World Excellence - International Edition

IAIR WORLD 1023 WORLD EXCELLENCE EXCELLENCE 11 www.lefonti.com

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ARAB WOMEN TRANSFORMING THE CORPORATE WORLD CEO of the Year Nashwa Al Ruwaini on her journey to success.

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ZIMMER BIOMET Li Yong Ming wins award at the 7th annual Le Fonti IAIR Awards in Singapore

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CONTENTS

OVERVIEW 6

WORLD AFFAIRS

BUSINESS & FINANCE

ECONOMICS

A Global Outlook

The New Anti-Semitism

20

In Defense of Globalization

30

How Economic Populism Works

10

Russia’s Bad Equilibrium

24

Smart, Successful, Instant

34

Is the Deflation Cycle over?

26

What’s the Matter with Germany?

PROTAGONIST

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Interview with Nashwa Al Ruwaini of Pyramedia

64 SINGAPORE

58 DUBAI

67 MILANO

ECONOMICS

AWARDS

INNOVATION & TECHNOLOGY

36 Will Trump Block Latin Recovery?

Publisher/Director Guido Giommi Editors, America: Imani Nicole Jones Scarlett Williams

International Subscription Kate Rios

© Project Syndicate 2017 WorldExcellence

Art Director Nick Lowen

Volume 23

Editor, Asia: Eric Davide

Graphic Design Mary Thompson

Editors: Claudia Chiari Alessia Rosa Alessia Liparoti Simona Vantaggiato

Editorial Offices: London, Milan, New York, Singapore, Dubai and Hong Kong

Copyright © 2017 All rights reserved.

Reproduction in whole or in part is prohibited without prior written permission of World Excellence. Information is based solely on sources believed to

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The Promise of Ethical Machines

46

Gene Editing and Seed Stealing

50

Economic Prosperity in the Digital Age

54

Zimmer Biomet

be reliable, though the accuracy has not been verified by World Excellence. Neither the information in World Excellence nor the opinions expressed should be taken as a solicitation for investment. World Excellence accepts no liability for actions based on the information herein.

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OVERVIEW

A GLOBAL OUTLOOK USA Where The S&P 500 Will Finish in 2017 Yes, stock markets rose sharply after Trump’s win. But uncertainty about his impact on growth and trade will unnerve investors who are already anxious about interest rates and overvalued U.S. stocks. Expect the S&P 500 to finish 2017 about 3% below where it closed on Election Day. 1.25%: The Federal Funds Rate at the End of 2017.

The Federal Reserve spent much of 2016 hinting that it wanted to raise rates.

Now, Janet Yellen and Co. have a president-elect whose economic agenda may prove to be inflationary. The economy won’t justify huge rate hikes, but we can expect three quarter-point increases between now and next Thanksgiving.

U.S. GDP Growth Will Break 2%

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BRAZIL

BRAZIL

Inflation falls to lowest level since September 2012

Slow Signs of Stabilization

Consumer prices in January increased 0.38% over the previous month, which was above. The rise in consumer prices was driven by higher prices for food and drinks, while transport prices rose significantly, albeit at a more moderate pace than in December.

Inflation dropped from 6.3% in December to an over four-year low of 5.4%.

The sharp fall has ramped up speculation that the Central Bank could cut the SELIC interest rate at the next monetary policy meeting to support an economic recovery.

High unemployment, tight credit conditions, political turmoil and weak external demand held Brazil’s economy in the worst recession in modern history last year. While signs of stabilization have emerged, activity is meagre and gains are uneven. Consumer and business confidence both fell to six-month lows in December along with the manufacturing PMI. However, retail sales surged to the best result in over three years in November.

OVERVIEW

RUSSIA

RUSSIA

Economic Outlook

Economic Growth

President Trump has spoken on several occasions of his desire to improve relations with Russia, raising the prospect that he might relax some of the sectoral sanctions imposed on the country in response to its annexation of Crimea and military intervention in eastern Ukraine.

Trump does not require congressional approval to lift sanctions. It is however unlikely that he will relax sanctions unless he can present them as part of a deal with Russia that offers benefits to the U.S.

The Russian economy is emerging from a 2-year recession.Preliminary estimates show the economy contracting 0.2% in 2016, economic activity should strengthen this year with higher oil prices and stronger exports. Private consumption will remain weak and fiscal consolidation weighs on growth.

CHINA Economic Growth

FocusEconomics panelists forecast that the economy will grow 6.4% in 2017, which is unchanged from last month’s estimate. In 2018, the panel expects GDP to slow to 6.1%.

CHINA

Investment growth hit multi-year low in 2016 In the full year 2016, urban fixed-asset investment (FAI), excluding rural households, expanded 8.1%. The print was below the 10.0% increase in 2015 and represented the weakest growth since 1999. 2016’s slowdown was the result of poor performances in all three sectors of the economy.

Activity among private companies decelerated from a 10.1% increase in 2015 to a meagre 3.2% in 2016. This signals that the public sector continues to be the main source of investment growth at the expense of the private sector, thereby casting doubt on the quality of China’s economic transition.

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WORLD AFFAIRS

AMERICA TODAY

The New Anti-Semitism

New politics recreating age old immigration issues.

Ian Buruma

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EW YORK – Those who have been telling us that Islam, not just revolutionary Islamism, is a lethal threat to Western civilization should now feel satisfied: the President of the United States, and his main advisers, agree with them.

In the tweeted words of Donald Trump’s National Security Advi-

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ser, General Mike Flynn: “Fear of Muslims is rational.” Stephen Bannon, the former executive chairman of the alt-right Breitbart News who is Trump’s chief political strategist and a member of the National Security Council, has stated that the “Judeo-Christian” West is engaged in a global war with Islam.

TRUMP HAS PROMISED TO PUT “AMERICA FIRST,” borrowing the

slogan of American isolationists in the 1930s, whose most famous spokesman, the aviator Charles Lindbergh, was a notorious anti-Semite who blamed Jews and liberals for pulling the US into a war with Hitler, a man whom he admired.

Lindbergh believed that, “We can have peace and security only so long…as we guard ourselves against attack by foreign armies and dilution by foreign races.”

So “America first” has racism in its DNA. Are the views concerning Islam that are now entrenched in the White House in any way similar to the anti-Semitism of the 1930s? Have Bannon, Flynn, and Trump simply updated old prejudices, and replaced one set of Semites with another?

Perhaps they were not even replaced.

Trump’s failure to mention Jews or antiSemitism in his statement on Holocaust

WORLD AFFAIRS

Remembrance Day seemed distinctly odd. And his campaign’s warning against prominent Jews, such as George Soros, who were claimed to be part of a global conspiracy to undermine America, did not go unnoticed.

STILL, THERE ARE SOME OBVIOUS DIFFERENCES BETWEEN THE 1930S AND OUR TIME.

There was no revolutionary movement among Jews then, committing atrocities in the name of their faith. Nor were there any states with Jewish majorities that were hostile to the West. But the similarities between anti-Semitism then and now are glaring.

One chilling give-away is the use of biological language in the perception of the enemy. Hitler spoke of Jews as a toxic “racial germ.” The title of one widely distributed Nazi pamphlet was “The Jew as World Parasite.” Frank Gaffney, an influential figure in Trump’s ethnic nationalist circles, spoke of Muslims as “termites,” who “hollow out the structure of the civil society and other institutions.”

Once human beings are categorized as parasites, germs, or noxious termites, the conclusion that they must be destroyed to defend social health is not far off.

There may be another difference, however, between the persecution of Jews and contemporary hostility to Muslims.

Prewar anti-Semitism was directed not

just at religious Jews, but also – and perhaps especially – at assimilated Jews, who were no longer easy to identify in any way as distinct. Prejudice against Muslims would appear to be less racial, and more cultural and religious.

But even this difference might be more apparent than real. Nineteenth- and twentieth- century anti-Semites assumed that a Jew was always a Jew, no matter what he or she professed to believe. Jews would always be loyal to their own kind.

Judaism was seen not as a spiritual faith, but as a political culture, which was by definition incompatible with Western civilization and its institutions. This culture was in the blood of the Jews. To defend it, Jews would always lie to Gentiles.

These views long preceded the Nazis. In fact, they were the reasons why the learned authors of independent Norway’s first constitution, drafted in 1814, prohibited Jews from becoming citizens. The case for exclusion was based on a defense of Enlightenment principles: Jewish culture and beliefs would inevitably undermine Norway’s liberal democracy.

Today’s enemies of Islam often use precisely this argument: Muslims lie to infidels. Their religion is not spiritual, but political. They might look moderate, but that is a lie. What we must fear, in Gaffney’s words, is “this stealthy, subversive kind of jihad.” But even if the underlying fears and prejudices about Muslim and Jewish conspiracies are similar, the consequences are likely to be quite different. Jews, alleged by the Nazis to pose an existential threat to Germany, could be persecuted – and later murdered en masse – with total impunity. Apart from a few small despe-

rate rebellions, there was no way for Jews to resist Nazi power.

THE BRUTAL VIOLENCE OF REVOLUTIONARY ISLAMISM, ON THE OTHER HAND, CANNOT BE DISMISSED. Acts of

Islamist terror in Western countries can be prevented only through good intelligence and police work, particularly in Muslim communities. But if all Muslims are antagonized and humiliated, terrorism will become a great deal worse. And what a “global war on Islam” will do to the highly combustible politics in the Middle East and Africa can easily be guessed. In that case, the “clash of civilizations” that exists in the minds of Islamist terrorists, as well as some of their most ardent enemies, would no longer be a fantasy; it could actually come to pass. Whether Trump’s crusaders are lighting fires without quite knowing what they are doing, or whether they might actually wish for a conflagration, is not yet clear.

