Opinion by Martin Scott – Kate Wright – Mel Bunce (norwich / edinburgh / london)
Inter Press Service
We argue that these humanitarian journalists show us that another kind of crises reporting is possible.
But who exactly are humanitarian journalists? What motivates them? Who do they work for? And how is their coverage of humanitarian affairs different to mainstream journalism?
In this article, we answer these questions though an account of ‘Sophia’ a fictional journalist whose story helps illustrate the key themes of our research.
Sophia: A humanitarian journalist
Sophia is a humanitarian journalist. She works for a small non-profit news outlet that covers international aid and global affairs. She regularly reports on under-reported crises, with a focus on in-depth, explanatory, and solutions-oriented journalism.
She is particularly keen to highlight the perspective, not only of affected citizens, but of a range of other local actors including rebels, aid workers, politicians, and think-tanks. She has significant freedom to choose which stories to cover and how to report them and regularly commissions local stringers living in affected countries.
Sophia used to work for a large international news broadcaster. Despite having a permanent position and a significantly higher salary, she left after just eighteen months because she was frustrated by what she felt was their rigid and formulaic approach to covering global affairs. She thought that much of their coverage of recent humanitarian crises was superficial and fleeting.
Although she was proud that she helped break a news story revealing corruption within an international NGO, she worries that it unfairly damaged the reputation of the humanitarian sector as a whole, because some of the subtleties of international humanitarian response got lost in the reporting.
The news organisation Sophia works for now generates very little advertising or reader revenue and relies almost exclusively on short term grant funding from a very small number of private foundations. Although she has never felt under any pressure to cover stories in ways that might please their current, or potential donors, she does resent the amount of time it takes to meet their reporting requirements.
If their funding is cut, and she loses her job, she intends to work either as a freelance journalist, or as an aid agency press officer. The only other news outlet she is aware of that covers similar stories has recently closed due to a lack of funding.
Sophia has never actually met any of her current colleagues in person as they all work remotely, in different countries. During their daily online editorial meetings they frequently disagree about which stories fall within their remit.
There is no consensus about what makes a story ‘humanitarian’, as opposed to a human rights or global development issue, for example. For this reason, some of the stories she pitches still get rejected – and she doesn’t fully understand why.
Although Sophia was recently nominated for a One World Media award, in general, she is frustrated by the lack of recognition and reach of her work. She also worries about being able to pay the bills – she knows her job is precarious.
But despite this lack of external recognition and the financial risks, Sophia is glad she took this job – because it allows her the freedom to do the kind of work she has always wanted to do.
Sophia is one of a small group of ‘humanitarian journalists’ whose work bridges the worlds of international news production and humanitarianism. She is motivated by both the traditional journalistic desire to document, witness and explain events, and the desire to help alleviate suffering and save lives.
There are a small number of non-profit news outlets employing humanitarian journalists like Sophia, who play a valuable role in the global media system.
Dr Martin Scott is Associate Professor in Media and Global Development at the University of East Anglia; Dr Kate Wright is Senior Lecturer in Media and Communications, Politics, and International Relations at the University of Edinburgh; Prof Mel Bunce is Professor of International Journalism and Head of the Journalism Department at City, University of London.
A wind energy generation plant located in Loiyangalani in northwestern Kenya. Credit: Isaiah Esipisu/IPS
Opinionwashington dc
Inter Press Service
WASHINGTON DC, Jan 31 (IPS) – Meeting our climate change goals will require massive investments in clean energy projects, in both advanced economies and across the Global South. But financing projects in the latter group of countries requires an increase in foreign capital inflows that will be constrained by currency exchange rate risk. Creating an innovative Exchange Rate Coverage Facility can help to overcome this constraint.
Over the coming two decades, annual energy emissions across the Global South (not counting China) are currently projected to grow by 5 Gt. Analysis by the International Energy Agency, the World Economic Forum and the World Bank shows that reversing this dynamic so as to meet the climate goals of the Paris Agreement, while also supporting the development needs of these countries, will require a four- to seven-fold increase in clean energy investments by 2030 from the current level of $150 billion.
Significantly, most of the needed clean energy projects provide domestic-oriented services (such as power from solar or wind power plants, public transit systems, building efficiency retrofit campaigns, electric vehicle charging stations). These generate local currency revenues.
Although much of the funding for these projects will come from domestic resources, the sheer magnitude of the required investment will necessitate significant amounts of foreign capital, potentially $180 billion or more per year by 2030.
Exchange rate risk (i.e., the potential that the local currency devalues relative to the foreign currency loan or other investment) is a major impediment to mobilizing large foreign capital flows for these projects (albeit, not the only one).
This risk translates into many problematic impacts. Notably, it increases the cost of capital, raises the financial liabilities of domestic stakeholders as their local currency depreciates, and, perhaps most significantly, constrains the level of foreign investment.
While currency hedging and other options exist (including specialized programs for developing countries), they can be expensive and are lacking for many Global South currencies, particularly at the long tenors, low cost and large scale required to support many clean energy investments.
If this currency risk cannot be overcome, it will be impossible to mobilize the level of foreign capital inflows that developing countries require to grow their energy systems with a low-emissions trajectory. This poses risks for both rich and poorer countries in the global effort to lower greenhouse gas emissions.
What to do to address this impediment? We propose an Exchange Rate Coverage Facility (ERCF), a blended-finance vehicle that would be funded by a combination of host country stakeholders, multilateral/bilateral development and climate agencies, and climate-engaged international capital.
The ERCF would be established as an offshore facility to absorb currency exchange risk on its balance sheet. It would issue guarantees protecting international lenders against this risk (see figure 1), while in parallel helping to insulate domestic sponsors from it. The Facility would pay any and all shortfalls between the value of contracted local currency (LC) payments and foreign currency (FC) debt repayments if the local currency (LC)depreciates relative to pre-defined exchange rate .
Figure 1: Clean Energy Exchange Rate Coverage Facility Model
Under our proposed financing structure, the Facility would be a “blended finance” vehicle funded by the following :
(i) carbon credits generated by the clean energy project that are assigned to the Facility, which would cover “first loss”;
(ii) multilateral development banks (including guarantees counter-guaranteed by host countries), development finance institutions and other development/climate agencies, providing funding for defined subsequent losses; and
(iii) international capital, including philanthropies, sovereign wealth funds, and interested private institutions, covering “third loss”.
Figure 2: The “Ladder” of Coverage for Local Currency Depreciation in the ERCF
The Facility could generate multiple benefits:
(i) catalyzing additional foreign financing for clean energy projects in developing countries;
(ii) lowering exposure of local project stakeholders to currency exchange rate shifts, thereby reducing prospect of tariff increases if the LC depreciates;
(iii) reducing the cost of foreign financing to clean energy projects;
(iv) facilitating scalability of coverage;
(v) supporting the growth of carbon credits projects and markets;
(vi) enabling funders to leverage financial impact through blended-finance structure; and
(vii) flexibility to include specialized windows (e.g., country-specific programs, including under the Just Energy Transition Partnerships being discussed with South Africa, Indonesia, Vietnam and others).
To mobilize international capital flows in the magnitude required to achieve the dual objectives of sustained development and low emissions, there is a need for new financial tools.
The proposed blended-finance ERCF is being incubated as a solution to address currency exchange risk as part of the initiative on Mobilizing Investments for Clean Energy in Emerging Economies. Its proponents welcome interested organizations and individual experts to join forces on the implementation of a pilot Facility to facilitate increased funding for the global clean energy transition.
Authors: Philippe Benoit, Adjunct Senior Research Scholar, Center on Global Energy Policy, Columbia University; Jonathan Elkind, Senior Research Scholar, Center on Global Energy Policy, Columbia University; Justine Roche, Energy Initiative Lead, World Economic Forum
The initial version of this story had incorrect price changes for 2023. It is now updated with information as of the market close on Jan. 31.
Investors staged a January rally, with solid gains for the S&P 500 and an even better showing for technology stocks that led the dismal downward action in 2022.
This is an opinion editorial by Jimmy Song, a Bitcoin developer, educator and entrepreneur and programmer with over 20 years of experience.
We need work and work needs us.
Labor is what takes a harsh, brutist and difficult world and turns it into a livable, enjoyable and even meaningful place. Work is how we contribute to our civilization, our communities and, of course, our families. Work in a normal, functioning market provides value.
Work, in a very real sense, is what we contribute to civilization. The output of our labor is a legacy we leave behind. Our collective work is what builds everything around us, from the buildings we live in, to the roads that we travel on, the computers we type on, the electricity that we use, and pretty much everything else.
Yet this very basic equation of work — productive labor in return for money — is not working that well. You can see this in the massive layoffs that are currently happening all over the economy, particularly in tech. What is going on? How is it that tens of thousands of people in different companies can be let go and things still function? What were they all doing? Making inane TikTok videos?
In this article, I’m going to answer those questions and place the blame where it belongs. As usual, it’s fiat money’s fault.
Work Lets You Specialize
Markets work because people are willing to pay for goods and services they find valuable. Someone pays because it would cost them more in some way otherwise, say in convenience, quality, price or something else. Money, or the common medium of exchange that we all employ, allows us to specialize and do what we’re good at.
A fisherman can catch lots of fish, far more than he can eat. A cobbler can make shoes, far more than he can wear. But through trade, they can leverage their own skills to get everything they want and need. This is why fishermen are not making their own shoes and cobblers are not catching their own fish.
Civilization gets built because of this specialization of work. And, in a sense, everyone optimizes for value provided per time worked while minimizing the unpleasantness of the task. More colloquially, we try to make the most money we can while doing things that we dread the least.
This last point is important because there are things that pay very well, but people are loath to do, like collecting garbage or truck driving, which can offer a better per-hour rate than other tasks but with unpleasantness that keeps many away. The price of labor goes up to compensate for its unpleasantness. Similarly, rare skills are compensated better because fewer people can do them. Labor is like any good in the market, where the usefulness of what you produce and its relative rarity determine price. The people that make the most money should be the ones doing the work that’s most difficult and/or least desirable to do.
Clearly, something is wrong because many high paying jobs are definitely not that difficult (think tanks, administration, etc.) and many are very desirable (board member, venture capitalist, investment banker.) There’s something about our economic system that rewards the wrong things.
Fiat Adds Meaningless Work
Fiat money throws a wrench into a beautifully efficient market by adding another buyer. By creating money out of nothing, fiat money allows governments to create all sorts of work that does not add value. These are what we call rent-seeking jobs.
Money in a normal market pays for value provided. Inefficiencies are punished through less profit or even loss. Labor, therefore, has to create value. But in a fiat economy, there’s another buyer, who’s not particularly price-sensitive, the money printer. Generally, the people in power buy conspicuous consumption, national prestige, make-work jobs, bribes to loyalists and so on. These add less value than Roger Ver.
For the money printers, labor isn’t connected to creating value anymore, but to satisfying their desires, usually to maintain power. In a democracy, the money printers might spend to create valueless jobs, like the proverbial digging and filling back in of a ditch. In a military dictatorship, the money printers might spend more money on buying votes and paying for weapons or even social programs. Even jobs in such a government can be a thin veneer for bribes and nepotism. The money gets printed and used to staying in power and not creating value for anyone.
As the money printer in a fiat economy becomes a large customer of everything in the economy, almost all work gets mingled with fiat rent seeking. Work that’s valuable gets mixed with work that’s not. The further along the money printing path we get, the harder it is to disentangle what provides value and what doesn’t, what’s beneficial to civilization and what’s not. Rent-seeking has spread like fungus on an old sandwich.
For example, many large companies have human resources departments that specialize just in employment compliance. In typical bureaucratic fashion, each employee has to complete cringe-worthy training, whether they be on sexual harassment, race discrimination, interview questions that are allowed to be asked and so on. These are almost certainly unrelated to the business they’re in but nevertheless each new employee is forced to waste valuable time on them. These compliance requirements may not be monetary taxes, but they are time taxes. As such, our labor gets split between productive and non-productive work. In the last 50 years, the non-productive part has grown so much that entire positions are non-productive, even in very profitable companies.
Is it any wonder, then, that Twitter, Google, Facebook, Microsoft and many other profitable companies can lay off so many people and have everything run just fine? Layoffs are the equivalent of chemotherapy, surely hurting the companies that do them, but also excising the cancer underneath.
Fiat Friction
The blight of rent seeking slows down the economy, the same way a flat tire does to a car. Fiat money’s ubiquitous entanglement with politics is one of the many ways in which productive work gets slowed down, adding less value. The work that people strive for is not in providing value, but in becoming middlemen to valuable transactions. They slash tires and inconvenience everyone so they can sell more tires.
As a result, in a fiat economy, even if you wanted to, it’s difficult to provide value. There’s a lot of rent-seeking friction that needs to be overcome and these barriers prevent people from providing value. How hard is it to start a business in most places? How hard is it to open a bank account, get the right permits and comply with the many rules that enrich rent seekers? These are all taxes on not just entrepreneurs, but on civilization itself.
So why is rent seeking so hard to eliminate? The problem is that rent seeking is very attractive to most people. It’s a lot less volatile than the market and the income is guaranteed through the government in some way. There’s much less dealing with difficult customers, changing market conditions or ambitious competitors. Most people would take less money to have this long-term certainty. As a result, even those providing value slide toward rent seeking very quickly.
The Slippery Slope To Rent Seeking
Not all rent seekers start out that way. Many fall into rent seeking slowly and almost unnoticeably. You can see this in some of the most “successful” tech companies of the last 20 years. Amazon, Facebook and Google were very good services. Of course, part of why they were perceived that way is because they sold their goods and services at a loss. In the case of Amazon, it lost money on a lot of sales early on. Facebook and Google gave their services away for free. Incidentally, this was only possible because of the large amount of money available for investment, which is a side effect of an inflating fiat currency. Thus, the services that you got for the cost were a great deal for customers.
But that was part of their long-term strategy. Like a drug dealer giving the first hit for free, their convenience hooked the users. Then they started selling ads to “monetize” their audience. Monetizing is really a euphemism for becoming middlemen in transactions that their users want to engage in. Thus, Amazon, Google and Facebook started becoming brokers for third-party merchants, either through ads or through becoming monopolistic platforms.
As soon as the users were hooked, they made the terms attractive for the other side of the transaction, the merchants. Lead generation on Facebook or Google were much cheaper than what existed before. Soon, merchants became addicted to their platforms and then they were exploited to monetize further. Auctions for ads were manipulated and fees for listing became more expensive. They used fiat money to be middlemen in a market they entirely controlled. At each step, these companies inserted themselves deeply in the value being provided to capture the profit. In other words, they became rent seekers.
What’s worse is that this was their plan all along! This is the plan for nearly every startup and has been for many years. Grab a lot of users, grab a lot of merchants and become the middleman. Every venture capitalist talks about this as a desirable outcome: to capture lots of value and be able to defend that monopoly. This is the path to profitability that every venture backed startup strives for and hence why there’s so much emphasis on growth.
