Magnificent Nine

The Amazing Story of the Magnificent Nine!

I had the pleasure of watching a fantastic Japanese film, The Magnificent Nine (殿、利息でござる! (Tono, Risoku de Gozaru!). The trailer can be viewed here.

The Seven Samurais have always captured the imagination of people with their valour and bravery. However, this riveting film based on a true story of the magnificent nine heroes – and theirs is a story that must be told and spread widely – is an important one.

This is a movie about sacrifice, about going beyond one’s own sense of privilege and thinking of the wider community and striving to support one’s people and community regardless of the hardships this may bring about. This remarkable tale was recorded by the priest Zuishi Eishu in his book, “Koko-on-ki.”

The story is set in the middle of the 18th century (1766 to be precise) during the Samurai era. The place is Yoshioka, a poor town, within the Kurokawa district in northern Japan. The people of Yoshioka were ruled at the time by a young feudal lord by the name of Shigemura Date.

When I first started watching the film, I’d assumed that it was a comedy; and whilst there were some laughs and warm-hearted moments, it could not make the deeply philosophical messages about the themes of sacrifice and noblesse oblige.

Yoshioka was a small ‘post town’ – so called because it was under the obligations of an old tradition (established 150 years earlier) called the “post horse duty” – where it was the duty of the folk of the ‘post town’ to transport all of their feudal lord’s goods at their own cost (including that of horses and labour) to the next unfortunate ‘post town’ which had to do the same until it got to its desired destination.

Due to the severe burden placed upon it, the little town of Yoshioka faced a growing exodus.  The people of the town, already in dire straits, went bankrupt and fled. The remaining town folk faced an increasingly greater burden as more people left and had to deal with growing costs of the post-horse duties.

It was at this point, one of the remaining residents, a tea grower by the name of Sugawaraya, hit upon an idea of a collective solution that will reduce the burdens of the townsfolk.

The idea rested on a simple premise. A select group of investors will band together and raise 1000 ryos (an old Japanese denomination) or US$3 million in current day terms and loan that full amount to Lord Shigemura Date, who was in straightened financial circumstances.

Subsequently when their Lord pays the interest on the loan, the yearly interest income will cover the full costs of their ‘post town’ duties for each and every person in the town. This meant that all of the people of Yoshioka will be able to escape the debilitating effects of the post-down duties and be able to build better live for themselves.

These few men had a belief that since they have the means, the can band together and create a solution for all of the people in their society. This small group of men will receive no returns nor profit as a result of doing this and their only benefit is the collective well-being of their town.

The efforts of this small band of heroes meant that the town of Yoshioka flourished and grew for a hundred years as they were paid an interest by the Lord and his successors till the end of the Edo era. Yoshioka entered the Meiji era as a vibrant town with a healthy and prosperous community.

It was profoundly moving to watch the story of the sacrifices of these unassuming few. One of them, Kokudaya, stated in his will simply, “Do not tell others what I have done.”

However the legacy of these men has somehow endured the test of time due to the efforts of the aforementioned priest, Zuishi Eishu.

Kokuday (who came from the Asanoya clan who were famous for their sake brewery) has his name living on as a beer and sake brewery in Yoshioka to this day. Please see photo below.

kokudaya-201606

The thoughts and words of Kokudaya’s brother, Jinnai Asanoya, also were very profound. When they were in the presence of a very powerful official of Lord Shigemura Date’s court and enquired why Jinnai had not used the horses or palanquin sent to fetch him, Jinnai demonstrated his Confucian belief system which guided him and  formed the cornerstone of his values and attitudes towards life.

Jinnai explained to the powerful court official that he was taught that as Man is the lord of all creation, it was not right for one to ride on the back of an ox or a horse and cause it grief. He further explained that riding a palanquin was even worse as one man being carried by another man showed nothing but contempt. He also felt that one should not make use of men or cause suffering.

Jinnai spoke the truth, risking potential death, knowing fully well that Lord Shigemura Date himself often used the palanquin and horses! This virtuous quality of speaking the truth, even in the most dangerous of circumstances is one that one should seek to emulate.