Crass ignorance cannot be underestimated in these circles. But it is perhaps not too cynical to imagine that Trump’s ideologues do wish to see blood. Islamist violence will be met by emergency laws, state-sanctioned torture, and limits on civil rights – in a word, authoritarianism.

THIS MIGHT BE WHAT TRUMP WANTS. But it certainly is not

the outcome that most Americans, including some of those who voted for him, would wish for. WE

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WORLD AFFAIRS

GEOPOLITICAL STRENGHT

Russia’s Bad Equilibrium Russia is finally stabilizing geopolitically.

Anders Åslund

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WORLD AFFAIRS

OSCOW – After more

than two years of economic contraction, Russia seems to have achieved some semblance of stability. Though economic growth is expected to reach only about 1% in 2017, the fear of economic destabilization that has permeated the country since its 2014 invasion of Crimea – which was met with crippling sanctions from the West – has all but evaporated. The combination of foreign-policy optimism, creature comforts, and domestic repression seems to be a potent elixir. Just as in Leonid Brezhnev’s time, foreign policy is overshadowing Russia’s domestic politics.

Unlike then, however, Russia’s prospects are looking up. US President Donald Trump has made clear his desire to improve relations with the Kremlin, and will reportedly meet with Russian President Vladimir Putin in June. The French presidential election, set for April, may also go Russia’s way. Both the center-right candidate, François Fillon, and the far-right candidate Marine Le Pen, are ardent friends of Putin, though centrist Emmanuel Macron, who

is not, also stands a chance.

Russia’s own presidential election, set to take place in March 2018, appears much less momentous, because no change is expected, with Putin being reelected and Dmitri Medvedev staying on as prime minister.

That appears to be acceptable to most Russians, at least to comfortable Muscovites.

MOSCOW’S INFRASTRUCTURE HAS NEVER LOOKED BETTER: the city boasts a well-

functioning and recently expanded metro system and modern, clean, and efficient airports. Even its oncechaotic parking lots have been put in order – and the need to park has been reduced by the proliferation of cheap and rapid car-sharing services. Residents can visit impeccable and luxurious shopping malls, and purchase virtually any food they desire (apart from Western cheeses) from upmarket grocery stores.

Of course, there are Russians who are not satisfied with the current state of affairs. That, among other things, is what the all-powerful Federal Security Service (FSB) is for. Freedom House has just further downgraded Russia’s score for political rights, to the lowest possible level.

The specter of repression was apparent at last month’s Gaidar Forum, an annual event held by the Russian Presidential Academy of National Economy and Public Administration that honors the Yeltsin-era reformer Yegor Gaidar. Each year, thousan-

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WORLD AFFAIRS

ds of Russia’s social scientists and hundreds of foreigners gather for three days to discuss economic policy.

Government ministers on the panels appear relaxed, open, and competent, but are careful to avoid stark statements.

Russia’s key problems – the absence of real property rights, rule of law, and democracy – were mentioned this year, notably by former Finance Minister Alexei Kudrin, but only gently and in passing.

As usual, most plenary discussions were devoted to details of the country’s well-functioning macroeconomic policy. Russia’s large economic establishment remains too well off to want to rock the boat.

While the ministers’ stance may not be surprising, past Gaidar Forums have carried the hope – if not the expectation – of some challenge to the ruling elite. Moscow’s academic economists listen intently to the Forum each year, hoping to hear something radical, or even a little defiant, though they themselves are unwilling to mount a challenge.

At last year’s Forum, a ten-person panel of prominent Russian liberal political analysts – a regular feature of the Forum, in which I participate – suspected that some defiance was on its way. Some panel members even predicted a challenge to the regime – say, that a member of the opposition would be elected to the Duma, or that economic hardship would fuel social unrest.

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Those predictions came to nothing.

Few of Russia’s Europeanized liberals voted in the Duma election; the conservatives in the country’s

south and east were far more enthusiastic. Our panel, it seems, overestimated economic results and underestimated the role of war and repression in consolidating support for Putin and his regional sultanates.

In fact, the overwhelming sense among Russians is that Putin’s invasion of Ukraine and annexation of Crimea were good for Russia. It was a masterful play on Putin’s part. By transforming Ukraine into a weak and conflict-ridden enemy, he both quelled rising pro-democracy sentiment in Russia, inspired partly by Ukraine’s move toward the European Union, and aroused nationalist euphoria.

ANOTHER FOREIGN-POLICY DEVELOPMENT MAY HAVE BENEFITED PUTIN. According to

Tatyana Vorozheykina, a professor at the Moscow School of Social and Economic Sciences, Russia’s destruction of Aleppo has given Putin

another “win” to tout. Add to that the growing clout of right-wing populists in the West – a symptom of a larger crisis of liberalism – and it has been easy to portray Putin as the kind of leader countries need.

This year, nobody on the Gaidar panel anticipated anything but policy inertia, more repression, and mass conformism. Putin’s regime has consolidated itself around the flag, and few within Russia are willing to challenge the status quo.

The only potential sources of change, therefore, are external events and relationships – areas where Putin does not have full control.

AS IT STANDS, RUSSIA SEEMS TO BE ON STRONG GEOPOLITICAL FOOTING. But things

are not always as they seem. For example, though Trump’s support for closer ties would seem to be good for Russia, a major ingredient of Putin’s nationalist appeal is his ability to reinforce Cold War drama. For that, he needs the US – and the West, more generally – to be his enemy. Amity could spell longterm trouble for Putin.In the short term, however, as the independent political analyst Dmitri Oreshkin put it at the Gaidar Forum, it is likely that only a “black swan” event abroad could bring about change in Russia. The country’s new equilibrium may not be good, but it appears stable – for now. WE

PROTAGONIST

INTERVIEW

Arab Women Transforming the Corporate World In 1998 after time in London and Cairo, Nashwa established her own production company Pyramedia in the UAE. Pyramedia is today one of the largest of its kind.

Read on to hear her story...

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COVER STORY

IAIR World Excellence 15

PROTAGONIST

W

E sat down with Nashwa Al Ruwaini of Pyramedia this month to converse about her recent win at the IAIR Awards in Dubai. Nashwa Al Ruwaini has been notably recognized as one of the most powerful women by Forbes and has been an international leader in the media industry. From a very young age, Nashwa made it her mission to defeat all odds. She launched her career on Qatari radio prior to becoming the youngest Arab women working for Qatar TV. From there, Nashwa continued on to launch her own production company, Pyramedia, which is the largest production company in the UAE region. Nashwa currently sits on the board and is CoFounder Abu Dhabi Film Festival, is CEO of oth the Nashwa Charity Foundation and Delma Medical Centre and Spa, and a member of the International Academy of TV Arts and Sciences. For women everywhere, this womens accomplishments have proven to be an inspiration and monumental. Read on to find out what advice she has to give on reaching this level of success.

CONGRATULATIONS ON YOUR RECENT IAIR AWARD. AS A MULTIYEAR WINNER OF OUR PRESTIGIOUS RECOGNITION, WHAT ADVICE CAN YOU GIVE TO UP AND COMING COMPANIES LOOKING TO BE RECOGNIZED?

To succeed in a field as dynamic as the one I work in, the main component is to be a pioneer and creative in the projects that you undertake. You consistently have to think out of the box

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and ensure that the projects are in the limelight.

You also need to be consistent in your perseverance of your goals.

Projects need not necessarily be huge but they need to resound and leave an impression and mark on the industry you are engaged in.

A vital component of success is reputation and quality of the work that the company is producing and sustaining this reputation is a step in being recognized for your endeavors. If a company is a creative powerhouse in its field, then over time it will easily be remembered and recognized for its achievements.

WE READ THAT YOU HAVE RECENTLY BEEN HONORED BY FORBES AS

ONE OF THE MOST POWERFUL ARAB WOMAN, WHAT FUTURE GOALS ARE YOU LOOKING TO ACCOMPLISH NEXT?

I am planning to enhance and grow my businesses throughout the region, and to continue leading in the media production industry as well as diversify my portfolio of businesses which span regionally. I am hoping to maintain the reputation of my businesses and tap into new opportunities that will help me sustain the business model of suc-

PROTAGONIST

I THINK

I HAVE BEEN ABLE TO INSPIRE WOMEN TO TAKE ON MORE LEADERSHIP ROLES SO THAT THEY CAN BE COURAGEOUS ENOUGH TO MAKE THEIR DREAMS COME TRUE.

cess that I have built over the years. I would like to serve as an inspiration to others, especially women and actively partake in assisting them to become transformational leaders in media and other sectors. I would also like to give back to the community through philanthropic work in the region because I believe it is my role to do so. I aspire to continue growing as an individual and as a role model in the Arab world as a source of courage, leadership and entrepreneurial thinking to others.

I am forever looking for new challenges, something to wake up for in the morning. At the moment I am pushing to open the Pandora’s box of the Arab World to the world. It’s time for the Arab media to have a strong presence internationally to showcase who we really are. There are many stories behind the news that we need to show case. The human stories that the media is not showing should be out there. This is a job that someone needs to do, and I believe that I can start the ball rolling on this front.

