic loans used to be the bread and butter business of banks, venture capital firms and crowdfunding platforms are creating entirely new financing opportunities for companies, but also for private needs. The challenges in this area are immense. For example, who controls the cash flows and what happens when data indicating a specific cash balance is for example deleted? Are providers of payment apps just as trustworthy as banks? And how is it ensured that the bookings of transactions are correctly posted in debit and credit and that, for example, duplicate bookings do not lead to wondrous increases or decreases in money? How to master the challenges of digitization Of course, the examples given above are just exactly that—examples to illustrate the changes caused by digitization and the associated challenges. Rather, one could cite a lot more examples of changes—be it “production on demand” using 3D printers, virtual reality or augmented reality, big data (especially in the healthcare sector) or artificial intelligence. The question now is how to deal with and master these changes and challenges. At this point, it’s not about highlighting specific skills like coding. Rather, it is more exciting to think about which “mindset” one should have or develop to meet the changes and how one should set oneself up to deal positively with the them. Of course a lot could be written about this mindset—but here a few short thoughts must be enough at the moment. At the top of the recommendation list is the ability to be fundamentally positive about change. Alone for the reason that nothing is as constant as change—changes are inevitable. Fear of change usually comes because of the fear of negative impact of change. In fact, the outcome will depend on how open you are to change. Next is a certain playful handling of new developments. The author is active in an extremely conservative and strongly “change-resistant” industry—legal consulting. Be it the handling of data, be it marketing,
AT THE TOP OF THE RECOMMENDATION LIST IS THE ABILITY TO BE FUNDAMENTALLY POSITIVE ABOUT CHANGE.
be it communication with clients—for many colleagues, change is “hellish stuff”. However, the attitude “let´s try it” will open a lot of new worlds. And finally, it is recommended not to be afraid of mistakes. Of course, mistakes are usually uncomfortable and in the worst case can have serious negative consequences. On the other hand, the actual consequences of a mistake are only in rare cases endangering for the the existence of a person or a company—with sufficient preparation the consequences can be well controlled and the positive outlook far outweighs the feared negative consequences. Big changes are coming – let´s welcome them The upcoming changes are unstoppable. The author dares to predict that the way we live in 20 years will be seriously different from the way we live today. No option is to bury the head in the sand. A positive attitude, a playful handling of innovations and less fear of mistakes—a mindset that adopts these three aspects will make one look forward to the future with all its changes and the associated challenges. ■
Carsten Lexa is a German commercial lawyer based in Germany and Berlin. He is the former Chairman of the G20 Young Entrepreneurs´ Alliance (G20 YEA) and was as such the spokesperson for more than 500.000 young entrepreneurs in the G20 countries. In 2017 he was the host of the G20 YEA Summit in Berlin. Since 2015 he is a member of several B20 Task Forces and by invitation of the European Commission a participant in the SME Assembly. Carsten Lexa can be found online: www.kanzlei-lexa.de.
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G7 Executive Talk Series Peace & Security Authored by: Jessica Berns and Stacey Connaughton
Partnering for Solutions in Peace and Security The economic impact of violence containment on the world economy is $9.46 trillion per year, equaling almost 11 percent of World GDP. Here is the G7 can help change that.
he G7 Summit’s priorities this year include: “Building a more peaceful and secure world. As the nature of conflict changes, it’s more important than ever to reach out to our partners and build solutions that can deliver lasting peace.” Just how great are the human and economic costs of violent conflict? According to the Institute for Economics and Peace, the economic impact of violence containment on the world economy is $9.46 trillion per year, equaling almost 11 percent of World GDP. How can G7 focus their resources to effectively “reach out to our partners and
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build solutions that can deliver lasting peace”? Reimagine “Partner” We suggest that the partners must ultimately be local actors: those regularly affected by conflict and living with the consequences. The Liberian Pen-Pen Peace Network is an example of a local actor. Formed in 2013, the Network consists of actors from multiple sectors including everyday citizens who have collaborated to prevent violence related to strained intercommunal relations, Ebola, and tensions around elections. With support from
the Purdue Peace Project (PPP), their partners have included, among others, the Liberia Ministry of Transport and the Liberia National Police. The approach the PPP and others utilize has come to be called locally driven (led) peacebuilding: “Locally driven peacebuilding is an approach in which the people involved in, and most affected by, violent conflict work together to create and enact their own solutions to prevent, reduce, and/or transform the conflict, with the support they desire from outsiders.” Social science research and practitioners’ evidence bases demonstrate that local ownership is key to lasting peace. Peacebuilding strategies designed with deep knowledge of specific context and cultures are more likely to yield positive, lasting impacts. Emphasizing this point, the 2015 High-Level Independent Panel on United Nations Peace Operations underlined the value of local missions engaging with local communities as core to success. An example of local leadership includes, for example, in Sudan, local peace committees operating in South Kordofan and Blue Nile States successfully
Peace & Security
mobilizing to prevent violence before it erupts. These peace committees are supported by the local organization Collaborative for Peace in Sudan (CfPS), with support from Peace Direct (UK) and funded by the UK’s Foreign and Commonwealth Office. Locally led peacebuilding does not only have impact at the local level. Efforts at the local level can prevent conflicts from spilling over to other parts of the country or even across borders. Relationships that are built across ethnic or religious groups in one community can help secure relationships at a national level. And networks that are initiated at the local level can be expanded across the country to monitor and prevent violence. Build Solutions When solutions are generated on the ground, led and driven from a local community, and with support (financial and other) from national and international allies, we see that they can deliver lasting peace. Conflicts are increasingly local and global. Locally led peacebuilding may not be enough on its own, which is why the partnership
between donor countries, international funders and NGOs, and local, community groups on the ground is so key. However, international efforts must be in the service of local priorities, and international partners like the G7 countries must work to make sure that national governments commit to supporting local efforts too. Here are examples of solutions that are locally driven but supported by outsiders: ■ The United States Agency for International Development’s Local Works program seeks to make development more locally-owned and sustainable through a mandate that prioritizes such approaches. Launched in 2015, their most recent Guidance states that Local Works provides funding to: “Support local ownership, leadership, and selfreliance. Find creative ways to do things in support of, rather than for, our local partners.” ■ The EU Global Strategy on Foreign and Security Policy (June, 2016) also recognizes the importance of “locally owned approaches” for the effectiveness of the EU’s engagement in third countries
in appreciation of the fact that a “positive change can only be home grown”. The government of Canada, via the High Commission of Canada in Kenya, has allotted program funds (Canada Fund for Local Initiatives, CFLI) for projects designed by local groups in Burundi, Kenya, Rwanda, Somalia, and Uganda. Similar initiatives exist in Nigeria. “Ensuring security and stability” is a thematic priority of CFLI.
Although the participation of local actors is central to creating sustainable peace, too often these voices are left out of policy conversations and ignored when it comes to the design and evaluation of peacebuilding strategies. G7 country humanitarian and development assistance, already generous in its support, must strengthen its focus on partnerships with organizations and citizens at the national, sub-national, and community levels in fragile or conflict affected states that have the in-depth knowledge of local history and culture necessary to comprehend and resolve the deep sources of tensions. Reaching out to local, grassroots organizations and citizens will require long-term relationships of trust, smaller funding streams, and more flexible monitoring and evaluation mechanisms. The priority “reach out to your partners and build solutions that can deliver lasting peace” is not without its challenges, but the benefits of engaging at the local level include better understanding of what is happening on the ground in conflict contexts, relationships with civil society that can endure postconflict, and more creative solutions to preventing and ending violence and keeping the peace. ■
Stacey L. Connaughton is an Associate Professor in the Brian Lamb School of Communication at Purdue University, USA. She is the Director of the Purdue Peace Project. Jessica Berns is a Consultant to NonGovernmental Organizations, Universitybased programs, and philanthropists dedicated to good governance, peacebuilding, and social cohesion.
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G7 Executive Talk Series The Science Race Authored by: Simon Wahl, Gerd Folkers and Claude Garcia
Taking Shortcuts in the Red Queen’s Science Race Academia should be the place that fosters the exploration of nature and allows for critical introspection.
t seems the rules of the Red Queen hold true also for the academic community. As students, we try to collect credits as efficiently as possible and cram our CVs with extracurricular experiences. As researchers, always worried about our impact factor, we must publish and review faster than our colleagues publish and review. In short, it takes all the running you can do just to stay in the same place. We seem to be willing to pay the price of running as fast as we can, to hyper-compete - a state that presents a strong incentive for circumventing procedures - to achieve faster results. The unfortunate side effect is insidious. Even in good faith, running can prompt academics to take cognitive shortcuts, gravitating toward the most obvious explanations and leaving the limits of their understanding unquestioned. Thinking critically requires time and energy—a step that could be abandoned under increased pressure. In executing proper science, shortcuts can be dangerous. ETH Zurich—The Swiss Federal Institute of Technology in Zurich—launched a Critical Thinking Initiative with the goals of encouraging “interdisciplinary exchange, critical thinking, and autonomous activity,” as well as promoting “the ability [...] to discern between different positions, points of view, policies and prospects, to critically (and self-critically) examine these, and to determine appropriate courses of action”. What happened to prompt the executive board of a world leading university to launch an initiative that emphasizes these points that are so fundamental to conducting scientific research? Are not students and professors critical thinkers by definition? After all, that is how enlightenment started. The very existence of a Critical Thinking Initiative suggests that society faces fundamental challenges in the modern academic world. Academia under Pressure Is critical thinking more crucial now than ever before? The digital world in which we live mandates that we wade through more and more information. Today’s world generates torrents of data from which we might benefit only with interpretation. As we enter the Digital Revolution, automatization and artificial intelligence compete against traditional jobs in the workplace—critical thinking may be one of the few things that still distinguishes us from computers. It is a fundamental attribute for every scientist facing the future.