Jinnai, who lost his sight from his middle age, also spent the rest of his life spending the profits of his business in building and repairing the roads and bridges of Yoshioka. His sake business grew from strength to strength despite at one point being almost bankrupt because he contributed the most money to fund the loan at the expense of his business.

However Lord Date, who heard of the selfless sacrifice made by these men, ensured that Jinnai remained in business and ensured that Jinnai followed his commandment that: “Your business must not be ruined. If you fail because of your lord, then my honour will be stained.”

Kokudaya, his brother Jinnai Asanoya, Kokudaya’s son Oteomon also embody the values of filial piety and honouring of parents. Kokudaya and Jinnai’s father, unknown to them, had previously already started collecting money to do precisely what they did – to loan money to their feudal lord and use the interest collected to offset the post-town burden. His sons, when they found out, were determined to complete the task their father started, to the point where Jinnai sacrificed his entire business to fulfil his father’s dreams and desires.

This fascinating tale (and beautifully captured movie) encapsulates the ingenuity of men in times of need. It also extols the timeless values of service, duty and sacrifice above one’s own needs. Values which transcend culture, language and faith.

The notion that ordinary men can indeed make a profound difference if they had the right set of values and the company of like-minded men is one that is made powerfully through this movie and story. Get the DVD!!

If you are keen to read a more detailed plot and summary of the film, the links below will be a good place to start:

 http://jbspins.blogspot.co.uk/2016/07/japan-cuts-16-magnificent-nine.html

http://nanaironohouseki.tumblr.com/post/146487223111/summary-of-the-magnificent-nine

For those with Japanese proficiency:

http://blog.kahoku.co.jp/shokuweb/vam/2016/07/post_251.html

For anyone keen on visiting Yoshioka today and learning more, please visit:

http://www.town.taiwa.miyagi.jp/site/kanko/3571.html

 

(C) Mike Luckovich

FW: INCOME INEQUALITY RE: MAJOR PROBLEM

 

“I believe this [income inequality] is the defining challenge of our time.”
Barack Obama (2013)

 

“One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy.”
Christine Lagarde (2015)

 

There is a clear recognition of the risks, dangers and the pain which income inequality imposes on society. Despite the recognition, it is a problem which seems to constantly be forwarded on to successive generations to resolve rather than finding a decisive set of solutions.

We will all do well to pay heed to the US Senator John Sherman who in 1890 when he introduced his landmark Sherman Antitrust Act said that he sought to “put an end to great aggregations of capital because of the helplessness of the individual before them” and also because he fundamentally believed that amongst all of the nation’s problems, “none is more threatening that the inequality of condition, of wealth and opportunity.”

So why does inequality matter? Why is it important that we all strive towards resolving it? Societies that are hugely imbalanced and unequal ultimately become fractured which in turn lead to painful social and economic consequences that affect everyone. Neither the rich nor the poor will be able to avoid the huge social costs of a fractured society.

The stark facts

  • 62 of the richest people in the world own what the bottom 50% of the world’s population own.

  • 1915: The richest 1% of Americans earned 18% of the national income.
    1930s to 1970s: The share plummeted and remained below 10%
    From the 1970s: The share has increased to almost 30%

  • 1980: The top 0.1% wealthiest Americans controlled about 9% of all household wealth
    2015: The top 0.1% own 22% of all household wealth.

  • USA: The top 1% of America control 40% of America’s wealth

  • Germany: Poverty has risen by half since 2000.

  • 1965: CEO pay at the largest 350 U.S companies was 20 times as high as the pay of the average workers
    1989: The figure is 58 times as high
    2012: The figure is now an astounding 273 times as high.
    (It is worth bearing in mind that Peter Drucker argued that the pay ratio between the top executive and the humblest worker should be no greater than 20 to 1.)

  • OECD: The gap between the rich and poor is now at its highest level in OECD economies in 30 years according to a report produced in 2014. The overall increase in income inequality has been driven by the richest 1%.
  • 2008: The United Nations University (UNU) and the World Institute for Development Economic Research (WIDER) estimate that the global Gini coefficient (a measurement of inequality between 0 – representing complete equality and 1 – representing complete inequality) was 89.