HOW HAVE YOUR ACHIEVEMENTS INSPIRED OTHERS IN THE ARAB COMMUNITY?

I think through the recognition of my achievements, I have been able to inspire women to take on more leadership roles so that they can be courageous enough to make their dreams come true.

As an Arab women, I have encouraged younger women to realize that there is no limit to their ambitions and that whatever the industry they too can succeed.

I have also helped them tap into their potential to help them take entrepreneurial risks and grow their businesses into regional and international business models that can serve as exemplary examples of success. I have also shown that you can start with a local idea that in time can expand into a regional and international one empowering entrepreneurs to learn to think big and aim high. I have started from scratch and I have always voiced that. I have always pushed for women empowerment throughout my projects and my companies. I am not gender biased but I truly

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PROTAGONIST

advocate women leadership. When I need something to be done I give it to a woman that I trust. I know she will get the job done with the level of excellence I expect. Women in our part of the world excel when they get the chance and I was blessed to be given a chance, so whenever I can I pay it forward and I support women in every field.

WHERE DO YOU SEE PYRAMEDIA IN THE NEXT 5 YEARS?

I am hoping that we continue the legacy that has prevailed so far and that Pyramedia continues to have a leading role in media production of successful projects that are new, interesting and different. I envision that the Company will have grown over the next 5 years into a leader and teacher of media production that will serve as a benchmark in the region. I also would like Pyramedia to be a dynamic part of the transformation in the media industry where we incorporate new concepts, technology and ideas into all the work that we do.

I aim to make sure that Pyramedia is a flexible platform of media production that has an even more diverse portfolio of projects and clients that will allow us to expose our capabilities in the field, and be continually recognized and acknowledged for pioneering work.

Pyramedia has turned into a group within 18 years, we started as a production and consultancy company and grew with subsidiaries; PyraStars which handles the star representations and casting in TV and Film, PyraMovies which produces films, PyraDocs which produces documentaries, PyraPhotography which nurtures the

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talented photographers of the Arab world, PyraSports which manages sports events and PyraSales which is our latest addition to the group which is the commercial arm for key events.

Pyramedia is also working closely with its sister company ALJOUDE for advertising that we established in Saudi Arabia. In five years I can see Pyramedia flourish and I can see that other additions would come into the picture that would cater to the ever changing face of the media market.

HOW WOULD YOU DESCRIBE YOUR MANAGEMENT STYLE?

I think the most important thing in management is how to be a true leader as opposed to simply being a manager.

Instead of micro-managing everyone in the team, the most vital thing is empowering everyone to find their true potential. I do this by selecting high caliber staff who are confident enough in their skills and engage in an open-door policy with them to create positive dialogue and rapport. I also believe in a culture of dynamic inclusion whereby everyone’s opinion is taken into consideration and at my companies we all function as a tight-knit team which I think always produces the best work results. I also ensure that there is a challenging career path for my team members so that they have the capacity to grow with the business and feel that they are an integral part of it, as opposed to be merely being a statistical cog in the wheel.

A good leader is always open to listening, accommodating and integrating other people’s ideas and I allow and encourage those who work with me to

think creatively and individualistically to help develop dynamic and powerful projects. I always seek to create a culture of ownership where the individual feels responsible for their projects so that they can engage deeply and perform to their utmost ability. And finally each and every member of any of my companies is family. And family members look after each other through the good and bad.

WHAT CHALLENGES DO YOU PREDICT WILL OCCUR IN THE MEDIA INDUSTRY IN THE FOLLOWING YEARS AND HOW DO YOU PLAN TO TACKLE THEM?

I think that the most common rising theme in the future is citizen media, where the general public have as a very active voice and opinion. To be able to handle this the most important thing is to engage with the general public through tools such as the prominent social media channels, which is transforming how business today is done. I believe that now there is an interactive platform between the media industry and audiences in general and the key is to listen and engage with them.

The future of media will also be in the form of Virtual Reality which is slowly going to be a key media tool.

To succeed with the rise of this new idea is to adapt and incorporate it into new business models and projects.

Traditional media is no longer the only player in town. The face of media has changed and we are changing with it.

The pace of change is now phenomenally fast and those who do not accommodate in our industry would face the fate of dinosaurs. WE

BUSINESS & FINANCE

TRADE OPINION

In Defense of Globalization The way of the new world.

Jim O’neill

LONDON– I was recently in beautiful Chile for a Futures Congress, and I had a chance to travel south to the very tip of Latin America. I also recently made a BBC radio documentary called “Fixing Globalization,” in which I crisscrossed the United Kingdom in search of ideas for improving certain aspects of it and discussed topical issues with well-known experts. In both cases, I saw things that convinced me that it is past time for someone to come to globalization’s defense.

Chile today is Latin America’s richest country, with per capita GDP of around $23,000 – similar to that of Central European countries.

This is quite an achievement for a country that depends so heavily on copper production, and it sets Chile apart from many of its neighbors.

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Like many other countries, Chile is facing economic challenges, and its growth rate leaves something to be desired; but it also has many promising opportunities beyond its borders.

FOR EXAMPLE, when I led a re-

view on antimicrobial resistance, I learned that copper has powerful antibacterial properties and is an ideal material for use in health-care facilities where bacteria often spread. This means that copper producers such as Chile, Australia, and Canada can improve global health – and boost exports – by introducing affordable copper infrastructure into hospitals and other clinical settings around the world. Chile is also a storehouse of knowledge for managing earthquakes and tsunamis.

BUSINESS & FINANCE

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BUSINESS & FINANCE

TODAY

CHILE IS LATIN AMERICA’S RICHEST COUNTRY, WITH PER CAPITA GDP OF AROUND $23,000 WHILE I WAS THERE, I VISITED LA SERENA, WHICH IN 2015 EXPERIENCED THE SIXTH-STRONGEST EARTHQUAKE EVER RECORDED But

the ensuing tsunami killed only 11 people, though it surely would have killed far more in many other places.

Chilean officials’ advanced preparation and rapid response seems to have made the difference. With so much institutional experience, Chile can be a valuable resource for other countries threatened by seismic events. La Serena is also near one of the world’s best stargazing sites, which attracts leading astronomers from around the globe. In fact, Chile hosts much remarkable collaboration among the world’s scientists, in part because it is just north of the Antarctic – long a site for scientific and environmental cooperation. Beyond Chile, it is interesting that Chinese President Xi Jinping is attending the World Economic Forum’s Annual Meeting in Davos this year. Now that Donald Trump has been elected

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President of the United States, and the United Kingdom is withdrawing from the European Union, I had assumed that such an elitist event’s glory days were behind it. Xi’s presence suggests that China is exploring where it can position itself on the world stage, and which elements of globalization it can harness to its advantage, now that Western powers are turning inward.

INDEED, as the Chinese ambassador to the UK pointed out on my radio program, China is already the largest importer – yes, importer – for at least 70 countries, and accounts for about 10-11% of all imports globally. Despite its supposed economic challenges, China will likely be a bigger importer than the EU before this decade is over, and it will probably surpass the US soon thereafter. Moreover, economic inequality among countries has declined sharply in the past 20 years, owing partly to China’s rise, as well as to economic development across Asia, Latin

America, and elsewhere. In fact, by 2010, the United Nations had already achieved its Millennium Development Goal of halving poverty by 2015, and recent projections suggest that, by 2050, poverty will be eradicated everywhere except Africa.

THIS WILL NOT HAPPEN WITHOUT GLOBALIZATION. African

countries, in particular, will need to trade more with one another, and there is talk of creating an African freetrade area. But this could prove difficult now that anti-trade sentiment is on the rise. Are globalization’s critics – those who wrongly consider it a zero-sum game – against eradicating global poverty? Policymakers

BUSINESS & FINANCE

can take action to alleviate anxieties about globalization.

FOR STARTERS, the seemingly endless growth of profits as a share of global GDP must stop. Anyone who thinks this sounds radical needs to brush up on economics. Higher profits should attract new market entrants, which would then erode incumbents’ profits through competition. The fact that this isn’t happening suggests that some markets have been rigged, or have simply failed. Policymakers need to address this with stronger regulation in some areas. For example, as I have previously argued, the current climate is far too permissive of share-

repurchase programs.At the same time, policymakers need to pursue measures to increases wages for the lowest earners, which could actually help boost productivity as capital becomes less expensive relative to labor. And, as World Bank President Jim Yong Kim recently pointed out to me, we need to strengthen enforcement of laws governing trade deals, and do more to help challenged domestic sectors that lose out as a result of those deals. This reminds me of a sad story I heard from some laid-off Goodyear Tire workers in Wolverhampton, in England’s West Midlands. They told me that job listings for their lost positions were posted on a notice board, and they

could re-apply for them if they wanted to move to Mexico. The workers surmised that it was easier for the company to close its factory in the UK than to close even less productive factories in France or Germany. Surely changes like this can be handled better. Lastly, policymakers need to prioritize development projects such as the UK’s “northern powerhouse” and “Midlands engine.” And more such initiatives should be launched elsewhere. Despite the many challenges it has created, globalization has made the world a better place than it otherwise would have been. And we still need it to eradicate poverty and generate higher living standards for all.WE

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BUSINESS & FINANCE

WHY FOREX TRADING IS MORE IMPORTANT THAN JUST A WAY OF EARNING MONEY

Smart, Successful, Instant Paul Pejon discusses how Forex trading changes mindsets for good Paul Pejon, InstaForex

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OWADAYS, people can hardly do without regular updates on politics and finances.