This is not an isolated story since 1971. Once Nixon ended the gold standard and every currency pegged to the dollar suddenly became fiat currency, the market incentives changed. Rent seeking was much more profitable and unsurprisingly, we’ve gotten a lot more rent seekers. There are few businesses that are creating significant value anymore. Many large businesses rely on some form of government spending, fiat loans or both. Many tech companies relied on a lot of venture capital (VC) money which are really, fiat loans, to become rent seekers. The fiatization of the economy has been ever-present and growing for the past 50 years and even the most productive companies have become infected.
Glorifying Rent Seeking
Why is it that so many people coming out of business school now want to be wealth managers? Because they’re imitating the Warren Buffets of the world. He’s a guy that hasn’t created anything in his entire life, he has just managed other peoples’ money. He’s the ultimate rent seeker which has made him fabulously wealthy. Because of the primacy of money, rent seeking has become extremely prestigious. The heroes of this generation are guys like Buffet and not Thomas Edison or Nikola Tesla, who actually made things.
Bitcoin, thankfully, starts shaming rent seekers for who they are. Altcoiners are so obviously rent seeking and creating no value. Hence they’re rightfully condemned strongly by Bitcoiners. You can see the obvious rent seeking in the “free money” altcoins use to bribe people to market for them. The main attraction of altcoins is that they let you be a rent-seeker without the gatekeeping of top-tier business schools, political connections or media approval. It’s really rent-seeking for all, which really means no one’s doing any real work.
In a sense, altcoins are the natural end of fiat rent seeking. They are all completely non-productive and have no redeemable quality whatsoever. The aspiration is that you can make money for doing nothing valuable. That’s what’s so attractive, but also what’s so unsettling. Most people can sense that there’s something extremely wrong about people making money for doing nothing. Something doesn’t add up and even a 5-year old can sense it. The value has to come from somewhere and hence there’s always a bit of dread with most altcoiners. Even in bull markets, they know at some level that they’re playing with house money that they didn’t earn. So many altcoiners go broke like lottery winners because deep down, they know they didn’t provide any value.
Indeed, the value being extracted by all this rent seeking is from the capital that civilization has built up over many generations. In Western countries, there’s a culture of trust that’s starting to disintegrate. Trust is a capital good that takes a long time to form. Trust is why you saw an economic miracle in Japan and Germany after World War II but not one in the Soviet block. Abusing that trust for monetary gain reduces communal trust. These rent-seeking frauds are eating our seed corn.
Adding Value
Thankfully, there’s no rent-seeking in Bitcoin as there’s no centralized entity that can hand out rent-seeking positions. Bitcoin is building up capital again because Bitcoin rewards people who add value. The toxic maximalism that everyone complains about is really just a reaction against rent-seeking, value-subtracting behavior. VCs are experts in being rent-seeking middlemen. Influencers are as well. These are the people who, when they come in trying to extract value from Bitcoiners, get roasted.
Bitcoin companies are harder to create than any other because there’s no room for rent seeking. The Ethereum Foundation isn’t giving you a grant, nor is the “crypto” VC going to give you money because you don’t have a new token they can pump. But that’s what makes for better, more honest companies and why Bitcoiners are much more likely to support them. The value add is obvious because there’s no fiat or altcoin subsidization.
Bitcoin builds capital through making work about adding value again. And work is harder, but less scammy. In other words, instead of being scammy rent seekers, we can do honest work again.
Reject rent seeking. Build.
This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
This is an opinion editorial by Joakim Book, a research fellow at the American Institute for Economic Research and contributor to Bitcoin Magazine, HumanProgress.org and the Mises Institute.
Finding fault with Bitcoin and Bitcoiners is easy. Every schmuck, stick, know-it-all pundit, wiseass and establishment elite has a handful of complaints readily available. Bitcoin uses too much electricity; its fixed money supply schedule makes interventions from a benevolent central bank impossible; it doesn’t have enough inflation for a growing economy; it is used by pesky criminals; and its mean, technobabbling users hurt my brittle feelings.
The objections get tiresome about as quickly as they get recycled.
One fantastic example is the doomspeaker economist Nouriel Roubini, known for his bombastic and bearish declarations — frequently nicknamed “Dr. Doom” by the financial press. In his own mind, he is merely “realistic,” which every madman would say about himself when queried. In his latest book, “Megathreats: The Ten Trends That Imperil Our Future, And How To Survive Them,” he insists that most people overlook something about this infamous nickname:
“Those who label me Dr. Doom fail to see that I examine the upside with as much rigor as the downside. Optimists and pessimists both call me contrarian. If I could choose my nickname, Dr. Realist sounds right.”
The Bitcoin obituaries site 99bitcoins.com lists our beloved economist hater 12 times, but Googling finds plenty more Bitcoin denouncements from this outspoken character — in every outlet that’ll have him, it seems, from Twitter to the Financial Times.
To Roubini, bitcoin was a bubble in 2013, a “Ponzi game” and “not a currency” in 2014, a “gigantic speculative bubble” in 2017, almost all transactions were fake in 2019 and, most tastefully, in 2020 a little bit of everything:
What his new book does so well is outline the world’s many macroeconomic troubles. For five mesmerizing chapters, he describes the debt problems, the demographic impossibility that is the bankrupt Ponzi (sorry, “pension”) schemes of Western nations, the easy money disaster and the boom-bust cycle that it gives rise to. Stagflation in the 2020s did not come as a surprise to him, and he locates the blame precisely where it should be: “We poured massive amounts of money and fiscal stimulus into a financial and economic system already awash in cash and credit.” With a short-term view and politically-captured central banks, we get disastrously easy money because “that is what voters want and leveraged markets need to avoid crashing.”
He even comes down on the correct side of the 2022 blunder to use the dollar payment rails to sanction a G8 economy: “This sort of weaponizing of currency for the pursuit of national security goals is the latest frontier of the mission creep of central banks, starting with the Fed” (ignoring that the Federal Reserve doesn’t make sanction decisions).
As a rule, whatever Bitcoin’s flaws are — as a money, as a protocol, as a usable tool, as a community — it gets better, relatively speaking, when the incumbent monetary system gets worse. Whatever your position on Bitcoin was three, five or 10 years ago, you must look at it more favorably today: the monetary system in place has gotten so much worse, with inflation, anti-money-laundering bureaucracy, clown-world behavior and frozen accounts being just the worst offenders. All is not well in the world of money; that makes Bitcoin a more tempting prospect, all things equal.
So, is Roubini a Bitcoiner now? Has the ultimate Bitcoin bear, diligently at it for a decade, finally come around? Seeing clearly the monetary madness of the world, it wouldn’t be the strangest thing for Dr. Doom to at last tone down his criticism of Bitcoin.
Instead, we got Groundhog Day.
The single chapter dedicated to financial instability spends a dozen or so pages on Bitcoin, unbelievably dedicating most of them to “crypto,” “DeFi,” “stablecoins” and central bank digital currencies. Sigh.
Still, even here we had potential: The rise of crypto, explains Roubini, “exposes our collective wilting faith in the ability of governments to back the money they issue.” Hear, hear.
Queen Taylor Called
“Ugh, so he calls me up and he’s like ‘I still love youuu’, and I’m like ‘I just… I mean, this is exhausting, you know? Like, we are never getting back together. Like, ever.’”
If you are to critique Bitcoin — something youcertainly, certainly can do — here are some things you should do:
First, get your monetary attributes in order.
There are three — store of value, unit of account, medium of exchange — not five. You can’t invent new ones and duplicating previous ones isn’t useful. Roubini introduces “single numeraire,” which is exactly the same thing as a unit of account, and splits store of value into stable value against “market value” and against “an index of the price of goods and services.” Try carving out a difference. This is silly word play.
Second, make sure your criticism is levied against Bitcoin, not “crypto.”
Most people think of bitcoin as merely the first “cryptocurrency,” the most famous among tens of thousands of scammy shitcoins. It’s not. What holds and happens in the la-la land of vaporware tokens rarely has anything to do with Bitcoin: Sam Bankman-Fried’s shenanigans, Terra’s implosion or the Cryptoqueen scam do in no way detract from Bitcoin’s core, its principles or operations. When Roubini cites “BaconCoin,” quotes LoanSnap’s founder or reports negative comments by DogeCoin’s creator, he does not undermine Bitcoin’s promise.
Bitcoin is a one-off monetary invention, separated from every other money or “crypto” by a Great Wall of categories and concepts: it doesn’t have a company or founder running it, like every other shitcoin does; it doesn’t have counterparty risk nor is it subject to censorship like every other fiat currency. Bitcoin has no CEO and no marketing department; it has the strongest Lindy and the highest hash rate.
Third — and this is a hard one — make sure your points haven’t already been debunked, answered and relegated to the dustbin of unimpressive, erroneous jabs at Bitcoin.
Repeating an outdated accusation makes you look stupid, not Bitcoin. Roubini goes for the vast wealth inequality in Bitcoinland, believing it to be “worse than that of North Korea.” It’s not, and as flawed as these investigations are, UTXO ownership seems to become less and less unequal over time — as you’d expect for an emerging money that gets distributed in use.
Unsurprisingly, it uses too much energy, as much as a small country and therefore “will blunt urgent climate initiatives to slow down global warming.” It doesn’t and it won’t: if anything, Bitcoin unlocks stranded energy, contributes to balancing the grid and miners are more renewable than most major economies.
Fourth, make sure that the property of Bitcoin that you’re attacking isn’t worse in the legacy system.
Warren Buffet often makes this error, thinking that hacks, fees or the fact that bitcoin doesn’t generate “yield” dooms it to failure. Nevermind that paper money doesn’t either (unless you count seigniorage to the central bank); nevermind that his ridiculing of bitcoin as a Ponzi applies equally well to apartments or Uncle Sam’s pension schemes.
The most absurd accusation arrives with Roubini’s silly soda shitcoins: If you need Coke coins to buy Coke and Pepsi coins to buy Pepsi, how could you ever establish (relative) value?! How could you ever know what either of them are worth?
Makes you wonder how Americans could ever buy things when they’re abroad, how pound-based customers (i.e., British residents) can ever acquire anything sold in euros or spend their melting currency on Fifth Avenue. There’s a publicly-displayed market price for you to “convert” value into the monetary system that you’re familiar with; and there’s a publicly-traded market that the banks on either side of your and your vendor’s transaction can trade and settle such that international trade works.
Fascinating.
His currency risk examples are illustrative — and disingenuous. Apparently vendors can’t “price” goods in bitcoin since “an overnight fall in value might wipe out the [seller’s] profit margins.” That’s true as far as it goes, but holds equally so for any cross-currency transaction in the legacy world: imports or export or any supply chain more complicated than your local currency area. Besides, if you worry about the currency exposure in your sales, there is a liquid market that provides hedges for you. Many stores that accept bitcoin through various third-party solutions instantly exchange them for dollars, thus mitigating the risk.
In the very next sentence, Roubini considers the downside of the opposite risk:
“Were someone to write a mortgage with principal and interest in bitcoin, a spike in the value of bitcoin would cause the real value of the mortgage to skyrocket. If default then likely occurs, the lender loses money, and the borrower loses her house.”
I suppose no American therefore owns property in New Zealand or Mexico, no European has debt contracts in USD-dollars. These are not novel risks, but ordinary financial risks that firms and households deal with already.
What’s so fascinating is Roubini’s lack of symmetry: If margins can get obliterated by an overnight drop, then margins can also be doubled by an equal overnight rise. Symmetric risk. If bitcoin’s exchange rate for dollars falls — which Roubini is so certain it will — a bitcoin-denominated mortgage will wipe out itself by becoming easily repayable with appreciating dollars. This isn’t to say that he’s wrong to point out these risks, but that they’re reduced to what economists call “risk aversion.” Unhedged bitcoin transactions or debt contracts are bad if households worry about the downside more than the upside — which, in the real world, seems to be true only to some extent.
The honest conclusion isn’t Roubini’s “bitcoin is incapable of being money,” since many established currencies with volatile values between one another can serve that function, but that an emerging bitcoin economy would have this added, minor layer of business risk.
It’s like Roubini went out of his way to be up to date on all his other macro worries, only to lay forth criticism of Bitcoin that was outdated by the time he first voiced it in the mid-2010s.
Most devastatingly of all: Can anyone really be taken seriously when they slap a plural “s” on the uncountable noun “bitcoin”?
The better you understand the faults of the current way of doing monetary things, the better Bitcoin looks.
When you look at the many macro ills that Bitcoiners are so well attuned to, the pit of your stomach should churn in anxiety. When you look at the debts (public and private) that rampage the system, you should be feeling nauseous. All of this Roubini captures expertly, and much of his writing could even have been featured on these pages. Our beloved economist hater gets the problem, better and more vocally than most. Still, no dice.
It’s unfathomable that someone so attuned to the world’s catastrophic macro problems as Roubini cannot see the master-key solution that is Bitcoin.
This is a guest post by Joakim Book. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Credit: ASEAN Parliamentarians for Human Rights (APHR)
Opinion by Jan Servaes (brussels)
Inter Press Service
BRUSSELS, Jan 30 (IPS) – Parliamentarians worldwide face increasing human rights violations and a greater risk of reprisal simply for exercising their mandate or expressing their ideas and opinions.
Asia follows the same trend according to the Inter-Parliamentary Union (IPU). It is the second most dangerous region for MPs, with the number of cases recorded by the IPU increasing every year.
While instances of physical attacks remain rare in Southeast Asia, governments often resort to politically motivated charges against parliamentarians and opposition leaders in what has come to be known as ‘lawfare”.
Myanmar
Since the military takeover and the suspension of parliament in February 2021, the IPU has received specific reports of human rights violations against 56 MPs elected in the November 2020 vote.
Two new MPs, Wai Lin Aung and Pyae Phyo, were arrested in December 2021. This brings the total number of detained MPs to 30. Many of the detainees are reportedly held incommunicado in overcrowded prisons. where they are mistreated and possibly tortured, with little access to medical care or legal advice.
According to Amnesty International, torture and ill-treatment are institutionalized in Myanmar. Women have been tortured, sexually harassed and threatened with rape in custody,
Stop lawfare!
ASEAN member states must immediately stop using judicial harassment and politically motivated charges against critics and political opponents, the ASEAN Parliamentarians for Human Rights (APHR) stated at a January 27 press conference in Manila under the banner: “Stop Lawfare! No to the weaponization of the law and state-sponsored violence.”
The press conference explained the continued use of lawfare and its effect on freedom of expression. It was a show of solidarity with parliamentarians and others facing this kind of repression.
Philippines
The Philippines is ranked 147th out of 180 countries in the 2022 World Press Freedom Index, and the Committee to Protect Journalists ranks the Philippines seventh in its 2021 Impunity Index, which tracks the deaths of media workers whose killers go unpunished .
In the Philippines, “lawfare” has been used systematically by the previous administration of President Rodrigo Duterte and also by the current administration of Ferdinand Marcos, Jr. to suppress opposition voices. A notable case is that of APHR’s board member and former member of parliament in the Philippines: Walden Bello.
On August 8, 2022, Walden Bello was arrested on a cyber libel charge. Bello is facing politically motivated allegations filed by a former Davao City information officer who now works as Chief of the Media and Public Relations Department in the office of the Vice President, Sara Duterte.
The indictment against Walden Bello is a clear example of political intimidation and revenge designed to terrify opponents of the current Philippine government. It is a violation of freedom of expression, which is essential for a democracy.
