Peace through Economic Development- Part 1 Laying the Foundation

India is an emerging economy with a population of 1.38 billion people.

China is the world’s fastest growing emerging economy bound to takeover US soon with a population of 1.43 billion people.

Pakistan is a country with a population of 220 million people, with the GDP 1/10th the size of India’s GDP and population 1/6th the size of India’s population. The two countries can be compared because they gained their independence at the same time from British rule. Why is it then, that India is growing and advancing technologically while Pakistan still lags far behind?

The answer is complex, because of the geopolitics and the internal political struggle that has left Pakistan’s economy bereft. While my purpose is not to delve into the wars fought and other historical struggles, if interested, it is well described concisely in the book titled ‘Prisoners of Geography’ authored by Tim Marshall.

These neighbouring countries due to their different strategic goals have clashed on several occasions. However, what can bring them together is economic development and cooperation.

In this series of articles, I am going to focus on peace through Oil and Gas Pipelines. Iran also becomes a key player. The peace pipeline has been abandoned by Pakistan and India. In present day, it is an ideal and an opportune time to revive the deal that has suffered at the hands of foreign influence and international sanctions on Iran.

US and Iran are going to engage in indirect talks to resume JCPOA- the nuclear agreement. If these countries can put aside their conflicts, i.e., Iran, Pakistan, China, India, and US. Iran can resume its nuclear agreement under international agreement and Pakistan and India can benefit by meeting their energy needs. In the process, they can create much needed specialist jobs, build infrastructure and kickstart upstream, downstream, and midstream companies in the Oil and Gas Sector. China benefits from it all as it has vested interests in Pakistan and Iran. As growing economies, they can help Iran broker the deal with US. It sounds like an easy issue, but it is an extremely difficult one. What do I gain from writing this research? Perhaps some peace in my mind that I am working towards achieving peace in an unstable region. Iran has its own troubles in the Middle Eastern region, which of course does not help. Setting aside the issues in Middle East for now, I am going to focus on Pakistan’s and India’s energy needs and demands for their long-term growth and prosperity. Sounds a bit selfish that I am just ignoring the Middle Eastern crises. What I do know is that, like everything cannot be painted with a single stroke of brush, similarly, peace cannot be achieved with stability in the whole world simultaneously. When one starts to understand the nature of the ‘Self’, a lot of clarity emerges on all issues whether they are of individual nature or collective.

The Great Reset after the pandemic has created a shift towards cleaner energy, lowering carbon emissions and safeguarding our ecosystem. I do not believe that the renewable energy sources alone can meet those needs. We live in a complex world. Even at the height of the pandemic and world wide lockdowns, oil demand fell by a mere 7 mbpd. The world can’t just kick the oil habit with a swish of a magic wand. We consume approximately 100 mbpd of oil. That is 4.2 billion gallons of oil in a single day. On the contrary, I believe that we have to do a lot to create a safer world and safeguard our ecosystem. Climate change, biodiversity, deforestation, afforestation, ocean pollution, plastic waste, whales, phytoplankton, and coral reefs are major issues we face as humankind collectively.

The optimum and safer mix of energy that each nation can create, the more it can contribute towards fighting climate change and all environmental issues mentioned above. Oil spills from VLCCs and tankers are still huge detrimental issues for the seas and oceans.

An appropriate mix of energy between the renewables and non-renewables can create an optimum mix of energy that is productive for the society. This productivity can be utilised, and funds can be appropriated to fight climate change, plant trees and progress towards building a cleaner and safer earth.

40 % of the world’s population resides in (China, India, Iran, and Pakistan) these four nations that share borders and economic ties. This region is also where the centre of the world will shift to with this reset and where perhaps the new world order will emerge once more as Ray Dalio describes in his book the ‘Changing World Order’. The peace and stability becomes even more significant for these nations in the region.

This is the reason why I believe collective diplomacy among these countries can help bring stability, better economic growth, and prosperity for the masses. Of course, State of Kashmir remains the biggest issue between Pakistan and India. As I mentioned, my aim is not to seek resolution for the thorny geopolitical issues, for which I am sure there is a solution but difficult to achieve. My aim is to boost economic ties. If there is one thing I have learnt through history, it is that merchants, traders, and economic collaboration can bring the world together.

In my view, the best way to reduce carbon emissions is not through axing petrol and diesel vehicles and electrifying all vehicles. Sure, that is a noble cause as the entire transport sector accounts for 21% of total emissions, and road transport accounts for three-quarters of transport emissions, road transport accounts for 15% of total CO2 emissions.