    An alternative way to interpret this is that in a population of 10 people, if one person had $1000, the other nine have only $1 each.

  • 2014: The Credit Suisse Global Wealth report estimates that that the richest 0.7% (who hold over US$1 million in wealth) held 44% of the global net worth.

Some context

The economic success stories of many countries hides a dangerous truth – that a significant majority of economic gains are going to those at the very top of the income distribution whereas those lower down have seen real incomes stagnate or diminish.

This has in turn perpetuated further inequality as those in a position of privilege often use their wealth and influence to shape policies that further increase their concentration of power. These policies have not necessarily been in the interests of those lower down the income ladder.

A research conducted by Martin Gilens, a political scientist at Princeton, lends credence to the notion that the US government responds more positive to the most affluent ten percent of Americans whilst “the preferences of a vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt.” (A video of Gilen’s lecture can also be viewed here.)

The erosion of the social compact

This wasn’t always the case though. Whilst there has always been inequality, it has never been to this extent or been as pervasive. There was also more concerted effort to reduce the level of inequality and dampen its deleterious impact on society.

The experience of the First World War revolutionised American attitudes towards taxation and redistribution of income. When the War Revenue Act of 1917 was passed, there was talk of “conscription of income” and “conscription of wealth” at a time when young men were enlisting en masse. “Let their dollars die for their country too,” one congressman said. The call for fiscal patriotism helped legitimate the progressive income tax in the United States, and by 1944 the top marginal rate had risen as high as 94 percent.

Across Europe, a fear that the lack of reform could lead to social and political turmoil and the horrors of two World Wars meant that policies such as social insurance, minimum wage, a strong welfare state and progressive income tax were implemented leading to more egalitarian societies and economies.

inequality 2The experiences of global ears produced visions of a social bond holding countries together and nurtured the notion that every single person owed a debt to the welfare of the broader community and society.

However since the 70s, the disappearance of these conditions has meant that the support for egalitarian public policies has also diminished.

We now live in a world where even high skilled jobs are being commoditised so that even highly educated workers are not making sufficient progress as gains in economic growth are limited to a very elite group of financiers, entrepreneurs and managers. In the past only unskilled workers lost jobs to automation, now even highly skilled occupations are at risk with the advancement of artificial intelligence, robotics and automation.

The social structure of Silicon Valley provides us with an instructive view of the future: One where expert systems have replaced the majority of people and a tiny but well-remunerated minority direct the economy whilst the majority exist to serve them alone.

The conflict is no longer just between the working class and the middle and upper classes – it is now between a tiny elite and the great majority of citizens. As the majority develop a sense of common interest, or what Marx may have termed ‘class consciousness’, the need to resolve inequality will become more acute as the resentment of it intensifies.

 

What happens when income inequality starts to become entrenched?

  • Health: Societies that are more unequal tend to have lower life expectancies, higher infant mortality, higher levels of infant mortality and high levels of diseases and conditions such as HIV/AIDS.
  • Human capital development: As inequality rises, scores on the UNICEF index of child well-being become significantly worse. Literacy rates are also lower and youth unemployment also becomes a major issue. A higher level of equality also leads to a greater level of innovation as a result of greater access to opportunity.
  • Social mobility: Inequality restricts social mobility – equality of opportunity is enhanced by greater income equality. Reduced social mobility further exacerbates income inequality and this becomes a vicious spiral from which an effective functioning economy becomes more and more difficult.

    inequality1 2
    (C) Walt Handelsman
  • Economic progress and stability: An IMF report highlights that by reducing inequality and bolstering longer term economic growth are “two sides of the same coin.” In both rich and poor countries, inequality is strongly correlated with shorter spells of economic expansion and growth over time. Unequal economies are also more susceptible to severe boom-and-bust cycles leading to greater volatility and crisis. Extreme levels of income inequality depress economic growth. An OECD report estimates that inequality has had a cumulated loss of GDP across OECD economies of 8.5% over twenty-five years.
  • Social challenges and issues: Inequality breeds corruption. Unequal societies also lead to greater economic instability. If one considers the root causes of the Arab Spring, the lack of economic opportunity or equality is one of the main drivers leading to revolt.