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The Science Race
At the same time, our capacity to exhibit critical thinking seems to be under pressure. Lecturers report observing that students become increasingly indifferent and passive as they proceed with their studies. Scientists are tempted to rephrase their hypotheses to increase the statistical significance of their results and publish in journals with a higher impact factor—a procedure known as “p-hacking.” The danger of taking cognitive shortcuts exists for everyone under pressure. Increased demand for critical thinking and a depleting capacity to exercise it—two complimentary trends—leads to a gap significant enough that the ETH Zurich Executive Board felt compelled to take action. Critical Thinking and the Red Queen’s Race What exactly is “critical thinking?” It is a blurry concept. Its definition differs among academic disciplines from life sciences to engineering and in social sciences; and it is not the same for PhD students and professors. It points to several domains of thinking, cognition, and understanding, but also to structures and institutions as well as academia and higher education in general. Various abilities have been attributed to the term “critical thinking.” For example, it can mean the ability to think self-reliantly and independently; to acknowledge and define limitations; to find gaps in understanding or to break through the known. It can also be perceived as an ability to contextualize and assess consequences; to do interdisciplinary work; or to question and reflect the origin of knowledge. Critical thinking can also be attributed to the ability to discern the credibility of sources, narratives and results, assumptions, methods, means, and even authorities. No matter what definition of “critical thinking” we adopt, we still need to devote attention to exhibiting the abilities connected with it. Again, these efforts require time, energy, focus, freedom, confidence, and trust. It requires courage to insist upon these recourses, especially under existing conditions in which increased pressure can lead academics into the Red Queen’s race. The economization of science and higher education increasingly shapes the frame conditions of the academic world—a “massification” of the scientific enterprise. Managing the cost of higher education and research can lead to a utilitarian attitude based on simplified paradigms. It has
Illustration by Sir John Tenniel from Lewis Carroll’s Through the Looking-Glass, 1871
consequences on human behavior. The more obvious symptoms are systems of measuring and rewarding the success of both students and researchers. We might not want to admit or not even notice it, but often, in subtle ways, such a system robs us of time, energy, focus, freedom, or confidence—to a point in which we may no longer be able to think critically. Our understanding of how the human brain works means that no scientist is free from the illusions of understanding. The simple fact of labeling someone as an expert increases the propensity for cognitive bias. Entitlement potentially leads to close-mindedness. In addition, attention is a limited cognitive resource. Digitalization forces us to split our attention between more channels and topics. As a result, we overstimulate the brain and suffer from information-overload. Critical thinking is not a default mode. It needs attention and energy. It needs to be cultivated.
be the result of a conscious decision, and not an accidental occurrence. We should not let the Red Queen rule. The issue of critical thinking touches something fundamental in academia; however, its exploration also reveals structural problems. Rather than paralyze us, this realization should encourage transformation—a change not only in methodology, but also in attitude. We need concerted action, as no single institution can achieve that. Academia should be the place that fosters the exploration of nature and allows for critical introspection. If our capacity for critical thinking is threatened, even in this hall, where else can we exercise it then? ■
Don’t Bow Down to the Red Queen We propose it is possible to get somewhere, if we allow ourselves to stop running for a while. The first step would be for you, the reader, to pause and take stock of your situation. Devote attention to the question: What does it mean to think critically? Do you exercise it? What hinders you from exercising it? Let us become aware of the shortcuts that we all take in the Red Queen’s race. Racing might be a driver of progress, but it should
Gerd Folkers is with the Department of Humanities, Social and Political Sciences, Chair of Science Studies, ETH Zurich.
Simon Wahl, MSc Environmental Systems and Policy, is with the Department of Environmental Systems Science, ETH.
Claude Garcia is with the Department of Environmental System Sciences, Forest Management and Development Group (ForDev), ETH Zurich; Centre International de Recherche Agronomique pour le Développement (CIRAD), Research Unit Forest and Society, Montpellier, France.
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G7 Executive Talk Series Science and the SDGs Authored by: Dr. Carol O’Donnell
Science Education, Identity, and Civic Engagement: Empowering Youth through the UN Sustainable Development Goals
chools around the world are facing similar challenges of increased urban migration, digital divides, and unsatisfactory teacher training; meanwhile, there is an explosion of scientific knowledge and exponential shifts in career paths, which demand that schools prepare students to be scientifically literate. Globalization indicates that the problems of one country affect everyone; therefore, educating all children to be responsive to the issues of the day is critical. As Emmanuel Nnandozie, of the African Capacity Building Foundation (PAS, 2015) notes, “real transformation will not happen unless countries give real priorities to STEM” education. A powerful and sustained implementation of inquiry-based
science education (IBSE) teamed with civic learning and social emotional learning (SEL) can help students focus on the issues of critical importance, such as climate change, the health of the world’s oceans, and clean energy, while examining each issue from multiple perspectives. Educating youth about complex socio-scientific issues will help to inoculate young people and their teachers and parents against societal and health problems that can adversely affect their lives. The Solution: Sustainable Development Goals (SDGs) Inspired and motivated by the universal call to action within the United Nations Development Programme (UNDP) Sustainable
Figure 1: United Nations Development Programme Sustainable Development Goals
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Development Goals (SDGs) (see Figure 1), the Smithsonian Institution, through the Smithsonian Science Education Center and with the technical support of the InterAcademy Partnership (IAP) and the private sector, has made a collaborative commitment to work towards ensuring inclusive and equitable education programs and lifelong learning opportunities for all. We are doing that by developing a set of free curriculum modules for students ages 8-17 called Smithsonian Science for Global Goals, which blends together previous practices in Inquiry-Based Science Education (IBSE), Social and Emotional Learning (SEL), Global Citizenship Education (GCE), and Education for Sustainable Development (ESD). Smithsonian Science for Global Goals will create new forums across the globe to proffer education solutions to complex socio-scientific problems of national and global import. The goal is to not only teach students the science behind these socioscientific issues, but to drive students’ capabilities to take action to use this science to do social good in their communities and the world. Today, the SDGs are driving education decisions in international settings, and the Smithsonian Science Education Center is responding by developing a culturally relevant SDG curriculum to better serve our global audience of young learners. One of the challenges with abstract global goals is how to apply them concretely in local settings. To address that challenge, our curriculum is designed to incorporate place-specific data and community perspectives in order to ensure local relevance. It is not enough to teach students that the SDGs exist. Instead we are seeking new ways for students to embody the SDGs in their classrooms every day. Through the Smithsonian Science for Global Goals curriculum, the Smithsonian is engaging experts from multiple sectors
Science and the SDGs
from around the globe to empower the next generation of decision makers capable of making the right choices about the complex socio-scientific issues facing human society (e.g., climate change, healthy oceans, clean energy, biodiversity, nutrition, healthy ecosystems, freshwater access, pollution, etc). Development partners include researchers, partnering government agencies, private and public-sector funders, and scientists from across the globe who are part of the 130 national and regional academies of science and medicine that are members of the InterAcademy Partnership (IAP). Pedagogical Approach to E ducating Youth on the SDGs Our pedagogical approach to educating youth on the SDG’s is what we call our “Global Goals Action Progression” (see Figure 2), which combines science education, identity and social and emotional learning, and civic engagement (IBSE, SEL, GCE, ESD). Taken together, these key elements build a progression that takes students from understanding their own identity and the identify of their community as it relates to the socio-scientific issue; to questioning and investigating the relevant scientific and social causes, engaging in critical reasoning and systemic thinking, and then taking their newfound scientific knowledge to engage in social action. The goal is for students to use their newfound scientific knowledge and community understanding to form the habit of taking action on global issues in a way that is locally relevant. The center portion of the “Global Goals Action Progression”—critical reasoning and systemic understanding—is the tie that binds. Armed with their new scientific understanding of the complex socio-scientific issue, students examine their own values and perspectives (ethical, social, economic, and environmental) on the issue and test how these values and perspectives influence their local and global thinking. Learning teams use their understandings to find common ground, build consensus, and plan and carry out local actions to help attain the SDGs. Along the way, their perspectives and mindsets change as they learn more about the world around them, building a new foundation from which to tackle the next socio-scientific problem. Mosquito-borne Diseases Through Smithsonian Science for Global Goals we are not only working toward
IT IS NOT ENOUGH TO TEACH STUDENTS THAT THE SDGs EXIST. INSTEAD WE ARE SEEKING NEW WAYS FOR STUDENTS TO EMBODY THE SDGS IN THEIR CLASSROOMS EVERY DAY.
meeting the 2030 agenda of the UN, but we also hope to address the Smithsonian’s 2022 vision to “engage and inspire” more students and teachers, “where they are, with greater impact, while catalyzing critical conversations on issues affecting our nation and the world.” With educational, social, health, and environmental challenges facing our most vulnerable populations, students around the world need to become scientifically literate citizens who can make informed decisions about their individual and collective futures. The Smithsonian Science Education Center has developed the first of an anticipated 17 SDG-focused curriculum modules called “Mosquito! How Can We Ensure Health For All From Mosquito-borne Diseases?” (see Figure 3) funded in part by the Gordon and Betty Moore Foundation and Johnson & Johnson. Mosquito! addresses SDG #3, 4,
16 and 17 and employs the latest research on how children learn. We have also proposed a tentative framework for the titles for 16 additional Smithsonian Science for Global Goals curriculum modules. The modules develop socio-scientific understanding across goals and targets, rather than each module addressing one individual SDG. This helps to build connections between the goals. Each curriculum module will be translated into several languages and the emphasis on local knowledge means teachers can adapt it to the context of their classroom. With the help of private and government sectors, our next step is to take this framework and example module and seek funds to develop the remaining curriculum modules and develop support for teachers so that we can freely disseminate and implement the curriculum across the globe. ›
Figure 2: Global Goals Action Progression for the “Smithsonian Science for Global Goals” Curriculum Source: 2018 Smithsonian Institution: Heidi Gibson, Katherine Blanchard, Andre Radloff, Brian Mandell
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G7 Executive Talk Series SDGs
IT IS NOT ENOUGH TO TEACH STUDENTS THAT THE SDGs EXIST. INSTEAD WE ARE SEEKING NEW WAYS FOR STUDENTS TO EMBODY THE SDGS IN THEIR CLASSROOMS EVERY DAY.
! O T I U Q S M O
H OW C A N W E R ALL ENSURE HEALTH FO -BORNE DISEASES? FROM MOSQUITO
COMMUNITY UIDE RESEARCH G Figure 3: “Mosquito!”—the first of 17 proposed SDG curriculum modules for students ages 8-17 Source: 2018 Smithsonian Institution: Authors: Andre Radloff and Brian Mandell
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› According to the United Nations, the World Bank, and the International Monetary Fund, economies around the world are reorganizing their giving to align with the SDGs. Corporations are also recognizing the importance of supporting trusted organizations—like the Smithsonian and academies of science—that are catalyzing critical conversations that affect the nation and the world. Corporate Social Responsibility dollars, and even dollars once reserved for marketing, are now shifting to support SDG-related activities. Consumers—and today’s youth—are making more of their choices about which companies they support based on how much “social good” those companies are doing and whether the companies are helping the planet and its citizens. The SDGs are helping to prepare students to be scientifically literate and drive social change. ■
Carol’s 35 years in science education include working at the Smithsonian Institution, National Academy of Sciences, U.S. Department of Education, and George Washington University. Carol has expertise in education policy, professional development, cognition, curriculum development, and education research. She serves on the InterAcademy Partnership (IAP) Science Education Programme Global Council.