If you are unaware of a political situation, you are likely to vote for the wrong candidate in elections, though it will not affect your finances. However, if you lack financial literacy, you are losing your potential income nonstop. In other words, you have been losing money today, since yesterday or last year because you just do not know how to make money.

LIKE AN AVERAGE PERSON ON EARTH, YOU HAVE SOME SAVINGS AT YOUR DISPOSAL.

This money is your investment instrument, so you can make good use of it right now. Imagine that a new printing press is being stored in your garage or cupboard. Why is it still left to lie idle? Why haven’t you found any customers to print graphic materials for them?

24 World Excellence

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BUSINESS & FINANCE

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World Excellence 25

BUSINESS & FINANCE

EUROPE

What’s the matter with Germany?

Germany struggles to compete in per capita GDP growth.

Federico Fubini

26 World Excellence

OME – Italy may be the

“sick man of Europe” to day, but it is not the only co untry in need of medicine. On the contrary, even the mighty Germany seems to be coming down with something. Italy is, to be sure, in dire straits. Over the last two decades, annual GDP growth has averaged just 0.46%, and government debt has risen steadily, totaling more than 130% of GDP today. Unemployment has remained persistently high, investment is plummeting, and the banking sector is deeply troubled. Equally concerning, the number of

BUSINESS & FINANCE

ALERT

THE FACT IS THAT GERMANY’S AVERAGE ANNUAL PER CAPITA GDP GROWTH OF 0.51% SINCE 2014 PUT IT FARBEHIND OTHER CORE EUROZONE COMPANIES NAMELY, AUSTRIA, BELGIUM, FINLAND AND THE NETHERLANDS.

women of child-bearing age has fallen by nearly two million since the fall of the Berlin Wall in 1989. And the share of active workers with a university education remains at levels barely comparable with other advanced economies. Given all of this, it should come as no shock that Italy and crisis-plagued Greece are the eurozone’s weakest performers in terms of per capita GDP growth over the last three years. What is surprising is that Germany is the third-weakest performer. Germany is fiscally sound, with a large accumulation

of surplus savings. It is also highly competitive in unit-laborcost terms, enjoys its highestever labor participation rates, and benefits from a steady inflow of skilled labor from other parts of Europe. But the fact is that Germany’s average annual per capita GDP growth of 0.51% since 2014 puts it far behind other core eurozone countries – namely, Austria, Belgium, Finland, and the Netherlands. Even France, where per capita growth barely exceeds that of Italy, slightly outperforms Germany.

HOW IS IT POSSIBLE THAT ECONOMIES AS DIFFERENT AS GERMANY AND ITALY HAVE SUCH SIMILAR PER CAPITA GROWTH PERFORMANCE? To some extent, the

explanation might seem obvious.

Germany is much closer to potential growth than Italy and even the United States, which struggled more than Germany to escape the Great Recession. But the more recent recovery in other advan-

ced countries should, if anything, have boosted potential growth in export-driven Germany.

L I K E W I S E , M I G R AT I O N COULD AFFECT PER CAPITA GDP GROWTH. Germany

has received 2.7 million new residents, net of outflows, over the last five years, nearly a million of whom are refugees. The latter provide an obvious Keynesian boost, but don’t add much to potential output. Yet the migrant flows into Germany are not exactly anomalous. The country had experienced similarly strong net inflows at other times in the last three decades, without such adverse effects on per capita GDP growth. On the contrary, in many cases, migrants into Germany, particularly the young and skilled among them, have contributed to potential output. The real culprit behind Germany’s low per capita GDP growth must be sought elsewhere. According to the Bank for International Settlements, German banks’ claims

World Excellence 27

BUSINESS & FINANCE

on other eurozone countries – including Austria, France, Ireland, Italy, the Netherlands, Portugal, and Spain – have fallen by over $200 billion, in aggregate, since the peak of the debt crisis in mid-2012. Claims on Italy are down to pre-euro levels, and claims on Spain are nearing that benchmark. Germany has even been disinvesting from core eurozone economies. German banks’ quiet move toward disintegration contrasts sharply with the behavior of banks based in France, Italy, Spain, and the Netherlands, all of which have resumed European financial integration by stabilizing and often increasing their exposure in other countries.

These divergent trends, rather than generic capital flight, explain part of the growing imbalances in the Target 2 eurozone payment system.

WHY ARE GERMAN BANKS THE ONLY ONES BACKTRACKING ON INTEGRATION? One possible reason is that

domestic financial authorities, skeptical about the euro’s future, have instructed banks to cut their exposure to the rest of the eurozone. Another is that German banks are experiencing a slow-burn malaise that European regulators have yet to recognize fully. Their cost-base is, after all, the highest in the advanced world, yet their profitability is among the lowest,

28 World Excellence

despite their negligible burden of bad loans. Nonetheless, such skittishness is puzzling. Around half of the German banking system is publicly owned, and thus enjoys an implicit government guarantee. In fact, German banks received €239 billion ($253 billion) in state aid between 2009 and 2015. In any case, German banks’ withdrawal from Europe cannot possibly be good for confidence, investment, or a dynamic service sector.

And, indeed, investment in Germany last year was more than five percentage points below its 1999 levels as a share of GDP, even though gross national savings have climbed to the highest levels since the International Monetary Fund data series began in 1980.

German officials usually explain away this huge drop by citing the parsimony of an aging society.

But demographic challenges – which are tomorrow’s constraints on potential output – should inspire reforms in entitlements and education, not suppression of today’s demand. And that is where the real issue lies: no EU country, with the possible exception of France, has implemented so few

reforms over the last decade as Germany.

THAT LACK OF REFORM IS STARTING TO SHOW. Wary

banks and low investment must have played a role since 2012 in what looks like Germany’s slowest stretch of growth in total factor productivity in three decades. Relying largely on exports – that is, other countries’ demand – may have distracted the German government from some of its own domestic responsibilities. But it is in the interest of all of Europe – and Italy, in particular – that the continent’s largest economy become even stronger. To be sure, the productivity slowdown is far from unique to Germany.

But unless Germany addresses the roots of that slowdown at home, it risks taking a huge hit, in the event that its currency is sharply revalued, in the form of lower exports and damage to its already-weak banking sector, resulting from deflation and negative long-term interest rates.

Italy’s illness is far more acute than Germany’s, but both are potentially serious. Both are in need of immediate treatment.WE

ECONOMICS

POLITICAL OPINION

How Economic Populism Works Bad policies pay off long before they become toxic.

Andres Velasco

30 IAIR World Excellence

ECONOMICS

ANTIAGO– Now that po-

pulists are coming to power in the West, a conflict over intellectual ownership of their approach is brewing. Writers like John Judis claim that nineteenth-century Americans invented political populism, with its antielitist stance and inflammatory rhetoric. Argentines, who gave the world über-populist Juan Domingo Perón, or Brazilians, who brought us Getúlio Vargas, might beg to differ.

Yet there can be no disagreement that Latin Americans have been the longest and best practitioners of economic populism. In the twentieth century, Perón and Vargas, plus Alan García in Perú (at least during his first term), Daniel Ortega in Nicaragua and Salvador Allende in Chile, and many others, engaged in trade protectionism, ran large budget deficits, overheated their economies, allowed inflation to rise, and eventually suffered currency crises. In recent years, Hugo Chávez and Nicolás Maduro of Venezuela took these policies to new lows.

What should the rich world, now undergoing its own bout of economic populism, learn from Latin America’s experience?

ropean Union, a recession, if not a full-blown economic crisis, would be inevitable. After the referendum, the pound depreciated some, but nothing much else happened. Today, the British economy continues to grow.

In the United States, academic economists repeatedly warned that Trump’s economic plans were little short of lunacy, and in the aftermath of his shocking election victory, some prophesied immediate economic catastrophe. Since then, the stock market has reached record heights, commodity

ECONOMIC POPULISM

phasizes the risks of inflation and deficit finance, external constraints, and the reaction of economic agents to aggressive nonmarket policies.” They add that populist approaches “do ultimately fail,” not because conservative economics is better, but as “the result of unsustainable policies.”

“ULTIMATELY” CAN BE A VERY LONG TIME. Populist policies are

called that because they are popular. And they are popular because they work – at least for a while.

A sizeable fiscal stimulus in a sluggish economy produces a pickup in growth and job creation. If financial markets turn bullish (as they often do), the exchange rate appreciates, quelling nascent inflationary pressures and making it cheaper to import. And, as Argentine economist and Columbia University professor Guillermo Calvo has long argued, precisely because they are unsustainable, populist policies cause people to shift spending from the uncertain future to the present, when the going is good.

This reinforces the expansionary impact of the stimulus, which is particularly strong under fixed exchange rates. So, eurozone countries: beware!

With consumption, credit, and employment booming and asset prices sky-high, a warm and fuzzy feeling of prosperity permeates society. Populist leaders feel vindicated, and they are not shy about claiming credit. Their

WHAT SHOULD THE RICH WORLD, NOW UNDERGOING ITS OWN BOUT OF ECONOMIC POPULISM, LEARN FROM LATIN AMERICA’S EXPERIENCE?

MAKE NO MISTAKE: JUDGING BY THE TRACK RECORD OF ITS ESTABLISHMENT PUNDITS, THE RICH WORLD NEEDS SOME LESSONS.