A blueprint for change and resolution

The solution and change required for income inequality is not a zero-sum game. There will be those who are impacted more than others, but it is essential in calibrating the world in a more equal way.

It is very easy to be dangerously complacent and ignore equality, but chronic economic inequality hurts everyone, both the rich and the poor.

Resolution of a problem like inequality requires a revolutionary approach. We need to accept a fiscal revolution or risk a social one.

I’ve highlighted below briefly some key practical steps that need to be considered as we seek an urgent resolution to the problem of income inequality.

  1. Tax reforms – Income taxes need to be more progressive (the way they were previously in times of greater equality). There needs to be a reform in the way the transfer of wealth is also taxed. The OECD has suggested that attempts to reduce inequality tax and transfer policies will not harm growth as long as the chosen policies are well designed and implemented. The OECD further argues that redistribution efforts should focus on families with children, on the youth and the improvement in human capital investment through the promotion of skills learning and development.
  1. Continued focus on economic growth and employment – Policies targeting economic growth need to continue as growth ensures jobs are created and ensures employment. Employment will support social mobility which is essential to the reduction of inequality.
  1. Ensure emphasis on social mobility – Social mobility is a key driver towards the reduction on inequality. Emphasis on education, skills learning and development is vital to support social mobility.
  1. Support small savers and small businesses – Policies should not be tilted towards just merely taxing the rich but also be aimed at increasing the wealth of small savers and businesses. For instance we should consider the introduction of accounts for small savers and businesses that guarantees positive returns in excess of inflation. It is also a widely observed phenomenon that lower income families borrow more to support their consumption and this in turn creates a systemic risk.
  1. Enhanced social policies – Governments and policy makers should also consider more directed interventions to enhance the social conditions of lower income families. For instance, in the UK, the Child Benefit offers a weekly allowance to parents for every child they raise. The transfer could be better targeted by making the income taxable as personal income, which will reduce the size of the benefit for those in higher tax brackets or who do not have face any other mitigating circumstances. In the UK, child poverty has dropped sharply whilst in the USA; it has risen by a third between 1969 and 2013. A child-benefit programme will help make a major dent in child poverty and also represent a powerful investment in the future. Introducing a child-benefit program in the US will make a major dent in child poverty and represent a powerful investment into the future.
  1. Minimum wage – Governments should also take an active review of the minimum wage policies in their countries and recalibrate them to local conditions. There is always a temptation to keep minimum wage lower because neighbouring countries are keeping theirs lower, but this beggar thy neighbour policy will not benefit anyone in the long run. Countries that make the effort to ensure greater equality will be healthier in the long term.
  1. Automation and technological change – Governments should take an active interest in the direction of technological change. It is mostly governmental grants and labs that are responsible for the underlying research that has led to the progress in automation and technology and they therefore have the right to ensure a clear review is undertaken to mitigate the social impacts of technological change through appropriate fiscal and taxation policies.

It is crucial that we as a collective rise up to face the challenges of income inequality and work closely to create a more equal society. The corrosive impacts of inequality will affect us all and the sooner we can find solutions to achieve an equal society, the better, for all.

DSC01445

e-Learning and the needs of developing countries

Having had the pleasure of speaking at the UNCTAD14: e-Learning – Leapfrogging Skills Development session on the 21st of July 2016 in Nairobi, I am enclosing below some of my thoughts on e-Learning and the needs of digital countries in terms of knowledge development and how to best address them.

Details of my fellow participants can be found here.

The full video of the session can also be found at E-learning: Leapfrogging skills development from TrainForTrade on Vimeo.

Introduction

ACCA, as the global body for professional accountants , has within its DNA embedded the notion of delivering public value and to also advance the science of accountancy.

As an organisation committed to innovation and providing opportunity, it was only apt that we became the first professional accountancy body to develop ACCA-X, a comprehensive suite of learning modules towards financial literacy, accountancy and business skills using MOOC (Massive Open Online Content) learning through an exciting partnership with edX and Epigeum .