The Smithsonian Science Education Center is an industry leader when it comes to handson, experiential learning. The Smithsonian Science Education Center was jointly founded in 1985 by the National Academy of Sciences and the Smithsonian Institution to transform the teaching and learning of science for all students. In 2010 the Smithsonian Science Education Center was brought fully in the Smithsonian Institution, but continues to represent the National Academy of Sciences for K-12 education outside the United States through a longterm agreement. The Smithsonian Science Education Center has been producing world class science curriculum for over 30 years that integrates the arts, history, culture and science of the Smithsonian. The Smithsonian Science Education Center’s curriculum is used in all 50 US states, reaching 6.5 million students in 1,454 school districts nationally, and in 25 countries around the world.
I DEN TIT Y P ROTECT ION W ITHOU T COMP ROMISE
G7 Executive Talk Series Branded Story / Generali Global Assistance
Data Globalization Gives New Meaning to the Ever-Evolving Identity Theft Threat A Review of the Evolution of the Identity Protection Industry t’s 2003, and the United States Federal Trade Commission (FTC) has just released some scary findings about this new crime called identity theft. There’s not much you can do to prevent it, and its effects are alarming – the FTC reports that the average victim in the U.S. spends about $1,200 and 60 hours trying to fix their identity theft issue.1 At this time, almost any type of identity theft protection or prevention service is solely focused on credit or data monitoring – which, as we know today, is just a single component in safeguarding one’s identity. Indeed, the concept of identity theft was still in its infancy in the U.S., and, at a global level, it was barely being discussed.
At this stage, fifteen years ago, Generali Global Assistance (GGA) took a different approach. Being owned by the company that invented the concept of real-time care assistance over 50 years ago (Europ Assistance), providing compassionate assistance to people in times of need is in our DNA. Today, we remain a global provider of assistance services to people in the fields of health, home and family, automotive, and travel, helping thousands of companies protect their customers and employees from life’s difficulties. Thus, the protection and restoration of identities was a natural fit for us as we came to know and understand the devastating ramifications that identity theft can have on people’s lives and families.
Accordingly, we launched identity theft resolution services via a business to business (B2B) offering, becoming one of the first identity protection providers to focus on helping the person behind the data. Monitoring services alone simply alert customers of suspected fraud incidents and stop there, leaving the victim to pick up the pieces and attempt to restore their identity on their own. As a company firmly rooted in the mantra “We care,” our goal was, and still is today, to go above and beyond for each one of our client’s customers. For those dealing with the aftermath of identity theft, we attend to the time-consuming and stressful tasks of contacting and following up with creditors, credit bureaus, law enforcement, and other third-parties on their behalf, while also providing compassionate assistance and expert advice to help put their mind at ease – something most other identity protection providers weren’t doing at the time and, frankly, some still struggle with today. Nevertheless, identity protection as a consumer product was very much still emerging a decade and a half ago, and most people held a false sense of security that something so life-changing could never happen to them. It’s different though today, in that our current climate has almost normalized large-scale data breaches and compromised personal information. Undeniably, awareness levels have increased since 2003 – and whether that’s good or bad is up to interpretation. What is certain is that the identity protection landscape has also evolved to keep up with the ever-advancing crimes of identity theft and fraud. Today’s Identity Protection Services The need for identity protection across the board has become increasingly apparent, and, as a result, more and more players are entering the identity protection space. The current landscape is varied, with some companies monopolizing the direct-toconsumer market, others operating more behind the scenes in the B2B realm like GGA, and even major credit bureaus and credit card companies have found opportunity to capitalize on the growing industry. The types of services offered by these players also run the spectrum, with some merely tacking on complimentary credit or identity monitoring services to a core offering and others offering an entire suite of identity protection services that make up a more comprehensive program.
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THE MORE DEVICES THAT ASK US TO INPUT OUR DATA, CUSTOMIZE TO OUR PERSONAL PREFERENCE, AND ACCESS REMOTELY, THE MORE GATEWAYS THERE ARE TO IDENTITY THEFT. Today, GGA’s offerings have certainly expanded but are still firmly rooted in full-service resolution services. Between 2008 and 2014, we added identity monitoring and alerts, 3-bureau credit monitoring and alerts, and an Online Data Protection Suite with anti-keylogging and anti-phishing software. In addition, GGA’s resolution team became Certified Identity Theft Risk Management Specialists (CITRMS) and FCRA-certified by the Consumer Data Industry Association. In 2016, we launched our most robust identity protection product yet – a 360° platform with a single, easy-to-use online dashboard – and we’ve since expanded our offering globally to also include smartphone protection with secured browser and keyboard. Today, GGA’s identity and digital protection product offering is pinned around four pillars: experience, solutions, technology, and service – none of which should be compromised. We don’t offer our products and services simply because they’re popular – for us, it’s the result of consistent research and continual awareness of a need that continues to grow. Looking back, we started offering identity protection services for a very simple reason: there was a genuine need to help people that wasn’t being fulfilled. Today, that need has evolved (e.g., IoT, data globalization, etc.) and become a global concern, and we’re leveraging our resources to address it. Our offering has naturally evolved and advanced over the years – to better protect our customers – and we’re sure it will continue to change and evolve as the identity theft landscape will as well. No matter what, our mission will always remain the same – to protect and help people. The Future of the Identity Protection Space & Its Influencers The more devices that ask us to input our data, customize to our personal preference, and access remotely, the more gateways › Charlevoix. Canada 2018 ❙ 113
G7 Executive Talk Series Branded Story / Generali Global Assistance
› there are to identity theft. Indeed, the digitalization of even the most ordinary of objects has taken us to a place that’s more opportunistic than ever for identity thieves. But it’s not all bad. Our highly-digitalized lives have afforded us opportunities and conveniences that some of the greatest engineers could have never fathomed several decades ago. Digital globalization has given power to small one-man shops, allowing them to compete globally and sell to quite literally anyone in the world.
RECOGNIZING THAT THERE ARE SOME THINGS CONSUMERS HAVE CONTROL OVER AND OTHERS THAT THEY DON’T, CONSUMERS MUST USE THEIR VOICES TO CREATE CHANGE.
With so much information being shared, downloaded, and accessed cross-continentally, there should be a global platform seeking identity and cyber protection for all. We’re still a long way from such an idealistic approach, but the European Union’s induction of the General Data Protection Regulation (GDPR) was a major step in the right direction. Having officially gone into effect on May 25, 2018, its goal is to fundamentally protect all EU citizens, no matter where they are in the world. Thus,
AT A GLANCE: GGA and the Identity Theft Landscape
GGA launches identity theft services and adds 1 bureau credit monitoring services
TJX data breach of U.S., Puerto Rico, Canadian customer transaction data. There were 45.6 million records stolen, making this the worst ever breach involving PII up to this point
UK-based financial company, Nationwide Building Society, has an unencrypted laptop stolen from a companyemployee that held the personal data of 11 million members
GGA adds identity monitoring services
California data breach law became effective (2003)
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the new data privacy regulation will apply to any company that does business with an EU citizen. As more countries start looking at data privacy and protection like this for their citizens, it won’t be such a big leap to start talking about personal identity protection for all. With half of the world’s traded services delivered digitally,2 businesses are no longer confined to serving local customers; the world is their consumer now. And yet, today, most businesses abide by only their country’s (or, for those in the U.S., their state’s) legislation regarding data privacy and breach notification. Unfortunately, most laws are inadequate at best, leaving consumers’ identity and digital protection primarily their responsibility – even while it’s oftentimes out of their hands. Recognizing that there are some things consumers have control over and others that they don’t, consumers must use their voices to create change. They can begin by putting increased pressure on their local legislators to encourage them to play a bigger role in putting more global regulations in place. And because every country has their own unique challenges in the identity protection realm, governments need to listen closely so that they can best meet their citizens’ needs. Consumers should also feel empowered to force the companies that they do business with (locally and abroad) to provide more transparency into how their data is being protected. Clearly though, data privacy and consumer protection isn’t going to change overnight, and we know it’s going to be an uphill battle – that’s why we’re doing our part too. At GGA, we recognize that education is a key piece in better protecting consumers; after all, they are their own best identity advocate. Education is a key component in the products we offer, and we’re also present in the space
to help foster consumer education. By participating in and partnering with various identity-focused organizations such as the University of Texas Center for Identity and the Identity Theft Resource Center, and speaking at industry events, such as the U.S. Federal Trade Commission’s Conference on Identity Theft, we understand our responsibility to remain engaged in the industry so that we can, ultimately, help shape it for the better. Additionally, GGA is continuously exploring new products and solutions to stay ahead of identity thieves. One of the most popular trends we’re seeing right now is the use of Blockchain technology, which essentially is a way to better protect and isolate data from potential hackers. We’re also seeing the use of biometrics becoming increasingly popular, particularly in consumer technology. As a means of identity validation, biometrics may be another great advancement in thwarting fraudsters. GGA as a Global Player As a global company, we’re constantly keeping our finger on the pulse of the market to adapt and evolve with it. We’re in a unique position to help people and companies all over the world. It’s an advantage that we take seriously and will use to truly be a part of the growing challenge to provide identity and digital protection globally – which we know we can’t do alone. The identity protection space itself is still rapidly evolving and perhaps will always continue to do so. Intrinsically tied to technology, there may be no end in sight – the identity theft problem, instead, will just expand, or morph, or develop, into different issues that are unknown to us today. For this reason, we are always looking ahead. Today, we’re taking the lessons learned in the U.S. – where the issues have been
fast-tracked and the market now a bit more mature – and applying those lessons globally. The U.S. identity protection market has, in a way, been reactive to the identity theft issues that have transpired over the last two decades. GGA has launched identity protection services in Canada and is in the process of launching across Europe and in India; these are unique products that meet each specific market’s identity protection needs, and, first and foremost, they’re proactively addressing the rising issues present in each country. In the U.S., we’ve seen the identity protection industry go through many phases and stages, with different protection components getting different levels of attention throughout the 2000s. With data breaches now a mainstay in societies across the world – and so much information being made available to fraudsters – it’s only a matter of time until that manifests into larger issues for vast numbers of people. We predict this will ultimately put resolution services into the industry spotlight and when it does, resolution services will become necessary to participate in the global identity market as a true player. It is at that point that other companies will then follow suit, but we have been there all along providing caring, compassionate assistance – the foundation upon which our services are built. Today, we’re exploring the future of identity from a global perspective while maintaining local considerations and keeping white-glove service and the “We care” mentality close to heart. We hope others follow us in that – sooner rather than later. ■ Resources 1 https://www.ftc.gov/sites/default/files/documents/ reports/federal-trade-commission-identity-theft-program/ synovatereport.pdf 2 https://hbr.org/2016/03/globalization-is-becomingmore-about-data-and-less-about-stuff
GGA add 3 bureau credit monitoring services and GGA Identity Resolutions Specialist become certified
GGA adds anti-phishing & anti-keylogging tools, enhanced identity monitoring services, and family plans
GGA launches new 360° identity protection services in the U.S., Canada, Europe and India
• Target is breached with 70 million U.S. and Canadian customers affected (2013)
GGA launches smartphone protection
• Year of the Breach: Korea Credit Bureau, AOL, eBay, UPS, Home Depot, Gmail, JPMorgan Chase, Sony Pictures Entertainment were all breached (2014)
• Alabama became the last U.S. state to enact data breach legislation, completing the nationwide patchwork of state data breach laws. (2018)
• Canadian Digital Privacy Act amends Personal Information Protection and Electronics Documents Act (PIPEDA) to include breach notification requirements (2015)
• NetEase data breach of 1.2 billion subscriber records in China (2017)
• Equifax data breach of 145+ million U.S. consumer records (2017) • EU’s GDPR is enacted (2018)
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G7 Executive Talk Series Freedom of Speech Authored by: Greg Lebedev
An Epidemic of Intolerance: Global Threats to Freedom of Expression
he 2015 attacks on Charlie Hebdo in Paris and a free speech meeting at a Danish café are unfortunate memories that we’d like to forget. But, what we hopefully learned and will not forget is that these events were more than just another horrific example of Islamic terror. They were a reminder of an epidemic that continues to spread throughout the world; a reminder of an “epidemic of intolerance” that cannot and should not be ignored. Groups or ideologies or governments regularly don’t like stuff that other people think or say and they are very good at finding ways to suppress it. Their intolerance is creative, it can be subtle, it is certainly relentless, and make no mistake, their intolerance is a threat to our core belief in free speech. It is important for us to remember that our adherence to the notion of free speech—the 1st amendment and all that it means to us— is unique to the American experience. As we know, the concept of free speech was debated by our founders and deliberately woven into the documents that are the fabric of our social behavior today. This is not the case in most other countries. In fact, probably half the countries in the
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Freedom of Speech
IT IS IMPORTANT FOR US TO REMEMBER THAT OUR ADHERENCE TO THE NOTION OF FREE SPEECH—THE 1ST AMENDMENT AND ALL THAT IT MEANS TO US—IS UNIQUE TO THE AMERICAN EXPERIENCE.