In addition to Walden Bello, many other political leaders and activists, including Senator Leila De Lima, Senator Risa Hontiveros and Senator Antonio Trillanes, have fallen victim to dubious justice. Senator Leila de Lima, was arrested in February 2017 on trumped-up drug charges, shortly after she launched a Senate investigation into extrajudicial killings under the Duterte administration. She has been in detention ever since, still awaiting trial, despite several key witnesses retracting their testimony.
Many local and regional leaders are also suffering arbitrary detention following questionable arrests in the wake of government “red-tagging” campaigns against local activists and journalists, including human rights and environmental defenders.
Maria Ressa, who, as editor-in-chief of Rappler, received the Nobel Peace Prize in 2021 together with a Russian journalist, has repeatedly been a victim of lawfare. They were recently acquitted of tax evasion. Ressa said it was one of several lawsuits former President Duterte used to muzzle critical reporting.
However, Ressa and Rappler face three more lawsuits: a separate tax suit filed by prosecutors in another court, her appeal to the Supreme Court against an online libel conviction, and Rappler’s appeal against the closing of the Securities and Exchange Commission. Ressa still faces up to six years in prison if she loses the libel conviction appeal.
The ASEAN Parliamentarians for Human Rights (APHR) therefore call on all “Southeast Asian authorities to stop abusing the justice system to quell dissent and urge ASEAN to reprimand member states that use laws to attack the political opposition.
The Philippine government can take the first step by dropping all charges against Walden Bello and immediately releasing Senator Leila De Lima and all others unjustly detained on politically motivated charges,” said Mercy Barends, president of APHR and member of the Indonesian House of Representatives.
ASEAN
“Lawfare is happening all over Southeast Asia and beyond. Governments in the region use ambiguous laws to prosecute political opponents, government critics and activists. This weaponization of the justice system is alarming and incredibly damaging to freedom of expression.
It creates an atmosphere of fear that not only silences those targeted by such lawfare, but also makes anyone who wants to criticize those in power think twice,” said Charles Santiago, APHR co-chair and former Malaysian MP.
Myanmar and Cambodia
In Myanmar and Cambodia, for example, treason and terrorism laws have been used to crack down on opposition. The most tragic example occurred last July, with the execution of four prominent Myanmar activists on charges of bogus terrorism by the Myanmar junta. These were the first judicial executions in decades and are an extreme example of how the law can be perverted by authoritarian regimes to bolster their power.
In Cambodia, members of the opposition are sentenced to long prison terms on trumped-up charges simply for exercising their right to freedom of expression. Journalists are increasingly subjected to various forms of intimidation, pressure and violence, according to a new report published by the UN Human Rights Office (OHCHR).
Thailand
Meanwhile, libel laws are among the most commonly used laws in Thailand where, unlike many other countries, it can be considered a criminal offense rather than just a civil crime. Sections 326-328 of Thailand’s Penal Code establish various defamation offenses with penalties of up to two years in prison and fines of up to 200,000 Thai Baht (approximately USD 6,400).
“I think we as parliamentarians in our respective countries should do our utmost to repeal or at least amend these kinds of laws. Our democracies depend on it. But I also think we can’t do it alone. We need to work together across borders, share experiences with parliamentarians from other countries and stand in solidarity with those who fall victim to it, because at the end of the day we are all in this together,” said Rangsiman Rome, member of the Thai parliament and APHR member.
Jan Servaes was UNESCO-Chair in Communication for Sustainable Social Change at the University of Massachusetts, Amherst. He taught ‘international communication’ in Australia, Belgium, China, Hong Kong, the US, Netherlands and Thailand, in addition to short-term projects at about 120 universities in 55 countries. He is editor of the 2020 Handbook on Communication for Development and Social Change.
This is an opinion editorial by Joe Nakamoto, a pseudonymous Bitcoin traveler and reporter who helped create a recent documentary on Madeira’s Bitcoin adoption.
What is a Madeira? Why do Bitcoiners keep talking about it? Does it come with fries? And why did Pleb Music (aka, Max DeMarco) shoot a Bitcoin documentary on this tiny island?
Answering those questions, a band of high-profile Bitcoiners set out to “orange pill” the Portuguese island of Madeira this summer. Pleb Music brought its Bitcoin story to life in a documentary resplendent with swooping drone shots, storytelling sleight of hand and the agile camerawork of his talented videographer friend, @Cinemuck_. With the Northern hemisphere winter biting hard, it’s worth watching. You’ll drink in a warm mug of life on Madeira and find it to be an up-and-coming Bitcoin base.
But before we get to that, let’s reach consensus on Madeira; let’s explore why this Portuguese isle should now feature on any traveling Bitcoiner’s bucket list.
The Pearl Of The Atlantic
The sunkissed island of Madeira rises up from the Atlantic Ocean some 600 miles off the coast of Portugal. A popular tourist destination thanks to Instagram-ready landscapes, a warm, temperate climate and a rich cultural heritage, it’s a peaceful patch of land. There’s a regular direct flight to New York while low-cost airlines whisk passengers to a handful of European capital cities.
Much like other small island developing states, or SIDS, Madeira’s development is restricted by its area. A burgeoning tourism industry props up the local economy, but natural resources are limited. Madeiran bananas and passionfruit — often spotted in my local supermarket on Portugal’s mainland — are plentiful but not profitable. Madeira also exports just enough tea to keep the United Kingdom quenched for about two seconds, as well as Madeiran wine.
Tourism aside, there’s a smattering of remittance sent in from the many Madeirans scattered across the world (oh look, Bitcoin fixes this!), as well as some trade in its ports.
In the winter months, tourism diversification strategies such as ecotourism and enticing digital nomads to work from the island serve two purposes: one, keeping Madeira’s economy ticking over in the low season, and two, driving down the average age of holidaymakers on the island.
Madeira is home to espetada (loads of Madeiran meat piled up on a skewer like a posh kebab), quality steak and scrumptious fish. It certainly appeals to the average Bitcoiner’s diet; while the vegetarians and vegans can be rest assured that a lot of food is cultivated locally.
Quality red meat and fish are abundant on the island. Restaurant: Lá ao fundo. Source: author.
Madeira boasts an educated population, absurdly fast internet and civil engineering infrastructure that made Greg Foss’ jaw drop more frequently than he deploys the f-bomb on Bitcoin podcasts. Indeed, although the Madeiran economy pretty much relies on tourism, Madeira receives a substantial chunk of EU subsidies to build bridges, roads and even cable cars.
One of Madeira’s many highrise, highway tunnels. Source.
For the 2021 to 2027 period, the European Commission will invest a whopping 1.9 billion euros in the “outermost regions” of the EU, which includes the Açores and Madeira. The Açores are Madeira’s bigger, colder brothers, hundreds of miles northwest of the island. The EU money is earmarked for improving the connectivity of the islands, transport and, undoubtedly, tunnels.
Without the substantial EU subsidies, Madeira would likely suffer and economic activity may dwindle. And without tourism — as shown during the COVID-19 pandemic, when Madeira’s GDP contracted by as much as 10% — the island may grind to a halt.
However, the ace up this small island’s sleeve is a certain André Loja. Loja, pronounced “Loshja” (no, not “lo-haa,” Daniel Prince), is a proud Madeiran entrepreneur with business interests that straddle tourism, real estate and, crucially, Bitcoin.
Loja (far left) relaxes after lunch at Restaurante Fajá Dos Padres. Source: author.
Prior to developments on the island, Loja was a rather lonely Bitcoiner. Fortunately, and much like many others Bitcoiners who I have the pleasure of calling friends, he’s unhinged. Because rather than simply try to introduce his friends to Bitcoin, Loja thought, “Fodasse, caralho!” — Portuguese for “fuck it!” — “I’m going to orange pill the president of this island.”
A Madeiran Monetary Transition
Loja’s work, coupled with that of Prince Philip of Serbia, Prince and a brief cameo from Michael Saylor, led to an announcement by the president of Madeira, Miguel Albuquerque, at the Bitcoin 2022 conference. During Samson Mow’s keynote, Albuquerque exclaimed, “I believe in the future and I believe in Bitcoin.”
However, contrary to some rather dodgy crypto media reporting, this outburst does not mean that Madeira adopted bitcoin as legal tender. And nor can it.
Madeira uses the euro and is highly unlikely to replace or even complement the European shitcoin with magic internet money any time soon. With this in mind, our visit to the island in June 2022 was an investigation and an aid to the announcement; an ode to “don’t trust, verify.” The mission would uncover what it means for Madeira to “embrace” Bitcoin, and understand how we, as Bitcoiners, can pitch in.
Sidebar: Like all good Bitcoiners, once upon a time, Madeira shitcoined hard. The Madeira Blockchain Association hosts an annual conference, while the coworking space that Loja runs is a favorite for cRypT0pp digital nomad types. You know the sort: jabbering millennials passionate about something that they can’t quite define but will probably, definitely empower everyone online, all the time, cuz WAGMI, Web3, “Yes it does need a blockchain, here’s why.”
I deeply empathize with Loja, who I sometimes picture in his office next to the coworking space, scrolling on Bitcoin Twitter while overhearing conversations and ideas from his cowork tenants. Ideas such as how to decentralize the luggage storage industry or build the next best dapp on Ethereum that, “Trust me, bro it’s more secure than Bitcoin.
The entrance to Loja’s coworking space, Cowork Funchal. Do you think it accepts bitcoin? Source: author.
Furthermore, similar to Max Keiser and Stacy Herbert’s approach to El Salvador, Loja strives to steer the crypto scams and Ponzi schemes clear of his shores. It’s a thankless, unrelenting task. And it’s undoubtedly why not a single Bitcoiner who participated in the Madeira trip could be considered a “shitcoin sympathizer.” Indeed, for a man who lives by the catchphrase, “I don’t know shit about fuck,” the man knows his shit when it comes to organizing a serious batch of Bitcoin advocates.
Orange Pill Dispensers
And so, over the course of 10 days in June 2022, the all-star team set about showing, sending and sharing Bitcoin with locals in Madeira. From surf shops to civil servants, taxi drivers to tax officials and poncha bars to presidents, they spread the word about Satoshi Nakamoto’s innovation. (FYI, “poncha” is the Madeiran drink of choice. It’s potent. Just ask Jeff Booth).
The surf shop owner Foss and I paid bitcoin to (using the Lightning Network, naturally) for surfboard rentals. Source: author.
Thanks to Loja, the group took a Lightning-guided tour of the island and its infrastructure. Not only had Loja spent hours setting up meetings with policymakers and business leaders in Madeira, but he’d also organized the obligatory Bitcoin boat ride (Yes, my private keys are now on the Atlantic seabed); a cable car to a secluded restaurant and trips through more tunnels than there are shitcoins listed on CoinMarketCap. The group got a real taste of Madeira.
Although DeMarco’s documentary underlines that the pinnacle of the trip was meeting with the president, Madeira is simply a must-visit destination. It has all of the ingredients to become a Bitcoin citadel — or a free private city — just ask Peter Young.
With 200,000-ish people, a manageable, fertile land area, warm weather, cheap cost of living and phenomenal internet speeds, what’s stopping you from moving there? Or at least, entertaining the daydream — I often do.
Câmara de Lobos, formerly an impoverished area of Madeira — now it’s Instagrammable. Source: author.
You can buy a house with bitcoin, spend sats at a few merchants and hang out at Bitcoin meetup. The Regional Forum of Economic Education, or F.R.E.E Madeira, is on hand to help you on your journey. Cofounded by Bitcoiners and Madeiran experts, the group hopes to make Madeira one of the new homes for the “new base layer of the new internet,” as Booth explained. And this is just the start.
However. Madeira is not El Salvador. You cannot live on a Bitcoin standard in Madeira. Peer-to-peer interactions, Bitrefill, the Bitcoin Company, FREE Madeira’s assistance and many other Bitcoin workarounds will assist you in using bitcoin on the island, but be aware that cash reigns supreme on Madeira and we are still very early. In this regard, Madeira needs your help.
Ask not what Madeira can do for you, but what you can do…
If you’re reading this, you’re probably a Bitcoin enthusiast or you’re at least Bicurious (no, not the horny kind). I’m going to assume, therefore, that you know 100 times more about Bitcoin than the average Madeiran does. In Madeira, a lot of people have not yet heard of Bitcoin. In my experience, over 95% of the population have not used Lightning and awareness is in its genesis.
Following the Presidential meal, Prince onboarded Madeiran ministers using Muun wallet. Source: author.
Moreover, President Albuquerque is not quite on the same level as laser-eyed President Bukele of El Salvador. The Central American nation executed a top-down Bitcoin adoption strategy when declaring bitcoin as legal tender in 2021.
To continue the El Salvador comparison, while Salvadorans see volcanoes as a source of energy for Bitcoin mining, in Madeira, during our visit, the civil servants at the energy ministry raised the valid question, “How did you know the Bitcoin is here?” The energy specialist had not yet grasped that Bitcoin is digital, and not physical. We are still very early.
The Madeira men in the president’s office. Source: author.
Our conversations with business people, ministers and entrepreneurs were among the first Bitcoin touchpoints. For example, if Madeira was to mine Bitcoin, who would custody the keys? Should it be sold for euros or should it be HODL’d? Is it even legal to do so, and what would the EU think?
To add to this, while the president is fully on board with Bitcoin, how far do his powers extend? It’s worth considering the impact of the EU one day banning Bitcoin mining or the MiCA (markets in crypto assets) regulation on Madeira’s decision to embrace Bitcoin — and to what extent the EU would come down on Madeira, or let it live in a gray area as an EU outer zone.
So, What Can You Do?
First, book your ticket. Take a dip in the natural sea pools, ride cable cars and hike “levadas” (hillside canal walks). Break bread with Bitcoiners and laugh off the clown word we inhabit over a glass of poncha in Maderia’s capital, Funchal.
Consider the cumulative effect of all of these visits and Bitcoin connections on Madeira over the next five to 10 years. It’s a bit like Bitcoin Park in Nashville, or Praia Bitcoin in Brazil or Bitcoin Jungle in Costa Rica. If enough Bitcoiners come down, show interest, set up shop or even relocate to Madeira, the island will reach what Swan Bitcoin has coined the “intransigent minority.”
It’s of course a low-time preference goal, and some ways away. But it’s a future I can get on board with.
In the meantime, I don’t know about you, but shooting the shit with Bitcoiners IRL is far more enjoyable than shitposting on Twitter (or Nostr, sorry). And the best part about this Portuguese paradise? In Madeira, you can do both.
This is a guest post by Joe Nakamoto. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The rapid decline of insects is caused by multiple factors including climate change and agriculture, increases in the usage of insecticides and herbicides, deforestation, urbanization, and light pollution. Credit: Zadie Neufville/IPS
Opinion by Esther Ngumbi (urbana, illinois, usa)
Inter Press Service
URBANA, Illinois, USA, Jan 27 (IPS) – Recently, the United States Department of Agriculture granted a conditional license for the first-ever honeybee vaccine. This is an exciting step that will protect bees from American foulbrood disease and ultimately help to stop the alarming decline in their numbers.
