Building Back Together

Date: 27‑02‑2021

Source: Project Syndicate by Joschka Fischer

Joschka Fischer, Germany’s foreign minister and vice chancellor from 1998 to 2005, was a leader of the German Green Party for almost 20 years. 

The world is confronting three great ruptures: the COVID‑19 pandemic, the digital revolution, and climate change. Unfortunately, it is confronting them with the nation‑state, which is no longer fit for purpose.

BERLIN – Human beings are creatures of habit. We tend to envisage a future much the same as the past, so we cling to familiar tools, approaches, and perspectives, even as the world changes. But, at this moment of profound social, political, and economic transformation, we must take care not to permit our habits to lead us astray.

Historically, major transformations – such as that following the collapse of the Soviet Union and the Warsaw Pact at the beginning of the 1990s – have not made societies collectively wiser, or even more skeptical. Instead, they have generally been met with the expectation that everyday life will remain largely the same – or at least return to “normal.”

How much capital should banks hold?

Caterina Mendicino, Kalin Nikolov, Juan Rubio-Ramirez, Javier Suarez, Dominik Supera 24 February 2021, vox.eu

Caterina Mendicino

Senior Lead Economist, Monetary Policy Research Division, ECB

Kalin Nikolov

Lead Economist, Financial Research Division, ECB

Juan Rubio-Ramirez

Charles Howard Chandler Professor of Economics, Emory College

Javier Suarez

Professor of Finance at CEMFI, Madrid; CEPR Research Fellow

Dominik Supera

PhD candidate in Finance, Wharton School,University of Pennsylvania

Well-capitalised banks make the financial system more resilient to episodes such as the COVID-19 crisis. This column assesses how much capital would be optimal for banks to hold, taking into consideration the risk of banking crises driven by borrower defaults. It finds that capital requirements of around 15% provide the optimal trade-off between lowering the frequency of banking crises caused by borrower defaults and maintaining the availability of credit in normal times. While the exact figure depends on a number of assumptions, it is higher than both the Basel III minimum and the optimum implied by macroeconomic frameworks that underestimate or neglect the impact of borrower default on bank solvency.6A

Winners and Losers in the Digital Transformation of Work

Date: 26‑02‑2021

Source: Project Syndicate by Michael Spence

Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, serves on the Academic Committee at Luohan Academy, and co‑chairs the Advisory Board of the Asia Global Institute. He was chairman of the independent Commission on Growth and Development, an international body that from 2006‑10 analyzed opportunities for global economic growth, and is the author of The Next Convergence: The Future of Economic Growth in a Multispeed World.  

Advances in artificial intelligence and machine learning have again raised fears of large‑scale job losses. And while labor‑market adaptation is likely to stave off permanent high unemployment, it cannot be counted on to prevent a sharp rise in inequality.

MILAN – Perhaps no single aspect of the digital revolution has received more attention than the effect of automaton on jobs, work, employment, and incomes. There is at least one very good reason for that – but it is probably not the one most people would cite.

Using machines to augment productivity is nothing new. Insofar as any tool is a machine, humans have been doing it for most of our short history on this planet. But, since the first Industrial Revolution – when steam power and mechanization produced a huge, sustained increased in productivity – this process has gone into overdrive.

How to Cooperate with China

Date: 25‑02‑2021

Source: Project Syndicate

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable Finance, is a former chairman of the Hong Kong Securities and Futures Commission. His latest book is From Asian to Global Financial Crisis. 

Xiao Geng, Chairman of the Hong Kong Institution for International Finance, is a professor and Director of the Research Institute of Maritime Silk‑Road at Peking University HSBC Business School. 

With his plan to build a concert of democracies to contain China, US President Joe Biden is making a grave mistake. The US and China should each be doing their part to protect the global commons, not competing for global dominance.

HONG KONG – China is a tough country to comprehend – even for most Chinese. But much of what makes China enigmatic – its long history, vast and varied territory, huge and diverse population, complex politics, and massive, dynamic economy – also makes understanding the country important. For better or worse, what happens in China affects everyone.

Western observers tend to struggle the most in deciphering China. As Dutch sinologist Hans Kuijper put it, “There is something fundamentally amiss in Western Sinology: ‘China experts’ either pretend to be knowledgeable about everything related to China, in which case they cannot be taken seriously, or – eventually – admit not to be scientific all‑rounders with respect to the country, in which case they cannot be called ‘China experts.’

Foxconn to Build Cars for Electric‑Vehicle Startup Fisker

Date: 25‑02‑2021

Source: The Wall Street Journal

Companies to produce more than 250,000 vehicles a year under deal, possibly at Foxconn factory in Wisconsin

Fisker headquarters in Manhattan Beach, Calif.

Foxconn Technology Group, the world’s biggest electronics contract manufacturer, has agreed to assemble cars for electric‑vehicle startup Fisker Inc., the latest deal for the Apple iPhone assembler in its eager expansion into the automotive sector over the past year.

Taipei‑based Foxconn and Los Angeles‑based Fisker have signed a memorandum of understanding to jointly produce more than 250,000 vehicles a year, the companies said in a statement Wednesday.