In Britain, Brexit opponents insisted that if voters decided to leave the Eu-

prices have recovered, and forecasts of US economic growth keep rising.

Have the pundits been smoking something? Or have Trump and proBrexit leader Nigel Farage abrogated the principles of introductory macroeconomics? Nothing of the sort. But to understand the effects of populist policies, one must first understand their logic. In a classic paper, Sebastian Edwards of UCLA and the late Rudiger Dornbusch of MIT define economic populism as “an approach to economics that emphasizes growth and income redistribution and deem-

World Excellence 31

ECONOMICS

advanced economies borrow in their own currencies at near-zero (and sometimes negative) interest rates. Even if the starting point is a high debt-to-GDP ratio, it can be a long time before growing debt triggers an emergency. Just ask the Japanese.

WHAT HAPPENS WHEN FINANCIAL MARKETS FINALLY GET COLD FEET AND STOP LENDING?

approval rating can only go up – and it does. Soon, teetotalers begin to warn that debt is accumulating too quickly, credit quality is deteriorating, inflationary pressures are incubating, and an overvalued exchange rate is doing lasting harm to exporters. But the music is too loud and the dancing too lively, so no one listens to the warnings.

How long can the party go on? One thing we know from the Latin American episodes is that the answer depends, first of all, on initial conditions. Most industrial economies have grown little since the financial crisis.

Deflation, not inflation, has been the

32 IAIR World Excellence

problem.

YES, THE UNEMPLOYMENT RATE HAS DROPPED CONSIDERABLY IN THE US. But after so many shocks and so

much technological change over the last decade, there is considerable uncertainty about how much unused capacity remains and where the non-accelerating inflation rate of unemployment (NAIRU) lies. It couldwellbethatthelikesofTrumpfindthat they can stimulate the economy for quite a while before obvious imbalances emerge.

The other thing we have learned is that debt, both public and private, does become a constraint. But when and how depends crucially on what kind of debt it is. Today,

Well, as the Nobel laureate economist Paul Krugman was at pains to demonstrate in a recent paper, an economy with flexible exchange rates and debt denominated in domestic currency will expand, not contract, in response to a foreign deleveraging shock. (Of course, Krugman was arguing for fiscal expansion under a Democratic president, but the point still stands.) Not even then do you get an immediate crisis.

In 1953, Perón sent a message to Chilean president Carlos Ibáñez, a fellow army general. “My dear friend: give the people, especially the workers, all that is possible,” he wrote. “There is nothing more elastic than the economy, which everyone fears so much because no one understands it.” Trump, should he come to think about it, might stumble to the same conclusion.

Anti-populists in the US, the UK, and elsewhere must come to terms with the reality that bad policies pay off, both economically and politically, long before they become toxic. Yes, the excessive private and public debt, the loss of export capacity, and the weakening of institutions harm the economy (and the polity) – but only in the long run. If critics do not understand that and act accordingly, populists will have as long (and destructive) a run in the rich countries as they once had in Latin America.WE

ECONOMICS

FISCAL OPINION

Is the Deflation Cycle Over?

The International Monetary Fund projects that 2017 will be the first in a decade that no advanced economy will experience deflation.

Carmen Reinhart

C

AMBRIDGE – Until the global

financial crisis of 2008-2009, deflation had all but disappeared as a concern for policymakers and investors in the advanced economies, apart from Japan, which has been subject to persistent downward pressure on prices for nearly a generation. And now deflationary fears are on the wane again.

BY THE MID-1960S, THE ADVANCED ECONOMIES BEGAN AN ERA OF RISING INFLATIONARY PRESSURES, ignited

largely by expansionary fiscal and monetary policies in the United States, and acutely compounded by the oil price hikes of the 1970s. Stagflation, the combination of low economic growth and high inflation, became a buzzword by the end of that decade. Most contemporary market forecasts extrapolated those trends, predicting an uninterrupted upward march in oil and commodity prices.

Inflation came to be seen as chronic,

34 World Excellence

and politicians looked toward price controls and income policies. Real (inflation-adjusted) short-term interest rates were consistently negative in most of the advanced economies.

Federal Reserve Chairman Paul Volcker’s monumental tightening of US monetary policy in October 1979 ended that long cycle. Stagflation gave way to a new buzzword: disinflation, which accurately characterized many advanced economies, as inflation rates fell from double digits.

BUT DISINFLATION IS NOT THE SAME AS DEFLATION. As

shown in the figure, between 1962 and 1986, not a single advanced economy recorded an annual decline in prices. In many emerging markets, inflation rates soared into triple digits, with several cases of hyperinflation. As late as 1991, Greece had an inflation rate of about 20%. Even in historically pricestable Switzerland at that time, inflation was running above 5%.WE

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ECONOMICS

UNCERTAINTIES

Will Trump Block Latin Recovery?

The future is not so bright for U.S. and Latin American relations.

José Antonio Ocampo

36 IAIR World Excellence

INNOVATION & TECHNOLOGY

IAIR World Excellence 37

ECONOMICS

EW YORK – Across Latin America, there is a growing sense of anguish that is reminiscent of Michael Corleone’s lament in The Godfather III: “Just when I thought I was out, they pull me back in.” At a time when the region seemed finally to be grasping economic recovery, Donald Trump’s inauguration as President of the United States has brought new trade and financial uncertainties to Latin America.

THIS YEAR, LATIN AMERICA IS EXPECTED TO EMERGE FROM THE RECESSION THAT BEGAN IN 2015; but it will still expe-

rience a fourth consecutive year of anemic growth – or the sixth, if one counts the slowdown that was already evident in 2012 and 2013.

Trump’s declarations on topics ranging from tariffs to the construction of a border wall have already affected some investments in Mexico, and sent the peso plummeting.

Domestic factors will also hinder growth in Latin America. Venezuela’s ongoing political and economic crises are the most important, but not the only, example. Brazil’s crises seemed to have ended in 2016, but the economy is not yet positioned for a strong recovery from its worst-ever recession. Argentina, for its part, is still fighting high inflation and fiscal deficits. And Ecuador has been saddled by falling oil revenues and dollarization in a region where most countries have already depreciated their currencies.

38 World Excellence

CHILE, COLOMBIA, AND URUGUAY REMAIN ON A SLOWGROWTH TRAJECTORY AS WELL. Among the region’s large

and medium-size economies, only Peru’s is recovering – but at a much slower rate than during the last commodity “super cycle.” Overall, the only ones that seem to be resisting the negative trend are some small economies of South America (namely, Bolivia and Paraguay), Central America, and the Dominican Republic.

THE GOOD NEWS IS THAT THE DEMAND FOR LATIN AMERICA’S EXPORTS SHOULD IMPROVE. The US economy is ex-

pected to expand, the European Union is recovering, and there are fewer economic uncertainties in China than there were a year ago.

Commodity prices seem to have bottomed out in 2016, and re-

mittance inflows have recovered, now exceeding 2007-2008 levels.

Still, the benefits of the latter two trends could be limited. Judging by their historical dynamics, commodity prices are at the beginning of a long weak period, while migration opportunities in the US and Spain largely disappeared after the 2008 financial crisis – and will probably be even scarcer under Trump.

Latin America will also have to deal with major adverse trends in international trade and finance.

According to CPB Netherlands, the volume of world trade has grown less than 2% since 2007.

This is the most tepid growth since World War II, with trade volume expanding at a slower rate than world production for the first time in the post-war era.

SLOW TRADE GROWTH POSES A SIGNIFICANT RISK FOR LATIN

ECONOMICS

AMERICAN COUNTRIES, because increasing and diversifying exports is an essential component of their recovery strategies. And US protectionism – or even the start of trade wars – is now a real possibility.

This threat has centered not only on China, but also on Mexico, where firms have already reduced investments or canceled plans to expand output to serve the US market. And if Trump follows through on his promise to renegotiate the North American Free Trade Agreement, the impact could be felt throughout Latin America, because many other bilateral free-trade agreements between the region’s countries and the US are essentially NAFTA’s offspring.

MAINTAINING ACCESS TO AFFORDABLE FINANCE WILL BE A SECOND MAJOR CHALLENGE FOR LATIN AMERICAN COUNTRIES. In recent

years, the region has benefited from abundant financing, and it has gotten by even as falling commodity prices, China’s financial

But now there could be new shocks. Following the initial increase in risk spreads after the US election, financing has become more expensive. The benchmark interest rate for Latin American bonds – the ten-year US Treasury bond – has increased by about one percentage point since the election,

CORLEONE’S LAMENT IN THE GODFATHER III

“JUST WHEN I THOUGHT I WAS OUT, THEY PULL ME BACK IN.”

disturbances in 2015 and early 2016, and the impending normalization of US interest rates have raised the costs of external debt.

and the US Federal Reserve could now push interest rates higher.

Worse still, global financial disturbances could become more likely if the US mixes an expansionary fiscal policy – which will depend largely on Congress – with a contractionary monetary policy and a stronger US dollar. This would be similar to the policy mix that precipitated global economic trouble in the mid-1980s, especially if the rising trade deficit gives Trump another reason to pursue protectionism, as the US did then against Japan. The economic-policy decisions that Trump makes during the first days of his presidency will be crucial for Latin America. Let us hope that his administration does not stymie economic recovery and pull Latin America back into recession – just when it thought it had gotten out.WE

World Excellence 39

INNOVATION & TECHNOLOGY

SCIENTIFIC OBSERVATION

The Promise of Ethical Machines How ethical machines will guide the modern man.