But the honeybee is just one of the many described insect species whose declining numbers has entomologists like me, environmentalists, and everyday citizens who love insects including Monarch butterflies worried. Across the U.S. and around the world there is a growing body of evidence and trend of insect decline. It’s so bad, that many are calling it the insect apocalypse.
Currently, there are over 1 million described species. But in study after study, review after review the story has remained the same: we are losing insects at unprecedented rates. The rapid decline of insects is caused by multiple factors including climate change and agriculture, increases in the usage of insecticides and herbicides, deforestation, urbanization, and light pollution.
Everyone should be worried about this trend. Insects, including bees, ants, butterflies, dragonflies, beetles, and grasshoppers, make up over 80% of terrestrial species on Earth. Insects are a keystone species that provide invaluable ecosystem services – from pollination, to biological control to serving as bio-indicators of healthy soils and streams.
A world without insects would be disastrous. Insects are food to other species including birds and their demise would have catastrophic effects on food webs.
Human food and nutrition security also benefits from insects. Essential micronutrients in the human diet (antioxidants, vitamins A and C, lycopene, folic acid, and tocopherol) are derived from insect-pollinated crops, primarily citrus and other fruits and vegetables including tomatoes.
Clearly, we need insects. The U.S. government, policy makers, scientists like me and everyday citizens should act with urgency to prevent further declines in their numbers
First, since habitat destruction is among the largest drivers of insect declines, it is important that countries — beginning with the U.S. — create diverse landscapes. This includes forestland, meadows, and prairies to provide a variety of food and nesting resources for insects.
Second, we must reduce insecticide and herbicides usage. Managing pests and weeds can be done by using integrated pest management approaches or integrated vegetation management approaches. These approaches promote the use of safer alternatives and encompass multiple non-chemical methods such as the use of resistant cultivars, trap cropping, and crop rotation.
Third, we can reduce light pollution. Evidence available suggests that light pollution is a driver of insect declines as it interferes with insect foraging, development, movement and their reproductive success. Simple actions like turning outdoor lights off at night can make a huge difference.
Fourth, do your part to help reduce carbon emissions. Climate change is among the biggest drivers of insect decline. Simple actions by everyday citizens like biking to work and using renewable energy sources can make a difference.
Fifth, you can choose to become an ambassador and advocate for insects and insect conservation. Begin by learning about the local, regional, national, and global policies that are in place to protect insects to prevent further insect decline.
Furthermore, encourage elected officials and all forms of governments – from local to state to federal — to pass laws and policies to protect insects while implementing measures such as setting aside protected land spaces including parks to serve as refuge spaces for insects.
Complementing the above actions is the need to support research and educational institutions, professional societies, and nonprofit organizations that are actively addressing insect decline issues through research and taking actions to protect our natural world and conserve ecosystems that are home to insect species. These include the Entomological Society of America , The International Center for Insect Physiology and Ecology, and The Xerces Society.
Finally, research and research funding are needed both now and in the future. This can help facilitate discovery of more insect species, monitor and document insect biodiversity across a diversity of landscapes and ecosystems and help us understand all facets of insect biology in natural and managed settings.
We need insects. Our ecosystems need insects. We must commit to doing something to protect them. Their existence is essential for a sustainable future.
Esther Ngumbi, PhD is Assistant Professor, Department of Entomology, African American Studies Department, University of Illinois at Urbana-Champaign
SYDNEY, Jan 27 (IPS) – As the year 2022 drew to an end, the United Nations Conference on Trade and Development (UNCTAD) warned, “Developing countries face ‘impossible trade-off’ on debt”, that spiralling debt in low and middle-income countries (LMICs) has compromised their chances of sustainable development.
Anis ChowdhuryIn early December, an opinion piece in The New York Times headlined, “Defaults Loom as Poor Countries Face an Economic Storm”. And the World Bank’s International Debt Report highlighted rising debt-related risks for all developing economies—low- as well as middle-income economies.
Debt on the rise
Debt build-up accelerated in the wake of the 2008-2009 global financial crisis (GFC). The World Bank’s, Global Waves of Debt reveals that total (public & private; domestic & external) debt in emerging market and developing economies (EMDEs) reached an all-time high of around 170% of GDP ($55 trillion) – more than double the 2010 figure – by 2018, before the onset of the COVID-19 pandemic.
Total debt in low-income countries (LICs), after a steep fall from the peak of around 120% of GDP in the mid-1990s to around 48% ($137 billion) in 2010, increased to 67% of GDP ($270 billion) in 2018.
Pandemic debt
The COVID-19 pandemic greatly lengthened the list of EMDEs in debt distress as rich nations and institutions dominated by them, e.g., the World Bank, failed to provide any meaningful debt reliefs or increase financial support to adequately respond to the health and economic crises.
The World Bank’s International Debt Statistics 2022 reveals that the external debt stock of LMICs in 2021 rose to $9.3 trillion (an increase of 7.8% compared to 2020) – more than double a decade ago in 2010. For many countries, the increase was by double digit percentages.
Riskier debt
Over the past decade, the composition of debt has changed significantly, with the share of external debt owed to private creditors increasing sharply. At the end of 2021, LMICs owed 61% of their public and publicly guaranteed external debt to private creditors—an increase of 15 percentage points from 2010.
The private creditors charge higher interest rates, and offer little or no scope for restructuring or refinancing at favourable terms, as they maximise profit. The private creditors also usually offer credits for shorter duration, while development financing needs are for longer-terms.
Failed aid promises
Development needs of developing countries have increased many-folds, especially for meeting internationally agreed development goals, such as the Millennium Development Goals (MDGs) and now Sustainable Development Goals (SDGs). The LMICs’ estimated aggregate investment needs are $1.5–$2.7 trillion per year—equivalent to 4.5–8.2% of annual GDP— between 2015 and 2030 to just meet infrastructure-related SDGs. But the rich nations spectacularly failed to honour their promises of finance made at the 2015 UN conference on financing for development (FfD) in Addis Ababa.
In fact, they failed all their past aid promises, e.g., to provide 0.7% of their gross national income (GNI) as aid, a promise made over half a century ago. While aid hardly reached half the promised percentage of GNI, it in fact declined from the peak of around 0.55% of GNI in the early 1960s to around 0.34% in recent years. Oxfam estimated 50 years of unkept promises meant rich nations owed $5.7 trillion to poor countries by 2020!
At their 2005 Gleneagles Summit, G7 leaders pledged to double their aid by 2010, earmarking $50 billion yearly for Africa. But actual aid delivery has been woefully short. G7 and other rich OECD countries also broke their 2009 pledge to give $100 billion annually in climate finance until 2020.
Promoting private finance
Meanwhile institutions dominated by rich nations – the World Bank and OECD, in particular – promoted private financing of development. The World Bank, the IMF and multilateral regional development banks, e.g. Asian Development Bank jointly released From billions to trillions, just before the 2015 FfD conference.
The document optimistically but misleadingly advised governments to “de-risk” development projects for enticing trillions of dollars of private capital in public private partnerships (PPPs). While de-risking effectively meant governments bearing financial risks, or socialise private investors’ loss, PPPs are found to have dubious impacts on SDGs, especially poverty reduction and enhancing equity.
Meanwhile the OECD donors advocated “blended finance” (BF) to use aid money to leverage, again trillions of dollars of private capital. But as The Economist noted, BF is struggling to grow, stuck since 2014 “at about $20 billion a year…far off the goal of $100 billion set by the UN in 2015”, despite suspected double counting. Like PPPs, BF has effectively transferred risk from the private to the public sector. On average, the public sector has borne 57% of the costs of BF investments, including 73% in LICs.
Collateral damage
In the wake of the GFC the rich countries followed so-called unconventional monetary policies that kept interest rates exceptionally low – in some cases at zero – for a decade. This saw capital flowing from rich countries to EMDEs in search for higher returns, as exceptionally low interest rates enticed EMDE governments and businesses.
The opportunity to borrow at low rates also made the EMDE governments lazy in their domestic revenue mobilisation efforts. Such policy complacency was rewarded by the donor community, especially the World Bank, through its now discredited Doing Business Report, encouraging a harmful race to the bottom tax competition among countries to cut corporate and other direct taxations. The World Bank and IMF also advised to remove or lower easier to collect indirect taxes, e.g., excise duties in exchange for regressive and difficult to implement goods & services or value-added tax in poorer countries.
Bleeding revenues
Meanwhile transnational corporations (TNCs) continue to avoid and evade paying taxes using creating accounting, aided by tax havens, mostly situated in rich nations’ territories. Developing countries lost approximately $7.8 trillion in illicit financial flows from 2004 to 2013, mostly through TNCs’ transfer mispricing, or the fraudulent mis-invoicing of trade in cross-border tax-related transactions.
African countries received $161.6 billion in 2015, primarily through loans, personal remittances and aid. But, $203 billion was extracted, mainly through TNCs repatriating profits and illegally moving money out of the continent.
International tax rules are designed by the rich nations. They continue to oppose developing countries’ demand for an inclusive international tax regime under the auspices of the UN.
Perfect storm
Global supply-demand mis-matches due to the pandemic, the Ukraine war and sanctions are a perfect recipe for a perfect storm. The advanced countries’ inflation fight is causing adverse spill-over on developing countries.
Higher interest rates have slowed the world economy, and triggered capital outflows from developing countries, depreciating their currencies, besides lowering export earnings. Together, these are causing devastating debt crises in many developing countries, similar to what happened in the 1980s.
In October 2022, a United Nations Development Programme (UNDP) report estimated that 54 countries, accounting for more than half of the world’s poorest people, needed immediate debt relief to avoid even more extreme poverty and give them a chance of dealing with climate change.
Rich nations fail again
As pandemic debt distress became obvious, the G20 countries devised the so-called Debt Service Suspension Initiative (DSSI) for 75 poorest countries, supposedly to provide some modest relief between May and December 2020. DSSI does not cancel debt, but only delays re-payments, to be paid fully later with the interest cost accumulating – thus effectively “kicks the can down the road”. As the private lenders refused to join the G20’s initiative, unsurprisingly only 3 countries expressed interest in DSSI. Moreover, the G20 initiative does not address debt problems facing MICs, many of which also face debt servicing, including repayment issues.
Although the IMF acted innovatively at the start of the pandemic debt distress with debt service cancellation for 25 eligible LICs (estimated at $213.5 million), the World Bank’s Chief refused to supplement, let alone complement the IMF’s debt service cancellation for the most vulnerable LICs. Nonetheless, the Bank’s President hypocritically advocates debt relief as “critical”. He wants to have the cake and eat it too; apparently wanting to increase lending, but without sacrificing the institution’s AAA credit rating.
China debt trap diplomacy?
Meanwhile the rich nations accuse China of “debt trap diplomacy” that China is deliberately pushing loans to poorer countries for geopolitical and economic advantages. Less than 20% of LICs external debt is owed to China as against more than 50% to the commercial lenders.
Most Chinese loans are concessional, and China has provided more debt relief than any other country, bilaterally negotiating around $10.8 billion of relief since the onset of the pandemic.
Damaging trade-off
Rising debt servicing in the face of higher import costs, falling export revenues and declining remittances, are forcing developing countries to a damaging trade-off. They are forced to service external debt owed to rich nations and international financiers at the cost of development.
This is an opinion editorial by Konstantin Rabin, a finance and technology writer.
I am one of those who was fortunate enough to find out about Bitcoin more than a decade ago before it gained mainstream attention. Sadly, I am also one of the morons who saw this opportunity, didn’t think too much of it at first and let it fly by.
In this little story, I’d like to share the path that led me to pass on investing in bitcoin three different times before eventually giving in and becoming a HODLer. So, here are the key lessons I learned along this journey that are worth sharing with anyone who is still doubting BTC.
The Inception
Given that I started my first full-time job in an online brokerage back in 2011, it should come as no surprise that I had a bunch of colleagues who were really into trading and super passionate about everything related to investments, technology and the progress of the financial world. It wasn’t long before I made a friend named Edgar. We shared some interests, predominantly gaming and our long-standing nicotine addictions. Even though we worked in different departments and rarely had to collaborate for our jobs, we would still ping each other whenever it was time to head out and smoke a ciggy, gleefully chatting about life, the universe and everything else, as we dosed on nicotine and fresh air.
One day, sometime during 2012, I popped through one of these “smoke?” messages to Edgar when I noticed that his Skype status was some sort of gibberish that looked like a cat had been walking over his keyboard.
It looked something like this: “1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.”
During our smoke session, I asked him, “Was it a cat, or did your account get hacked?” He denied both of these possibilities and then went into a long and complicated explanation about Bitcoin addresses and blockchains.
Edgar passionately explained what the whole Bitcoin thing is all about, and his excitement instantly got me extremely interested in the topic. Being in the investment industry, I was well aware of many online scams and fake dubious products such as e-gold, that seemed, at least at the surface level, to all be similar. But, the more he told me about it, the more Bitcoin seemed like it might be much more than just some fly-by-night scheme; at the very least, it was worth a gamble.
My biggest problem was that 2012 was probably my worst year on record when it came to financial health, and while 3,730,218 public keys already existed on the Bitcoin network by then, I certainly didn’t have the spare cash to go gambling on some new and unproven technology promising to “revolutionize” the way we do money.
To put it bluntly, I was so poor. So poor, in fact, that by the last week of each month, my grocery store visits would come down to a choice between buying food or killing the hunger pains with a pack of cigarettes. So, I came to the conclusion that, while eating meat was considered a luxury, gambling on the future of digitized tokens was not within the scope of logical spending. Back then, bitcoin was trading for under $10.
The Doubt
Let’s fast forward to 2015. Having gotten a few good years of work under my belt, I was an experienced employee and had moved up to head marketing strategy and execution for one of the most prominent fintech startups in Europe. The workplace was great. Most of my colleagues were hardcore software developers who worked ceaselessly on retrieving people’s financial data from banks without asking for banks’ permission. As if to enforce the kind of work being done, there was even a good old Jolly Roger flying in the office. As you can imagine, many of my colleagues were huge fans of Bitcoin and everything that it stood for.
Since I’d grown quite a lot professionally, the numbers that indicated my salary had also seen a substantial addition. I was finally able to buy cigarettes and food, while even having a chunk of money that could be set aside for a rainy day. Working in this world, I knew more than most that just keeping your money in the bank is not the way to go and I started thinking of investing my extra capital, as I had no real plan for spending it.
My colleagues would fling the term “Bitcoin” around the office quite often, but I was still skeptical as to whether it would be a solid investment. At the time, bitcoin was trading at around $250, having just crashed from its all-time high of around $1,000. I approached it with my well-trained investment brain and concluded that bitcoin szx most likely never going to recover and that it would keep dwindling until just a few of the most hardened nerds were still clinging to it.
I was even looking at the Bitcoin dominance charts and seeing that, despite this fall, it still had a massive dominance over the market, which led me to the conclusion that it was the only cryptocurrency that managed to achieve something, and with no competition, it would never manage to grow to something huge.
“I need a more stable investment product for my savings,” said the wise investor in my mind, and so I bought $7,500 in gold bullion. Having kept an eye on the continual rise of gold since the economic crisis of 2008, it struck me as one of the most stable investments possible.