world care little or know little about free speech as we think of it. A few other societies—primarily European—have adopted the precepts of free speech, but they’ve done it selectively because freedom of expression doesn’t conjure up the same reverence as it does in the United States. In other words, they believe in free speech, as long as they can be occasionally intolerant. My concern today is about the dilution or distortion of America’s belief in the open expression of ideas. When I was in law school, we would study a particular legal principle, and in a great many instances it was accompanied by a “California Rule.” Meaning, there is an established position, but we should also be aware of a different California angel because their approach may someday find its way into the mainstream of American legal thinking. To be perfectly frank, any policy or practice that emerges from California today gives me chills. But that aside, my worry is that the international rationales or excuses for intolerance will somehow find their way into the mainstream of American thinking about freedom of thought and expression. ›
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G7 Executive Talk Series Freedom of Speech
› Let’s look for a minute through an international lens at what I call the “layers of intolerance,” which are simply the various and increasingly draconian techniques which are employed by “thought police” everywhere to intimidate and shut down those with whom they disagree. The first layer is “Social Intolerance.” This is the very subtle process whereby a small group of people somehow convince a larger population that there are words, phrases and ideas that should not be voiced. This is what we have come to know as “political correctness,” and it’s both goofy and pernicious. Just recently, the Canadian Prime Minister, Justin Trudeau, was meeting with a group of Canadian activists, and one young woman was passionately explaining the virtues and success of their project. With great enthusiasm, she concluded by saying that the results of their work would hopefully impact all of mankind. Almost before she could finish the PM jumped in and said, “Excuse me, we don’t say mankind . . . we say peoplekind.” I say . . . it’s really OK if we choose our own words. When the edicts of political correctness are not sufficient to silence annoying people or ideas, the next tactic is “Public Intolerance.” This layer ratchets up the campaign against freedom of expression by publically “shaming” the offending individuals or “labeling” what they have to say. For example, in Europe and the U.S., climate change is holy writ to a great many people. But, since many believe this is beyond debate, if you stray from the cataclysm you’re called a “denier,” which is intended to demonize you and discredit your views by suggesting that you don’t believe in science . . . and that you probably hang out with the flat-earth crowd or folks who are a little skeptical of that Darwinian evolution stuff. Another effective approach to marginalize a practice that some don’t like or to even coerce the offending party into stopping the offensive conduct is “boycotts.” By this technique the perpetrators are in effect saying: we will hurt you economically by telling terrible and possibly untrue stories about you until you stop saying or doing what we don’t like. The Israelis regularly face this tactic in Europe and the U.S. because of their West Bank settlement policies or their perceived mistreatment of Palestinians. As we move up the scale of techniques which are designed to curtail what we think of as free speech we find ourselves in a 118 ❙ g20g7.com
WE WOULD LIKE TO THINK THAT THE CRIMINALIZATION OF OPINION—A TERRIBLE STATE OF AFFAIRS WHERE LEGISLATIVE BODIES ACTUALLY VOTE TO OUTLAW CERTAIN SPEECH—IS THE END OF THE STORY.
really dangerous neighborhood—”Regulatory Intolerance.” This layer combines the slippery slope of labeling and the law—let’s call something “hate speech,” for example, and then let’s make it illegal. No lesser bodies than the United Nations and the Council of Europe believe that hate speech should be punished, and a great many European authorities regard hate speech as a crime. The problem, of course, is who’s doing the defining. One person’s hate speech is another person’s outrageous exclamations. But, the “regulation” of speech works. In 2016, in response to pressure from the European Union, Facebook, Twitter, YouTube and Microsoft collectively agreed to a “code
of conduct” by which they gave themselves permission to remove from their sites “illegal hate content”—the definition of which is a little murky. But the story gets worse. We’ve always known that much of the Islamic world has had blasphemy laws prohibiting defamatory comments about their religion, or more specifically, about the Prophet Mohammed. But, as it turns out, this is not an exclusively Muslim practice. Eighty-seven countries today have “hate speech” laws against various forms of religious defamation, including the Finns, the Germans, the Italians and many more. And, libel laws are also handy tools to turn against annoying opponents. We would like to think that the criminalization of opinion—a terrible state of affairs where legislative bodies actually vote to outlaw certain speech—is the end of the story. But it’s not. Because the last layer of intolerance is “Government Intolerance.” We read in the newspapers every day that governments around the world, without even the veneer of a Parliamentary blessing, are regularly suppressing public opinion in very effective ways. The Socialist paradise of Venezuela suspended 34 private media licenses. Turkey, China, and much of Africa conduct periodic “media blackouts” that deny citizen access to social media during election cycles or when the folks are just getting a little out of hand. And in Russia and Argentina the governments actually use their authority to break up annoying media companies or just take them over. So, there’s no doubt about it. The international trend line of intolerance is going in the wrong direction. But we have the obligation, at least here in the United States, to come to grips with the origins of these intolerant tendencies—a little like the search for “Patient Zero” in any epidemic. And, fortunately or unfortunately, we don’t have to look very far to see that the soft and silly “political correctness” is not really so benign. In truth, it’s a gateway drug to an alarming increase in the suppression of ideas and the distortion of information which could, if we’re not vigilant, undermine our sacred belief in freedom of expression. ■
Greg Lebedev is Chairman of the Center for International Private Enterprise (CIPE).
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G7 Executive Talk Series Branded Story / FarmaTrust
Combating Counterfeit Pharmaceuticals
ccording to a recent PWC report, up to 30% of all drugs in circulation are fake, leading to around a million deaths annually, including 450,000, preventable deaths from malaria alone. Tragically, unjustly, the counterfeit drugs industry has to a degree, been able to go unchallenged and is now said to be worth $200 Billion pa. Whilst some of those 450,000 deaths can be attributed directly to the toxic ingredients (such as rat poison, floor wax, industrial chemicals and
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the like) used to produce counterfeit drugs. We have found many more are a result of substandard drugs being sold to unsuspecting consumers, with little to no active ingredients present in drugs, which would otherwise have saved the consumers from preventable or curable diseases. This callous force, which all too often can go untraced, knowing no boarders, must be stopped in its tracks. Here at FarmaTrust, we have developed the most efficient global tracking system
which provides security to the pharmaceutical companies, governments, regulators and crucially, the public, that counterfeit drugs do not enter the supply chain. Our Blockchain based system Zoi utilises Artificial Intelligence and big data analysis to provide the pharmaceutical industry with value added services which allow for more efficient processes and methods as well as a more transparent supply chain. Our system is safe, secure, encrypted and immutable. Using the blockchain, we are able to track pharmaceutical drugs from the point of manufacture until the point of consumption by working with unique labelling or smart RFID labelling. Crucially we will remain
sensor neutral, so it can continue to work with any sensor innovations. Completely and utterly futureproof. Moreover, in certain countries where technology solutions are not available, then we provide smartphone Apps to collect data from customs authorities, logistics providers, pharmacies and hospitals. This is alongside our consumer app, which empowers every singe mobile phone user on the planet with confidence in the genuine source of pharmaceuticals. Simply scan and instantly verify genuine products. Working alongside governments and ministries of health is of integral importance to us at FarmaTrust. We have recently begun work with the Mongolian Government and thus far, it has been a greatly rewarding experience. By providing a holistic view of medicines within the territory, nations using our system can monitor current spending levels and forecast future budgets like never before. Furthermore, within the global political climate of today, accountability and transparency are key. In many countries across the globe, drugs are subsidised by the government through tax payers. This national subsidised system requires that public finances are auditable and spent efficiently. FarmaTrust gives governmental organisations complete visibility across their territories, thereby allowing for the identification of waste, through expired drugs or “leakage”. Within the pharmaceutical industry, major challenges remain. Such issues related to pharmaceutical products include the differing legislations across jurisdictional borders, compliance thereof, and the enforcement of these rules. So, within this sphere, the mission of FarmaTrust is to become the provenance system of choice for the pharmaceutical supply chain, by providing an effective and global data verification and coordination layer which provides pharmaceutical companies a cost-effective approach to meet track and trace regulatory compliance. It is here, where we can truly generate efficiencies. I am personally driven by an overarching goal to protect the vulnerable by eliminating deadly counterfeit medications on a global scale. Unfortunately however, counterfeit drugs are on the rise. In fact, reports of counterfeit or falsified anti-malarials rose 90 percent between 2005 and 2010, according to a 2014 article in the Malaria Journal. To my mind, we finally have the technology, so as a global community, the time to act is now. ■
HERE AT FARMATRUST, WE HAVE DEVELOPED THE MOST EFFICIENT GLOBAL TRACKING SYSTEM WHICH PROVIDES SECURITY TO THE PHARMACEUTICAL COMPANIES, GOVERNMENTS, REGULATORS AND CRUCIALLY, THE PUBLIC, THAT COUNTERFEIT DRUGS DO NOT ENTER THE SUPPLY CHAIN.