In the 12 months since launch (from July 2015), there have been over 120,000 learners from over 210 countries who have participated and engaged with the courses and started their journey towards a better understanding of accountancy, business and finance.

 

Four key areas for developing and transition economics to consider for e-Learning knowledge development:

  1. Tackling the employability gap

  2. Building the foundations for data-led learning

  3. Capacity building for educators and policy makers

  4. The value of partnerships

 

Tackling the employability gap

  • Employability is one of the key policy issues of our times.
  • Linking education to employability and improving overall efficiency and productivity is something policy makers and politicians are grappling all over the world.
  • Interestingly, UNCTAD Secretary General Mukhisa Kituyi highlighted in a high level policy roundtable during the first day of the UNCTAD14 conference that employees in developing nations only have an output that is 10% of their counterparts in the EU.
  • It is important to note though that employability is an issue that afflicts both developing and developed nations equally. It is a problem in India (with increasing numbers of graduates unable to find relevant jobs); it is a problem in China (with the numbers of graduates increasing from 1 million in 2000 to 6.1 million in 2011); it is a problem across the EU with over a fifth of 15 – 24 year olds unable to find gainful employment. Further details can be found here.
  • Reasons for this employability gap:
    1. mismatch in skills required by industry and what they are being trained towards;
    2. lack of clarity of skills needs and dialogue between educators and industry;
    3. education and training style (focus still on role learning – does not foster mental agility and innovative flair)
  • This is where technology and e-Learning becomes an enabler to helping fill the gap between education and technology:
    1. Technology allows for learners to reflect, plan and articulate knowledge
    2. E-learning embeds amongst their learners core digital literacy skills – which is crucial
    3. Learning and assessment become more authentic through digital learning à more closely aligned to workplace
    4. For instance with ACCA-X, there is an emphasis to ensuring that the business and accounting theory is supported by interactive simulations of actual practice and with significant support in ensuring learners understand the link between the theory and how they can be expected to apply their knowledge in practice and enable them to be work-ready.
    5. E-Learning allows for students to become active agents of engagement and change and allow them to further develop their social and leadership skills. It also aids students towards becoming self-aware and independent learners which could be argued is the main purpose of education. It is this quality that should be at the heart of institutional strategy policy formulation.
      (C) zodakreza
  • E-learning allows the opportunity to establish a clear pedagogy (to cater to the different learning styles) – to the right levels of assessment – to effective monitoring and management (through data) and support a process of continuous improvement.

 

 

Building the foundations for data-led learning

  • The data allows for identification of hot spots, areas for improvement and ensure a programme of targeted support and intervention.
  • Data analytics and review is a critical component to aid both educators and learners along with policy makers.
  • The availability of data to enhance educators’ ability to better support their learners is a major component of effective e-Learning.
  • Tutors also have the tools to enhance learner management and be able to teach to scale.
  • The availability of learning data will also be instrumental in helping policy makers and researchers identify the learning gaps and hot spots and ensure there is effective capacity building taking place at appropriate levels to resolve outstanding issues.

Capacity building for educators and policy makers

  • This is often an area that is overlooked as e-learning programmes and initiatives are rolled out.
  • Whilst there is ample learning support for students to help them make the relevant transition to e-learning and blended learning, there isn’t always the same level of support of policy makers.
  • A key policy area for policy makers is to provide the right levels of support to educators as they embed e-learning within the curriculum.
  • The ACCA experience has demonstrated that there needs to be support for educators in helping develop blended learning solutions so that they are able to best leverage the opportunities offered through e-learning.
  • It is a large shift away from strictly face to face traditional’ transmit’ style learning – and training and support needs to be given to help educators adapt to e-Learning.
  • Educators and teachers also need to be given the comfort and confidence that e-learning is not designed to replace them. It is in fact designed to re-configure their role and their place in classrooms.