Boris Johnson ‚a liar‘ who will blame Brexit costs on Covid, says diplomat

Date: 25‑02‑2021

Source: The Guardian Patrick Wintour Diplomatic editor

Sylvie Bermann, former French ambassador, puts PM’s handling of pandemic alongside Donald Trump’s

Boris Johnson is “an unrepentant and inveterate liar” who feels he is not subject to the same rules as others, Sylvie Bermann, the former French ambassador to the UK during the Brexit vote, says in a new book.

She also claims some Brexiters are consumed with hatred for Germany and gripped by a myth that they liberated Europe on their own, describing Brexit as a triumph of emotion over reason, won by a campaign full of lies in which negative attitudes to migration were exploited by figures such as Johnson and Michael Gove.

America Is Back, but Europe Has Moved

Date: 24‑02‑2021

Source: The Wall Street Journal By William A. Galston

Macron and Merkel respond coolly to Biden, and public opinion backs them.

A video‑conference between President Biden and European leaders at the Munich Security Conference shown on‑screen in Paris, Feb. 19.

President Biden set out to declare a triumphant U.S. return to the trans‑Atlantic alliance. “America is back,” the president said in his speech this week to the Munich Security Conference. The leaders of France and Germany promptly made it clear that the four years of the Trump presidency had changed the relationship.

France’s President Emmanuel Macron renewed his call for Europe’s “strategic autonomy,” which would require the Continent to be prepared to defend itself. Germany’s Chancellor Angela Merkel bluntly stated that the interests of the U.S. and Europe wouldn’t always converge, which most listeners took as a reference to the European Union’s recent trade pact with China, along with Germany’s determination to complete the Nord Stream 2 natural‑gas pipeline from Russia. The U.S. may be back, but it can’t expect to reclaim its old seat at the head of the table.

Apple buys a company every three to four weeks

Date: 24‑02‑2021

Source: BBC

Apple chief executive Tim Cook

Apple has acquired about 100 companies over the last six years, the company’s chief executive Tim Cook has revealed.

That works out at a company every three to four weeks, he told Apple’s annual meeting of shareholders on Tuesday.

Apple recently delivered its largest quarter by revenue of all time, bringing in $111.4bn (£78.7bn) in the first‑quarter of its fiscal year 2021.

Mr Cook told the shareholders meeting that the acquisitions are mostly aimed at acquiring technology and talent.

Apple’s largest acquisition in the last decade was its $3bn purchase of Beats Electronics, the headphone maker founded by rapper and producer Dr Dre.

10 Breakthrough Technologies 2021

Date: 24‑02‑2021

Source: Technology Review

This list marks 20 years since we began compiling an annual selection of the year’s most important technologies. Some, such as mRNA vaccines, are already changing our lives, while others are still a few years off. Below, you’ll find a brief description along with a link to a feature article that probes each technology in detail. We hope you’ll enjoy and explore—taken together, we believe this list represents a glimpse into our collective future.

Messenger RNA vaccines 

We got very lucky. The two most effective vaccines against the coronavirus are based on messenger RNA, a technology that has been in the works for 20 years. When the covid‑19 pandemic began last January, scientists at several biotech companies were quick to turn to mRNA as a way to create potential vaccines; in late December 2020, at a time when more than 1.5 million had died from covid‑19 worldwide, the vaccines were approved in the US, marking the beginning of the end of the pandemic. 

The new covid vaccines are based on a technology never before used in therapeutics, and it could transform medicine, leading to vaccines against various infectious diseases, including malaria. And if this coronavirus keeps mutating, mRNA vaccines can be easily and quickly modified. Messenger RNA also holds great promise as the basis for cheap gene fixes to sickle‑cell disease and HIV. Also in the works: using mRNA to help the body fight off cancers. Antonio Regalado explains the history and medical potential of the exciting new science of messenger RNA.

GPT‑3

Large natural‑language computer models that learn to write and speak are a big step toward AI that can better understand and interact with the world. GPT‑3 is by far the largest—and most literate—to date. Trained on the text of thousands of books and most of the internet, GPT‑3 can mimic human‑written text with uncanny—and at times bizarre—realism, making it the most impressive language model yet produced using machine learning.

The Digital Transformation Strategy Africa Needs

Date: 23‑02‑2021

Source: Project Syndicate

Victor Harison is the African Union Commissioner for Economic Affairs. 

Mario Pezzini is Director of the OECD Development Centre and Special Adviser to the OECD Secretary‑General on Development. 

Nurturing large‑scale job creation in Africa will require policies that bring digital solutions to the non‑digital economy. To reorient and strengthen their digitalization strategies, the continent’s governments should follow four guiding principles.

ADDIS ABABA/PARIS – Many African countries reacted quickly and effectively to mitigate the health and economic risks posed by COVID‑19. Less well documented is the agility with which the region’s private and public actors have adapted their digital practices in light of pandemic‑related constraints. But the success stories are spectacular.

For example, person‑to‑person mobile money transfers in Rwanda increased fourfold during the first month of lockdown from mid‑March to mid‑April 2020, as contactless payments became the “new normal.” To slow transmission of the coronavirus, innovative start‑ups developed digital solutions, like remote mobile app DiagnoseMe in Burkina Faso and COVID‑19 triage tools in Nigeria. Education ministries in at least 27 African countries set up e‑learning platforms for students affected by school closures.