Aviation – while it often gets the most attention in discussions on action against climate change – accounts for only 11.6% of transport emissions. It emits just under one billion tonnes of CO2 each year – around 2.5% of total global emissions. International shipping contributes a similar amount, at 10.6%. 

Rail travel and freight emits very little – only 1% of transport emissions. Other transport – which is mainly the movement of materials such as water, oil, and gas via pipelines – is responsible for 2.2%.

Source:  Our world in data

Source: IEA

What helps us absorb the CO2 that is released in the atmosphere is whales, phytoplankton, forests, coral reefs as they help ocean & land biodiversity.

According to International Moentary Fund (IMF), the average great whale absorbs approximately 30,000 kg of CO2 in its lifetime. The CO2 absorbed gets deposited at the bottom of the ocean with its carcass. Whereas, when these whales are hunted and killed all of that CO2 is released into the atmosphere. Whales are also responsible for the growth of phytoplankton. Wherever there are whales there is phytoplankton. Phytoplankton help remove 1/3rd of the atmospheric CO2. The CO2 is absorbed into the phytoplankton shells and sinks to the bottom of ocean once it dies.

Source: BBC- Future Planet

Do you see the direction I am trying to navigate to, with this peace pipeline? Railway Emissions are lowest with oil and gas pipelines, it also saves us from occasional but costly oil spills on sea and ports. That further helps us safeguard ocean biodiversity and help increase the number of endangered whales. All of this is in addition to fulfilling the growing demand of energy, providing energy to areas where there is a lack thereof, creating jobs, boosting the GDP which is a by-product of literacy rate, infrastructure, and productivity.

In the part 2 of this post, I will highlight the energy needs of the countries in discussion specifically India, Pakistan and China.

Restarting the Economy

How to Restart the Economy and Ease the Lockdown Measures?

Covid-19 pandemic has caused a global depression within a few months. There is no cure currently as of this writing or a vaccine. The only viable option available to remove these economic sudden stops and bring back productivity and normalcy is to design a way to stop the spread of the virus transmission.

Thus far, the governments and various health departments have issued self-isolation measures, lockdown measures, advice on PPE such as N95 respirators and surgical masks, hand sanitisers, washing the hands with soap for minimum of 20 seconds to dissolve the virus. But the measures have not been enough to stop the contagion and rise in number of deaths globally. Here is a snapshot of the global pandemic via John Hopkins University

There is a case in every continent, and those who initially flattened the curve such as Singapore and South Korea and China are reporting new cases. The second wave and reinfection are what is preventing those countries from a return to normal. To be precise, pre Covid-19 normal.

Furthermore, what we know so far from the researchers is that even if vaccine is developed, the vaccine fades away and the risk of infection remains once it does. We are coming dangerously close to a time, where only the healthy population survives and the others slowly inch closer to death. This is a stark reality when you look at the number of deaths and how quickly it has spread globally. The first cases were reported some say in December, some say in November, the bottom line however, is that in Four Months, the global cases stand at 2.9M, the deaths at 203.5K.

There is no consistency in measures and response either, different policy makers have taken different approaches. Some who responded earlier, limited the number of fatalities, others who were slow to respond and hoping for herd immunity have witnessed an exponential rise in number of cases and deaths. In previous wars, military heroes and political heroes emerged. In this new war, it is the doctors and nurses fighting the invisible forces of the universe.

The health damage is not limited to covid-19 fatalities, the mental health, domestic abuse, paedophilia, sexual and physical abuse is creeping and gripping upon those who are vulnerable. Here is an article by FT related to this subject; The Hidden Health Costs of UK Lockdowns. This is not just a UK phenomenon. The bigger risks are developing countries.

The reason I am mentioning this is because everything is very much connected to the global financial system. Economic failures, risks and unemployment in the developing world where many are daily labourers face unprecedented risks. This economic collapse of demand and work is creating ripples and affecting the mental health.

Economic Impact

To understand the global monetary system and how it is currently shaping, have a read of this thread by Raoul Pal of Real Vision. Flight to dollars has caused a shortage of dollars globally, everybody wants to hold the reserve currency because 55% transactions occur in dollars globally. The stock market has seen outflows in trillions of dollars since the spread of pandemic.

The travel and tourism industry has come to halt with forecasted business travel spend revenue loss in billions of dollars. According to data by Statista, China is projected to lose $404.1 bn, Europe is projected to lose $190.5 bn, with the rest of the regions bringing the forecasted total to $810.7 bn. The actual numbers will be much worse because it is difficult to quantify the impact of coronavirus and the extension of lockdowns with each milestone.