 

The value of partnerships

  • Developing effective partnerships will be the most effective way for countries to develop effective e-learning and knowledge platforms and solutions to meet their needs and ambitions.
  • The development of high quality e-learning (from the pedagogy to course development to platform development and delivery) can be extremely resource and investment intensive. This can be a significant deterrent for various developing and transition economies to either defer investment or worse, to develop poorly designed e-learning solutions which hinder more than they help.
  • The ACCA experience has shown that through partnerships, it is possible to develop a high-quality learning experience and allows for stakeholders in developing and transition economies to scale the learning curve much more rapidly.
  • Partnerships between policy makers, educators, industry organisations and employers is vital in developing the e-learning solutions developing nations needs.

Conclusion

E-learning solutions represent the most efficient way for nations to build the productive capacity they need to support the wider learning and development programmes to support their employability agenda, to promote social mobility and tackle the endemic problem of inequality.

The path of e-learning and digital learning that remains ahead of us is an exciting one. It is not without its challenges but a focussed and targeted approach of developing the appropriate e-learning solutions that are fit for purpose and in partnership, where possible, will ensure that much more rapid progress is made.

Opening Remarks – 4th Shared Services Centres Forum (Nairobi, Kenya)

Date                : 20th July 2016. Wednesday.

Location         : Serena Hotel, Nairobi

Topic              : 4th Shared Services Centres Forum: Sharing Experiences

 

A very good morning distinguished guests, ladies and gentlemen

It is a pleasure to present the opening remarks for the 4th Shared Service Centres Forum. We are particularly pleased to be partnering with Deloitte and Standard Chartered Bank Kenya for this crucially important business area.

Over the last decade, we have seen an increasing number of companies using shared services, outsourcing and global business services to improve efficiency, lower costs while maintaining a high level of rigour and quality. Shared services and BPOs have been one of the most instrumental pillars of financial transformation and we know that almost three quarters of a million finance personnel are employed in this sector globally.

Many organisations are looking at GBS, shared services and outsourcing as a way to help transform their finance function from a traditional cost-focused and back-office function looking mainly at historical data into a value driven, value-adding forward-looking part of the business.

Shared service organisations are ideally place to lead this change due to their global reach, visibility of data and information across the entire business (in contrast to a finance function within a single business unit), and they are also geared towards continuous  improvement and standardisation

Kenya in particular has been one of the early adopters in Africa in the space of shared services, BPOs or global business services. Given Kenya’s position as a major communications and business hub, we can only expect the sector to grow exponentially in the coming years as more business, particularly in East Africa seek to enhance efficiencies and adopt best practices in financial transformation.

A critical component of this transformation is the building of human capacity with the right set of skills and capabilities. It is to this end that ACCA has worked closely with our partners globally to develop the right set of solutions to support the process.

In the last two years, ACCA identified needs based on 12 months of consultation with over 150 multi-national companies including captive shared service centres and business process outsourcers, governments and industry bodies, in 13 countries.

Following this extensive consultation, ACC developed a suite of Global Business Services qualifications, starting a Certificate level, progressing on to Diploma and Advanced Diploma level. This also dovetails nicely with companies’ training and development frameworks and ensure there is a consistent programme of training which in turn supports staff moral and staff retention, which is traditionally a huge risk and issue for most shared services and BPO firms.

ACCA’s delivery of this training is also available completely online. To this end, I am also pleased to introduce to you ACCA-X, which is ACCA’s landmark and award-winning digital learning program which provides training up to the Diploma level. We partnered with edX (formed by Harvard and MIT) who provide the technology solutions and Epigeum, part of the Oxford University Press, to develop a high quality learning content which provides training opportunities for all finance staff. The introductory courses are also available for free for anyone, anywhere in the world.

ACCA has always strongly believed in the future of the SSO industry and continues to make significant investment in the sector. This includes development of cutting edge thought leadership and insights, development of qualifications, working with partners, such as the event today with Deloitte and Standard Chartered Kenya and working with various industry bodies to further support the growth of the sector.

We are pleased to continue this support here in Kenya today.

I look forward to an excellent forum today and hearing best practices from some of Kenya’s leading organisations and I wish you all a fruitful discussion and forum.