Susan Leigh Anderson

S

TORRS,

CONNECTICUT

– The prospect of artificial intelligence (AI) has long been a source of knotty ethical questions. But the focus has often been on how we, the creators, can and should use advanced robots.

What is missing from the discussion is the need to develop a set of ethics for the machines themselves, together with a means for machines to resolve ethical dilemmas as they arise. Only then can intelligent machines function autonomously, making ethical choices as they fulfill their tasks, without human intervention.

THERE ARE MANY ACTIVITIES that we would like to be

able to turn over entirely to autonomously functioning machi-

40 World Excellence

nes. Robots can do jobs that are highly dangerous or exceedingly unpleasant. They can fill gaps in the labor market. And they can perform extremely repetitive or detail-oriented tasks – which are better suited to robots than humans.

But no one would be comfortable with machines acting independently, with no ethical framework to guide them. (Hollywood has done a pretty good job of highlighting those risks over the years.) That is why we need to train robots to identify and wei-

INNOVATION & TECHNOLOGY

ROBOT

THEY CAN FILL GAPS IN THE LABOR MARKET. IAIR World Excellence 41

INNOVATION & TECNOLOGY

gh a given situation’s ethically relevant features (for example, those that indicate potential benefits or harm to a person). And we need to instill in them the duty to act appropriately (to maximize benefits and minimize harm).

Of course, in a real-life situation, there may be several ethically relevant features and corresponding duties – and they may conflict with one another. So, for the robot, each duty would have to be relativized and considered in context: important, but not absolute.

A duty that prima facie was vital could, in particular circumstances, be superseded by another duty.

THE KEY TO MAKING these

judgment calls would be overriding ethical principles that had been instilled in the machine before it went to work. Armed with that critical perspective, machines could handle unanticipated situations correctly, and even be able to justify their decision.

Which principles a machine requires would depend, to some extent, on how it is deployed. For example, a search and rescue robot, in fulfilling its duty of saving the most lives possible, would need to understand how to prioritize, based on questions like how many victims might be located in a particular area or how likely they are to survive. These concerns don’t apply to an eldercare robot with one person to look after. Such a machine would instead have to be

42 World Excellence

equipped to respect the autonomy of its charge, among other things.

WE SHOULD PERMIT MACHINES TO FUNCTION AUTONOMOUSLY ONLY IN AREAS WHERE THERE IS AGREEMENT AMONG ETHICISTS ABOUT WHAT CONSTITUTES ACCEPTABLE BEHAVIOR. Otherwise, we risk a

backlash against allowing any machine to function autonomously.

But ethicists would not be working alone. On the contrary, developing machine ethics will require research that is interdisciplinary in nature, based on a dialogue between ethicists and AI specialists. To be successful, both sides must appreciate the expertise – and the needs – of the other.

AI researchers must recognize that ethics is a long-studied field within philosophy; it goes far beyond laypersons’ intuitions.

Ethical behavior involves not only refraining from doing certain things, but also doing certain things to bring about ideal states of affairs. So far, however, the determination and mitigation of ethical concerns regarding machine behavior has largely emphasized the “refraining” part, preventing machines from engaging in ethically unacceptable behavior, which often comes at the cost of unnecessarily constraining their possible behaviors and domains of deployment.

For their part, ethicists must re-

cognize that programming a machine requires the utmost precision, which will require them to sharpen their approach to ethical discussions, perhaps to an unfamiliar extent. They must also engage more with the real-world applications of their theoretical work, which may have the added benefit of advancing the field of ethics.

More broadly, attempting to formulate an ethics for machines would give us a fresh start at determining the principles we should use to resolve ethical dilemmas. Because we are concerned with machine behavior, we can be more objective in examining ethics than we would be in discussing human behavior, even though what we come up with should be applicable to humans as well.

FOR ONE THING, we will not

be inclined to incorporate into machines some evolutionarily evolved behaviors of human beings, such as favoring oneself and one’s group. Rather, we will require that they treat all people with respect. As a result, it is likely that the machines will behave more ethically than most human beings, and serve as positive role models for us all.

Ethical machines would pose no threat to humanity. On the contrary, they would help us considerably, not just by working for us, but also by showing us how we need to behave if we are to survive as a species.WE

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INNOVATION & TECHNOLOGY

SCIENTIFIC OPINION

Gene Editing and Seed Stealing New technologies endanger conservation and prevent privacy.

Chee Yoke Ling - Edward Hammond

A

USTIN, TEXAS – Four hundred years ago, John

Rolfe used tobacco seeds pilfered from the West Indies to develop Virginia’s first profitable export, undermining the tobacco trade of Spain’s Caribbean colonies. More than 200 years later, another Briton, Henry Wickham, took seeds for a rubber-bearing tree from Brazil to Asia – via that great colonialist institution, London’s Royal Botanic Gardens – thereby setting the stage for the eventual demise of the Amazonian rubber boom. At a time of unregulated plant exports, all it took was a suitcase full of seeds to damage livelihoods and even entire economies.

THANKS TO ADVANCES IN GENETICS, IT MAY SOON TAKE EVEN LESS. To be sure, over the last

few decades, great strides have been made in regulating the deliberate movement of the genetic material of animals, plants, and other living things across borders. The 1992 United Nations Convention on Biological Diversity, in particular, has helped to safeguard the rights of providers of genetic resources – such as (ideally) the farmers and indigenous people who have protected and nurtured valuable genes – by enshrining national sovereignty over biodiversity.

46 World Excellence

While some people surely manage to evade regulations, laboriously developed legal systems ensure that it is far from easy. The majority of international exchanges of seeds, plants, animals, microbes, and other biological goods are accompanied by the requisite permits, including a material transfer agreement.

INNOVATION & TECHNOLOGY

BUT WHAT IF ONE DID NOT HAVE TO SEND ANY MATERIAL AT ALL? What if all it took to usurp

the desired seeds was a simple email?

What if, with only gene sequences, scientists could “animate” the appropriate genetic material? Such Internetfacilitated exchanges of biodiversity would clearly be much harder to re-

gulate. And, with gene sequencing becoming faster and cheaper than ever, and gene-editing technology advancing rapidly, such exchanges may be possible sooner than you think.

In fact, genes, even entire organisms, can already move virtually – squishy and biological at each end, but nothing more than a series of ones and zeros

while en route. The tiny virus that causes influenza is a leading-edge example of technical developments.

Today, when a new strain of influenza appears in Asia, scientists collect a throat swab, isolate the virus, and run the strain’s genetic sequence. If they then post that strain’s sequence on the Internet, American and European laboratories may be able to synthesize the

World Excellence 47

INNOVATION & TECNOLOGY

new virus from the downloaded data faster and more easily than if they wait for a courier to deliver a physical sample. The virus can spread faster electronically than it does in nature. More complicated viruses and some bacteria are in the range of such techniques today, though wholly synthesizing a higher organism with a more complex genome, such as maize, is many years away. But that may not matter, as new gene-editing technologies, like CRISPR-Cas9, enable scientists to stitch together complicated new organisms, using gene sequence information from organisms to which they do not have physical access. For example, the key traits of a drought-resistant maize from a Zapotec community in Oaxaca, Mexico, might be reproduced by editing the genes of another maize variety. No major new advance in the technology is needed to unlock this possibility.

WHAT IS NEEDED IS THE GENETIC SEQUENCES OF THOUSANDS OF TYPES OF MAIZE.

Those data act as a sort of roadmap and resource pool, enabling scientists to compare sequences on a computer screen and identify pertinent variations. The selected adjustments might then be made to, say, the parents of a new Monsanto or DuPont Pioneer maize hybrid. Managing access to large genomic databases thus becomes critically important to prevent a virtual version of the theft carried out by Rolfe and Wickham. And, indeed, in an unguarded e-mail released under the US Freedom of Information Act, one of the US Department of Agriculture’s top maize scientists, Edward Buckler,

48 World Excellence

OBSERVATION

THE VIRUS CAN SPREAD FASTER ELECTRONICALLY THAN IT DOES IN NATURE. called such management “the big issue of our time” for plant breeding.

If agricultural biotechnology corporations like Monsanto and DuPont Pioneer – not to mention other firms that work with genetic resources, including pharmaceutical companies and synthetic biology startups – have free access to such databases, the providers of the desired genes are very likely to lose out. These are, after all, wholly capitalist enterprises, with little financial incentive to look out for the little guy. In this case, that “little guy” could be African sorghum growers, traditional medicinal practitioners, forest peoples, or other traditional communities – people who have created and nurtured biodiversity, but never had the hubris or greed to claim the genes as proprietary, patented inventions. All it would take is for someone to sequence their creations, and share the data in open databases.

YET OPEN ACCESS IS THE MODE DU JOUR IN SHARING RESEARCH DATA. The US go-

vernment’s GenBank, for example, doesn’t even have an agreement banning misappropriation. This must change. After all, such no-strings-

attached databases do not just facilitate sharing; they enable stealing.

The question of how to regulate access to genetic sequence data is now cropping up in international discussions, including at the World Health Organization and the Food and Agriculture Organization. Perhaps the most important forum for such discussions is the Conference of the Parties to the Convention on Biological Diversity, the main treaty regulating access to biodiversity. The next meeting (COP 13) will take place in Cancún, Mexico, in early December.