Raja Sharif is the Founder and CEO of FarmaTrust. He is driving the company’s vision and mission of protecting the vulnerable by eliminating deadly counterfeit medications on a global scale and providing data services to the pharmaceutical industry. He is a corporate and commercial Barrister by background, having worked as General Counsel and company secretary managing legal affairs, risk and good corporate governance. He has sat on the Boards of most of the companies and was usually involved in M&A activity as well as listing Raja has managed a number of technology and media projects worldwide for some of the best known brands, including British Telecom and Al Jazeera. He established FarmaTrust after researching and developing the blockchain service.
Lord Anthony St John of Bletso is a Crossbench/Independent Member of the House of Lords, he was brought up in South Africa, where he qualified as a solicitor. After completing his Masters in Law at London University, he worked as legal counsel for Shell and then an oil analyst/specialist sales for several institutions in the City, including Merrill Lynch, focusing on Sub-Saharan African and the Far East. He is currently Chairman of Strand Hanson and Integrated Diagnostic Holdings plc and serves on the board of several public and private companies and has recently become a member of the House of Lords Ad Hoc Select Committee on Artificial Intelligence. His specialist interests are cyber security, financial services and life sciences.
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THE WORLD IN 2050 A FORUM ABOUT OUR FUTURE
TO LEARN MORE VISIT:
Branded Story / VELUX
Future Generation of Canadians Face Health Risk from Life Indoors
New indoor generation spend 90% of time indoors ■ Indoor air can be up to five times more polluted than outside but 53% are unaware according to YouGov survey ■ Children’s bedrooms are often most polluted rooms in the house ■ New report by VELUX examines importance of daylight and fresh air to health ■
iving in damp and mouldy homes increases our chance of asthma by 40% and unless we act now we risk endangering our health as a result. A new 24/7 indoor generation is unaware that the air inside our homes and public buildings can be more polluted than outside, with the vast majority of people in Canada (53%) believing indoor air quality is no better than or cleaner than that found outside. In fact, it can be up to five times more polluted. The VELUX Group has unveiled the results of The Indoor Generation report – a survey that found an overwhelming misconception about the impact on our health caused by spending too much time indoors, especially on children, whose bedrooms which can be the most polluted room in the house. The Indoor Generation refers to the growing number of people who spend the vast majority of their time indoors –
currently 90% of their lives – compared to previous generations. Everyday home life activities, such as cooking, cleaning, showering, lighting candles, air drying clothes indoors and even sleeping and breathing, all contribute to polluted indoor air, which over time can lead to mould and damp homes, increasing our risk of developing asthma, respiratory diseases and chronic obstructive pulmonary disease (COPD). Pollutants present in everyday household objects are releasing toxins into our homes – detergents and the plastic toys that we give our children to play with, as well as building materials, are just some of the items which can actually worsen our indoor air quality. It’s believed more children will suffer from asthma or allergies unless homes and public buildings are better ventilated, and the chances of being diagnosed with asthma increase by 40% if you spend too much time in damp, mouldy buildings. The survey also found a significant disconnect between how people think they live their lives and the way we actually do, with only a quarter of people (26%) in Canada saying they spend 21 hours or more inside. But the actual figure is far more worrying, with previous research discovering a new ‘indoor generation’ who spend about
90% of their time – and often in dark, poorly ventilated and unhealthy buildings. In fact, 1 in 6 Canadians live in unhealthy buildings. Peter Foldbjerg, head of daylight energy and indoor climate at VELUX, said: “We are increasingly turning into a generation of indoor people where the only time we get daylight and fresh air mid-week is on the commute to work or school. Modern life can often involve an early start to the day, race to work where we spend eight to ten hours inside an office and then straight home, or sometimes making a stop off for groceries or for a quick workout inside a damp and sweaty fitness centre. “What was interesting about the findings in our report was the gap between people’s perception and reality when it came to understanding that indoor air can be up to five times more polluted than outside – and our children are most likely to suffer health conditions as a result. “When people are asked about air pollution they tend to think of living near big factories or busy urban areas with high levels of car emissions. It uncovers a need for further awareness and education about the impact our indoor living habits is having on our body and minds in terms of health and wellbeing.” VELUX has launched a short film “The Indoor Generation” to raise awareness of the importance of living in healthy homes and the small changes that everyone can make to improve their living environment and indoor air quality. It can be viewed here: velux.ca/indoorgeneration
Here are six simple steps to make the air inside your home healthier: ■ Open your windows at least three to four times a day to allow fresh air in ■ Keep bathroom doors closed and turn on the exhaust fan or open a window when showering ■ Turn hood fan on when cooking and open your windows ■ Don’t burn candles ■ Dry clothes outside ■ Clean regularly and with environmentally friendly products ■ Charlevoix. Canada 2018 ❙ 125
G7 Executive Talk Series Africa Authored by: Uju Okoye
What Does the Fall of Mugabe Mean for Could the fall of Mugabe signal the beginning of the end of the era of African strongmen? Here’s a closer look at the continent’s other de facto dictators presiding over nations eager for change.
imbabwean President Robert Mugabe’s ousting after 37 years in power in the recent coup-that-wasn’t-a-coup is the third time last year that one of the continent’s strongmen has unexpectedly left office. Last August, Angola’s José Eduardo dos Santos stepped down after a 38-year stint as president. And in January, soon after troops from the regional bloc ECOWAS moved into the Gambia, President Yahya Jammeh relinquished control after having refused to accept the results of the previous month’s elections. He’d had a good inning, though, having clung to his seat for 22 years. Could this signal the beginning of the end of the era of African strongmen? In the short term, to be sure, it is likely that these despots and aspiring autocrats will tighten their stranglehold on the nations they rule in an effort to prevent themselves from suffering the same fate as Mugabe. But in the long term, the writing is on the wall. Here’s a closer look at the continent’s other de facto dictators presiding over nations eager for change…
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Africa’s Other Strongmen? Uganda’s President Yoweri Museveni Years in power: 30 Once feted as a member of Africa’s new generation of leaders and having previously scorned the strongmen who came before him, Museveni now refuses to step down himself, saying “How can I go out of a banana plantation I have planted that has started bearing fruits?” While the familiar tactic of eliminating presidential term limits has served him well, there is now another stumbling block in his path: according to the constitution, presidential candidates must be under 75. No matter, of course; he has engineered a private members’ bill to scrap this pesky technicality. However, opposition is beginning to burgeon. There have been myriad protests about the proposed changes to the age limit and ugly scenes in parliamentamidst suggestions that Museveni has tried to bribe MPs, with even fellow members of his party protesting against proposed constitutional changes. Add to this the fact that the country’s eonomy is declining (with growth rates having dropped from 6-10% between 2001-2011 to 4.6% in 2017), and growing criticism from former allies abroad over his attitude towards gay rights, among other matters, and it seems that though Museveni may yet win a few battles, he is unlikely to win the war.
The DRC’s President Joseph Kabila Years in power: 16 Kabila has a good reason for wishing to stay in office: he has leveraged his tenure to skim the cream from the DRC’s vast resources – gold, cobalt, timber, oil – into his family’s vast business empire. As a result, staying in the presidential palace, which he should have exited last December, is the only way to keep his family’s revenue streams from going dry. Despite his determination to stay put, internal and external calls for change are growing. The people of the DRC are taking to the streets in protest and, in response to the heavy-handed response from the authorities, the UN Human Rights Commission has given the DRC a year to report on actions taken to hold free and fair elections. › Charlevoix. Canada 2018 ❙ 129
G7 Executive Talk Series Africa
al-Bashir › Now, the government has set a December 2018 deadline for the next elections, a move that was denounced by exiled opposition leaderMoise Katumbi as “one more maneuver” by a regime that wants to stay in power “indefinitely.” But even if elections are hosted, if the international community doesn’t up the temperature and ensure Katumbi’s save return to the country, the DRC’s democratic order will not be restored. Sudan’s President Omar al-Bashir Years in power: 27 n North Africa, al-Bashir has the dubious honor of being the only sitting president with an outstanding arrest warrant from the International Criminal Court. Indeed, the warrant for his role in overseeing the genocide in Darfur is one of his main motivations to stay in office, having reportedly floated plans to change the constitution and run for a third term despite promises to step down in 2020. In the short-run, he may have more luck doing so than some of his peers. A great deal of power is concentrated within the ranks of the National Intelligence and Security Service (NISS) and the military, and so far, al-Bashir has managed to keep a wary peace between the two services. On top of that, key actors 130 ❙ g20g7.com
Abdul Aziz like Russia and the Gulf states have been willing to provide critical support to al-Bashir, and even the US recently lifted sanctions on the government, citing progress on human rights and counter-terrorism efforts. Most importantly, Sudan’s opposition is divided and weak: the most they can hope for at this point is a more open political process. Mauritania’s President Mohamed Ould Abdel Aziz Years in power: 8 Though his time in office is relatively modest compared with his peers, Mauritania’s leader – who took power in a coup – still ranks as a de facto dictator, and signs suggest that he could give some of his fellow strongmen a run for their money. He has successfully engineered a vote for a referendum to abolish the senate, which the opposition claims is the first step on the road towards changing presidential term limits in his own favor. The country ranks as one of the worst in terms of human rights and freedom of speech: around 1% or 43,000 people in the country are classed as slaves, human rights groups are calling for investigations into the abuse of protestors by police, and people have been sentenced to death for comments made on Facebook. In addition to facing growing
internal strife, Mauritania may become subject to rising scrutiny from international allies like the US, which has had a counterterrorism partnership with Nouakchott since 2002. If the government does not show enough progress towards stopping the flow of armed groups and, most importantly, addressing the very domestic grievances that further fuel home-grown terrorism, then Washington and other security partners may soon raise pressure on the government, opening the door for his eventual departure. Of course, before these strongmen leave, things may well get worse before they get better, as heads of state react more violently to dissent or use subterfuge to try to stay in power. Yet it is unlikely that the toppling of three autocrats this year will turn out to be an isolated incident – especially in an age when Africa’s growing middle class is demanding more from its political leadership, and when regional and international stakeholders are proving increasingly willing to sanction those who break the rules. ■
Uju Okoye is an Africa-based Correspondent and Contributor to Diplomatic Courier Magazine.