Thank you.

(C) Burak Gara/Getty Images

The last coup ever in Turkey?

The events of 15th July 2016 in Turkey with the attempted coup could go down in history as one of the most pivotal moments in Turkish history.

On the 16th of July, acting army chief of staff, General Umit Dunar announced that,  “the time of military coups and juntas is over,” and he could well be right.

It is worthwhile understanding the implications of the Turkish events for history has shown that when the Ottomans sneeze, Europe gets a cold and the Middle East falls into a catatonic shock and paralysis.

Modern Turkey has had a history of coups led by the military and often it has been due to the underlying philosophical and ideological conflicts between Kemalism (the secular principles enshrined by Mustafa Kemal Atatürk) and Sunni Islamism.

President Recep Tayyip Erdogan and his Justice and Development Party (AKP) are now back in full control of matters in Turkey following this very serious development in Turkey.

The fate of the former Egyptian president, Mohamed Morsi, and the Muslim Brotherhood (the ideological partners of the AKP)  who lost power in a coup in Egypt before being sentenced to death must have always weighed heavily on President Erdogan’s mind.

In a very prescient article by Gonul Tul for the Foreign Affairs magazine in May 2016, the risk that the empowering of the military generals by Erdogan to fight Kurdish separatists was raised and the danger that the “President was riding a tiger that is…wilder and more vengeful.”

At the heart of the matter is that the military with its strong Kemalist and secular traditions was always going to be viewed as a threat by the religiously-motivated AKP. However, 14 years of a more religious and conservative rule by the AKP would almost certainly have had the effect of changing the ideological mindset of the Turkish people as well as some of the military. Despite this, the military still refused to let graduates of religious schools enter military academies for fear of diluting the secular principles the modern Turkish state was founded on.

The latest failed coup attempt will no doubt see a mass changes in personnel and policies in the military which will have the impact of shifting some of the ideology underpinning the Turkish military.

In the longer term, the broader question is whether this could see the slow shift and tilt of modern Turkey away from very strict secular traditions towards Sunni Islamic traditions? Could a more Islamic Turkey, centred round more inclusive and tolerant beliefs be a bulwark against the extremist and fanatical Islamic terrorist ideology that is consuming the world in hate and anger?

The present Turkish government (under an Islamic leadership) signed a reconciliation agreement with Israel in June 2016 and seek to work with Israel to bring peace to the region. This is a much welcomed development in  world beset with too much hate and difference.

What happens next in Turkey remains to be seen, but Turkey could well establish some precedence within the Islamic world and be more than a physical bridge between the Muslim and Western worlds but go beyond this and be a spiritual and ideological bridge between both worlds. Watch this space.

 

Seven beneficiaries of UK’s Brexit

Following the  proxy class war that was the EU referendum, I was reflecting on who I think will be some of the beneficiaries of UK’s Leave or Brexit result besides the obvious parties like the Leave campaigners and Boris Johnson.

As a slight aside my personal view is that the root cause of this result is inequality which has led to a disenfranchised populace that is reacting against the increasing economic marginalisation an increasing majority of citizenry are facing. Even the issues of migration are being amplified against this backdrop of growing economic inequality. This is one of THE policy challenges of our time. Resolve this huge issue of rising economic inequality and I suspect we will find in it the panacea to a large number of other issues we are facing.

So on to who I suspect will be benefiting from this:

  1. Scottish independence campaigners – The will of the Scottish people is reflected in the results – they want to remain in the EU. During the last independence referendum, there was a clear statement that any exit from the EU by the UK may trigger another call for independence. Whilst 2014’s independence referendum was deemed a once in a generation campaign, I suspect the result of the 24th of June 2016 may bring forward the next independence referendum to as soon as the next two years.
  2. The United Irish brigade / and IrelandSinn Fein have been quick off the mark to argue their case for a union of the Northern Irish with the Republic of Ireland. Similar to the Scots, the Northern Irish were also in favour of remaining with the EU and there is a case for them to argue for independence and fulfil the long-held dreams and aspirations of Irish nationalists.