Participants at COP 13 must focus on the need to protect the rights of resource providers. To this end, they should pursue a careful assessment of existing policies and craft the necessary changes – before synthetic biology outpaces legal systems and renders them impotent.

Arrangements must be made to supervise access to genetic sequences in a way that ensures fair and equitable sharing of benefits from their use. Otherwise, decades of work to promote conservation and prevent piracy will be undermined, endangering the biodiversity convention – and those it protects. WE

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INNOVATION & TECHNOLOGY

NEED FOR CHANGE

Economic Prosperity in the Digital Age Strategies for Growth.

John Chambers

S

AN JOSE – Around the world, people are demanding change. Recent electoral outcomes – perhaps most notably, the Brexit vote in the United Kingdom and the presidential election in the United States – have highlighted rising economic uncertainty. In this environment, it is imperative that leaders articulate and deliver on a clear vision for inclusive economic growth, one that accounts not only for tax and trade policy –

50 World Excellence

INNOVATION & TECNOLOGY

the focus of many of today’s debates – but also for digitization.

REPRESENTING $19 TRILLION IN POTENTIAL ECONOMIC VALUE over the next decade,

digitization has the power to enable countries to kick-start GDP growth, job creation, and innovation. We’re already seeing the profound impact that digitization can have on countries that embrace it as a core driver of their economic

DIGITIZATION

AROUND THE WORLD, PEOPLE ARE DEMANDING CHANGE

strategies. In India, for example, Prime Minister Narendra Modi is implementing a strategy that is transforming India into a technology powerhouse and setting the stage for a digital future. In France, the government has invested in an extensive national digital plan that is expected to create 1.1 million jobs over the next 3-5 years and contribute $101 billion to GDP over the next decade. While other countries are embracing robust digital strategies, the US is falling behind. Despite having led the Internet race in the 1990s, the US is now the only major developed economy without a clear digitization plan. The consequences are already starting to show: according to the 2016 Bloomberg Innovation Index, the US is now the world’s eighth most innovative country, having fallen two spots since 2015.

The message is clear: when it comes to digitization, nobody is entitled to anything, and there is no time to waste. Even in Silicon Valley, we must constantly reinvent ourselves to stay competitive. The US economy must do the same, or risk losing its innovative edge.

Only with a clear and effective digitization plan can the US ensure that it retains its status as a global economic leader in the Digital Age, while fulfilling its citizens’ demands for more economic opportunities. I believe that connectivity has the power to transform economies and generate new opportunities.

That is why America’s new digital

IAIR World Excellence 51

INNOVATION & TECNOLOGY

agenda must rectify the fact that, despite living in one of the world’s wealthiest countries, one-third of the US population still lacks broadband access at home.

Existing Smart City initiatives promoting connectivity in Chicago and Washington, DC, are encouraging. But, to close the digital divide, a more comprehensive national digital strategy is needed, one that emphasizes digital infrastructure investment, rather than just physical infrastructure investment, as in the past. Only with broad access can technology continue to fulfill its potential as one of the great economic equalizers.

AN EFFECTIVE US DIGITIZATION PLAN MUST ALSO SUPPORT START-UPS. Young

companies represent the future of job creation – they are the primary source of new jobs in the US – and technological disruption. Yet startups are on the decline in the US. According to research by the Bro-

52 World Excellence

okings Institution, the start-up rate (the number of new companies, as a percentage of all firms) has fallen by nearly half since 1978.

To boost innovation and job creation, we need to reverse this trend, injecting more fuel into the US economy’s start-up engine. This will require businesses and government to work together to create an environment that encourages entrepreneurs to bring their visions to life. A combination of legislation, such as tax benefits for early-stage companies, and corporate/venture capital investments that provide financial backing and mentorship opportunities to start-ups, will be vital to sustain this ecosystem.

More broadly, US leaders must create an environment that encourages all kinds of business growth and investment. Trump’s call to update US tax rules in 2017 could produce benefits on this front, assuming that the new rules promote domestic investment by encouraging companies to bring back their

overseas earnings and by lowering the corporate tax rate, currently one of the highest among OECD countries. These steps could bring more than $1 trillion into the US economy, creating jobs and economic opportunities in the process.

YET ANOTHER CRITICAL ELEMENT OF AN EFFECTIVE DIGITIZATION plan is education and

training. Businesses need to invest in the existing workforce, which largely lacks the skills necessary to compete in the Digital Age. At the same time, we must transform our education system, so that younger generations acquire the skills they need to secure the high-paying digital jobs of the future. To this end, we must move beyond emphasizing science, technology, engineering, and mathematics – the so-called STEM subjects – to think about how to apply technology and digitization to all fields. Digitization could create $5.1 trillion in economic value for the US by 2025, while significantly lowering unemployment. But the US cannot realize this potential unless its leaders work effectively across party lines and with all industries to drive forward a digital agenda. Technology is changing everything: the way we do business, the rules of capitalism, and entire economic ecosystems – all at tremendous speed. The US must change with it, acting now to do what it takes to reclaim its innovative edge and thrive in the Digital Age. WE

INNOVATION & TECHNOLOGY TECNOLOGY

GLOBAL LEADER

Zimmer Biomet Executive awarded IAIR CEO/MD of the Year for Excellence in Leadership, Inspiration and Innovation

LI YONG MING Vice President,

Zimmer Biomet

Zimmer Biomet China and Hong Kong

Z

IMMER Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced that Li Yong Ming, Vice President of Zimmer Biomet China and Hong Kong, received the International Alternative Investments Review (IAIR) CEO/MD of the Year Award in Healthcare Solutions for excellence in leadership, inspiration and innovation Mr. Yong Ming is recognized for his entrepreneurial spirit, strategic direction and personal influence in consolidating the Zimmer Biomet businesses in China and Hong Kong, and positioning the company as a leader in the musculoskeletal healthcare field. During his tenure, Mr. Yong Ming not only led the successful integration of Zimmer and Biomet following the global merger, but also delivered double-digit growth, sustained organizational commitments and development of a high-performing sales team.

54 World Excellence

L

i Yong Ming holds a Bachelor Degree in Electronics Engineering and is currently serving as Vice President, Zimmer Biomet China and Hong Kong. Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare.

We design, manufacture and market orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products;

office based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products. Li Yong Ming has more than 25 years of experience in the Medical Device industry. He has held numerous portfolios in his endeavor in multinational medical device companies over the years ranging from Commercial leadership roles, China General Manager and Vice President.

“I AM HONORED TO RECEIVE THE PRESTIGIOUS IAIR CEO/ MD OF THE YEAR AWARD, AND HUMBLED TO BE CHOSEN FROM AMONG SUCH A STELLAR GROUP OF BUSINESS LEADERS AND COMPANIES,”

in China and Hong Kong.” “China’s rapidly-ageing population fuels a growing need for innovative and effective solutions to preserve and restore mobility, and Yong Ming has successfully led the strategic expansion of Zimmer Biomet’s Asia Pacific business to capitalize on this significant market growth opportunity while advancing our corporate mission to improve the lives of people with musculoskeletal disorders,” said Sang Yi, President of the Zimmer Biomet Asia Pacific region. WE

said Mr. Yong Ming.“I share this award with my Asia Pacific team who played an integral role in modifying the organizational structure and business processes to embrace a more unified, customer-centric business model to improve performance

55 World Excellence

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AWARDS

SINGAPORE MILANO DUBAI

Events of the year 2016 The race to corporate excellence continues as The Le Fonti IAIR Awards moves through the major financial capitals of Europe, Asia, and the Middle East.

Starting with Singapore on November 15th, followed by Milan on November 15th, and finishing the year in Dubai on the 15th of December – corporate leaders in every city were delighted to celebrate together in an evening of prestige and C-level networking. Corporate executives discussed hot topics such as leadership, innovation, and political uncertainty. In chaotic political eras, it is critical for the world’s greatest leaders and thinkers to unite for the purpose of generating ideas to tackle today’s issues and spread strategies for growth. Each event commands diversity in decision making and invites an open conversation in a peaceful setting. Congratulations to all of this roadshow’s honourees.

World Excellence 57

AWARDS

DUBAI

CEO &TOP EXECUTIVE OF THE

YEAR

Nashwa Al Ruwaini Pyramedia

1 Petri Pentti

Shadi Banna Potential

China State Construction Engineering Corporation

2

Hani Gharbawi

ENOC Group

3 58 World Excellence

Yu Tao

4

KAEC - King Abdullah Economic City

5

AWARDS

CEO &TOP EXECUTIVE

DUBAI CEO OF THE YEAR MIDDLE EAST

CEO OF THE YEAR REAL ESTATE MIDDLE EAST

Nashwa Al Ruwaini

Yu Tao

For her continuous achievements and her unceasing motivation to build not only a successfull media & entertainment company, but a landmark for innovation,sustainablegrowth,creativity anddiversity.Forheroutstandingcontribution to the industry and her influence as a woman and as an entrepreneur to the improvement of both society and business in the Middle East.

Forhissuccessfullapproach,focusedon innovation in Education and Life Long LearningPrograms-betterknownasEdTech.

Thankstoapioneeringdevelopmentprocess and efficient learning solutions, he has been able to motivate and inspire people,believinginthepowerofhuman potential.