Heather is researching how algae and carbon can produce biofuel. “We collect carbon dioxide and put it in a tank with algae and light. The reaction gives off oxygen and algae is pressed to release bio-oil which can be used for biofuel.” This is just one more example of the oil sands industry’s commitment to innovation and tomorrow’s energy. Learn more at:
G7 Executive Talk Series Venezuela Authored by: Bailey Piazza
The Next Chapter for Venezuela With each volatile move Maduro makes, the once-democratic Venezuela plummets further into political and humanitarian crisis.
ith each volatile move Maduro makes, the once-democratic Venezuela plummets further into political and humanitarian crisis. It is clear that Venezuela’s ruling socialist President Nicolas Maduro is extending his reach of power in order to consolidate complete political control. His suspected meddling claimed victories in last week’s mayoral elections and October’s gubernatorial elections. He also recently installed top military generals to executive positions in Venezuela’s state-owned oil company PDVSA, which generates the government’s main source of revenue. Now, President Maduro has locked eyes on 2018 elections. Planning to win by all means necessary, Maduro has banned the opposition parties from participating in next year’s presidential election. Maduro’s political agenda is not as concerned with encroaching economic failure as it is with consolidating a de jure dictatorship in Venezuela. Venezuela’s socialism tsunami has drowned its people in hyperinflation, food shortages, skyrocketing crime rates, and a deficit of basic medical resources. Sanctions and scoldings from the international community have barely bruised Maduro’s unsettling confidence. With tensions rising and conflict looming, what comes next for Venezuela? Civil War The violent protests that ransacked Venezuela’s city streets from 2014 to 2017 brought the possibility of civil straight to the peoples’ doorsteps. However, as the brutal suppression of riots rose in severity with the tally of deaths and disappearing pro-democracy activists, the violence subsided to those who held the guns: the government. In order for a civil war to be a remote possibility in the near future, both sides would require weapons. But with Maduro enjoying the consolidated support
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of the military, the protest-thwarting National Guard, and the collectivos—a terrorizing motorcycle gang turned quasipolice—guns are hard to come by if you are not on Maduro’s team. But with Venezuela’s rapidly deteriorating human rights and matching economy, reports indicate that over 80 percent of Venezuelans oppose Maduro’s reign. Maduro’s powers may be strong, but the rumble for regime change reverberates throughout the country. Military Coup Zimbabwe may be hundreds of miles away, but a military coup overthrowing a distrusted leader may be a source of inspiration to the Venezuelan people (on the off chance that the heavily censored, state-sponsored television would show such world events). Maduro has only shown favor to the highestranking military officials, leaving mid-ranking officers and their subordinates to suffer a similar fate as the rest of Venezuela’s impoverished civilians. Those military members who seem to be overlooked by Maduro and his favors have more reason than ever to reconsider their loyalties. It is too soon for a full-blown coup to transpire as the sentiments of the mid- and low-level ranks have yet to foment into brazen discontent. As Maduro’s grip on the reins of power continues to strengthen, his precious military may become disenchanted. Officers will turn from their posts. When ordering his armed forces to use excessive force against angry protestors, Maduro may find that his guns turn on him instead. Diplomatic Negotiation The ideal solution, of course, is to eliminate the threat of further violence and promote positive political negotiations between the government and opposition. However, Maduro is in no place to entertain the |concept of ceding power to his adversaries. Even if President Maduro somehow did
agree to negotiations, any agreement brought forth by the opposition would demand free and fair elections, meaning certain death to the unlimited power of Maduro and his henchmen. The opposition has all but given up on the prospect of peaceful negotiations. But should Maduro become desperate enough in the future to
WITH VENEZUELA’S RAPIDLY DETERIORATING HUMAN RIGHTS AND MATCHING ECONOMY, REPORTS INDICATE THAT OVER 80 PERCENT OF VENEZUELANS OPPOSE MADURO’S REIGN.
secure some semblance of popularity, he may find himself sitting across the table from his opponents once again. In truth, it is impossible to predict a definite ending to Venezuela’s tragic tale. The international community is raising its voice, pressuring Maduro economically and politically. Millions of Venezuelans
continue to defy the government’s deepening roots, making successful implementation of a strong dictatorship a daunting task. At any rate, if the tides of destructive socialism do not change soon, the next chapter for Venezuela may be reminiscent of the all-to-familiar dictatorship in Cuba. ■
Bailey Piazza is a Contributor to Diplomatic Courier Magazine.
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G7 Executive Talk Series Human Trafficking Authored by: Coby Jones
Modern Slavery Goes Beyond the Libya Slave Trade In the CNN video from Libya, the primary victims of the slave trade are men. Most often though, this process doesnâ&#x20AC;&#x2122;t happen on an auction block, there are no bids, and the victims are usually women.
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he auctioneer calls, “Does anybody need a digger? This is a digger, a big strong man, he’ll dig. What am I bid, what am I bid?” The auctioneer is selling a man, a slave, and that man’s bid goes for $400. The CNN footage of the slave trade in Libya has shocked the world. For some, this is the first time the reality of modern day slavery has entered their conception of the world and confronting it is horrifying. The reality is the slave trade is alive and well all over the world, not just in Libya. Human beings are bought and sold and forced into slavery every day. A report by the International Labour Office (ILO) and the Walk Free Foundation estimates that 40.3 million men, women, and children were victims of modern day slavery in 2016. Though there is no legal definition of modern day slavery, it is a broad term used to cover many forms of coercion in human rights or labor standards. Forced labor, marriage, sexual exploitation and stateimposed labor are terms the ILO uses to categorize instances of slavery. The average cost of a slave is $90. In the CNN video from Libya, the primary victims of the slave trade are men. While inhumane and urgent, this is not a typical example of how modern-day slavery takes
place. Most often though, this process doesn’t happen on an auction block, there are no bids, and the victims are usually women. Seventy one percent of modern day slavery victims are women. Gender-based violence, conflict, and poverty all contribute to women becoming the primary victims of modern day slavery. Gender-Based Violence The UN Refugee Agency defines gender-based violence as any act that is perpetrated against a person’s will and is based on gender norms and unequal power relationships. Genderbased violence and slavery are often closely linked, as violence is a defining characteristic of slavery, specifically sexual slavery and exploitation. This is most evident in the sex-trafficking and survivors of rape, sexual harassment and exploitation. In fact, the ILO reports that 99% of victims of sexual exploitation are women. Men certainly fall victim to sexual exploitation but women, are doubly victims of an unequal power dynamic. Gender-based violence is inherent in the violence perpetrated against women victims of slavery. Conflict Slavery is more easily perpetrated in countries that are affected by war and conflict. › Charlevoix. Canada 2018 ❙ 135
G7 Executive Talk Series Human Trafficking
› Slavery happens in all countries, but in countries where the rule of law is broken, there are many more opportunities for women to be forced into slavery. Reports of forced sexual slavery come from countries all around the world such as the Democratic Republic of Congo where rape and sexual violence have reached epidemic proportions and Iraq where ISIS has persecuted Yezidi women. Conflict and war also displaces men, women and children, forcing them to flee their homes in search of safety. Refugees and internally displaced persons are vulnerable to smugglers who buy and sell people, as was the case in the Libyan video. In the search for safety, women can be sold into domestic servitude and forced marriage under the disguise of an option for safety. For example, 24% of Syrian refugee girls in Lebanon are married because of the insecurity that continues to plague their families. Poverty Poverty creates vulnerability worldwide and hinders the education, health and rights of women. Often, poverty leads families to take extreme measures. In the Rohingya refugee camps, young girls are being sold into marriage. Marrying young girls means that
families do not have the responsibility to feed that child or will use the money to sustain the family. Poverty also forces women to take on the majority of unpaid care work. These jobs fall outside the formal economy and are not regulated by laws or contracts. As a result, they often end up being forced labor or indentured servitude as women are not paid at all or are paid so little they are unable to escape or change their circumstances. The tragedy of modern day slavery is that it is more insidious. You won’t see every slave in a video in CNN because the majority of modern day slaves are not auctioned publicly, but sold within their communities and families. This is a time to recognize that women are the primary victims of slavery globally. The video is a shocking reminder that slavery is a very real part of our global society, but we must go beyond the shock factor and tackle slavery in all its forms. Gender-based violence, conflict, and poverty create vulnerable situations for women around the world making slavery a terrifying reality for many. Until the international community can come together and create a more equitable world for women and men, slavery will continue to be a part of our global society. ■
SLAVERY IS MORE EASILY PERPETRATED IN COUNTRIES THAT ARE AFFECTED BY WAR AND CONFLICT. SLAVERY HAPPENS IN ALL COUNTRIES, BUT IN COUNTRIES WHERE THE RULE OF LAW IS BROKEN, THERE ARE MANY MORE OPPORTUNITIES FOR WOMEN TO BE FORCED INTO SLAVERY.
Coby Jones is a gender and development professional based in Washington, DC and a Contributor to Diplomatic Courier Magazine. She holds a Master’s Degree from The London School of Economics and is interested in gender specific development strategies. Follow her @JohnaCoby
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Did you know over 1,000 new businesses start up in the UK every day?