The Rejection
Let’s take a jump to 2018 when everyone was absolutely crazy about crypto. Besides bitcoin, a lot of other cryptocurrencies emerged and the initial coin offering (ICO) boom was in full swing, with $6.88 billion being raised through ICOs in just the first quarter of 2018. Everyone and their mothers were talking about Bitcoin and cryptos. You went for a haircut and would hear about it at the barbershop, go on Facebook and you couldn’t find a single page or group that wasn’t mentioning crypto in some way or other; even my parents gave me a call and asked me if I had any, telling me that I should get some since they heard it is likely to go up.
At that point in time, I was already offering some content marketing services on a freelance basis, and business was going well as the ICO bros would throw money at nearly any services they were offered as long as they could pay in crypto. Even though stablecoins like USDT had already been around for a while, it was quite uncommon for anyone to transact in them. I saw most of my payments coming in the form of BTC, with the rate ranging from $4,000 to $13,000 per bitcoin.
It was during this time that I acquired my first bitcoin, but being swept up in the absolute craziness that surrounded the whole crypto space, I decided not to hold any BTC and sold it all through someone I found via Local Bitcoins as fast as I got it. Back then, the daily volatility was huge, and I would catch a cab down to the local Bitcoin exchange as soon as the BTC hit my wallet to cash out for the safety of fiat money.
The Acceptance
The middle of 2018 was a turning point for me, career wise. I quit working full time for someone else and decided to focus on building my own company. At this time, I was also able to flip one of my projects for a hefty sum, which provided the initial capital to get my new venture started, while the funds sitting in my account allowed me to sleep calmly at night as I built the new business.
Life was good. I already owned some real estate, was making way more money than I could spend and had all the work opportunities I could handle. Things were on the up and up.
Then, one day, it just hit me. Why on Earth would I cash out? I have plenty of fiat in the bank and plenty of other investments in the markets. How does having an extra $10,000 to my name make any substantial difference to my wellbeing?
I finally came to the conclusion that it wouldn’t, but having no bitcoin could very possibly lead to me becoming poor again. What if fiat turns to monopoly money? After all, I don’t really trust the government and the people who I had met throughout my life who trusted Bitcoin were the ones I actually trusted a heck of a lot more than the people who dealt with fiat. With this in mind, I started hoarding and holding onto as much BTC as my finances would allow. My logic was simple: I get paid in BTC, I get to keep it without cashing out, ever.
What Lessons Have I Learned?
I am not angry at myself for not acquiring bitcoin earlier. Overall, I am a happy man, and despite the recent crypto winter and events like the FTX crash, I am still very bullish on crypto as a whole. Yet there are a few specific lessons that I took from my journey with BTC that I would like to share with you now.
Lesson One: You’re Never Too ‘Small’ To Invest
At the inception stage, I was thinking that it would be so great to spend some $1,000 to acquire BTC, but I simply didn’t have it and I let the opportunity slip. Overall, if you spot the opportunity, take it.
You should not invest all of your savings or feel uncomfortable because of your investment, but committing even a fraction of your income should not be too hard. Could I have saved $50 somehow back in 2012 to acquire 5 BTC? Most likely yes, but the idea of investing just $50 was a turnoff for me.
Lesson Two: Sacrifices Are To Be Made
I had to dig up some past experiences to compose this story since I wanted to get the dates right. While doing so, I noticed a $100 hotel booking made in early 2012. This was for one night abroad, which was pretty much a tourist trip with my girlfriend.
Yes, being broke and spending so much on a hotel is not the wisest decision overall. But hindsight is 20/20 and looking back, I could have certainly salvaged the trip and invested in BTC instead, or I could have simply gone to a cheaper hotel and spent the remainder on buying BTC. There is no use in looking back and feeling bad, but remember that making a sacrifice today could lead to your financial wellbeing a few years down the line.
Lesson Three: Balance Your Investment Portfolio
Every investment book tells you, “Don’t put all of your eggs in one basket.” Nothing is new here. Yet this is something I completely ignored back in 2015. I did have money to invest, and I did have some desire to acquire BTC, but for some reason, I decided to go all-in on a single commodity. If I had invested even just some 20% into BTC, my return would have been substantially higher.
Lesson Four: Don’t Chase Historical Prices
One of the reasons why I chose to invest in gold instead of BTC is simply because I felt that I was buying gold “cheap.” I weighed this against the fact that I would have had to pay 25 times more for bitcoin at that point than what I could have paid some three years before. In retrospect, I now know that the price now is the price now — don’t discount an investment today just because it looks expensive when compared to three years ago.
Lesson Five: Become A Part Of The Ecosystem
Accepting and holding BTC is considerably easier (mentally) than purchasing it for fiat. If you offer services or goods, why not let your clients pay in BTC? Just don’t make the mistake that I did and cash everything out as soon as you get it in.
Keep at least a fraction of your BTC balance intact and forget about it for now. This will only drive the adoption rates higher and will work in your and the whole community’s favor in the long run.
This is a guest post by Konstantin Rabin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
NEW YORK, Jan 27 (IPS) – As Turkey approaches its centennial anniversary this October, President Erdogan is stopping short of nothing to win the election in June to fulfill his life-time dream of presiding over the celebration. The Turkish people should deny him this historic honor because of the reign of terror to which he has mercilessly subjected his countrymen.
Righting the Wrong
Had Turkey’s President Erdogan continued with his most impressive social, economic, judicial, and political reforms that he initiated and implemented during his first years in power, today’s Turkey would have been a great country, respected and prosperous while enjoying tremendous regional and global influence under his leadership.
Instead, Erdogan reversed his remarkable achievements on all domestic and international fronts in pursuit of building an authoritarian regime that could satisfy his unquenchable thirst for ever more power. Erdogan will stop short of nothing to win the upcoming elections in June.
He certainly hopes to preside on October 29 over the hundredth anniversary of the establishment of the Turkish Republic by Mustafa Kemal Atatürk and to be recognized as the new Atatürk (father) of modern Turkey. The Turkish people must deny him that honor because of his continuing horrific human rights violations.
To put in perspective as to why Erdogan does not deserve to preside over the anniversary and should be handedly rejected in the June elections, it is first necessary to provide a brief account of his relentless reign of terror and his unremitting campaign to harass and delegitimize the opposition parties to achieve his sinister objective.
Following the failed coup of July 2016, Erdogan arrested tens of thousands of innocent people, including hundreds of security officials, academics, and military personnel suspected of belonging to the Hizmet (Gülen) Movement and charged them with participating in the coup. He uses Article 301 of the Anti-Terror Act to crack down on dissent and even criminalize criticism of “Turkishness.”
He arrested hundreds of journalists accusing them of spreading anti-government propaganda, shut down scores of TV and radio stations, and imposed restrictions on the use of social media. Nearly 200 journalists have been imprisoned since 2016; currently 40 remain incarcerated in subhuman prisons, which blatantly defies the convention of freedom of press, especially in a NATO member state.
Thousands of university graduates are leaving the country in the search for job opportunities and to free themselves from Erdogan’s shackles. Leaving their country behind is causing an alarming brain drain, which is affecting just about every industry.
The Council of Europe and the University of Lausanne reports that Turkey has the largest population of prisoners convicted on charges related to terrorism. As Turkish journalist Uzay Bulut notes, “The report, updated in April 2021, shows that at the time there were a total of 30,524 inmates in COE member states who were sentenced for terrorism; of those, 29,827 were in Turkish prisons” .
As Leo Tolstoy observed in War and Peace, “One need only to admit that public tranquility is in danger and any action finds a justification… All the horrors of the reign of terror were based only on solicitude for public tranquility.” To that end, Erdogan proclaims to be a pious man, but he cynically uses Islam as nothing but an evil political tool to project a divine power to assert his dictatorial whims unchallenged.
The World Organization Against Torture (OMCT) reports that Erdogan conveniently uses Anti-Terrorism Law No. 3713, which was enacted by his AK Party-led, rubber stamp parliament to stifle freedoms and silence the voices of those who defend human rights. The law allows him to label peaceful human rights defenders as ‘terrorist offenders’.
OMCT states that “Official data show that in 2020, 6551 people were prosecuted under the anti-terrorism law, while a staggering 208,833 were investigated for ‘membership in an armed organization,’” typically those involved with the Gülen movement.
Erdogan continues his crackdown on his own Kurdish community which represents nearly 20 percent of the population, depriving them of basic human rights. His systematic persecution of the Kurds seems to have no bounds, as he accuses thousands of being supporters of the PKK, which he considers as a terrorist organization and which successive Turkish governments have been fighting for more than 50 years at staggering human and material cost.
He consistently demands that various Balkan and EU states extradite Turkish nationals whom he accuses of being terrorists to stand trial in his corrupted courts, denying them due process and subjecting them to ferocious torture in order to extract confessions for offences they never committed.
He is preventing Finland and Sweden from joining NATO unless Sweden extradites about 130 political refugees, mostly Turkish Kurds, to stand trial in Turkey. Sweden has rejected his demand knowing that once they reach Turkish soil, it will be tantamount to the kiss of death. To be sure, the rule of law in Erdogan’s Turkey has been effectively dismantled.
To improve his chances of being re-elected, Erdogan wants to ensure that the Kurdish political parties are denied representation in the Parliament. He has incarcerated many of the 56 members of the pro-Kurdish Peoples’ Democratic Party (HDP) and removed its remaining members from the legislative process; he is determined to close the party altogether.
In addition, he arrested many members of the Democratic Regions Party (DBP), accusing them of unfounded terrorism-related offenses and illegally replacing them through government-appointed trustees.
Erdogan is asking the Biden administration to issue a statement in support of his policies to help him in his bid for reelection when in fact he is at odds with President Biden on a host of critical issues, including his egregious human rights violations, his refusal to allow Sweden and Finland to join NATO, his purchase of the Russian-made S-400 air defense system, his money laundering, and his ceaseless corruption.
And in 2019, he tried to block NATO’s plan for the defense of Poland and the Baltic states unless NATO identified the Kurdish-led Syrian Democratic Forces as terrorists.
One would think that if he is so desperate to be re-elected come June, he would make significant concessions both domestically and in his relations with the US and the EU. Why not offer amnesty to all political prisoners, free the journalists, stop harassing and jailing leaders of opposition parties, and fully adhere to human rights and the rule of law?
Why not drop his opposition to Sweden’s admission to NATO? Why not rescind his purchase of a second batch of S-400s and decommission those currently in use, which are totally incompatible with NATO’s air defense systems? Finally, why not restore the democratic principles which every member state of NATO is required to uphold?
But then, Erdogan’s obsession with absolute power has blinded him from seeing and feeling the plight of his own people, which only demonstrates his ignorance and shortsightedness. As Jorge Luis Borges aptly observed, “Dictatorships foster oppression, dictatorships foster servitude, dictatorships foster cruelty; more abominable is the fact that they foster idiocy.”
A number of years ago, Erdogan’s former prime minister Davutoglu told me that by the year 2023, Turkey will have restored the glory, the global influence, and prestige that the Ottoman Empire enjoyed in its heyday. Needless to say, Davutoglu’s prophecy has not come to pass.
To the contrary, today, Turkey’s economy, social and political order, and democracy are in complete disarray; Turkey is far from having “zero problems with neighbors,” and remains estranged from the US and the EU.
If Erdogan manages to be re-elected through cheating and by disenfranchising the opposition parties, he will celebrate the centennial anniversary while presiding over a country in retreat, with a disillusioned and despairing citizenry and diminishing regional and international stature. He will not be the new Atatürk even though he so frantically wants to portray himself as a great reformer leading a constructive and great power on the world stage.
Instead, Erdogan will be remembered with scorn and contempt for having squandered Turkey’s huge potential while degrading the anniversary that could have been Turkey’s greatest celebration in one hundred years.
Dr. Alon Ben-Meir, a retired professor of international relations at the Center for Global Affairs at New York University (NYU), taught courses on international negotiation and Middle Eastern studies for over 20 years.
In a tourism-dependent economy, sustainable finance will promote sustainable fisheries, maritime transport, and tourism. Credit: UNDP
Opinion by Christopher Marc Lilyblad (mindelo, cabo verde)
Inter Press Service
MINDELO, Cabo Verde, Jan 26 (IPS) – On 20 January, the world’s best sailors arrived in Mindelo, Cabo Verde, completing the initial leg of the 2023 edition of The Ocean Race. Coinciding with this stop was the launch of Cabo Verde’s first blue bond at the Ocean Summit, an event jointly organized by The Ocean Race and the Government of Cabo Verde on the sidelines of the grueling round-the-world race. United Nations Secretary-General Antonio Guterres was in attendance as this year’s keynote speaker.
The bond was launched on Cabo Verde’s Blu-X sustainable finance platform, a regional platform for listing and trading sustainable and inclusive financial instruments.
The issuance will raise domestic, regional, and global investment in Cabo Verde’s rising ocean economy while divesting capital from industries responsible for sea-level rise, pollution, and other transgressions against ocean rights.
In brief, the winds of sustainable finance are filling the sails of a local blue economy heeling towards global Ocean Rights.
Consistent with its blue seal, up to US$1 million in proceeds (minimum US$500,000) will supply affordable loans to microentrepreneurs and startups in coastal communities, emphasizing financial inclusion to ensure widespread access to the new value generated from the growing blue economy.
The remaining US$1.5 million foresees structural investments in small and medium-sized enterprises operating in the maritime and fisheries sectors.
Notably, this is the first initial public offering, or IPO, listed on the Blu-X sustainable finance platform. This means anyone, anywhere with access to the digital Blu-X platform can invest via their computer or phone, including foreign investors and members of Cabo Verde’s sizable diaspora.
Furthermore, this marks the first private issuance that does not rely on a public guarantee but is solely backed by market demand. With a ‘greenshoe’ (or ‘blue aquasocks’, rather?) option of an additional US$ 1 million triggered if demand for bond subscriptions exceeds the initial US$2.5 million, the blue bond could ultimately generate US$3.5 million in private and market-driven finance for a sustainable blue economy.
In a race against time during the UN’s Ocean Decade, this initial blue bond listing offers a potentially game-changing test case for Cabo Verde’s blue finance ambitions.
The strategic partnership between the Cabo Verde Stock Exchange (Bolsa de Valores de Cabo Verde – BVC) and UNDP under Cabo Verde’s integrated national financing framework (INFF) has already led to four sustainable bond issuances totaling USD32.5 million.
Building on this momentum, the blue bond’s proceeds are exclusively destined for sustainable marine- and ocean-based projects generating returns for the economy, society, and environment – the triple bottom line.
With funding from the UN’s Joint SDG Fund and UNDP’s strategic and technical support, the Blu-X team at the BVC guided the Cabo-Verdean International Investment Bank through the process of issuing the bond framework, following an external review process that ensures adherence to blue principles.
What actually ‘counts as’ blue has recently been established through a new blue bond regulation in November 2022, enacted under the authority of Cabo Verde’s capital market regulatory agency.
The regulation draws on the Atlantic Technical University’s blue taxonomy, derived from a scientific study of existing blue economy activities and the potential of Cabo Verde’s shores.