Here is a look at US Non-Farm Payrolls for the month of March. April’s data will be released on the 1st Friday of May given no delays. The US economy lost 701 thousand jobs in March, much worse than market expectations of a 100K cut, reflecting the effects of the coronavirus and efforts to contain it. It is the first decline in payrolls since September of 2010, but the figures were not as bad as those seen in 2008 as the number excludes the last two weeks of March when unemployment claims surged by nearly 10 million. About two-thirds of job losses occurred in leisure and hospitality, mainly in food services and drinking places. Employment also declined in health care and social assistance, professional and business services, retail trade, and construction via Trading Economics.

I think the next couple of months are going to look terrible,” White House economic adviser Kevin Hassett told reporters. “You’re going to see numbers as bad as anything we’ve ever seen before.” Reported 26thApr20, 15:33 BST.

The US economy lost 20.5 million jobs in April, less than market expectations of a 22 million cut, and after declining by 870K in March. It is the largest drop ever, bringing the employment to 131 million, its lowest level since February 2011, due to the coronavirus pandemic and consequent restrictive lockdown restrictions imposed such as business closures. Job losses were widespread, with the largest 7.7 million decline occurring in leisure and hospitality. Almost three-quarters of the decrease occurred in food services and drinking places (-5.5 million). Employment also fell in the arts, entertainment, and recreation industry (-1.3 million) and in the accommodation industry (-839,000). The change in total nonfarm payroll employment for February was revised down by 45,000 to +230,000, and the change for March was revised down by 169,000 to -870,000. With these revisions, employment changes in February and March combined were 214,000 lower than previously reported. [Trading Economics]

I do not think any amount of economic data justifies the message I am trying to convey. The reality is not yet fully quantifiable. Looking at the April NFP data, some of the quantifiable impact can be seen. Although investors such as Ray Dalio and others iterate that this was a likely outcome, coronavirus is the cause for the effects which would have inevitably taken hold of the global economy. He is right, the global economy would have come to this point because of some other cause. However, what can we do to address current issues? What can the people with wealth and money do to address this issue? Call me a cynic but, is that best that they can do? With vast resources in possession, the best minds, tech available? I am sure they are equally dumbfounded at their own powerlessness when faced with the forces of universe. We have already witnessed negative oil prices, the futures for May WTI Crude oil contract settling in negative territory for the first time in history. What more are we waiting for before we kickstart the economy? Yes, it is a dangerous approach and majority are against it because everyone fears the virus, the risk of reinfection and the burden on the health and medical facilities. However, we leave many bigger problems unaddressed, if we do not find an alternative to a new normal. A normal amidst the pandemic and a post-pandemic normal. Politicians are weaponizing the pandemic in US to smear at each other’s inadequate responses.

I am addressing this document as a proposal to put out an alternative solution. It seems a viable option, effective in theory to stop person to person transmission of the virus. It can be an effective way of easing the lockdown measures while researchers and scientists work hard at finding a cure and developing a vaccine. And as we know thus far, vaccine is not the ultimate solution. I am sure the people involved in inventing and designing these measures are doing their best and I wish them the best of luck, considering they are really putting the heart of the world before anything else.

General Election 2019 possible paths

In my previous post, I spoke about a low probabilistic, however, a positive outcome that could result from the upcoming UK Dec 2019 General Election.

Since writing that post, there have been further developments which one has to keep in account before believing the polls, be it MRP poll! I have spoken about the economics. In this article, I will share more insights on the Elections and what impact they could have!

Once again, I am merely providing information via studying history, ideologies, markets and economies. I am doing it, so you can make better informed decisions.

The General Election 2019 UK:

The figure shows the statistics by age group of the number of voters who have registered from 29th Oct to 26th Nov 2019.

A total of 2.5m voters who registered are aged under 34. The surge in applications is important to note because the younger public is more inclined to vote Labour. The reason is because of 2nd referendum, NHS and climate change policies.

The biggest issues on the minds of people in Germany are shown in the infographic below

Environment is currently the most important issue. Compare this to the issues facing UK, survey released Aug 2019 in the figure below.

What can change since Aug 2019, when Brexit was the biggest issue facing UK? Not much right? Because, Brexit is still the biggest uncertainty facing the whole country, economy and people. However, though, after revelations from Jeremy Corbyn about the NHS and how in the case, Conservatives win a majority, it will most likely end. The end of NHS made a loud impact, which if not notable from the Aug 2019 infographics, will be notable now, because 84% of the UK’s public views that NHS should be run by government and not SOLD to private companies. The surge in voters representation since Nov 22 leading up to Nov 26 shows, how important the issue of NHS is to UK’s population. A lot has been revealed, the leaked trade negotiations with the US which, mainstream media failed to bring to the public’s eye, was made evident by Jeremy Corbyn.