The UK is one of the leading business locations in the world and the number one destination for inward investment (FDI) in Europe. Discover a land alive with opportunity at invest.great.gov.uk The worldâ&#x20AC;&#x2122;s financial centre London, UK
G7 Executive Talk Series Free Trade Authored by: Dr Liam Fox, Secretary of State for International Trade
A Route to Global Prosperity
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s Secretary of State for International Trade, I’m often asked what the benefits of free trade are for the UK and for our global partners. I tell them that free trade has the power to drive growth, jobs and opportunities both at home and overseas. Equally important, however, is the power free trade has as an essential tool in the global fight against extreme poverty and the worldwide goal of the ending developing nations’ reliance on aid. The UK can, and does, consider this our obligation and our trade policy reflects this. This has become an essential aspect of the UK’s approach. A joint report by the OECD, ILO, World Bank, and the WTO shows that that per capita income grew more than three times faster for developing countries that lowered trade barriers than for other developing countries that did not. The Department for International Trade (DIT) is keen to build on this advancement through efforts to accommodate the needs of developing countries in their quest to develop trading capability. DIT has ensured we continue to offer tariff and quota-free access for the Least Developed Countries as well as offering generous tariff reductions to around 25 other developing nations. We will also seek to replicate the EU’s Economic Partnership Agreements, which are development focused trade deals with Africa, Caribbean and Pacific countries. Our first priority is to deliver continuity in our trading arrangements on leaving the EU. Once we leave the European Union we will have the freedom to go even further in supporting the trading growth of developing nations and expand our trading relationships. An essential element of any successful trading environment is mutual benefit and increasing these countries trading capacity will be of equal benefit to the UK. Look at Africa for example. Research by the McKinsey Global Institute suggests that African household consumption will reach $2.1 trillion in 2025 showing the huge potential market for UK businesses. Stronger trade relationships with developing economies are in our national interest, creating jobs and spreading mutual prosperity in this country, as well as overseas. DIT works closely with the Department for International Development, and the rest of Government, to deliver new long-term partnerships with developing countries. Through these partnerships we seek to
THE DEPARTMENT FOR INTERNATIONAL TRADE (DIT) IS KEEN TO BUILD ON THIS ADVANCEMENT THROUGH EFFORTS TO ACCOMMODATE THE NEEDS OF DEVELOPING COUNTRIES IN THEIR QUEST TO DEVELOP TRADING CAPABILITY. support aspirations for trade, investment, jobs and growth. UK companies can enjoy access to some of the world’s fastest-growing economies, and the chance to build lasting commercial relationships, driving growth and creating jobs. Developing economies can benefit from the knowledge and experience that UK firms can offer through these commercial relationships. With consumers evermore after global products, forging these partnerships can only be of benefit to the global economy. Trade is crucially about people – from entrepreneurs, to the people they hire and the families they support, this is at the core of what we are trying to achieve. We must ensure that no one is left behind –that we provide an environment for every individual to realise their full potential – if we are to achieve sustainable growth t hat is genuinely inclusive and reaches all corners of societies. For example, the Jaguar-Land Rover dealership I visited outside Johannesburg. At first glance, it is about selling luxury UK cars to the expanding middle-class market in South Africa. But look closer and you will see some of the most underprivileged young people gaining skills in salesmanship or mechanics, developing marketable skills for their future. We have also seen the UK-backed launch of the International Trade Centre’s (ITC) She
Trades Commonwealth programme. This will provide Commonwealth governments with the data they need to identify and improve opportunities for women – and help female entrepreneurs to start trading. These examples show the UK’s championing of free trade directly empowering individuals across society. To achieve a truly liberalised trading environment, there is much to consider. Removing the red tape that hinders the transition of goods across borders is a key battle in establishing free global trade. This is why the UK is supporting countries to implement the World Trade Organisation’s landmark Trade Facilitation Agreement that could boost global trade by up to $1 trillion. The Commonwealth Standards Network is another example of DIT and DFID led initiative to remove bureaucratic barriers which will further facilitate and increase trade flows between countries by encouraging and supporting Commonwealth countries to work to common international standards. Programmes like these enables the UK to be a voice for free trade and development, easing trade across borders and promoting inclusive policy. Through trade it is possible to spread prosperity, political stability and collective security. By championing free trade, the UK seeks to empower developing nations to sell to new markets, creating thousands of jobs and lifting yet more people out of poverty. ■ Charlevoix. Canada 2018 ❙ 139
G7 Executive Talk Series Branded Story / Mandala Authored by: Bridget Vandenbosch
Cryptocurrency Mass Adoption Through Regulation
he introduction of bitcoin has taken one of technology’s most novel innovations and delivered to the world an entirely new method of data propagation and value transference. Blockchain is streamlining the way societies create, store and verify data and transactions. With the power to further globalization, blockchain adds new layers of data security, accuracy and speed, creating opportunities for new efficiencies across economies, businesses and industries. While blockchain technology is relatively young, the possible implications for every business around the world are very real. However, the birthplace of this technology and the communities of adopters around it have obscured an already complex tool and resource. Though it has been nearly a decade since Bitcoins debut, the rate at which this space evolves has left a gap for regulators and lawmakers through no fault of their own. As hundreds, if not thousands, of cryptocurrencies, tokens and digital assets appeared, it’s relative immaturity has created a chasm where opportunists, fraudsters and the naive often find themselves in uncomfortably close quarters.The recent
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exponential growth of the space has created a culture where internet jokes, ‘memes’ and horror stories have drowned out the redeeming qualities and created uncertainty for those observing who have yet to adopt. This technology space shows no signs of slowing down, in order for adoption to take hold developers need to begin working with regulators to ensure that consumers are protected and that blockchain has a place in our society. As regulations becomes clear, cryptocurrencies, blockchain and tokens will be taken seriously around the world, but the burden should not fall to just the lawmakers. As Bitcoin introduced blockchain by way of a payment medium and distributed ledger network, the space has evolved to encompass new forms of crowdfunding. From 2013 up until today, ICO (Initial Coin Offering) introduced a new method of funding blockchain based projects through the private and public offering of tokens which is equivalent to a securities offering. “The SEC implies most ICO’s are securities, and I tend to agree. Developers have been soliciting funding much the same as a corporation would. While we at Mandala wholly support crowdfunding, we are firm
in our value that these activities must be conducted in accordance with the law,” said Anant Handa, Co-Founder and CSO of Mandala. “Earlier in the year, the SEC testified in a congressional hearing, noting that they believe every ICO constitutes a securities offering and yet none had registered. It’s a problem that we need to fix. We as industry leaders need to embrace our responsibilities in this wonderful technology space.” Of late, the acronym ‘ICO’ has become synonymous with financial fraud and illicit activity in addition to being unregistered securities offerings. “A much more appropriate term would be Securities Token Offering or STO. That’s what has been going on in the cryptosphere,” according to Nate Flanders, Co-Founder and CEO of Mandala. “Securities offerings are a funding or investment round that enables a business to raise capital for operations, special projects and many other business initiatives. Developers, totally unaware, have created a new method to fundraise through digital assets, a token. These tokens are usually based on Ethereum, and the problem we face is that they are unregistered securities offerings,” according to Anant Handa. Project developers may have been ignorant to global securities laws in driving forward with their passion for blockchain and innovation. A lot of the projects that exist today have created real world tools and applications that could bring meaningful change across a wide a spectrum of industry. It would be a shame for innovation to stop and for the blockchain space to remain in limbo. Without regulatory guidance, clear laws and certainty, consumers will remain hesitant and adoption will continue to lag. “Taking obscurity out of the space, making trading and investing in cryptocurrencies and digital assets not just accessible and safe, but bringing it to mainstreet; this is what drives us at Mandala,” said Nate Flanders. Mandala is a team of industry professionals dedicated to leading the charge across the digital asset space. “Raising the standard of expectation means we aren’t beating around the bush. These are securities. This is people’s hard earned money. Consumers must be protected and industry leaders must engage with regulators and lawmakers. It is about ensuring the longevity of the industry and the safety of market participants,” said,
Anant Handa, commenting on Mandala’s mandate to achieve full compliance. Mandala strives to be an agent of change, creating a platform that users can feel confident in, knowing it will be there tomorrow, that their funds are safe and that the organization is accountable. Not shy, the leadership behind Mandala is ready to engage directly with regulators and the SEC (U.S. Securities & Exchange Commission). Plans already in place and filings ready to mail, Mandala will register as an Alternative Trading System (ATS) with the SEC and register or acquire a Broker-Dealer (BD) license. The organization is also seeking Money Transmitter Licenses (MTL) in as many states as possible. “Mandala is a first of its kind exchange and platform. We introduce a functional token to our users and central to our mission is achieving full compliance. It is a primary objective,” said Anant Handa. “There has always been a risk that unregistered exchanges could be shut down with a legal notice and forced to halt trading. When it is people’s money on the line, that’s just not okay, and it isn’t the regulators fault, they have to protect consumers.” In addition to the above licenses Mandala is filing for a Reg A+ offering, allowing their MDX token to flow back to the United States. The team behind Mandala is taking their mission seriously, doing it right, and delivering a unique experience and advantage to its user base through compliance. “I’ve been in this space for a few years, mostly as a market participant, and let me just say, if we want to see the adoption spread beyond current demographics, the path is through regulation. It’s needed, we have people committing fraud left and right, others entirely naive to what they are doing - clarity, certainty, that’s how we grow the space into a trillion dollar market,” according to Anant Handa. “I think what makes us unique is that we were market participants, we’ve seen it all - that’s why Anant and I are a driving force behind the next phase of blockchain implementation around the world,” added Nate Flanders. Organizations like Mandala, and industry leaders like Anant Handa and Nate Flanders are firm in their values of adoption, legal compliance and reasonable regulation throughout the blockchain space, known today as the wild west. “Connecting the universe through blockchain is our motto to us it means driving accessibility for
novices, veteran, institutions and retail investors. As we accomplish this through regulation, the opportunities for developers in the space are limitless. With regulatory certainty, innovation on blockchain technology would only accelerate, benefiting society globally,” concluded Anant Handa. One of the greatest technological advancements since the internet, blockchain is driving connectivity and innovation on a scale the world has never seen. While regulators and lawmakers absolutely have to continue to drive forward with their mandates of consumer protection, industry leaders and developers must meet them in the middle.
To ensure that regulation is done reasonably and thoughtfully is in the best interest of the user base, adopters and developers. Blockchain, cryptocurrency and Security Token Offerings will find their place in the technology and investment world. The current market demographic is a fraction of what it could be and fostering adoption means taking the space out of obscurity, out of the wild west phase and into a new frontier. Having the foresight and seizing the opportunity to participate in regulatory development will foster adoption and ensure a lasting place in the blockchain history books. ■
Anant is a co-founder of Mandala, a next generation cryptocurrency exchange and platform. Anant Handa is a serial entrepreneur and seasoned chief executive with over 10 years of experience. He has cultivated over $100M in revenue across multiple ventures throughout his career. He is a strategic investor, mentor and advisor to multiple start-ups.He has accomplished this by maintaining awareness of both the external and internal competitive landscape, opportunities for expansion, customers, market, new industry developments and standards. Anant has a degree in Information Technology and Software Systems Engineering from Colorado Technical University and currently lives in Chicago with his family.
Nate Flanders has owned, operated, and scaled multiple successful companies that range from online marketing agencies, software development & sales, the gambling industry, the cell phone repair retail & wholesale industry, and most recently the blockchain industry. Most recently, Nate has Co-Founded a second generation digital asset exchange within the cryptocurrency industry, Mandala. Mandala aims to disrupt the current crypto exchange market and become one of the first cryptocurreny exchanges to become fully compliant with the SEC.
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THE BIRTH OF A NEW DIGITAL ECONOMY INDUSTRY Achieving Real Economic Integration
oday we witness millions of Small and Medium Enterprises (SMEs) pursuing their passion, nurturing the craftsmanship of their employees, and building close relationships with customers. These SMEs support families and provide nearly 60 percent of global employment. As the backbone of our global economy, SMEs face numerous challenges, from the continuous battle to stay competitive, comply with regulatory requirements, secure finance, manage operational and trade costs as well as selling products to new markets – the obstacles are many. Yet, given the challenges for these businesses to produce even the simplest of products, it is a wonder they survive in today’s competitive environment.
Therefore, if we are to build our economic base throughout the world, we have a duty to support our SMEs with innovative policies and tools to ensure their prosperity. This challenge was recognized by the countries of the OECD in the late 1990s and resulted in a conference of Ministers responsible for SMEs hosted by the Italian government in June 2000. Nearly 50 member and non member countries attended. They adopted the Bologna Charter for SME policies. Italy was a logical choice because northern Italy in particular has been the breeding ground for many entrepreneurial SMEs which have successfully penetrated global markets for their products.