The first of its kind in Africa, the regulation reflects the country’s pioneering role in defining blue finance norms, standards, and principles, which closely aligns with the Ocean Race’s Sustainability Charter and corresponding calls for a Universal Declaration of Ocean Rights anchored at the United Nations.
By hoisting the blue flag, Cabo Verde is again signaling its emergence as a global front-runner. Indeed, since the first blue bond issuance by Seychelles in 2018, these financial instruments have mostly been treated as a subsidiary category of green bonds in financial markets. However, what was once seen as a ‘shade of green’ is now emerging as a primary colour of its own.
Building on this initial proof of concept, the proliferation of blue bonds has the potential to transform financing for Cabo Verde’s strategic sustainable development agenda: Ambition 2030.
In a tourism-dependent economy vulnerable to external shocks, the growth of sustainable finance and the blue economy will accelerate socio-economic decentralization and sectorial diversification, from fisheries and maritime transport to nautical sports and ocean-based technology.
As a small island developing state that is “99 percent ocean,” this stands to benefit the local communities that depend on marine environments and maritime spaces for their livelihoods.
Blue economy impact investing poignantly illustrates why marine environments and biodiversity should be preserved not only as ends in themselves but also as catalysts for value creation.
As more and more people subscribe to the idea that protecting ocean resources is vital for maintaining and growing economies, we will see an upsurge in innovative businesses, initiatives and transactions that advance marine conservation.
The growth of blue entrepreneurship and investment paves the way for greater collaboration spurring collective action capable of avoiding a tragedy of the ocean commons.
In other words, by reshaping economic incentive structures along these lines and leveraging their effects in local coastal communities, sustainable finance enhances cognizance of global ocean sustainability principles and incentivizes corresponding human action.
The Ocean Race Cabo Verde presented by Blu-X marks a growing interest in Cabo Verde’s emerging blue standard. Inspired by these blue finance bearings, perhaps others will soon chart a similar course, with the prospect of collectively raising an entire fleet racing towards the UN Ocean Decade finish.
Christopher Marc Lilyblad is Head of Strategy and Policy Unit, a.i. UNDP Cabo Verde; Development Economist & Head of Strategy and Economic Cluster, a.i. UNDP Guinea-Bissau
This is an opinion editorial by Jimmy Song, a Bitcoin developer, educator and entrepreneur and programmer with over 20 years of experience.
We need beliefs. Belief is something that we live for, something that informs our morals, something that defines our metaphysical existence. We need belief because we need purpose. Belief is a necessary part of a fulfilling life and, traditionally, people valued their beliefs more than anything else. Sadly, fiat money debases our beliefs the same way Nickleback debases music and Joel Osteen debases Christianity.
The end result of fiat money is that those who win don’t believe in anything, at least in any traditional sense. And if you don’t believe in anything, you are a nihilist. You’re probably nodding along because the people in power seem very much like the inner party leaders in George Orwell’s “1984.” They change their beliefs to whatever the authorities tell them and do it on command. Heck, we saw that in real time during the COVID-19 pandemic.
That’s the topic of this essay: What happened? And how is it that so many people are so willing to change their beliefs so quickly under government command? How did so many people, especially members of the media, academics and bureaucrats of all types, become sycophantic yes-men to what the government told us to believe?
Fiat Obsession
Fiat money makes us obsessed with money. It does this by causing us to pay way too much attention to it.
Because fiat money is continually being debased, people with any wealth at all are forced to invest their money to keep up with that debasement. The more wealth you have, the more obsessed you have to be. The moderately wealthy research stocks and real estate. The truly rich have to research venture funds, private equity and special-purpose acquisition companies (SPACs). Speak with any rich person and they’re most likely to talk about the deals they’re involved in because this is pretty much the only thing that they truly believe in. The only way to stay rich in a fiat economy is to really be obsessed with money and get involved in Cantillon games, leaving very little room for genuine beliefs. Fiat money rewards cowards who conform to those who align with it and those are the people who get really rich. Ideological diversity is about as welcome in those places as Barry Silbert at the Gemini offices.
On the other end of the scale, those with no savings are bombarded by offers of debt. Loans and credit are readily available, so those without savings have the option to bring consumption forward. When combined with advertising, propaganda and a lack of savings vehicles, consumption becomes conspicuous. Unfortunately, that enslaves people for many years, possibly their whole lives, as the debt can be rolled over and consumption generally only goes up. Principles and beliefs and well-nigh everything gets sacrificed to serve the debt. Like an overweight person always waiting until tomorrow to start their diet, the cycle of debt puts genuine belief on hold.
Either way, under a fiat system, the only belief most people end up serving is that of the primacy of money. Sadly, money is a terrible and all-consuming god that requires the sacrifice of everything that makes life meaningful.
Anything For Money
The primacy of money has meant that other beliefs are put on the back burner, made to be less important and generally debased. In biblical times, tax collectors and prostitutes often made way more money than other people in the economy. Yet they were considered lower than scum. Why? Because they violated something that was more sacred than money: community morals and community belief. To violate those was to violate who you were.
This isn’t an isolated occurrence. In most times and places, it was considered completely dishonorable to make money at the cost of the community. If you made money through grifting, you might have money, but your reputation would be in tatters and many people would not trade with you. It was considered completely unacceptable to take other peoples’ property through deception, or by hurting the community in some way. Nowadays, that’s just called marketing. So what changed?
Debasement Of Politics
Fiat money debases communities because it makes communities completely reliant on its central control and, thus, its benevolence. Even the most tyrannical monarch of the past couldn’t control the money to the extent that central banks can today. Central banking was the fifth plank of the “Communist Manifesto” for a reason. Karl Marx recognized money’s integral function in any community and wanted to control it. It’s not a coincidence that the most debased communities, the ones whose very cultures were completely supplanted, were the totalitarian ones in the 20th century. We are all zombies to the necromancing of the central bank.
People used to believe in things and were willing to fight for them, especially against oppression. This was what led to the spirit of 1776. Belief was what held that community together.
Yet, looking at the state of politics today, it’s pretty clear that most fights are fights over money and power, not over belief. Fiat money is so powerful that it’s become the only thing to fight for. Belief has taken a back seat to the power to print money. Naturally, this means that beliefs are malleable and you get more psychopathic behavior from leaders.
Why is what we’re supposed to believe continuously changing? How is it that transgender bathrooms became such an issue so fast? Or Ukraine? Or terrorism? The beliefs that they tell us to believe are more inconsistent than CSW’s statements to courts of law. The short answer is that they do this because they can.
Debasement Of Work
As mentioned above, work used to have some bounds, but now, more than ever, rent seeking is accepted, even celebrated as noble employment. Thus, the psychopathic investment banking character that will do anything for money is something people strive to be. The moral nihilism of the character is something that they don’t worry about.
Of course, it’s not just investment banking, but many other professions. The goal is always to climb up the ladder of power at any cost. Status is no longer awarded on the basis of character, it’s rewarded on the basis of money and power. Fiat money has made work a place where beliefs go to die. The goal of getting more money has become all consuming and put beliefs completely on the back burner.
Toxic Maximalism
One of the things I’ve noticed about the Bitcoin community is just how vicious it can be toward people who would otherwise be welcomed with open arms in any other community. Venture capitalists like Raoul Pal and Mark Cuban would be deferred to and respected for their influence and money anywhere else. Yet in Bitcoin, we pay them no mind and have zero problems questioning their understanding or even making fun of their stupidity. There’s no buying your way to influence in Bitcoin. There’s no jumping in front of the parade because you have name recognition.
Bitcoin is decentralized and that’s how we like it, thank you. Anyone trying to speak for Bitcoin and trying to change it will be rightly derided as being a detriment to the community. If you try to co-opt this community for your own ends, you will be shunned like the ideological leech you are.
Altcoiners call this “toxic Bitcoin maximalism,” but this protection of the community is a good thing. Toxic maximalism is not just an immune system keeping the beliefs pure. It’s a rejection of the fiat model of doing things. Fiat institutions trade on status, influence and money and their beliefs can be changed for a price. Bitcoiners are principled and no one gets to tell us how it is. That’s the main feature of decentralization. The node I run is mine and you can’t change it. There’s no single point of failure to go bribe.
Contrast this with what Greenpeace USA started doing once Ripple’s executive chair gave it $5 million. It started FUDing Bitcoin because its beliefs are for sale. It is a fiat institution that can be bought. Cantillionaires can’t understand Bitcoiners because they’re used to being able to buy their way into everything with their printed dollars. Fiat slaves can’t understand Bitcoiners because they’re used to changing their beliefs when their fiat jobs depend on changing them. Bitcoiners are misunderstood because we have beliefs that are not for sale. We are not debased.
Altcoins Debase Belief
Altcoining, though, debases your beliefs pretty quickly. One need not look much further than Erik Voorhees, Trace Mayer and Udi Wertheimer to see that. The minute you sell out your belief and embrace altcoins, you are forced into a lot of mental gymnastics to justify your salary. You have to take untenable positions and end up supporting stupider and stupider projects to ensure some allies.
Thankfully, when these projects blow up, their reputations blow up along with them. Altcoins operate on the same fiat system of bribery using printed money, but with a lot more volatility and without the monopoly on violence. Hence, it’s very easy to get altcoiners to embrace any belief. This is why their pitches can be so stupid and still find an audience. You can buy your way to influence. But of course, this is unsustainable without violence. So in a sense, their crashes are as inevitable as Sam Bankman-Fried making a stupid public statement.
By contrast, what is endlessly frustrating for VCs, altcoin founders and Bitcoin affinity scammers is that it’s impossible to debase Bitcoiners’ decentralized beliefs. This is in stark contrast to the fiat world. Just pay some money for influence and you’re good. You can’t do that in Bitcoin. No amount of money is going to get the toxic maxis to like you. There’s no jumping in front of this parade. Bitcoiners have no hesitation rejecting you and there’s no central committee to bribe. The rules are different here because Bitcoin is genuinely decentralized.
Bitcoin And First Principles
Bitcoiners have enriched their beliefs. We’ve learned to think for ourselves through analysis via first principles. Instead of swallowing what someone is selling us, we have learned to analyze things and come to our own conclusions. This is why you see so many Bitcoiners give carnivory or fasting or Christianity a chance. These are not popular now in the mainstream, but they’ve historically been popular for a reason. The fact that Big Ag has debased food or that Big Food has made fasting look ridiculous or that Marxism of many kinds has instilled atheism is not lost on Bitcoiners. They look at these things with fresh eyes because the blindfold of fiat money has been taken off.
In other words, our beliefs which once were debased, have arisen anew through first-principles analyses. Beliefs have become more real and personal through soul searching and logical analysis. This is in contrast to beliefs under the fiat system which are fake and wispy because they’re absorbed through propaganda. Talk to any Bitcoiner and you’ll likely see that they have many more strong opinions than your typical fiat slave does. That’s not a coincidence. Under a fiat system you say whatever to get along and get ahead. Under Bitcoin, you say what you believe.
Rent Seekers Don’t Believe Anything
Belief in a fiat system is a means, not an end. Most people have malleable belief systems so they can get ahead in their careers. This is especially so in the institutions infected most by fiat: academia, media, government, Hollywood and venture capital. The most successful in these institutions are the ones who believe whatever is most convenient to get ahead. As that is often the price of admission, their beliefs are lightly held, not analyzed for inconsistencies and really swallowed without much thought.
These are also very political institutions and the ability to gauge the temperature of your colleagues and bosses and adjust your beliefs is the key to success in those places. These are debased people, nihilistic at the core and only believing in power. To me, these are not really people at all. And it’s not a coincidence that the morals of the people in these places are often completely corrupt. Lest you doubt me, I’ll remind you that Jeffrey Epstein didn’t kill himself.
Belief Is Needed To Be Human
Belief is a necessary part of being human. Sadly, fiat money debases our beliefs and as we are more integrated into fiat money, the more nihilistic we become. The more nihilistic we become, the less human we are.
Bitcoin brings us back to having beliefs again because money is no longer our master, but our servant. The money works for us now by being a savings technology. It’s no longer our master who enslaves us through debt or forced investment.
Belief is a prerequisite to everything that is meaningful in life. Morals and purpose. It’s sad to see that these critical things are destroyed by fiat money. Thank God for Bitcoin. And that’s where your journey as a liberated human being can begin anew.
Now, go forth and learn.
This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Despite unprecedented challenges, 2022 also opened windows of opportunity to move the needle around critical anti-corruption issues, such as anti-money laundering, asset recovery, beneficial ownership, and renewable energy. Credit: Shutterstock.
Opinion by Sanjeeta Pant (sanjeeta pant)
Inter Press Service
Sanjeeta Pant, Jan 25 (IPS) – The G20 India Presidency is marked by unprecedented geopolitical, environmental, and economic crises. Rising inflation threatens to erase decades of economic development and push more people into poverty. Violent extremism is also on the rise as a result of increasing global inequality, and the rule of law is in decline everywhere. All of these challenges impact the G20’s goal of realizing a faster and more equitable post-pandemic economic recovery.
But as India prioritizes its agenda for 2023, it is corruption that is at the heart of all of these other problems- and which poses the greatest threat to worldwide peace and prosperity.
An Idea Whose Time Has Come
Despite unprecedented challenges, 2022 also opened windows of opportunity to move the needle around critical anti-corruption issues, such as anti-money laundering, asset recovery, beneficial ownership, and renewable energy. When global leaders meet during the G20 Indian Presidency , they must prioritize and build on this progress, rather than make new commitments around these issues that they then fail to implement.
According to the UN, an estimated 2-5% of global GDP, or up to $2 trillion, is laundered annually. Although the G20 has repeatedly committed to the Financial Action Task Force’s (FATF) anti-money laundering standards, member countries have been slow to implement policy reforms. In the wake of the Russian invasion of Ukraine and ineffective economic sanctions against Russian oligarchs, governments have started reexamining existing policy and institutional gaps, especially recognizing the role of Designated Non-Financial Businesses and Professions (DNFBPs), also known as “gatekeepers.”
G20 member countries are responding to concerns and criticisms from their national counterparts regarding failures to adopt FATF recommendations and clamp down on “dirty money.” Grappling with the need to be able to prosecute money-laundering cases and recover billions of dollars worth of frozen assets, they are also amending national laws to be able to do so.
Lack of beneficial ownership transparency is also aiding the flow of laundered money globally. The G20 recognizes beneficial ownership data as an effective instrument to fight financial crime and “protect the integrity and transparency of the global financial system.”
The Russian invasion helped drive home this message, especially among countries that are popular destinations for those buying luxury goods and assets. FATF’s amendment of its beneficial ownership recommendations in early 2022 was timely. Member countries are also introducing new reporting rules, and fast-tracking policies and processes to set up beneficial ownership registers. While there are still gaps in the proposed policies – as identified here– these are important first steps.
Similarly, the transition to renewable energy, initially raised as an environmental issue and then as a national security concern is increasingly gaining attention from a resource governance perspective. Given the scale of the potential investment, there is a need to tackle corruption in the energy sector to avoid potential pitfalls resulting from a lack of open and accountable systems as we transition to a net zero economy.
The cross-cutting nature of the industry means a wide range of issues– from procurement and conflict of interest in the public sector to beneficial ownership transparency- need to be considered. The global energy crisis and the Indonesian Presidency’s prioritization of the issue have helped build momentum around corruption in the renewable energy transition, and this focus must continue.