CEO OF THE YEAR EDTECH MIDDLE EAST

CFO OF THE YEAR ENERGY MIDDLE EAST

GENERAL COUNSEL OF THE YEAR MIDDLE EAST

Shadi Banna

Petri Pentti

OF THE

YEAR Potential

For his successfull approach, focused oninnovationinEducationandLifeLong Learning Programs - better known as EdTech. Thanks to a pioneering development process and efficient learning solutions, he has been able to motivate and inspire people, believing in the power of human potential.

3

Pyramedia

China State Construction Engineering Corporation

1

2

Hani Gharbawi

ENOC Group

KAEC - King Abdullah Economic City

For his over 23 years of experience spanning the energy, aviation and metal industry sectors holding various finance positions. For his role as CFO at ENOC, adiversifiedoilandgasgroup,supplying energy to Dubai and the UAE, as well as internationally to the Middle East, Africa and Europe, with a mission to achieve sustainabledevelopmentandhighlyprofitable growth.

For his leadership in managing all the legal aspects related to one of the most innovativedevelopmentmegaprojectin theregion,renamedtheSiliconValleyof the Middle East.

Thanks to his skills and experience, he has been able to lead his team to cover contractualmatters,regulation,compliance,contributingtothebuildingofacity that became a sustainable and efficient model.

4

5

World Excellence 59

AWARDS

DUBAI

CORPORATE

AWARDS Pyramedia

Sanofi

Pyramedia

Sanofi

1

COMPANY OF THE YEAR FOR LEADERSHIP MEDIA & ENTERTAINMENT MIDDLE EAST

CORPORATE SUSTAINABILITY TEAM OF THE YEAR HEALTHCARE MIDDLE EAST

Pyramedia

Sanofi

For being a dynamic and unique company that provides world class media services across a full spectrum of television/filmproduction,events,public relations, marketing and advertising.

Thankstoanaward-winningteamfrom different disciplines and a charismatic CEO, Pyramedia promotes a culture of creativity, variety and talent with an undisputed added value for audience, clients and the whole industry.

For the contribution to bettering the living conditions of billions of women and men, responding to the needs of patients.

Forensuringhealthystandardsandimprovingsustainableandreliableaccess, andinparticularfortheexcellentresults achievedbythecorporateteamleader, Ms. Simone Mechiche.

Pyramedia

Sanofi

1

60 World Excellence

2

2

AWARDS

DUBAI

REAL ESTATE

AWARDS Shaikhani Group

DAR Designs

Shaikhani Group

COMPANY OF THE YEAR FOR LEADERSHIP REAL ESTATE DEVELOPMENT MIDDLE EAST

DAR Designs

1

Shaikhani Group

COMPANY OF THE YEAR FOR LEADERSHIP INTERIOR DESIGN MIDDLE EAST

2

DAR Designs

Shaikhani Group

DAR Designs

Forbeinganinternationalbusinesscompany with over 30 years of experience in realestatedevelopment.Withpowerfulvisionanddetermination,ShaikhaniGroup has distinguished themselves amongst the competition by offering innovative and high-quality themed-projects and unparalleledcustomerservice.Shaikhani Groupisaniconofexcellenceinproperty development units across the world.

Forofferingworld-classdesignsolutions for residential, corporate, commercial, and retail projects and for the New Cairo Private Residence prestigious project.

1

2 World Excellence 61

AWARDS

DUBAI

ZAS

EDGE

ZAS

EDGE

3

4

COMPANY OF THE YEAR FOR LEADERSHIP ARCHITECTURE MIDDLE EAST

COMPANY OF THE YEAR FOR LEADERSHIP ARCHITECTURE UAE

ZAS

EDGE

ZAS

EDGE

Forprovidingafullyintegratedandcomprehensive service for projects of all scales and various levels of complexity.

For their unique, fresh and innovative approachtoproblemsolvingandforthe Rosemont Five Star Hotel & Residences, a first mover in ultra-luxury urban resort destination facilities.

For their ability to deliver projects in all sectorsincludingcommercial,residential, hospitality,retail,mixed-useandsports/ entertainmentvenuesandforusingthe mostmoderndesignmethodologiesto createintegrated,economicallyandenvironmentallyself-sustainingmasterdevelopments.

3

62 World Excellence

4

AWARDS

DUBAI

IAIR

BROKER AWARDS

BINARY OPTIONS PLATFORM OF THE YEAR

Olymp Trade Olymp Trade

For its trading platform that received a quality certificate from the Financial Commission and let traders choose amongdifferentcurrencypairsandcommodities for trading.

1

Olymp Trade Olymp Trade

1

World Excellence 63

AWARDS

SINGAPORE

CEO &TOP EXECUTIVE OF THE

YEAR

Chew Hua Seng

Li Yong Ming

Raffles Education

Zimmer Biomet

1

CEO OF THE YEAR EDUCATION ASIA

MANAGING DIRECTOR OF THE YEAR HEALTHCARE SOLUTIONSCHINA

Chew Hua Seng

Li Yong Ming

For his leadership in international education,managingacompanyfocused on achieving a sustainable growth throughimprovementinoperations.For having lead his company on the marketswithhigherreturnsoninvestments and having started sustainable education-related businesses. For taking the opportunity, this year, to enter the US education market and further invest in expanding its presence in Europe.

Zimmer Biomet, an innovative center of excellence since 1927 and a global leader in musculoskeletal healthcare.

For the foresight of Mr. Li Yong Ming, Managing Director of Zimmer Biomet China, a company striving to meet the needs of its employees, so that they have the tools to succeed and advance together with the company.

Raffles Education

Zimmer Biomet

1

64 World Excellence

2

2

AWARDS

SINGAPORE

CORPO RATE AWARDS

Fubon Financial Holdings Fubon Financial Holdings

COMPANY OF THE YEAR FOR INNOVATION & LEADERSHIP FINANCIAL SERVICES ASIA Fubon Financial Holdings

COMPANY OF THE YEAR FOR LEADERSHIP PHARMA ASIA

1

Mundipharma

2

Mundipharma

Fubon Financial Holdings

Mundipharma

For having built a strong portfolio of financial service companies, pursuing stablegrowththroughM&Aopportunities in Greater China. For the business philosophywhichisfocusedonintegrityand innovation,andforthemultifacetedfinancialproductsandservicesofferedtoallof their clients.

Aninnovativecenterofexcellenceanda leading pharmaceutical company.

Forprovidingpioneeringhealthcaresolutions thanks to a 60-years visionary approachthatenablesthecompanytooffer newtreatmentsandtopromoteabetter quality of life.

1

Mundipharma

2 World Excellence 65

SINGAPORE

Sia & Moore

Trilliant Holdings

LKK Health Products Group

Sia & Moore

Trilliant Holdings

COMPANY OF THE YEAR FOR INNOVATION ENERGY ASIA

3

COMPANY OF THE YEAR FOR LEADERSHIP INTERIOR DESIGN TURKEY

LKK Health Products Group

4

HR TEAM OF THE YEAR HEALTH HONG KONG

5

Trilliant Holdings

Sia & Moore

LKK Health Products Group

An innovative center of excellence and aleadingSmartCommunicationsPlatform in the energy industry.

Forhelpingutilitiesandenergyretailers to successfully implement a broad set ofsmartgridinitiatives–fromadvanced metering to distribution automation andconsumerapplicationssuchasdemand-responseanddistributedenergy resources.

Aprestigiousmultidisciplinaryconsultancy firm of architecture, design and interior design based in Istanbul.

ForbelievinginsupportingTurkeydesign and manufacturing industries.

For its constant attention to corporate socialresponsibilityandinparticularto family-friendlyemploymentpoliciesand practices.Thankstoauniquecorporate culturethatpromotesapositiveworking atmosphere, the HR team was able to help employees achieving a triple balance among work, family and health.

Trilliant Holdings

Sia & Moore

3

66 World Excellence

LKK Health Products Group

4

5

IBG IAIR Mag 210x297mm.indd 1

12/3/14 12:11 PM

AWARDS

MILANO

CEO &TOP EXECUTIVE

CEO DELL’ANNO INSURANCE EUROPE

Yılmaz Yıldız Zurich Sigorta

OF THE

YEAR 68 World Excellence

Yılmaz Yıldız Zurich Sigorta

1

For being a charismatic leader and a pioneer in the insurance sector.

For his management of the companyinitscontinuousgrowth,promoting the CSR culture in different fields: from women’s rights to employees satisfaction as well as public initiatives.

1

AWARDS

MILANO

CORPO RATE Zurich Sigorta

African Open Sky

Zurich Sigorta

African Open Sky

COMPANY OF THE YEAR FOR LEADERSHIP ARCHITECTURE MIDDLE EAST

1

Zurich Sigorta

African Open Sky

Zurich Sigorta

African Open Sky

For its constant growth and leadership in all insurance fields, from non-life insurance to bancassurance field. For its customer and employee satisfaction, strenghtenedbydifferentdiversityandinclusioninitiativesalongsidewithculture and art sponsorships which lead it to be, notonlyatrustworthycompanybutalso a landmark for its country.

For its unfaltering success, thanks also to the leadership of its CEO, Mr. Max O Cisse.Forwinningthechallengeof“open theAfricansky”,facilitatingmovements andprovidingupdatedinformation,such as NOTAMs and contact details to all the airports on the continent.

1

70 World Excellence

COMPANY OF THE YEAR FOR LEADERSHIP ARCHITECTURE UAE

2

2