However, much of the focus was on issues such as developing suitable cross border dispute mechanisms which were too cumbersome and costly for most SMEs. At that time we could hardly imagine the incredible potential for SMEs of the digital economy industry which lay beyond the horizon and which would completely revolutionize the B2B businesses of SMEs on a global basis. For most it was at best a dream unlikely to become a reality in the foreseeable future. Today that dream is shared today by the G20 leaders who see it rapidly becoming a reality through the establishment of the G20 Digital Economy Development and Cooperation Initiative that includes creating enhanced digital inclusion within the global value chains for SMEs. While the period of rapid globalization during the past 30 years has lifted one billion people out of extreme poverty, we still have a long road ahead of us in the journey to develop greater inclusiveness that is key to achieving sustainable prosperity at every level within our societies. It is now an imperative for leaders around the world to re-envision the future of our global economy and to work together by embracing the Digital Economy to transform it into one that truly connects and serves us all. Our journey must begin with understanding the significant demographic shifts over the past few decades that has impacted every nation across the globe today.
Honourable Donald Johnston
OECD Secretary General (1996-2006); Minister of the Canadian Federal Government (1980-1984) Chair Emeritus of the McCall MacBain Foundation (Geneva)
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High-income countries have declined during the last 35 years from 22 percent to around 15 percent of the world’s total population. Their increased efficiency, low birth rates and aging populations have resulted in excess capacity with lower local market demand for the products and services they produce. In comparison, low and mid-income countries have experienced high birth rates and a youthful population, however, they currently have much lower salaries and higher trade costs than their counterparts, leaving them with weak buying power. Accordingly, a major imbalance in our global economy has resulted, one that requires that we connect the strengths of our economies to achieve sustainable growth for all. By achieving greater efficiency and transparency, low and mid-income countries will de-risk and grow trade with the high-income countries. increasing their buying power, and providing high-income countries with new market opportunities. The question remains, where do we start in today’s 21st century digital era? While the current trend is to focus on artificial intelligence, robotics and internet of things, how do these innovations truly benefit the SMEs in the real economy of manufacturing, agriculture and the services industries that supports them? The answer is we must digitize and de-risk trade within the global USD 140 trillion B2B marketplace to once again maximize the power of today’s technology for the public good. The use of technology has historically proven to create significant advancements when applied to connecting societies. For example, Indonesia once lagged behind the world in terms of telecommunications capability. With the advent of digital communications, Indonesia leap frogged ahead of the United States that had invested heavily in analog switches and copper wires. Hence, the use of technology has contributed significantly to Indonesia’s economic growth becoming the 16th largest
economy in the world, representing a vast new market for the high-income countries.
17 percent to its GDP by 2030. The enormous benefits of the Digital Economy are undeniable.
The technology industry can once again drive a tremendous social impact in today’s interdependent global economy by helping to derisk trade and build the purchasing power of mid and low-income countries towards rebalancing the world economy. Otherwise, who will be left to buy the goods and services produced by high income countries in 20 to 30 years?
The use of new digital tools for trade can also maximize physical infrastructure capacity utilization which has been proven successfully by Germany where it regularly reaches the world’s top rankings in trade efficiency. When applied to our global value chains, today’s technology can provide a self-monitored dashboard to ensure the transparency and visibility of trade related information for the private and public sectors to prioritize investments and maximize their economic returns. In all, new Digital Economy tools increase competitiveness and grow global trade.
Since trade is a horizontal process involving 19 industry trade clusters, harnessing the potential of the digital economy by digitizing our global value chains is key to escaping the low growth and low productivity trap in which the global economy is caught. Accordingly, there is a tremendous opportunity for the
WE MUST DIGITIZE & DE-RISK TRADE WITHIN THE GLOBAL USD 140 TRILLION B2B MARKETPLACE
world’s technology firms to partner together under one roof and develop new processes and business models towards building the applications demanded by the real economy participants at the ground level. Therefore, the use of technology to create greater trade efficiency and transparency can de-risk doing business, reduce excess trade costs and ease access to finance and insurance that will grow trade and build the buying power of the mid and low-income countries, thus creating new loyal consumers for the high-income countries. By harnessing the power of new digital technologies, it is estimated that the world can add as much as
It is important to note that the cost of technology must not hinder its adoption since SMEs cannot afford the high cost of vertical systems in use today. Therefore, we must ensure that these new digital tools are made available at no cost to the end user through a sustainable business model, providing inclusiveness within our global value chains for our SMES to gain the prosperity which they deserve. As the world moves to digitize its global value chains, we must recognize that one organization or one country cannot deploy the required digital solution due to geopolitical, monopolistic and data security concerns. For example, a balanced global governance and deployment structure must be in place to ensure the data owner’s data is only exchanged with the express authorization of the data owner. In this way we can ensure a secure means by which to exchange our trade data and facilitate greater trade throughout the world. Today, it is apparent that the digitalization of the B2B marketplace is key to the future sustainable growth for all nations, as it affects every aspect of public and private life. The birth of a new Digital Economy Industry will re-energize the financial industry to grow trade and create millions of jobs led by our SMEs globally.
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THE BIRTH OF A NEW A New Era of Trade Finance
s noted by Dr. Donald Johnston, the importance of SMEs’ contribution to economic growth should not be underestimated. It is imperative to ensure that the world’s SMEs have access to the credit they deserve to expand their business. Increasing the inclusion of SMEs in global value chains (GVCs) was highlighted at the 2017 G20 Germany Leaders’ Summit and remains an objective we must continue to pursue. However, can you imagine then that among our financial institutions throughout the world, many of them are letting go of their SME customers since they find that it is too expensive to continue doing business with them? The irony is that the rules and regulations set forth after the Global Financial Crises to strengthen the foundation of the financial industry have placed huge constraints on our banking institutions to provide the necessary funding to our SMEs. The World Bank’s estimate of the SME credit gap is approximately USD 5.2 trillion, about 3% of the B2B market. However, this financing gap only recognizes the gap in SME trade financing compared to the actual applications
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made - many potential borrowers do not apply for financing due to current regulatory requirements and strict lending criteria Therefore, the question still remains, how can financial industry transform itself to deliver what the SMEs demand to achieve the economic prosperity required to reenergize the global economy? The advent of the FinTech industry is but one example of the attempts to maximize on the power of today’s technology. However, while many new technology-based competitors have entered the financial services marketplace over the last decade, few have survived. According to McKinsey & Company, “In the eight-year period between the Netscape IPO and the acquisition of PayPal by eBay, more than 450 attackers — new digital currencies, wallets, networks, and so on — attempted to challenge incumbents. Fewer than 5 of these challengers survive as stand-alone entities today. In many ways, PayPal is the exception that proves the rule: It is tough to disrupt banks.” These failures illustrate that such applications fail to address the comprehensive needs of all trade participants within the supply chains,
and these FinTech platforms represent another form of a fragmented vertical solution. The lack of real-time shipment information and timely data of buyers, sellers, and the movement of goods results in high underwriting costs, perceived credit and transaction risks, as well as an ongoing burden of regulatory requirements, limiting the ability to expand trade finance, particularly into the SME sector. These findings were evident through the G20 Nations Case Study of trade efficiency conducted by 90 G20 ministries, industry associations, academia and private sector experts following the collection of 1.2 million data points through face to face interviews. The results indicated that 90.4% of B2B participants have no integrated system and 94.5% want the Digital Economy Platform to reduce their trade and operating costs, ease access to finance and better connect with global markets to increase their trade. The results also showed that the banking industry rated among the least integrated of the 19-industry clusters involved in the global value chains. The financial services industry has poor visibility over physical trade activities
and has to rely upon non-validated data to base its underwriting decisions. The solution of an open access Digital Economy Platform, deployed by the world’s leading technology firms provides an ecosystem of seamlessly integrated e-commerce, e-finance, e-insurance and e-logistics tools to the B2B marketplace, at no cost to the end users. The main benefit of such an ecosystem allows the creation of the smart E-Finance matrix that will provide the dynamic scoring level needed to: Mitigate Trade Finance Risk – by minimizing underwriter risk based upon borrowers’ historic and future global trade finance activities. Minimize Transaction Risk – by maximizing lenders’ capability to electronically direct loan proceeds to the borrower’s preapproved sellers of products and services. Reduce Asset Recovery Risk – by ensuring the capability to seize assets in the trade pipeline for rerouting or liquidation to minimize asset impairment losses. All of the above will expedite trade finance, enabling new global market expansion for the SMEs of the world.
Improved Risk Management. Real time and dynamic transaction monitoring resulting in better-informed decisions to manage the asset portfolio and achieve higher Tier One capital asset ratios. Trade Finance Program Efficiency. Access to a wide range of relevant trade information
THE BANKING INDUSTRY RATED AMONG THE LEAST INTEGRATED OF THE 19-INDUSTRY CLUSTERS IN THE GLOBAL VALUE CHAINS
shipments within the trade pipeline, customer forecasts, pricing, raw materials and market demands. New Products and Services. Expanded service revenue streams such as freight finance, inventory finance, receivables finance, bill consolidation, and foreign exchange-driven profitability. With SMEs struggling to access the financing they deserve, it is therefore incumbent upon policy makers and business leaders to adopt a paradigm shift and listen to the voice of the B2B participants on the ground to help get the financing of trade humming again. Through a Digital Economy Platform, financial Institutions can integrate far more deeply within the B2B marketplace to link banking services dynamically to the physical movement of the product and all associated documents efficiently, thereby tapping into the power of SMEs. The Digital Economy can promote an ecosystem that permits global integration of product and service offerings with the intelligent proficiency to match to targeted buyers. This environment must be based upon dynamic, validated real time information accumulated and continuously updated through the normal course of trade activities around the world and not based on unsubstantiated reviews and incomplete documentation currently in use today.
The use of a Digital Economy Platform will reduce additional Captain, Samuel Salloum pressures that are stymieing Co-Chairman, Global Coalition for Efficient Logistics growth. Such a platform will afford financial institutions with the opportunity to participate in a new USD 2.4 trillion e-finance industry providing: thereby mitigating credit and transaction The rise of the Digital Economy is the fourth risks to increase trade finance activity, job industrial revolution, paving the way for the rise of a completely new era of trade finance, creation and “Aid for Trade”. Greater Visibility. Seamless integration powering greater prosperity today and in into the dynamic global trade financial activities and new market opportunities for Global Deployment of Supply Chain generations to come. banks, particularly SMEs in high, mid and Finance. Dynamically linking to the global low-income countries. supply chains, including the state of
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DEEP IN CHARLEVOIX, LESS THAN AN HOUR AND A HALF FROM QUÉBEC CITY,NATURE’S HEARTBEAT BRINGS A LANDSCAPE TO LIFE. Echoing down green mountains and across crystal streams, it joins the rhythm
of bustling village streets before mixing with the waves of the majestic St. Lawrence as it f lows to the sea. Whether you come for a cultural getaway, an epicurean adventure, or the chance to explore a natural world of limitless horizons, you will leave transformed by
the incomparable charm of Charlevoix.
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