    Any push towards reunification will also lead to the levels of investment and pump-priming of both Irish economies leading to further growth. Furthermore, in the near term, I suspect some of the investment meant for the UK may be diverted to Ireland, particularly in the financial services and outsourcing sectors.

  3. First time home buyers – With the expected fall in asset prices, it may finally become easier for people trying to get onto the property ladder. Furthermore, a reduction in immigration will also dampen demand for housing and rental yields, leading to more affordable homes. It is also widely expected that the Bank of England will not be hiking rates any time soon to carry on fostering demand as well, making the overall cost of home ownership more affordable.
  4. Lawyers and accountants – Over the next two years, as major UK enterprises and companies seek to understand their legal, tax and financial planning positions vis-à-vis the EU, they will rely on an army of lawyers and accountants to make sense of their obligations and required strategies to maximise profit and minimise liabilities (legal and financial).
  5. Management consultants – I am fairly sure BCG, McKinsey, Booz (PwC), and other management consultants heard a loud ker-ching of cash registers going off collectively as they seek to become the ‘experts’ in EU law and supporting both the public sector (particularly as they become overnight subject matter experts in Article 50 of the Lisbon Treaty that governs EU exit) and private enterprises as they help organisations make sense of what Brexit means for them (by first asking them what it means for them and then re-writing it into 100 PowerPoint slides and charging them a fortune for it…).
  6. Trump’s policy advisors and US isolationist/protectionist campaigners – The Donald will point to UK’s EU referendum results to his domestic base and use it as an argument about why his protectionist and isolationist policies are for the best and will help “Make America Great Again (TM).” It could also be a powerful argument against the likely Democrats’ positions about open economies and trade reforms.
  7. UK exporters – At least in the short to medium term, as there is a downward rebalance of the UK Sterling, I suspect it will help improve UK’s exporters (particularly seeing as 50% of UK’s 15 export partners in volume are outside the EU). However, it has to be also noted that UK’s net deficit is roughly £300 billion and given the higher level of imports, it is also likely there will be a strong inflationary pressure with little monetary tools or options at the Bank of England’s disposal.
Raghuram Rajan

Muzzling a rockstar central banker – the Indian way

This article reflects only my own personal thoughts and do not reflect the official position of any other organisation. Responsibility for the information and views expressed this article lies entirely with me. 

The news of the resignation of India’s central banker Raghuram Rajan has unsettled Indian investors, and rightfully so.

Rajan was one of India’s best central bankers and was a cornerstone in driving the Indian economy over the last three years.

Here is a man who in 2005 at a conference in Jackson Hole made some prescient statements about how financial developments have made the world a riskier place and called out the systemic risks posed by banks to the global economy. (His speech can be found here: https://www.imf.org/external/np/speeches/2005/082705.htm). He was derided as a luddite who was misguided. However, the developments of the 2008 financial crisis proved him right and a number of his proposed safeguards have since been implemented.

Some may question why the current Indian administration has removed a man who is widely recognised as an architect of India’s growth story.

It goes back to 2014, when Rajan questioned Modi’s “Make in India” campaign and cautioned against “against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work.”

Last year, Rajan also questioned the rising of sectarian tensions and intolerance propagated by factions associated with the currently ruling government.  In a speech to the Indian Institute of Technology last October, Rajan lambasted the rising intolerance and stated: “India has always protected debate and the right to have different views. Excessive political correctness stifles progress as much as excessive license and disrespect.”

This is consistent with the pattern of behaviour displayed by the current Indian administration .

What have Modi and his administration achieved in the last two years:

 

So what does this administration do in response? Remove one man who can help make a difference and help improve matters.

Another great article here: By getting Raghuram Rajan out, Modi may have won, but India has lost

I am genuinely concerned at the state of affairs in India and despite the sometimes effective PR campaign Modi’s government may run, the cracks are beginning to show.

India’s always been a home to alternative thoughts, ideas, ideologies, religions, faiths, beliefs, ethnicities and ways of life. We have been a beacon of hope and democracy for all and it is very sad to see the very edifices of inclusivity and secularism crumbling.