Calling on India
Corruption-related issues identified here are transnational in nature and have global implications, including for India. For instance, with money laundering cases rising in India, it cannot afford to regard it as a problem limited to safe havens like the UK or the US. The same is true for the lack of beneficial ownership transparency or corruption in the renewable energy transition, which fuels illicit financial networks in India and beyond, and which often transcend national borders.
Finally, corruption has a disproportionate impact on the global poor. Almost 10% of the global population lives in extreme poverty, many of whom live in countries such as India. The G20, under the Indian Presidency, provides a unique opportunity to ensure the voices of the most vulnerable are heard at the global level. By prioritizing the anti-corruption agenda and building on past priority issues and commitments, the Indian government can lead efforts to bridge the North-South divide.
Sanjeeta Pant is Programs and Learning Manager at Accountability Lab. Follow the Lab on Twitter @accountlab
These are tricky times in the stock market, so it pays to look to the best stock-fund managers for guidance on how to behave now. Veteran value investor Bill Nygren belongs in this camp, because the Oakmark Fund OAKMX he co-manages consistently and substantially outperforms its peers.
That isn’t easy, considering how many fund managers fail to do so. Nygren’s fund beats its Morningstar large-cap value index and category by more than four percentage points annualized over the past three years. It also outperforms at five and…
Yasmine Sherif pictured in Lebanon speaking to a young child at an ECW-supported facility. Credit: Education Cannot Wait (ECW)
Opinion by Yasmine Sherif, Stephen Omollo (new york)
Inter Press Service
NEW YORK, Jan 24 (IPS) – “Is it a sin to be a girl? We don’t want to be at home and illiterate. We want to go to school, study and be intelligent.”
In just a few words, this plea for education from a young Afghan girl has captured the world’s attention. Her heartbreaking question shows how the Taliban’s recent ban on girls attending secondary school and university – effectively ending education opportunities for all Afghan girls and women – is not only violating their fundamental human right to education but shattering countless hopes and dreams in an instant.
Elsewhere in the world, millions of other girls living through humanitarian crises are also being deprived of the right to go to school. In their case, it isn’t necessarily a proclamation that bars them from learning, but hunger, conflict or the consequences of extreme weather induced by the climate crisis, sometimes a combination of all of these. And underpinning this, gender inequality means that the sheer fact they are girls means their education and rights often aren’t prioritized.
For example, at present, hunger is causing huge damage to girls’ education opportunities in the Horn of Africa, the Sahel, Haiti and other hotspots around the word.
Yasmine Sherif and Stephen Omollo. Credit: Education Cannot Wait (ECW)
The reasons for this are many and interconnected. When food is scarce, it is often girls who shoulder the responsibility of travelling long distances to find sustenance, or caring for siblings while their parents do so, leaving little time for their studies. When small quantities of food are shared amongst a family, evidence shows girls often eat least and last, making it difficult for them to focus and truly benefit when they do go to school.
Elsewhere, from Ukraine to South Sudan, conflict is disrupting girls’ education as families are forced to flee for their safety – indeed, half of all refugee children are out of school.
Whatever the reason, when girls are forced to drop out of school, it isn’t just their education and life opportunities that suffer. Adolescent girls in particular then become even more vulnerable to violence, exploitation, early pregnancy and harmful practices, from child marriage to female genital mutilation. Indeed, the chances of a girl marrying as a child reduce by six percent with each year she remains in secondary education.
Inclusive, quality education is a lifeline which has a profound effect on girls’ rights. But more needs to be done to make this a reality.
Girls in crisis settings are nearly 2.5 times more likely to be out of school than those living in countries not in crisis. One reason for this is that in emergencies and protracted crises, education responses are severely underfunded. The total annual funding for education in emergencies as a percentage of global sector-specific humanitarian funding in 2021 was just 2.9%.
Yasmine Sherif pictured in Lebanon speaking to a young child at an ECW-supported facility. Credit: Education Cannot Wait (ECW)
Together with partners, Plan International and Education Cannot Wait (ECW), the UN’s global fund for education in emergencies and protracted crises, are calling for this proportion to be increased to at least 10% of humanitarian financing. This must include increased multi-year investments in the institutional capacities of local and national actors.
Today, on International Day of Education, we stand in solidarity with girls in Afghanistan and in all other crisis affected countries to say “education cannot wait.” Education is not only a fundamental human right, but a lifesaving and life-sustaining investment for girls affected by crisis. We must stand with girls as they defend this right.
Next month, when world leaders will gather in Geneva at the Education Cannot Wait High-Level Financing Conference, we urge donor governments to immediately increase humanitarian aid to education. We must translate our promises into action through bold, courageous and substantive financing.
This funding is essential if we are to build resilience in the most climate-exposed nations, where the consequences of extreme weather will all but certainly pose a threat to girls’ education in the years to come. Education budgets – which declined by two-thirds of low- and lower-middle-income countries after the onset of COVID-19 – must be protected and increased, especially in crisis-affected countries.
Investments should be geared towards building stronger education systems and tackling gender inequality and exclusion, with girls’ needs prioritized at every stage of programming. Governments should also ensure that refugee and internally displaced children aren’t overlooked, and make concrete commitments towards inclusive quality education for displaced children and youth at the Global Refugee Forum in December of this year.
Right now, 222 million crisis-affected children and adolescents are in need of urgent education support and more than half of those are girls. It is critical that Education Cannot Wait is fully funded with a minimum of US$1.5 billion in additional resources over the next four years, so that partners such as Plan International and others can deliver the critical programmes needed.
Too often, girls’ voices are silenced during emergencies, leaving their experiences invisible and their needs ignored and overlooked. It’s up to us to change this, for a more just, equal and peaceful world.
About the AuthorsYasmine Sherif is the Director of Education Cannot Wait, the UN’s global fund for education in emergencies and protracted crises.
Stephen Omollo is Chief Executive Officer of Plan International, a child rights and humanitarian organisation active in more than 80 countries globally.
This is an opinion editorial by Q Ghaemi, a stocks and bitcoin analyst and author of the Qweekly Update newsletter.
Earlier this month, reports surfaced that the Central Bank of Iran is working with the Russian Association Of The Crypto Industry And Blockchain to create a stablecoin that will be backed by gold to settle trade. This is not the first foray into the crypto universe for either country, nor will it be the last. But this venture will come to nothing, ultimately bringing both countries one step closer to adopting Bitcoin.
Iran’s Foray Into Cryptocurrencies Favor Bitcoin
In August 2022, a headline came and went and most did not hear about it, and those who did gave it little thought: “Iran Approves Use Of Cryptocurrency For Imports To Bust Sanctions.” Ignoring the fact that the source for this headline was a Saudi-funded media outlet with the likely goal of destabilizing and delegitimizing Iran, it is important to recognize that Iran successfully completed a trade in August with an estimated value of $10 million, which can be assumed to have been conducted in bitcoin.
Based on daily volume, there are about 20 possible cryptocurrencies that could have been used to complete this transaction, however, if we take these cryptocurrencies by daily volume and agree that none with a daily volume less than $1 billion could have possibly been used (anything greater than 1% of daily volume would move the price too significantly: 1% of $1 billion is $10 million) we are left with seven possible cryptocurrencies: Ripple (XRP), Solana (SOL), USDC, Ethereum (ETH), Binance (BNB), Tether (USDT) and Bitcoin (BTC).
We can quickly eliminate USDC, Solana and Ripple because they are all run by U.S. corporations and, due to sanction laws (see: Tornado Cash), they would be forced to prevent Iran from using their platform (also it is safe to assume that the Iranian government chose to avoid U.S. companies for simplicity’s sake). Tether can also be thrown out given its link to the U.S. dollar. I will also throw out Ethereum because Iranians are too cheap to pay those gas fees. This leaves us with two options: BNB and Bitcoin. Personal bias aside, no one is settling international trade with BNB without Binance CEO Changpeng Zhao (CZ) taking some sort of a victory lap. Bitcoin wins.
Iran also previously banned Bitcoin mining operations due to stress on Tehran’s power grid. It has since returned all of the mining equipment and, as noted above, made the claim that $10 million in international trade was completed using cryptocurrency. Suffice to say, Iran has begun to see the potential of Bitcoin.
Russian Foray Into Cryptocurrencies Demonstrates Need For Unsanctioned Exchange
Russia has also begun to dip its toes in the broader cryptocurrency space. After the U.S. government responded to the invasion of Ukraine with sanctions, Russia was forced to explore alternatives to completing international trade. President Vladimir Putin’s response was to forgo the over $500 billion in its reserves and mandate that every buyer of Russian natural gas pay in Russian rubles. The ruble responded very positively to this news (see the chart below with a red arrow pointing to when U.S. sanctions began and a green arrow pointing to when the ruble became the only payment for Russian natural gas).
Russia then slowly began to reverse its 2020 position on cryptocurrencies. Late last year, Russia announced that it will allow international settlement in cryptocurrencies without any restrictions, a huge reversal from its previous stance. These moves prove that Russia sees the potential for cryptocurrencies as a medium of exchange.
Sanctions Make The Bond Stronger
Both countries have been on the receiving end of U.S./Western sanctions but have found ways to navigate around them to remain in power. The lesson that both of these countries have learned is to trust no one, especially in the world of finances. Putin profusely announced that by freezing Russia’s dollar holdings, it “practically defaulted,” signaling that even the mighty dollar may not be as mighty as the U.S. wants you to believe.
Iran is also no stranger to the empty promises of the West: after negotiating and agreeing to a nuclear deal in 2015, President Donald Trump came in and tore up the old agreement. While this may be common practice in some (shady) business ventures, this is an insult in Persian culture. Every indication that a new nuclear deal will be signed by Iran was laughable: why would Iran assume the next deal would be upheld after this president left office? Needless to say, the Iranian government has very little trust of foreign governments.
“The enemy of my enemy is my friend” plus “keep your friends close but your enemies closer” equals Iran/Russia relations.
In 2023, it almost makes sense to Westerners that Russia and Iran would work together. Both countries are deemed villains by many Western countries, and strict sanctions prevent them both from selling their resources to the world. Both have stockpiles of oil and gas that the world desperately needs. And yet, their history is far from harmonious.
Until the 1920s, both the U.K. and Russia fought over control of the resources of Iran. The Qajar dynasty would bend the knee and give anything foreign powers requested in exchange for wealth and riches for its family. This all changed after the 1921 coup brought an end to the Qajar dynasty and brought to power Reza Shah.
Reza Shah refused to give concessions to foreign powers and focused on growing Iran. The Soviet Union came to be one year later, which caused the USSR to focus on domestic growth as well. As Iran began to grow in importance to the West (chiefly to the U.K. and the U.S.), Reza Shah and his son (the last Shah of Iran, Mohammad Reza Shah), would use the West’s fear of communism to their advantage. If Iran would not get what it wanted from its Western trade partners, it would go make a small deal with the USSR to remind them who was in charge.
Despite the once contentious history between these two nations, it seems like they have found a common ground: perception as an enemy of the West.
Why The New Stablecoin Will Fail
I made a lofty claim that the stablecoin experiment between Iran and Russia will fail and cause them to adopt Bitcoin. How will it fail? There is no trust: there never was and there never will be.
Trust can be eroded while the network is being formed. While many Russian and Iranian leaders may believe that their countries’ top engineers can craft a product that is able to circumvent any adversarial attacks, what is to stop the other country from giving themselves backdoor access? What is stopping someone from creating a way to double spend tokens? Now, this is all conjecture: I am presenting just a handful of potential flaws in this system — how many more can you think of?
The largest question is regarding the gold reserves backing the stablecoin: Where will the gold be stored and who will verify that the amount of gold listed is still there? Given the lack of trust, neither country can be expected to blindly accept that the other is holding the amount of gold it claims to be (see “The Bitcoin Standard” for more on this topic), and sanctions prevent a reputable third party from getting involved (although China could fit into the puzzle in some way here).
As this very large and very important hurdle is met, another question will continue to loom: Why? Why do we need to do any of this when there is a cryptocurrency out there with enough liquidity to suffice their needs and that requires no trust in either party?
Both countries are still in the information-gathering stage and, if by some miracle, a researcher stumbles across this article, let me spell it out plain and simple: History has proven that when given the opportunity to control money, the people in charge will manipulate the money for their benefit.
There is a reason the Roman Empire fell and that we don’t use guilders or pounds as global currencies. Instead of bringing this temptation into the equation, adopting a trustless form of money that cannot be manipulated or inflated is the only solution. Bitcoin is the inevitable money you are looking for. Whether you get there before your enemies is up to you.
This is a guest post by Q Ghaemi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Short selling can be controversial, especially among management teams of companies whose stocks traders are betting that their prices will fall. And a new spike in alleged “naked short selling” among microcap stocks is making several management teams angry enough to threaten legal action:
Taking a long position means buying a stock and holding it, hoping the price will go up.
Shorting, or short selling, is when an investor borrows shares and immediately sells them, hoping he or she can buy them again later at a lower price, return them to the lender and pocket the difference.
Covering is when an investor with a short position buys the stock again to close a short position and return the shares to the lender.
If you take a long position, you might lose all your money. A stock can go to zero if a company goes bankrupt. But a short position is riskier. If the share price rises steadily after an investor has placed a short trade, the investor is sitting on an unrealized capital loss. This is why short selling traditionally has been dominated by professional investors who base this type of trade on heavy research and conviction.
Brokers require short sellers to qualify for margin accounts. A broker faces credit exposure to an investor if a stock that has been shorted begins to rise instead of going down. Depending on how high the price rises, the broker will demand more collateral from the investor. The investor may eventually have to cover and close the short with a loss, if the stock rises too much.
And that type of activity can lead to a short squeeze if many short sellers are surprised at the same time. A short squeeze can send a share price through the roof temporarily.
Short squeezes helped feed the meme-stock craze of 2021 that sent shares of GameStop Corp. GME, +10.45%
and AMC Entertainment Holdings Inc. AMC, +2.54%
soaring early in 2021. Some traders communicating through the Reddit WallStreetBets channel and in other social media worked together to try to force short squeezes in stocks of troubled companies that had been heavily shorted. The action sent shares of GameStop soaring from $4.82 at the end of 2020 to a closing high of $86.88 on Jan. 27, 2021, only for the stock to fall to $10.15 on Feb. 19, 2021, as the seesaw action continued for this and other meme stocks.
Naked shorting
Let’s say you were convinced that a company was headed toward financial difficulties or even bankruptcy, but its shares were still trading at a value you considered to be significant. If the shares were highly liquid, you would be able to borrow them through your broker for little or almost no cost, to set up your short trade.
But if many other investors were shorting the stock, there would be fewer shares available for borrowing. Then your broker would charge a higher fee based on supply and demand.
For example, according to data provided by FactSet on Jan. 23, 22.7% of GameStop’s shares available for trading were sold short — a figure that could be up to two weeks out-of-date, according to the financial data provider.
According to Brad Lamensdorf, who co-manages the AdvisorShares Ranger Equity Bear ETF HDGE, -2.65%,
the cost of borrowing shares of GameStop on Jan. 23 was an annualized 15.5%. That cost increases a short seller’s risk.