The poll results from MRP:

#GE2019

seat projection, MRP model: CON: 359 LAB: 211 SNP: 43 LDEM: 13 via

@YouGov

Given the size and methodology of the MRP poll I think people shouldn’t read too much into this. Survey was conducted last two weeks and since then, gap is narrowing. A lot has happened in the two weeks including iTV debates, Corbyn’s interview on BBC, US-UK secret trade negotiations brought to light! The projected margins of victory are below 5 per cent in at least 67 seats predicted to be Conservative.

Indeed, this statement stands true when you just look at how many people who registered are under 34 and the surge of applications in the last few days.

What is also interesting is Labour’s performance in the last two general elections! This general election might just converge the gap further or perhaps even tip it in their favour.

Given the narrow margin last election, it sure is a tough call. All the above information is just a quick summary into the elections to date including the previous post.

Markets and Economy:

Let’s suppose Conservatives win a majority in the upcoming election. A likely outcome given the Brexit issue! What then? PM Boris then gets his deal approved by 31st Jan 2020. UK comes out of the EU and has till Dec2020 to negotiate a trade deal, which is highly unlikely as evident from the shambles going back till referendum. This increases the odds of UK then, exiting with No deal Brexit! Voilà, the US comes in picture as they have been pushing for a no deal Exit as evident from Trump’s remarks and revealed documents. NHS goes private! Food labels go haywire and we are eating GMOs, lab grown and chemically enhanced meat, beyond meat takes over! Jokes aside, if I ever wanted to go vegetarian again, I would much prefer cooking fresh! Or even vegan, there are better options for vegans too, am sure, although I don’t know much about veganism!

GBP will have an initial reaction or even a short-term strength, until the end of 2020 when it starts coming under pressure.

What about in the case of Labour in power? Let’s suppose that too, initial reaction will be GBP negative, as spending will increase, and taxation will change, and new labour deal will have to be negotiated. Given that, a lot of groundwork for EU trade deal has already been done, Labour will implement their changes into the Theresa May’s negotiated deal within 3 months. Which then strengthens the sterling. However, referendum will then be the major factor as the vote will be put back to the public. The pound and markets won’t react much in my view to it, as both options, either to stay in EU or come out with the deal, will not create any further uncertainty. The public will be satisfied, as in this referendum they make a better-informed decision. Be it leave or remain!

These are just possible paths and obviously nothing can be said with certainty. Weigh out the probabilities, and as events unfold, clarity emerges.

Conclusion:

To conclude this, I would like to add some deep thoughts here. What we have to understand is that most of our actions and behaviours are subconscious! Some perhaps even unconscious. To unlearn it all is a huge task, and for that you really have to take a dive within yourself.

The campaign being run by conservatives currently is rooted in causing divisions between populace, with the help of mainstream media. What the people don’t realise is that, if the conservatives win the majority. The wealth gap will widen further, the values gap will further widen. The masses will be further polarised, it’s not apparent from the offset, but if you project yourself into the future and try think of all the scenarios occurring, keeping in mind at the same time, what is happening around the world. It will become evident that the likelihood of internal and external conflicts will increase in odds in the coming decade. 

If you read history and how conflicts arise, what conditions and values reside at that time, it will become apparent to you all that, we are living in sensitive times. There’s a lot of conflicts, hate, a huge disproportion of the rich and the poor. Rising protectionism, the model of globalised economy is increasingly deteriorating. These all conditions were very similar before the start of world war 2. As humans, we can learn from our past mistakes. Let’s not repeat history. I am not implying that a war full of conflict will start tomorrow or doomsday is approaching us, rather let us learn from history and let it not repeat itself!

Everything at the same time is so connected, that the ripples travel across oceans and lands. They cause metaphoric earthquakes, division, discord, dissent! We are living in such times ! We have to wake up from the slumber. 

We have to learn to think independently. We are bombarded by media, tv and so much of other stuff in the world and education itself don’t really help individuals to think for themselves.  I am no conspiracy theorist, neither am I trying to preach it that way. 

I want you all to be pragmatic, empathetic and learn to appreciate that we all have more in common. 

I know very little, but the little that I know has fueled this passion to increase love between human beings. Inspired me to chase my dreams, reform the education system, create equal opportunities. In order to work towards this, I simultaneously have to ensure that the future generations inherit a safer and habitable world. 

Hopefully, this sets me forward to start blogging away from politics too and start writing about how we can unlearn what we know and start to accept that there is a great deal of unknowns. When we appreciate this, we will also become less judgemental, less stereotypical and less envious.

The real change starts within, whatever the results of elections, don’t let it turn you spiteful to one another or breed further hate and division.