What if you wanted to short a stock that had even heavier short interest than GameStop? Lamensdorf said on Jan. 23 that there were no shares available to borrow for Carvana Co. CVNA, +10.63%,
Bed Bath & Beyond Inc. BBBY, -12.24%,
Beyond Meat Inc. BYND, +11.31%
or Coinbase Global Inc. COIN, +1.45%.
If you wanted to short AMC shares, you would pay an annual fee of 85.17% to borrow the shares.
Starting last week, and flowing into this week, management teams at several companies with microcap stocks (with market capitalizations below $100 million) said they were investigating naked short selling — short selling without actually borrowing the shares.
This brings us to three more terms:
A short-locate is a service a short seller requests from a broker. The broker finds shares for the short seller to borrow.
A natural locate is needed to make a “proper” short-sale, according to Moshe Hurwitz, who recently launched Blue Zen Capital Management in Atlanta to specialize in short selling. The broker gives you a price to borrow shares and places the actual shares in your account. You can then short them if you want to.
A nonnatural locate is “when the broker gives you shares they do not have,” according to Hurwitz.
When asked if a nonnatural locate would constitute fraud, Hurwitz said “yes.”
How is naked short selling possible? According to Hurwitz, “it is incumbent on the brokers” to stop placing borrowed shares in customer accounts when supplies of shares are depleted. But he added that some brokers, even in the U.S., lend out the same shares multiple times, because it is lucrative.
“The reason they do it is when it comes time to settle, to deliver, they are banking on the fact that most of those people are day traders, so there would be enough shares to deliver.”
Hurwitz cautioned that the current round of complaints about naked short selling wasn’t unusual and even though short selling activity can push a stock’s price down momentarily, “short sellers are buyers in waiting.” They will eventually buy when they cover their short positions.
“But to really push a stock price down, you need long investors to sell,” he said.
Different action that can appear to be naked shorting
Lamensdorf said the illegal naked shorting that Verb Technology Co. VERB, +69.65%,
Genius Group Ltd. GNS, +45.37%
and other microcap companies have been recently complaining about might include activity that isn’t illegal.
An investor looking to short a stock for which shares weren’t available to borrow, or for which the cost to borrow shares was too high, might enter into “swap transactions or sophisticated over-the-counter derivative transactions,” to bet against the stock,” he said.
This type of trader would be “pretty sophisticated,” Lamensdorf said. He added that brokers typically have account minimums ranging from $25 million to $50 million for investors making this type of trade. This would mean the trader was likely to be “a decent-sized family office or a fund, with decent liquidity,” he said.
Most investors want to keep things simple, but digging a bit into details can be lucrative — it can help you match your choices to your objectives.
The JPMorgan Equity Premium Income ETF JEPI, +0.20%
has been able to take advantage of rising volatility in the stock market to beat the total return of its benchmark, the S&P 500 SPX, +1.19%,
while providing a rising stream of monthly income.
The objective of the fund is “to deliver a significant portion of the returns associated with the S&P 500 Index with less volatility,” while paying monthly dividends, according to JPMorgan Asset Management. It does this by maintaining a portfolio of about 100 stocks selected for high quality, value and low price volatility, while also employing a covered-call strategy (described below) to increase income.
This strategy might underperform the index during a bull market, but it is designed to be less volatile while providing high monthly dividends. This might make it easier for you to remain invested through the type of downturn we saw last year.
JEPI was launched on May 20, 2020, and has grown quickly to $18.7 billion in assets under management. Hamilton Reiner, who co-manages the fund with Raffaele Zingone, described the fund’s strategy, and its success during the 2022 bear market and shared thoughts on what may lie ahead.
Outperformance with a smoother ride
First, here’s a chart showing how the fund has performed from when it was established through Jan. 20, against the SPDR S&P 500 ETF Trust SPY, +1.20%,
both with dividends reinvested:
JEPI has been less volatile than SPY, which tracks the S&P 500.
FactSet
Total returns for the two funds since May 2020 pretty much match, however, JEPI has been far less volatile than SPY and the S&P 500. Now take a look at a performance comparison for the period of rising interest rates since the end of 2021:
Rising stock-price volatility during 2022 helped JEPI earn more income through its covered call option strategy.
FactSet
Those total returns are after annualized expenses of 0.35% of assets under management for JEPI and 0.09% for SPY. Both funds have had negative returns since the end of 2021, but JEPI has been a much better performer.
““Income is the outcome.””
— Hamilton Reiner
The income component
Which investors JEPI is designed for? “Income is the outcome,” Reiner responded. “We are seeing a lot of people using this as an anchor tenant for income-oriented portfolios.”
The fund quotes a 30-day SEC yield of 11.77%. There are various ways to look at dividend yields for mutual funds or exchange-traded funds and the 30-day yield is meant to be used for comparison. It is based on a fund’s current income distribution profile relative to its price, but the income distributions that investors actually receive will vary.
It turns out that over the past 12 months, JEPI’s monthly distributions have ranged between 38 cents a share and 62 cents a share, with a rising trend over the past six months. The sum of the past 12 distributions has been $5.79 a share, for a distribution yield of 10.53%, based on the ETF’s closing price of $55.01 on Jan. 20.
JEPI invests at least 80% of assets in stocks, mainly selected from those in the S&P 500, while also investing in equity-linked notes to employ a covered call option strategy which enhances income and lowers volatility. Covered calls are described below.
Reiner said that during a typical year, investors in JEPI should expect monthly distributions to come to an annualized yield in the “high single digits.”
He expects that level of income even if we return to the low-interest rate environment that preceded the Federal Reserve’s cycle of rate increases that it started early last year to push down inflation.
JEPI’s approach may be attractive to investors who don’t need the income now. “We also see people using it as a conservative equity approach,” Reiner expects the fund to have 35% less price volatility than the S&P 500.
Getting back to income, Reiner said JEPI was a good alternative even for investors who were willing to take credit risk with high-yield bond funds. Those have higher price volatility than investment-grade bond funds and face a higher risk of losses when bonds default. “But with JEPI you don’t have credit risk or duration risk,” he said.
An example of a high-yield bond fund is the iShares 0-5 Year High Yield Corporate Bond ETF SHYG, -0.10%.
It has a 30-day yield of 7.95%.
When discussing JEPI’s stock selection, Reiner said “there is a significant active component to the 90 to 120 names we invest in.” Stock selections are based on recommendations of JPM’s analyst team for those that are “most attractively priced today for the medium to long term,” he said.
Individual stock selections don’t factor in dividend yields.
Covered call strategies and an example of a covered-call trade
JEPI’s high income is an important part of its low-volatility total-return strategy.
A call option is a contract that allows an investor to buy a security at a particular price (called the strike price) until the option expires. A put option is the opposite, allowing the purchaser to sell a security at a specified price until the option expires.
A covered call option is one an investor can write when they already own a security. The strike price is “out of the money,” which means it is higher than the stock’s current price.
Here’s an example of a covered call option provided by Ken Roberts, an investment adviser with Four Star Wealth Management in Reno, Nev.
You bought shares of 3M Co. MMM, +1.63%
on Jan. 20 for $118.75.
You sold a $130 call option with an expiration date of Jan. 19, 2024.
The premium for the Jan. 24, $130 call was $7.60 at the time that MMM was selling for $118.75.
The current dividend yield for MMM is 5.03%.
“So the maximum gain for this trade before the dividend is $18.85 or 15.87%. Add the divided income and you’ll get 20.90% maximum return,” Roberts wrote in an email exchange on Jan. 20.
If you had made this trade and 3M’s shares didn’t rise above $130 by Jan. 19, 2024, the option would expire and you would be free to write another option. The option alone would provide income equivalent to 6.40% of the Jan. 20 purchase price in the period of a year.
If the stock rose above $130 and the option were exercised, you would have ended up with the maximum gain as described by Roberts. Then you would need to find another stock to invest in. What did you risk? Further upside beyond $130. So you would have written the option only if you had decided you would be willing to part with your shares of MMM for $130.
The bottom line is that the call option strategy lowers volatility with no additional downside risk. The risk is to the upside. If 3M’s shares had doubled in price before the option expired, you would still wind up selling them for $130.
JEPI pursues the covered call options strategy by purchasing equity-linked notes (ELNs) which “combine equity exposure with call options,” Reiner said. The fund invests in ELNs rather than writing its own options, because “unfortunately option premium income is not considered bona fide income. It is considered a gain or a return of capital,” he said.
In other words, the fund’s distributions can be better reflected in its 30-day yield, because option income probably wouldn’t be included.
One obvious question for a fund manager whose portfolio has increased quickly to almost $19 billion is whether or not the fund’s size might make it difficult to manage. Some smaller funds pursuing narrow strategies have been forced to close themselves to new investors. Reiner said JEPI’s 2% weighting limitation for its portfolio of about 100 stocks mitigates size concerns. He also said that “S&P 500 index options are the most liquid equity products in the world,” with over $1 trillion in daily trades.
Summing up the 2022 action, Reiner said “investing is about balance.” The rising level of price volatility increased options premiums. But to further protect investors, he and JEPI co-manager Raffaele Zingone also “gave them more potential upside by selling calls that were a bit further out of the money.”
BERLIN, Jan 23 (IPS) – Russia has been at war with Ukraine for more than 10 months, with no end in sight and with just as little prospect for direct negotiations between the warring parties. These were last broken off mutually on 17 May 2022.
Since then, there have been repeated calls in Germany, whether in opinion articles or open letters, for more diplomatic efforts to end the hostilities. Such calls were often combined with demands for the federal government to cease arms deliveries to Ukraine: when all is said and done, peace is achieved not with arms, but with a truce, the argument goes.
And continuing the war with the already unrealistic goal of a Ukrainian victory and the recapture of all the territory occupied by Russia would only mean useless bloodshed. These calls are all too understandable given the horrific images of suffering and destruction that reach us daily from Ukraine.
Even so, it would be wrong right now to urge Ukraine to negotiate – or even give up parts of its territory and the people living there.
Jana PuglierinSurely, no one wants the guns to go silent more than the Ukrainians themselves. They are the victims of this war. It is their hospitals, kindergartens and schools that have been destroyed by Russian missiles and drone attacks. Many have lost their homes.
When the air raid sirens sound, it is they who sit in the shelters and who go without heating, electricity or running water, often for hours or days on end. The exact number of soldiers who have died at the front is unknown; US estimates put the count at up to 100,000.
And yet, the Ukrainian government wants to continue the fight against the Russian aggressor – and only negotiate directly with Russia if and when the Kremlin first answers for its war crimes before an international tribunal and withdraws all troops from Ukraine, including from the illegally annexed areas. In this, the government is supported by the vast majority of the Ukrainian population.
Putin wants total control of Ukraine
It is clear to the Ukrainians that the Russian President Vladimir Putin is not interested in finding a way for a secure coexistence with a sovereign and independent Ukraine that can determine its own future. He wants it gone.
A Ukraine that is independent of Russia and wants to open up to Europe along the lines of its central European neighbours is unacceptable because it calls into question the very foundations of the Russian imperium, which Putin is determined to prevent from falling apart.
The repeatedly expressed assumptions that Russia is ultimately only concerned with preventing Ukraine from joining NATO, or only has geographic interests in the Donbas, are wrong. In truth, Moscow wants Ukraine to relinquish much more: its freedom, its identity, its self-determination, its culture.
The destruction of Ukrainian life, Ukrainian art and Ukrainian statehood, together with repressions – from murder to rape to abduction – in the occupied territories are clear demonstrations of this.
So far, there is no reason to believe that Putin’s thinking has changed in recent months. On the contrary, with every further step, Putin makes clear that he is not ready to make concessions. Although he and other members of the Russian government regularly mention the word ‘negotiations’, they have so far not presented a concrete option.
As recently as the end of December 2022, Russian Foreign Minister Sergey Lavrov repeated the call for the ‘demilitarisation and denazification’ of Ukraine and described the illegally annexed areas of Ukraine as Russia’s ’new territories’.
Clearly, Putin has not abandoned his goal of complete political control over the country but has merely adjusted his approach and timeline. Because Russia was not militarily successful, the devastating airstrikes on the Ukrainian civilian population and the energy infrastructure are now intended to break the population’s will to resist and to wear down the country – until Russia is able to launch a new offensive in the spring.
Putin is also counting on the fact that the western supporter states – also under pressure from their populations – will soon tire and run out of weapons, ammunition and money for Kyiv.
If the West were now to press for a ceasefire or peace negotiations, perhaps with the threat that it would otherwise end support for Ukraine, that would signal to the Kremlin that its method is working and that all it has to do is wait until we lose patience.
So far, none of the advocates of an imminent ceasefire have been able to convincingly explain how Putin can be persuaded to make concessions without exerting further military pressure on him.
Preventing Russia from dictating peace
We Germans, in particular, have for years been repeating the mantra that ‘there is no military solution’ to this or that conflict. Unlike Vladimir Putin: in Georgia, the Crimea and Syria, he has learned that he can very successfully use military force to achieve his political goals.
In the current conflict, therefore, only Ukraine’s military successes prevent such a dictated peace from happening. In other words, Russia must first be stopped and pushed back militarily before there can be any chance of real diplomacy. It’s about enabling Ukraine to hold its own against the Russian invasion and showing Putin that even a new military offensive in the spring has no chance of succeeding – and that this won’t change over time.
The West itself has a paramount interest in Putin not making any gain from his war of aggression. His ambitions are a danger to all of Europe. If he gets away again with using force and nuclear blackmail to bring parts of another state under his control, this invites repetition elsewhere, be it by Russia or another state.
The goal of an overall revision of the European security order, which is essential for peace and prosperity also here in Germany, was announced by Russia in the treaty texts of December 2021.
The decision by Germany, the US and France to now also supply Ukraine with armoured personnel carriers and reconnaissance vehicles is therefore logical. It emphasises that the major military powers of the West will not force Ukraine into an unacceptable deal with Russia.
Of course, the danger of escalation must always be kept in mind when providing military support. However, the reactions after missiles fell on the Polish-Ukrainian border in particular has shown that the West is aware of this and is reacting prudently and is capable of risk management.
Real negotiations will only begin again when both Russia and Ukraine come to the conclusion that there is more to be gained from a truce than from fighting on. Perhaps the cards will be reshuffled after spring — if the ’hot autumn’ and the ’winter of fury’ in Europe fail to materialise, if the western democracies continue to stand firmly on the side of Ukraine and if a new Russian offensive proves unsuccessful.
What is certain is that any negotiations and compromises will reflect the resulting balance of power between the parties. Our goal must therefore be to get Ukraine ready as well as possible for this point in time and to prepare together with Kyiv for the moment when the window for diplomacy indeed opens.
Dr. Jana Puglierin heads the Alfred von Oppenheim Center for European Policy Studies. Prior to this, she was a program officer at the German Council on Foreign Relations’ (DGAP) Future Forum Berlin and an advisor on disarmament, arms control, and non-proliferation at the German Bundestag.
Source: International Politics and Society (IPS)-Journal published by the International Political Analysis Unit of the Friedrich-Ebert-Stiftung, Hiroshimastrasse 28, D-10785 Berlin
